Another carrier halts service

The third small airline in a week shut down Friday as Skybus Airlines, a carrier that offered $10 fares from Burbank to Columbus, Ohio, called it quits.

All three carriers -- Skybus, ATA Airlines Inc. and Aloha Airgroup Inc., parent of Aloha Airlines -- blamed high fuel costs and the slowing economy for their demise.

Friday’s announcement culminated one of the more tumultuous weeks for the airline industry in recent times. Skybus said it was canceling all scheduled flights after the arrival of the last plane into its home airport in Columbus shortly after midnight Saturday morning.

The airline operated two flights a day from Burbank, nonstop service to Columbus and to Greensboro, N.C. Those flights were completed Friday, an airline spokesman said. Skybus began operating in May 2007, and as of Friday it was operating 11 aircraft making 80 daily flights to and from 15 cities around the U.S.

Passengers holding reservations for future flights were told that they should contact their credit card companies to arrange for a refund. The company said more information for customers would be made available on its website at www.skybus.com.

The airline created a major buzz last year for offering $10 fares for the first 10 passengers who bought tickets on a flight. Dubbed an “ultra low-cost” airline, Skybus had hoped to appeal to travelers who were willing to pay extra for meals, pillows and other amenities in exchange for lower fares.

Taking low cost to the extremes, the airline also charged for checking baggage, for drinks and for priority seating.

The company said it was sorry. “We deeply regret this decision, and the impact this will have on our employees and their families, our customers, our vendors and other partners, and the communities in which we have been operating,” the airline’s chief executive, Michael Hodges, said in a statement.

“Skybus struggled to overcome the combination of rising jet fuel costs and a slowing economic environment,” he said. “These two issues proved to be insurmountable for a new carrier.”

The grounding of Skybus came as Hawaii-bound travelers were still reeling from the collapse of ATA and Aloha, which stranded thousands of passengers at Los Angeles International Airport and across the country.

In Honolulu, the Hawaii Tourism Authority said it was going to pay for charter flights to help an estimated 9,000 mainland-bound tourists stranded on the islands.

Still, analysts contend that the string of airline failures in the last week is probably not a harbinger of a general industry collapse and that major carriers are expected to survive the financial storm.

Fuel costs and concerns that the slowing economy could damp air travel have led major carriers to cut back on flights and retire older, less fuel efficient planes.

US Airways Group Inc. said Friday it would cut capacity as much as 4%, joining three other major U.S. carriers making similar moves in response to high fuel prices.

“While demand has remained strong, given high fuel prices we are taking proactive steps,” US Airways President Scott Kirby told Bloomberg News.

Aviation industry analyst James M. Higgins said, “They all need to pull down capacity to lower costs, and many of them have been very prudent in doing so.”

Higgins, an analyst at Soleil Securities Corp. in Solebury, Pa., said higher ticket prices might loom. “They may be able to raise ticket prices later in the year,” he said, because there will be fewer seats available.

Skybus has about 450 employees -- 350 based in Columbus and the remainder in North Carolina. Employees were asked to report to work Monday to retrieve their belongings.

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peter.pae@latimes.com