In today’s N&R Ideas section, JLF’s Michael Lowrey takes a closer look at the Skybus deal:
For business travelers, time is a very valuable commodity — and Skybus just isn’t the answer. In fact, it doesn’t even pretend to be the answer.
PTI also will not serve as a hub — that is as a connecting point — for Skybus, as the airlines’ business model focuses solely on point-to-point travel. In fact, it doesn’t do connections at all. Sorry, Punta Gorda-to-Portsmouth flyers.
With oil at or near an all-time high, and a growing fleet of new planes to pay for, it remains to be seen if Skybus can prosper — or even survive.
Meanwhile, a former pilot wonders what might have been for Eastwind Airlines with a nice incentives package and a cheerleading local media, while the Journal’s Richard Craver reminds us what happened to Piedmont Airlines:
Growing, however, required capital, which Piedmont received in December 1981 when Norfolk and Western Railway, now Norfolk Southern Corp., bought 20 percent of the airline’s stock and became its largest shareholder.
The infusion of capital enabled Piedmont to open hubs in Charlotte; Dayton, Ohio; Baltimore;and Syracuse, N.Y.; and to buy two airlines, begin a Florida shuttle service, and fly its first trans-Atlantic route.
Norfolk Southern liked Piedmont’s performance so much that when it became eligible to buy a bigger stake in the airline in January 1987, it made an offer of $65 a share in cash for the entire company.
USAir, now known as US Airways, realized that Piedmont would become a stronger East Coast rival with Norfolk Southern behind it, and made a counteroffer to Piedmont’s board. Gordon Bethune, a senior vice president of operations for Piedmont, said Norfolk Southern’s board decided that it would rather be “a seller at $69 than a buyer at $65.”
…..Part of the Piedmont mystique is that many former employees are convinced that it could have thrived independently in a deregulated industry that sent many legacy airlines into bankruptcy. Morten Beyer, an aviation consultant in Arlington, Va., said that Piedmont could have bought another airline or two “to take on enough debt to make its share price too overpriced to swallow.”
But Bethune said that it was unlikely Piedmont would have remained independent. “If Piedmont’s management hadn’t agreed to the USAir deal, it likely could have made another piss-poor deal,” he said.
