News-Record.com

Arrange to apply for a refund? It would be more reassuring to read, "Refunds are being processed." Once the company files for bankruptcy Monday, though, who knows?* Doug

If my memory is correct! I believe the Governor Office arranged a grant [North Carolina taxpayers funds] of over million dollars to Skybus a couple of months ago! Do you really believe the Governor and his staff will be in the refund line to defend the taxpayers rights?

And just think! You thought the doom and gloom anti-establishment crowd were a bunch of kooks a few years ago when they said to buy Gold and get the heck out of Dodge and paper currency!

It was very easy to get my money back. I called my credit card company, had to sign a form and show a copy of my E-ticket, then the refund was promptly issued. It was not big deal and that's the beauty of using a credit card.

It was nice while it lasted.

Thanks, FF. That's good to hear.

The incentives were performance-based.

Doug, there's something that puzzles me about this wave of airline shutdowns. The airlines acknowledge the weak economy, and of course that's plausible. Lots of companies go under in recessions (and we're probably in one now). But the airlines also point to high fuel costs, and that's harder to believe.

Take Skybus for example. Was it founded in the distant past, before the modern era of rising fuel prices? No, it started up last May. And yes, the price of jet fuel has risen about 57% since then. But it had already risen nearly 300% in the previous 5+ years. In other words, Skybus was founded in the midst of a long run-up in fuel prices, and it wants us to believe that it's been undone by rising fuel prices? Did its vaunted business plan really ignore that possibility?

Of course fuel prices could be an indirect factor, as one of the causes of the weak economy. But as a direct factor? I don't buy it. Skybus and its ilk could pass higher fuel costs on to flyers if the state of the economy would allow it.

And Doug's right that the Skybus incentives were contingent on performance:

http://blog.news-record.com/staff/outloud/archives/2008/03/hope_a_wing_and.shtml#comment-479951

Andrew, Doug, I used to cover the airline industry in DC for three years before I came to GSO in 2000. So covering and following things that fly brings back memories.

When you take high fuel costs, coupled with a business model that's unproven in the States (it may work in Europe, but it seems to be a problem here), and if their passenger loads weren't high, and you add in out-of-control expansion, you're not going to succeed as a start-up airline. It was WAAYYYY too early to SB to start talking hub & spoke. They hadn't proved themselves yet.

Erik may be right, but Andy raises a really interesting point.

We talked about fuel prices when we met with Skybus' Bill Diffenderffer and Mike Hodge a few months ago. They believed a couple of factors would give them a competitive advantage in the event of steep fuel cost hikes: more efficient aircraft, and less time spent on taxiways. If they were right about that, they should have been able to pass on higher costs to customers while still charging less than competitors.

Now, maybe their advantages were too slight to make enough of a difference. Certainly, their on-time record didn't seem to be what they hoped to achieve; maybe their planes were spending more time on the ground and less in the air than what they wanted. Maybe buying fuel in smaller quantities than larger competitors meant they were paying higher prices. Maybe they weren't selling enough extras to make up for discounted fares.

Still, I wonder if they pulled the plug too soon. They didn't give a reduced schedule much time to succeed. It seemed to me, just to use one example, that cutting from two daily flights to one between PTI and Fort Myers would really help. Not only would it put more passengers on the remaining flight, but it would add more passengers paying higher ticket prices as there would now be only 10 seats for $10 available each day instead of 20. Their revenue per seat would increase.

Anyway, when they file bankruptcy papers, I guess we'll learn more about their financials.

Anyway, when they file bankruptcy papers, I guess we'll learn more about their financials.* Doug

Not really! It will be years later when the appointed Trustee gets done spenting the remaining assets for services render in a business legal funeral. Skybus is clearly a business model that fail with cheap prices, soaring Oil prices, poor market reseach, High borrowing at outrageous lease rates, Gosh! That sounds like the present American federal government. For the dude who thinks he got his credit card refund back without a problem. Boy! Are you in for a surprise! The credit card company or Bank will simply charge off the business account with Skybus, and than simply borrow from the Federal Reserve to cover the losses, with the America taxpayers being struck with the interest rates payments to Red China as the buyer of the Government issue treasury bonds.

Of course the The Treasury Department currency printing presses will go into overtime printing out more massive inflation for the failing America dollar for the Federal Reserve creation of magic money out of nowhere which in turn makes the dude thinking he won the day until he trys to buy a gallon of milk at 20 bucks a gallon in the near future with a over the limited credit card..

I'm glad your credit card company was so understanding, frequent flyer. My MasterCard issuer refused to issue a credit and said I would have to file a "disputed charge" claim before they would do anything. They didn't hold out much hope I would ever see my money again. (It's actually my employer's money since the ticket was for a business trip, but I feel badly since it was my idea to fly Skybus and save money!)

Larry,

My credit card company also said by signing the form that I was filing for a "dispute" but that was just their procedure. The "dispute" involved signing one form. It was rather simple. I'm shocked that your CC company would say there's no hope. Also, since the ticket was purchased by your employer, I'm sure they also purchased traveler insurance and this scenario would be covered in such insurance. I don't know any employer who buys travel for their employees without also buying travel insurance. So I would not be feeling badly. I think it will be easy to get a refund if you follow through.

I'm certainly not a happy camper. Too bad they couldn't have stayed in business through July when our flights were!

I bought their travel insurance through AIG, so I suppose I'll give them a call first with the hopes that they might be able to reschedule my trip with another carrier and similar departure/arrival times. If nothing else, hopefully I'll at least get my money back.

"SKETCHY" IS PUTTING IT LIGHTLY. MY DAUGHTER GAVE UP HER SLOT IN A MEDICAL PROGRAM TO GO TO WORK FOR SKYBUS. THE PROMISES MADE AT HIRING WERE ALL LIES. THE EMPLOYEES WERE WORKED HOURS OF OVERTIME WITHOUT ANY COMPENSATION. IF THE AIRLINE HAD NOT CLOSED IT WOULD HAVE BEEN ASKING FOR LEGAL TROUBLE. MECHNICAL ISSUES AND DELAYS WERE AN EVERYDAY EVENT. THE COST OF GAS WAS ONLY A SMALL FACTOR IN THE CLOSING.