Executive Summary: SkyWest
SkyWest Inc. (SkyWest) primarily competes as a domestic regional carrier. In this capacity SkyWest provides service from small cities using regional jets to support the network carriers’ hub-and-spoke system (Northwest, Delta, United, etc.). Regional airlines feed the large national carriers by bringing customers from small airports to major hubs to catch connecting flights. Most of the flights operated by regional carriers are in partnership with the major carriers. SkyWest has partnerships with Delta, United, and Midwest Airlines. SkyWest’s growth and strategic planning has relied on the expansion of current partnerships and geographic growth. SkyWest operated as a west coast regional carrier but expanded to the east coast with the acquisition of Atlantic Southeast Airlines in 2005 and a partnership with Midwest Airlines. This partnership and acquisition essentially gave SkyWest national coverage. This coverage put SkyWest in a better position to serve more routes, major airlines, as well as low cost carries such as Southwest, and Jet Blue. Expanding into the low cost market is a strategic growth item for SW, but the company has yet to crack into that market. Bankruptcy filing by major carriers has created growth opportunities for SkyWest. As the major airlines begin to out source more of their routes, SkyWest can capitalize on that potential area of growth. Bankruptcy is a double edge sword because of the dependence on the major airlines for revenue. In order for a company to compete in the airline industry, several items demand attention. First, a company must focus on customer service. Happy customers become loyal customers, and with low customer switching costs, it is very easy for someone with a bad experience to never fly with the airline again. Another key area is operational efficiency. Specifically, airlines look at the cost per available seat mile. A safety rating is another key factor for success. Passengers will not...
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