BY KEITH BENMAN, Times of Northwest Indiana
kbenman@nwitimes.com
Skybus Airlines, which started flying to Gary a few weeks ago, has ceased all operations nationwide.
The last flight out of Gary departed at 8:04 p.m. Friday, the second of two regularly scheduled daily flights between Gary/Chicago International Airport and Greensboro, N.C.
INTERACTIVE: Learn about Skybus' short life in Gary.
The Skybus' flop came just one day after another low-cost carrier, ATA Airlines, declared bankruptcy, stranding 10,000 travelers nationwide.
"I think that unless they have a significant amount of cash, airlines just can't survive with fuel costs as high as they are," said Gary airport director Chris Curry on Friday night. "If it continues at this rate, the whole industry will crash."
Skybus is advising passengers holding reservations for Skybus flights scheduled to depart on or after today to contact their credit card companies for refunds. Passengers who purchased trip insurance can submit claims.
The airline itself is not making the refunds, according to Skybus spokesman Bob Tenenbaum. It will file for bankruptcy protection under Chapter 11 on Monday.
"Skybus struggled to overcome the combination of rising jet fuel costs and a slowing economic environment," said Skybus CEO Michael Hodge in a news release. "These two issues proved to be insurmountable for a new carrier."
Jet fuel prices have increased 75 percent since a year ago, battering low-cost and mainline carriers like United and Delta. Both those carriers recently announced dramatic cuts in service.
Skybus flew 80 daily flights to 15 cities around the United States. It employed 450 people. It attempted to mimic European ultra-low fare carrier RyanAir with a no-frills approach and fares as low as $10.
Skybus was backed by $160 million in capital from Wall Street firms and prominent Columbus, Ohio, businesses, where it operated its hub. It began flying from Columbus last May.
Skybus flew into Gary for just 23 days. The last airline to fly regularly scheduled flights there was SkyValue, which flew for just five months before going belly up last May.
In recent years, Hooters Air and Southeast Airlines also flew out of Gary. Both of those also failed.
The Gary airport will continue to try to recruit commercial air service, despite the current challenging conditions, Curry said.
VivaAerobus, a low-cost Mexican carrier, has applied to the U.S. Department of Transportation to begin daily flights between Monterey, Mexico, and Gary. It wants to start the flights by September.
With the start of Skybus flights, the airport began collecting fees for parking for the first time. It has ordered an automated parking system which will cost the airport about $400,000.
Curry said that system is not specifically for Skybus, and it can be used when other airlines begin service to Gary.