OPINION

SkyWest should bear some blame for Chicago service loss

MICHAEL PESCH
ST. CLOUD
  • SkyWest didn't have business strategy to build long-term success on St. Cloud-to-Chicago service
  • Company planned to let St. Cloud do all the work, market the service and take all the risk
  • Airlines know they often have to subsidize a route until enough time passes to prove reliability

My wife and I are sorry to see the end of St. Cloud's United Airlines/SkyWest air service to Chicago. We have a daughter who lives in Chicago. Between May and December 2014, several members of our family flew a total of five round-trips, plus a one-way flight between St. Cloud and Chicago's O'Hare International Airport.

After our first flight, I started calling the SkyWest service my "personal jet." We live about a mile from the St. Cloud airport, so to fly to Chicago, we drove five minutes and parked for free next to the terminal. We walked into the terminal and greeted the security people, who are so friendly I asked my wife if we could invite them for dinner. After a short wait in the beautiful terminal, we boarded our jet and enjoyed the privacy of the jet's twin-seating configuration — no middle seat! An hour later, we landed in Chicago. After a great weekend, we returned to St. Cloud on the Sunday evening flight, drove home and went to bed.

So why are we losing this great service that provided everyone in our region with their own personal jet without the overhead? It's my opinion that poor service and lack of commitment from our airline partner, United Airlines/SkyWest, should bear at least half of the responsibility for the cancellation of service.

A Jan. 15, Wall Street Journal article, "The Best and Worst Airlines," reported ratings for the eight major U.S. carriers on seven measures of customer service for 2014. United Airlines is dead last overall. On specific measures, United is last in on-time arrivals, canceled flights, extreme delays and involuntary bumping. It was second-to-last in 2-hour tarmac delays, mishandled baggage and complaints.

The No. 1 customer need in airline travel is service reliability. It's even more important than ticket price, especially for business travelers. What chance did St. Cloud have to build a reliable Chicago air service with a partner that had the worst service reliability in 2014?

Secondly, it's apparent that the level of commitment from United/SkyWest to build a viable long-term service was minimal. From the start, we heard that SkyWest was here because of a $1.75 million subsidy that covered passenger load shortfalls, and if passenger load didn't reach 75 percent when the subsidy ran out, SkyWest would be gone. And that's what happened. No extensions, no consideration for SkyWest's own lack of reliability, and no apparent sense of shared responsibility for the viability of the service.

The St. Cloud-to-Chicago service has a lot of potential to be profitable and a major asset to the Central Minnesota economy. Despite SkyWest's mixed service performance, passenger load factors were in the 60 percent to 65 percent range in December when the cancellation announcement was made, a level within sight of 75 percent. Service reliability, heavy marketing and time for travelers to change habits are necessary to build an air service route. Airlines know this, and they often subsidize a route until enough time passes to truly gauge its potential.

This did not happen with SkyWest. It drained the subsidy dry and left. St. Cloud Mayor Dave Kleis has been diplomatic about SkyWest's role in this experiment, saying in December, "That's their decision. They look at the bottom line."

When a business expands into new areas, it should have a business strategy and supporting functional strategies in marketing, finance and operations to build toward long-term success. In the case of SkyWest, the company's "plan" was to let St. Cloud do all the work, market the service, take all the risk and promise a guaranteed return. SkyWest essentially had no "skin in the game" and acted accordingly, then blamed St. Cloud for the failure.

Kudos to Mayor Kleis and the leaders who worked hard to make the St. Cloud-to-Chicago air service a reality. This was a tremendous effort, and I hope it's not the end of the effort to bring permanent air service to Central Minnesota.

Michael Pesch is a professor of operations management at St. Cloud State University.