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Case 13: SkyWest, Inc. and the

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Amanda Ehrlich

on 10 August 2014

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Transcript of Case 13: SkyWest, Inc. and the

Partnered with major airlines
Provide passengers with lower prices to fly
Reimbursed by major airlines as long as specific requirements are met
Business Model
Struggling economy
Higher prices for fuel
Decrease in fuel availability
Increased operational costs
Increase in industry regulations due to events of 9/11
Conflicts with their partnerships
Fees owed by Delta
Bankruptcy of Midwest Airlines
Competitors merging
Issues Facing the Firm
Financial challenges due to recession of 2008-2009
Decrease in air travel due to 9/11
Competition with major airlines
Competition with other regional airlines
Size of jets limits their competition
Fuel costs
Increase in safety and government regulations
Foreign flight marketshare
Competitive Environment
SkyWest utilizes a focused, or market niche, strategy which is "concentrated attention on a narrow piece of the total market" (Thompson et al., 2012). By entering into partnerships with other carriers as well as making strategic acquisitions, SkyWest is able to broaden their geographical focus. By increasing the geographical locations that they service, they will be able to decrease their costs while offering their customers more destinations.
Five Generic
Competitive Strategies
Case 13: SkyWest, Inc. and the
Regional Airline Industry in 2009

Team B
Matthew Bennett
Clayton Clark
Amanda Ehrlich
Seneca Gore
Mercy Mutuku
Trent Tornincasa
MGT795 Strategic Management & Ethics
University of Saint Mary
August 3, 2014
Expansion of business through mergers, acquisitions, and partnerships with other smaller airlines
Largest independently owned regional airline company
Increase efficiencies in operations
Increase luggage fees
Decrease fuel cost
Combine activities in finance, IT, and administrative services
Pay off debt through stocks
Operational & Financial Performance Objectives
1. Superior customer service and safety culture

2. Strong financial sheets

3. Largest number of regional aircraft

4. Lower ticket prices
"We understand and value the priceless commodity of time. We respect every individual's quality of life, and are committed to promoting dignity and trust in all we do" (SkyWest, 2014)
Vision & Mission Statement
We Strive to Be:

The Airline of Choice
The Employer of Choice
The Investment of Choice
Health & Safety First
Excellent Service & Quality
Personal & Operational Reliability
Respect & Teamwork
Personal & Corporate Integrity
Superior Profitability & Efficient Use of All Resources
SkyWest's Guiding Principles
Small operation
Partnered with multiple major airlines
Offer more flights
Low costs
Smaller airports for traveler satisfaction
Reputation for on-time arrivals, safety features, and customer satisfaction
Competitive Advantage
Financial Data
Five Force Model
Threat of New Entrants
Weak to moderate
Increased costs and federal regulations limit new start-ups in the industry
Possible merging of two or more airlines
Foreign airlines that enter US regional market
Threat of Substitutions
Dependent upon the time-frame a passenger has to arrive at their destination as well as fuel prices
Other modes of transportation:
Vehicles (cars, trucks)
Cruise ships
Bargaining Power of Suppliers
Moderate to strong
Limited by manufacturers as to what type of aircraft regional carriers can use
Increased competition to obtain contracts with major airlines
Other factors:
Union membership
Fuel costs
Ticket prices
Bargaining Power of Buyers
Weak to moderate
Has control over mode of transportation
Has control over which carrier they fly with
Able to obtain lower prices when tickets are purchased in advance
Competitive Rivalry
Multiple major and regional airlines
Customers demand:
Superior customer service
New and updated aircraft
Safety measures
On-time arrival accuracy
Full transcript