More analyst reaction to Skybus flight cuts at PTIA, from the Biz Journal:
More tough decisions may be ahead, analysts say. Skybus’ third-quarter 2007 filings with the Department of Transportation (DOT) showed per unit revenue was 5.5 cents, compared with 9.9 cents in expenses, and the load factor — or how full planes were — was 70 percent.
With the first 10 to 20 seats going for $10, that pulls the realistic load factor down to more like 55 to 60 percent, said Michael Boyd, president of The Boyd Group, an aviation research and consulting firm in Evergreen, Colo.
To become profitable, he said, “that’s a huge gap to fill when you’re filling 70 percent of your seats.”
“You’d love to see it work, but it’s not working,” said Boyd said, adding that if Skybus sticks with its business model, it risks plunging into bankruptcy. “Skybus is at that crossroads.”
