This is the 2962nd most frequent Japanese word.
スカイ
"Sky."
In this sentence, the word スカイ is used as a noun to directly refer to the concept of "sky." It is an English loanword used in Japanese.
スカイは空を意味します。
Sky means "the sky".
Here, スカイ is used as part of a composite noun "サンセットスカイ" to describe the sky during sunset.
私はサンセットスカイを見るのが好きです。
I enjoy watching the sunset sky.
In this case, スカイ is included in a proper noun "スカイツリー" which refers to an iconic structure in Japan.