WRRB/Telegram District City Council Forum 10/18
-
This forum is for all district council candidates; all candidates are here
today. Format: 14 total questions, 4 questions across districts (for all
candida...
6 months ago
5 comments:
News report stated they pre-sold 200,000 airline tickets...
Harry Tembenis
Worcester, MA
Very refreshing to see a post with a real name. Thanks Harry.
My pleasure, Bill .... here is an article from the 05/24/07 Boston globe...
With fares as low as $10, no-frills airline lifts off
By Peter J. Howe, Globe Staff | May 24, 2007
PORTSMOUTH, N.H. -- Richard Sutter was pleasantly astonished when he learned last month that the country's newest and cheapest airline, Skybus Airlines, would charge him just $10 to fly him here from Ohio so he could attend his grandmother's 90th birthday this weekend.
And after landing at Portsmouth International Airport yesterday morning, Sutter was even more astonished by how pleasant the flight from Columbus was.
"It was more than I thought it would be, a lot more. For 10 bucks, I was expecting chickens on the plane," said Sutter, a Dayton native, who wound up paying just $146 total -- counting taxes and security fees -- for round-trip tickets for himself, his wife Mandy, son Tyler, 9, and daughter Emma, 4. The Airbus A319 plane was clean and new, and with the ticket price so cheap, the Sutters had no complaint about paying the $20 Skybus fee to check their four bags and $2 apiece for some cans of soda.
Yesterday was the first full day of operations at Portsmouth for Skybus, a start-up airline based in the Ohio capital. It's bringing to the United States the ultra cheap discount service once offered by PeopleExpress on the East Coast in the 1980s and today offered in Europe by carriers such as RyanAir and EasyJet, which feature one-way promotional fares as low as one British penny.
While other US airlines have been trimming frills and edging into a-la-carte pricing for once-free services like checked baggage and extra legroom seats, Skybus takes frugality to new levels. The airline promises at least 10 $10 fares on every flight -- although by yesterday afternoon those were all gone for June and July on the Portsmouth-Columbus route. Skybus's website offered only $30 to $150 one-way tickets, which were still significantly less expensive than other airlines.
All any of the Skybus tickets buy, though, is a seat on the plane. Passengers have to pay $5 to check a bag, $8 for a blanket, $15 for a pillow, and $10 to wait at the front of the line, since there are no assigned seats. Except for babies and people with medical needs, passengers are forbidden to bring food or drink on board so Skybus squelches any free competition for its $5 Budweisers and $10 meat loaf plates.
There are no movies. And by eliminating first-class seating, it squeezes 144 coach seats on a model of plane that has 124 or 126 seats in two classes on most other carriers -- although Skybus's 30-inch coach "seat pitch," or spacing between seats, is the same as Northwest Airlines and US Airways in coach.
Also holding down costs: There is no phone number customers can call. All tickets are sold online, and the only access to Skybus customer service is the gate agent at the airport. One big revenue stream for the airline is making its jets flying billboards for Nationwide Insurance, which pays an undisclosed fee to get its name and website on the fuselage and inside the cabin.
Initially, Skybus is flying to seven other destinations besides Portsmouth from its Columbus hub: Richmond; Greensboro, N.C.; Fort Lauderdale, Fla.; Kansas City, Mo.; Burbank, Calif.; Oakland, Calif., and Bellingham, Wash. Like Portsmouth, which is 55 miles north of Boston and had no regularly scheduled jet service to or from anywhere before Skybus began operations Tuesday night, Bellingham, Burbank, and Oakland are meant to be cheap, if remote, alternatives for getting into the big metropolitan areas nearby of Seattle, Los Angeles, and San Francisco.
With $160 million in committed funding, Skybus plans to add 70 more jets to its current fleet of eight in the next five years and add several destinations. "Our belief is that if you bring down the fare a lot, a lot more people are going to want to fly," Skybus chief executive Bill Dieffenderffer said in an interview as he prepared to board the 9:05 a.m. flight back to his Columbus home.
Yesterday, Skybus was doing a better business eastbound than westbound, with about 105 passengers exiting the flight from Columbus to Portsmouth and about 50 waiting here to fly to Ohio, according to airport officials.
But the lure of too-cheap-to-believe fares clearly had huge appeal, especially for grandparents, who appeared to represent a disproportionate share of the passenger load. Gary Duncan , a Massachusetts environmental police officer headed with his wife, Kathy, to see their grandchildren Robert and Joseph in Indianapolis, figured he spent more on gas driving up to Portsmouth from his Wakefield home than the $10 he paid for the 1-hour, 45-minute flight to Columbus.
Jan Keefe , who was heading from Rochester, N.H., with her husband, Bill, to visit their son and his family in Florence, Ky., was initially thrilled with the $112 total round-trip fare. But after discovering she had erroneously booked a 9 p.m. flight instead of a 9 a.m. flight, she was actually happy to pay $80 to switch the tickets. "The Skybus people were unreal. They were so accommodating and nice about it," Keefe said.
Duncan, interviewed by cellphone after his flight landed in Columbus, said everything about the experience "was excellent. It was a brand new plane, very comfortable, and the service was excellent." Duncan, who rented a car to get from Columbus to Indianapolis, said compared to the nonstops he and his wife have flown from Logan International Airport to Indianapolis on US Airways, the Skybus plane was actually cleaner and better appointed. Negotiating the five-minute drive off Interstate 95 to the wide-open airport parking lot was a dream compared to Logan.
Even at $2 for coffee and $8 for a danish-and-fruit tray, he praised the food, too. "I'd recommend it to anybody. We'll be very glad to go again," Duncan said. "For $10, it was just amazing."
Peter J. Howe can be reached at howe@globe.com.
Harry Tembenis
Worcester, MA
More Press...
Low-cost Skybus prepares for inaugural flight
COLUMBUS, Ohio -- The success or failure of a new discount airline depends on whether some travelers are willing to fly to smaller, secondary airports and then drive 30 minutes or more to reach destinations such as Boston or Seattle, analysts say.
Skybus Airlines is scheduled to make its inaugural flight Tuesday, entering the often stormy industry of low-cost air travel. The company has plans to fly to 25 cities from its Columbus hub, using a model aimed at competing with Southwest and other no-frills airlines.
Every Skybus flight will offer at least 10 tickets for $10 each.
More than 200,000 tickets have already been sold -- tickets are booked solely through the company's Web site to save costs, part of a business strategy that also includes charging passengers for added services. Priority boarding will cost $10, and sandwiches and salads will cost up to $10.
Port Columbus International Airport is already served by low-cost carriers JetBlue and Southwest, yet the Skybus business plan convinced local investors such as Nationwide Mutual Capital to come onboard. Skybus also received an incentive package valued at $57 million from city, county and state officials.
"Investors like that Skybus has done what they said they would do: create an extremely efficient operating model and a great value position for travelers," said Josh Connor, a managing director at Morgan Stanley.
Other analysts are skeptical, especially with Skybus planning to offer flights to mostly secondary airports -- near Boston; Los Angeles; Seattle; Greensboro, N.C.; Kansas City, Mo.; Richmond, Va.; and Fort Lauderdale, Fla.
SkyBus will fly to Portsmouth International Airport in New Hampshire, which is 44 miles from Boston. The airline's Web site offers directions between Portsmouth and Boston, as well as information about car rentals.
"The biggest pitfall for them is, will U.S. customers accept this ultra-low cost to travel to remote airports?" said David Cahill, a visiting assistant professor at Ohio State University's Fisher College of Business. "If passengers are willing to do that, I think it's going to be an amazing business concept."
Mike Boyd, an aviation consultant in Colorado, said there's not enough public transit from remote airports to support new business. He also said it isn't realistic for Skybus to attract a groundswell of passengers from outside Columbus.
"You don't find anybody in the business who will say that (this plan) makes sense," Boyd said. "And there just aren't that many gaps anymore out there for low-fare service."
Skybus officials said they see an opportunity to draw would-be passengers from Cleveland, Cincinnati and as far as Fort Wayne, Ind., and Charleston, W.Va.
Skybus CEO Bill Diffenderffer said he's pleased with the company's progress so far. All of the company's routes are showing respectable bookings, though flights to Richmond and Kansas City are less popular than others.
"Unless they were doing pitifully slow, we wouldn't think about investing in a route for just a couple of months and then pulling out," Diffenderffer said.
Harry Tembenis
Worcester,MA
...and finally...
Skybus Aims High on Low-Cost Airfare
By Ted Reed
TheStreet.com Staff Reporter
5/25/2007 12:25 PM EDT
URL: http://www.thestreet.com/newsanalysis/transportation/10358787.html
Skybus, which began flying Tuesday, has some unusual ideas about air travel.
At least 10 seats on every flight are sold for $10. Passengers disembark from two doors, cutting turn times to 25 minutes. Every extra, from a soda to early boarding rights, is sold. Aircraft fly 15 hours a day. The seat backs have no magazine pouches, adding legroom. Nearly every flight serves a secondary airport.
And don't try to call Skybus: It lists no phone number. All passenger transactions are done on the Internet. Internet bookings cost just 35 cents to 40 cents a ticket, Skybus says.
It's unclear whether all this will create a profitable airline at a time when analysts are concerned about declining domestic yields due to a slowing economy and increased capacity. Skybus' home base, Columbus, Ohio, is perhaps too small for an airline with no connecting flights. Additionally, legacy carriers have reduced costs and become adept at competing with low-cost carriers.
The scenario has some experts, including industry consultant Mike Boyd, convinced that the Skybus concept lacks staying power. Boyd compares Skybus to ill-fated Independence Air, which charged below-cost fares until it shut down last year.
"Why don't they just file bankruptcy now and avoid the rush later?" he says, calling its executives "total amateurs."
Yet the company was attractive enough to raise about $160 million from 18 institutional investors, including Fidelity, Morgan Stanley, Tiger Management and various hedge funds.
And the airline industry is awash in unusual ideas that have lured financial backing. ExpressJet (XJT) flies 50-seat regional jets on flights of several hours, while Allegiant (ALGT) flies expensive-to-operate MD80 aircraft to small cities such as Belleville, Ill., and Kinston, N.C.
Skybus says its actual model is the Irish carrier Ryanair, which has led the industry in combining discount fares with extra charges for the slightest services and with prominent efforts to sell hotel packages and rental car agreements. Charlie Clifton, a member of the board of managers, spent 16 years at Ryanair.
"The business models have a lot of similarities," says Skybus CFO Mike Hodge, who previously oversaw Tiger Management's Ryanair investment. "The first is the ultra-low-cost model, [which] allows us to charge prices that stimulate demand and get people to take trips they wouldn't otherwise take."
Hodge says Skybus' cost per available seat mile falls below the 6-to-7-cent range of the lowest-cost U.S. carriers, such as AirTran (AAI) and Southwest (LUV) .
The savings start with the airplanes. Skybus is leasing Airbus A319s until late in 2008, when its 65-aircraft order starts to arrive. New planes require limited maintenance, and eschewing hub connections saves time. Skybus' 15-hour utilization compares with about 11 hours a day at American (AMR) . Its quick turns are aided by boarding and disembarking passengers on the ramp, through two doors, cutting seven minutes off the usual, single jetway process.
Seating is not luxurious. Skybus A319s generally have 144 seats, increasing to 156 seats when its own planes arrive. Frontier (FRNT) puts 132 seats in its A319s. Frontier offers a 33-inch pitch, while Skybus offers 28 to 29 inches, although Hodge says taking out magazine pouches adds two inches of legroom.
Skybus uses uncongested, secondary airports, reducing delays. On Tuesday, it scheduled three round-trip flights from Columbus to Burbank, Calif., Kansas City and Portsmouth, N.H. Richmond, Va., flights begin Wednesday. Next week, service begins to Bellingham, Wash., Fort Lauderdale and Greensboro, N.C. Eventually, Skybus will serve about two dozen cities from Columbus.
While Columbus is the airline's focus, it will not have connecting flights. So costs are low, but the customer base is limited to local passengers. That's OK, Hodge said, because about 1.6 million people live in the Columbus area, and nearly 6 million people live within 100 miles. An old adage, Hodge says, is that "people will drive 100 miles to save $100" on an airline ticket.
Response to Skybus' low fares has been strong, Hodge says.
"If I showed you the load factors, you would see the flights are full," he says. "That's the wonderful thing about demand stimulation: If we can get the prices low enough, people will show up."
Harry Tembenis
Worcester, MA
Post a Comment