SkyWest’s third quarter net earnings shrinks to $100,000

SkyWest, Inc. (St. George) today reported operating revenues of $955.4 million for the quarter ended September 30, 2011, compared to $686.9 million for the same period last year. SkyWest also reported net income of $0.1 million, or slightly more than $0.00 per diluted share, for the quarter ended September 30, 2011, compared to $25.5 million of net income, or $0.45 per diluted share, for the same period last year.

During the quarter ended September 30, 2011, SkyWest experienced a reduction of approximately $41.4 million in its pretax earnings compared to the same period last year.

Following are the significant items that contributed to the pretax reduction:

1. Incurred $10.7 million in additional United CRJ200 engine overhaul costs.

2. Incurred $9.7 million in additional crew related costs due to additional staffing needs.

3. Incurred $6.7 million in additional maintenance costs related to aircraft paint, parts and airframe heavy check costs.

4. Incurred $7.0 million of pretax loss from ExpressJet operations (acquired in November 2010).

5. Recorded $5.7 million of downward adjustment to the ExpressJet acquisition accounting in connection with the preparation of the 2010 tax return.

6. Recorded an additional $4.8 million from SkyWest’s share of losses from minority investments in Trip Linhas Aereas (TRIP) and Mekong Aviation Joint Stock Company (Air Mekong).

7. Recognized decreased revenue of $5.3 million as a result of application of provisions under our Delta Connection agreements generated $6.0 million increase in pretax results from pro-rate operations.

On November 12, 2010, SkyWest completed the acquisition of ExpressJet Holdings, Inc. (ExpressJet Airlines) and ExpressJet became a subsidiary of Atlantic Southeast Airlines, Inc. that is wholly-owned by SkyWest. ExpressJet Airlines, Inc. was the primary operating asset of ExpressJet. The acquisition included 244 regional jet aircraft and SkyWest’s consolidated operations and financial results for the quarter ended September 30, 2011 include significant increases related to revenues, expenses and statistical data compared to the quarter ended September 30, 2010.

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