Skybus Throws In The Towel

They say that April is the cruelest month and it’s shaping up that way for the smaller carriers:

Airlines’ Woes Continue as Skybus Announces Plans to Shut Down

Saturday, April 05, 2008

Associated Press

COLUMBUS, Ohio —

Low-cost carrier Skybus Airlines is shutting down Saturday and plans to file for bankruptcy protection next week, becoming the latest of the nation’s airlines to fall because of rising fuel costs and a slowing economy.

ATA and Aloha Airlines both stopped flying this week after filing for bankruptcy protection. American, Southwest and Delta airlines have all had to cancel flights recently to address safety concerns about some of their aircraft.

The financial situation of Skybus, which announced the shutdown late Friday, has worsened in recent weeks, said Skybus spokesman Bob Tenenbaum.

“We deeply regret this decision, and the impact this will have on our employees and their families, our customers, our vendors and other partners, and the communities in which we have been operating,” Michael Hodge, chief executive of Columbus-based Skybus, said in a statement.

“Skybus struggled to overcome the combination of rising jet fuel costs and a slowing economic environment,” he said. “These two issues proved to be insurmountable for a new carrier.”

The airline makes 74 daily flights to 15 U.S. cities, Tenenbaum said. It has about 450 employees.

Tenenbaum did not know how many passengers would be affected but said the company has flights scheduled through Sept. 2. All passengers affected by the shutdown are eligible for a full refund.

The airline said that all flights were to be completed Friday and that it plans to file Monday for Chapter 11 bankruptcy protection.

Skybus is pulling the plug less than two weeks after CEO Bill Diffenderffer resigned to pursue a book-writing career. He was succeeded by Hodge, the company’s chief financial officer for the past year.

Skybus has endured some bumps since it began flying May 22, 2007. Over two days during Christmas week, the airline canceled as many as a quarter of its flights because of problems with two of its planes. Recently, it has been dropping flights and destinations because of high fuel costs.

The announcement adds to a string of bad news for airlines, which have been hurt by a slowing economy, high fuel prices and maintenance concerns.