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444 South River Road
St. George, Utah 84790
Telephone: (435) 634-3000
Fax: (435) 634-3505
Incorporated: 1972 as Inter American Aviation, Inc.
Sales: $297.1 million (1998)
Stock Exchanges: NASDAQ
Ticker Symbol: SKYW
SICs: 4512 Air Transportation-Scheduled; 6719 Holding Companies, Not
Our mission is to provide airlines services that exceeds our
customers' expectations. Each of us is dedicated to excellence in service as
part of the Delta Air Lines and United Air Lines transportation systems. That
dedication includes safety first; on time, every time service; fairness and
consistency; working together as a team; personal and corporate integrity; and
SkyWest, Inc. is the holding company for three related
companies. First is SkyWest Airlines, which after its 1998 expansion became the
nation's fifth largest regional airline, with scheduled flights for passengers
and freight to 12 western states and Canada. It serves both business travelers
who use SkyWest as a commuter airline and tourists vacationing at ski resorts or
California's beaches. SkyWest Airlines' close ties to both Delta and Continental
airlines have been a key to its success. Second, Scenic Airlines offers air
tours, general aviation, and scheduled flights to the Grand Canyon and other
areas of Arizona, Utah, and Nevada. Third, National Parks Transportation
maintains a fleet of Avis rental cars to assist sightseers and others who have
flown to selected locations.
Origins in the Early 1970s
Skywest was built on the ruins of another airline. In the
small southern Utah city of St. George, Dixie Airline finally called it quits in
1972. Local attorney J. Ralph Atkin and four other men acquired Dixie's airport
lease and the intrastate rights for a commuter airline. Atkin also began a fixed
base operation (FOB) consisting of air charters, a flight school, aircraft
maintenance, and air ambulance service.
The descendent of Mormon pioneers, Atkin had graduated from
Brigham Young University and then earned a law degree from the University of
Utah. Atkin and his wife returned to St. George, where he worked in a law
partnership and in 1970 was elected county attorney. In 1971 one of his law
clients happened to be a flight instructor, so soon Atkin took flying lessons.
On March 2, 1972 he started a company called Inter American Aviation, Inc., so
that he and four friends could own a plane just for fun. Then Atkin decided to
offer commercial flights, and the firm's name was changed to SkyWest Airlines, a
division of SkyWest Aviation Inc.
By June 1972 the young company had four planes and three
part-time pilots. Jerry Fackrell piloted a twin-engine, six-seat Piper Seneca
N1021U on the company's first scheduled flight on June 19, 1972, from St. George
to Cedar City and on to Salt Lake City. In the early days SkyWest pilots also
served as ticket agents and baggage handlers. They were paid only $5 per flight
hour and $10 for extended layovers in Salt Lake City.
By 1973 and 1974 SkyWest had acquired a few more small
passenger planes and expanded with a route to Las Vegas, the closest big city.
In these early years, however, it did just about anything to make money. It flew
oil exploration crews in and out of Moab, Utah, and even conducted some cloud
Probably the most unusual early venture was providing charters
for the federal Immigration and Naturalization Service. It used its Cessna 206s
and Piper Cherokee Sixes to pick up illegal immigrants in different locations in
the West and fly them to just north of the Mexican border, where they were
deported. Since some deportees returned to the United States, SkyWest pilots
occasionally flew the same individuals repeatedly back to the Mexican border.
By 1974 the company had large debts and considered declaring
bankruptcy. Jerry C. Atkin, Ralph Atkin's nephew who joined the firm in 1974,
recalled that they tried to sell the company for $25,000, but nobody wanted it
at that price. They even offered to give SkyWest away, but nobody would take it.
Sidney J. Atkin, Ralph Atkin's brother and the majority whip
in the Utah legislature, helped the firm gain a state grant in 1975. That grant
for $15,000 helped save the company.
In October 1975 the company was reorganized with Jerry Atkin
named president, Ralph Atkin as board chairman and vice-president of corporate
development, Sid Atkin as vice-president of finance, and Lee C. Atkin (Ralph and
Sid's older brother) as secretary. By selling three aircraft, route reductions,
and personnel cutbacks, SkyWest barely survived this crisis. It paid its
creditors just $50 per month for one year, but eventually all were paid in full.
Expansion in the Late 1970s
In 1976 the firm made a modest profit--its first. That was
helped by Hughes Air West dropping its Cedar City-Salt Lake City route. At that
point SkyWest expanded its fleet by purchasing two more Navajo Chieftans, making
a total of five. SkyWest Aviation Inc. also expanded its car rental business. It
formed National Parks Transportation Company to manage two Avis franchises at
Cedar City and St. George.
In 1977 the company signed its first interline agreement with
American Airlines, which allowed passengers to be ticketed to their final
destination in just one check-in procedure. Later several other airlines would
also sign interline contracts with SkyWest.
Three major events marked the company's history in 1978.
First, SkyWest became the third commuter airline in the nation's history to
become a certified air carrier subject to federal government regulations just
like major airlines.
Second, the Civil Aeronautics Board (CAB) granted SkyWest its
first federal subsidy, a three-year agreement for annual amounts of $160,000 for
flights to Page, Arizona. The CAB also granted SkyWest authority for routes to
Yuma, Kingman, Prescott, Grand Canyon, Tucson, Winslow, and Phoenix, Arizona, as
well as Blythe, Los Angeles, and El Centro, California.
Third, and maybe most important, SkyWest in 1978 acquired its
first Fairchild Metroliner II, worth $1.4 million, far more than its earlier
planes, which cost about $150,000 apiece. A twin-propeller, 19-seat aircraft,
the Metro became the company's main plane as it entered the era of federal
Growth from Deregulation, Acquisition, and Affiliations in
After the federal government passed the Airline Deregulation
Act in 1978, major airlines no longer were required to service small markets.
Thus airlines such as United, Western, and American left less profitable
communities, which in turn opened the door to regional airlines like SkyWest.
For example, in 1980 SkyWest began flying three daily flights
into Pocatello, Idaho, after Western Airlines left that city. Pocatello became
SkyWest's main market in the early 1980s. And in 1982 SkyWest received
government permission to fly into Ely, Elko, and Reno, Nevada after United and
Frontier departed and Golden Gate, another commuter, declared bankruptcy. The
same year SkyWest replaced Frontier Airlines at Vernal, Utah, and Rock Springs,
Wyoming, and in September 1982 took over the route to Idaho Falls from departing
Adding such cities was expensive for the still modest regional
airline. Without adding new planes, SkyWest invested between $50,000 and
$100,000 for a new destination, which covered ground equipment, counter space,
and passenger lounges. If a new plane was needed, more than $2 million could be
By 1983 the company had purchased a total of seven Metros, and
it still had five smaller Navajo Chieftans and even smaller Cessna 207s for
charters. This fleet expansion indicated that SkyWest was prospering in spite of
the recession early in the Reagan Administration.
Like other airlines, SkyWest also had been hurt by President
Reagan's 1981 firing of the air traffic controllers after the illegal strike by
the Professional Air Traffic Controllers Association. The 1981 controllers
strike contributed to SkyWest's first accident. On September 24, when the
Flagstaff, Arizona control tower was closed because of the strike, a SkyWest
Metro collided on the ground with an inbound corporate jet. The corporate pilot
was blamed for this accident, which caused no deaths.
During SkyWest's tenth year anniversary in 1982, it adopted
its first computerized reservation system. It replaced its card files with
Republic's Escort computer system, a necessary step because SkyWest was flying
550 flight segments every week.
In the early 1980s SkyWest expanded its freight deliveries so
that about ten percent of its revenues were from mail, small packages, and bank
documents. This helped small communities that lost bus and rail services after
those industries were deregulated.
SkyWest enjoyed eight straight years of profitability by the
end of 1983, when it was ranked 42nd among the nation's top 100 regional
airlines. From its base in St. George, it served 17 locations in six states. It
employed about 250 individuals, so the intimate family atmosphere of the early
days was dissipating. This growth also resulted in President Jerry Atkin
delegating fiscal responsibilities to a new financial vice-president position.
At the same time separate marketing and customer service departments were
That set the stage for SkyWest's major acquisition. In August
1984 SkyWest began flying from Las Vegas into Palm Springs, California, its
first ventures into the highly competitive Southern California market. That led
to SkyWest acquiring Palm Springs-based Sun Aire, from its owner, the DiGiorgio
Corporation. Sun Aire had been founded in 1968 in Borrego Springs, California by
H. L. Van Sickle to shuttle travelers to and from San Diego, just 90 miles to
the south. In 1983 Sun Aire carried 330,000 passengers, about twice as many as
SkyWest. SkyWest operated the two firms separately until the merger was
completed in 1985. The acquisition boosted SkyWest to the nation's 11th largest
The Sun Aire acquisition resulted in major changes for
SkyWest. First, its fleet expanded. With SkyWest's 12 Metros and Sun Aire's 14
Metros, the merged company had the world's largest fleet of Fairchild Metros.
The combined company flew to 28 sites. Sun Aire had opened a new facility within
American Airlines's Los Angeles terminal three months before the merger, so the
renamed firm SkyWest/Sun Aire Lines gained access to that major market.
The merger also resulted in forming the holding company
SkyWest, Inc., with its three subsidiaries: SkyWest Airlines Inc. (changed from
the earlier SkyWest Aviation Inc.), National Parks Transportation Company for
the Avis rental car business, and Aviation Services West, Inc. for the fixed
base operations. In addition, SkyWest as a result of the merger replaced its
Escort CRS (computer reservation system) with the more advanced Sabre CRS, an
American Airlines system used by Sun Aire.
In Time Flies, the SkyWest corporate history, Sid Atkin
said the merger with Sun Aire "really did make us a professional airline when
the resources and talents of both organizations came together." The complete
merger took several years, however. Long-time employee Jan Nelson described the
transition in Time Flies, as follows: "We ran a northern operation and a
southern operation. This was like running two different airlines even after we
merged. We had different things to worry about in each section. They didn't have
to worry about the extreme temperatures, altitudes or the long hauls we had.
They were strictly operating in Southern California. ... They [Sun Aire
employees] viewed us as a Mormon company. They had different management methods
and attitudes. California people were just entirely different."
Meanwhile, another major change occurred. In 1985 SkyWest
became affiliated with Western Airlines through a code-sharing agreement in
which SkyWest adopted Western's two-letter code in computer reservation systems.
Western had 70 percent of Salt Lake City's market at the time, so this joint
venture increased SkyWest's flights. Code sharing was a very controversial
decision, however, for regional airlines tended to lose their identity.
In any case, later in 1985 Delta Airlines announced its
purchase of Western, which led to SkyWest becoming one of the regional airlines
that flew as the Delta Connection using the Delta code DL in computer
reservation systems. The Delta Connection became effective April 1, 1987, when
the Delta/Western merger was completed. Thus in the mid-1980s some SkyWest
personnel daily wondered what the company logo was, since the company had planes
with different paint designs as it evolved rapidly from SkyWest to SkyWest/Sun
Aire and then to affiliations as Western Express and Delta Connection.
These code-sharing affiliations were a major trend in the
evolving relationships between major and regional airlines in the 1980s. United
Airlines signed agreements with regionals to become United Express carriers, and
American Airlines established its American Eagle network. The major airlines
needed commuter connections, yet some of their executives worried about
increased liability for their smaller partners who now carried their name.
Larraine Segil, a leading consultant for airline alliances,
wrote about such issues in her book Intelligent Business Alliances
(Random House, 1996). In the January 1998 issue of Business & Commercial
Aviation, Segil pointed out that about 55 percent of all business alliances
fail after three years of trying. She explained some of the difficulties when
two corporate cultures collide: "You take a look at the airline industry and you
suddenly find local regional airlines that are very much either in start-up or
in high-growth mode. The larger national and international airlines are mature
and even some of them are in a declining mode. When you partner a declining or a
mature company with a start-up or a high-growth company, you have inherent
potential incompatibilities. Those ... are unavoidable, but they can be
Segil praised Delta Airlines for its efforts to integrate with
its junior partners like SkyWest. She said Delta had a "real commitment to make
the relationship work. I think that is a distinguishing factor." The Delta
Connection with SkyWest, begun in 1985, still functioned in 1998, backing up
In the mid-1980s SkyWest faced expanded opportunities, so it
purchased new planes, namely the Brasilia EMB-120 turboprop, manufactured in
Brazil by Embraer. This was SkyWest's first plane designed specifically for
regional airlines. The smaller Metros were corporate planes modified for
regional use and thus required increased maintenance to fly many more miles than
originally intended. Brasilia service was started on February 1, 1986 in Palm
Springs. Even into the 1990s SkyWest used most of its Brasilias in the highly
competitive California market.
To pay off the Sun Aire acquisition and to raise capital for
its expansion, SkyWest became a public corporation in 1986. After its initial
public offering under the symbol SKYW on the NASDAQ market, Jerry and Ralph
Atkin flew to New York City to get a check for almost $12 million, far more than
the less than $1 million raised in private offerings since the company had been
In 1987 SkyWest received Air Transport World's
Commuter/Regional Airline of the Year award, after being chosen from some 500
regional airlines in the world. In fiscal year 1988, however, SkyWest lost $2.3
million, its first loss in several years. Company leaders had expanded too fast
into California, the graveyard of at least 28 airlines, so they canceled some
routes and concentrated on core markets. In 1989, for the first time, SkyWest
flew more than one million passengers, a far cry from the 256 it had flown in
1972, its first year in business.
Events in the 1990s
SkyWest founder Ralph Atkin retired in 1991 as board chairman
and CEO; Jerry Atkin replaced his uncle in those positions. In 1992 the firm
broke ground for a new corporate office in St. George. The $3.6 million facility
on a 15-acre site provided offices for more than 250 employees.
Some stock analysts in 1993 encouraged investors to consider
the rising stocks of regional airlines, such as SkyWest, since the major
airlines were losing a lot of money. Since 1990 the airline industry had lost
nearly $10 billion, so investors naturally were skeptical. Yet most regionals
remained profitable. And SkyWest's nonunion work force helped it keep down labor
In June 1993 SkyWest's subsidiary Aviation Services West, Inc.
acquired the flight tour operations of Scenic Airlines, Inc., a company formed
in 1967 to provide tours to the Grand Canyon from Las Vegas and other sites.
Following the acquisition, Aviation Services West changed its name to Scenic
In 1994 SkyWest replaced Delta after the major airline
canceled its jet flights from Salt Lake City to five low-volume cities: Casper,
Wyoming; Butte, Montana; Burbank, California; and Rapid City and Sioux Falls,
South Dakota. To service those routes, SkyWest ordered ten Canadair Regional
Jets (CRJs) from Bombardier, Inc. These jets cost far more to purchase ($17
million each) and operate than the earlier Brasilias. CRJ advantages included
greater range, up to about 1,200 miles. Powered by two General Electric turbofan
engines, the CRJs cruised at about 540 miles per hour (Mach 0.8). This increased
speed allowed SkyWest to offer additional flights in some markets. The CRJs
featured seats for 50 passengers and the ability to fly up to 41,000 feet, above
most turbulent weather.
SkyWest leaders struggled with the transition to jets.
President Jerry Atkin in the September 1994 Business & Commercial Aviation
admitted, "It is a good thing I did not know how big a task it was." And Ron
Reber, senior vice-president of marketing and sales, said, "I did not think the
[regional airline] industry would ever accommodate a ... 50-passenger jet."
Reber changed his mind, especially after SkyWest worked through the protests of
city leaders in Butte, Montana. For years Butte had enjoyed Western and then
Delta flights. Montana's congressional delegation even visited Delta's Atlanta
headquarters to request continued flights, but in the end the city rejoiced at
the nonstop and more frequent flights provided by SkyWest.
SkyWest pilots faced challenges from the new cockpits in the
Canadair jets. None had any experience with the more sophisticated video screens
in the CRJ's glass cockpit, which provided an overwhelming amount of
information. After new training manuals were written, the pilots spent hours on
flight-training devices and simulators to make the transition.
In October 1995 Skywest and Continental Airlines signed a
marketing and code-sharing agreement whereby SkyWest became a Continental
Connection in markets operating in and out of Los Angeles. Only about three
percent of SkyWest passengers connected with Continental flights in 1996,
however, far less than the approximately 48 percent interline passengers who
connected with Delta flights the same year.
In 1996 the firm flew more than 2.5 million passengers and
bought its sixtieth plane as it continued to expand in the western United
States. The fleet then consisted of 50 Brasilias and ten Canadair Regional Jets.
That same year it retired its last Metroliner, the company's mainstay for many
SkyWest announced a marketing agreement with United Airlines
effective October 1, 1997, in which SkyWest began operating as United Express.
This code-sharing agreement, which replaced WestAir, gave SkyWest more
connecting opportunities at the Los Angeles International Airport, where United
was the largest major carrier. At the same time SkyWest reaffirmed its Delta
Connection contract for flights between Los Angeles and Salt Lake City.
In 1997 SkyWest celebrated its 25th anniversary. As of October
1, 1997, it operated 585 daily departures to 45 cities in 12 western states and
Canada. Its longest and only international flight was between Salt Lake City and
Vancouver, Canada, using the Canadair Regional Jets.
SkyWest and United on January 19, 1998 signed an agreement
that SkyWest would begin operating as the United Express carrier at United's San
Francisco hub on June 1, 1998. At that time it began offering some 90 departures
daily to 12 California communities. In 1998 SkyWest expanded its United Express
flights to include shuttles between outlying communities and the airports in
Portland and Seattle. Thus in 1998 SkyWest operated as a connecting carrier to
three major airlines: Delta, United, and Continental. Company executives planned
to add 30 more Embraer Brasilias by October 1, 1998 to handle its new West Coast
lines. These purchases would use some of the $40 million raised in a secondary
stock offering completed February 12, 1998.
The firm's financial performance for fiscal year 1998, ending
on March 31, showed that its annual revenues increased to $297.1 million from
$278.1 for fiscal year 1997. SkyWest's fiscal year 1997 net income was $10.1
million or 50 cents per share. In fiscal year 1998 those figures more than
doubled, with net income rising to $21.4 million or $1.06 per share. Not bad for
a company that its owners once wanted to give away!
Principal Subsidiaries: SkyWest
Airlines, Inc.; National Parks Transportation Co.; Scenic Airlines, Inc.
Creedy, Kathryn B., Time Flies ... The History of SkyWest Airlines, San
Antonio, Texas: Loflin & Associates, 1992.
Douglas, Diane, "How Time Flies," OutPosts (SkyWest's inflight magazine),
anniversary issue, 1997.
Henderson, Danna, "SkyWest Has Found Both Prosperity and Problems in the Golden
State," Air Transport World, February 1988, p. 88.
"High-Flying Skywest Inc. Doubles Its Net Income," Salt Lake Tribune, May
22, 1996, p. D15.
Hughes, David, "SkyWest Buys Regional Jets To Fly Former Delta Routes,"
Aviation Week & Space Technology, August 23, 1993, p. 34.
Knudson, Max B., "SkyWest Escapes from 'The Hangar of Doom,"' Deseret News
(Web Edition), March 27, 1994.
Labate, John, "SkyWest," Fortune, July 25, 1994, p. 233.
Lewin, Rebecca, "Airline Stocks: Upstarts Leave the Majors Behind," Medical
Economics, October 25, 1993, p. 120.
Lewis, Arnold, "Corporate Alliances," Business & Commercial Aviation,
January 1998, pp. 82-89.
------, "SkyWest Airlines: Making the Jet Transition," Business & Commercial
Aviation, September 1994, pp. C2-C6.
Moorman, Robert W., "Survivor of the West," Air Transport World, August
1992, p. 38.
Oberbeck, Steven, "SkyWest Continues Expansion with United Routes in Northwest,"
Salt Lake Tribune, February 18, 1998, p. D6.
Proctor, Paul, "SkyWest Balances Turboprop-Turbofan Fleet," Aviation Week &
Space Technology, March 2, 1998, pp. 49, 51-52.
Segil, Larraine, Intelligent Business
Alliances, New York: Random House, 1996.
"SkyWest Relocates Headquarters," Deseret News (Web Edition), February 9,
"SkyWest To Add 12 California Cities," Deseret News (Web Edition),
January 23, 1998.
International Directory of Company Histories, Vol. 25. St. James Press,