itsnotfinals
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Skybus Closes Additional Financing

Wed Nov 14, 2007 5:50 pm

http://columbus.bizjournals.com/colu...07/11/12/daily18.html?surround=lfn


"Skybus Airlines Inc. has closed a financing agreement for 13 airliners set for delivery to the Columbus carrier in 2009 and 2010.

The discount airline said Wednesday it has finalized an agreement with Singapore-based BOC Aviation, an aircraft leasing business and subsidiary of the Bank of China, to finance the Airbus A319 planes that carry a list price of more than $750 million combined.

Privately held Skybus earlier in the year struck a similar agreement with BOC to finance four airliners that are scheduled to join the company's seven-plane fleet by year-end.

Skybus spokesman Bob Tenenbaum wouldn't disclose the terms of either deal, but said the latest accord covers financing for all aircraft set to arrive through spring 2010.

The airliners set to join Skybus' fleet in the next three years are a small piece of the carrier's plans heading into the next decade. The company intends to add 67 planes over the next five years. "
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luv2fly
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RE: Skybus Closes Additional Financing

Wed Nov 14, 2007 7:06 pm



Quoting Itsnotfinals (Thread starter):
The airliners set to join Skybus' fleet in the next three years are a small piece of the carrier's plans heading into the next decade. The company intends to add 67 planes over the next five years. "

The second Braniff was receiving planes as it was shutting down flights, intentions and reality are usually two different things.
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B757capt
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RE: Skybus Closes Additional Financing

Wed Nov 14, 2007 7:12 pm



Quoting Luv2fly (Reply 1):
The second Braniff was receiving planes as it was shutting down flights, intentions and reality are usually two different things.

It all depends how you look at it. There was a thread about 2 years ago when WN was sending planes from BFI directly to the desert for short term storage. In the thread people went nuts talking about WN and problems......

I have no vested interest in SkyBus, all im saying is lets not write them off completely.
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luv2fly
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RE: Skybus Closes Additional Financing

Wed Nov 14, 2007 7:13 pm



Quoting B757capt (Reply 2):
It all depends how you look at it. There was a thread about 2 years ago when WN was sending planes from BFI directly to the desert for short term storage. In the thread people went nuts talking about WN and problems......

I have no vested interest in SkyBus, all im saying is lets not write them off completely.

I agree with you, though trying to give both sides of the story is all.
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MAH4546
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RE: Skybus Closes Additional Financing

Wed Nov 14, 2007 7:34 pm

I'm glad they secured financing for planes they will likely never take delivery of. Good for them.
a.
 
itsnotfinals
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RE: Skybus Closes Additional Financing

Wed Nov 14, 2007 8:08 pm

According to the article SX will have 24 aircraft by spring of 2010, that is very measured growth compared to B6's ramp up, and SX has the same amount of start up capitol (Adjusted for inflation) that B6 did.
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luv2fly
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RE: Skybus Closes Additional Financing

Wed Nov 14, 2007 11:48 pm



Quoting Itsnotfinals (Reply 5):
According to the article SX will have 24 aircraft by spring of 2010, that is very measured growth compared to B6's ramp up, and SX has the same amount of start up capitol (Adjusted for inflation) that B6 did.

That "might" be true. Though oil was not as high priced as it is now, that is fact. Also B6 did not drop routes so early in its first months like SX has already done.
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itsnotfinals
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RE: Skybus Closes Additional Financing

Wed Nov 14, 2007 11:52 pm



Quoting Luv2fly (Reply 6):
Also B6 did not drop routes so early

Like ATL ?


Adjusting to business drivers is the right thing to do, whether it's UA adding PS, B6 pulling out of BNA and CMH, or WN adding several Saturday only flights and scaling back many Trans Cons.

Change in and of itself is good in business.
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luv2fly
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RE: Skybus Closes Additional Financing

Thu Nov 15, 2007 12:01 am



Quoting Itsnotfinals (Reply 7):
Quoting Luv2fly (Reply 6):
Also B6 did not drop routes so early

Like ATL ?

Yeah ATL come into the route network in 2003 a whole 4 years after they took to the skies! Next!
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itsnotfinals
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RE: Skybus Closes Additional Financing

Thu Nov 15, 2007 12:05 am



Quoting Luv2fly (Reply 8):
years after they took to the skies! Next!

but they weren't even in the city for 7 months. the time in business really has no bearing.

http://www.businessweek.com/magazine/content/04_07/b3870109.htm

"Neeleman admits that it was his miscalculation that led to JetBlue's ill-fated foray into Atlanta. Delta's fares to Los Angeles were so high that about half of the passengers chose to suffer layovers to get a reasonably priced ticket. And Neeleman figured that low-cost rival AirTran Airways (AAI ), which also has a hub in Atlanta, wouldn't have a plane capable of making the long trip for at least a year.

He figured wrong. AirTran quickly leased planes and crews to fly the route. Then Delta increased the number of flights by 50% and slashed fares. When Neeleman couldn't make enough money on the route, he pulled out after seven months. Some rivals and analysts read an ominous message into the airline's re- treat. "It seems pretty evident that JetBlue's growth prospects have dimmed considerably," says one competitor. "

Looking back at that quote from February of 2004 is kind of funny since B6 has gone on to grow quite a bit.
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DTWAGENT
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RE: Skybus Closes Additional Financing

Thu Nov 15, 2007 12:08 am

Does Skybus have a permanent schedule yet? They keep adding and droping cities like crazy.

Chuck
 
luv2fly
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RE: Skybus Closes Additional Financing

Thu Nov 15, 2007 12:08 am



Quoting Itsnotfinals (Reply 9):
but they weren't even in the city for 7 months. the time in business really has no bearing.

Yes it does as they obviously put some thought in its routes as the early ones are still being operated and none of them were dropped in the first year of flying, unlike another new carrier that I can think of.
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itsnotfinals
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RE: Skybus Closes Additional Financing

Thu Nov 15, 2007 12:11 am



Quoting DTWAGENT (Reply 10):
They keep adding and droping cities like crazy

Dropping 2 cities in their history is just crazy isn't it?

They are adding cities "like crazy" becuase they are doing this thing called "growing".
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luv2fly
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RE: Skybus Closes Additional Financing

Thu Nov 15, 2007 12:13 am



Quoting Itsnotfinals (Reply 12):
Quoting DTWAGENT (Reply 10):
They keep adding and droping cities like crazy

Dropping 2 cities in their history is just crazy isn't it?

It makes you stop and ask yourself how much thought went into these cities and what they are smoking at the corporate office of SX.

Since we were all told just how "profitable" these cities were.
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itsnotfinals
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RE: Skybus Closes Additional Financing

Thu Nov 15, 2007 12:15 am



Quoting Luv2fly (Reply 13):
It makes you stop and ask yourself how much thought went into these cities and what they are smoking at the corporate office of SX

there aren't any posts saying any city was profitable, that is one of those Anet rumors that certain people love to perpetuate.

Maybe because Oil jumped 20 dollars a barrel they decided to adjust some things?
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ScottB
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RE: Skybus Closes Additional Financing

Thu Nov 15, 2007 1:07 am



Quoting Itsnotfinals (Reply 9):
Looking back at that quote from February of 2004 is kind of funny since B6 has gone on to grow quite a bit.

The airline has grown but its margins and profits sure haven't. They went from $103 million in net profit in 2003 to $46 million in 2004 -- then a net loss of $20 million in 2005 and another net loss of $1 million in 2006. Operating margins went from 17% in 2003 to 9% in 2004 to 3% in 2005 and 5% in 2006. Would you care to comment on their share price performance?

Quoting B757capt (Reply 2):
There was a thread about 2 years ago when WN was sending planes from BFI directly to the desert for short term storage.

The new 737-700's were going from BFI to the desert back in late 2001 and early 2002 -- because they couldn't exactly put the brakes on the deliveries from Boeing overnight and the state of the industry was in flux in the wake of 9/11. It was a response to a more-or-less unprecedented shock to the industry.

Quoting Itsnotfinals (Reply 14):
there aren't any posts saying any city was profitable

No, but there were posts claiming that Skybus was doing "very well at CMH."

Quoting Itsnotfinals (Reply 12):
Dropping 2 cities in their history is just crazy isn't it?

In a history of six months, that's quite a few. In a history of about 93 months, B6 has dropped about five. In a history of about 430 months, WN has dropped five airports (though only three cities, two of which were subsequently re-added).
 
ikramerica
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RE: Skybus Closes Additional Financing

Thu Nov 15, 2007 1:35 am

It's low risk to finance A319/A320s for any airline. If something goes wrong, it's easy to re-place them elsewhere. Just as VX. They placed them with SX, which now they can't get back!  Smile
Of all the things to worry about... the Wookie has no pants.
 
itsnotfinals
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RE: Skybus Closes Additional Financing

Thu Nov 15, 2007 3:21 am



Quoting ScottB (Reply 15):
No, but there were posts claiming that Skybus was doing "very well at CMH."

All the indcators would say they are doing wel at CMH.

All that matters in this stage of a start up is managing burn rate to plan. It's pretty obvious that is happening.

Quoting Ikramerica (Reply 16):
Just as VX. They placed them with SX, which now they can't get back!

Actually the leasing company leased them to SX, VX does not own them.

Quoting ScottB (Reply 15):
The airline has grown but its margins and profits sure haven't.

thanks to their massive growth, and introduction of another fleet type which SX doens't seem to be doing.
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luv2fly
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RE: Skybus Closes Additional Financing

Thu Nov 15, 2007 3:33 am



Quoting Itsnotfinals (Reply 17):
thanks to their massive growth, and introduction of another fleet type which SX doens't seem to be doing.

Massive growth yet did not cut routes in its first year of service like another start up I know. Also the introduction allowed them to grow smaller stations, and serve routes more than once a day.
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CitrusCritter
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RE: Skybus Closes Additional Financing

Thu Nov 15, 2007 3:37 am



Quoting MAH4546 (Reply 4):
I'm glad they secured financing for planes they will likely never take delivery of. Good for them.

So if SX is still around in two years, or even a year given your predictions in other threads, can we expect you to admit you were wrong? I have no interest in SX succeeding or failing, but it sure seems like some of you will have an aneurysm if they survive long-term.
 
Lexy
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RE: Skybus Closes Additional Financing

Thu Nov 15, 2007 3:40 am



Quoting Itsnotfinals (Reply 12):
They are adding cities "like crazy" becuase they are doing this thing called "growing".

They fly to cities?? LOL!!

Just kidding. But I stand by what I have said all along, they have to start flying to larger markets at some point.
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luv2fly
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RE: Skybus Closes Additional Financing

Thu Nov 15, 2007 3:40 am



Quoting CitrusCritter (Reply 19):
So if SX is still around in two years, or even a year given your predictions in other threads, can we expect you to admit you were wrong? I have no interest in SX succeeding or failing, but it sure seems like some of you will have an aneurysm if they survive long-term.

Sure I'll admit it, if it ends up being in the sky two years from now.
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B757capt
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RE: Skybus Closes Additional Financing

Thu Nov 15, 2007 3:41 am



Quoting MAH4546 (Reply 4):
I'm glad they secured financing for planes they will likely never take delivery of. Good for them.

HAHAHA

Quoting ScottB (Reply 15):

The new 737-700's were going from BFI to the desert back in late 2001 and early 2002 -- because they couldn't exactly put the brakes on the deliveries from Boeing overnight and the state of the industry was in flux in the wake of 9/11. It was a response to a more-or-less unprecedented shock to the industry.

Yah, I understand that, I was very involved in that process at the time. All i was stating is the wonderful speculation that occurred in the threads after 9/11 about other airlines that were being written off....
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MAH4546
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RE: Skybus Closes Additional Financing

Thu Nov 15, 2007 3:47 am

Quoting CitrusCritter (Reply 19):

So if SX is still around in two years, or even a year given your predictions in other threads, can we expect you to admit you were wrong? I have no interest in SX succeeding or failing, but it sure seems like some of you will have an aneurysm if they survive long-term.

Of course I'll admit I'm wrong. I have nothing against doing so. I'm already wrong because I never though Skybus would ever launch their first flights, and they did. have nothing against Skybus, but I do think they will fail, as I think ExpressJet will as well. There are too many problems with their business plans, and they are already showing signs of weak starts.

[Edited 2007-11-14 19:48:15]
a.
 
itsnotfinals
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RE: Skybus Closes Additional Financing

Thu Nov 15, 2007 4:32 am



Quoting MAH4546 (Reply 23):
There are too many problems with their business plans,

You haven't ever seen SX's business plan so it's hard to make that kind of statement. Time will tell that is for sure.
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MAH4546
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RE: Skybus Closes Additional Financing

Thu Nov 15, 2007 5:06 am



Quoting Itsnotfinals (Reply 24):
You haven't ever seen SX's business plan so it's hard to make that kind of statement. Time will tell that is for sure.

Unlike you apparently, I can read between the lines. Quit with that argument already. It's getting old. Using that logic, you can't make a statement that they will be around in two years.
a.
 
itsnotfinals
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RE: Skybus Closes Additional Financing

Thu Nov 15, 2007 5:36 am

Quoting MAH4546 (Reply 25):
Quit with that argument already


That argument is logical.


Considering you are supposedly a lawyer or a JD degree (but perhaps no bar passed), why would you ever assume to have discovery and talking points without ever seeing a shred of information from the actual business plan?


I have also never said how long they will be around for, I just post facts from verified sources to keep the negativity in check.

[Edited 2007-11-14 21:52:52]
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EA CO AS
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RE: Skybus Closes Additional Financing

Thu Nov 15, 2007 8:32 am



Quoting Itsnotfinals (Reply 24):
Quoting MAH4546 (Reply 23):
There are too many problems with their business plans,

You haven't ever seen SX's business plan so it's hard to make that kind of statement.

So? No one here was privy to Independence Air's business plans - just their publicly stated financials - and yet that was more than enough for everyone to start calling an over/under on how long until they shut down.

Red ink has a funny way of seeping through in a very public way, no matter what your business plan might say.
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panaman
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RE: Skybus Closes Additional Financing

Thu Nov 15, 2007 12:38 pm



Quoting EA CO AS (Reply 27):
So? No one here was privy to Independence Air's business plans - just their publicly stated financials - and yet that was more than enough for everyone to start calling an over/under on how long until they shut down.

Red ink has a funny way of seeping through in a very public way, no matter what your business plan might say.

Yes it does but as anyone seen red ink on SX yet???????? Well maybe MAH4546 since he seems to be sooooo important
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luv2fly
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RE: Skybus Closes Additional Financing

Thu Nov 15, 2007 3:58 pm



Quoting MAH4546 (Reply 25):
Quoting Itsnotfinals (Reply 24):
You haven't ever seen SX's business plan so it's hard to make that kind of statement. Time will tell that is for sure.

Unlike you apparently, I can read between the lines. Quit with that argument already. It's getting old. Using that logic, you can't make a statement that they will be around in two years.

I have to agree as Itsnotfinals you always stick up for them for some reason or another, yet you are no more in the know then the rest of us! So with that rational were all in the same boat, and why does that make your contribution to the thread anymore important or right on the money then anyone else's?
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itsnotfinals
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RE: Skybus Closes Additional Financing

Thu Nov 15, 2007 4:20 pm



Quoting Luv2fly (Reply 29):
make your contribution to the thread anymore important or right on the money then anyone else's?

I post links to real facts, MAH just uses his opinion as fact. That is a big difference.
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luv2fly
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RE: Skybus Closes Additional Financing

Thu Nov 15, 2007 4:24 pm



Quoting Itsnotfinals (Reply 30):
Quoting Luv2fly (Reply 29):
make your contribution to the thread anymore important or right on the money then anyone else's?

I post links to real facts, MAH just uses his opinion as fact. That is a big difference.

The links even though useful still do not prove anything more! A newspaper article touting 80% load factor still does not tell us what amount of revenue that brought in. The truth is SX is a private company and unless you or anyone works for them and has access to the info then we all just giving our opinion!
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itsnotfinals
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RE: Skybus Closes Additional Financing

Thu Nov 15, 2007 5:56 pm



Quoting Luv2fly (Reply 31):
The truth is SX is a private company and unless you or anyone works for them and has access to the info then we all just giving our opinion!

if you posts the facts then you don't have to worry about opinion.

the facts are the facts, here are a few more tidbits.

USA Today had a nice article just today about the disruptive nature of SX:

http://blogs.usatoday.com/sky/2007/11/whats-it-like-t.html

"Skybus says its average one-way fare is less than $100." does that mean more than 90 dollars average? or around 100?

"Sale items range from $5 cinnamon rolls to $44 bottles of Vera Wang Princess perfume and $98 cubic zirconium tennis bracelets. McCartney says attendants on the flight work customers for the sale. Skybus CFO Michael Hodge admits to McCartney: "I was not a believer in the beginning -- I didn't think people would buy. But they do.""

"Skybus sold more than 80% of its seats during the summer."
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luv2fly
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RE: Skybus Closes Additional Financing

Thu Nov 15, 2007 6:08 pm



Quoting Itsnotfinals (Reply 32):
Quoting Luv2fly (Reply 31):
The truth is SX is a private company and unless you or anyone works for them and has access to the info then we all just giving our opinion!

if you posts the facts then you don't have to worry about opinion.

the facts are the facts, here are a few more tidbits.

USA Today had a nice article just today about the disruptive nature of SX:

http://blogs.usatoday.com/sky/2007/11/whats-it-like-t.html

"Skybus says its average one-way fare is less than $100." does that mean more than 90 dollars average? or around 100?

"Sale items range from $5 cinnamon rolls to $44 bottles of Vera Wang Princess perfume and $98 cubic zirconium tennis bracelets. McCartney says attendants on the flight work customers for the sale. Skybus CFO Michael Hodge admits to McCartney: "I was not a believer in the beginning -- I didn't think people would buy. But they do.""

"Skybus sold more than 80% of its seats during the summer."

Again it tells us nothing, the ironic thing is your attacking MAH for the same thing your doing, having a opinion.

80% of there seats sold, GREAT, at what cost? What is the break even point to make a profit? We do not know that. People are buying, great, Hodges did not think it would happen, great, is he suprised that two people buy, or 50, again we do not know.
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panaman
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RE: Skybus Closes Additional Financing

Thu Nov 15, 2007 6:57 pm



Quoting Luv2fly (Reply 33):
80% of there seats sold, GREAT, at what cost? What is the break even point to make a profit?

Thats the great thing. Its none of our business how much SX is making. (Unless we are one of the investors)
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itsnotfinals
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RE: Skybus Closes Additional Financing

Thu Nov 15, 2007 7:37 pm



Quoting Luv2fly (Reply 33):
Again it tells us nothing, the ironic thing is your attacking MAH for the same thing your doing, having a opinion

how is posting facts from official sources an opinion?
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MUWarriors
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RE: Skybus Closes Additional Financing

Thu Nov 15, 2007 9:06 pm



Quoting Itsnotfinals (Reply 35):
how is posting facts from official sources an opinion?

The only facts in that article are an 80% load factor, less than $100 per seat and how much things cost. The "people are actually buying stuff" is anecdotal, and we do not know how much each of these items are being sold, or what their profit margin is, or how this helps the bottom line. So to infer that they are doing OK based on this is not any better than infering that they are doing poorly based on the fact they are dropping 2 cities in 6 months.

I personally have no feelings towards Skybus one way or another, but have to say dropping 2 cities within 6 months of launch makes me nervous. Let me just say if I were an investor I would be concerned about the decision making process right now.
 
flyinryan99
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RE: Skybus Closes Additional Financing

Thu Nov 15, 2007 9:23 pm



Quoting MUWarriors (Reply 36):
I personally have no feelings towards Skybus one way or another, but have to say dropping 2 cities within 6 months of launch makes me nervous.

I have no feelings towards Skybus either (unless they were to fly to TOL Big grin), but I have to disagree with you on this one. The ones they dropped were long haul routes in which others have dropped also due to fuel. Allegiant has dropped 6 longer haul routes, Southwest dropped some longer haul routes within the year. With their model, I think shorter routes and higher utilization rates is where they make their money - pushing more passengers through essentially. Long haul flights = less flights = less passengers. I think this is the right move and not really a cause for concern. If they start to drop flights from Florida and say to the Northeast, then that would cause for some concern. Just MHO though.
 
luv2fly
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RE: Skybus Closes Additional Financing

Thu Nov 15, 2007 9:30 pm



Quoting Flyinryan99 (Reply 37):
I have no feelings towards Skybus either (unless they were to fly to TOL ), but I have to disagree with you on this one. The ones they dropped were long haul routes in which others have dropped also due to fuel. Allegiant has dropped 6 longer haul routes, Southwest dropped some longer haul routes within the year.

Devils advocate, long haul flights you can charge more than short haul....
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itsnotfinals
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RE: Skybus Closes Additional Financing

Thu Nov 15, 2007 10:16 pm



Quoting MUWarriors (Reply 36):
I personally have no feelings towards Skybus one way or another, but have to say dropping 2 cities within 6 months of launch makes me nervous. Let me just say if I were an investor I would be concerned about the decision making process right now.

Ironically this whole thread is about a lender financing 4, then an additional 13 A319's they must feel just fine investing.

Quoting Luv2fly (Reply 38):
Devils advocate, long haul flights you can charge more than short haul....

not in the SX model, or B6 or WN's models either.
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luv2fly
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RE: Skybus Closes Additional Financing

Thu Nov 15, 2007 10:32 pm



Quoting Itsnotfinals (Reply 39):
Quoting Luv2fly (Reply 38):
Devils advocate, long haul flights you can charge more than short haul....

not in the SX model, or B6 or WN's models either.

Last I looked WN wanted more to fly me CLE to PHX then they want to fly me CLE to MDW.

B6 wants more to fly me JFK to LGB then to fly me BUF to JFK.

So if you can get me cheaper flights then I can give you dates to book me.
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MUWarriors
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RE: Skybus Closes Additional Financing

Fri Nov 16, 2007 1:37 am



Quoting Itsnotfinals (Reply 39):
Ironically this whole thread is about a lender financing 4, then an additional 13 A319's they must feel just fine investing.

Financing is different than investing. The lender in this case will get something regardless of whether or not SX ever actually pays for them because they will be able to take possession of the aircraft, and finding takers for an A319, while not the best selling plane in the world, will not be overly difficult.

Quoting Flyinryan99 (Reply 37):
I have no feelings towards Skybus either (unless they were to fly to TOL ), but I have to disagree with you on this one. The ones they dropped were long haul routes in which others have dropped also due to fuel. Allegiant has dropped 6 longer haul routes, Southwest dropped some longer haul routes within the year. With their model, I think shorter routes and higher utilization rates is where they make their money - pushing more passengers through essentially. Long haul flights = less flights = less passengers. I think this is the right move and not really a cause for concern. If they start to drop flights from Florida and say to the Northeast, then that would cause for some concern. Just MHO though.

I see your point about more utilization, but my question would then be, didn't they realize right off the bat that would be the case? I mean high oil prices or not more flights = more passengers, which if their business model makes more profitable why not start that way and work in long haul as it makes sense? I think the long and short of it is I just wouldn't have a ton of faith in the planning/future direction right now. Of course I felt that way as soon as they announced MKE, and why they thought 1 flight a day to CMH without allowing for connections is a good plan. Now if they plan on growing MKE then it might make sense (I kinda hope they do), but so far there is no sign of that.
 
flyinryan99
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RE: Skybus Closes Additional Financing

Fri Nov 16, 2007 3:57 am



Quoting MUWarriors (Reply 41):
I see your point about more utilization, but my question would then be, didn't they realize right off the bat that would be the case? I mean high oil prices or not more flights = more passengers, which if their business model makes more profitable why not start that way and work in long haul as it makes sense? I think the long and short of it is I just wouldn't have a ton of faith in the planning/future direction right now. Of course I felt that way as soon as they announced MKE, and why they thought 1 flight a day to CMH without allowing for connections is a good plan. Now if they plan on growing MKE then it might make sense (I kinda hope they do), but so far there is no sign of that.

This is totally my opinion, but I think they A: wanted to serve destinations Columbus didn't have service to nonstop which they knew they could fill (which they have). Kind of like "Columbus Pride" or something like that. And B: fuel wasn't $90+. When they first started out, IIRC, the price was around $55 - $65. At that price, they could make money on it but the way things are now, it's just not profitable, therefore they could use only a little more fuel and run more flights. So they adjusted their model. Just totally my opinion as to what their thought process may have been.

As for MKE, that's how they started out MCI, RIC, and GSO. *Seems* to have worked so far.
 
itsnotfinals
Posts: 1573
Joined: Sun Mar 04, 2007 8:51 am

RE: Skybus Closes Additional Financing

Fri Nov 16, 2007 4:14 am

Quoting MUWarriors (Reply 41):
Financing is different than investing. The lender in this case will get something regardless of whether or not SX ever actually pays for them because they will be able to take possession of the aircraft, and finding takers for an A319, while not the best selling plane in the world, will not be overly difficult
no bank wants a loan in default, contrary to popular belief you can't place an Airbus 319 in week and there are lots of ancillary costs that banks hate to deal with in liquidation, not to mention asset turn hurts performance ratios that banks are already trying to keep in the north side of acceptable.

Quoting Luv2fly (Reply 40):
So if you can get me cheaper flights then I can give you dates to book me.
The question is is the RASM % higher , the answer is No. Longer flights are not as cost effective for LCC's.

Quoting MUWarriors (Reply 41):
think the long and short of it is I just wouldn't have a ton of faith in the planning/future direction right now.
They did keep OAK and BUR and added GSO-BUR so they are still able to offer longer flights.

[Edited 2007-11-15 20:18:49]
Speedbird 178 Heavy, FINAL runway 27L
 
gregarious119
Posts: 399
Joined: Sat Jun 24, 2006 3:59 am

RE: Skybus Closes Additional Financing

Fri Nov 16, 2007 4:35 pm



Quoting Flyinryan99 (Reply 42):
This is totally my opinion, but I think they A: wanted to serve destinations Columbus didn't have service to nonstop which they knew they could fill (which they have). Kind of like "Columbus Pride" or something like that. And B: fuel wasn't $90+. When they first started out, IIRC, the price was around $55 - $65. At that price, they could make money on it but the way things are now, it's just not profitable, therefore they could use only a little more fuel and run more flights. So they adjusted their model. Just totally my opinion as to what their thought process may have been.

This is not necessarily fact, but I do believe they were given incentives to start west coast service from CMH. The cost of fuel/lack of revenue on those long flights may have outweighed the positive benefit of those incentives.

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