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SkyWest vs. United: Forbes Analysis Reveals Growth Potential Winner
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Published in Stocks and Investing on Sunday, December 28th 2025 at 5:29 GMT by Forbes- 🞛 This publication is a summary or evaluation of another publication
- 🞛 This publication contains editorial commentary or bias from the source
Navigating Turbulence: A Head-to-Head Airline Stock Showdown – SkyWest vs. United
The airline industry, historically volatile, has seen significant shifts in recent years. As 2025 draws to a close and investors look towards the new year, the question of which airline stock offers the most compelling opportunity remains a key debate. A recent Forbes analysis (published December 24, 2025) directly tackles this query, pitting SkyWest Airlines (SKYW) against United Airlines Holdings (UAL) in a detailed comparison designed to help investors make informed decisions. The article concludes that while both present unique risks and rewards, SkyWest currently holds the edge for investors seeking growth potential, albeit with higher risk tolerance.
Understanding the Contenders: A Brief Overview
The Forbes piece begins by establishing the fundamental differences between SkyWest and United. United Airlines, a legacy carrier, operates a vast global network with a focus on premium travel and international destinations. It's a behemoth, representing stability and established brand recognition but also burdened by significant debt and operational complexities – particularly in navigating fluctuating fuel prices and labor negotiations (as detailed in a recent UAL investor report cited within the Forbes article). United’s performance is deeply intertwined with macroeconomic trends affecting business travel and international tourism.
SkyWest, on the other hand, operates primarily as a regional airline under contract to major carriers like Delta, American, and Southwest. This “capacity purchase agreement” (CPA) model allows SkyWest to fly routes that larger airlines don't want or can’t profitably operate, essentially acting as an extension of their networks. This structure offers a degree of insulation from direct competition with the legacy carriers but makes SkyWest heavily reliant on the financial health and route strategies of its parent airlines – a point emphasized by analyst commentary included in the Forbes piece.
SkyWest: The Growth Story (and Its Risks)
The article highlights several factors supporting a positive outlook for SkyWest. Firstly, demand for regional air travel remains robust. As smaller cities and towns continue to see economic growth, the need for connections to larger hubs persists. Secondly, SkyWest’s CPA model allows it to adjust capacity more readily than United, enabling greater flexibility in responding to changing market conditions. This agility was particularly evident during the post-pandemic recovery period, according to the Forbes analysis, as SkyWest quickly adapted its routes and fleet deployment.
Furthermore, SkyWest's management team has demonstrated a history of operational efficiency and strategic acquisitions, expanding its network and bolstering its position within the regional airline landscape. The recent acquisition of Mesa Airlines’ CRJ900ER assets (discussed in detail on the AirNetNews website linked in the Forbes article) is cited as an example of this proactive approach to growth.
However, the Forbes piece doesn't shy away from SkyWest’s risks. The dependence on CPAs is a significant vulnerability. If Delta or American were to reduce their reliance on regional carriers – for example, by expanding their own domestic operations or outsourcing to alternative providers – SkyWest could face substantial revenue declines. The article also notes concerns about pilot shortages within the regional airline sector and potential inflationary pressures impacting operating costs, particularly maintenance expenses which are detailed in a recent regulatory filing mentioned. The ongoing negotiations with pilots regarding pay and benefits (covered by Reuters) add another layer of uncertainty.
United: Stability with Headwinds
United Airlines presents a more conservative investment proposition. The company’s size provides a degree of resilience against economic downturns, and its brand loyalty among premium travelers offers a consistent revenue stream. The article acknowledges United's efforts to modernize its fleet and improve customer experience, initiatives aimed at attracting and retaining high-value passengers.
However, the analysis emphasizes that United faces significant headwinds. Its substantial debt load, exacerbated by pandemic-era borrowing, limits its financial flexibility. The company’s exposure to international travel makes it vulnerable to geopolitical instability and fluctuating currency exchange rates. Moreover, ongoing labor disputes with various unions (covered extensively in Bloomberg) consistently threaten operational disruptions and increased costs. The article points out that United's recent quarterly earnings report showed a slower-than-expected recovery in business travel, indicating potential structural shifts in the market.
The Verdict: SkyWest for Growth, United for Stability
Ultimately, the Forbes analysis concludes that SkyWest offers greater upside potential for investors willing to accept higher risk. Its growth trajectory is tied to broader economic trends and the strategies of its parent airlines, but its agility and efficient operations position it favorably. However, a thorough understanding of the risks associated with the CPA model and pilot negotiations is crucial.
United Airlines, while offering more stability, appears to be facing persistent challenges that will likely limit its growth potential in the near term. The article suggests that United might be a suitable investment for risk-averse investors seeking dividend income or those who believe in the long-term resilience of legacy carriers.
Key Takeaways & Future Considerations:
- Regional Airline Dependence: SkyWest’s reliance on CPAs remains its biggest vulnerability, requiring careful monitoring of parent airline strategies.
- Pilot Shortages: The ongoing pilot shortage within regional airlines poses a systemic risk to the entire sector.
- Fuel Prices: Fluctuations in fuel prices will continue to impact both airlines' profitability, although hedging strategies can mitigate some of the effect.
- Macroeconomic Conditions: The overall health of the economy and consumer confidence will significantly influence air travel demand for both companies.
The Forbes article serves as a valuable reminder that even within established industries like aviation, careful due diligence and an understanding of specific business models are essential for successful investing. As 2025 concludes, investors considering airline stocks should weigh these factors carefully before making any decisions.
Read the Full Forbes Article at:
[ https://www.forbes.com/sites/greatspeculations/2025/12/24/which-airline-stock-to-invest-in-skywest-or-united/ ]
