Discount Airline Redux: Skybus Founder Creates New Airline

By Kate Gardiner in News on May 27, 2009 5:00PM

There may only be one plane in the fleet, but new airline start-up Jet America jump passengers between inconvenient regional hotspots starting July 13. According to the Chicago Tribune, Jet America is modeled after the British airline Ryan Air, which provides cheap flights on a sliding scale all over Europe. According to its press release, the airline will offer 34 flights per week on its full-sized jet, a Boeing 737-800. The first 9 seats will go for $9 starting today; cities served include Lansing, Mich.; Melbourne-Vero Beach, Fla.; South Bend, Ind.; Toledo, Ohio and New York-Newark, N.J.

In the US, the model has been tried at least three times before: the failed Skybus project, which involved Jet America founder John Weikle and Hawaii's go! airlines, which has successfully driven prices for inter-island flights down by as much as $80, and was partially blamed for the collapse of the much larger Aloha Airlines last spring. Allegiant Airlines, which flies from local airports to tourist destinations, is probably the largest direct competitor with the new brand, though it flies a variety of smaller planes and has traditional, set prices. While the Jet America model is currently limited by its fleet and schedule, a low-cost carrier could be viable in an economic recession plagued by the cost of oil.

According to the Tribune article, aviation market researchers said Weikle's model has potential,

"His timing is actually pretty good," said Vaughn Cordle, a former airline pilot turned market researcher, who thinks the uptick in consumer confidence points to an airline industry rebound in 2010. "Unfortunately, airlines serving those small markets very rarely make it. He will not get economies of scale or scope."

Locally-based United Airlines responded to the threat, telling the Tribune, "We are Chicago's hometown airline and will compete aggressively with competitive fares, better service and more convenient flight options," said Robin Urbanski, a United spokeswoman."