SKYW REPORTS 1st QUARTER PROFIT OF 36.4 Million

[ke4akj1976]

Alot better than I expected.

 

[sweptback]

Umm?

ST. GEORGE, Utah, May 6 /PRNewswire-FirstCall/ -- SkyWest, Inc. ("SkyWest") (Nasdaq: SKYW - News) today reported operating revenues of $672.6 million for the quarter ended March 31, 2009, compared to $868.0 million for the same period last year. SkyWest also reported net income of $9.4 million or $0.16 per diluted share, for the quarter ended March 31, 2009, compared to $29.1 million of net income or $0.47 per diluted share, for the same period last year.

 

[Andy Neill]

Well, it is a lot better than the $0.11 per share the analysts were predicting.

 

[Medeco]

I thought this was interesting, with regard to our requirement to be the second lowest DCI carrier. It seems they are having a fight over how you determine cost between each carrier.

He said at the beginning of the call they already adjusted the rate $5 million lower, and now with the NWA carriers in the mix it has complicated the issue.

Medeco

Duane Pfenningwerth - Raymond James

That’s helpful; and one follow-up, just regarding the rate adjustment in the first quarter, I guess what’s behind that rate adjustment? Is that essentially you comping yourself off of the entire grouping, including both Northwest and Delta carriers or can you give us any detail behind how you got to the magnitude of the $5 million adjustment? Thanks.

Mike Kraupp

Well, it is basically what you just said. I mean, so the provision calls for us to match the weighted average of the portfolio and that number is taking us pretty close to the weighted average of the whole portfolio, including the Northwest carriers.

Duane Pfenningwerth - Raymond James

Okay, so what’s left to negotiate?

Mike Kraupp

Well, as in all of these things, the actual calculations and how you get an accurate and fair representation of the other carriers’ costs. How you allocate costs? When you throw in a batch of owned carriers, what’s flowing through their cost structure and what’s not? Okay, it’s getting handle on all of that, before you actually settle and agree on a new rate. It’s a process of gaining access to enough information for us to do diligence on it, to substantiate the data.