By Nancy Kercheval

April 5 (Bloomberg) -- Skybus Airlines Inc., a U.S. low- fare carrier that started operations less than a year ago, stopped service today, the third airline to shut down this week as fuel costs soared and the economy slowed.

The closely held, Columbus, Ohio-based airline began offering service May 22 with some tickets as low as $10 for a four-hour flight. It will seek bankruptcy protection next week.

Aloha Airgroup Inc., a closely held Hawaiian airline that filed for bankruptcy protection, ended service April 1 when it couldn't find a buyer or financing to stay in business. ATA Airlines Inc., a Midwest carrier based in Indianapolis, shut down the following day when it sought bankruptcy protection, blaming its demise on high fuel prices and the loss of a contract for military charter flights.

``Nobody has a long-term viable business plan that can be sustained at these jet-fuel prices,'' said Darryl Jenkins, an airline consultant. ``This is a killer category. We're probably going to see some more casualties out there.''

About 90 percent of airline routes probably aren't profitable, Jenkins said. ``What do you do in a situation like that?''

Jet fuel has increased 62 percent in the past year, including a 3.7 percent rise to almost $3.20 per gallon this week, according to the International Air Transport Association, a trade group representing 240 airlines. The typical Airbus A319 flown by Skybus pilots carries 6,300 gallons of fuel.

``Skybus struggled to overcome the combination of rising jet fuel costs and a slowing economic environment,'' the company said. ``These two issues proved to be insurmountable for a new carrier.''

Skybus operated a fleet of 11 Airbus jetliners and served 15 cities.

The company will file for Chapter 11 bankruptcy in U.S. Bankruptcy Court in Delaware on April 7, Skybus spokesman Bob Tenenbaum said.

``This is a shutdown,'' he said. ``All of (the aircraft) will end up in the bankruptcy proceeding.''

Passengers were urged to contact their credit-card companies to arrange for refunds for any flights scheduled after April 4.

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(And Locally here...)
By Nick Smith, nsmith@advertiser-tribune.com

FOSTORIA — Rumors about the possible closing and relocation of Fostoria’s ThyssenKrupp crankshaft machining plant became reality Friday afternoon.

News of the closing and relocation, set to be completed by Dec. 1, 2009, was handed down shortly before 3 p.m. Friday to top executives at the Fostoria plant and employees and in a conference call with Mayor John Davoli and Fostoria Economic Development Corp. Executive Director Jim Bischof.

The closing affects all 359 employees at ThyssenKrupp Crankshaft Co. LLC Fostoria Machining, 901 S. US 23.

For Davoli, the news was a shock.

“The thought of ThyssenKrupp and Honeywell (closing) is always in the back of my mind, and we try to keep tabs on what’s going on with them. This was probably the saddest call I’ve ever received as mayor and probably about the saddest day I’ve ever had as mayor,” Davoli said.

Davoli said he received word at about 10 a.m. that corporate officials from ThyssenKrupp wanted a conference call with him and Bischof in the afternoon.

“I knew then the news probably wasn’t good at all,” Davoli said.

The plan, according to a press release Friday from ThyssenKrupp, is to consolidate the machining plants in Fostoria and Danville, Ill., into a single facility in Danville.

The closing of the Fostoria plant and relocation of operations to Danville will be completed by Dec. 1, 2009, the company said.

Davoli said rumors about the possibility of the plant closing had been out there for awhile, and especially after the company announced a $40 million expansion to its Danville facility in October.

“From what I understand, fuel prices have escalated to the point where it’s too expensive to transport and operate between the two plants. Apparently some ThyssenKrupp executive in Dusseldorf, Germany, decided to close us down,” Davoli said.

Christian Koenig, a public and government affairs spokesman for ThyssenKrupp USA, said the decision to consolidate operations in Danville was made in March. He said the decision was made based on the fact that the forging operations were already based in Danville and the issue of cost regarding transport of materials between the two locations.

“That’s 300 miles of transport between the two locations for materials and corporate employees shuttling back and forth. This is being done to remain competitive as the entire auto industry is intensely competitive in these times,” Koenig said.

Koenig said the closing and relocation is set to take place over a longer period so it can be done as gradually and as carefully as possible. Koenig also said there have been a few conversations about the possibility of relocating some Fostoria workers to Danville.

“It’s still subject to further discussion and way too early to determine that, however,” Koenig said.

Davoli said the news is devastating to the city and will have an impact not only on the employees and their families but the entire community.

“This is a big thing for the city and my heart goes out first and foremost to all of the families affected by this,” Davoli said.

Davoli said now that the rumors have become fact, the city will have over a year to do the best it can to market the soon-to-be vacant building and its workers.

“This came down to the forging plant being there and not here; otherwise, we might be the ones celebrating and they would be sad in Danville. But we’re a very resilient city and we’re gonna make it through this,” Davoli said.

ThyssenKrupp previously was known as Atlas Crankshaft. ThyssenKrupp purchased Atlas in late 1999.

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(From the New York Times)
The unemployment rate ticked up to 5.1 percent from 4.8 percent, its highest level since the aftermath of Hurricane Katrina in September 2005. More Americans looked for work than in February, when many simply took themselves out of the job market. But employment opportunities remained sparse.

“Three months in a row of payroll job losses and a sizable negative revision: these are clear signs that the job market is in recession,” said Jared Bernstein, an economist at the Economics Policy Institute. “I’m hard-pressed to imagine anyone who would raise doubt to that at this point.”

In the last 50 years, whenever there has been an employment downturn like the one of the last few months, a recession has followed.

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It is just beginning.