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But if history is any guide, many of you will not fly Skybus. And because you don't step up, Skybus will fail.
Here's how travelers typically ruin new low-cost airlines:
Travelers rejoice when a discounter arrives on the scene. They love it because the discounter usually sparks a fare war with the well-known major airline that serves their hometown.
But as fares drop, many travelers simply fly the major airline, taking advantage of its lower fares. Few fly the new discounter. Then, the discounter fails because of lack of business. And the major airline hikes its fares back up, hurting consumers.
A classic case: Years ago, AirTran began service to Pittsburgh, challenging US Airways on many routes. But over time, US Airways matched AirTran's low fares, and customers flocked to US Airways. AirTran has since withdrawn almost entirely from Pittsburgh.
Folks in Washington, D.C., witnessed this pattern when scrappy newcomer Independence Air challenged United on various routes, such as one to Burlington, Vt. That airline was forced to shut down within two years of challenging United on these routes.
Frontier, which charged relatively low rates without being a true discounter, also lost its battle against United when it challenged the dinosaur on its prized San Francisco to Denver route.
While other factors were involved in the above situations, the trend is fairly well-established. People don't support the low-fare airlines as much as they should. Southwest is a rare exception and it grew partly by avoiding competition with the major airlines during its early years.
Here's my plea: If you live where Skybus flies and you like the low fares it has brought to your area, then you owe this airline your business. Otherwise, you are partly to blame for high ticket prices.
Feel free to post a comment with your thoughts.
EARLIER: Skybus expands its routes and $10 fares.
ELSEWHERE: As much as we like Skybus, it's wrong to say that Portsmouth, Mass., is "near" Boston, says Jaunted.
Photo by the inimitable Jessie Barber, via Flickr.
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AirTran is a success story today at Pittsburgh International Airport.
AirTran was the first Low Cost Carrier (LCC) at Pittsburgh International Airport in 2000 when they faced aggressive competition from US Airways and minimal community support. At that time US Airways' largest hub was in Pittsburgh, the airline had more than 80 per cent market share and incredible customer loyalty. Despite cutting routes to popular US Airways destinations, Philadelphia and LaGuardia, AirTran continued here and held competitive pricing in several markets including Atlanta right up to the present day.
Today, US Airways has announced further cuts at PIT and is down to a 38 per cent market share. AirTran has added more flights and is the first LCC to step up and fill the gaps left by the last round of US Airways cuts.
AirTran Airways announced that it will be adding new daily flight service, beginning Feb. 14, 2008, between Pittsburgh International Airport and Southwest Florida International Airport in Ft. Myers. Also beginning the same day, the low-fare carrier will increase its service between Pittsburgh and Tampa to daily flights from Saturday-only and introduce daily flights between Pittsburgh and Ft. Lauderdale.
For Pittsburgh travelers, this is a guarantee that PIT will have service in major top markets.
There was a rather large section on AirTran in the LCC study Pittsburgh International Airport just did: http://www.flypittsburgh.com/PDF/Executive_Summary.pdf
or
http://www.flypittsburgh.com/PDF/PIT_LCC_FINAL_ENTIRE_DOCUMENT.pdf Page 7 of the PDF.
Posted By JoAnn Jenny on October 24, 2007, 5:02 PM
Dear JoAnn,
Thanks for taking the time to add those statistics to the debate. It's an impressive report!
And it helps to underline what I wrote: Customers have to support the low-cost carriers if they want them to survive in a tough fight against an entrenched airline.
Regards,
Sean
Blog editor
Posted By Blog Editor on October 24, 2007, 5:11 PM
I plead guilty as charged.
But I owe Independence Air... UAL's counter FlyI promotion was a sliding scale of awards based on round trips from DC area airports. 24 round trips and you got a Business Class round-the-world ticket. We went to New Zealand, Australia, Singapore, Egypt and Austria :-)
When FlyI started, I had real concerns about their business model, and they picked a bad time to start an airline. ACA was one of the better regional commuter operations. I felt really bad for the people who lost their jobs on what was probably a bad business decision.
dave
Posted By David Emery on October 25, 2007, 8:45 AM
Hi, Dave,
Lucky you to have taken that RTW trip! Sounds fantastic. I remember that promotion, too.
You may have some travel experiences from that trip that might qualify as a winning story or photograph for our magazine contests. Details at budgettravel.com/10
Regards,
Sean
Posted By Blog Editor on October 25, 2007, 9:17 AM
I appreciate the need to keep budget airlines in business, but I think you're blaming the victim! I can barely afford to travel, and I have to cut corners wherever I can...if a mainstream airline is cheaper, I'll go. I think we should more be looking at how to stop the big airlines from undercutting the competition.
Posted By Katy on October 26, 2007, 11:19 AM
Hi, Katy,
Thanks for your comment! Yes, I hemmed and hawed about that blog post. I wasn't sure if I was saying the right thing. Thanks for speaking your mind.
Regards,
Sean
Blog editor
Posted By Blog Editor on October 26, 2007, 11:21 AM
Katy, I think you're missing the point. By failing to support lower-cost carriers and running to save that 10 bucks for a flight, you're cutting off your nose to spite your face.
Sure, you save that 10 bucks now. But when the low-cost carrier goes belly-up and you're paying another 100 bucks each way, that 10 bucks sure isn't going so far.
Think ahead, the point of this is. Pay a bit more now to save a lot more later. Bet you can swing it.
Posted By Amanda on November 1, 2007, 9:46 PM
I will not fly a discount carrier if I do NOT like flying on a discount carrier simply to keep it in business. Lower fares are nice; comfort and mileage awards are nicER!
Posted By Pua Kealoha on November 5, 2007, 12:28 PM
I'd love to fly skybus; however, they canceled service to Washington state and left me hanging to find alternative flights. That does not qualify as promising.
Posted By Adrian Bohl on November 5, 2007, 12:55 PM
I could not agree more, Pua! I don't mind discounted prices, but I do mind the discounted customer service that often comes with them. I recently opted to fly with Delta Connects from Buffalo to New York to save some $$$ and my experience was not positive, we experienced 6-hour delays going both ways. That means I could have driven in less time than I spent at the airport (and I would have had more leg room in my compact).
Posted By Sarah on November 5, 2007, 1:04 PM
I fly out of RIC - and was happily taking Jet Blue on my weekly commute to NYC - even if it meant flying into an inconvient airport (JFV vs LGA); even when the price for USAir was cheaper. Comfort was much more important to me. However, starting this month they did away with the most convient business person flight out of JFK. You can now only go home from JFK to RIC before noon or at 10PM. I can survive on the USAir reginal jet if I can get home six hours earlier. I know several commuters that were on the same flights and have switched over to USAir or Delta.
Posted By Robin on November 5, 2007, 1:06 PM
And the major lines are HEAVILY subsidised by the taxpayers, whether they travel or not.
You also forgot about PeopleExpress in the 80's.
Posted By Jim Michalek on November 5, 2007, 1:19 PM
I haven't flown Skybus yet but have a flight scheduled for April 2008 from Columbus, OH, to Chicago, with my daughter. I'm looking forward to trying this new airline out. I was able to get the $10/each way fares...lucky me, I say!
Posted By Sue Dondelewski on November 5, 2007, 1:56 PM
This is total bunk. The marketplace is never "wrong." Companies must adapt to the marketplace, not the other way around. The big airlines want to preserve their place at the table in the various markets that they serve. When someone is undercutting them, the larger airline responds to the stimulus in that market. Customers then usually decide to fly the larger airline because they have more flight times, a more known track record, personnel that are used to dealing with a bag claim, rewards programs, etc. No one can be blamed for taking the known quantity over the new kid on the block when the price is the same. It would be different if this were generic veggies versus the name brand. You put your life in someone else's hands when you fly as those who remember the ValueJet crash in the Everglades can tell you. You don't take chances unless there is a real incentive. When the price difference isn't there, neither is the incentive.
I should probably add that this price matching effort by the big airline doesn't mean that the larger airline has been "overcharging" and now has to "right-size" its price. That means that they see the situation as temporary and a price cut is an easily implemented temporary fix that is less costly than the alternative. If the situation were to go long term, they would have to adapt with newer/more fuel efficient aircraft or layoffs or other more permanent measures and costly measures.
In short, the larger airline has done nothing wrong when they attempt to adapt to a competitor and the customer has done nothing wrong when they fly the established carrier on a similar priced flight. It's up to Skybus and those like them to be able to compete long-term once the price advantage is no longer theirs exclusively. With the capital required to start an airline, you would think that long term strategy would be taken into consideration. That's just business...not to mention common sense.
Posted By Donald Fincher on November 5, 2007, 4:17 PM
I think you miss an important point. Successful budget airlines can't just compete on price. The major airlines can lower prices with a click of the mouse. We lived in Central Europe for the past year and saw and flew on a lot of discount airlines. The successful ones avoided the spoke and hub routes of the majors but concentrated on direct flights to medium sized cities where the majors were not serving with direct flights. If you want to go from Bratislava, Slovakia to Girona, Spain, take RyanAir. If you want to go from Sofia, Bulgaria to Dublin, Ireland, take SkyEurope. It is the convenience of the direct flights which makes the budget airlines so successful in Europe. The major airlines, which are so wed to the hub and spoke routes, can't or won't match this. SkyBus is doing some of this, with flights nonstop from Greenville, NC to Hartford, Conn.
Posted By Chuck Routh on November 5, 2007, 6:45 PM
Good comment Chuck. This is a real life example of what I was talking about when I said the discounters need to be able to compete long-term once the price advantage is no longer exclusive to them.
Posted By Donald Fincher on November 5, 2007, 11:05 PM
Skybus recently announced they are pulling out of Bellingham, WA (or "Seattle/Vancouver" despite being at least an hour or more from each).
Bellingham Herald story: "Airline spokesman Bob Tenenbaum said the end of service here has nothing to do with Bellingham and everything to do with the price of jet fuel."
'The price of fuel definitely is the thing that pushed it over the edge,' Tenenbaum said. 'Its not something anybody anticipated. The passenger loads have been excellent.'
Then, within a week or two, Skybus announced service between Greensboro and Los Angeles.
So, we have an airline that didn't anticipate that jet fuel could go up in price, cancels a route that is doing just fine in passenger loads, then starts up another similar-length route within two weeks. Are these people calculating and evil, or just incompetent?
Posted By richbham on November 5, 2007, 11:15 PM
Plan ahead? I'm not arguing that choosing the bigger airline means less budget carriers - you're right. But some of us want to travel when we can find the time, not save for five more years to be able to afford to snub a big airline. Sure, in 10 years I'll have made enough to make those choices, without skipping vacations, but in the first few years out of school there's no way I can afford it.
Posted By Katy on November 7, 2007, 11:53 AM
You are right that people do tend to fly with carriers they know rather than the upstarts. Too bad.
I just flew with Frontier on the San Franciso-to-Denver route mentioned in the article. Even though Frontier was the cost leader I was initially reluctant to book with them, but after checking seat pitch on Seatguru.com I opted for Frontier's 33" of legroom in coach. I'm pleased to say it was a great experience. Ditto my last trip on Jet Blue. The new carriers seem to actually appreciate customers, not just tolerate us!
Posted By Jeff on November 9, 2007, 1:49 AM
The same thing happened in may home town, and it's extremely frustrating. We had a low cost carrier introduce a direct flight to London, UK after the local major carrier canceled their direct flight. After realizing there was new competition, however, the major airline re-established their direct flight. Nobody flew the discount carrier anymore as the fares were slightly cheaper with the major carrier, so they stopped their flights altogether. But, and this is the kicker, as soon as the discount carrier had gone out of business, the major airline canceled their direct flight again! So now we have to fly four hours in the wrong direction before even going to London. It's an unfortunate situation.
Posted By Jackie on November 13, 2007, 3:56 PM