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Category Archives: SkyWest Airlines

SkyWest Airlines to end Los Angeles-Carlsbad service on April 6

SkyWest Airlines (St. George, Utah) will United Express Embraer EMB-120 Brasilia service between the Los Angeles hub and Carlsbad/Oceanside, California on April 6, 2015. SkyWest is phasing out all of its Brasilias.

Copyright Photo: Michael B. Ing/AirlinersGallery.com. Embraer EMB-120ER Brasilia N568SW (msn 120343) arrives at Los Angeles International Airport.

United Express-SkyWest aircraft slide show:

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SkyWest Airlines is taking over the Endeavor Air Fort Wayne maintenance base

SkyWest Airlines (St. George, Utah) has informed its maintenance employees that it is taking over the Endeavor Air (Delta Connection) (Minneapolis/St. Paul) maintenance base at Fort Wayne, Indiana on February 1, 2015. The company expects to handle up to four overnight Bombardier CRJ200s for the Delta Connection system (see route map below).

Copyright Photo: Michael B. Ing/AirlinersGallery.com. SkyWest’s Bombardier CRJ200 (CL-600-2B19) N466SW (msn 7856) departs from Los Angeles in the house colors.

Delta Connection-SkyWest aircraft slide show:

Delta Connection-SkyWest current route map (click to expand):

Delta Connection-SkyWest 12.2014 Route Map

Alaska Airlines to expand its relationship with SkyWest Airlines with new Embraer 175s and three new cities

Alaska Airlines (Seattle/Tacoma) announced today it is expanding its partnership with SkyWest Airlines (St. George, Utah) with the addition of three new destinations from Alaska’s Northwest hubs. Flying on new Embraer ERJ 175 jets (a new type in Alaska colors), Alaska will begin offering daily nonstop service starting on July 1, 2015 between Seattle/Tacoma and Milwaukee, Wisconsin; Seattle/Tacoma and Oklahoma City, Oklahoma; and Portland, Oregon and St. Louis.

The 76-seat E175 jet will feature 12 seats in first class and 64 in coach, and boasts cabin dimensions on par with a Boeing 737. Onboard amenities include Wi-Fi Internet access, streaming inflight entertainment and 110 volt power in every first class seat. Food and beverage will include hot meals and picnic packs for purchase, in addition to Northwest microbrews and wine.

SkyWest has purchased seven Embraer E175 aircraft to fly on behalf of Alaska under a capacity purchase agreement (CPA). The first three aircraft will arrive in the summer of 2015, and the remaining four will be delivered in the first quarter of 2016.

SkyWest operates for Alaska Airlines as Alaska SkyWest.

Alaska 11.2014 New Service

“The E175 is new for the Alaska brand and fills a specific need to serve ‘long, thin routes’ – destinations that are too distant for our regional aircraft, but currently don’t have enough customer demand to fill a mainline jet,” said Andrew Harrison, senior vice president of planning and revenue management for Alaska Airlines. “The smaller, but spacious, E175 jet will not only open up new cities, but provide feed traffic to our Northwest hubs, while giving customers a comfortable experience on these longer flights.”

Today, SkyWest flies 40 flights a day between 14 cities for Alaska Airlines and by August 2016, that will increase to 52 flights a day to 17 cities.

Alaska Airlines has been growing its Seattle/Tacoma hub, this year launching service to six new cities which include Albuquerque, Baltimore/Washington, Cancun, Detroit, New Orleans and Tampa. With the addition of these new SkyWest-operated flights, next summer Alaska will offer 298 peak-day departures to 81 destinations from Seattle/Tacoma – three times any other carrier. From Portland, starting in July Alaska Airlines will offer 125 peak-day departures to 44 destinations – more than any other carrier.

In related news, SkyWest confirmed its order for seven Embraer 175s with this announcement:

SkyWest, Inc. and Embraer have confirmed a firm order for seven E175 jets. The aircraft will be flown by SkyWest Airlines under a Capacity Purchase Agreement (CPA) with Alaska Airlines. The value of the firm order, which will be included in Embraer’s 2014 fourth-quarter backlog, is estimated at $301 million, based on 2014 list prices.

These aircraft are part of SkyWest’s previous order for 100 (40 firm and 60 reconfirmable), E175 current generation E-Jets – with an additional 100 options – placed in May 2013, taking the firm order number to a total of 47. The E175s for Alaska Airlines will be configured with 76 seats including 12 First Class seats. Deliveries are schedule to begin in the second semester of 2015.

SkyWest Airlines operates a fleet of approximately 15 E175 and 39 EMB 120 Brasilia aircraft. ExpressJet Airlines operates 226 aircraft of the ERJ 145 family and is the largest ERJ operator in the world.

In a separate deal with Embraer, announced in June of 2013, SkyWest became the launch customer of the E175-E2, ordering 100 aircraft with 100 additional options, for deliveries beginning in 2020.

Copyright Photo: Michael B. Ing/AirlinersGallery.com. SkyWest Airlines currently operates 10 Bombardier CRJ900s (CL-600-2C10s) including the pictured N223AG (msn 10010) arriving at Long Beach.

Alaska Airlines aircraft slide show: AG Slide Show

Alaska SkyWest aircraft slide show:

SkyWest Airlines to start CRJ200 regional jet flights to Pocatello and Elko on January 1, 2015

SkyWest Airlines (Delta Connection) (St. George, Utah) will commence new daily jet service between Pocatello, Idaho and the Salt Lake City hub on January 1, 2015. SkyWest will operate Delta Connection flights from Pocatello to Salt Lake City with two roundtrips from Monday through Friday and one roundtrip on Saturdays and Sundays.

The new jet service will be onboard the 50-passenger Canadair Regional Jets (CRJ200s) and will replace the existing 30-seat Embraer EMB-120 turboprops. SkyWest Airlines is phasing out its EMB-120 Brasilias.

The carrier on the same day is also replacing its Brasilias with CRJ200s on the Salt Lake City-Elko, Nevada route.

Copyright Photo: Michael B. Ing/AirlinersGallery.com. SkyWest’s Bombardier CRJ200 (CL-600-2B19) N464SW (msn 7827) lands in Long Beach.

Delta Connection-SkyWest: AG Slide Show

Delta continues its Seattle/Tacoma expansion, announces 5 new routes

Delta Air Lines (Atlanta) will launch daily nonstop service next spring from Seattle-Tacoma International Airport to five new destinations in the continued expansion of its West Coast hub.

Delta’s new service will include:

Five daily flights to Denver, beginning June 4*
Four daily flights to Sacramento, Calif., beginning May 4* **
Four daily flights to Boise, Idaho, beginning May 4**
One seasonal daily flight to Ketchikan, Alaska beginning May 15**
One seasonal daily flight to Sitka, Alaska beginning May 15**

*Flight operated by Delta Connection carrier Compass Airlines
**Flight operated by Delta Connection carrier SkyWest Airlines

Delta will serve the top 15 destinations in the Western U.S. with the addition of Boise, Denver and Sacramento, while Ketchikan and Sitka complete the top five destinations in Alaska. Delta will also increase its number of daily flights from Seattle/Tacoma to Anchorage, Alaska; Atlanta; Calgary, Alberta; Detroit; Los Angeles; San Francisco and Salt Lake City.

On December 20, Delta will begin service from Seattle/Tacoma to several sun and ski destinations, including Bozeman, Mont.**; Maui, Hawaii; Palm Springs, Calif.**; Phoenix**; Puerto Vallarta, Mexico; and Tucson, Ariz.*; as well as a second daily flight to Honolulu. Additionally, Delta commenced service to Calgary** and Spokane, Wash.* **, at the beginning of November.

*Flight operated by Delta Connection carrier Compass Airlines
**Flight operated by Delta Connection carrier SkyWest Airlines

Delta currently operates 80 peak-day departures to 25 destinations from Seattle and will increase to 93 peak-day departures to 32 destinations in December. By next summer, Delta will offer 120 peak-day departures to 35 destinations.

The new routes will allow customers to seamlessly connect to Delta’s ten long-haul international flights from Seattle, while providing compelling travel options to cities important to local customers. Earlier this year, Delta launched international service to London-Heathrow, as well as Seoul and Hong Kong and now provides more international long-haul service from Seattle than all other airlines combined. This includes the top five destinations in Asia and three of the top four destinations in Europe. Delta is the only carrier to offer nonstop service from Seattle to Amsterdam, Hong Kong, Paris, Shanghai and Tokyo-Haneda.

Copyright Photo: Bruce Drum/AirlinersGallery.com. Compass Airlines is already operating several routes at SeaTac as a Delta Connection carrier with its Embraer 175s. ERJ 170-200LR N608CZ (msn 17000195) taxies to the runway at SEA.

Delta Air Lines (current livery): AG Slide Show

Delta Connection-Compass: AG Slide Show

 

SkyWest Airlines to remove all remaining Embraer EMB-120 Brasilias from service

SkyWest, Inc. (SkyWest Airlines and ExpressJet Airlines) (St. George, Utah) has announced fleet transitions and contract updates designed to improve SkyWest’s overall efficiency and long-term profitability.

Specifically, SkyWest announced that SkyWest Airlines, Inc., its wholly-owned subsidiary, intends to transition to an all-jet fleet by removing all remaining 30-seat Embraer EMB-120 Brasilia turboprop aircraft from service by summer 2015. The EMB-120 fleet retirement comes, in part, in response to increased costs and additional challenges associated with new FAR117 flight and duty rules, implemented in January 2014.

Separately, SkyWest announced that ExpressJet Airlines, Inc., its wholly-owned subsidiary, has executed an agreement with United Airlines, Inc. to reduce the term of the existing 50-seat ERJ 145 contract between ExpressJet and United from November 2020 to December 2017, subject to certain extension rights by United. ExpressJet Airlines anticipates the reduction in the ERJ 145 operations will improve its overall operational reliability and financial results.

As a result of the decision to remove the EMB-120 aircraft from service by June 2015 and as a result of the reduced term to operate the ERJ 145 aircraft, SkyWest, Inc. anticipates recording pre-tax special charges (primarily non-cash) ranging from $55-70 million in the fourth quarter of 2014.

It is unclear how the grounding and retirement of the Brasilia fleet will affect air service to remote communities.

Top Copyright Photo: Michael B. Ing/AirlinersGallery.com. SkyWest Airlines mainly operates its Brasilias under the United Express brand however 13 EMB-120s wear the SkyWest house livery (below). Embraer EMB-120ER brasilia N294SW (msn 120321) arrives in Los Angeles.

United Express-SkyWest Airlines aircraft slide show: AG Slide Show

SkyWest Airlines aircraft slide show: AG Slide Show

Bottom Copyright Photo: Michael B. Ing/AirlinersGallery.com. Embraer EMB-120ER Brasilia N217SW (msn 120286) arrives in Las Vegas.

SkyWest reports a third quarter net profit of $41.3 million

SkyWest, Inc. (SkyWest Airlines and ExpressJet Airlines) (St. George, Utah) today reported financial and operating results for the third quarter ended September 30, 2014. Highlights are as follows:

SkyWest’s net income was $41.3 million (inclusive of $15.3 million after-tax related to TRIP gain from below), or $0.79 per diluted share, for the quarter ended September 30, 2014. This compares to net income of $26.4 million, or $0.50 per diluted share, for the same period last year.

Significant financial items related to the third quarter included:

Operating income, which excludes TRIP gain, increased $2.9 million from the same period last year, despite the negative financial impact of FAR117 flight and duty rules implemented January 2014

The completion of the Trip Linhas Aereas S.A. stock sale resulted in a pre-tax gain of $24.9 million and interest income of $2.1 million

Operating revenues, after excluding a reduction in direct contract reimbursement for pass-through cost expenses, increased 1.9% compared to the prior period, despite a 6.0% reduction in departures and 3.8% reduction in block hours from the prior period

Significant operational and commercial items include:

16 ERJ145s were removed from contract during the third quarter of 2014. SkyWest anticipates 18 ERJ145s will be removed during the fourth quarter of 2014, and 23 ERJ145s and 9 ERJ135s will be removed during the first half of 2015.

As of September 30, 2014, SkyWest had 14 E175 jet aircraft in the United Airlines contract and took delivery of one additional E175 in October 2014. SkyWest expects delivery of six additional E175 aircraft by December 31, 2014 and the remaining 19 additional aircraft by August 2015.

ExpressJet appointed Alexandria Marren as its COO effective October 1, 2014

Operational reliability at ExpressJet improved to 99.4% adjusted completion for the September 30, 2014 quarter from 99.0% from the same period last year

SkyWest invested approximately $35.7 million for E175 specific spare parts, engines and tooling as of September 30, 2014. SkyWest also invested $56.0 million into E175 ownership equity as of September 30, 2014.

Commenting on the results, Jerry C. Atkin, SkyWest’s Chairman and CEO said, “The increase in operating income from last year is positive news when factoring the significant cost impact of FAR117 we’ve experienced in 2014 and the reduction in departures and block hours since last year.” He continued, “As we pursue opportunities to remove our older 50-seat aircraft from service and add new larger dual-class aircraft, we are optimistic that our operational reliability and financial results will continue to improve. We remain committed to our major partners and our process to improve both financial and operating performance.”

Financial Performance

Total operating revenues, excluding the significant direct contract reimburses for fuel, landing fees, station rents, and engine maintenance, increased by $12.7 million during the quarter ended September 30, 2014 from the same period last year. The improvement was primarily due to certain contract renewals and modifications, operating additional E175 aircraft, and increased government subsidies for operating certain routes.

Flight crew costs and related crew hotels expenses associated with FAR117 and training costs for the introduction of the new E175 aircraft, that resulted in an increase of $13.8 million in operating costs compared to the quarter ended September 30, 2013.

Direct maintenance expense, excluding engine maintenance expense, decreased $12.2 million during the quarter ended September 30, 2014 compared to the same period last year due to a reduction in scheduled events and removal of older aircraft after June 30, 2013. Certain other operating expenses, primarily related to the E175 aircraft and pro-rate operations, increased during the three months ended September 30, 2014 compared to the same period last year.

Liquidity

At September 30, 2014, SkyWest had $555.7 million in cash and marketable securities, compared to $467.0 million as of June 30, 2014 and $670.1 million as of December 31, 2013. Cash and marketable securities decreased $114.4 million from December 31, 2013 to September 30, 2014, primarily due to SkyWest’s investment of approximately $91.7 million in E175 assets and E175 equity investment in the debt financing and timing of semi-annual aircraft lease payments resulting in an increase of prepaid aircraft rents of $20.3 million. The cash and marketable securities balance increased from June 30, 2014 primarily due to pre-tax income generated during the quarter.

Long-term debt increased $130.8 million from December 31, 2013 to September 30, 2014. During this period, $323.7 million of long-term debt was used for the 14 E175 aircraft delivered in 2014, offset by principal payments made on outstanding debt.

Copyright Photo: Mark Durbin/AirlinersGallery.com. As the Embraer ERJ 135 and ERJ 145 fleet shrinks at ExpressJet, SkyWest Airlines had 14 Embraer ERJ 175 jet aircraft in the United Airlines contract at the end of September and took delivery of one additional ERJ 175 this month. SkyWest expects delivery of six additional E175 aircraft by December 31, 2014 and the remaining 19 additional aircraft by August 2015. Embarrass ERJ 170-200LR (ERJ 175) N118SY (msn 17000420) taxies at the San Francisco hub.

United Express-SkyWest Aircraft Slide Show: AG Slide Show

United to add Wi-Fi to over 200 two-cabin United Express regional jets

United Airlines (Chicago) announced plans to outfit more than 200 two-cabin United Express regional jets with Wi-Fi and personal device entertainment, with the first Wi-Fi-enabled flights expected later this year.

The airline intends to install Gogo’s ATG-4 advanced air-to-ground Wi-Fi product on Embraer 170, 175 and Bombardier CRJ700 aircraft and to complete planned installations by next summer.

Early next year, United expects to expand personal device entertainment to these aircraft, enabling customers to select from a wide range of movies and television shows to view on their Wi-Fi-enabled iOS and Android devices using United’s mobile app, as well as on laptop computers.

Regional Jet Investments

United has announced significant investments in its United Express service, including:

A fleet of 120 brand new Embraer 175 regional jets (above), which offer 12 seats in United First with in-seat power, 16 United Economy Plus seats, and larger overhead bins throughout the aircraft;

New, modern seats with a signature seat design on more than 100 CRJ700 aircraft and on the E175 fleet; and

Freshly prepared food for premium-cabin customers on United Express flights beginning in 2015.

Wi-Fi and Entertainment Investments

The launch of regional jet Wi-Fi and personal device entertainment is United’s latest investment in its customers’ in-flight connectivity. The airline also offers:

More than 340 aircraft with Wi-Fi, including nearly two-thirds of its mainline domestic fleet, with plans to install Wi-Fi on the entire mainline fleet by mid-2015; and

More than 180 mainline aircraft with personal device entertainment, including all Boeing 747s and Airbus aircraft and nine Boeing 777s that primarily fly between the continental U.S. and Hawaii. United plans to offer personal device entertainment on more than 200 mainline aircraft by the end of this year.

Copyright Photo: Mark Durbin/AirlinersGallery.com. Operated by SkyWest Airlines, Embraer ERJ 170-200LR (ERJ 175) N118SY (msn 17000420) taxies at the San Francisco hub.

United Airlines: AG Slide Show

United Express-SkyWest:

AG Slide Show

United Express-SkyWest Aircraft Slide Show:

SkyWest Airlines to drop Chico, California on December 2

SkyWest Airlines (United Express) (St. George, UT) will drop Chico, California and the Chico-San Francisco route on December 2. The route is not profitable according to KRCR News. This will end commercial air service at the airport.

Read the full article: CLICK HERE

Copyright Photo: Mark Durbin/AirlinersGallery.com. Embraer EMB-120ER Brasilia N295SW (msn 120322) taxies at the San Francisco hub.

United Express-SkyWest Airlines: AG Slide Show

United Airlines to start San Francisco-Montrose, Colorado flights

United Airlines (Chicago) will start twice-weekly United Express service, operated by SkyWest Airlines (St. George, UT) CRJ700s, between its San Francisco hub and Montrose, CO on December 20 per Airline Route.

Copyright Photo: Michael B. Ing/AirlinersGallery.com. Bombardier CRJ700 (CL-600-2C10) N763SK (msn 10228) of SkyWest Airlines departs from Los Angeles.

United Airlines (current): AG Slide Show

United Express-SkyWest: AG Slide Show

SkyWest swings to a $14.7 million net loss for the second quarter

SkyWest, Inc. (SkyWest Airlines and ExpressJet Airlines) (St. George, UT) reported financial and operating results for the second quarter ended June 30, 2014. Highlights are as follows:

SkyWest’s net loss was $(14.7) million, or $(0.29) per diluted share, for the quarter ended June 30, 2014. This compares to net income of $20.7 million, or $0.39 per diluted share, for the same period last year.
The significant items that impacted the financial results for the quarter ended June 30, 2014 included the following:

We achieved lower than anticipated performance incentive bonuses under our flying contracts and had unfavorable flying contract settlements that negatively impacted revenue.

We experienced a significant amount of pilot training and related costs associated with compliance with FAR117 flight and duty rules, pilot attrition and introduction of the new E175 aircraft.

We wrote-off certain asset values acquired through the ExpressJet acquisition, wrote-down the carrying value of the Saltillo paint facility and recorded a loss on the disposition of ground handling fixed assets.
A change in our estimated pre-tax results for calendar 2014 resulted in the reversal of a portion of the income tax benefit we recorded in the first quarter of 2014.

2014 and the first half of 2015 will be a significant transition period for SkyWest, and to address the challenges we have made key leadership changes and fleet changes, such as:

In May 2014, SkyWest announced Russell “Chip” Childs as President, SkyWest, Wade Steel EVP, SkyWest and Michael Thompson, COO, SkyWest Airlines

In the second half of 2014, SkyWest expects 56 of its unprofitable 50-seat aircraft contracts will naturally expire and the aircraft will be returned to lessors. SkyWest also expects an additional 101 unprofitable 50-seat aircraft contracts will naturally expire and be removed from service by December 31, 2015.

SkyWest added eight E175 regional jet aircraft as of June 30, 2014, expects delivery of 13 additional E175 aircraft by December 31, 2014 and the remaining 19 additional aircraft by August 2015. With the training and other start-up costs associated with the E175 aircraft launch, SkyWest anticipates the economic benefit of the E175 aircraft will become evident by the second quarter of 2015.

SkyWest invested approximately $26.8 million for E175 specific spare parts, engines and tooling as of June 30, 2014 and anticipates investing another $10.0-$12.0 million for similar items by the end of 2014. SkyWest also invested $33.6 million into E175 ownership equity as of June 30, 2014.

Other notable items that occurred during the quarter, or subsequent to the quarter end, include the following:

We repurchased $5.3 million or 427,500 shares of outstanding common stock

We settled our outstanding IROP’s suit with Delta Air Lines with no immediate or additional further negative impact to our financial results.

Commenting on the results, Jerry C. Atkin, SkyWest’s Chairman and CEO, said, “Although we recovered somewhat from the severe weather and related impact we suffered during the first quarter of 2014, we faced additional issues in the second quarter of 2014 and our financial and operating results simply did not meet our expectations during the quarter.” He continued, “However, non-operating items accounted for about 50% of the lower results at ExpressJet Airlines while SkyWest Airlines financial performance was slightly better than plan. We believe we are on the right path and will continue to work with our major partners and internally to achieve the objectives for improving both financial and operational performance. On a positive note, SkyWest Airlines achieved a successful introduction of 11 of 40 firm ordered E175 regional jet aircraft under contract with United Airlines.”

Financial and Operating Results

Operating revenues totaled $816.6 million for the quarter ended June 30, 2014, compared to $839.1 million for the same period of 2013, a decrease of $22.5 million. The significant items impacting operating revenue, after excluding the impact of pass-through costs under our flying agreements, include missed contract performance incentives and unfavorable flying contract settlements that resulted, in the aggregate, in $9.8 million lower revenue compared to the quarter ended June 30, 2013.

The significant items that impacted our total airline expenses (consisting of total operating and interest expenses) after excluding the impact of pass-through costs under our flying agreements, include increased flight crew costs related to implementation of FAR117 flight and duty rules, pilot turnover and training costs for the introduction of the new E175 aircraft, that resulted in an increase of $20.6 million compared to the quarter ended June 30, 2013. We also wrote-off a foreign value added tax asset associated with our aircraft paint facility in Saltillo as well as wrote-down the carrying value of the facility due to changes in its value and recorded a loss on the disposition of ground handling equipment that resulted in a combined write-off of $6.8 million.

Liquidity

At June 30, 2014, SkyWest had $467.0 million in cash and marketable securities, compared to $670.1 million as of December 31, 2013. Cash and marketable securities decreased $203.1 million from December 31, 2013 to June 30, 2014, primarily due to SkyWest’s investment of approximately $60.0 million in E175 assets and E175 equity investment in the debt financing, timing of semi-annual aircraft lease payments resulting in an increase of prepaid aircraft rents of $48.0 million, incurring a pre-tax loss for the six months ended June 30, 2014 of $46.0 million and investment of approximately $20.0 million in engines for our CRJ200 aircraft. SkyWest also anticipates refinancing interim debt financed aircraft into long-term leases, and if it is successful in that process, SkyWest’s management anticipates the return of approximately $34.0 million in cash.

Copyright Photo: Michael B. Ing/AirlinersGallery.com. Operating 50-seat regional jets has been a drag on earnings for the company. According to the company, “In the second half of 2014, SkyWest expects 56 of its unprofitable 50-seat aircraft contracts will naturally expire and the aircraft will be returned to lessors. SkyWest also expects an additional 101 unprofitable 50-seat aircraft contracts will naturally expire and be removed from service by December 31, 2015.” Bombardier (Canadair) CRJ200 (CL-600-2B19) N652BR (msn 7429) in the house SkyWest colors departs from Los Angeles International Airport.

SkyWest Airlines: AG Slide Show

Combined Route Map:

SkyWest 8.2014 Route Map

United expands Embraer 175 operations

United Express ERJ 175s (United)(LRW)

United Airlines (Chicago) will add additional Embraer 175 flights from the San Francisco hub in the fall. In addition to the previously-reported routes, United will add United Express service from SFO with the new E175 flights to Boise (starting on September 30), Calgary (September 21), Dallas/Fort Worth (October 26), Kansas City (October 26), St. Louis (September 20) and Salt Lake City (October 26) per Airline Route.

The SFO flights are expected to be operated by SkyWest Airlines.

SkyWest Airlines operated its E175 inaugural flight, operating as United Express, from Chicago O’Hare to Reagan National Airport in Washington, D.C. on Saturday, May 17. According to SkyWest, “the milestone represented a tremendous amount of preparation and hard work by many SkyWest employees during the last 15 months.”

Within the next two years, SkyWest will take delivery of 40 new E175s that will operate under an agreement with United Airlines.

According to the airline, “the E175 is the fifth aircraft type in SkyWest’s current fleet, and from full-sized cargo-bins to larger aisles and seats, it’s filled with enhanced features that will help ensure every passenger enjoys a comfortable, convenient flight.”

From Houston, E175 service on flights between the hub at George Bush Intercontinental Airport and Atlanta and New Orleans begins on June 15, and between Houston and Austin starting on June 16. United also launched E175 service between Chicago O’Hare and Minneapolis/St. Paul on June 5; between Chicago O’Hare and Atlanta beginning on June 15; and between Chicago O’Hare and New York LaGuardia beginning on June 23.

United Express carrier Mesa Airlines will operate the flights between Houston and Atlanta, Austin and New Orleans. United Express carrier SkyWest Airlines will operate the flights between Chicago and Atlanta, New York LaGuardia and Minneapolis/St. Paul.

Copyright Photo: United Airlines.

 

 

United to end its regional routes to Las Vegas on September 2

United Airlines (Chicago) will end its Embraer EMB-120 Brasilia regional routes to Las Vegas on September 2 per Airline Route. SkyWest Airlines (St. George) currently operates its United Express Brasilias to both Fresno and Palm Springs from LAS.

Additionally United is starting nonstop United Express Bombardier CRJ200 regional jet service from its San Francisco hub to Kelowna, British Columbia on September 20.

Copyright Photo: Eddie Maloney/AirlinersGallery.com. SkyWest’s EMB-120ER Brasilia N568SW (msn 120343) lands at LAS.

United Airlines (current): AG Slide Show

United Express-SkyWest: AG Slide Show

United to drop United Express service from Portland, Oregon to Eugene, Redmond and Seattle/Tacoma

United Airlines (Chicago) has decided to drop its United Express flights from Portland, Oregon to Eugene, Redmond and Seattle/Tacoma on September 1 according to Oregon Live. The flights are operated by SkyWest Airlines Embraer EMB-120ER Brasilias.

Read the full story from Oregon Live: CLICK HERE

In addition, United is dropping service to Doha, Qatar on August 30 as an extension of the daily Washington (Dulles)-Dubai route according to Airline Route.

Copyright Photo: Bruce Drum/AirlinersGallery.com. SkyWest Airlines EMB-120ER Brasilia N584SW (msn 120352) taxies across the ramp at Seattle-Tacoma International Airport (SEA).

United Airlines (current): AG Slide Show

United Express-SkyWest: AG Slide Show

United Airlines and SkyWest Airlines introduce the Embraer 175

United Express ERJ 175 PR-EFC (CO 91)(Flt)(Embraer-United)(LRW)

United Airlines (Chicago) has introduced the Embraer 175 aircraft to the United Express fleet, with service on the regional jet operating between Chicago (O’Hare) and the top business markets of Washington (Reagan National) and Boston (Logan).

United Express carrier SkyWest Airlines (St. George, Utah) began Boston service today (May 19). Service between Chicago (O’Hare) and Ronald Reagan Washington National Airport began on Saturday (May 17). The E175 flights complement existing United service in those markets.

The 76-seat E175 regional jet is the newest addition to the United Express fleet, enabling the airline to offer an improved regional jet experience. With 12 seats in United First, 16 seats in United Economy Plus and 48 seats in United Economy, the E175 offers more personal space for customers, with wider seats and aisles than other regional aircraft. Each United First seat features a power outlet. The aircraft’s large overhead bins can accommodate standard-sized carry-on bags, resulting in more convenience for customers.

United will offer E175 in several additional markets beginning in June, complementing existing United services:

Chicago O’Hare-Minneapolis /St. Paul, beginning June 5
Chicago O’Hare-Atlanta, beginning June 15
Houston Bush Intercontinental-Atlanta, beginning June 15
Houston Bush Intercontinental-New Orleans, beginning June 15
Chicago O’Hare-New York LaGuardia, beginning June 23
San Francisco-St. Louis, beginning September 20
San Francisco-Austin, beginning October 26
San Francisco-Dallas/Fort Worth, beginning October 26
San Francisco-Minneapolis/ St. Paul, beginning October 26

SkyWest Airlines will operate the services to and from Chicago O’Hare International Airport and to and from San Francisco International Airport. Mesa Airlines will operate the flights to and from Houston George Bush Intercontinental Airport.

United expects to introduce 70 E175 aircraft into the United Express fleet by the end of 2015. As United inducts new aircraft into the fleet, the airline will remove smaller, less efficient regional aircraft from the fleet. The E175s consume less fuel per seat and have fewer CO2 emissions per seat than the aircraft they replace.

Copyright Photo: United Airlines.

United Airlines (current): AG Slide Show

United Express-SkyWest Airlines: AG Slide Show

SkyWest reports a rare first quarter net loss of $22.9 million due mainly to bad weather

SkyWest, Inc. (SkyWest Airlines and ExpressJet Airlines) (St. George, Utah) reported a net loss of $22.9 million, or $0.44 per diluted share, for the first quarter ended March 31, 2014, compared to net income of $3.2 million, or $0.06 per diluted share, for the same period last year.

Quarter Summary

Due primarily to the severe weather and its related effects during the quarter ended March 31, 2014, SkyWest experienced a significantly larger pretax loss than it previously anticipated. Consistent with the experience reported by other airlines operating in the eastern United States, SkyWest experienced a significant number of flight cancellations related to a series of severe winter storms during the quarter ended March 31, 2014. Specifically, SkyWest, through its operating airlines, SkyWest Airlines, Inc. (SkyWest Airlines) and ExpressJet Airlines, Inc. (ExpressJet Airlines) cancelled a total of approximately 27,000 flights during the quarter ended March 31, 2014, of which approximately 21,000 were related to the severe weather. As a result of these flight cancellations, SkyWest not only experienced a negative effect on total operating revenues due to block hours not flown, but also experienced increased total operating costs due to its obligations to pay flight crews for cancelled flights, as well as incurring additional maintenance and other expenses from the negative effects of the severe weather.

Following are selected statistics and financial and operating information from the quarter ended March 31, 2014, compared to the quarter ended March 31, 2013:

Net income declined from $3.2 million for Q1 2013 to a net loss of $(22.9) million for Q1 2014

Fully-diluted EPS declined from $0.06 for Q1 2013 to $(0.44) for Q1 2014

Block hour production declined (4.4)%, from 571,991 block hours during Q1 2013 compared to 546,813 block hours during Q1 2014

Estimated aggregate negative financial impact of severe weather in Q1 2014 of $30.3 million pretax from plan

Additional maintenance costs of approximately $6.2 million in Q1 2014 due to weather and general aging of the fleet

Repurchased $3.1 million, or 242,250 shares of outstanding common stock

Took delivery of first E175 regional jet aircraft in firm order of 40 aircraft

Increased total aircraft fleet to 758 aircraft as of March 31, 2014, compared to 752 aircraft as of March 31, 2013

Outlook for 2014

With the challenges experienced in the first quarter some outlook is provided here for the remainder of 2014. It will continue to be a year of transition for SkyWest as we are working to resolve financial and operational issues with our operating airlines and work with our major partners for mutually beneficial resolutions to these challenges. We will see continued reductions of our 50 seat aircraft and flying as indicated in the attached table to this release as well as take delivery of an estimated 23 Embraer E175 regional jet aircraft. The reduction of 50 seat aircraft coincides with capacity purchase agreement expirations on the 50 seat aircraft, the majority of which are aircraft financed by our major partners and will be returned to the major partner with no further obligation by SkyWest. The certification process for the Embraer E175 regional jet aircraft continues as previously scheduled and we anticipate flying our first aircraft in scheduled operations later in May 2014. This certification process will result in additional transition costs related to the launch of a new aircraft type on the SkyWest platform, including training costs.

Commenting on the results, Jerry C. Atkin, SkyWest’s Chairman and CEO, said, “Due primarily to factors outside of our control from the series of severe winter storms, we experienced a significant negative impact to our financial and operating results for the quarter ended March 31, 2014.” He continued, “We have experienced some relief from the severe weather in the month of April and look to achieve more normalized operating and financial results in the remaining quarters for 2014. On a positive note, we continue to make good progress on our certification work for the Embraer E175 regional jet and have taken delivery of the first two of the 40 E175 aircraft order.”

Financial and Operating Results

Operating revenues totaled $772.4 million for the quarter ended March 31, 2014, compared to $803.5 million for the same period of 2013, a decrease of $31.1 million. The decrease was due primarily to three factors, 1) a reduced amount of revenue of approximately $21.1 million from fuel expenses, certain engine overhaul amounts, landing fees and station costs which are recorded as operating revenues and are considered “pass-through amounts” under contracts with SkyWest’s major partners, 2) a reduction of approximately $20.5 million as a result of significant flight cancelations, including missed markup and margins, from weather impact and 3) increases of approximately $10.5 million from normal contract escalations in SkyWest’s contract flying and improvements in prorate flying.

Total airline expenses (consisting of total operating and interest expenses) increased approximately $10.0 million, or 1.2%, during the quarter ended March 31, 2014, compared to the same period in 2013. However, after deducting “pass-through” costs like fuel, certain engine overhaul expenses, aircraft ownership, landing fees and station costs from total operating cost and interest expenses, the remaining total airline expenses increased $31.0 million. Management estimates that approximately $20.1 million of the increase was due primarily to increased flight crew and maintenance labor costs related to severe weather impact and approximately $6.2 million from aircraft maintenance expenses, again related to the weather impact and general aging of SkyWest’s fleet. Lastly, SkyWest Airlines incurred approximately $1.5 million, consisting primarily of pilot training costs, related to certification costs of the new E175 aircraft.

Under certain of its agreements with its major partners, SkyWest recognizes revenue at fixed hourly rates for mature engine maintenance on regional jet engines and recognizes engine maintenance expense on its CRJ200 Regional Jet (CRJ200) engines on an as-incurred basis as maintenance expense. During the quarter ended March 31, 2014, CRJ200 engine expense under these agreements decreased $3.3 million to $6.7 million, compared to $10.0 million for the quarter ended March 31, 2013, primarily as a result of decreased engine overhaul expense due to the timing of scheduled engine maintenance events. SkyWest was reimbursed approximately $12.4 million and $11.4 million for engine overhaul expense, under its agreements with its major partners, during the quarters ended March 31, 2014 and 2013, respectively.

Liquidity

At March 31, 2014, SkyWest had $542.7 million in cash and marketable securities, compared to $670.1 million as of December 31, 2013. Cash and marketable securities decreased $127.4 million during the quarter ended March 31, 2014 compared to the balance as of December 31, 2013, due primarily to SkyWest’s normal recurring debt and lease payments made on a semi-annual basis, amounts spent for capital expenditures for operations and operating losses experienced at ExpressJet Airlines, primarily related to the severe weather impact. SkyWest’s long-term debt was $1.28 billion as of March 31, 2014, compared to $1.29 billion as of March 31, 2013. SkyWest has significant long-term lease obligations that are recorded as operating leases and are not reflected as liabilities on SkyWest’s consolidated balance sheets. At a 5.8% discount rate, the present value of these lease obligations was approximately $1.4 billion as of March 31, 2014.

Business Developments

On May 21, 2013, SkyWest announced it had entered into a Capacity Purchase Agreement (“CPA”) with United Airlines, Inc. (United Airlines) to operate 40 new Embraer E175 dual-class regional jet aircraft. The CPA is for 12 years and the new aircraft are scheduled to be operated by SkyWest Airlines. Deliveries for these aircraft began in March 2014 and are expected to continue through July 2015. The aircraft are expected to start to be introduced into service for United in mid-May 2014.

Additionally, on May 21, 2013 SkyWest announced it reached an agreement with Embraer S.A. (Embraer) for the purchase of 100 new E175 dual-class regional jet aircraft, 40 of which are considered firm orders and are scheduled to be placed into service under the United CPA discussed above. The remaining 60 aircraft remain conditional upon SkyWest entering into capacity purchase agreements with other major airlines. SkyWest also has an option for an additional 100 E175 dual-class regional jet aircraft.

On June 17, 2013, SkyWest and Embraer jointly announced an aircraft purchase agreement covering 100 E175-E2 dual-class regional jet aircraft and an option to purchase an additional 100 of the same aircraft. Deliveries for these E2 aircraft are tentatively planned to start in 2020.

During 2012, SkyWest announced the award of 34 additional dual-class aircraft and the removal of 66 CRJ200 aircraft under its Delta Connection agreements with Delta Air Lines, Inc. (Delta Air Lines). As of May 2013, all 34 of these additional dual-class aircraft had been delivered. As of March 31, 2014 SkyWest had removed 38 (22 placed in contract with another major partner and 16 removed from SkyWest’s fleet) of the 66 CRJ200 aircraft from service and currently anticipates removing another 22 CRJ200 aircraft during 2014. SkyWest believes the remaining six CRJ200 aircraft will be removed from its fleet in early 2015. Additionally, 41 of the 66 CRJ200 aircraft were financed by Delta and have been returned or will be returned to Delta with no further obligation by SkyWest.

Read the analysis of why SkyWest suffers the most during periods of bad weather from Bloomberg Businessweek: CLICK HERE

Copyright Photo: Michael B. Ing/AirlinersGallery.com. SkyWest believes the remaining six Bombardier CRJ200 aircraft will be removed from the Delta Connection contract fleet in early 2015. Bombardier CRJ200 (CL-600-2B19) N427SW (msn 7497) of SkyWest Airlines approaches the runway at Long Beach in the old 2000 livery.

Delta Connection-SkyWest Airlines: AG Slide Show

SkyWest Airlines to operate United Express flights from the Denver hub to Hays, Kansas starting on August 1

 

SkyWest Airlines (United Express) (St. George, Utah) will start a new route for United Airlines. The first United Express flight, operated by SkyWest Airlines, from Hays, Kansas to Denver is scheduled to take off beginning on August 1, 2014.

The Hays flights will operate using 50-seat Bombardier-manufactured CRJ200 regional jet aircraft.

Copyright Photo: Ton Jochems/AirlinersGallery.com. SkyWest’s Bombardier CRJ200 (CL-600-2B19) N930SW (msn 7713) operating in United Express colors arrives in Los Angeles.

SkyWest Airlines: AG Slide Show

SkyWest Route Map:

SkyWest 4.2014 Route Map

 

 

United Airlines to end all service to Klamath Falls and Modesto in June

United Airlines (Chicago) will end United Express Embraer EMB-120 Brasilia service to Klamath Falls, Oregon (from Portland and San Francisco) on June 3 per Airline Route. Service to Modesto, California from San Francisco will end on June 4. The routes are operated by SkyWest Airlines (St. George, Utah).

Copyright Photo: Michael B. Ing/AirlinersGallery.com. Embraer EMB-120ER Brasilia N233SW (msn 120307) arrives in Los Angeles.

United Express-SkyWest: AG Slide Show

Current SkyWest (United Express) routes on the West Coast:

United Express-SkyWest WC 4.2014 Route Map

 

Embraer delivers the first Embraer E175 to SkyWest Airlines

United Express-SkyWest ERJ 175 PR-EED (CO 91)(Grd) SJK (Embraer)(LR)

Embraer (São José dos Campos) yesterday (March 27) delivered, in a ceremony held at the Company’s headquarters, in São José dos Campos, the first dual-class 76-seat Embraer 175 (ERJ 175) to SkyWest Inc. (SkyWest Airlines) (St. George, Utah). The aircraft is part of the firm order signed by the airline last year, for 40 E175 aircraft. SkyWest Airlines will operate the aircraft as an United Express carrier for United Airlines. The E175s are configured in a dual-class 76-seat layout.

An additional 60 orders are reconfirmable, subject to SkyWest being awarded Capacity Purchase Agreement (CPA) contracts with major U.S. airline partners. The agreement between SkyWest and Embraer also includes options for another 100 E175s, taking the potential total order up to 200 airplanes.

In a separate deal with Embraer, SkyWest became the launch customer of the E175-E2, ordering 100 aircraft with 100 additional options, for deliveries beginning in 2020.

SkyWest is the largest regional airline group in the world and is the parent company of SkyWest Airlines and ExpressJet Airlines. Both companies have long histories with Embraer and were early customers for the Embraer EMB 120 Brasilia turboprop aircraft. More than 40 EMB 120 Brasilia aircraft currently fly in the SkyWest Airlines network, primarily in the western United States. ExpressJet Airlines operates 251 aircraft of the ERJ 145 family and is the largest ERJ operator in the world.

The new type is due to enter revenue service on May 17, 2014 on the Chicago (O’Hare)-Washington (Reagan National) route.

Copyright Photo: Embraer.

United Express-SkyWest: AG Slide Show

Routes operated as United Express:

United Express-SkyWest 3.2014 Route Map

 

SkyWest to upgrade service to Twin Falls, Idaho this summer

Logo

SkyWest Airlines (Delta Connection) (St. George, Utah) will upgrade service to Twin Falls, Idaho this summer to Bombardier CRJ200 service from Embraer EMB-120 Brasilia flights. The airlines issued this statement:

“Flying in and out of Twin Falls is about to get an upgrade with the start of new jet service this summer. The daily Delta Connection flights, operated by SkyWest Airlines, are scheduled to begin June 5. This transition to larger, jet aircraft will continue to make flying out of Magic Valley Regional Airport simple and convenient.

The twice-daily jet service will be onboard the 50-passenger Bombardier-manufactured Canadair Regional Jet 200 (CRJ200) and will replace the current 30-passenger EMB-120 Brasilia flights.”

Copyright Photo: Michael B. Ing/AirlinersGallery.com. Bombardier CRJ200 (CL-600-2B19) N912SW (msn 7595) prepares to touch down in Los Angeles.

Delta Connection-SkyWest: AG Slide Show

Delta Connection routes operated by SkyWest Airlines:

Delta Connection-SkyWest 3.2014 Route Map

 

SkyWest Airlines to add two new United Express destinations in North Dakota

SkyWest Airlines (St. George, Utah) has announced new United Express jet service from Jamestown and Devils Lake Regional Airports to the Denver hub.

Beginning June 5, 2014, there will be 11 roundtrip flights each week from both Jamestown and Devils Lake to Denver, including both nonstop and one-stop trips. Every flight is timed to provide extensive connection opportunities on hundreds of daily United Airlines flights in Denver.

The new service from Jamestown and Devils Lake will be operated with 50-passenger Bombardier-manufactured Canadair Regional Jet 200s (CRJ200s).

Copyright Photo: Michael B. Ing/AirlinersGallery.com. SkyWest’s Bombardier CRJ200 (CL-600-2B19) N973SW (msn 7949) climbs away from the runway at Los Angeles International Airport.

United Express-SkyWest: AG Slide Show

Routes operated as United Express:

United Express-SkyWest 3.2014 Route Map

United Airlines announces additional Embraer 175 routes

United Express ERJ 175 (CO 91)(Flt)(United)(LRW)

United Airlines (Chicago) has announced that it will launch service with the airline’s new Embraer 175 aircraft on flights between United’s Houston hub at George Bush Intercontinental Airport and Atlanta and New Orleans beginning on June 15, and between Houston and Austin beginning on June 16. United also announced ERJ 175 service between Chicago O’Hare and Minneapolis/St. Paul beginning on June 5; between Chicago O’Hare and Atlanta beginning on June 15; and between Chicago O’Hare and New York LaGuardia beginning on June 23.

The 76-seat ERJ 175 regional jet is the newest addition to the United Express fleet. The aircraft features 12 seats in United First, 16 seats in United Economy Plus and 48 seats in United Economy. United Express carrier Mesa Airlines (Phoenix) will operate the flights between Houston and Atlanta, Austin and New Orleans. United Express carrier SkyWest Airlines (St. George, Utah) will operate the flights between Chicago O’Hare and Atlanta, New York LaGuardia and Minneapolis/St. Paul.

Last month, United announced that SkyWest Airlines will operate ERJ 175 service between Chicago O’Hare and Reagan Washington National beginning on May 17 and between Chicago O’Hare and Boston Logan beginning on May 19.

United Airlines (current): AG Slide Show

United Airlines to introduce the Embraer 175 on May 17

United Express ERJ 175 (CO 91)(Flt)(United)(LRW)

United Airlines (Chicago) will introduce the first Embraer 175 (ERJ 175) on two routes from its Chicago O’Hare hub in May.

United Express ERJ 175 inaugural flight will be launched on May 17 between Chicago (O’Hare) and Washington (Reagan National). Two days later, the new type will be introduced between Chicago (O’Hare) and Boston according to USA Today.

SkyWest, Inc. announced in May 2013 it had entered into a Capacity Purchase Agreement (CPA) with United Airlines, Inc. to operate 40 new Embraer 175 (ERJ 175) dual-class regional jet aircraft.  The CPA with United has a term of 12 years and SkyWest will operate under terms and conditions similar to its existing agreements with United.

SkyWest has determined that these 40 regional jet aircraft will be operated by SkyWest Airlines, Inc. (St. George), a wholly-owned subsidiary of SkyWest. Under the agreement, it is anticipated that the 40 aircraft will be introduced into service in the second quarter of 2014, with deliveries continuing to mid-2015.  The aircraft will be configured with 76-seats in dual-class.

SkyWest, Inc. also announced it has entered into an agreement with Embraer for the purchase of 100 new Embraer 175 dual-class regional jet aircraft. Of the 100 aircraft, 40 are considered firm deliveries and the remaining 60 aircraft are considered conditional until SkyWest enters into capacity purchase agreements with other major airlines to operate the aircraft.  Deliveries for the 40 firm aircraft are anticipated to begin in the second quarter of 2014 and continue through mid 2015. The aircraft will be configured in 76 seats in dual-class. The agreement also includes options for an additional 100 ERJ 175 aircraft and would be valued at $8.3 billion if all 200 aircraft are ordered.  The initial 40 firm aircraft outlined above will be operated by SkyWest Airlines, Inc.

Previously in April 2013 United Airlines announced an agreement to add 30 Embraer ERJ 175 regional jets to the United Express fleet. Under an agreement with Embraer, United will purchase the aircraft with deliveries in 2014 and 2015.

United also secured options for 40 additional aircraft.

The Embraer ERJ 175 is the first 76-seat regional jet aircraft in the United Express fleet. The aircraft will be configured with 12 United First, 16 Economy Plus and 48 United Economy seats. The design of the aircraft will result in more personal space for customers with wider seats and aisles than those on the 50-seat aircraft. The aircraft can accommodate standard carry-on bags, resulting in more convenience for customers.

As United inducts the new aircraft into the United Express fleet, the company will remove some of the older 50-seat regional jets in the fleet. The E175s will consume 10 percent less fuel per seat and will have less CO2 emissions per seat than the 50-seat aircraft they replace.

Image: United Airlines.

United Airlines (current): AG Slide Show

United Express-SkyWest: AG Slide Show

SkyWest, Inc. reports lower fourth quarter net profit of $8.6 million and a higher net profit of $59 million for 2013

SkyWest, Inc. (SkyWest Airlines and ExpressJet Airlines) (St. George, Utah) reported net income of $8.6 million, or $0.17 per diluted share, for the quarter ended December 31, 2013, compared to net income of  $13.9 million, or $0.27 per diluted share, for the same period last year.

SkyWest also reported net income of $59.0 million, or $1.12 per diluted share, for the twelve months ended December 31, 2013, compared to $51.2 million, or $0.99 per diluted share, for the same period last year.

Quarter Summary

For each of the quarters ended March, June and September of 2013, SkyWest reported improved financial results, on a year-over-year basis, in achieving increases in its fully-diluted earnings per share.  However, SkyWest experienced a decline in its financial results for the quarter ended December 31, 2013 compared to its financial results for the quarter ended December 31, 2012. During the quarter ended December 31, 2013, compared to the quarter ended December 31, 2012, SkyWest experienced increased crew training costs as a result of new regulations regarding pilots (FAR 117) that became effective January 4, 2014 of approximately $3.0 million pretax. SkyWest also experienced increased maintenance costs of approximately $5.0 million, pretax, due primarily to performing additional C-checks related to used aircraft that were added to SkyWest’s fleet during 2013.  Additionally during the quarter ended December 31, 2013, SkyWest incurred approximately $3.0 million, pretax, of costs associated with advanced pilot training and efforts to become certified to operate the new Embraer 175 regional jets scheduled for deliveries beginning in March 2014.

For the quarter ended December 31, 2013, SkyWest generated increased operating revenues (net of fuel, certain engine overhaul, landing fee and station pass-through revenues under SkyWest’s contracts with its major partners), of approximately $23.0 million, or 3.7%, compared to the quarter ended December 31, 2012,  primarily due to additional block hour production of 2.8%  and scheduled rate escalations. The increased operating revenues were offset by increased costs in several areas that resulted in a reduced amount of operating and pre-tax income for the quarter ended December 31, 2013 compared to the quarter ended December 31, 2012.

Following are selected statistics and information from the quarter ended December 31, 2013, compared to the quarter ended December 31, 2012:

  • Pre-tax income declined to $15.1 million, compared to $25.6 million
  • Fully-diluted EPS declined to $0.17, compared to $0.27
  • Increased block hour production 2.8% to 584,594 block hours, compared to 568,808 block hours
  • Increased operating revenues by approximately $23.0 million (net of fuel, certain engine overhaul, landing fees and station pass-through revenues) primarily related to rate escalations under SkyWest’s agreements with its major partners and increased block hour production
  • Increased total aircraft fleet to 757 aircraft as of December 31, 2013, compared to 744 aircraft as ofDecember 31, 2012

Commenting on the results, Jerry C. Atkin, SkyWest’s Chairman and CEO, said, “The decrease in our earnings in the fourth quarter is primarily due to advance preparations for the implementation of FAR 117, the new flight and duty time regulations, and aging maintenance costs on the 50-seat aircraft. We also invested in our future by beginning certification work on the Embraer 175 aircraft that are scheduled for delivery beginning in the first quarter of 2014.”

Financial and Operating Results

Operating revenues totaled $804.4 million for the quarter ended December 31, 2013, compared to $810.7 million for the same period last year or a decrease of $6.3 million.  The decrease was due primarily to the reduction of approximately $29.2 million in fuel expenses, certain engine overhaul amounts, landing fees and station costs which were directly reimbursed by SkyWest’s major partners and recorded as operating revenues.  However, this reduction was mostly offset by recording $23.0 million in additional operating revenues, primarily resulting from rate escalations under SkyWest’s agreements with its major partners and a 2.8% increase in total block hours for the quarter ended December 31, 2013, compared to the quarter ended December 31, 2012.

Total airline expenses (consisting of total operating and interest expenses) increased $4.0 million, or 0.5%, during the quarter ended December 31, 2013, compared to the same period in 2012.  However, after deducting pass-through costs for fuel, certain engine overhaul expenses landing fees and station costs from total operating cost and interest expenses, the remaining total airline expenses increased $33.4 million.  Management estimates that approximately $16.9 million of the increase was due primarily to the 2.8% increase in block hour production and approximately $16.4 million was primarily due to additional maintenance costs, cost increases resulting from new pilot regulations (FAR 117) and costs incurred from certifying a new E175 aircraft type.

Under certain of its agreements with its major partners, SkyWest recognizes revenue at fixed hourly rates for mature engine maintenance on regional jet engines and recognizes engine maintenance expense on its CRJ200 regional jet engines on an as-incurred basis as maintenance expense.  During the quarter ended December 31, 2013, CRJ200 engine expense under these agreements decreased $1.0 million to$9.6 million, compared to $10.6 million for the quarter ended December 31, 2012, primarily as a result of decreased engine overhaul expense due to the timing of scheduled engine maintenance events.  SkyWest was reimbursed approximately $12.7 million and $10.3 million for engine overhaul expense, under its agreements with its major partners, during the quarters ended December 31, 2013 and 2012, respectively.

Liquidity

At December 31, 2013, SkyWest had $670.1 million in cash and marketable securities, compared to$709.4 million as of December 31, 2012.  Cash and marketable securities decreased $39.3 million during the quarter ended December 31, 2013 compared to the balance as of December 31, 2012, due primarily to SkyWest’s payment of $40.0 million (total amount required under agreement) related to deposits on its new order for E175 regional jet aircraft.  SkyWest’s long-term debt was $1.29 billion as of December 31, 2013, compared to $1.47 billion as of December 31, 2012.  The decrease in long-term debt for the twelve-months ended December 31, 2013 was due primarily to SkyWest’s payment of normal recurring debt obligations.  SkyWest has significant long-term lease obligations that are recorded as operating leases and are not reflected as liabilities on SkyWest’s consolidated balance sheets.  At a 5.8% discount rate, the present value of these lease obligations was approximately $1.5 billion as of December 31, 2013.

Business Developments

On May 21, 2013, SkyWest announced it had entered into a Capacity Purchase Agreement (CPA) with United Airlines, Inc. to operate 40 new Embraer 175 dual-class regional jet aircraft. The CPA is for 12 years and the new aircraft will be operated by SkyWest’s wholly-owned subsidiary, SkyWest Airlines, Inc. (St. George). Deliveries for these aircraft are scheduled to begin in March 2014 and continue through July 2015.

Additionally, on May 21, 2013 SkyWest announced it reached an agreement with Embraer S.A. for the purchase of 100 new E175 dual-class regional jet aircraft, 40 of which are considered firm orders and the remaining 60 aircraft remain conditional upon SkyWest entering into capacity purchase agreements with other major airlines. SkyWest intends to place the 40 new E175 aircraft into service under the terms of the United CPA discussed above.

On June 17, 2013, SkyWest and Embraer jointly announced an aircraft purchase agreement covering 100 E175-E2 dual-class regional jet aircraft and an option to purchase an additional 100 of the same aircraft.  Deliveries for these E2 aircraft are tentatively planned to start in 2020.

During 2012, SkyWest announced the award of 34 additional dual-class aircraft and the removal of 66 CRJ200 aircraft under its Delta Connection Agreements with Delta Airlines, Inc. (Atlanta).  As of May 2013, all 34 of these additional dual-class aircraft had been delivered. As of December 31, 2013 SkyWest had removed 33 (22 placed in contract with another major partner and 11 removed from SkyWest’s fleet) of the 66 CRJ200 aircraft from service and currently anticipates removing another 29 CRJ200 aircraft during 2014.  SkyWest believes the remaining four CRJ200 aircraft will be removed from its fleet in early 2015.  Additionally, 41 of the 66 CRJ200 aircraft have been financed by Delta and will be returned to Delta with no further obligation by SkyWest.

Copyright Photo: Michael B. Ing/AirlinersGallery.com. Even though SkyWest is shrinking its Bombardier CRJ200 fleet, it was fortunate to place some of the grounded CRJ200s with American Airlines as an American Eagle carrier. SkyWest’s Bombardier CRJ200 (CL-600-2B19) N864AS (msn 7502) departs the runway at Los Angeles International Airport.

American Eagle-SkyWest: AG Slide Show

SkyWest to offer Delta Connection service to Moab and Vernal, Utah starting on March 2

SkyWest Airlines (St. George) will bring Delta Connection air service from the Salt Lake City hub to Eastern Utah passengers in March. In both Moab and Vernal, Utah, the new Delta Connection flights, operated by SkyWest, will begin on March 2, 2014.

Each of the new flights from both Moab and Vernal have been timed to provide maximum connection opportunities in Salt Lake City. With 260 daily flights in Salt Lake to more than 80 destinations, including New York and Washington, D.C., it is easy for passengers to get anywhere they want to go. The direct access to Utah’s capital will also continue to drive economic development in Eastern Utah, and makes it simple for those who want to take advantage of the incredible outdoor activities that are available in Moab and Vernal.

All flights will be operated on 30-seat Embraer EMB-120ER Brasilia turboprops.

Copyright Photo: Bruce Drum/AirlinersGallery.com. SkyWest’s Brasilias currently operate in their own in-house 1986 color scheme for Delta. They are not expected to adopt the Delta Connection livery. Embraer EMB-120ER Brasilia N562SW (msn 120336) lands in Las Vegas.

SkyWest Airlines: AG Slide Show

Delta Connection-SkyWest Airlines: AG Slide Show

Route Map: SkyWest-operated routes for Delta Air Lines:

Delta Connection-SkyWest 12.2013 Route Map

 

Alaska Airlines gets ready to expand its ski flights network

Alaska Airlines (Seattle/Tacoma) is starting new nonstop flights between Portland, Oregon and Reno/Tahoe, California on November 8, between Seattle/Tacoma and Steamboat Springs, Colorado on December 18, and between San Diego and Mammoth, California, on December 19. This is addition to the airline’s increase in flights between Los Angeles and Mammoth, starting on December 1, and seasonal service from Seattle/Tacoma and Los Angeles to Sun Valley, Idaho, starting on December 14.

Several of the flights will be operated by Alaska Airlines’ regional partners Horizon Air (Alaska Horizon) (Seattle/Tacoma), using 76-seat Bombardier DHC-8-402s (Q400s), and SkyWest Airlines (Alaska SkyWest) (St. George, Utah), using 70-seat Bombardier CRJ700 regional jets.

Copyright Photo: Bruce Drum/AirlinersGallery.com. Horizon Air’s Bombardier DHC-8-402 (Q400) N417QX (msn 4086) taxies to the runway at the Seattle-Tacoma International Airport hub.

Alaska Airlines: AG Slide Show

Alaska Horizon-Horizon Air: AG Slide Show

SkyWest announces quarterly income of $26.4 million

SkyWest, Inc. (St. George, Utah)  today reported net income of $26.4 million, or $0.50 per diluted share, for the quarter ended September 30, 2013, compared to net income  of  $20.9 million, or $0.40 per diluted share, for the same period last year.

SkyWest also reported net income of $50.3 million, or $0.96 per diluted share, for the nine months ended September 30, 2013, compared to $37.2 million, or $0.72 per diluted share, for the same period last year.

Quarter Highlights

SkyWest experienced improved financial results for the quarter ended September 30, 2013, compared to its financial results for the quarter ended September 30, 2012.  SkyWest generated increased operating revenues (after giving effect to reduced fuel, certain engine overhaul and landing fee pass through amounts) primarily due to additional block hour production from increased aircraft utilization, larger fleet size and rate escalations in SkyWest contracts with its major airline partners.  Following are selected highlights from SkyWest’s quarter ended September 30, 2013, compared to the quarter ended September 30, 2012:

  • Increased pretax income 34.8% to $44.4 million, compared to $32.9 million
  • Increased fully-diluted EPS 25.0% to $0.50, compared to $0.40
  • Increased block hour production 2.8% to 613,821 block hours, compared to 596,901 block hours
  • Increased operating revenues by approximately $32.9 million (net of fuel, certain engine overhaul and landing fee pass through revenues), primarily related to rate escalations under SkyWest’s agreements with its major partners and increased block hour production
  • Made cash payments of $22.9 million consisting of $11.5 million for the repurchase of 800,000 shares of treasury stock and $11.4 million for deposits on new aircraft
  • Increased total aircraft fleet to 756 aircraft as of September 30, 2013, compared to 739 aircraft as of September 30, 2012

Commenting on the results, Jerry C. Atkin, SkyWest’s Chairman and CEO, said “We are pleased with the improved financial performance for the current quarter. However, in spite of current challenges we remain committed to further improvement in meeting our current and long-term operational and financial objectives.”

Financial and Operating Results

Operating revenues totaled $850.7 million for the quarter ended September 30, 2013, compared to $865.3 million for the same period last year or a decrease of $14.6 million.  The decrease was due primarily to the reduction of approximately $47.5 million in fuel, certain engine overhaul amounts and landing fees which were directly reimbursed by SkyWest’s major partners and recorded as operating revenues.  However, this reduction was mostly offset by recording approximately $32.9 million in additional operating revenues, primarily resulting from rate escalations under SkyWest’s agreements with its major partners and a 2.8% increase in total block hours for the quarter ended September 30, 2013, compared to the quarter ended September 30, 2012.

Total airline expenses (consisting of total operating and interest expenses) decreased $18.2 million, or 2.2%, during the quarter ended September 30, 2013, compared to the same period in 2012.  However, after excluding pass-through costs for fuel, certain engine overhaul expenses and landing fees, total airline expenses increased $29.3 million.

Under certain of its agreements with its major partners, SkyWest recognizes revenue at fixed hourly rates for mature engine maintenance on regional jet engines and SkyWest recognizes engine maintenance expense on its CRJ200 regional jet engines on an as-incurred basis as maintenance expense.  During the quarter ended September 30, 2013, CRJ200 engine expense under these agreements decreased $4.0 million to $9.1 million, compared to $13.1 million for the quarter ended September 30, 2012, primarily as a result of decreased engine overhaul expense due to the timing of scheduled engine maintenance events.  SkyWest was reimbursed approximately $12.8 million and $10.4 million for engine overhaul expense, under its agreements with its major partners, during the quarters ended September 30, 2013 and 2012, respectively.

Liquidity

At September 30, 2013, SkyWest had $727.8 million in cash and marketable securities, compared to $709.4 million as of December 31, 2012.  The increase in cash and marketable securities of $18.4 million was primarily the result of increased profitability.  Cash and marketable securities increased $62.2 million during the quarter ended September 30, 2013 compared to a balance of $665.6 as of June 30, 2013.  SkyWest’s long-term debt was $1.35 billion as of September 30, 2013, compared to $1.47 billion as of December 31, 2012.  The decrease in long-term debt for the nine-months ended September 30, 2013 was due primarily to SkyWest’s payment of normal recurring debt obligations.  SkyWest has significant long-term lease obligations that are recorded as operating leases and are not reflected as liabilities on SkyWest’s consolidated balance sheets.  At a 4.7% discount rate, the present value of these lease obligations was approximately $1.6 billion as of September 30, 2013.

Recent Business Developments

On August 2, 2012, SkyWest announced the award of 34 additional dual-class aircraft and the removal of 66 CRJ200 aircraft under its Delta Connection Agreements with Delta Airlines, Inc.  As of May 2013, all 34 of these additional dual-class aircraft had been delivered. As of September 30, 2013 SkyWest had removed 30 (22 placed in contract with another partner; other 8 removed from fleet) of the 66 CRJ200 aircraft from service and currently anticipates removing another 18 CRJ200 aircraft between October 2013 and December 2013.  SkyWest believes the remaining 18 CRJ200 aircraft will be removed at various times through 2014 and early 2015.  Additionally, 41 of the 66 aircraft have been financed by Delta and will be returned to Delta with no further obligation by SkyWest.

On May 21, 2013, SkyWest announced it had entered into a Capacity Purchase Agreement (CPA) with United Airlines, Inc. to operate 40 new Embraer ERJ 175 dual-class regional jet aircraft. The CPA is for 12 years and the new aircraft will be operated by SkyWest’s wholly-owned subsidiary, SkyWest Airlines, Inc. (United Express). Deliveries for these aircraft are scheduled to begin in March 2014 and continue through August 2015.

Additionally, on May 21, 2013 SkyWest announced it reached an agreement with Embraer S.A. for the purchase of 100 new ERJ 175 dual-class regional jet aircraft, 40 of which are considered firm orders and the remaining 60 aircraft remain conditional upon SkyWest entering into capacity purchase agreements with other major airlines. SkyWest intends to place the 40 new aircraft into service under the terms of the United CPA discussed above.

On June 17, 2013, SkyWest and Embraer jointly announced an aircraft purchase agreement covering 100 E175-E2 dual-class regional jet aircraft and an option to purchase an additional 100 of the same aircraft.  Deliveries for these E2 aircraft are tentatively planned to start in 2020.

Copyright Photo: Michael B. Ing/AirlinersGallery.com. SkyWest Airlines’ Bombardier CRJ700 (CL-600-2C10) N752SK (msn 10209) climbs away from the runway at Los Angeles.

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United Express-SkyWest Airlines: AG Slide Show

Delta to add more routes to Seattle/Tacoma

Delta Air Lines (Atlanta) will add new daily nonstop flights to Seattle-Tacoma International Airport from San Diego International Airport and Portland International Airport as well as an additional flight from Ted Stevens Anchorage International Airport, beginning next year. The new service will provide customers with convenient connections to the airline’s growing international network from Seattle/Tacoma.

Delta’s new and expanded Seattle/Tacoma service includes:

  • Four new daily nonstop flights from San Diego beginning on June 2, 2014.
  • Four new daily nonstop flights from Portland, Ore. beginning on September 2, 2014.
  • One summer seasonal flight from Anchorage, Alaska beginning on June 5, 2014 in addition to returning seasonal service which begins on May 23, 2014.

Delta’s new service from San Diego and Portland will be operated by Delta Connection carrier SkyWest Airlines (St. George) using 76-seat, two-class Bombardier CRJ900s. The additional Anchorage-Seattle seasonal service will be operated with a Boeing 737-800. Each aircraft is equipped with First Class and Economy Comfort seating as well as onboard Wi-Fi.

What message does this SEA continued build-up send to partner Alaska Airlines (Seattle/Tacoma)?

Copyright Photo: Michael B. Ing/AirlinersGallery.com. SkyWest Airlines’ Bombardier CRJ900 (CL-600-2D24) N810SK (msn 15093) in Delta Connection colors departs from Los Angeles.

Delta Air Lines: AG Slide Show

Delta Connection-SkyWest Airlines: AG Slide Show

Alaska Airlines launches new routes today

Alaska Airlines (Seattle/Tacoma) begins daily service between Boise, Idaho, and San Diego today, as the carrier celebrates 30 years of service to Boise Airport.

Summary of new service:

Start date City pair

Departs

Arrives Frequency
Nov. 1 Boise-San Diego

10:30 a.m.

11:40 a.m. Daily
Nov. 1 San Diego-Boise

5:35 p.m.

8:45 p.m. Daily

All times based on local time zones.

The flights will be operated by Alaska Airlines regional partners SkyWest Airlines (St. George) and Horizon Air (Seattle/Tacoma).

In other news, Alaska Airlines is also inaugurating daily service between Seattle/Tacoma and Colorado Springs, Colorado, starting today, and between Seattle/Tacoma and Omaha, Nebraska, starting on November 7.

Summary of new service:

Start date City pair Departs Arrives Frequency
Nov. 1 Seattle-Colorado Springs 6:20 p.m. 9:55 p.m. Daily
Nov. 2 Colorado Springs-Seattle 8:00 a.m. 9:55 a.m. Daily
Start date City pair Departs Arrives Frequency
Nov. 7 Seattle-Omaha 10:40 a.m. 3:45 p.m. Daily
Nov. 7 Omaha-Seattle 4:15 p.m. 5:45 p.m. Daily

Times based on local time zones.

Flights will be operated by SkyWest Airlines using 70-seat Bombardier CRJ700 regional jets.

Finally, Alaska Airlines is growing again in Portland, Oregon, with new nonstop flights between the Rose City and Tucson, Arizona, today, and between Portland and Reno/Tahoe, Nevada, starting on November 8.

Summary of new service:

Start date City pair Departs Arrives Frequency
Nov. 1 Portland-Tucson 9:15 a.m. 12:05**/1:05 p.m. Daily
Nov. 1 Tucson-Portland 12:35**/1:45 p.m. 3:30**/3:40 p.m. Daily

** Nov. 1 and Nov. 2 flight time differs due to daylight saving time adjustment.

Start date City pair Departs Arrives Frequency
Nov. 8 Portland-Reno 11:10 a.m. 12:45 p.m. Daily
Nov. 8 Reno-Portland 1:15 p.m. 2:50 p.m. Daily

All times based on local times zones.

Alaska Airlines’ Portland-Tucson flights will be operated by SkyWest Airlines using 70-seat CRJ700 regional jets (above). Portland-Reno/Tahoe flights will be flown for Alaska by Horizon Air using 76-seat Bombardier DHC-8-402s (Q400s).

Copyright Photo: Michael B. Ing/AirlinersGallery.com. Alaska SkyWest’s (SkyWest Airlines) Bombardier CRJ700 (CL-600-2C10) N217AG (msn 10031) climbs away from the Seattle-Tacoma International Airport hub.

Alaska Airlines: AG Slide Show

Alaska SkyWest: AG Slide Show

United to add new “ski season” flights

United Airlines (Chicago) will add flights to popular U.S. ski destinations for the upcoming winter and spring ski season, with three new routes and increased service on several existing routes.

New Service

On December 12, 2013, United will launch nonstop service from its San Francisco hub to Sun Valley, Idaho, with daily flights offered through March 30, 2014.

United will also begin nonstop service from its Chicago O’Hare hub to Gunnison/Crested Butte and Steamboat Springs/Hayden, Colorado. The Gunnison/Crested Butte flights will begin on December 21, 2013, and the Steamboat Springs/Hayden flights will begin on February 15, 2014. The Gunnison/Crested Butte and Steamboat Springs/Hayden flights will operate through March 29, 2014.

Additional Service on Existing Markets

United will also add flights to existing ski market routes from several of its hubs:

  • Denver to Kalispell/Whitefish, Montana.
  • Houston to Aspen, Colorado.
  • Houston, Los Angeles and Newark to Jackson Hole, Wyoming.
  • Los Angeles to Steamboat Springs/Hayden, Colorado.
  • Newark to Bozeman, Montana.

United Express carrier SkyWest Airlines (United Express) (St. George, UT) will operate the new routes, using Bombardier CRJ700 regional jet aircraft with United First, United Economy Plus and United Economy seating.

SkyWest’s CRJ700 aircraft are among the first being outfitted with United’s new signature seat design that is focused on customer comfort and environmental responsibility.

The multi-tonal leather seats on the CRJ700 aircraft will have more ergonomic and supportive cushioning and additional seat-back storage space in United Economy Plus and United Economy. New technology makes the seats more environmentally friendly by reducing seat weight and volume, contributing to less fuel burn. United will also outfit other aircraft types with the multi-tonal leather interiors and similar cushioning and seat-back storage.

Winter Ski Destinations from All U.S. Hubs

From the Denver hub alone, United offers nonstop flights to 13 ski resorts for the winter ski season. Additionally, the new flights further expand United’s broad range of winter-season service from all of its U.S. hubs to ski destinations across North America, including:

  • Aspen: from Chicago, Denver, Houston, Los Angeles and San Francisco
  • Bozeman: from Chicago, Denver, Los Angeles, New York/Newark and San Francisco
  • Burlington, Vt.: from Chicago, Cleveland, New York/Newark and Washington
  • Durango, Colo.: from Denver
  • Eagle/Vail, Colo.: from Denver, Houston and New York/Newark
  • Gunnison/Crested Butte: from Chicago, Denver and Houston
  • Hayden/Steamboat Springs: from Chicago, Denver, Houston, Los Angeles, and New York/Newark
  • Jackson Hole: from Chicago, Denver, Houston, Los Angeles, New York/Newark and San Francisco
  • Kalispell/Whitefish: from Denver
  • Kelowna, British Columbia: from Los Angeles
  • Mammoth Lakes, Calif.: from Orange County and San Francisco
  • Montrose/Telluride, Colo.: from Chicago, Denver, Houston, Los Angeles, and New York/Newark
  • Reno/Tahoe, Nev.: from Denver, Houston, Los Angeles, and San Francisco
  • Salt Lake City: from Chicago, Denver, Houston, Los Angeles, and San Francisco
  • Santa Fe/Taos, N.M.: from Denver
  • Sun Valley: from San Francisco
  • Vancouver, British Columbia: from Chicago, Denver, Houston, Los Angeles, and San Francisco

Copyright Photo: Michael B. Ing/AirlinersGallery.com. SkyWest Airlines’ Bombardier CRJ700 (CL-600-2C10) N706SK (msn 10149) climbs away from the runway at Los Angeles International Airport.

United Express-SkyWest Airlines: AG Slide Show

United Airlines: AG Slide Show

United Airlines introduces a new Bombardier CRJ700 seat design

United Airlines (Chicago) on October 3 unveiled a new, signature seat design focused on customer comfort and environmental responsibility, with a sophisticated, modern look. The company will deploy the new seats on hundreds of aircraft that fly within the United States, Canada, Central America and the Caribbean.

The new design includes:

  • Bold elements, such as multi-tonal leather seat covers, distinctive double-stitch patterns, sculpted contouring and a new United-branded tag
  • More ergonomic and supportive cushioning and additional seat-back storage space in United Economy Plus and United Economy
  • Technology that makes the seats more environmentally friendly by reducing seat weight and volume, contributing to less fuel burn

The airline is introducing the new design with a Bombardier CRJ700 operated by United Express carrier SkyWest Airlines (St. George). United expects to deploy the new look on its domestic mainline aircraft and on regional aircraft operated by United Express carriers. Ultimately, United plans the new design to be on more than 60,000 seats on more than 500 aircraft, including, United anticipates, approximately 400 aircraft by 2015.

The airline developed the seats with global travel and transport design consultant Priestmangoode.

Copyright Photos: United Airlines. The new CRJ700 seats.

United Airlines: AG Slide Show

United Express-SkyWest Airlines: AG Slide Show

Delta to expand Seattle/Tacoma operations with new flights to Las Vegas, Los Angeles and San Francisco

Delta Air Lines (Atlanta) despite having a close relationship with Alaska Airlines (Seattle/Tacoma), will offer new daily nonstop service to Seattle-Tacoma International Airport from San Francisco International Airport as well as increased service from Las Vegas’ McCarran International Airport and Los Angeles International Airport, beginning next year. The new service is designed to provide customers access to the airline’s growing trans-Atlantic and trans-Pacific network from its global gateway in Seattle/Tacoma.

Details of Delta’s new and expanded Seattle/Tacoma service include:

  • Six new daily nonstop flights from San Francisco beginning March 29, 2014, increasing to seven daily flights on June 5, 2014.
  • Two additional flights from Las Vegas for a total of three daily nonstop flights beginning Jan. 6, 2014, increasing to five daily nonstop flights on April 1, 2014.
  • Two additional flights from Los Angeles for a total of seven daily nonstop flights beginning June 5, 2014.

The Seattle area is one of Delta’s fastest-growing international gateways. The airline currently operates nonstop service to six international markets including Amsterdam, Beijing, Osaka, Paris, Shanghai-Pudong and Tokyo, and recently announced additional service in 2014 to London-Heathrow, Hong Kong and Seoul, pending government approval. The new and additional flights will allow for convenient connections to all of Seattle’s international Delta flights.

As of January 1, 2014, every international Delta flight from Seattle/Tacoma will feature full flat-bed seats in BusinessElite, Economy Comfort seating and entertainment on demand in every seat throughout the aircraft.

Delta’s service from San Francisco and Los Angeles will be operated by Delta Connection carrier Compass Airlines (Delta Connection) using two-class Embraer ERJ 175s, with the exception of one daily mainline flight from Los Angeles. Additionally, Delta’s Las Vegas-Seattle/Tacoma service will be operated by Delta Connection carrier SkyWest Airlines (Delta Connection) (St. George) using two-class Canadair CRJ700s and CRJ900s. Each aircraft is equipped with First Class and Economy Comfort seating as well as onboard Wi-Fi.

Copyright Photo: Tony Storck/AirlinersGallery.com. Embraer ERJ 170-200LR (ERJ 175) N613CZ (msn 17000203) prepares to land at Washington (Reagan National).

Delta Air Lines: AG Slide Show

Delta Connection-SkyWest Airlines: AG Slide Show

Delta Connection-Compass Airlines: AG Slide Show

United Airlines to drop the Los Angeles-Inyokern route on November 5

United Airlines (Chicago) is dropping the Los Angeles-Inyokern route on November 5 per Airline Route. The United Express route is operated with Embraer EMB-120 Brasilias of SkyWest Airlines (St. George, UT).

Copyright Photo: Mark Durbin/Airlinersgallery.com. Wearing the new identity, Embraer EMB-120ER Brasilia N295SW (msn 120322) taxies at the San Francisco hub.

United Airlines: AG Slide Show

United Express-SkyWest Airlines: AG Slide Show

SkyWest Airlines to open a new maintenance base at South Bend, Indiana

SkyWest Airlines, a subsidiary of SkyWest Inc. (St. George, Utah), has announced it will open a maintenance facility at South Bend Airport (SBN). The facility will begin operations in the coming months in an existing hangar at SBN.

Of the 40 positions created by the facility, 16 of these are expected to be local hires. Positions include parts supply control,
custodial and a facility maintenance manager. The additional positions will be FAA Airframe and Powerplant Mechanics
(A&P Mechanics).

South Bend will become the ninth maintenance base for the airline, in addition to facilities in Chicago (O’Hare), Colorado Springs, Fresno, Milwaukee, Nashville, Palm Springs, Salt Lake City and Tucson. SkyWest will perform routine maintenance and repairs, primarily on the Bombardier-manufactured CRJ200 aircraft, each night at the 46,000-square-foot SBN facility.

Copyright Photo: Michael B. Ing/AirlinersGallery.com. SkyWest Airlines’ Bombardier CRJ200 (CL-600-2B19) N927SW (msn 7693), operated for United Airlines as an United Express carrier, approaches the runway at Los Angeles International Airport.

SkyWest-United Express: AG Slide Show

Combined Route Map:

SkyWest Combined 9:2013 Route Map

Delta Connection to start weekly Orlando-Norfolk flights on December 21

Delta Air Lines (Atlanta) is planning to launch weekly Delta Connection service between Orlando and Norfolk, Virginia. The new route will be operated on Saturdays with Bombardier CRJ700 aircraft per Airline Route.

The operator is unspecified.

Copyright Photo: Michael B. Ing/AirlinersGallery.com. SkyWest Airlines‘ Bombardier CRJ700 (CL-600-2C10) N604SK (msn 10249) lands at Long Beach, California.

Delta Air Lines: AG Slide Show

Delta Connection-SkyWest Airlines: AG Slide Show

 

SkyWest reports increased net income of $20.7 million in the second quarter

SkyWest, Inc. (SkyWest Airlines and Atlantic Southeast Airlines) (St. George) today reported net income of $20.7 million, or $0.39 per diluted share, for the quarter ended June 30, 2013, compared to net income of $17.0 million, or $0.33 per diluted share, for the same period last year.

SkyWest also reported net income of $24.0 million, or $0.46 per diluted share, for the six months ended June 30, 2013, compared to $16.3 million, or $0.32 per diluted share, for the same period last year.

Quarter Highlights

SkyWest experienced improved financial results for the quarter ended June 30, 2013 compared to its financial results for the quarter ended June 30, 2012.  SkyWest generated additional block hour production and corresponding operating revenues (after giving effect to reduced fuel and certain engine overhaul pass through revenues) as a result of increased utilization and increasing the size of its aircraft fleet between June 30, 2013 and June 30, 2012.  Following are selected highlights from SkyWest’s quarter ended June 30, 2013, compared to the quarter ended June 30, 2012:

  • Increased pretax income 17.8% to $33.7 million, compared to $28.6 million
  • Increased fully-diluted EPS 18.2% to $0.39, compared to $0.33
  • Increased block hour production 6.1% to 609,711 block hours, compared to 574,884 block hours
  • Recorded approximately $28.2 million in additional revenues (net of fuel and certain engine overhaul pass through revenues), primarily related to increased block hour production
  • Increased total aircraft fleet to 760 aircraft as of June 30, 2013, compared to 725 aircraft as of June 30, 2012

Commenting on the results, Jerry C. Atkin, SkyWest’s Chairman and CEO, said “We are pleased with the progress we continue to make in producing improved operational and financial performance as compared to the same period last year.”  He continued, “We will remain focused on our profit improvement objectives while continuing to deal with the ever-present challenges in the airline industry.”

Financial and Operating Results

Operating revenues totaled $839.1 million for the quarter ended June 30, 2013, compared to $937.2 million for the same period last year or a decrease of $98.1 million.  The decrease was due primarily to the reduction of $117.9 million of fuel and certain engine overhaul amounts which were directly reimbursed by SkyWest’s major partners and recorded as operating revenues.  However, this reduction was partially offset by recording approximately $28.2 million in additional operating revenues primarily resulting from a 6.1% increase total block hours for the quarter ended June 30, 2013, compared to the quarter ended June 30, 2012.

Total airline expenses (consisting of total operating and interest expenses) decreased $103.7 million, or 11.4%, during the quarter ended June 30, 2013, compared to the same period in 2012.  However, after excluding pass-through costs for fuel and certain engine overhaul expenses, total airline expenses increased $14.2 million or only 1.9% which was less than the 6.1% increase in block hours produced.

Under certain of its agreements with its major partners, SkyWest recognizes revenue at fixed hourly rates for mature engine maintenance on regional jet engines and SkyWest recognizes engine maintenance expense on its CRJ200 regional jet engines on an as-incurred basis as maintenance expense.  During the quarter ended June 30, 2013, CRJ200 engine expense under these agreements decreased $3.2 million to $10.6 million compared to $13.8 million for the quarter ended June 30, 2012, as a result of decreased engine overhaul expense due to the timing of scheduled engine maintenance events.  SkyWest was reimbursed approximately $12.8 million and $10.2 million for engine overhaul expense, under its agreements, in each of the periods ended June 30, 2013 and 2012, respectively.

Liquidity

At June 30, 2013, SkyWest had $665.6 million in cash and marketable securities, compared to $709.4 million as of December 31, 2012.  The decrease in cash and marketable securities of $43.8 million was primarily the result of the payment of scheduled semi-annual lease and debt payments as well as making deposits on recent aircraft orders.  Cash and marketable securities increased $34.1 million during the quarter ended June 30, 2013 compared to the balance of $631.5 as of the quarter ended March 31, 2013.  SkyWest’s long-term debt was $1.38 billion as of June 30, 2013, compared to $1.47 billion as of December 31, 2012.  The decrease in long-term debt for the six-months ended June 30, 2013 was due primarily to SkyWest’s payment of normal recurring debt obligations.  SkyWest has significant long-term lease obligations that are recorded as operating leases and are not reflected as liabilities on SkyWest’s consolidated balance sheets.  At a 4.7% discount rate, the present value of these lease obligations was approximately $1.5 billion as of June 30, 2013.

Recent Business Developments

On May 21, 2013, SkyWest announced it had entered into a Capacity Purchase Agreement (“CPA”) with United Airlines, Inc. (Chicago) to operate 40 new Embraer ERJ 175 dual-class regional jet aircraft. The CPA is for 12 years and the aircraft will be operated by SkyWest’s wholly-owned subsidiary, SkyWest Airlines, Inc. (St. George). Deliveries for these aircraft are scheduled to begin in April 2014 and continue through August 2015.

Additionally, on May 21, 2013 SkyWest announced it reached an agreement with Embraer S.A. for the purchase of 100 new ERJ 175 dual-class regional jet aircraft, 40 of which are considered firm and 60 aircraft remain conditional upon SkyWest entering into capacity purchase agreements with other major airlines. SkyWest intends to place the 40 new aircraft into service under the terms of the United CPA discussed above.

On June 17, 2013, SkyWest and Embraer jointly announced an aircraft purchase agreement covering 100 E175-E2 dual-class regional jet aircraft and an option to purchase an additional 100 of the same aircraft.  Deliveries for these E2 aircraft are tentatively planned for 2020.

On August 2, 2012, SkyWest announced the award of 34 additional dual-class aircraft and the removal of 66 CRJ200 aircraft under its Delta Connection Agreements with Delta Airlines, Inc. (Atlanta) and by end of May 2013, all 34 of these dual-class aircraft had been delivered. As of June 30, 2013 SkyWest had removed 24 (22 placed in contract with another partner; other 2 removed from fleet) of the 66 CRJ200 aircraft and currently anticipates removing another 24 CRJ200 aircraft during the months of September 2013 through December 2013.  These 24 aircraft have been financed by Delta and will be returned to Delta with no further obligation by SkyWest.  SkyWest believes the remaining 18 aircraft will be removed at various times through 2014 and early 2015.

Copyright Photo: Michael B. Ing/AirlinersGallery.com. The CRJ200s will be totally removed from the Delta Connection contract by early 2015. SkyWest Airlines Bombardier CRJ200 (CL-600-2B19) N423SW (msn 7456) approaches Los Angeles International Airport.

Delta Connection-SkyWest Airlines: AG Slide Show

 

Delta to fly to Aspen, Colorado this winter

Delta Air Lines (Atlanta) will add new nonstop seasonal service to Aspen/Snowmass, Colorado with daily flights from Atlanta and Saturday-only flights from Minneapolis-St. Paul, effective on December 21, 2013.

The new service will be operated by Delta Connection carrier, SkyWest Airlines (Delta Connection) (St. George, Utah), using a two-class, 65-seat Bombardier CRJ700 aircraft, featuring nine First Class seats and eight Economy Comfort seats.

The schedule for Delta’s new nonstop service connecting Aspen to Atlanta and Minneapolis is as follows:

 

Service Frequency Departs Arrives Service Begins Service Ends
ASE-ATL Daily 12:45 p.m. 5:53 p.m. Dec. 21, 2013 March 30, 2014
ATL-ASE Daily 10:10 a.m. 11:59 a.m. Dec. 21, 2013 March 30, 2014

 

Service Frequency Departs Arrives Service Begins Service Ends
ASE-MSP Saturday only 2 p.m. 5:11 p.m. Dec. 21, 2013 March 29, 2014
MSP-ASE Saturday only 11:40 a.m. 1:13 p.m. Dec. 21, 2013 March 29, 2014

Copyright Photo: Michael B. Ing/AirlinersGallery.com. Bombardier CRJ700 (CL-600-2C10) N609SK (msn 10020) Climbs away from the runway at Los Angeles International Airport.

Delta Air Lines: AG Slide Show

Delta Connection-SkyWest Airlines: AG Slide Show

Delta Air Lines adds additional flights at Los Angeles International Airport

Delta Air Lines (Atlanta) will debut increased domestic service beginning this fall at Los Angeles International Airport with new daily flights to four destinations and expanded service to nine existing markets.

Delta currently operates more than 115 peak-day departures to 40 destinations from Los Angeles, and every flight offers BusinessElite/First Class and Economy Comfort seating. Additionally, every domestic flight features Wi-Fi service.

Delta’s new and expanded Los Angeles service includes (effective dates):

  • Pacific Northwest service with four new daily flights to Portland, Oregon*, as well as two additional daily flights to Seattle/Tacoma* (September 3)
  • Expanded Bay Area service with three additional daily flights to San Francisco*, two additional daily flights to Oakland, California*, and one additional daily flight to San Jose, California*, (September 3)
  • One additional daily flight to New Orleans (September 3)
  • One additional daily flight to Kansas City, Missouri * (September 3)
  • Additional flights to both Indianapolis and Columbus, Ohio resulting in daily service (September 3)
  • Retimed daily service to Tampa, Florida, and Raleigh, North Carolina (September 3)
  • New limited daily service to Missoula, Montana*, and Kalispell, Montana * (December 21 – January 5)
  • New limited daily (December 21 – January 5) and Saturday only (Januray 11 – March 29) service to Jackson Hole, Wyoming *
  • Seasonal limited daily (December 21 – January 5) and Saturday only (Januray 11 – March 29) service to Bozeman, Montana * (December 21 – March 29)

*A portion of travel for some itineraries may be on the Delta Connection® carriers: Compass Airlines and SkyWest Airlines (Delta Connection).

Delta is remodeling Terminal 5 at LAX in conjunction with its partnership with the City of Los Angeles and Los Angeles World Airports. The current project will double the size of the ticketing lobby and screening checkpoints, open an exclusive, separate Sky Priority lobby and checkpoint, and include renovations to the Delta Sky Club and new baggage carousels.

On July 3, Delta added its code to Virgin Atlantic Airways’ twice-daily service to London’s Heathrow Airport as part of its codesharing agreement providing convenient bookings for Delta customers.

Earlier this year, Delta announced increased service at LAX with daily, year-round and seasonal service to 14 destinations, including eight new markets. By this winter, Delta and its partners including Virgin Australia Airlines, Alaska Airlines, Air France-KLM and Virgin Atlantic will operate more than 170 peak-day departures to 59 nonstop destinations, including Amsterdam, London-Heathrow, Paris, Sydney and Tokyo, from Los Angeles.

Copyright Photo: Michael B. Ing/AirlinersGallery.com. SkyWest Airlines Bombardier CRJ900 (CL-600-2D24) N822SK (msn 15203) approaches the runway at Los Angeles International Airport.

Delta Air Lines: AG Slide Show

SkyWest Airlines-Delta Connection: AG Slide Show

Horizon Air and SkyWest to open up four new routes from Seattle/Tacoma and Portland for Alaska Airlines and two routes from San Diego

Alaska Airlines (Seattle/Tacoma) will inaugurate daily service between Seattle/Tacoma and Colorado Springs, Colorado, starting on November 1, and between Seattle/Tacoma and Omaha, Nebraska, starting on November 7. The carrier will also add nonstop flights between Portland, Oregon, and Tucson, Arizona, starting on November 1, and between Portland and Reno, Nevada, starting on November 8, 2013.

Summary of new service:
Seattle-Colorado Springs
Start date City pair Departs Arrives Frequency
Nov. 1 Seattle-Colorado Springs 6:20 p.m. 9:55 p.m. Daily
Nov. 2 Colorado Springs-Seattle 8 a.m. 9:55 a.m. Daily
Seattle-Omaha
Start date City pair Departs Arrives Frequency
Nov. 7 Seattle-Omaha 10:40 a.m. 3:45 p.m. Daily
Nov. 7 Omaha-Seattle 4:15 p.m. 5:45 p.m. Daily
Portland-Reno
Start date City pair Departs Arrives Frequency
Nov. 8 Portland-Reno 11:10 a.m. 12:45 p.m. Daily
Nov. 8 Reno-Portland 1:15 p.m. 2:50 p.m. Daily
Portland-Tucson
Start date City pair Departs Arrives Frequency
Nov. 1 Portland-Tucson 9:15 a.m. 1:05 p.m. Daily
Nov. 1 Tucson-Portland 1:35 p.m. 3:30 p.m. Daily
All times based on local time zones.

The new Portland-Reno flights will be flown for Alaska Airlines by Horizon Air (Alaska Horizon) (Seattle/Tacoma) using 76-seat Bombardier DHC-8-402s (Q400s). The remaining flights will be operated by SkyWest Airlines (Alaska SkyWest) (St. George) using 70-seat Bombardier CRJ700 regional jets.

Alaska Airlines last operated between Portland and Reno in 2009 and also served Portland-Tucson in 2003.

In addition, Alaska Airlines will begin new daily service between San Diego and Boise, Idaho, starting on November 1, and daily seasonal service between San Diego and Mammoth Mountain Ski Area in California, starting on December 19, 2013.

Summary of new service:
San Diego-Boise
Start date City pair Departs Arrives Frequency
Nov.1 Boise-San Diego 10:20 a.m. 11:25 a.m. Daily
Nov.1 San Diego-Boise 5:35 p.m. 8:40 p.m. Daily
San Diego-Mammoth Lakes
Start date City pair Departs Arrives Frequency
Dec. 19-April 13 San Diego-Mammoth 5:30 p.m. 7 p.m. Mon, Tue, Wed,
Thu, Fri, Sun
Dec. 19-April 13 Mammoth-San Diego 7:30 p.m. 9 p.m. Mon, Tue, Wed,
Thu, Fri, Sun
Dec. 21-April 12 San Diego-Mammoth 9:30 a.m. 11 a.m. Saturdays only
Dec. 21-April 12 Mammoth-San Diego 11:30 a.m. 1 p.m. Saturdays only
All times based on local time zones.

The new 90-minute flight to Mammoth Lakes is estimated to save residents more than 6 hours of driving. Horizon Air (Alaska Horizon) will operate the Mammoth Lakes flights for Alaska Airlines using 76-seat Bombardier DHC-8-402s (Q400s). SkyWest Airlines (Alaska SkyWest) will operate the new San Diego-Boise flights for Alaska using 70-seat Bombardier CRJ700 regional jets.

With these flights, Alaska Airlines will offer 25 peak-daily departures from San Diego with nonstop service to 12 domestic and two international destinations.

Top Copyright Photo: Bruce Drum/AirlinersGallery.com. Horizon Air’s Bombardier DHC-8-402 (Q400) N441QX (msn 4348) pushes from the gate at the Seattle-Tacoma International Airport hub.

Alaska Airlines: AG Slide Show

Alaska Horizon: AG Slide Show

Alaska SkyWest: AG Slide Show

Bottom Copyright Photo: Michael B. Ing/AirlinersGallery.com. SkyWest Airlines’ Bombardier CRJ700 (CL-600-2C10) N215AG (msn 10009) lands at Long Beach.

 

SkyWest signs a firm order for 100 new Embraer E175-E2 Second Generation jets

Embraer E175-E2 (Flt)(Embraer)(LRW)

SkyWest Inc. (SkyWest Airlines and ExpressJet Airlines) (St. George) has signed a firm order for 100 Embraer E175-E2 aircraft, with another 100 Purchase Rights, bringing the total potential of the order to 200 aircraft. The announcement was made today at a press conference at the 50th International Paris Airshow. If all the orders are exercised, the contract has an estimated value, at list price, of $9.36 billion.

SkyWest logo-3

This new contract is in addition to SkyWest’s previous order in May 2013 for up to 200 current generation E175 aircraft, and therefore the potential order of E-Jets at SkyWest may reach 400 aircraft.

As the first operator to order the E175-E2, SkyWest becomes the launch customer for that aircraft, one of three E-Jets E2 models. SkyWest is the largest regional airline group in the world.  It is the parent company of SkyWest Airlines and ExpressJet Airlines, both of which have been long time operators of Embraer aircraft.  More than 40 EMB-120 Brasilia turboprops continue to fly in the SkyWest Airlines network, primarily in the western states. ExpressJet Airlines operates 249 aircraft from the ERJ 145 family and has the largest ERJ fleet in the world.

The E-Jets E2 represent Embraer’s commitment to continuously invest in the company’s line of commercial jets and maintain its leadership in the 70 to 130 seats market. The three new airplanes (E175-E2, E190-E2, E195-E2) carry the designator “E2” which signifies generational changes in technology that have been incorporated in the design. Each of the three aircraft has the versatility for a range of single class, multi-class or high-density seat capacities to suit operator requirements with new ‘look and feel’ and improved comfort levels.

State-of-the-art engines in combination with new aerodynamically advanced wings, full fly-by-wire flight controls, and advancements in other systems will result in double-digit improvements in fuel burn, maintenance costs, emissions and external noise.

The first delivery of an E-Jets E2 (the E190-E2) is planned for the first semester of 2018. The E195-E2 is slated to enter service in 2019 and the E175-E2 in 2020. Over 950 E-Jets have been delivered to date. Currently, 65 customers from 47 countries have added Embraer E-Jets to their fleets.

Pratt & Whitney will provide exclusive power for up to 100 firm plus 100 purchase right Embraer Second Generation E-Jets for an order announced today by Embraer and SkyWest, Inc. Deliveriesare scheduled to begin in 2020. Pratt & Whitney is a division of United Technologies Corporation.

Each Embraer Second Generation E2 E-Jet will be powered by two PurePower engines. Pratt & Whitney has announced orders for more than 3,500 engines that include announced and unannounced firm orders, plus options. The PurePower family of engines uses an advanced gear system allowing the engine’s fan to operate at a different speed than the low-pressure compressor and turbine. The combination of the gear system and an all-new advanced core deliver the improvements in fuel efficiency, environmental emissions and noise.

Image: Embraer.

SkyWest Airlines: AG Slide Show

 

Newsworthy Photo of the Day – May 23, 2013

United Express-SkyWest Airlines Embraer EMB-120ER Brasilia N295SW (msn 120322) SFO (Mark Durbin). Image: 912231.

Copyright Photo: Mark Durbin.

United Express-SkyWest Airlines: AG Slide Show

SkyWest orders 100 conditional new Embraer 175s, SkyWest Airlines to operate 40 for United Express

United Express ERJ 175 (CO 91)(Flt)(United)(LRW)

SkyWest, Inc. (SkyWest Airlines and ExpressJet Airlines) (St. George) announced today that it has entered into a Capacity Purchase Agreement (CPA) with United Airlines, Inc. (Chicago) to operate 40 new Embraer 175 (ERJ 175) dual-class regional jet aircraft.  The CPA with United has a term of 12 years and SkyWest will operate under terms and conditions similar to its existing agreements with United.

SkyWest has determined that these 40 regional jet aircraft will be operated by SkyWest Airlines, Inc. (St. George), a wholly-owned subsidiary of SkyWest. Under the agreement, it is anticipated that the 40 aircraft will be introduced into service in the second quarter of 2014, with deliveries continuing to mid-2015.  The aircraft will be configured with 76-seats in dual-class.

SkyWest, Inc. also announced today that it has entered into an agreement with Embraer for the purchase of 100 new Embraer 175 dual-class regional jet aircraft. Of the 100 aircraft, 40 are considered firm deliveries and the remaining 60 aircraft are considered conditional until SkyWest enters into capacity purchase agreements with other major airlines to operate the aircraft.  Deliveries for the 40 firm aircraft are anticipated to begin in the second quarter of 2014 and continue through mid 2015. The aircraft will be configured in 76 seats in dual-class. The agreement also includes options for an additional 100 ERJ 175 aircraft and would be valued at $8.3 billion if all 200 aircraft are ordered.  The initial 40 firm aircraft outlined above will be operated by SkyWest Airlines, Inc.

SkyWest management believes reaching this agreement brings to conclusion a thorough process that also included the negotiation of support and long-term maintenance agreements that will enable SkyWest to efficiently manage the operating costs of the new aircraft.  SkyWest management also believes it has developed an industry-leading agreement that will allow SkyWest to offer competitive benefits to its major partners.

Image: United Airlines.

Video: A SkyWest pilot shows the views from the cockpit:

Current Routes operated for United Airlines by SkyWest Airlines (click on the map for full-size view):

United Express-SkyWest 5:2013 Route Map

United Express/SkyWest Airlines: AG Slide Show

SkyWest reports quarterly income of $3.2 million, will remove 66 CRJ200s from the Delta contract

SkyWest, Inc. (SkyWest Airlines)  (St. George) today reported net income of $3.2 million, or $0.06 per diluted share, for the quarter ended March 31, 2013, compared to a net loss of  $(0.7) million, or $(0.01) per diluted share, for the same period last year.

Quarter Highlights

SkyWest’s financial results for the quarter ended March 31, 2013 were slightly improved compared to the financial results for the quarter ended March 31, 2012.  SkyWest generated a 2.8 percent increase in block hours which resulted in additional revenues of approximately $10.5 million; however, overall revenues decreased by a total of $117.7 million as a result of lower reimbursement payments of $99.7 million for fuel and $19.7 million for engine overhaul expenses, under its contracts with SkyWest’s major partners. The majority of fuel is now purchased directly by SkyWest’s major partners and as a result, SkyWest reports lower operating revenues and expenses.  SkyWest’s financial results were also negatively impacted during the quarter ended March 31, 2013 by severe weather which resulted in approximately 1,900 cancelled flights and 4,500 fewer block hours at an estimated impact of $4.5 million (pretax).

Following are some selected highlights for the quarter ended March 31, 2013 compared to the same period last year:

 (Unaudited)

Dollars in thousands, except per share amounts

Three Months Ended

March 31,

2013 2012  % Change
Total operating revenue $      803.5 $       921.2 (12.8)%
Total operating margin 1.9% 2.2%      (0.3)pts
Pretax income (loss) $          5.4 $         (1.2) NM
Net income (loss) $          3.2 $         (0.7) NM
Fully diluted earnings per share $        0.06 $       (0.01) NM
Block hours 571,991 556,421 2.8%

Commenting on the results, Jerry C. Atkin, SkyWest’s Chairman and CEO, said “We had planned to achieve improved financial results for the quarter just ended over the same period last year, however our results were negatively impacted primarily by weather and other operational challenges,”   He continued, “In spite of the challenges experienced during the quarter, we remain optimistic on our profit improvement objectives as well as improved operating results.”

Financial and Operating Results

Operating revenues totaled $803.5 million for the quarter ended March 31, 2013, compared to $921.2 million for the same period last year or a decrease of $117.7 million, or 12.8%. The decrease was due primarily to the reduction of $128.2 million of fuel and certain engine overhaul amounts which are directly reimbursed by major partners and recorded as operating revenues.  Total block hours for the quarter ended March 31, 2013 were 571,991, or an increase of 2.8 percent, compared to 556,421 for the same period last year, which generated approximately $10.5 million in additional revenues.

Total airline expenses (consisting of total operating and interest expenses) decreased $114.6 million, or 12.5%, during the quarter ended March 31, 2013, compared to the same period in 2012.  However, after excluding pass-through costs for fuel and certain engine overhaul expenses, total airline expenses increased $4.8 million or less than 1%.

Under United Express agreements for SkyWest Airlines, Inc. (“SkyWest Airlines”) and ExpressJet Airlines, Inc. (“ExpressJet Airlines”), SkyWest recognizes revenue at fixed hourly rates for mature engine maintenance on regional jet engines and SkyWest recognizes engine maintenance expense on its CRJ200 regional jet engines on an as-incurred basis as maintenance expense.  During the quarter ended March 31, 2013, CRJ200 engine expense under these agreements decreased $7.6 million to $10.0 million compared to $17.6 million for the quarter ended March 31, 2012, as a result of decreased engine overhaul expense due to the timing of scheduled engine maintenance events.  SkyWest was reimbursed approximately $11.4 million and $9.4 million for engine overhaul expense, under its United Express agreements, in each of the periods ended March 31, 2013 and 2012, respectively.

Liquidity

At March 31, 2013, SkyWest had $631.5 million in cash and marketable securities, compared to $709.4 million as of December 31, 2012.  The decrease in cash and marketable securities of $77.9 million was primarily the result of the payment of scheduled semi-annual lease and debt payments.  SkyWest’s long-term debt was $1.44 billion as of March 31, 2012, compared to $1.47 billion as of December 31, 2012.  The decrease in long-term debt was due primarily to SkyWest’s payment of normal recurring debt obligations.  SkyWest has significant long-term lease obligations that are recorded as operating leases and are not reflected as liabilities on SkyWest’s consolidated balance sheets.  At a 4.7% discount rate, the present value of these lease obligations was approximately $1.7 billion as of March 31, 2013.

Recent Business Developments

On August 2, 2012, SkyWest announced the award of 34 additional dual-class aircraft and the removal of 66 CRJ200 aircraft with Delta Airlines, Inc. (“Delta”) and has taken delivery of 33 of these dual-class aircraft. SkyWest anticipates removal of the 66 CRJ200 aircraft starting in October of 2013.

On September 11, 2012, SkyWest announced the signing of an agreement with American Airlines, Inc. (“American Airlines”) to operate 23 CRJ200 regional jet aircraft as American Eagle and had integrated 12 of these aircraft into operations by December 31, 2012. The remaining 11 aircraft were introduced into service February 14, 2013.

On July 11, 2012, SkyWest announced the execution of an Aircraft Purchase Agreement with Mitsubishi Aircraft Corporation covering the purchase of 100 Mitsubishi regional jet aircraft. Deliveries are currently expected to begin in 2016.

SkyWest has increased its total fleet to 752 aircraft as of March 31, 2012, compared to 727 aircraft as of March 31, 2012.

Copyright Photo: Michael B. Ing. SkyWest will start the removal of 66 Bombardier CRJ200 aircraft from the Delta Connection contract starting in October 2013. Bombardier CRJ200 (CL-600-2B19) N408SW (msn 7055) completes its final approach into Los Angeles International Airport.

Delta Connection-SkyWest: AG Slide Show

Delta to expand service to Montana for the summer season

Delta Air Lines (Atlanta) will offer new and expanded summer service from Montana to Atlanta and Los Angeles, effective on June 22, 2013.

The new service changes include:

  • Atlanta to Bozeman expanded from twice per week to three weekly
  • Atlanta to Kalispell expanded from once per week to twice weekly
  • New Saturday service from Atlanta to Missoula
  • New Saturday service from Los Angeles to Bozeman

Delta’s new service between Atlanta and Bozeman, Kalispell and Missoula, will be operated with Boeing 737-800 aircraft. The fourth flight, between Bozeman and Los Angeles, will be operated by Delta Connection carrier SkyWest Airlines (St. George) using a 76-seat two-class Bombardier CRJ900.

Returning summer seasonal service between Atlanta and Bozeman will operate Wednesdays and Saturdays on a Boeing 757-200, while Atlanta-Kalispell service will operate Saturdays on Boeing 737-800 aircraft.

Delta has served Montana since 1927 and offers more flights statewide than any other airline. During the peak summer travel season, Delta serves eight Montana communities with more than 1,300 monthly departures and offers 54 percent more seats than its largest competitor. In 2012, the airline carried 1.3 million passengers to and from Montana.

Montana markets Delta provides service include: Butte, Billings, Bozeman, Great Falls, Helena, Kalispell, Missoula and West Yellowstone.

Delta’s new and returning summer seasonal flights in Montana are scheduled as follows:

Bozeman/Atlanta Operated on a Boeing 737-800

Departs Arrives Service Dates Frequency
Atlanta – 2:55 p.m. 5:05 p.m. June 22-Aug. 24 Saturday Only
Bozeman – 8:15 a.m. 2:00 p.m. June 23-Aug. 25 Sunday Only

Bozeman/Atlanta Operated on a Boeing 757-200

Departs Arrives Service Dates Frequency
Atlanta – 11:00 a.m. 1:10 p.m. June 22-Aug. 31 Wednesday/Saturday
Bozeman – 2:00 p.m. 7:47 p.m. June 22-Aug. 31 Wednesday/Saturday

Bozeman/Los Angeles Operated by Delta Connection carrier Skywest on a CRJ900

Departs Arrives Service Dates Frequency
Los Angeles – 9:00 a.m. 12:15 p.m. June 22-Aug. 24 Saturday Only
Bozeman – 12:50 p.m. 2:05 p.m. June 22-Aug. 24 Saturday Only

Kalispell/Atlanta Operated on a Boeing 737-800

Departs Arrives Service Dates Frequency
Atlanta – 3:00 p.m. 5:38 p.m. June 22-Aug. 24 Saturday Only
Kalispell – 8:00 a.m. 2:07 p.m. June 23-Aug. 25 Sunday Only

Kalispell/Atlanta Operated on a Boeing 737-800

Departs Arrives Service Dates Frequency
Atlanta – 9:50 a.m. 12:28 p.m. June 22-Aug. 31 Saturday Only
Kalispell – 1:10 p.m. 7:17 p.m. June 22-Aug. 31 Saturday Only

Missoula/Atlanta Operated on a Boeing 737-800

Departs Arrives Service Dates Frequency
Atlanta – 10:25 a.m. 1:03 p.m. June 22-Aug. 31 Saturday Only
Missoula – 1:45 p.m. 7:51 p.m. June 22-Aug. 31 Saturday Only

Copyright Photo: Michael B. Ing. Boeing 757-232 N610FL (msn 22817), formerly the pink Breast Cancer Awareness 757 aircraft, climbs away from Ted Stevens Anchorage International Airport (ANC).

Delta Air Lines: AG Slide Show

Delta Connection-SkyWest Airlines: AG Slide Show

 

Delta to connect Dickinson, ND with the Minneapolis/St. Paul hub

Delta Air Lines (Atlanta) will add two daily flights between Dickinson’s Theodore Roosevelt Regional Airport in Dickinson, North Dakota and Minneapolis-St. Paul International Airport, effective on June 10, 2013.

The new service will be operated by Delta Connection carrier SkyWest Airlines (St. George) using 50-seat Bombardier CRJ200 regional jets. Last year, Delta also added service to Williston, N.D., where the Bakken oil reserves were first discovered.

The new market is growing due to the local expanding gas and oil industry.

Delta’s two daily flights between Dickinson and Minneapolis are scheduled as follows:

Dickinson to Minneapolis-St. Paul

Departs Arrives Service Begins
7:45 a.m. 10:19 a.m. June 10, 2013
11:50 a.m. 2:23 p.m. June 10, 2013

Minneapolis-St. Paul to Dickinson

Departs Arrives Service Begins
10:15 a.m. 11:02 a.m. June 10, 2013
 5:30 p.m. 6:16 p.m. June 10, 2013

Copyright Photo: Michael B. Ing. SkyWest’s CRJ200 (CL-600-2B19) N447SW (msn 7677) is pictured in action at Long Beach.

Delta Air Lines: AG Slide Show

Delta Connection-SkyWest: AG Slide Show

 

SkyWest to operate St. George-Denver CRJ200 flights for United

SkyWest Airlines (St. George, UT) has announced new United Express service between its St. George, Utah base and the United Airlines Denver, Colorado hub beginning on June 6, 2013. SkyWest will provide once-daily Denver service utilizing its 50-passenger Canadair Regional Jet (Bombardier) CRJ200s.

Copyright Photo: Michael B. Ing. Bombardier CRJ200 (CL-600-2B19) N927SW (msn 7693) climbs away from Los Angeles International Airport.

SkyWest Airlines: AG Slide Show

United Express-SkyWest: AG Slide Show

SkyWest routes operated for United Airlines:

Please click on the map for the full-size view.

Please click on the map for the full-size view.

SkyWest rebounds with a 4Q net profit of $13.9 million, $51.1 million net profit in 2012

SkyWest, Inc. (SkyWest Airlines and ExpressJet Airlines) (St. George, UT)  today reported net income of $13.9 million, or $0.27 per diluted share, for the quarter ended December 31, 2012, compared to a net loss of  $(18.0) million, or $(0.35) per diluted share, for the same period last year.

Quarter Highlights

SkyWest’s operating and financial results for the quarter ended December 31, 2012 reflect a significant improvement compared to the same period of 2011, primarily as a result of recording additional revenues from an increase in block hour production and continuing to reduce its cost structure as part of its profit improvement plan; however, for financial reporting purposes, the increased revenues were offset by lower reimbursement payments for fuel and maintenance overhaul expenses under contracts with SkyWest’s major partners, resulting in a net decrease in total operating revenues. These efforts resulted in a $53.3 million improvement in pretax income and an improvement in fully diluted earnings per share of $0.62 for the quarter ended December 31, 2012, compared to the same period last year. This is the fourth quarter in a row where reported results have exceeded market estimates.  Following are some selected highlights for the quarter and twelve months ended December 31, 2012 compared to the same periods last year:

(Unaudited)

Dollars in thousands, except per share amounts

Three Months Ended

December 31,

Twelve Months Ended

December 31,

2012 2011  % Change 2012 2011 % Change
Total operating revenue $   810,725 $    899,851 (9.9)% $3,534,372 $3,654,924 (3.3)%
Total operating margin 5.4% (0.6)%       6.0pts 4.7% 1.1%    3.6pts
Pretax income (loss) $     25,556 $    (27,773) 192.0% $     85,896 $   (50,170) 271.2%
Net income (loss) $     13,946 $    (17,967) 177.6% $     51,157 $   (27,335) 287.1%
Fully diluted earnings per share $         0.27 $        (0.35) 177.1% $         0.99 $       (0.52) 290.4%
Block hours 568,808 550,808 3.3% 2,297,014 2,250,280 2.1%

Commenting on the results, Jerry C. Atkin, SkyWest’s Chairman and CEO, said “We are very pleased with our operating and financial results for the quarter ended December 31, 2012.  This is a solid result for a quarter that can typically be very challenging.”  He continued, “We continue to make positive progress in our cost reduction efforts that are resulting in improved profits, quarter over quarter.”

Financial and Operating Results

Under certain of SkyWest’s flying contracts, fuel purchased for SkyWest flights has been directly reimbursed by SkyWest’s major partners and, for financial reporting purposes, was included in operating revenues. The majority of fuel is now purchased directly by SkyWest’s major partners and as a result, SkyWest experienced a reduction of $92.5 million in reported operating revenues and operating expenses related directly to fuel purchases by its major partners  under its contract flying, for the quarter ended December 31, 2012, compared to the quarter ended December 31, 2011.

Operating revenues totaled $810.7 million for the quarter ended December 31, 2012, compared to $899.9 million for the same period last year or a decrease of $89.2 million, or 9.9%,  The decrease was due primarily to the reduction of $115.8 million of fuel and certain engine overhaul amounts which are directly reimbursed by major partners and recorded as operating revenues, offset by an increase in revenues of approximately $27.5 million as a result of additional block hour production  and incentive amounts for improvements in completion factors and on-time performance for its flights.  Total block hours for the quarter ended December 31, 2012 were 568,808, or an increase of 3.3 percent, compared to 550,808 for the same period last year.

Total airline expenses (consisting of total operating and interest expenses) decreased $139.1 million, or 15.0%, during the quarter ended December 31, 2012, compared to the same period in 2011.  However, after excluding pass-through costs for fuel and certain engine overhaul expenses that are directly reimbursed by SkyWest’s major partners, total airline expenses decreased $35.2 million or 4.6%.  The decrease was primarily the result of 1) reduced non-pass through maintenance costs of approximately $14.7 million, 2) reduced United Express CRJ200 engine overhaul costs of approximately $8.7 million and 3) reduced customer service labor of approximately $7.9 million due to the elimination of handling of flights at certain airports.

Under United Express agreements for SkyWest Airlines, Inc. (St. George) and ExpressJet Airlines, Inc. (Atlanta) SkyWest recognizes revenue at fixed hourly rates for mature engine maintenance on regional jet engines and SkyWest recognizes engine maintenance expense on its CRJ200 regional jet engines on an as-incurred basis as maintenance expense.  During the quarter ended December 31, 2012, CRJ200 engine expense under these agreements decreased $8.7 million to $10.6 million compared to $19.3 million for the quarter ended December 31, 2011, as a result of decreased engine overhaul expense due to the timing of scheduled engine maintenance events.  SkyWest was reimbursed approximately $10.3 million and $8.9 million for engine overhaul expense, under its United Express agreements, in each of the periods ended December 31, 2012 and 2011, respectively.

Liquidity

At December 31, 2012, SkyWest had $709.4 million in cash and marketable securities, compared to $646.5 million as of December 31, 2011.  The increase in cash and marketable securities of $62.9 million was primarily the result of increased profitability for the twelve-month period ended December 31, 2012.  SkyWest’s long-term debt was $1.47 billion as of December 31, 2012, compared to $1.61 billion as of December 31, 2011.  The decrease in long-term debt was due primarily to SkyWest’s payment of normal recurring debt obligations.  SkyWest has significant long-term lease obligations that are recorded as operating leases and are not reflected as liabilities on SkyWest’s consolidated balance sheets.  At a 4.7% discount rate, the present value of these lease obligations was approximately $1.8 billion as of December 31, 2012.

Recent Business Developments

SkyWest (Delta Connection) recently announced the award of 34 additional dual-class aircraft and the removal of 66 CRJ200 aircraft with Delta Airlines, Inc. (Atlanta) and has taken delivery of 20 of these dual-class aircraft by December 31, 2012. The remaining 14 aircraft have planned delivery dates between January and May 2014.  SkyWest anticipates removal of the 66 CRJ200 aircraft starting in October of 2013.

SkyWest also recently announced the signing of an agreement with American Airlines, Inc. (Dallas/Fort Worth) to operate 23 Bombardier CRJ200 regional jet aircraft as American Eagle and had integrated 12 of these aircraft into operations by December 31, 2012. The remaining 11 aircraft have been introduced into service February 14, 2013.

SkyWest recently announced the execution of an Aircraft Purchase Agreement with Mitsubishi Aircraft Corporation covering the purchase of 100 Mitsubishi regional jet aircraft. Deliveries are currently expected to begin in 2016.

SkyWest has increased its total fleet to 744 aircraft as of December 31, 2012, compared to 732 aircraft as of December 31, 2011.

Copyright Photo: Michael B. Ing. SkyWest Airlines now has 23 Bombardier CRJ200 regional jets in operation for American Airlines as an American Eagle Carrier. Unfortunately for SkyWest, the newly painted aircraft will have to be painted in the new American Eagle livery. CRJ200 (CL-600-2B19) N464SW (msn 7827) climbs away from Los Angeles International Airport.

American Eagle-SkyWest: AG Slide Show

American Eagle-SkyWest Route Map: The American Eagle operation is based in Los Angeles.

American Eagle-SkyWest 2:2013 Route Map

 

Delta to offer nonstop Los Angeles-Seattle/Tacoma service starting on April 8

Delta Air Lines (Atlanta) will add three daily flights between Los Angeles and Seattle/Tacoma, beginning April 8, 2013.

Delta is rapidly growing Seattle as an Asian gateway and recently received approval for new service to Shanghai for summer 2013. The airline currently offers international service to Beijing and Osaka, Japan. Delta also has an extensive codeshare agreement with Alaska Airlines in Seattle, providing customers access to more than 50 domestic markets. From Los Angeles, customers can enjoy nonstop service to destinations including Sydney and Tokyo, as well as codeshare flights with Virgin Australia to Melbourne and Brisbane.

The new service will be operated by Delta Connection carrier SkyWest Airlines (St. George) using 76-seat two-class Bombardier CRJ900 regional jets. In addition to a first class cabin, these aircraft are equipped with onboard WiFi and Delta’s snack, food for purchase and beverage offerings.

Delta currently operates the world’s largest WiFi-equipped fleet, and plans to introduce WiFi onboard international widebody aircraft in 2013.

By summer 2013, all trans-Pacific flights will feature Delta’s full flat-bed product in Business Elite. In addition, Delta is in the process of upgrading its facilities at both Los Angeles International Airport and Seattle-Tacoma International Airport as part of its ongoing $3 billion investment to improve products, services and facilities.

Delta’s three nonstop flights between Los Angeles and Seattle are scheduled as follows:

Los Angeles to Seattle

Flight Departs Arrives Service Begins
4523 8:15 a.m. 11:00 a.m. April 8, 2013
4591 3:20 p.m. 6:05 p.m. April 8, 2013
4564 9:30 p.m. 12:15 a.m. April 8, 2013

Seattle to Los Angeles

Flight Departs Arrives Service Begins
4563 6:45 a.m. 9:25 a.m. April 9, 2013
4523  11:50 a.m. 2:30 p.m. April 8, 2013
4591 6:50 p.m. 9:30 p.m. April 8, 2013

Delta Air Lines serves more than 160 million customers each year.

Copyright Photo: Michael B. Ing. SkyWest Airlines’ Bombardier CRJ900 (CL-600-2D24) N823SK (msn 15205) prepares to land at Los Angeles International Airport.

Delta Air Lines: AG Slide Show

Delta Connection-SkyWest Airlines: AG Slide Show

SkyWest firms up its order for 100 Mitsubishi MRJ90 regional jets

Mitsubishi Aircraft Corporation and SkyWest, Inc. (St. George), the holding company for SkyWest Airlines (St. George) and ExpressJet Airlines (Atlanta) that conducts the world’s largest combined regional airline operations, has announced they have executed a definitive agreement for the purchase of 100 MRJ90 aircraft and up to an additional 100 option aircraft. The agreement sets forth respective rights and obligations that enable Mitsubishi Aircraft and SkyWest to mutually position themselves for opportunities in the US regional airline industry. MRJ deliveries to SkyWest are currently anticipated to commence in 2017, with deliveries of executable option aircraft currently anticipated to commence in 2021. Based on the MRJ90 list price, SkyWest’s order for 100 aircraft is valued at US $4.2 billion, with an additional US $4.2 billion related to the executable 100 options.

SkyWest logo-1

SkyWest Airlines: AG Slide Show

Delta orders 40 new Bombardier CRJ900 regional jets

Delta Air Lines (Atlanta) has finalized an agreement with Bombardier Aerospace that will allow the airline to continue restructuring its domestic fleet by replacing less efficient single-class 50-seat aircraft with new two-class 76-seat aircraft. As part of the agreement, Delta will acquire 40 new CRJ900 two-class regional jets, with the option to purchase an additional 30 CRJ900 aircraft, and Bombardier will assist Delta in phasing out 60 single-class CRJ200 aircraft.

The addition of the CRJ900 is the latest step in Delta’s domestic fleet optimization plan focused on reducing inefficient flying, implementing strong capacity discipline by matching the right size aircraft to each market and improving the customer experience. The 76-seat CRJ900 will primarily replace less efficient 50-seat aircraft on a capacity-neutral basis. Retiring these aircraft reduces fuel and maintenance expense, improving Delta’s cost structure and environmental profile.

This announcement follows previously announced transactions supporting Delta’s domestic fleet optimization plan, including the addition of 88 Boeing 717-200 aircraft to primarily replace 50-seat aircraft, and acquisition of 100 new Boeing 737-900 ER jets to replace Boeing 757 and 767 aircraft.

Delta will begin taking delivery of CRJ900, 717-200 and 737-900 ER aircraft in the latter half of 2013.

This agreement also supports Delta’s efforts to improve the customer experience. The 40 76-seat CRJ900 aircraft enhance Delta’s efforts to offer customers more first class seats than any other airline. The CRJ900 will be configured with 12 seats in the first class cabin, 12 seats in Delta’s popular Economy Comfort section and 52 seats in economy. The aircraft will feature Delta’s all-leather seating in a two-by-two configuration with window and aisle seats only. Customers flying on Delta’s regional aircraft will continue to have access to the planeside valet program, with the opportunity to drop off larger carry-on baggage at the boarding door and pick it up planeside upon arrival.

Larger two-class regional jets flying for Delta also offer in-flight Wi-Fi access, Delta’s complimentary snacks and beverages, food available for purchase and complimentary first class meals on flights over 900 miles.

Delta’s regional fleet currently features 255 larger two-class regional jets, including 101 CRJ900 aircraft.

It is unclear which airline will operate the new CRJ900 aircraft.

In other Delta Connection news, flight attendants at subsidiary Compass Airlines (Minneapolis/St. Paul) have requested arbitration by the National Mediation Board (NMB) that will allow them to strike if management fails to negotiate a new agreement according to this report by Reuters.

Read the full report: CLICK HERE

Top Copyright Photo: Michael B. Ing. Formerly operated by Comair, Bombardier CRJ900 (CL-600-2D24) N548CA (msn 15159) is now assigned to SkyWest Airlines (St. George).

Delta Air Lines: AG Slide Show

Delta Connection-SkyWest Airlines: AG Slide Show

Delta Connection-Compass Airlines: AG Slide Show

Bottom Copyright Photo: Brian McDonough. Compass Airlines operates a large Embraer fleet for Delta Air Lines. Embraer ERJ 170-200LR (ERJ 175) N608CZ (msn 17000195) arrives at Baltimore/Washington.

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