BillReid From Netherlands, joined Jun 2006, 1144 posts, RR: 1 Posted (8 years 4 months 2 days 13 hours ago) and read 13938 times:
Skybus recently adjusted its capacity out of the west coast and increased capacity into Florida. This indicates an overcapacity situation and a misjudgement of several markets.
The planning was schizophrenic with them serving cities such as SAN, FLL and MCI while also serving tertiary cities as well. Now monopoly markets are dying like SAN, and others can't be maintained.
Boyd at the forecasting conference stated that although failure is probable, they will have a short term positive impact on CMH, unfortunately at the investors cost who are losing their shirts.
Boyd group stated that the opportunity for Ryanair and EasyJet in Europe was driven by national borders falling in Europe and creating an environment for success. America is different where these borders fell long before the airplanes were invented and lowcost airlines have been estalished for years.
So how long before they turn to standard airports like RSW. The risk into airports such as PGT is huge with capacity exceeding last years demand into SRQ and RSW combined. Is assuming a 170% regional stimulation reasonable especially given that off season flights to SRQ and RSW and TPA are far from full leaving limited spill into the tertiary airport. And Florida isn't the yield rich market airlines would like it to be.
Please comment on how long they will last. What they will do with 65 birds when the first markets chosen aren't sustainable with just five to seven birds. Are these people idiots or justing having losts of fun lowin the investors money?
Some people don't get it. Business is about making MONEY!
7E72004 From United States of America, joined Mar 2004, 3587 posts, RR: 1
Reply 5, posted (8 years 4 months 2 days 12 hours ago) and read 13809 times:
Just because they pull out of a couple of markets, does not mean they are going to fail. THey pulled out of markets that were way over on the west coast that used too much fuel (which is at new highs at this point). They can make money and will probably stay more "confined" as in the eastern 2/3 of the country. Airlines pull out of markets all of the time. I don't think they will fail.
The next generation of aircraft is just around the corner!
FreequentFlier From United States of America, joined Feb 2007, 927 posts, RR: 12
Reply 8, posted (8 years 4 months 2 days 12 hours ago) and read 13656 times:
I think the biggest concern is what Skybus does with the 60! Airbuses they have coming their way. I've been on record as saying both Skybus and VX were stupid ideas and destined to fail (even more so with oil at $88 a barrel). So far I've seen nothing to suggest otherwise. Skybus is already canceling multiple destinations despite a large number of aircraft coming on line and VX is already pulling flights from their schedule because they can't seem to coordinate aircraft deliveries and interior furnishings. For whatever reason, investors become completely irrational when it comes to investments in new airlines. They seem to think you can just put nice pretty airplanes up in the sky and (poof!) print money left and right. As the legacies and LCCs have shown us, its not easy to make money in this industry and it won't be going forward either.
Why...based on your username, the Skybus employees are getting paid much better than the people at "your" airline. I really do not get what is to laugh about...because they are trying to make money a different way than having a OAK-LAX flight be $500, but a OAK-LAX-SAN flight be $70?
"Why does a slight tax increase cost you $200 and a substantial tax cut save you 30 cents?"
CRJ200FAGuy From United States of America, joined May 2007, 406 posts, RR: 0
Reply 11, posted (8 years 4 months 2 days 11 hours ago) and read 13600 times:
Quoting Boston92 (Reply 10): Why...based on your username, the Skybus employees are getting paid much better than the people at "your" airline.
Actually, they aren't. I make over double the pay of a Skybus FA and don't tell me they make commission. I make commission too on what I sell. I know of at least 2 pilots that Skybus has contacted and it would be a paycut. We laugh, because it's a concept that won't work in the long run. Plus, they look like UPS drivers.
44k From United States of America, joined Aug 2007, 310 posts, RR: 0
Reply 12, posted (8 years 4 months 2 days 10 hours ago) and read 13439 times:
Quoting Boston92 (Reply 10): Why...based on your username, the Skybus employees are getting paid much better than the people at "your" airline.
That is incorrect. Sx has some of the lowest paid airline employees: Quote Wiki:
Quote: In order to keep wages in line with their projected low fares, flight attendants are only paid $9 per flight hour, and will not be paid a per diem. While this is considerably lower than competing airlines' wages, flight attendants also receive 10% of all sales made during the flight, splitting all commissions evenly among all flight attendants on-board. Starting pilot wages are also below average, starting at $65,000 annually for Captains, and $30,000 for First Officers.The average commercial airline pilot wage is approximately $135,000.
Qantas787 From , joined Dec 1969, posts, RR:
Reply 13, posted (8 years 4 months 2 days 9 hours ago) and read 13410 times:
Quoting MAH4546 (Reply 7): At least if they do fail, people are out only twenty bucks.
Actually I don't know why everybody says they are so cheap, whenever I check their web site I can't find that much to get excited about. When you take into consideration the lack of frequency and the crappy timings, I think they should be even cheaper. On the upside they might be doing better then we all think. Mind you I am just a long distance bystander.
BAW716 From United States of America, joined Nov 2003, 2045 posts, RR: 26
Reply 14, posted (8 years 4 months 2 days 9 hours ago) and read 13339 times:
The problem with SkyBus is twofold:
1. They attempted to introduce a European product in the USA. I don't think this is a bad idea, per se, it was just done badly. Ryanair and Easyjet make money because they have a low cost base, stage lengths that are for the most part less than two hours with a market segment that is accustom to being crammed into airplanes and having little to no service (the European charter market is a good example). In addition, for the most part they operate from smaller airports not close to their large city destinations. The key reason why it works is that the rail system in Europe allows for carriers such as Ryanair to fly to these airports far from their city destinations and passengers can take trains from nearby into the city center. In the USA, where the stage lengths tend to be longer and schedule and reliability are the two biggest product factors AND absent a ground transport system that works as in Europe, the Ryanair model can't work here...especially given the strength of the network carriers coming out of bankruptcy and low fare carriers like Southwest and jetBlue.
2. They started out with too many aircraft. This was their biggest mistake. If I heard correctly, they have 60 some aircraft? If the idea was to create bargain basement carrier, flying between secondary markets would have been fine if they had stuck with short stage lengths operated with fewer aircraft. Depending upon their success, they would have been able to grow into markets in which that type of product might have had a chance to succeed. Having that many aircraft in their fleet or on order, they would have had to achieve something like 800+ hours of aircraft utilization per day in order to make their aircraft unit cost even fall into the ball park of reality. That would be something on the order of 500+ flights per day?
I personally believe that Skybus is beyond the point of no return. The reason I believe this? At what point can you take a flawed business plan and the losses they have sustained and continue to operate? Short answer: NOT. I hate to be blunt, but Skybus was history even before the first aircraft got off the ground. It's just a shame that a lot of people will suffer as a result of it.
David L. Lamb, fmr Area Mgr Alitalia SFO 1998-2002, fmr Regional Analyst SFO-UAL 1992-1998
Indy From United States of America, joined Jan 2005, 4618 posts, RR: 16
Reply 15, posted (8 years 4 months 2 days 9 hours ago) and read 13316 times:
I am probably going to take heat for this but oh well. I think Skybus is bad for U.S. aviation. The standards for domestic service have been lowered far enough as it is. The last thing we need is for someone new to come along and prove the standards can be lowered even more. Joe Cheapskate is going to go for someone like Skybus and then turn around and expect the same level of pricing from others. Unfortunately other airlines aren't smart enough to ignore the wants of Joe Cheapskate and will adjust their product down to his level. I hope the legacies ignore Joe Cheapskate and focus on the traveler that wants the extra service and doesn't mind paying a bit more for it. If you are going to provide Greyhound level service then we might as well take Greyhound.
At least with Greyhound we aren't required to show up a couple hours early and take our shoes off to go through security and aren't kicked off for the shirts we wear.
LTU932 From Costa Rica, joined Jan 2006, 14231 posts, RR: 46
Reply 16, posted (8 years 4 months 2 days 9 hours ago) and read 13313 times:
Quoting BAW716 (Reply 14): If I heard correctly, they have 60 some aircraft?
Hardly 60. Airfleets shows that SX has currently 5 aircraft, some of those being aircraft that were originally destined for VX, examples being N521VA and N522VA (N522VA has recently been re-registered as N522SX).
BrianDromey From Ireland, joined Dec 2006, 4113 posts, RR: 10
Reply 19, posted (8 years 4 months 2 days 6 hours ago) and read 13161 times:
Quoting BillReid (Thread starter): Please comment on how long they will last. What they will do with 65 birds when the first markets chosen aren't sustainable with just five to seven birds. Are these people idiots or justing having losts of fun lowin the investors money?
I dont see why you guys dont see the SkyBus model working. Its all about the costs. SkyBus should have very low costs. It also gives the impression that it is ALWAYS the cheapest, even this is almost certainly the case. FR in europe also have this perception, and can often be more expensive than the flag carriers, yet people still book with FR and fly to Airports which are not quite their destination.
Quoting CRJ200FAGuy (Reply 11): We laugh, because it's a concept that won't work in the long run
You might want to tell that to Ryanair and Air Asia, and to a lesser extent the psuedo LCCs like EasyJet, Air Berlin, Frontier, Jet Blue, etc. They seem to be doing exceptionally well on a "concet that wont work". I'll let you in on a little secret. When FR were ordering their first 738s in 1997/8 Boeing took their business model. The worst Boeing could do: Break Even. Now SX has many FR people. I would be betting the model is similar, if not identical.
Quoting BAW716 (Reply 14): The key reason why it works is that the rail system in Europe allows for carriers such as Ryanair to fly to these airports far from their city destinations and passengers can take trains from nearby into the city center. In the USA, where the stage lengths tend to be longer and schedule and reliability are the two biggest product factors AND absent a ground transport system that works as in Europe,
Maybe you should visit these airorts? While there might be a rial system to some of these airports, the vast majority have no rail connection. FR sells "Terravision" bus tickets on board its flights for connections into the city....
Quoting Indy (Reply 15): I hope the legacies ignore Joe Cheapskate and focus on the traveler that wants the extra service and doesn't mind paying a bit more for it. If you are going to provide Greyhound level service then we might as well take Greyhound.
And yet, when the likes of VX provide a sort of service aimed at the top end of the sectrum people flame that too. The reality is people DO NOT WANT NEW CARRIERS TO SUCCEED. Because it uts pressure on them and their jobs. Dont pretend otherwise, its OK to be looking ot for your self and your families. Just dont pretend it wont work because they fly to secondary airports (a la WN) or because they fly Airbusses.
Next flights: MAN-ORK-LHR(EI)-MAN(BD); MAN-LHR(BD)-ORK (EI); DUB-ZRH-LAX (LX) LAX-YYZ (AC) YYZ-YHZ-LHR(AC)-DUB(BD)
BlueElephant From United Kingdom, joined Dec 2006, 1817 posts, RR: 5
Reply 22, posted (8 years 4 months 2 days 4 hours ago) and read 12987 times:
I'm Sorry Bill...I've gotta disagree with a number of your statements...If I come off a little harsh, my apologies.
Quoting BillReid (Thread starter): The planning was schizophrenic with them serving cities such as SAN, FLL and MCI while also serving tertiary cities as well. Now monopoly markets are dying like SAN, and others can't be maintained.
I'm sorry, a quick check on FLL and MCI on Skybus.com shows that they are getting pretty good money on these flights. People are paying up to 300 bucks one way for Flights to FLL and thats the same thing being charged for an ERJ flight nonstop on DL...MCI on the other hand also doing quite well from the prices I can see on Skybus.com $250 dollars one way for today to MCI. And these are relatively Short Haul flights, which make their revenue a lot higher.
SAN I can agree with you, I don't think it's that they can't maintain it. I think it's that with the amount of planes they have right now, their money would be better well spent on shorter haul flights.
Quoting BillReid (Thread starter): So how long before they turn to standard airports like RSW. The risk into airports such as PGT is huge with capacity exceeding last years demand into SRQ and RSW combined. Is assuming a 170% regional stimulation reasonable especially given that off season flights to SRQ and RSW and TPA are far from full leaving limited spill into the tertiary airport. And Florida isn't the yield rich market airlines would like it to be.
I'm Sorry here again. I'm sure that the Skybus Execs aren't stupid. They must have bargained with PGD like crazy..there has to be a reason...And if you look at Skybus.com, you'll notice that flights for May 2008 are already selling at $45 a ticket. and thats with 3 flights a day. Flights from PSM are also selling at about 100 dollars one way.
And you're saying Florida isn't the yield rich market would like it to be, yah...I can understand that...But is it producing money?...Obviously...otherwise why would airlines want to fly there. There is already a huge presence of other airlines to FL from CMH...WN and DL fly a ton of flights all over FL...and yet Skybus continues to thrive there. Do you really think they would continue to add flights and destinations to FL if they weren't making money?
Quoting BillReid (Thread starter): Boyd at the forecasting conference stated that although failure is probable, they will have a short term positive impact on CMH,
Well Duh...even a 13 year old boy can go to the CMH website and do simple math and tell you that more people are traveling to and from CMH...
But I don't think he can say the impact is only short term, Even in the long run as long as they continue to offer cheaper fares than their competitors, then prices will slowly come down out of CMH and people will travel more.
Quoting BillReid (Reply 2): Someone who understands CASM and RASM and knows when you cancel your launch destinations you are in real deep do-do.
Yes and even I understand CASM and RASM but who are you to say what their RASM and CASM is?...Skybus does not release figures, and they're not a public company. Like someone said above....SX makes money from their on board sales as well, not to mention advertising and lower operating costs, and higher utilisation. So i'm sorry, unless you are an Investor in the airline...You can't completely be confident over your knowledge of CASM and RASM and SX.
As far as their Launch Destinations being cancelled?...I think its a good Idea...I think that they realized that it is possible to use their aircrafts better...Hell even I thought that CMH-GSO was the stupidest idea in the world....but obviously it is the most profitable route the airline flies and because it is such a short flight, they can increase their revenue more by getting more out of their airplane.
And who is to say they are cancelling them completely?...I doubt that for sure..I definately remember reading in the dispatch that they will go back to these destinations when they have more aircraft.
Quoting BillReid (Thread starter): What they will do with 65 birds when the first markets chosen aren't sustainable with just five to seven birds.
Plus...Think about it this way...There's got to be other operational reasons they decided to keep these aircraft on the east coast. Hmmm...Another Focus city perhaps?...Now they can get even more use from newer markets out of their aircraft until more come online.
65 Birds they will have...but that is projected out over years. You make it seem that they are getting 65 planes in a matter of months...and throwing them on Flights Strictly out of CMH.
What ever happened to other focus cities?...Have you thought about that?...international destinations?...Please don't make it sound like they're stupid..because I don't think they are.
I am not saying however that I believe in all their choices for Destinations....CHO...what the hell were they thinking..
I think they could use their aircraft better...
But is their Model failing?...I don't think so....I think they're gearing up to do something interesting....Thats probably why they knocked of BLI and SAN...and a BUR flight...those trips take 3 planes total, and about say...10 block hours a day....each...Imagine what you can do with 27 additional block hours among 3 planes....
Caspritz78 From Germany, joined Aug 2007, 518 posts, RR: 0
Reply 23, posted (8 years 4 months 2 days 4 hours ago) and read 12957 times:
Quoting BrianDromey (Reply 19): Maybe you should visit these airorts? While there might be a rial system to some of these airports, the vast majority have no rail connection. FR sells "Terravision" bus tickets on board its flights for connections into the city....
That's true most of these airports have no rail connection but Europe is smaller then the US. I think no airport that FR serves is more than 60 minutes away from the targeted city/region. In the US some of the large airports are already 60 minutes away from the city. FR has also the advantage of the first player in the European LCC market and Southwest in US LCC market. Skybus is a typical late follower that tries to get a small share of the LCC market by relying on offering a "me-too" product.
MSYtristar From , joined Dec 1969, posts, RR:
Reply 24, posted (8 years 4 months 2 days 3 hours ago) and read 12894 times:
Quoting Indy (Reply 15): I think Skybus is bad for U.S. aviation
I agree. While consumers in the markets they serve benefit from cheap prices, I for one am not a fan of continuing to bring service down to the lowest common denominator. What's next? Budget Rent-A-Plane flights like the one that appeared in Police Academy 5? The U.S has enough carriers out there who provide the bare minimum of service. No need to bring it down even further. All that being said, if they can make it work, more power to them. But an airline which pays its Flight Attendants a petty $9/hour doesn't get a lot of respect from me.
: I thought there was a global pilot shortage? Where will crews willing to work for such short money come from to man these 60+ aircraft?
: They've called a friend of mine 5 times to get him to work there. He's politely declined.
: Be careful about assuming *too* much from the prices listed on the Skybus website. (a) Prices seem to almost invariably jump up in the couple of days
: My bets are on VX folding before SX, absent any drastic changes to the business model and further cash infusions.
: you mean a business model based on $10 fares and charging for everything else doesnt work??????
: You can not expect people to buy other items and you can not think that it will always happen.
: I want to comment real quick on some of the above comments about Skybus being bad for the industry. People will pay for what they want. IMO, Southwest
: No. I am correct. SX employees are paid better than the regional airlines I was talking about.