Why Skybus’ Fate Didn’t Happen to Ryanair
Budget Travel Online’s Sean O’Neil recently weighed in on the Skybus bankrupcy, and made some interesting points about why this same fate hasn’t befallen many similar ultra-cheap carriers in Europe.
“Which airline will fail next? Frontier and Airtran look shaky. Among the majors: United. That’s all according to Fox Business. Admittedly, the major airlines should be doing better because they have hiked their prices in recent months, as fare-watcher Rick Seaney has blogged. But the fare hikes haven’t been enough to cover the higher costs of flying planes today, notes Hartford Courant columnist Jeanne Leblanc.
Why do European low-cost carriers succeed while Skybus failed? The difference may be in the route maps and in the public transportation systems. As Jared Blank explained recently on his blog, Skybus had hub airports at medium-sized airports trying to serve other, even-smaller airports. But not enough passengers visited these small airports to keep Skybus planes full.
Skybus’s costs were thus far higher than those for European success story Ryanair, partly because Ryanair flies most of its flights out of major hub cities, such as London and Rome, with lots of passengers. Of course, Ryanair also flies to some truly out-of-the-way airports, such as Hahn, Germany. But European governments have subsidized public transportation links between many of its smaller airports (such as Hahn) and its largest cities (such as Frankfurt), while the U.S. government hasn’t invested in public transportation.
For Skybus, this meant that not enough budget-conscious Americans were willing to fly to small airports, such as Punta Gorda, Fla., because they’d have to add a rental car cost into their trip budget–something Europeans fliers have the practical option of skipping.”