New airline could rise from ashes of Skybus
Operating license, plane contracts on the block
Saturday, April 19, 2008 3:10 AM
By Marla Matzer Rose
THE COLUMBUS DISPATCH
The death of Skybus Airlines has left behind a trail of valuable assets that could be used by investors to start a new carrier that flies from Port Columbus.
Topping the list is this: the federal operating certificate that gave Skybus the right to fly.
Having an existing operating certificate has advantages because it can save months of effort and anywhere between $5 million and $15 million in costs involved in starting from scratch.
Even given current economic conditions, which Skybus management blamed for its demise, the discount airline’s assets could attract multiple suitors, said Nawal Taneja, who leads the aviation department at Ohio State University. He is an industry author and consultant.
“I know there are people interested in the certificate. They just think the management team and the business model weren’t right,” Taneja said.
At the same time, small carriers are folding and the big legacy carriers are looking at mega-mergers to cut costs. Some experts think the entire industry could go bankrupt.
Is this the end for cheap airline fares?
Fuel costs, big merger plans shake industry
By Julie Johnsson | Tribune reporter
April 19, 2008
…The U.S. airline industry is undergoing a radical makeover and the first casualty, observers say, is the ultralow pricing that has sent Americans to the skies in record numbers but left carriers struggling to stay in business.
It’s not just fuel costs. U.S. carriers, large and small, are going through the biggest transformation since the industry was deregulated 30 years ago. Power is being concentrated in the hands of larger players, while a shakeout thins the ranks of the 100-odd smaller carriers whose aggressive promotions made it difficult for any airline to cover costs on many domestic flights, analysts say.
The pending merger of Delta Air Lines Inc. and Northwest Airlines Corp., creating the world’s largest airline, could be followed by one or even two blockbuster deals, analysts say. The likeliest is a tie-up between Chicago-based United Airlines and Houston’s Continental Airlines, which could follow within weeks, insiders say.
With few cost-cutting opportunities remaining, airlines are looking to mergers to boost revenues: either by broadening their reach into lucrative international markets, or by gaining greater pricing power, obtained by parking planes and paring overlapping routes.
I personally think a return of Skybus in any name would be unlikely given the huge risk in the airline industry and history of recent failures, but we shall see. There’s no doubt that more air service would be good for the people of Columbus, but would it be good for an airline?