Case: SkyWest, Inc. and the Regional Airline Industry in 2009 •
SkyWest INC is a regional airline that operates on contracts with other major airlines connecting smaller hubs to the main location. This relationship with the major airlines has given SkyWest a great advantage to become a profitable company. Sky west has excelled and has been awarded "Regional Airline Company of the Year”, and “Number One on Time Airline”. This has help SkyWest acquire more contracts and now they have expanded across the states and looking to join new international markets.
Give a brief statement of the purpose of the report and how the report is organized •
The purpose of this report is to internally and externally analyze SkyWest, Inc. and the Regional Airline Industry in 2009. The analysis will be broken up into the following consecutive sections: economic factors, driving forces, key success factors, five forces model of competition, SWOT analysis, financial assessment, key decisions, and alternatives. From this analysis, we will recommend what the firm could do to address each of the main points at issue.
Give a brief summary of the current situation
At the end of 2009, SkyWest, Inc. was the largest independently owned regional airline company in the regional airline subgroup of the airline industry. Its two wholly owned regional airlines’, SkyWest Airlines and Atlantic Southeast Airlines, combined operations offered service through approximately 2,400 departures and 208 cities in the United States, Canada, Mexico, and the Caribbean.
Give a brief summary of the current vision, mission, objectives, and strategies •
Atlantic Southeast Airlines’ current vision is to be committed to connecting more people, more often; to the places they love, by becoming the world’s first super regional airline. •
They intend to do that by putting safety first in everything they do, treating people with dignity and respect, operating with honesty, integrity and transparency, working smart with commitment to continuous self-improvement, and taking pride in making sure the job is done right. •
SkyWest, Inc. relied heavily on the partnership contracts with United and Delta for its customers and revenue.
Discuss economic factors
There were many economic factors influencing SkyWest, Inc. •
The U.S. airline industry experienced much turbulence since the September 11, 2001 terrorist attacks on the World Trade Center and the Pentagon. \ •
Major airlines’ prior overexpansion and bloated flight schedules caused for economic distress. •
Increasing fuel costs
Increased competitive pressures from low-cost carriers
The post-9/11 fear of flying
The post-9/11 fears of terrorist attacks had led to government intervention in the industry through increased security regulations, leading to additional cost for airlines. •
The industry was highly sensitive to the fluctuations in the economy because a significant portion of travel by both leisure and business travelers was discretionary. •
The recession in the early 2000s lowered the overall demand for airline services in the United States. •
As 2009 began, a worldwide recession of a scale not seen since the Great Depression was expected to cause problems within the industry.
Discuss driving forces
Trying to find a way to cut costs
Over booking flights
Routes that are outsourced from the major airline partners
Discuss key success factors
Major airlines can’t afford to have flight from so many small hubs •
Competition from other airlines are going out of business •
Have a different business strategy then the other failing airlines •
Able to see future markets and expanded into them
Have contracts with the major airlines that pay well back to SkyWest
Discuss the five forces model of competition
When it comes to competition from rivals, the completion is intense. Pricing is very competitive and they...
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