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The Honolulu Advertiser
Posted on: Sunday, June 3, 2007

Low-cost, no-frills flights taking off on Mainland

By Peter Pae
Los Angeles Times

LOS ANGELES — How low can airfares go?

Try $10 for a one-way ticket from Burbank to Columbus, Ohio. Or $9 from Los Angeles International Airport to Fort Lauderdale, Fla. Better yet, there is a 1-cent fare for flights from LAX to Guatemala.

Yes, those are actual fares offered by a new generation of carriers that are redefining budget travel by taking "low-cost, no-frills" service to new heights.

Such as $15 for a pillow. Or two bucks for water. Don't want a middle seat? You can pay $10 and jump ahead of the line to board a Skybus Airlines plane.

And the flight attendants are paid partly on commission based on in-flight sales.

"It's the extreme example of a la carte flying," said Michael Boyd, an airline industry consultant.

Even so, flights on these cheapie airlines, now officially dubbed ultra-low-cost carriers, can be a bargain and quite a trip even if you missed out on grabbing one of the limited number of $10 teaser fares.

"The seats were comfortable, and the flight went pretty well," said Allyx Kronenberg, a Santa Monica resident who paid $105 last week for her roundtrip ticket on a Skybus flight from Burbank to Columbus. "But you do have to pay for everything."

These flights have been around Europe for several years, but they are now making a splash in the U.S.

Skybus offers 10 seats on every flight for $10, with the vast majority of fares ranging from $50 to $175 one way. That's about half the cost — or less — of other airlines flying to Columbus.

Spirit Airlines, which flies out of LAX, has promotional fares that range from 1 cent to $24, including the $9 tickets to Fort Lauderdale and Detroit.

FLY, DRIVE

The Skybus fares were so much cheaper than other carriers' that Shahla Salamat decided to fly her family to Columbus and then drive eight hours to Atlanta for her cousin's wedding during Memorial Day weekend.

Renting a car and driving that distance with her sister and three young sons was worth the estimated $2,000 savings, the Chino Hills resident said.

"It's kind of crazy, I know," Salamat said, explaining how she chose the $200-roundtrip fares on Skybus.

The cheapest alternative she could find from Los Angeles to Atlanta was $600.

"But when you think about the savings," she said, "it doesn't sound too bad."

The savings were so substantial for the Salamats that they didn't mind paying $2 for bottled water.

Passengers are not allowed to bring food or beverages onto the plane. Besides, Skybus had warned them ahead of time on the company's reservations Web site: "No, the drinks aren't free. Give us a break — some of you paid $10 for your seat."

Skybus says it will gradually expand its network to such places as Oakland and Seattle as it gets new Airbus A319 planes, which are on order. The airline hopes to be profitable within a year, even with its rock-bottom fares.

"We don't think the same way as everybody else," said Bill Diffenderffer, Skybus' chief executive and former attorney for now-defunct Eastern Airlines. "... What makes passengers happy is having low fares and on-time, nonstop flights to their destinations. They don't need all that free stuff."

In many ways, Skybus doesn't seem much different from Ryanair, an Irish carrier that offers dirt-cheap fares with virtually no amenities or service. It is now the largest European airline.

Diffenderffer said Skybus initially considered modeling itself after Ryanair and U.S. low-cost behemoth Southwest Airlines. But then it decided to start from "scratch and try to improve on everything."

To generate additional revenue, it will allow a company to paint a logo on its planes for $500,000.

To keep costs down, the airline doesn't have a telephone service center. Everything, from booking a flight to changing or canceling a reservation, must be done on its Web site.

LOW LABOR COSTS

The airline flies only to secondary, less-crowded airports that have lower fees and can turn Skybus planes around in less than 25 minutes. Major carriers typically have their planes at the gate for about 45 minutes to an hour. The longer the plane stays on the ground, the less passenger revenue it generates.

Skybus also flies new, fuel-efficient Airbus planes, which keep maintenance and operation costs down. Its labor costs are among the lowest in the industry. It has one of the lowest hourly rates for flight attendants, but they get a 10 percent commission on what they sell on the plane.

With the commission and stock options, the overall compensation is higher than competitors', Skybus said.

"The result is that we have a cost structure that is so much lower than anyone else," Diffenderffer said. "That's why we can have fares that are half as low and make money."

Airline consultant Boyd said he was skeptical that the airline could survive, contending that low-cost carriers such as Southwest are going the other way by beefing up service and amenities.

"Once you start nickel-and-diming things and having flight attendants hawking food, passengers might not want to try it again," Boyd said. "It's novel, but most pipe dreams are."

Moreover, the eye-popping fares often have caveats that could create ill will. For instance, the 1-cent deal from LAX to Guatemala on Spirit Airlines was available only on certain days and didn't include taxes that totaled $84.70.

A flight to Guatemala recently was available for 1 cent, but the return 1-cent fare was sold out. The next-best fare was $109.50. In the end, the total roundtrip fare was about $200, or about half the prevailing fares at other airlines.