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Rude Awakening for Skybus

Ted Reed

Skybus service between Greensboro, N.C., and Columbus, Ohio, didn't begin auspiciously.

Instead, on the start-up carrier's eighth day of operation Tuesday, the inaugural departure from Greensboro left 3½ hours late.

Delays aren't atypical in the airline industry. Nevertheless, a long delay on a closely watched flight raises questions when an airline's operating philosophy involves reducing costs by avoiding popular airports because they have long delays.

"I hate that this happened, but it happened," said CEO Bill Diffenderffer, a passenger on the flight. It left Columbus about three hours late because a valve in the cargo hold temperature-monitoring system wasn't working, he said. The airline replaced the valve, but the monitor still registered, so another aircraft was substituted.

"We had one of those worst of all cases, a creeping delay, until we said, 'Let's switch the airplane,'" Diffenderffer said. "We followed procedures exactly the way they are supposed to be followed, even when the CEO is going to be embarrassed for being late on an inaugural."

Not only was the Greensboro arrival delayed, but the departure was further delayed because a scheduled 25-minute turn took longer. (Although the airline's figures show a 24-minute turn, the plane spent about 50 minutes on the ground with its wheels blocked.) A plan to board passengers at two doors failed because portable stairs didn't accommodate wheelchair users, who needed a special lift.

Then, at the last minute, a frantic passenger thought she had left a child's medicine on the plane. Agents searched the plane, until the passenger was reminded that the medicine had already been returned to her. This exercise consumed several minutes.

More broadly, the experience also embodied the ugly reality of the airline industry, where the timeliness of 30,000 daily departures constantly faces challenges that are often uncontrollable. In fact, the industry's vast array of challenges is often overwhelming. Since deregulation in 1978, the Transportation Department has certified nearly 200 airlines to begin flying that have since ceased to exist.

Many observers believe Skybus could join them because it charges such low fares -- at least 10 seats on every flight sell for $10 -- and it operates from secondary airports. Skybus announced Wednesday it will serve Chicopee, Mass., St. Augustine, Fla., and San Diego. They join a list of five destinations, including Bellingham, Wash., and Portsmouth, N.H, all served from Columbus.

The skeptics include Jim Dent, founder of the original Skybus, which flew between Florida and the Northeast between 1992 and 1993. Like its successor, the first Skybus charged for extras such as drinks and luggage. It even charged $25 to apply for a job, and it charged for crew training. It failed, Dent said, because it didn't get paid by the travel agency that processed its credit card transactions.

Dent, now retired, said the new Skybus markets don't have enough origin and destination traffic.

"You have to go where the passengers are when you start," he said. "The first six months is your toughest time to make money in the airline business, and you can't take the losses." However, while Dent started with limited funds, the new Skybus raised about $160 million.

In the Skybus view, the airline industry is committed to a flawed model. American(AMR) flies its planes an average of 11 hours a day, while Skybus hopes to fly 15. United(UAUA) and Continental(CAL) have huge shares of their daily operations at delay-plagued airports in Chicago and Newark, while Skybus uses speedy airports like Greensboro.

And established airlines are set in their ways. In fact, until JetBlue(JBLU) came along, the industry believed fervently that passengers would never use New York's Kennedy for domestic flights.

Contrarian Diffenderffer said low fares also offer advantages. They draw so much attention that Skybus doesn't need to advertise. Additionally, they are just the first financial contact with the passengers. Services, from food to early boarding privileges, are sold. Even more services will be sold to people attracted to the airline's Web site.

In a sense, Skybus competes not with American, but with Amazon(AMZN) and Expedia(EXPE), making the fare irrelevant. "Ultimately what I want is to charge nothing for the flight," Diffenderffer said. "The most important thing is to have people come and look at the Web site and do good things there."

Dent, who said he has no claim to the Skybus name, wished the airline well. "I always thought it was a great name, and I'm glad somebody picked it up," he said.