SKYWEST , INC. and the REGIONAL AIRLINE INDUSTRY IN 2009
WHAT ARE THE DOMINANT CHARACTERISTICS OF THE US REGIONAL AIRLINE INDUSTRY? Regional airlines specialize in short-haul flight services from small cities that do not have the facilities or frequency of passenger travel to support larger airports. Regional airlines used to travel shorter distances with inferior aircrafts, but today, regional aircraft are getting larger, faster, and flying longer ranges. Regional airlines are considered to be their own segment of airline carrier, the other 2 being network and low-cost. Larger regional carriers operate using a business model which relies on contracts with major carriers to generate revenue. Regional airlines sell all or most of their flights to larger carriers who offer long and short haul flights. Regional airlines conduct their businesses in one of two ways. As feeder airlines, contracting with major airlines or operating under their own brand name and providing service to small, isolated communities, where the airline is their only reasonable link to a larger town. In this role, the term commuter airline is generally used. WHAT IS THE RELATIONSHIP OF THE INDUSTRY TO THE NATIONAL AND GLOBAL AIRLINES? Most of the revenues of the regional airline companies come from their contracts as feeder airlines for the major companies. They rely on each other in order to do business. Regional airlines that have partnerships with major national companies have an advantage because they are able to gain access to large established internet bases. In the partnership between the regional airlines and the big carriers, it is mostly the regional airline companies that control the power. This is mainly due to the fact that major airlines with international flights don’t have the capability to transport passengers from small communities to the big main airports themselves.
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