SkyWest, Inc., and the Regional Airline Industry in 2009
Table of Contents
Introduction 3
US Airline Industry 3
Regional Airlines 3
Chart 1: 20 Year Industry Statistics 4
Relationships between Regional and Global Airlines 4
Competition 5
Supplier Power 5
Chart 2: Fuel Expenses 6
Threat of Entry 6
Threat of Entry 6
Threat of Substitutes 7
Industry Rivalry 7
The Second Phase 8
Cause and Effect 8
Impacts 8
Factors for Success 8
SkyWest’s Advantage 9
The Competitive Advantage 9
Resources and Capabilities 9
Company Performance 10
Conclusion 10
References 11
Introduction
SkyWest Airlines founded in1972 by Ralph Atkin after the purchase of Dixie Airlines started with humble beginning. With his first fleet consisting of only a 2-seat Piper Cherokee 140, a 6-seat Cherokee Six, a 4-seat Cherokee Arrow and a 6-seat Piper Seneca, the airline flew a total of 256 passengers that year (Reber, 2010). With a fleet of 294 aircraft flying to more than 163 destinations, with an excess of 11 million passengers per year, SkyWest Airline is one of the nation’s leading regional carriers. Although very successful over the years, the reduction of passenger loads brought on by the threat of terrorism, high fuel prices and a weakening economy created severe financial challenges for SkyWest and other airlines in the years 2008 and 2009.
US Airline Industry
Regional Airlines
Regional carriers are at the forefront of the airline industry. They operate fairly new aircraft with seating capacity to accommodate 70-86 passengers. The aircraft are multi-configured, multi-classed cabin air capable of performing long or short hauls. Sometimes serving as feeder airlines, they conduct business with major airlines via code share to accommodate the needs of passengers in smaller cities. In 2010, regionals carried 163.5 million passengers, up 2.5% from 2009; RPMs increased 3.9% to 75.8 billion and ASMs totaled...