Category Archives: American Eagle-SkyWest Airlines

American to seasonally test the Los Angeles – Flagstaff market

American Eagle Airlines (2nd)-SkyWest Airlines Bombardier CRJ700 (CL-600-2C10) N702SK (msn 10136) LAX (Michael B. Ing). Image: 936836.

American Airlines will operate American Eagle service seasonally on Saturdays in the Los Angeles – Flagstaff, AZ market starting on May 5, 2018 per the Arizona Daily Sun. The weekly service will operate until September 2018 to test the market.

Copyright Photo: American Eagle Airlines (2nd)-SkyWest Airlines Bombardier CRJ700 (CL-600-2C10) N702SK (msn 10136) LAX (Michael B. Ing). Image: 936836.

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American to end American Eagle service to both Monterey and Santa Fe from Los Angeles

American Airlines 2013 logo

American Airlines (Dallas/Fort Worth) is planning to end American Eagle service from Los Angeles to both Monterey, California and Santa Fe, New Mexico on September 8 per Airline Route. AA is planning to end all service to both stations.

American Eagle (2013) logo

Copyright Photo below: Michael B. Ing/AirlinersGallery.com. Like others, American is also downsizing 50-seat regional jet operations. SkyWest Airlines‘ Bombardier CRJ200 (CL-600-2B19) N492SW (msn 7168) climbs away from Los Angeles International Airport.

American Airlines aircraft slide show (current livery): AG Airline Slide Show

American Eagle-SkyWest Airlines aircraft slide show: AG Airline Slide Show

American to end American Eagle Los Angeles-Santa Barbara service

American Airlines (Dallas/Fort Worth) will end American Eagle Bombardier CRJ200 service between Los Angeles and Santa Barbara on April 1 according to Airline Route.

Copyright Photo: Michael B. Ing/AirlinersGallery.com. How much longer will AA contract for the small 50-seat CRJ200s on feeder routes? Operated by SkyWest Airlines on contract, CRJ200 (CL-600-2B19) N864AS (msn 7502) prepares to land at Los Angeles International Airport (LAX).

American Eagle-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

American and American Eagle to add nine new destinations from Los Angeles

American Airlines (Dallas/Fort Worth) is significantly expanding service from Los Angeles International Airport (LAX) this year. In addition to American’s new service between Los Angeles and Raleigh/Durham, North Carolina, which began on April 2, American will begin serving the following new destinations this summer from LAX:

  • Eugene, Oregon, beginning June 12 (operated by SkyWest Airlines)
  • Redmond, Oregon, beginning June 12 (operated by SkyWest Airlines)
  • Pittsburgh, Pennsylvania, beginning August 27
  • Indianapolis, Indiana, beginning August 27
  • Columbus, Ohio, beginning August 27
  • Hartford/Springfield, Connecticut, beginning August 27
  • Northwest Arkansas Regional Airport in Bentonville, Ark., beginning Aug. 27 (operated by American Eagle Airlines)

In February American filed an application with the U.S. Department of Transportation for the right to fly additional United States – Brazil frequencies beginning in 2013. Pending government approval, American intends to use these frequencies to add one new daily round trip service from its Los Angeles hub to Sao Paulo on November 21, expanding the airline’s Latin American network footprint. American currently offers more than 900 weekly flights to 49 cities throughout Latin America, including Mexico, Central and South America.

With these new markets, American will serve 51 domestic and international destinations from its LAX hub. 

Further demonstrating its commitment to the Los Angeles market, American will be deploying its brand new 777-300 ER aircraft on its route between Los Angeles and London Heathrow in June. The 777-300 ER introduces new enhancements to the inflight experience, including fully lie-flat seats in First and Business Class – all with direct aisle access; a walk-up bar for premium-cabin customers that offers snacks and sweets; and a sophisticated entertainment system offering hundreds of hours of audio and video programming options at every seat throughout the aircraft. American was the first U.S. airline to order and take delivery of the state-of-the-art Boeing 777-300 ER and intends to take delivery of 20 of the aircraft over the next few years.

Copyright Photo: Brian McDonough. Boeing 737-823 WL N803NN (msn 29566) arrives at Washington (Reagan National) in the new look. Will new incoming American CEO Doug Parker allow the combined fleet to be repainted in outgoing CEO Tom Horton’s livery?

American Airlines: AG Slide Show

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

 

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

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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