Last year, a friend said, “I’ve got a great example of an early-stage disruption for you.” He showed me a full page advertisement for a new airline called Skybus. The model seemed to hit key disruptive notes: fares as low as $10 coupled with new revenue streams such as branded planes.

But earlier this week Skybus shut down. What went wrong? The short answer: Skybus’s strategically sensible move to find a disruptive-friendly pocket of the aviation industry ran counter to its need to develop a profitable business model.

As we note in Seeing What’s Next, the airline industry can be surprisingly difficult for low-cost entrants. In ideal disruptive circumstances, market leaders are happy to cede low-end markets to attackers. But incumbent airlines care a great deal about serving even the least demanding customers because the marginal cost of adding an additional passenger to a plane is relatively low. Incumbents typically respond to a low-cost incursion by slashing prices to try to drive the entrant out of business.

Thirty years ago Southwest Airlines found a way out of this dilemma. The key to Southwest’s historical success was flying in and out of secondary airports, such as Baltimore, Maryland and Manchester, New Hampshire. Instead of trying to cherry pick passengers on existing routes, Southwest historically grew by flying non-competitive routes.

Skybus tried to follow this approach. Only one of its initial routes (Columbus, Ohio to Los Angeles) overlapped directly with a major airline’s route. It also borrowed RyanAir’s model of “unbundling” plane tickets, or charging seemingly impossibly low fares to entice more people to fly and then layering on additional charges for various services like checking in bags.

Southwest succeeded because it coupled the most attractive secondary routes with a very low-cost business model. RyanAir has been able to succeed because its cost structure is incredibly low, its operations are incredibly efficient, and it has high capacity utilization. In both cases disruptive success traces back to business models that allow prosperity at low price points.

After all, at the end of the day succeeding with a low-priced offering requires a business model that turns low prices into attractive profits. Otherwise a low-priced model is simply a recipe to make less money than market leaders.

Evidently, Skybus couldn’t crack the code on the aviation business model. Part of its problem could be that there just aren’t that many attractive secondary routes in the United States that haven’t already been picked off by Southwest and others.

Of course, like all airline players Skybus also struggled with skyrocketing fuel costs and a shaky economy. Put all these factors together, and it isn’t hard to see how Skybus’s $170 million investment just wasn’t enough.

Seemingly disruptive beginnings don’t always lead to disruptive endings. Perhaps Skybus’s model would have flourished a decade ago when competition was less fierce and the economic climate was rosier. But Skybus’s failure to create a profitable model meant its long-term chances of success were quite low.