ASA...Skywest making $$$$$$$$$$$$$$$

[Sinca3]

http://biz.yahoo.com/prnews/060209/lath058.html?.v=41

 

[Sinca3]

In case link doesn't work:


SkyWest Announces Fourth Quarter and 2005 Annual Earnings
Thursday February 9, 7:00 am ET
ST. GEORGE, Utah, Feb. 9 /PRNewswire-FirstCall/ -- SkyWest, Inc. (SkyWest) (Nasdaq: SKYW - News) today reported operating revenues of $742.4 million for the quarter ended December 31, 2005, a 127.2% increase, compared to $326.7 million for the same period last year. SkyWest reported net income of $38.7 million for the quarter ended December 31, 2005, or $0.64 per diluted share, an 82.1% increase, compared to $21.2 million of net income or $0.37 per diluted share for the same period last year.
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SkyWest reported operating revenues of $2.0 billion for the year ended December 31, 2005, a 69.9% increase, compared to $1.2 billion for the same period last year. SkyWest reported net income of $112.3 million for the year ended December 31, 2005, or $1.90 per diluted share, a 37.0% increase, compared to $82.0 million of net income or $1.40 per diluted share for the same period last year.
On September 7, 2005, SkyWest completed the acquisition of Atlantic Southeast Airlines (ASA) from Delta Air Lines, Inc. for the purchase price of $426.6 million. The total purchase price of $426.6 million and $50 million related to certain aircraft financing deposits were paid to Delta at closing and in December 2005 when Delta obtained authorization from the U.S. Bankruptcy Court to affirm its renegotiated Delta Connection agreements with SkyWest Airlines and ASA. As a result of the acquisition, ASA became a wholly-owned subsidiary of SkyWest and SkyWest's consolidated operations and financial results for periods subsequent to September 7, 2005, reflect the financial and operating results of ASA (including the addition of 153 aircraft operated by ASA for such periods). The following discussion of the primary items of significance for SkyWest includes the operating activity of ASA during the period of the acquisition date through December 31, 2005.
The primary items of significance affecting SkyWest's financial performance during the fourth quarter of 2005 are outlined below:
Total operating revenues for the fourth quarter of 2005 increased primarily as a result of a 125.4% increase in available seat miles (ASMs) and due to increased fuel cost reimbursements by SkyWest Airlines's and ASA's major partners that are recorded as operating revenues under contract flying arrangements.
Total operating expenses and interest per ASM for the fourth quarter of 2005, excluding fuel charges, of $243.2 million or $0.052 per ASM, decreased approximately 8.8% to $0.093 from $0.102 for the same quarter of 2004, primarily as a result of acquiring 30 new 70-seat regional jet aircraft since December 31, 2004.
Total ASMs for the fourth quarter of 2005 increased 125.4% from the fourth quarter of 2004, primarily as a result of SkyWest increasing its fleet size to 380 aircraft as of December 31, 2005, from 210 aircraft as of December 31, 2004. During the quarter, SkyWest took delivery of five new 70-seat regional jet aircraft. At December 31, 2005, SkyWest's fleet consisted of 306 regional jets (108 United and 198 Delta), 62 EMB-120 aircraft (49 United and 13 Delta) and 12 ATR-72 aircraft (12 Delta). During the fourth quarter of 2005, SkyWest generated 4.72 billion ASMs, compared to 2.09 billion ASMs during the same period of 2004. On September 14, 2005, Delta together with certain affiliated entities, filed a voluntary petition for bankruptcy protection under Chapter 11 of the U.S. Bankruptcy Code in the Southern District of New York. On October 6, 2005, the U.S. Bankruptcy Court for the Southern District of New York authorized Delta to assume its obligations under the Delta Connection agreements for both SkyWest Airlines and ASA that were entered into in conjunction with SkyWest's acquisition of ASA. The court's approval was not appealed and subsequently, during the quarter ended December 31, 2005, SkyWest released $120 million subject to the terms of the escrow agreement related to the ASA acquisition.

 

[Sinca3]

Xxxxx

 

[Sinca3]

At December 31, 2005, SkyWest had approximately $324.5 million in cash and marketable securities ($24.8 million restricted cash relating primarily to collateral for worker's compensation policies and remaining escrow for the ASA acquisition), compared to approximately $549.7 as of December 31, 2004 ($9.2 million restricted cash related to collateral for worker's compensation policies). During the quarter, SkyWest took delivery of five new 70-seat regional jet aircraft from Bombardier and financed the new aircraft acquisitions with long-term permanent U.S. leveraged leases and third party long-term debt.
SkyWest's long-term debt was $1.42 billion as of December 31, 2005, compared to $463.2 million at December 31, 2004, as a result of the acquisition of ASA previously noted. 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 7.0% discount factor, the present value of these lease obligations was approximately $2.1 billion as of December 31, 2005.
Under SkyWest Airlines's United Express agreement, specific amounts are included in the rates charged for mature maintenance on regional jet aircraft engines that SkyWest records as revenue. However, consistent with the change to a time and material maintenance policy, as more fully described in SkyWest's Annual Report on Form 10-K for the year ended December 31, 2004, SkyWest records maintenance expense on its regional jet aircraft engines as the maintenance events occur. As a result, during the fourth quarter of 2005, SkyWest collected and recorded as revenue $5.3 million (pretax) under the United Express agreement with no corresponding offset for regional jet engine maintenance overhauls since there were none incurred.
During the quarter ended December 31, 2005, SkyWest discovered that in January and July 2005 it had issued shares of common stock under its Employee Stock Purchase Plan (the Purchase Plan) that exceeded the number of shares authorized for issuance under the Purchase Plan. On February 8, 2006, after reviewing the issues associated with the over issuance, including SkyWest's amendment of the SkyWest, Inc. Executive Stock Incentive Plan (the Executive Plan) and the SkyWest, Inc. 2001 Allshare Stock Option Plan (the Allshare Plan) to reduce the number of shares issuable pursuant to those plans by a number that exceeded the number of shares issued in excess of the number of shares authorized pursuant to the Purchase Plan, the staff of The Nasdaq Stock Market notified SkyWest that the issuance of shares of common stock in excess of the number of shares authorized pursuant to the Purchase Plan was in violation of the shareholder approval rule set forth in Nasdaq Marketplace Rule 4350(i)(1)(A). The Nasdaq staff letter also notified SkyWest that the reduction in the number of shares issuable pursuant to the Executive Plan and the Allshare Plan, both of which had been previously approved by SkyWest shareholders, had the effect of restoring SkyWest's compliance with Marketplace Rule 4350(i)(1)(A). The Nasdaq staff letter indicates that, as of the date of the letter, the matter is closed.
SkyWest Airlines, based in St. George, Utah, and ASA, based in Atlanta, Georgia are wholly owned subsidiaries of SkyWest. SkyWest Airlines operates as United Express and Delta Connection carriers under contractual agreements with United Airlines and Delta Air Lines. ASA operates as a Delta Connection carrier under a contractual agreement with Delta Air Lines. System-wide, SkyWest serves a total of approximately 218 cities in the United States, Canada, Mexico and the Caribbean, with approximately 2,400 daily departures. This press release and additional information regarding SkyWest and its subsidiaries can be accessed at www.skywest.com.
In 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 "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. Actual results will vary, and may vary materially, from those anticipated, estimated, projected or expected for a number of reasons, including, among others: Delta's bankruptcy proceedings; the failure to integrate the operations and employees of SkyWest and ASA and achieve the anticipated synergies as a result of the acquisition; the failure to successfully operate as anticipated under the terms of the Delta Connection Agreements; the impact of negotiations with ASA's organized labor forces and the impact of the costs of such labor forces on SkyWest's operations and financial condition; the failure to accurately forecast acquisition-related costs; and the challenges of competing successfully in a highly competitive and rapidly changing industry. Other factors that may cause actual results to vary from SkyWest's expectations include developments associated with fluctuations in the economy and the demand for air travel; bankruptcy proceedings involving United; ongoing negotiations between SkyWest and its major partners regarding their contractual relationships; variations in market and economic conditions; employee relations and labor costs; rapidly escalating fuel costs; the degree and nature of competition; potential fuel shortages in markets where SkyWest Airlines or ASA operates; the impact of weather-related or other natural disasters on air travel and airline costs; the ability of SkyWest Airlines and ASA to expand services in new and existing markets and to maintain profit margins in the face of pricing pressures; aircraft deliveries; SkyWest's ability to obtain financing; and other unanticipated factors. Risk factors, cautionary statements and other conditions which could cause 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, entitled "Factors That May Affect Future Results."

 

[Sinca3]

Following chart didn't maintain its look in the transfer, therefore a bit hard to follow:

SKYWEST, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Dollars and Shares in Thousands, Except per Share Amounts)

Three Months Ended Year Ended
December 31, December 31,
2005 2004 2005 2004
Operating revenues:
Passenger $734,459 $322,903 $1,938,450 $1,139,580
Ground handling and
other 7,905 3,785 25,598 16,464
742,364 326,688 1,964,048 1,156,044
Operating expenses:
Flying operations 409,328 171,248 1,079,292 577,492
Customer service 94,359 50,656 271,746 180,578
Maintenance 78,989 32,172 186,675 113,537
Depreciation and
amortization 45,037 19,369 115,275 76,817
General and
administrative 29,281 16,425 90,652 62,844
656,994 289,870 1,743,640 1,011,268
Operating income 85,370 36,818 220,408 144,776
Other income (expense):
Interest income 2,778 3,496 12,943 10,050
Interest expense (27,821) (4,899) (53,331) (18,239)
Gain (loss) on sale of
marketable securities
and equipment 191 -- (394) --
(24,852) (1,403) (40,782) (8,189)
Income before income
taxes 60,518 35,415 179,626 136,587
Provision for income
taxes 21,834 14,166 67,359 54,635
Net income $38,684 $21,249 $112,267 $81,952

Basic earnings per
share $0.66 $0.37 $1.94 $1.42
Diluted earnings per
share $0.64 $0.37 $1.90 $1.40
Weighted average common
shares:
Basic 58,218 57,458 57,851 57,858
Diluted 60,197 57,967 58,933 58,350



Unaudited Operating Highlights

Operating Highlights

Three Months Ended Year Ended
December 31, December 31,
2005 2004 % Change 2005 2004 % Change

Passengers
carried 7,355,036 3,612,943 103.6 20,343,975 13,424,520 51.5
Revenue
passenger
miles
(000) 3,538,828 1,532,583 130.9 9,538,906 5,546,069 72.0
Available
seat
miles
(000) 4,717,972 2,092,730 125.4 12,718,973 7,546,318 68.5
Passenger
load
factor 75.0% 73.2% 1.8pts 75.0% 73.5% 1.5pts
Passenger
breakeven
load
factor 69.2% 66.0% 3.2pts 68.6% 65.5% 3.1pts
Yield per
revenue
passenger
mile $0.208 $0.211 (1.4) $0.203 $0.205 (1.0)
Revenue per
available
seat mile $0.157 $0.156 .6 $0.154 $0.153 .7
Cost per
available
seat mile $0.145 $0.141 2.8 $0.141 $0.136 3.7
Fuel
cost per
available
seat mile $0.052 $0.039 33.3 $0.046 $0.033 39.4
Average
passenger
trip length 481 424 13.4 469 413 13.6



Source: SkyWest, Inc.

 

[800Dog]

http://biz.yahoo.com/prnews/060209/lath058.html?.v=41

Not a flame but, do you think if Skywest/ASA went out on their own like Independance, how do you think they would do and why?

 

[CheeseHead13]

And they want us to take concessions? They can kiss my hemorrhoid!

 

[Sinca3]

Not a flame but, do you think if Skywest/ASA went out on their own like Independance, how do you think they would do and why?

I think the industry has learned from others mistakes!

 

[atrdriver]

So let's see. They make 21.2 million in net income, and they want me to take a paycut so they can make more. What's wrong with this picture.

And if they decided to go it alone they would fail, just as Indy did. You can't run a LCC with RJ's. But I don't think that they are stupid enough to do something like that. They know where the money trees are, and they are putting up the tents right next to them.

 

[800Dog]

I think the industry has learned from others mistakes!

Can you be more specific?

 

[Sinca3]

Can you be more specific?

I think it has been proven now that the cost involved with 50 seat a/c does not support an airline.......let alone a LCC! The CASM for an RJ are too great to make money as a stand alone operation.
The reason ASA/Skywest/American Eagle etc etc all make money is b/c they all have agreements with their mainline partners to offset much of the cost associated with the RJ......such as the high CASM for operation. Without these offset cost all of the regionals would be out of business b/c they would all be in the red. Good thing for them is that the flexibility and service they provide for their mainline partners is important and profitable for them, otherwise they wouldn't contract with them.
Cheers

 

[reno]

Hand over fist!

 

[reno]

So let's see. They make 21.2 million in net income, and they want me to take a paycut so they can make more. What's wrong with this picture.

Correction:

SkyWest reported net income of $38.7 million for the quarter ended
December 31, 2005, or $0.64 per diluted share, an 82.1% increase, compared to $21.2 million of net
income or $0.37 per diluted share for the same period last year.​

 

[TEXAN AVIATOR]

Maybe proper pay for the 700 is in order?

 

["GO AROUND"]

Hows that gonna happen? They gonna demand those rates? Good luck.

 

[hotwing]

???

errr... wish you all the best -- it is a tough market out there...

 

[800Dog]

I think it has been proven now that the cost involved with 50 seat a/c does not support an airline.......let alone a LCC! The CASM for an RJ are too great to make money as a stand alone operation.
The reason ASA/Skywest/American Eagle etc etc all make money is b/c they all have agreements with their mainline partners to offset much of the cost associated with the RJ......such as the high CASM for operation. Without these offset cost all of the regionals would be out of business b/c they would all be in the red. Good thing for them is that the flexibility and service they provide for their mainline partners is important and profitable for them, otherwise they wouldn't contract with them.
Cheers

Best of luck to you guys. I hope you all get the pay raises and quality of life improvements you deserve.

 

[atrdriver]

Correction:

SkyWest reported net income of $38.7 million for the quarter ended
December 31, 2005, or $0.64 per diluted share, an 82.1% increase, compared to $21.2 million of net
income or $0.37 per diluted share for the same period last year.​

Oh, OK. NOW I see why I need to take concessions.

 

[Tomct]

Yeah....we are in big trouble.....loosing money.....Give me a BREAK!! They are making so much freakin money it makes me sick! They want us to take pay cuts so that they can get bigger bonuses, I DON'T THINK SO IDIOTS!! Now this should REALLY piss off some people, the way these negotiations have dragged on! JA better start making things happen or it is going to go to H3LL in a handbasket.....FAST!!!



Skywest pilots...this ought to really piss you off! Making the same pay to fly 50-90 seaters, and yet they are making this kind of money! Sounds like a UNION vote is in order!! Get them on property QUICK!!

Stay Unified everyone, they are going to try the ole whipsaw!

 

[Sioux115]

I think it has been proven now that the cost involved with 50 seat a/c does not support an airline.......let alone a LCC! The CASM for an RJ are too great to make money as a stand alone operation.
The reason ASA/Skywest/American Eagle etc etc all make money is b/c they all have agreements with their mainline partners to offset much of the cost associated with the RJ......such as the high CASM for operation. Without these offset cost all of the regionals would be out of business b/c they would all be in the red. Good thing for them is that the flexibility and service they provide for their mainline partners is important and profitable for them, otherwise they wouldn't contract with them.
Cheers

Our management figured that out and switched all but one of our RJ orders to the wonderful Q400. I just flew the last new RJ at Horizon two days ago, probably the last one ever unless we get more contract flying which is not likely. I just hope the reliability comes back up on the Q400 or we're gonna be hurting.

 

[amcnd]

Not to side on managment but... profits now does not indicate we will have a profit in 2 years. Things can change fast! we have all seen that.

 

[=w=]

Not to side on managment but... profits now does not indicate we will have a profit in 2 years. Things can change fast! we have all seen that.

Then they can come back and ask for cuts in 2 years. It's as easy as that.

 

[Tomct]

amcnd...you are killing me man! You are just the kind of pilot that magmnt loves! They yell " the sky is falling....the sky is falling..." and you want to take their side and do what they say! Look at all the bonuses that are being paid out around the "hurting" industry! Don't drink so much Kool-Aid! Isn't it amazing how all these companies are hurting and YET, their magmnt continues to get their bonuses, stock options etc. Yet here we are making the whole thing RUN, and they want us to take concessions! Screw THAT!! When the head man sells his house or one of his New shiney sports cars, then MAYbe I will THINK about worrying! C'mon man, it is all smoke and mirrors!

 

[Bluto]

Then they can come back and ask for cuts in 2 years. It's as easy as that.

They don't even have to ask at SkyWest. They could just implement the paycuts and be done with it. That's the strange part to me. They are so hesitant to give a real pay-raise because of potential future financial troubles. Weird.

 

[OOramperpilot]

Stay Unified everyone, they are going to try the ole whipsaw!

Hey, that's a great idea. Wow, now that my eyes have been opened I can see how all of the unions at the other carriers that have made out like bandits lately. What have we been thinking. We need to get on that wagon quick! Woohoo, the gravey train is right around the corner!

 

[gator_hater]

I don't think paycuts are the answer, but 10-12% profit margins are not soemthing that I would be particularly extatic about.

 

[restart]

A profitable airline expecting an employee group to take concessions/pay cuts after posting significant profits is like bitch slapping your grandma.

 

[Dave Benjamin]

The problem is these are are combined results so we can't really see how the companies compare in profitability. The combined net profit is rather low at 5.2%. Nothing too stellar. Historically pre-merger profits were higher for SkyWest. If we assume SKYW alone is still as profitable as it was pre-merger than the ASA profit margin is pretty low. I own a business and at the end of the day I'm concerned about profit. Revenues are great but profit is what counts.

 

[ExFokkerFlyer]

Skywest does need a union, but not for pay negotiations. It couldn't hurt the way things have been going, but that shouldn't be the sole reason.

Protection from management, protection of our work rules (yeah will probably lose some in negotiations, makes it tougher to take away though), and to prevent disasters like PBS from happening again... just to name a few.

I was once firmly opposed to unions, now firmly in favor. You guys are right, they are making money hand over fist (funny that word keeps getting used) and asking is to do even more with even less... no way, not anymore.

but, it is going to take some time here to get the interest, and the unity required to get a union on property. We have too many new guys who are just happy to be here, and too many morons who have been here long enough to know better, but just want to give Jerry and the boyz the capital to expand and keep us safe. Please...

Hey, I was one of those morons so I can talk. I once was blind, but now I see.

 

[Rogue5]

So, any ideas what this means for the quarterly profit-sharing check?

Is the SkyWest Airlines profit to be figured separate from SkyWest Inc?