Skywest Case Analysis

Topics: Regional airline, Delta Connection, Airline Pages: 2 (598 words) Published: November 13, 2012
SkyWest, Inc.

SkyWest is one of the most successful companies of its time primarily due to its remarkable turnaround of the recent acquisition it made of Atlantic Southeast Airlines (ASA) in late 2005. SkyWest takes on a low-cost carrier (LCC) business model. Despite becoming a leading regional carrier in the industry, SkyWest has faced many critical issues causing the company to constantly participate in active strategic management and planning in order to maintain a sustainable competitive advantage within the industry. The entire industry took a major blow from the stock market crash of 2008. The economy was heading into a recession, which had a high correlation with the poor financial performance of SkyWest. The stock market This recession in 2009 led to a conflict between Delta and SkyWest that weakened their partnership. SkyWest was hesitant to sue its major partner because they believed it would discourage Delta from sending future business their way. “SkyWest claimed that Delta owed them nearly $25 million in payments” (Lohman, Pg. 16). SkyWest should have been more aggressive in this case and followed through with suing Delta. They could have used the money won in court to become more attractive to other major networking carriers by purchasing larger jets. This would have allowed them to partner with more majors to obtain a larger customer base between multiple networking companies. Another important strategic issue SkyWest faced was the wind down of their partnership with Midwest Airlines. Republic Airway Holdings, a direct competitor of SkyWest, purchased Midwest.

SkyWest Inc., suffered from increased fuel costs as well. This heightened fuel cost was a big issue for SkyWest because in 2009 fuel costs ranged from 35-50 percent of an airline’s operating costs. SkyWest could have turned the fuel increases into a sustainable competitive advantage among the other carriers. They could have implemented a health rewards program that would...
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