Skybus

In an industry plagued by failing companies and bankruptcies, one might think that the airlines wouldn't be the ideal candidate for a potential new start-up.

One would be wrong.

Chief Executive Bill Diffenderffer started with $160 million and completely redesigned the airline business model from the ground up. Say hello to Skybus, where an airline ticket costs as little as 10 bucks.

No, our monkeys didn't mistype that. Ten dollars. Diez dólares. Dieci dollari.

Beginning in May, Skybus began flying Between Burbank, California and Columbus, Ohio. Flights were soon added between Bellingham, Washington and Columbus, then between San Diego and Columbus. As of this article, Skybus is flying five Airbus A319s on routes from Columbus to 11 cities nationwide. If everything goes according to schedule, we'll see 80 Airbus A319s flying to various cities across the US.

So how do they do it? What's their secret?

First of all, only the first ten seats actually sell for $10. After these seats sell-out, the price increases to $50, with incremental price increases of $25 as more seats sell, up to $175 for the remaining available seats. The average cost of a one-way ticket is around $100 if you don't manage to get in early.

And by early, we mean, like, immediately. Within hours of being posted, the $10 fares on every flight for the entire year were sold-out online. Carmen Hulbert, Skybus's Director of Marketing, likened it to a feeding frenzy.

But still, even if you paid $100 for your ticket, that's a hell of a lot better than what you're going to find anywhere else. Skybus managed to sell 86% of their seats in their first month of business, which is incredible for an airline just getting its wheels up.

Okay, so you want to book a flight; how do you do it? Call their 1-800 number and talk to a customer service representative?

Wrong. There is no spoon, there is no 1-800 number, and there are no customer service representatives. You have to buy your ticket on their website.

So you log onto their website and reserved a seat. Now you head to the airport and look for the Skybus counter. Don't expect to see a smiling employee standing by to wait on you; you have to pay homeage to one of the automated kiosks. Have bags to check? It will cost you $5 extra per bag.

Hey, now. Wait one damn minute! Why do we have to pay extra to check our bags? Well, if you think about it, you pay that extra amount at traditional airlines, too. It's factored in to the inflated cost of your ticket. With Skybus, you're only paying that extra cost if you are actually using the service.

Alright. So the attendants help you check your bags. 30 minutes before your flight, these same attendants move to the gate to help board passengers. Meanwhile, since there is no separate cleaning crew, the flight attendants are cleaning the cabin and preparing it for your arrival.

Like Southwest Airlines, Skybus doesn't have assigned seating. If you want to get first dibs, you can pay another $10 for priority boarding.

So now you know this is Skybus, and they are all about cutting costs. You board the plane, expecting to find a bare-bones aircraft, probably with rows of plastic folding chairs instead of aisles of seats. Actually, the Airbus A319 is first-class. The seats are made of plush leather and are designed by the same Italian dude who makes the seats for Ferrari sports cars. It also has wider aisles for moving about.

The cost savings is in the leg-room.

There is approximately two inches less leg-room than in traditional airliners. This means Skybus can cram in 20 more passengers for a total of around 134.

Don't expect television shows, movies, or music. No complimentary lunch. Free pretzels? Forget about it. You'll be paying separate for any drinks, food, pillows, or blankets, but remember: you were already paying for this crap before in the inflated cost of traditional airline tickets. With Skybus, you only pay if you want the service.

Flight attendants are also paid less and work on a 10% commission. You can expect to find them roving up and down the aisles and peddling their wares. $10 for a meal. $2 for a soda or candy bar. A bud light for $5. They'll even try to sell you perfume, watches, and jewelry during the flight.

You'll see advertisements on the flight attendants shirts. You'll see advertisements on the over head bins. You'll see them on the carpet, and you might even see them on the outside of the airplane itself; nationwide Insurance paid $100,000 to have its logo pained on one of the Airbus A319s.

Keep in mind, Skybus doesn't do connecting flights. Not only does this cut down on the amount of lost luggage, but it saves time and money by ensuring that every aircraft is flying in a straight line to its intended destination without detours.

You also won't find Skybus at any of the major airports. You'll be landing in podunk towns like Chicopee, Massachusetts, and Burbank, California.

Why?

The average taxi-time at major airports is around 30 minutes. At smaller ones, its closer to 10 minutes. A half-hour weather delay at a major airport might result in a two-hour backlog. At smaller airports, there is no backlog. Less time waiting around equals less man-hours, less fuel burning, and more money in the pocket.

Our only question is, why didn't someone think of this sooner? Hell, why didn't we think of this? It's so simple, yet so genius.

Only time will tell if Skybus's business model will be a success, but you can bet that we'll be investing in Bill Diffenderffer's brain child if we ever see it stroll onto Wallstreet.