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Bite-size Case Study

Skybus Airlines: the spectacular failure of an excellent idea

Published on August 31, 2017 Originally recorded 2011   11 min
0:04
The airline industry may well be the worst possible industry in which to start a new firm. Plagued by high fixed costs, low profit margins, and fierce competition, these factors have created a poor environment for startups. In fact, the airline industry was deregulated in 1978 and since then, over 150 new entrants have failed. Why would SkyBus enter such a competitive industry? Because despite the perception that the airline industry was one of the toughest to enter, SkyBus believe that a window of opportunity was open for a new airline that offered low fares without frills. Taking advantage of American West Airlines pulling down its Columbus Ohio hub, SkyBus's founders started raising capital to start the airline. Together, we will walk through an analysis of SkyBus Airlines, as it enters this very competitive industry.
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Skybus Airlines: the spectacular failure of an excellent idea

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