SkyWest



SkyWest

Introduction

The paper covers the famous case of SkyWest, Inc. and the Regional Airline Industry in 2009. SkyWest Inc. is an independently owned airline company. They own two regional airlines, SkyWest (with focus on west coast) and Atlantic Southeast Airlines or ASA (with focus on east coast). We will critically analyze the business operations of the company and its significant role in the regional airline industry.

Background of the Case

In 2009 SkyWest Inc. like all airlines faced several challenges from the on-going recession. When comparing the 2008-2009 annual financial reports, overall SkyWest Inc numbers are down across the board. However, according to my calculations although the company's current liquidity ratio and working capital has decreased, they still show that they are financially secure. The end of 2009 SkyWest Inc. entered into a new code-share with AirTran giving SkyWest additional business opportunities.

In 2006 SkyWest Inc. partnered with Midwest Airlines and after a short two years, Midwest filed for bankruptcy and was bought out by Republic Airways Holdings, a direct competitor of SkyWest Inc. Fuel costs and the economic recession were two more significant issues facing SkyWest Inc.

Decision Maker(s)

The decision makers of the strategic alliances with other airlines were initiated by the partners of the organization who made each schedule of the baggage problems being faced by the company on the regional level.

Problem Statement

There are several problems that are faced by the SkyWest Inc. in a nut shell, it could be defined that partnering with the large airlines has bring problems for regional airline. The SkyWest Inc. and other regional airline are facing challenge of market uncertainty that is change in fuel prices, government regulations, and other customer preferences (McCartney, 2007). Although these factors are difficult to overcome, but partnering with large airline bring several difficulties for the regional airlines and it has become difficult for them have to get time on run ways (McCartney & Scot, 2007).

Available Alternatives

These are the following alternatives available for SkyWest Inc.

The airline should take advantage of business and leisure passengers. They should start their operations in far locations so that more revenue could be earned.

The airline has good reputation for punctuality and low cancelation. The increased advertisements are helpful for the airline.

SkyWest Inc. should not depend on other airlines and present itself as a separate entity so the name is perceived uniquely.

Airline networking and outsourcing could also be a good alternative for the SkyWest Inc.

SkyWest Inc. has the opportunity to partner with low-cost carriers and further expand their regional airport locations.

Analysis of Alternatives

When performing the five forces analysis, it is seen that competing sellers have a large impact on SkyWest Inc. Airlines are all feeling the pressure to compete as never before, with fewer passengers traveling and margins tightening. Many customers who were at one time very brand loyal to certain airlines are now making travel plans based on bottom line cost or other factors. Flying has basically become a commodity and the ability to differentiate has become the ...