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Goodbye Skybus!

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Skybus shuts down, cancels all flightsFriday, April 4, 2008 8:20 PMBy Marla Matzer RoseTHE COLUMBUS DISPATCHhttp://www.dispatch.com/live/content...4/skybust.htmlSkybus Airlines, a Columbus carrier that excited central Ohio travelers with its $10 fares, is calling it quits.The news came quickly today, with the airline announcing at 9:30 p.m. that it will no longer be in business Saturday.After today, all flights are canceled.Those holding tickets for future flights are advised to contact their credit card companies about obtaining refunds.Skybus is not providing alternate transportation. Those who purchased trip insurance within the last month should make any claims through the Skybus insurance provider, AIG TravelGuard. The policy that went into effect in early March covers airline-caused cancellations; the previous policy did not.As of today, Skybus was making 80 daily flights to 15 cities around the U.S. It made its first flight from its home base at Port Columbus on May 22 of last year and opened a second base in Greensboro, N.C. in January.Skybus has approximately 450 employees. Of those, 350 are based in Columbus, with the remainder in Greensboro.

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For some reason I'm vaguely reminded of the "Crazy Eddie" bust-out scheme of 25 years ago. His prices also were unbelievably low.I'm waiting for the other shoe to drop.

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$10 dollar fares... That's the price of a taxi to go a few blocks!

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which says more about the extortionate prices for taxi rides than the prices for airline tickets, but it's indeed extremely low (unless like most airlines there's one seat per X flights at that rate and everyone else pays a lot more).

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That makes Aloha, ATA, and Skybus--all in one week.Maybe Frontier, Spirit and AirTran next week?And all the experts said don't fret $100/bbl oil.Bob ScottATP IMEL Gulfstream II-III-IV-VSantiago de Chile

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fullstoplanding,Re waiting for the other shoe to drop, herewith the text of a post I made on a different site earlier today ...Folks,As I mentioned on another site, I sense the possibility of a "bust out" scheme here, perhaps similar to the Crazy Eddie bust-out of the early 80s, perhaps something different, perhaps nothing at all. I'm not accusing Skybus of wrongdoing, I'm just saying that I agree with the notion that the business plan was ridiculous on its face, in my opinion. I don't need to read the plan to know that ten dollar airfares cannot, in my opinion, be made to work, and I wonder what the motive was for starting such a business.xxxxxxxxxxxxxxxxxxxxxxxxxxAnyway, here's what to do if you want to run one kind of hypothetical scam, which I do not recommend. I'm describing it only because, in my opinion, there might be some journalistic value in understanding what the possibilities are ...If you were to use proxies to pump the stock of a business whose prices were ridiculously low, and if you then use those same proxies to distribute their pump-motivated stock purchases to enthusiastic buyers, and if the proxies then sell short a bunch more stock, and the owners or managers or employees then let the business tank, then in my opinion somebody might stand to make a great deal of money.Of course to bring off this kind of market manipulation scheme you would, in my opinion, have to evade the scrutiny of the SEC. This might be easy or it might be difficult. If difficult, there might be ways of getting people to close their eyes, in my opinion.xxxxxxxxxxxxxxxxxxxxxxxxxxAgain, no accusations against Skybus, but $10 airfares seem ridiculous on their face, in my opinion, and the issues usually are "who benefits", and "how". So while I don't have the answers, I certainly do have questions.

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Mike, you just described almost perfectly the way hedgefunds work, and do it all well within the rules of the SEC and its counterparts abroad...

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jwenting,You're right about hedge funds. The rule is "Don't get caught", exactly the rule taught at the Harvard Business School.And did you notice in the news the other day that the investigation into whether deliberate short selling is what tanked Bear Stearns has been called off?I wonder why. (And, trust me, I am not a conspiracy theorist.)

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I doubt it's a conspiracy. While aviation certainly has it's fair share of crooks and grifters at all levels, I'm more inclined to see Skybus as the result of poor management combined with cut-throat competition.Bryan

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