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Press release from PR Newswire

SkyWest, Inc. Addresses Anticipated Second Quarter 2011 Financial Results

Friday, July 15, 2011

SkyWest, Inc. Addresses Anticipated Second Quarter 2011 Financial Results16:17 EDT Friday, July 15, 2011ST. GEORGE, Utah, July 15, 2011 /PRNewswire/ -- SkyWest, Inc. (NASDAQ: SKYW) ("SkyWest") announced today that it expects its financial results for the quarter ended June 30, 2011, to be lower than it previously anticipated.  Due primarily to the reasons discussed below, SkyWest currently estimates that its financial performance will be breakeven for the quarter ended June 30, 2011.  SkyWest cautioned, however, that these estimates are preliminary and are subject to modification or revision in the course of completing SkyWest's quarterly financial review procedures.There are three primary factors that contributed to SkyWest's determination of the estimated breakeven financial results for the second quarter of 2011.  First, SkyWest's operating airlines, SkyWest Airlines, Inc. ("SkyWest Airlines"), Atlantic Southeast Airlines, Inc. ("Atlantic Southeast") and ExpressJet Airlines, Inc. ("ExpressJet") have experienced additional crew costs during the quarter ended June 30, 2011. These additional crew costs were principally the result of 1)SkyWest Airlines and Atlantic Southeast having the opportunity to take delivery of additional aircraft to be used in contract flying not previously anticipated and incurring related training and transition expenses, 2)increased summer block hour production as scheduled by SkyWest's major partners, 3)the reallocation of crews based on major partner schedule changes in certain hubs, and 4)pilot shortages resulting in paying double time and premium pay on certain flying. SkyWest currently anticipates that the aggregate impact of the additional crew costs for the quarter ended June 30, 2011 will be approximately $14.5 million (pre-tax).  Second, SkyWest incurred merger related costs attributable to the integration of ExpressJet's operations into Atlantic Southeast's operations, and other cost increases, such as health care, in the aggregate amount of approximately $7.0 million (pre-tax) for the quarter ended June 30, 2011.  SkyWest management currently believes that Single Operating Carrier certificate status for Atlantic Southeast and ExpressJet will be achieved later in the fourth quarter of 2011.   Third, based on SkyWest's ownership percentages of two non-U.S. regional carriers, TRIP and Air Mekong, SkyWest management currently estimates that SkyWest will recognize a loss attributable to the operations of such entities in the aggregate amount of approximately $3.0 million (pre-tax) for the quarter ended June 30, 2011.  Further, SkyWest management anticipates that during the remainder of 2011 SkyWest will experience higher than anticipated expenses in connection with these the items outlined in its public releases and as a result SkyWest's financial results for the third and fourth quarters of 2011 will be significantly lower than SkyWest management previously anticipated.  A more detailed explanation of items that affected the quarter ended June 30, 2011, and are anticipated to effect the third and fourth quarters of 2011, will be provided when SkyWest announces its financial results for the quarter ended June 30, 2011, which is currently estimated to occur in early August 2011. SkyWest is the holding company for three scheduled passenger airline operations and an aircraft leasing company and is headquartered in St. George, Utah. SkyWest's scheduled passenger airline operations include SkyWest Airlines also based in St. George, Utah; Atlantic Southeast based in Atlanta, Georgia and recently acquired ExpressJet based in Houston, Texas.  SkyWest Airlines operates as United Express and Delta Connection carriers under contractual agreements with United Airlines, Inc. ("United") and Delta Air Lines, Inc. ("Delta").  SkyWest Airlines also operates flights for AirTran under a marketing agreement and with Alaska Airlines under a contractual agreement.  Atlantic Southeast operates as United Express and Delta Connection carriers under contractual agreements with United and Delta. ExpressJet operates as Continental Express and United Express under contractual agreements with Continental Airlines, Inc. and United.  System-wide, SkyWest serves markets in the United States, Canada, Mexico and the Caribbean with approximately 3,950 daily departures and a fleet of approximately 725 regional aircraft.  This press release and additional information regarding SkyWest can be accessed at www.skywest.comFORWARD-LOOKING STATEMENTSIn addition to historical information, this release contains forward-looking statements.  SkyWest may, from time to time, make written or oral forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995.  Such statements encompass SkyWest's beliefs, expectations, hopes or intentions regarding future events.  Words such as "forecasts", "expects," "intends," "believes," "anticipates," "should," "likely" and similar expressions identify forward-looking statements.  All forward-looking statements included in this release are made as of the date hereof and are based on information available to SkyWest as of such date.  SkyWest assumes no obligation to update any forward-looking statement.  Readers should note that many factors could affect the future operating and financial results of SkyWest, SkyWest Airlines, Atlantic Southeast and ExpressJet, and could cause actual results to vary materially from those expressed in forward-looking statements set forth in this release.  These factors include, but are not limited to, the risk that the operations of Atlantic Southeast and ExpressJet will not be integrated successfully or at all; the ability of the combined company to realize potential synergies and other anticipated financial impacts of the acquisition of ExpressJet; future financial and operating results of the combined company if, integrated, may not meet SkyWest's forecasts; the timing of the proposed integration, if achieved, may be delayed. Actual operational and financial results of SkyWest, SkyWest Airlines, Atlantic Southeast and ExpressJet will also vary, and may vary materially, from those anticipated, estimated, projected or expected for a number of other reasons, including, among those identified above: the challenges of competing successfully in a highly competitive and rapidly changing industry; developments associated with fluctuations in the economy and the demand for air travel; ongoing negotiations between SkyWest, SkyWest Airlines, Atlantic Southeast and ExpressJet and their major partners regarding their contractual relationships, and the consequences of settlements reached as a result of those negotiations; the financial stability of those major partners regarding any impact on the contracts that SkyWest, SkyWest Airlines, Atlantic Southeast or ExpressJet operates under in their behalf; the resolution of current litigation with a major airline partner of SkyWest Airlines and Atlantic Southeast; fluctuations in flight schedules, which are determined by the major partners for whom SkyWest's operating airlines conduct flight operations; variations in market and economic conditions; labor relationships; the impact of global instability; rapidly fluctuating fuel costs; the degree and nature of competition; potential fuel shortages; the impact of weather-related or other natural disasters on air travel and airline costs; aircraft deliveries; and other unanticipated factors.  Risk factors, cautionary statements and other conditions which could cause SkyWest's actual results to differ from management's current expectations are contained in SkyWest's filings with the Securities and Exchange Commission; including the section of SkyWest's Annual Report on Form 10-K for the year ended December 31, 2010, entitled "Risk Factors."  SOURCE SkyWest, Inc.For further information: Michael J. Kraupp, Chief Financial Officer and Treasurer, +1-435-634-3212, Fax, +1-435-634-3205