About these ads

Category Archives: SkyWest Airlines

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.

 

 

About these ads

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.

Have you seen the “new look” AirlinersGallery.com photo library website?

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.

AMR Corporation asks the bankruptcy judge to extend the exit plan deadline to March 11

http://airlinersgallery.smugmug.com/Airlines-UnitedStates/American-Eagle-2nd-SkyWest/i-x2R3gS9/0/S/American%20Eagle-SkyWest%20CRJ100%20N868CA%20%2884%29%28Tko%29%20LAX%20%28MBI%29%2846%29-S.jpg

AMR Corporation (Dallas/Fort Worth) has asked the bankruptcy court judge to extend by six weeks, through March 11, 2013 the period in which the company has the exclusive right to propose an exit plan.

Read the full story from the Chicago Tribune and Reuters: CLICK HERE

Copyright Photo: Michael B. Ing. Will American Eagle be spun off? Meanwhile as AMR struggles with this question it is farming out more flying to other carriers like SkyWest Airlines which started flying for AMR on November 15 as a new American Eagle carrier. Ex-Comair Bombardier CRJ100 (CL-600-2B19) N868CA (msn 7427) departs from Los Angeles International Airport.

American Airlines: AG Slide Show

American Eagle: AG Slide Show

American Eagle/SkyWest Airlines: AG Slide Show

SkyWest reports net income of $20.9 million in the third quarter

SkyWest, Inc. (SkyWest Airlines) (St. George)  today reported net income of $20.9 million, or $0.40 per diluted share, for the quarter ended September 30, 2012, compared to $0.1 million of net income, or slightly more than $0.00 per diluted share, for the same period last year.

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. Recently, SkyWest’s major partners have increased the amount of fuel they purchase directly for SkyWest’s flights which has resulted in a significant decrease in the amount of fuel reimbursement SkyWest records as revenue.  SkyWest anticipates this trend will continue and that early in 2013 the majority of fuel purchases will be made directly by SkyWest’s major partners.  At that time, fuel reimbursements paid by SkyWest’s major partners will no longer be reflected in SkyWest’s financial statements.   Due to the decreased fuel reimbursements paid by SkyWest’s major partners, SkyWest experienced a reduction of $88.0 million in reported operating revenues and operating expenses related to fuel purchases under its contract flying, for the quarter ended September 30, 2012, compared to the quarter ended September 30, 2011.  Operating revenues totaled $865.3 million for the quarter ended September 30, 2012, compared to $955.4 million for the same period last year.

Quarter Summary

SkyWest’s operating and financial results for the quarter ended September 30, 2012 reflected a significant improvement compared to the same period of 2011.  After excluding fuel and certain engine overhaul expenses, of approximately $94.0 million, that are directly reimbursed from SkyWest’s major partners, SkyWest generated increased operating revenues resulting from increased block hour production and incentive payments under its contracts with major partners primarily as a result of improved on-time and completion factor performance.  SkyWest’s improved results also reflected the implementation of cost reduction programs during 2011 from which SkyWest achieved reduced flight crew and maintenance costs, as well as other benefits for the quarter ended September 30, 2012.  This is the third consecutive quarter in which SkyWest has reduced flight crew and maintenance costs under its cost reduction programs.  As a result of SkyWest’s improvements as described above, SkyWest’s pre-tax income for the quarter ended September 30, 2012 increased $35.0 million over the quarter ended September 30, 2011.  SkyWest reported pre-tax income of $32.9 million for the quarter ended September 30, 2012, compared to a pre-tax loss of $(2.1) million for the comparable quarter of 2011.  Following are the primary items that affected SkyWest’s financial results for the third quarter of 2012, compared to the third quarter of 2011:

  • Recorded approximately $6.2 million in additional revenues related to increased block hour production and improved metrics for on-time performance and higher completion factors
  • Reduced United Express CRJ200 engine overhaul costs by approximately $15.1 million due to timing of engine overhauls
  • Reduced airframe maintenance and other maintenance costs by approximately $4.9 million
  • Reduced crew and crew-related training costs by approximately $3.0 million

Commenting on the results, Jerry C. Atkin, SkyWest’s Chairman and CEO, said “We are very pleased with our cost reduction efforts.  Those efforts are resulting in lower flight crew and maintenance costs, quarter over quarter, and are contributing to improved profitability.”  He continued, “We are also pleased that, while reducing our cost structure, we continue to improve the quality of our operations with improved performance metrics for on-time, completion factor and customer service.”

3rd Quarter 2012 Compared to 2nd Quarter 2012

SkyWest’s implementation of its plan to return to profitability also resulted in improved financial results for the quarter ended September 30, 2012, compared to the quarter ended June 30, 2012.  During the third quarter of 2012, SkyWest generated increased operating revenues (after excluding fuel reimbursements and certain engine overhaul expenses that are directly reimbursed by SkyWest’s major partners) and reduced its operating costs, while producing more block hours than the second quarter of 2012.  During the third quarter of 2012, SkyWest also continued to make progress on its cost reduction plan by reducing crew-related costs and maintenance expenses from the first and second quarters of 2012, while taking into account the increased block hour production it generated during the third quarter of 2012.  Following are highlights resulting from SkyWest’s implementation of its plan to return to profitability, comparing the third quarter of 2012 to the second quarter of 2012:

  • Total passenger revenues increased $10.7 million (after excluding direct reimbursements of fuel and engine overhaul expenses) to $761.9 million compared to $751.2 million
  • Total operating expenses and interest increased only $2.7 million (after excluding direct reimbursements of fuel and engine overhaul expenses) to $743.0 million compared to $740.3 million
  • Pre-tax income improved $4.3 million to $32.9 million, compared to $28.6 million
  • Net income improved $4.0 million to $20.9 million, compared to $16.9 million
  • Block hours increased to 596,901, compared to 574,884

Financial and Operating Results

SkyWest’s total operating revenues decreased $90.2 million, or 9.4%, during the quarter ended September 30, 2012, over the same period in 2011, primarily due to the reduction fuel reimbursed from SkyWest’s major partners as previously explained above.  Total block hours for the quarter ended September 30, 2012 were 596,901, compared to 585,146 for the same period last year.

Total airline expenses (consisting of total operating and interest expenses) decreased $118.9 million, or 12.5%, during the quarter ended September 30, 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 $24.9 million or 3.2%.  The decrease was primarily the result of SkyWest’s implementation of planned cost reduction efforts, which resulted in reduced crew-related and non-pass through maintenance costs of approximately $7.9 million. For the quarter ended September 30, 2012, compared to the third quarter of 2011, SkyWest also experienced a reduction in United Express CRJ200 engine overhaul costs of approximately $15.1 million.

Under United Express agreements for SkyWest Airlines and ExpressJet Airlines, SkyWest recognizes revenue at a fixed hourly rate 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, 2012, CRJ200 engine expense under these agreements decreased $15.1 million to $13.1 million compared to $28.2 million for the quarter ended September 30, 2011, as a result of decreased engine overhaul expense due to the timing of scheduled engine maintenance events.  SkyWest was reimbursed approximately $10.4 million and $9.6 million for engine overhaul expense, under its United Express agreements, in each of the periods ended September 30, 2012 and 2011, respectively.

Liquidity

At September 30, 2012, SkyWest had $739.1 million in cash and marketable securities, compared to $646.5 million as of December 31, 2011.  The increase in cash and marketable securities of $92.6 million was primarily the result of increased profitability and a reduction in working capital amounts for the nine-month period ended September 30, 2012.  SkyWest’s long-term debt was $1.53 billion as of September 30, 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 5.2% discount rate, the present value of these lease obligations was approximately $1.8 billion as of September 30, 2012.

Other Items

SkyWest has also recently achieved the following milestones:

  • Announced the award of 34 additional dual-class aircraft and removal of 66 CRJ200 aircraft with Delta Airlines, Inc. (“Delta”)
  • Announced an agreement with American Airlines to operate 23 aircraft as American Connection
  • Announced the execution of a Memorandum of Understanding with Mitsubishi Aircraft Corporation covering the purchase of 100 Mitsubishi regional jet aircraft
  • Increased its total fleet to 739 aircraft as of September 30, 2012, compared to 727 aircraft as of September 30, 2011

Copyright Photo: Michael B. Ing. SkyWest Airlines also operates for Alaska Airlines as Alaska SkyWest. Bombardier CRJ700 (CL-600-2C10) N216AG (msn 10023) lands at Long Beach.

Alaska SkyWest: 

SkyWest to operate 23 Bombardier CRJ200s for American Eagle

SkyWest, Inc. (St. George) announced today that it has signed a Capacity Purchase Agreement (CPA) with American Airlines, Inc. (Dallas/Fort Worth) to operate 23 Bombardier CRJ200 regional jet aircraft under the American Eagle designation.  SkyWest currently anticipates that it will commence its American flights on November 15, 2012, with all 23 aircraft being placed in service prior to end of the first quarter 2013.   SkyWest intends to source the aircraft from its existing fleet where they have previously been operated in behalf of another major partner and anticipates that 12 of the aircraft will be flown by SkyWest Airlines, Inc. and 11 aircraft will be flown by ExpressJet Airlines, Inc. (Atlanta). SkyWest also anticipates that the American aircraft will be primarily operated out of Los Angeles International Airport and Dallas/Fort Worth International Airport.

The CPA, which has a term of four years, provides for SkyWest, through its operating airlines SkyWest Airlines and ExpressJet Airlines, to be compensated in similar fashion to existing capacity purchase agreements with SkyWest’s other major partners.

SkyWest is the holding company for two scheduled passenger airline operations and an aircraft leasing company and is headquartered in St. George, Utah. SkyWest’s scheduled passenger airline operations consist of SkyWest Airlines, also based in St. George, Utah, and ExpressJet Airlines, based in Atlanta, Georgia.  SkyWest Airlines operates as United Express and Delta Connection carriers under contractual agreements with United Airlines, Inc. and Delta Air Lines, Inc.  SkyWest Airlines also operates as US Airways Express under a contractual agreement with US Airways, Inc., and operates flights for Alaska Airlines under a contractual agreement.  ExpressJet Airlines operates as United Express and Delta Connection carriers under contractual agreements with United and Delta. System-wide, SkyWest serves markets in the United States, Canada, Mexico and the Caribbean with approximately 4,000 daily departures and a fleet of approximately 725 regional aircraft.

Copyright Photo: Michael B. Ing. Bombardier CRJ200 N496CA (msn 7791) arrives at Los Angeles.

SkyWest: 

SkyWest Airlines to start Denver-Laramie service on November 4

SkyWest Airlines (St. George) operating for United Airlines, will operate twice-daily Denver flights to Laramie, Wyoming starting on November 4. The United Express flights will be operated by SkyWest Airlines utilizing the 30-seat Embraer-manufactured EMB-120ER Brasilia.

Copyright Photo: Michael B. Ing. Embraer EMB-120ER Brasilia N584SW (msn 120352) completes its final approach into Los Angeles International Airport.

United Express-SkyWest Airlines: 

SkyWest reports 2Q net income of $17.0 million

SkyWest, Inc. (SkyWest Airlines) (St. George) reported a second quarter net income of $17.0 million.

Here is the full report:

“SkyWest, Inc. today reported operating revenues of $937.2 million for the quarter ended June 30, 2012, compared to $933.7 million for the same period last year.  SkyWest also reported net income of $17.0 million, or $0.33 per diluted share, for the quarter ended June 30, 2012, compared to $1.6 million of net income, or $0.03 per diluted share, for the same period last year.

Quarter Summary

SkyWest’s operating and financial results for the quarter ended June 30, 2012 reflected a significant improvement compared to the same period of 2011.   SkyWest generated increased operating revenues resulting from increased incentive payments under its contracts with major partners primarily as a result of better on-time and completion factor performance.  SkyWest’s improved results also reflected the implementation of cost reduction programs during 2011 from which SkyWest achieved reduced flight crew and maintenance costs, as well as other benefits for the quarter ended June 30, 2012.  As a consequence of SkyWest’s improved results, SkyWest’s pre-tax income for the quarter ended June 30, 2012 increased $30.4 million over the quarter ended June 30, 2011.  SkyWest reported pre-tax income of $28.6 million for the quarter ended June 30, 2012, compared to a pre-tax loss of $(1.8) million for the second quarter of 2011.  Following are the primary items that affected SkyWest’s financial results for the second quarter of 2012:

  • Recorded approximately $7.0 million in additional revenues related to improved metrics for on-time performance and higher completion factors
  • Recorded improvement in pro-rate flying operations of approximately $2.5 million
  • Reduced crew and crew-related training costs by approximately $10.0 million
  • Reduced engine and airframe maintenance costs by approximately $3.7 million
  • Recorded reimbursement from a major partner of approximately $3.0 million in aircraft redeployment costs previously incurred

2nd Quarter 2012 Compared to 1st Quarter 2012

SkyWest’s implementation of its plan to return to profitability also resulted in improved results from the quarter ended March 31, 2012 to the quarter ended June 30, 2012.  During the second quarter of 2012, SkyWest generated increased operating revenues and reduced its operating costs, while producing more block hours that the first quarter of 2012.  During the second quarter of 2012, SkyWest also continued to make progress on its cost reduction plan by reducing crew-related costs and maintenance expenses from the first quarter of 2012, while taking into account the increased block hour production it generated during the second quarter of 2012.  Following are highlights resulting from SkyWest’s implementation of its plan to return to profitability, comparing the second quarter of 2012 to the first quarter of 2012:

  • Total operating revenues increased to $937.2 million compared to $921.2 million
  • Total operating expenses and interest decreased to $909.8 million compared to $$920.5 million
  • Pre-tax income improved $29.9 million
  • Net income improved $17.6 million
  • Block hours increased to 574,884 compared to 556,421 or 3.3%

As a result of continued cost reduction efforts and better utilization of personnel, SkyWest was able to reduce its crew related block hour costs for the second quarter ended June 30, 2012 by approximately 3.9% compared to the first quarter ended March 31, 2012. Additionally, as a result of these efforts, SkyWest was able to reduce it maintenance costs (less engine overhauls) for the second quarter ended June 30, 2012 by approximately 3.7% compared to the first quarter ended March 31, 2012.

Financial and Operating Results

SkyWest’s total operating revenues increased $3.5 million, or 0.4%, during the quarter ended June 30, 2012, over the same period in 2011.  However, after excluding pass-through costs for fuel and engine overhaul’s, (that are included in operating revenues) for the quarters ended June 30, 2012 and 2011, total operating revenues increased approximately $17.3 million for the quarter ended June 30, 2012 compared to the same quarter last year. The increase in total operating revenues was primarily 1) the result of experiencing improved on-time, completion and customer service metrics and 2) from normal recurring contract escalation increases allowed under SkyWest’s contracts, and are included in the rates paid by its major partners.  SkyWest’s pro-rate flying operations experienced a planned reduction in block hours of 7.3% resulting in reduced revenues of approximately $2.1 million for the quarter ended June 30, 2012.  In spite of reduced operating revenues from pro-rate flying, SkyWest’s revenue per available seat mile for pro-rate flying increased approximately 5.0% from improved pricing.  Total block hours for the quarter ended June 30, 2012 were 574,884 compared to 574,372 for the same period last year.

Total airline expenses (consisting of total operating and interest expenses) decreased $24.9 million, or 2.7%, during the quarter ended June 30, 2012, over the same period in 2011.  The decrease was primarily the result of SkyWest’s implementation of planned cost reduction efforts, which resulted in reduced crew-related and non-pass through maintenance costs of approximately $13.6 million. For the quarter ended June 30, 2012, compared to the second quarter of 2011, SkyWest also experienced a reduction in engine overhaul costs of approximately $9.3 million, which costs are considered pass-through costs under its contracts with its major partners.

Under United Express agreements for SkyWest Airlines and ExpressJet Airlines, SkyWest recognizes revenue at a fixed hourly rate 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, 2012, CRJ200 engine expense under these agreements decreased $1.6 million to $13.8 million compared to $15.5 million for the quarter ended June 30, 2011, as a result of decreased engine overhaul expense due to the timing of scheduled engine maintenance events.  SkyWest was reimbursed approximately $10.2 million and $9.6 million for engine overhaul expense, under its United Express agreements, in each of the periods ended June 30, 2012 and 2011, respectively.

Liquidity

At June 30, 2012, SkyWest had $629.5 million in cash and marketable securities, compared to $646.5 million as of December 31, 2011.  SkyWest’s long-term debt was $1.53 billion as of June 30, 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 5.2% discount rate, the present value of these lease obligations was approximately $1.8 billion as of June 30, 2012.

Other Items

SkyWest has recently achieved the following milestones:

  • Completed  the sale of our investment in Trip Linhas Aereas (“TRIP”) in July 2012
  • Announced a Memorandum of Understanding with Mitsubishi Aircraft Corporation covering the purchase of 100 Mitsubishi regional jet aircraft
  • Announced award of 34 additional dual-class aircraft and removal of 66 CRJ200 aircraft
  • Total fleet as of June 30, 2012 consisted of 725 total aircraft compared to 725 aircraft as of June 30, 2011″

Copyright Photo: Michael B. Ing. SkyWest is one of the last operators of the Brasilia in the United States. SkyWest Airlines’ Embraer EMB-120ER Brasilia N296SW in the 1986 color scheme prepares to land at Los Angeles.

SkyWest Airlines: 

SkyWest to get 34 Comair aircraft for the Delta Connection operation, will retire 66 CRJ200s

SkyWest, Inc. (SkyWest Airlines) (St. George) has announced that it has reached an understanding with Delta Air Lines, Inc. (Atlanta) on a transaction which provides SkyWest, Inc. 34 additional dual-class regional jet aircraft and for the early termination of 66 Bombardier CRJ200 regional jet aircraft under its existing Delta Connection agreements.  The 34 additional aircraft consist of five Bombardier CRJ700 aircraft and 29 Bombardier CRJ900.  SkyWest, Inc. anticipates that it will take delivery of the 34 aircraft incrementally between August 2012 and June 2013.  Subject to the completion of agreements to be negotiated between SkyWest, Inc. and Delta, SkyWest, Inc. also anticipates that these changes will be incorporated into its existing Delta agreements with a December 2022 termination date for these operating rights.

SkyWest, Inc. intends to remove the 66 CRJ200 aircraft from existing Delta Connection service between August 2012 and December 2015.  Of those aircraft, 41 are Delta-financed aircraft which are scheduled to be returned to Delta without obligation to SkyWest, Inc.  The remaining 25 aircraft are SkyWest, Inc. financed aircraft and SkyWest is currently working on opportunities to mitigate the financial risk associated with removing those aircraft from Delta service.

Copyright Photo: Michael B. Ing. Bombardier CRJ900 (CL-600-2D24) N802SK (msn 15061) is pictured on final approach into Los Angeles International Airport.

Delta Connection-SkyWest: 

SkyWest pilot kills himself after trying to steal a CRJ200 at St. George, Utah

 

SkyWest Airlines‘ (St. George) pilot, who was wanted for the murder of his former girlfriend in Colorado, attempted to steal an unoccupied SkyWest regional jet from the St. George Airport yesterday (July 17). The pilot then committed suicide after smashing the unoccupied Bombardier CRJ200 (CL-600-2B19) N865AS (msn 7507) into the loading bridge according to this report by the The Salt Lake Tribune.

Read the full report (with photos): CLICK HERE

Copyright Photo: Michael B. Ing. N865AS is seen at Long Beach before the incident.

SkyWest Airlines: 

SkyWest orders 100 Mitsubishi Regional Jets

SkyWest Airlines (St. George) has placed a firm order for 100 Mitsubishi Regional Jets for deliveries between 2017 and 2020.

Read the full full story from Reuters: CLICK HERE

SkyWest Airlines is celebrating 40 Years of flying in 2012. SkyWest cooperates and flies for United Airlines, Delta Air Lines, US Airways  and Alaska Airlines. With a fleet of 314 aircraft, SkyWest’s more than 11,000 aviation professionals operate more than 1,800 flights each day to 162 destinations throughout North America (see route map below).

SkyWest Current Fleet: CLICK HERE

SkyWest Slide Show: CLICK HERE

Top Copyright Photo: James Helbock. SkyWest currently operates 159 Bombardier CRJ200s which will be the first aircraft to be replaced in addition to the 42 Embraer EMB-120 Brasilias, 92 Bombardier CRJ700s and 21 CRJ900s also operated.

Video on the MRJ:

Route Map:

Please click on the map to expand.

 

 

SkyWest to sell its 26% share in TRIP Linhas Aereas for $42 million for a profit

SkyWest, Inc. (St. George) announced today that it entered into an agreement on Wednesday, May 23, 2012, to sell its 26% ownership (20% common and 6%  preferred)  in the Brazilian airline TRIP Linhas Aereas S.A. (Sao Paulo) for a price of $42 million.  SkyWest has agreed to sell its TRIP shares to Trip Investimentos Ltda., a Brazilian limited liability company affiliated with TRIP. The purchase price is scheduled to be paid in three installments over a two-year period and may be accelerated based on certain conditions under the purchase agreement.

As part of the agreement, SkyWest also received an option to acquire 15.38% of the ownership in Trip Investimentos Ltda., the purchaser of the shares, which SkyWest may exercise at its discretion.  The call option has an initial set price per share, escalates annually at a specified rate and can be exercised up to between four to six years following receipt by SkyWest of the required installment payments from Trip Investimentos Ltda.,  under the agreement.  SkyWest’s sale of the TRIP shares, as well as the other transactions governed by the purchase agreement, are contingent on TRIP’s receipt of Brazilian regulatory approvals.

SkyWest acquired its initial interest in TRIP in August 2008 and has invested a total of $30 million for its 26% interest. Due to SkyWest’s treatment of its TRIP ownership position under the equity method of accounting, it has decreased its investment in TRIP to a current carrying amount of $23.2 million as of March 31, 2012. SkyWest anticipates recording a net gain on the investment upon closing, however the amount will be contingent on SkyWest recording its share of TRIP’s income or loss up until the closing date of the transaction,  which is yet to be determined and is subject to TRIP’s receipt of regulatory approvals.

TRIP is merging with Azul Linhas Aereas forming a new holding company called Azul Trip.

Copyright Photo: AirSpeed.

TRIP Linhas Aereas: 

United to add Shreveport and Grand Forks service from Denver, Anchorage flights to go to year-round

United Airlines (Chicago) has announced plans to launch daily nonstop service linking its Denver hub with two new markets: Shreveport, Louisiana, and Grand Forks, North Dakota. In addition, United will expand existing summer-season flights between Denver and Anchorage to year-round service.

This new announcement comes one week after United announced daily, nonstop service between Denver and its hub at Tokyo Narita International Airport, starting in the spring of 2013.

Shreveport: Once-daily, nonstop service between Denver and Shreveport starts on August 28.  United Express carrier ExpressJet Airlines (Atlanta) will operate the flight with 50-seat Embraer ERJ 145 regional jets (above).  Shreveport Regional Airport serves north Louisiana, east Texas and southwest Arkansas.

Top Copyright Photo: Brian McDonough.

United Express-ExpressJet: 

Grand Forks: Twice-daily, nonstop service between Denver and Grand Forks International Airport begins on October 3.  United Express carrier SkyWest Airlines (St. George) will operate the flights with 50-seat Canadair CRJ200 regional jets.

Middle Copyright Photo: Michael B. Ing.

United Express-SkyWest: 

Anchorage: United’s seasonal service between Denver and Anchorage, launched on May 1 with Boeing 737-800 aircraft, will operate year-round.

Bottom Copyright Photo: Tony Storck.

United Airlines: 

SkyWest reduces its first quarter loss to $700,000

SkyWest, Inc. (St. George) today reported operating revenues of $921.2 million for the quarter ended March 31, 2012, compared to $866.0 million for the same period last year.  SkyWest also reported a net loss of $(0.7) million, or $(0.01) per diluted share, for the quarter ended March 31, 2012, compared to $(11.1) million of net loss, or $(0.21) per diluted share, for the same period last year.

The full report:

Quarter Summary

SkyWest’s operating and financial results for the quarter ended March 31, 2012 reflected a significant improvement compared to the first quarter of 2011.  Specifically, SkyWest generated positive revenue growth, period over period, primarily as a result of flying approximately 16,500 additional block hours during the first quarter of 2012.  SkyWest’s improved results also reflected the implementation of cost reduction programs during 2011 from which SkyWest achieved reduced maintenance costs, as well as other benefits.  SkyWest also produced better results than it had forecast for the quarter ended March 31, 2012, principally as a result of executing on its return to profitability objectives for 2012.  As a consequence of SkyWest’s improved results, SkyWest’s pre-tax loss for the quarter ended March 31, 2012 was $17.3 million less than the quarter ended March 31, 2011. SkyWest reported a pre-tax loss of $1.2 million for the quarter ended March 31, 2012, compared to a pre-tax loss of $18.5 million for the first quarter of 2011.  Following are the primary items that affected SkyWest’s financial results for the first quarter of 2012:

  • Recorded approximately $30.1 million in additional revenues related to increased block hour production, improved utilization and ground handling contracts
  • Reduction of $4.6 million in prorate flying loss
  • Recorded an additional $5.7 in United CRJ200 engine overhaul costs
  • Recorded an additional $3.8 million in employer benefit costs
  • Recorded an additional $4.1 million of loss attributable to SkyWest’s minority investments in Trip Linhas Aereas (“TRIP”) and Mekong Aviation Joint Stock Company (“Air Mekong”)

Commenting on the results, Jerry C. Atkin, Chairman and CEO said “We are very pleased with the improvement in our financial results, quarter over quarter, as well as how we performed compared to our first quarter operating plan for 2012.”  He continued, “We executed well on our action plan items and also experienced a higher completion factor of our scheduled flights and on-time arrivals due to better weather in the quarter compared to the same period last year. We remain committed to our return to profitability program for 2012.”

Financial and Operating Results

SkyWest’s total operating revenues increased $55.2 million, or 6.4%, during the quarter ended March 31, 2012, over the same period in 2011.  The increase in operating revenues was the result of higher pass-through costs (primarily fuel and engine overhaul costs) under SkyWest’s agreements with its major partners and an increase in block hour production.  The increase in operating revenues was offset by a planned reduction in prorate flying block hours of 13.4% resulting in reduced revenues of approximately $6.0 million.  In spite of the reducing operating revenues from prorate flying, SkyWest’s revenue per available seat mile for this flying increased 14.6% from improved pricing. After excluding the increased pass-through costs of approximately $31.1 million, for fuel and engine overhauls, and the reduction in prorate flying revenue of $6.0, total operating revenues increased approximately $30.1 million due to the additional block hour production of 3.1% and improved utilization. Total block hours for the quarter ended March 31, 2012 were 556,421 compared to 539,910 for the same period last year.

Total airline expenses (consisting of total operating and interest expenses) increased $34.6 million, or 3.9%, during the quarter ended March 31, 2012, over the same period in 2011.  After excluding the increase in fuel costs of $20.7 million, total operating costs and expenses increased $13.8 million or 1.8% which was less than the rate of increase in block hours of 3.1%.

Under United Express agreements for SkyWest Airlines and ExpressJet Airlines, SkyWest recognizes revenue at a fixed hourly rate 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, 2012, CRJ200 engine expense under these agreements increased $5.7 million to $21.5 million compared to $15.8 million for the quarter ended March 31, 2011, as a result of increased engine overhaul expense due to the timing of scheduled engine maintenance events.  SkyWest was reimbursed approximately $9.4 million and $8.2 million for engine overhaul expense, under its United Express agreements, in each of the periods ended March 31, 2012 and 2011, respectively.

Liquidity

At March 31, 2012, SkyWest had $583.3 million in cash and marketable securities, compared to $646.5 million as of December 31, 2011. The reduction in cash and marketable securities during the year ended March 31, 2012 was primarily related to increases in its prepaid aircraft lease amounts and changes in certain other working capital accounts of approximately $65.5 million offset by the issuance of $2.2 million of common stock under SkyWest’s employee stock purchase program. SkyWest’s long-term debt was $1.58 billion as of March 31, 2012, compared to $1.71 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 5.2% discount rate, the present value of these lease obligations was approximately $1.9 billion as of March 31, 2012.

Other Items

During the quarter ended March 31, 2012, SkyWest achieved the following milestones:

  • Completed implementation with US Airways for 14 CRJ200 regional jets
  • Completed corporate merger between ExpressJet Holdings and Atlantic Southeast effective on January 1, 2012, with the surviving entity named ExpressJet Airlines, Inc.
  • Total fleet as of March 31, 2012 consisted of 727 total aircraft compared to 713 aircraft for the same period last year

SkyWest is the holding company for two scheduled passenger airline operations and an aircraft leasing company and is headquartered in St. George, Utah. SkyWest’s scheduled passenger airline operations consist of SkyWest Airlines also based in St. George, Utah and ExpressJet Airlines based in Atlanta, Georgia.  SkyWest Airlines operates as United Express and Delta Connection carriers under contractual agreements with United Airlines, Inc. and Delta Air Lines, Inc.  SkyWest Airlines also operates as US Airways Express under a contractual agreement with US Airways, Inc., and operates flights for Alaska Airlines under a contractual agreement.  ExpressJet Airlines operates as United Express and Delta Connection carriers under contractual agreements with United and Delta. System-wide, SkyWest serves markets in the United States, Canada, Mexico and the Caribbean with approximately 3,900 daily departures and a fleet of approximately 727 regional aircraft.

Top Copyright Photo: Michael B. Ing.

SkyWest Slide Show: CLICK HERE

Delta Connection-Atlantic Southeast Slide Show: CLICK HERE

Delta Connection-ExpressJet Slide Show: CLICK HERE

Delta Connection-SkyWest Slide Show: CLICK HERE

ExpressJet Slide Show: CLICK HERE

United Express-ExpressJet Slide Show: CLICK HERE

United Express-SkyWest Slide Show: CLICK HERE

Middle Copyright Photo: Mark Durbin.

Bottom Copyright Photo: Brian McDonough.

Follow

Get every new post delivered to your Inbox.

Join 1,752 other followers

%d bloggers like this: