Airport moves on after Skybus folds

[thelakelander]

Jacksonville Business Journal - by Dave Strupp Staff Writer

ST. AUGUSTINE -- In the slipstream of Skybus Airlines Inc. ceasing operations and filing for Chapter 11 bankruptcy, the St. Augustine-St. Johns County Airport Authority is considering its options for the terminal that Skybus used.

The startup airline ceased operations April 5, shutting down all future flights and filing for Chapter 11 bankruptcy April 7. The company announced April 4 that it would no longer be able to operate because of rising jet fuel costs and a slowing economy.

"Our financial condition is such that our board of directors felt it had no choice but to cease operations," the company said on its Web site.

Skybus was the first commercial airline to service the St. Augustine airport. The airline approached airport officials in 2006 about flying into Northeast Florida and eventually came forward with a plan for the airport, said authority Executive Director Ed Weullner.

The authority built a 12,000-square-foot temporary terminal and added other infrastructure to make way for the airline, a total investment of about $2.3 million, which the authority split with the Florida Department of Transportation, Weullner said.

The authority planned to pay back its share of the cost in about two years of Skybus' operation through a passenger facility fee.

The authority made about $4 per passenger on Skybus through the fee, and it estimated about 200,000 passengers annually, which would bring in about $800,000 per year.

The terminal used by Skybus at the St. Augustine airport was designed to allow multiple carriers to use it at different times. The airport authority has been in discussions with several unnamed carriers that have shown interest in providing service to the airport, Weullner said.

With Skybus out of the picture, the future of the terminal is undecided, but the authority is not out of options. Its design allows the terminal to be used as an airplane hangar, which the authority could decide to rent out if needed.

"We knew we were dealing with a startup carrier," Weullner said. "We can convert that building into a hangar and rent it out, which was always one of our backup plans."

The St. Augustine, Ponte Vedra and the Beaches Visitors and Convention Bureau hoped to attract visitors from the north through more Skybus connections. Several convention and visitors bureaus from other cities on the Skybus route recently visited St. Augustine and met with the St. Augustine VCB to tour the area.

"Tourism is going to be the biggest part hit" from the Skybus closure, said Nick Sacia, executive director of the St. Johns County Chamber of Commerce Economic Development Council.

"I think Skybus had more effect on our community than we initially realized. And now we could likely see the results of their demise, not just at the airport level but through other layers of the economy."

Skybus first took to the skies last May, servicing eight initial destinations from the company's home base of Columbus, Ohio. To keep overhead low and ticket prices about half that of other airlines, Skybus relied on its business model of flying into less-congested secondary airports, offering no frills for passengers, cutting down on overnight stays in other cities for its flight crews and charging for checked luggage.

But some in the industry claim they could see too many flaws in Skybus' business model for the company to thrive.

That business plan "guaranteed failure," said Michael Boyd, president of The Boyd Group Inc. in Denver, an aviation consulting group.

"The first 20 seats were basically given away. There's no way you can make money doing that. Alternative business models don't work now."

The airline began servicing St. Augustine last July with direct flights to Columbus and had since added a second daily flight to Columbus and service from St. Augustine to Portsmouth, N.H.; Greensboro, N.C.; Richmond, Va.; and Chicopee, Mass.

Adding flights
Before Skybus' announcement April 4, officials at the St. Augustine airport were expecting at least one or two more flights by the end of 2008. While Skybus was cutting flights in other cities, it began adding flights to St. Augustine.

Extra parking lots were added for Skybus passengers to use, initially free of charge, but recently costing $1 per hour for up to $5 per day.

Contracts betwen rental car companies The Hertz Corp., Avis Rent A Car System LLC and Enterprise Rent-A-Car Co. and the airport were not affected, but a contract with a potential fourth unnamed company will be put on hold for the time being and kept on the shelf for possible future plans, Weullner said.

The daily operation of the terminal was outsourced to fixed-base operators Galaxy Aviation, since Skybus did not have staff at its airport terminals.

http://jacksonville.bizjournals.com/jacksonville/stories/2008/04/14/story3.html?b=1208145600^1617817

[Jason]

I wonder who else they may be courting?

[Steve]

I don't really see much commercial happening here, unless congestion gets REALLY bad at JAX.  I also question whether or not it is needes, or if it hurts to spread the commercial out.  With more flights, JAX may be able to offer more services.

[Jason]

Looks like the ariport is still eager for more carriers.  These are no SkyBus but they could be successful.

Airport lands 2 new airlines

Contracts get initial OK

By PETER GUINTA   |   More by this reporter  |  peter.guinta@staugustine.com   |   Posted: Tuesday, May 20, 2008 ; Updated: 12:41 AM on Tuesday, May 20, 2008

The St. Augustine Airport Authority -- perhaps hoping to exorcize the lingering ghost of the now-defunct Skybus -- on Monday unanimously approved preliminary contracts with two new airlines that want to come to St. Johns County.

Ed Wuellner, the Airport Authority's executive director, said the larger of the pair is Casino Direct Air, which wants to fly 130-seat Airbus A319s or an equivalent aircraft to Gulfport, Miss., three times a week.

The company will begin operations here June 20, Wuellner said.

"Casino Direct may in time be interested in increasing their level of service to other cities," he said.

Gulfport is a picturesque beach front city of 70,000 on the Gulf of Mexico that features beaches and casinos.

The smaller airline wanting to come here is Craig Air Center, which will fly its 19-seat aircraft to Marsh Harbour, Bahamas, three to four times a week.

They begin operations June 7.

Casino Direct passengers depart at no charge. But passengers leaving on Craig Air must pay a $10 emplanement fee to help cover the cost of a new U.S. Customs office opening soon at the airport.

The Airport Authority plans to make money on these deals from parking fees, rental cars, fuel sales and from a small federal fee paid to the airport per passenger.

Michael Slingluff of Galaxy Air, the airport's fixed base operator, told the board that it should review the business plans of both companies before agreeing to bring them in.

"We jumped in bed with Skybus and nine months later found that they didn't factor in rising fuel prices," he said.

Wuellner said that the airport needs 10,000 emplanements per year to continue receiving the federal grants, but that for 2008, there have already been 30,000 from the time when Skybus was operating.

Doug Burnett, the Airport Authority's attorney, said the agreements with both airlines are three years long, but either side could get out of the contract with six months notice.

Wuellner said, "There's no financial commitment to them on our part at all."

Each will fly in during the middle of the day,

Board member Wayne George asked for a "no nighttime flights" clause in the contract, and that was approved.

A few weeks ago, after Skybus tanked, Wuellner asked if there should be any changes in the way the board wanted to structure agreements with new airlines.

"But the board was determined to keep the same structure," he said.

Board member Jack Gorman said that the board voted to allow Wuellner to seek new airlines.

"We've got to take these (agreements) as a business generator, a business risk," Gorman said.

Board member Randy Brunson said, "We want to make sure these people will stay in business."

But board member Kelly Barrera moved to approve, saying, "Our risk is almost nil."

Wuellner said he would do his best to check the financial soundness of both commuter airlines.

"No one wants a black eye less than I do," he said.

Source: http://staugustine.com/stories/052008/news_052008_050.shtml

[Ocklawaha]

30,000 in the first quarter of 08... As I predicted in JACKSONVILLE TRANSIT, St. Augustine is on the move UP - UP and AWAY !

http://jacksonvilletransit.blogspot.com/search/label/St.%20Augustine%20Airport%20Authority

The "airport that uses it's brains!" Scott Clem, if you were in on this planning, take a bow on us!

Ocklawaha