SkyWest Announces Third Quarter 2009 Results

ST. GEORGE, Utah, Nov. 5 /PRNewswire-FirstCall/ -- SkyWest, Inc. ("SkyWest") (Nasdaq: SKYW) today reported operating revenues of $637.8 million for the quarter ended September 30, 2009, compared to $934.1 million for the same period last year. SkyWest...


ST. GEORGE, Utah, Nov. 5 /PRNewswire-FirstCall/ -- SkyWest, Inc. ("SkyWest") (Nasdaq: SKYW) today reported operating revenues of $637.8 million for the quarter ended September 30, 2009, compared to $934.1 million for the same period last year. SkyWest also reported net income of $28.6 million or $0.50 per diluted share, for the quarter ended September 30, 2009, compared to $26.2 million of net income or $0.45 per diluted share, for the same period last year.

SkyWest also reported operating revenues of $2.0 billion for the nine months ended September 30, 2009, compared to $2.75 billion for the same period last year. SkyWest reported net income of $64.2 million or $1.13 per diluted share, for the nine months ended September 30, 2009, compared to $91.7 million of net income, or $1.55 per diluted share for the same period last year.

Following are the significant items effecting SkyWest's financial and operating performance during the quarter ended September 30, 2009:

Total operating revenues for the third quarter of 2009 decreased $296.4 million primarily as a result of a reduction in fuel cost reimbursements paid by SkyWest's major partners. SkyWest is reimbursed by its major partners for fuel and certain other costs under its contract flying arrangements. For financial reporting purposes, these reimbursements are recorded as operating revenues. As SkyWest's major partners have increased the amount of fuel they purchase for SkyWest's operations, SkyWest's fuel purchases (and the corresponding reimbursements and revenues from SkyWest's major partners) have declined. The reduction in operating revenues was partially offset during the third quarter of 2009 as SkyWest experienced an increase in block hours of 3.2%, compared to the same quarter of 2008. SkyWest produced 359,573 block hours for the quarter ended September 30, 2009, compared to 348,522 block hours for the same period last year.

Total operating expense and interest per available seat mile ("ASM") for the third quarter of 2009, excluding fuel expense of $61.8 million or $0.010 per ASM, decreased 4.3% to $0.090 from $0.094 for the comparable quarter of 2008. The decrease was due primarily to the reduction in customer service labor as well as other labor-related costs, principally as a result of SkyWest's major partners now providing certain customer service functions. The decrease was also partially attributable to flying more regional jets, with larger seating capacity, that typically generate more ASMs than smaller aircraft flying the same routes. SkyWest's operating subsidiaries (ASA and SkyWest Airlines) continue to incur significant non-reimbursable maintenance costs as a result of the general aging of their fleets. SkyWest expended an additional $5.5 million as a result of these costs, however these additional costs were partially offset by the reduction in customer service labor and other labor-related costs mentioned above. Total operating expense and interest, excluding fuel expense, was $533.8 million for the quarter ended September 30, 2009, compared to $534.0 million for the quarter ended September 30, 2008.

SkyWest recorded stock-based compensation expense of approximately $1.7 million ($1.1 million after-tax) for the quarter ended September 30, 2009, compared to $2.6 million ($1.6 million after tax) for the same quarter of 2008.

During the quarter ended September 30, 2009, SkyWest repurchased 93,545 shares of its common stock, at an average cost of $10.46 per share and a total cost of approximately $978,000, under stock buyback programs previously authorized by its Board of Directors. As of September 30, 2009, SkyWest had authorization to repurchase up to an additional 2.78 million shares of its common stock. SkyWest may continue to purchase shares of its outstanding stock under the authorized stock buyback program from time to time, as it deems appropriate.

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