Silver Airways SWOT Analysis

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Introduction

Silver Airways is a company striving to provide the best service possible to its customers through affordable prices and the expansion of flight destinations. Its management has set an ambitious goal of becoming a major US airline, thus, there is a need for strategic analysis and planning. The tool for defining an organization’s future course is SWOT analysis; it will allow the company executives to choose the best solution for the firm’s plans.

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SWOT Table.

Strengths Weaknesses
Partnership with American Airlines, United, JetBlue, American, Delta, Avianca, and Copa Airlines. (Business Wire, 2019, para. 5) Limited destinations (Silver Airways, n.d. b, para. 4)
Interline agreements with Air Canada, Alaska Airlines, All Nippon Airways, Azul, Bahamasair, Emirates, and Hahn Air (Business Wire, 2019, para. 5) The firm depends on partners for booking (Silver Airways, n.d. b, para. 4)
Strong leadership in the region (Business Wire, 2019, para. 1) Small aircrafts with less than fifty seats (Silver Airways, n.d. a, para. 9)
Above-average compensation to employees (Zippia, 2020, para. 2)
Acquiring Puerto Rico’s Seaborne Airlines with tropical destinations (Hurtibise, 2018, para. 1)
Opportunities Threats
Digital solutions and new technologies to optimize the operations (ReportLinker, 2020, para. 3) COVID-19 limitations and competition caused by the bankruptcy of similar companies (Ng, 2020, para. 2)
Partnership with a new carrier builder in the US (Silver Airways, n.d. a, para. 2) One carrier type with less than fifty seats limits operational choices (Silver Airways, 2018, para. 3)
New destinations, not only the Bahamas, the Southeast US, and the Caribbean (Business Wire, 2019, para. 5) The US citizens, the main target clients, may be forced to limit traveling in upcoming years (Scudellari, 2020, p. 25)
Protection of employee welfare during the time of pandemic (ReportLinker, 2020, para. 3)

SWOT Analysis: Silver Airways

Strengths

Silver Airways occupies a unique niche in the airline industry, with the main route designed explicitly for vacation clients traveling from Florida to the Bahamas and Caribbean. The recent acquirement of Puerto Rico-based Seaborne Airlines allowed the company to expand the geography of its destinations without adding numerous hours to the scheduled flights (Hurtibise, 2018, para. 1). The firm had similar to Silver Airways’ goals of providing tropical and relaxing getaways for US citizens (Seaborn Airlines, n.d., para. 1). Silver Airways is a leader in its region, which lets it set the prices for the services, choose current and potential destinations, and support loyal relationships with the customers who prefer to travel to the Bahamas or Caribbean resorts.

Numerous partnerships with equal or larger airlines advertise the company’s services to millions of potential clients via code sharing and loyalty programs. The list of Silver Airways business collaborations includes the following firms: American Airlines, United, JetBlue, American, Delta, Avianca, Copa Airlines, Air Canada, Alaska Airlines, All Nippon Airways, Azul, Bahamasair, Emirates, and Hahn Air (Business Wire, 2019, para. 5). Despite focusing mainly on US citizens, Silver Airways spreads information about its services through international collaborations. This helps to build the valuable reputation of the business for potential future expansion. Another strength of Silver Airways is its above-average employee compensation, which makes the firm attractive to pilots, managers, and other people who would like to connect their lives with the airline industry (Zippia, 2020, para. 2). The described qualities create an image of a stable, successful business that may grow in the next years.

Weaknesses

The main weaknesses of Silver Airways include heavy dependence on partners for booking and limited destinations. The company mainly operates flights between Florida and the Bahamas or other vacation destinations in the Caribbean and Southeast US (Business Wire, 2019, papa. 5). Considering that the management’s goal is to become a major US airline, such a narrow business field is a disadvantage compared to other airlines, such as American or United Airlines (Horton, 2020). The firm also depends heavily on ticket booking and advertisements through its partners (Silver Airways, n.d. b, para. 4). They may not be supportive if Silver Airways announces its decision to compete on the national level.

Opportunities

Many potential business opportunities are available for Silver Airways to develop and grow in the next decades. COVID-19 made current operations challenging for many touristic and hospitality services, but it also catalyzed technology development during the last year (ReportLinker, 2020, para. 2). Digital solutions could be incorporated in booking, registering, receiving luggage, flight entertainment, and advertisement of the company to optimize the operations. Another opportunity lies in partnering with a different aircraft builder, possibly from the US, not to be dependent solely on the current ATR-600s producers from France and Italy (Silver Airways, n.d. b, para. 4). This may decrease the designer and construction costs for the aircraft and increase their seat capacity.

Since Silver Airways is focused on vacation destinations and has a corresponding reputation, it would be reasonable for it to expand into the Latin American or US coastal areas. The mentioned places have various vacation resorts Americans choose to visit every year. If the company is strong enough financially, it may consider adding the routes to the US west coast and Hawaii. However, it would require significant spending on fuel and numerous bureaucratic procedures. Finally, Silver Airways, similar to many other regional airlines, suffers from the negative economic consequences of the COVID-19 pandemic as many people chose not to go on vacation last year (ReportLinker, 2020, para. 2). At this time of uncertainty, supporting the employees and guaranteeing their welfare through a newly developed program would be an opportunity for the company to keep its reputation as a thoughtful job provider.

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Threats

The coronavirus pandemic affected the airline industry significantly, and the amount of flights is not likely to return to pre-COVID-19 figures in the next several years. Many firms similar to Silver Airways claimed bankruptcy because they could not operate under the last year’s limitations (Ng, 2020, para. 2). While the analyzed business has not only survived but is considering further expansion, the potential threat of not generating profit in the needed amount will be present until the end of the pandemic. Even afterward, people would be likely reluctant to spare large sums of money on vacation traveling. They also may opt for business trips or visiting family in the continental US instead of going abroad.

The US citizens are the main target clients for Silver Airways. Since the COVID-19 consequences and elimination time are unknown yet, they may be forced to limit traveling in upcoming years. The scientists vary in their predictions about when it would be safe for the countries to open their borders and allow unrestricted tourism (Scudellari, 2020, p. 25). The company has to consider a scenario in which the traveling services will no longer be profitable.

Silver Airways has recently decided to upgrade its fleet with new ATR-600 aircraft to provide the best experience for the passengers. The new models are safe and technologically advanced, but they still fit less than fifty passengers in each airplane (Silver Airways, 2018, para. 3). Relying mainly on a single relatively small model significantly limits the flexibility of Silver Airways. It will not be prepared to compete with the firms providing similar services with higher seat capacity or different aircraft sizes available to adjust the flying vessel to the number of passengers.

Strategic Goals and Objectives

  • STRATEGIC GOAL 1: The first strategic goal is gaining a reputation as an independent airline that provides high-quality and all-inclusive service. Currently, Silver Airways is not easily recognizable by tourists and depends heavily on its partners for booking (Silver Airways, n.d. b, para. 4). As a successful outcome, the potential clients will start searching for Silver Airways directly.
    • Objective 1: The company needs to develop or buy the software necessary for the booking process promotion. It has to be convenient, simple, reliable, quick, and entertaining. Marketing will also be essential to allow the public to become familiar with the new booking interface and functions.
    • Objective 2: Silver Airways has to use screens and flyers for promotion in the national US airports to make holidays at the coast an attractive goal. The company can use COVID-19 as a reason for the sunny beaches to be a safe and healthy alternative to busy cities. People are tired of lockdowns and limitations and will be willing to go to the shore as long as the government does not prohibit it.
  • STRATEGIC GOAL 2: The second strategic goal is the route expansion of Silver Airways into Latin America and the West US coast. The recent acquisition of Seaborn Airlines by the analyzed company made it possible for the clients to travel south (Seaborn Airlines, n.d. para. 2). Further negotiation to add the popular destinations of Latin America may be beneficial for Silver Airways. In addition, California may also be considered a vacation resort for domestic US tourism.
    • Objective 1: Silver Airways has to negotiate the possibility of adding the popular vacation destinations in Mexico and Nicaragua with their local governments and tourist centers to the current flights. Many Americans enjoy scuba diving in Cancun and visiting the islands near Nicaragua. Seaborn Airlines could add those destinations to their schedule, although the flight time is likely to increase.
    • Objective 2: Silver Airways needs to contact the tourism and travel departments of California to consider the possibility of flying to the West coast. Santa Monica and Malibu beaches are popular destinations for surfing and sunbathing; however, additional luxury vacation advertisements may be needed to attract the required target audience.
  • STRATEGIC GOAL 3: The company must find an alternative aircraft manufacturer in the US for future development. Silver Airways has already achieved renewing its fleet with ergonomic and technological ATR-600s from Italy and France (Silver Airways, n.d. a, para. 6). However, a domestic designer and a larger aircraft would be preferred for further US market development.
    • Objective 1: Silver Airways needs to find an American aircraft designer and manufacturer for future operations. Adding the airplanes to the fleet is an expensive and long-term commitment, thus, the firm has to start acting on it now to be ready for the new routes and larger numbers of travelers.
    • Objective 2: The company has to define the number of seats and services people would demand in the future. This could be done by surveying and analyzing passengers’ and potential clients’ data over the next year.

Conclusion

This paper summarizes the SWOT characteristics of Silver Airways before suggesting three strategic goals with objectives. The aim of the planning is for the company to become a “major US airline,” as the management has stated. The strategic goals are the following: gaining a reputation as an independent airline, route expansion, and finding an alternative US aircraft maker for future activities. Silver Airways has much potential for ambitious and profitable development in the upcoming future.

References

Business Wire. (2019). Silver Airways and American Airlines announce a codeshare partnership. Web.

Horton, W. (2020). Why American Airlines is growing twice as fast as Delta and United. Forbes. Web.

Hurtibise, R. (2018). Fort Lauderdale-based Silver Airways acquires Puerto Rico’s Seaborne Airlines. Sun Sentinel. Web.

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Ng, A. (2020). Over 40 airlines have failed so far this year – and more are set to come. CNBC News. Web.

ReportLinker. (2020). Post-pandemic growth opportunity analysis of the global airport & airline industry. GlobeNewswire. Web.

Scudellari, M. (2020). How the pandemic might play out in 2021 and beyond. Nature, 584, 22-25. Web.

Seaborn Airlines. (n.d.). Our story. Web.

Silver Airways. (2018). Silver Airways announces major strategic growth developments and new leadership. Web.

Silver Airways. (n.d. a). A new Silver takes off. Web.

Silver Airways. (n.d. b). Company information. Web.

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Zippia. (2020). Silver Airways salary. Web.

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BusinessEssay. 2022. "Silver Airways SWOT Analysis." November 27, 2022. https://business-essay.com/silver-airways-swot-analysis/.

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