skywest strategic audit

SkyWest Strategic Audit

Stefan JohnsonAllan PaduaMike RichardsonRachel Sa-OnoyLibby SchusterClear Vision,

Inc.

SkyWest, Inc.

SkyWest Inc. SWOT AnalysisStrengths Weaknesses

•Strong reputation for safety, on time arrivals, and customer service•Largest independently owned regional airline•Partnerships with United and Delta•Positive employee relations

•Smaller aircraft are perceived by public as being less safe•ASA ranked near bottom in customer satisfaction•Regional carriers limited geographically and can be affected by bad weather

Opportunities Threats

•Expand outside the U.S. to China, Brazil, and Mexico•Diversify operations to reduce dependence on Delta and United

•State of economy affect business•Rising costs of fuel•Pressure from major partners to accept lower fees

MESA Air Group SWOT Analysis

Strengths Weaknesses

•Partnerships with United Airlines, U.S. Airways, Midwest Airlines, and Delta•Good Reputation for customer service

•Filed for bankruptcy in 2009 to reduce fleet size

Opportunities Threats

•Consolidate fleet and resources•Focus on customer satisfaction

•Increasing cost of fuel•State of economy•Loss of contracts with major airlines

Pinnacle Airlines SWOT Analysis

Strengths Weaknesses

•Ranks high in customer satisfaction•Major airline partnerships with Delta and Northwest Airlines

•Involved in airline disaster when a plane crashed into a home in 2009

Opportunities Threats

•Focus on customer satisfaction and safety•Pursue new contracts to increase scope of service

•Increasing fuel costs•State of economy•Loss of contracts with major airlines

Key Success Factors•Acquire partnerships with major airlines•High customer Satisfaction•Strong safety image•On-time arrivals

Key Success Factors    SkyWest

Inc.Mesa Air

GroupPinnacle Airlines Corp.

Key Success Factors

Weight

Rating

Weighted Score

Rating Weighted Score

Rating

Weighted Score

Major Partnerships

.35 5 1.75 4 1.4 4 1.4

Customer Satisfaction

.3 3 0.9 3 0.9 4 1.2

Safety Image .2 4 0.8 3 0.6 2 0.4

On-time Arrivals

.15 4 0.6 4 0.6 4 0.6

Total 1.0   4.05   3.5   3.6

Financial analysis

  2009 2008 2007 2006 2005 2004

SkyWest Inc. 3.2% 3.2% 4.7% 4.7% 5.7% 7.1%

Mesa Air Group

N.A. (2.2%) (6.3%) 2.7% 5.0% 2.9%

Pinnacle Airlines

5.0% (1.3%) 3.9% 9.4% 3.1% 6.4%

Net Profit Margin

Debt-to-Equity Ratio

  2009 2008 2007 2006 2005 2004

SkyWest Inc. 2.01 1.96 1.99 1.97 2.43 0.99

Mesa Air Group

N.A. 7.75 7.45 3.69 5.61 7.70

Pinnacle Airlines

11.61 19.23 11.3 2.11 11.30 (6.43)

Porter’s Five Forces Model

Competitive Rivalry (Strong)Buyer’s Bargaining Power (Strong)Supplier’s Bargaining Power (Strong)Availability of Substitutes (Weak)Threat of New Entrants (Weak)

Attractiveness of the Industry

Industry as a Whole (Not Attractive)

Historical View of Strategies (Typology)

Problems•Recession

Implementation Plan•Advertise to Increase Brand Awareness•Member Reward/Incentive Program•Repurchase Shares•Upgrade Technology and Decrease Labor

Costs•Improve Flight Portfolio

▫Increase Fleet in Operation▫Seek Out Partners, Absorption of Smaller

Airlines▫ Expand to Division of Low Cost Carriers

and Regional Routes

Contingency Plan•Failing Plan:

▫Immediate Reissuance of stock▫Consolidation Though Sale of Weak

Branches▫Reduce Service (cut out rural areas)▫Seek Further Partnerships and Mergers

•Company Failure:▫File Chapter 11 to Reorganize the

Company▫Sell Off Assets to Repay Debt

Sources of Resistance

Ethical Implications of Recommendations