Columbus is host to the National Hockey League All Star game this week-end. The NHL showcase will bring thousands fans and visitors to the city as well as international media attention.
Skybus Bankruptcy: Millions in Debt
Listen to the Story
Bankruptcy papers for Skybus Airlines show hundreds of companies are owed into the millions of dollars. The low-cost carrier filed papers in U.S. Bankruptcy Court in Delaware Saturday night.
About the only thing left unattended at Port Columbus Monday was the Skybus ticket counter. There were no service agents, only handouts with flight times to Skybus destinations aboard other carriers. Rich Savage says he bought tickets to Wilmington, Del., three days before the carrier’s Saturday shut down.
“Certainly you should have been aware that there were some issues going on and suspended all new flights or at the least finish out your schedule and then cease operations, give the people a heads-up,” Savage says. “So I feel very ripped off right now.”
Bankruptcy filings indicate Skybus owes World Fuel Management in Chicago $ 8 1/2 million; it owes almost $2 million to Airbus North America. The bankruptcy court has ordered the company to pay employee wages, benefits and taxes which could total more than $1 million.
But what about taxpayers? Skybus was told it would receive $57 million in incentives to get it off the ground. But Director of Development for the City of Columbus, Boyce Safford, III, says taxpayers have not lost anything. <br.
“We committed to them last year approximately $14 million in incentives to help them get started.”
“How much has been paid out and how much has not been paid out?”
“Nothing has been paid out to date,” Safford says. “Most of the incentives were job related. They did create about 350 jobs. This year, 2008, was supposed to be the beginning of that incentive but this event happened and we haven’t paid out a dime to date.”
The airline filed for chapter eleven bankruptcy which allows for possible reorganization. But Columbus Airport Authority vice president David Whitaker believes the airline is gone. Skybus still owes $200,000 to the authority. The authority spent $11 million to renovate a portion of the Port Columbus terminal to accommodate the leased Skybus fleet. Monday, Whitaker was looking on the bright side.
“We believe that space is reusable over time. But right now they still belong to SkyBus,” Whitaker says. “They file Chapter 11, they’ll still be protected on that space as well so we’ll have to work through the issue of their bankruptcy and how they proceed from there. After that point when the facility is returned to us we see a reuse for them.”
Skybus might have been a challenge for other higher fare airlines during its 10 month run. Jet Blue for example, pulled out of the Columbus market in January. But like the other airlines, Skybus had been hurt by rising fuel prices and a softening economy. That’s one reason David Whitaker says he does not see other carriers picking up the passengers that Skybus has left behind.
“I don’t anticipate a spike in new service any time soon given the aforementioned industry conditions,” Whitaker says. “The remaining ten carriers will add slowly as the market allows.”