Regional Airline Industry in United States is one of the most competitive out of three major airline industries. Those categories include network carriers such as Delta Airlines or American Airlines, low-cost carriers like JetBlue or Southwest and regional carriers which include SkyWest Airlines and ExpressJet. The US airline industry has its turbulences since 9/11 attack and recession in 2009 which lowered demand for its services. Seasonal fluctuations could further destabilize the industry. The increase of the price of fuel has been contributing factor to the financial troubles of the major airlines. Those financial problems of major airlines can create for regional airlines both opportunities and threats.
Skywest Inc., is a holding company for two North American regional airlines, SkyWest Airlines and ExpressJet Airlines, and an aircraft leasing company. SkyWest Inc. was founded in 1972 in St. George, Utah as SkyWest Airlines to facilitate the connections of passengers to flights of major airlines to serve smaller airports and shorter routes. SkyWest Airlines to provide those services is using either regional jet or turboprop, an engine that is operating on shorter haul than regional jets and lands on shorter runways. Skywest Airlines skyrocketed their first profits only four years after its first flight launched. Net income was $17,097 and the airlines was debt free at that point as well. The first Interline agreement is made with American Airlines, followed by one with United Airlines. The demand for services from small communities to bigger cities grew each year and major carriers begun its partnerships with regional partners, including SkyWest Airlines. It was in year of 1983 when the first code sharing agreement was born. By definition code sharing is an aviation business agreement where two or more airlines share the same flight. Seat could be purchased on one airline but is actually operated as a cooperating airline under a different flight number or code. Code-share agreements also generally obligate the major airline to provide services such as reservations, ticketing, ground support and gate access to the regional airline, where the regional airline provides a designated number of low-capacity flights.
In 1986 SkyWest Airlines became Delta Connection carrier. Thanks to constant growing profits and popularity, SkyWest was able to acquire multiply smaller regional carriers and expand their routes. Steady growth allowed SkyWest Airlines to dominate the regional routes in western locations of US. Until 2005, SkyWest, Inc. was the holding company of its sole subsidiary, SkyWest Airlines. In September 2005 SkyWest Inc. closed the deal to acquire Atlantic Southwest Airlines (ASA) from Delta for $425 mln in cash. Furthermore, in 2010 Skywest Inc. announced that Atlantic Southwest Airlines, which operated separately from SkyWest Airlines, will acquire ExpressJet. The deal was closed and in 2011 after integration of operations of both airlines, the combined airline was branded as ExpressJet. This acquisition and merger gave SkyWest Inc. access to the East Coast of the United States.
SkyWest’s airline companies provide commercial air service in cities across the United States, Canada, Mexico and the Caribbean with approximately 4,000 daily flights. SkyWest Airlines and ExpressJet have developed industry-leading reputations for providing quality regional airline service during their long operating histories. SkyWest Airlines has been flying since 1972 and ExpressJet since 1979. According to the Annual Report at December 31, 2013, SkyWest Inc., fleet consists of 757 total aircraft, operating 712 regional jets which included 511 aircraft in the 50-seat category and 201 aircraft in the 66 to 76-seat category.
As of today SkyWest Airlines operates through partnerships with United Airlines, Delta Air Lines, US Airways, American Airlines and Alaska Airlines. ExpressJet Airlines operates through…