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JumpJetter

Basking in LUV!
Joined
Nov 25, 2001
Posts
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SkyWest says United filing to hurt business

Friday December 13, 8:33 PM EST

ST. GEORGE, Utah, Dec 13 (Reuters) - SkyWest Inc. (SKYWE), a regional jet service provider for United Airlines and Delta Air Lines (DAL), said on Friday that its financial performance will suffer and become less predictable in the wake of this week's bankruptcy filing by United.

SkyWest operates about 35 percent of its regional jet flights for United's United Express service. Nearly all major U.S. air carriers are turning toward smaller, cheaper regional jets to cut costs, but analysts have said SkyWest's business was not likely to see sizable benefits.

United said on Thursday that it has considered reviving its own lower-cost carrier, Shuttle by United, which would operate on the West Coast, and could potentially run some routes that would otherwise be handled by SkyWest.

Utah-based SkyWest said it was planning on "aggressive" cost cuts to address the issue, with the help of its workers. It expected to pass a large amount of those expense cuts on to United and Delta by reducing its rates from 2003 forward, but it said that would, in turn, cut into its margins.

United, a unit of UAL Corp. (UAL) is scrambling to slash costs across its business as it begins restructuring under Chapter 11 bankruptcy protection. SkyWest said it still believed 28 of the 36 new aircraft it expected for delivery next year would go into service for United Express.

The group of new planes, if delivered, would boost SkyWest's passenger capacity by 40 percent.
 

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