ST. GEORGE, Utah, April 1, 2011 /PRNewswire/ -- SkyWest, Inc. (Nasdaq: SKYW) ("SkyWest") announced today that it expects its financial results for the quarter ended March 31, 2011, to be significantly lower than it previously anticipated. For the reasons discussed below, SkyWest is now forecasting a net loss of between $ (13.0) million and $ (15.0) million resulting in a basic and diluted loss per share estimated to be between $(0.24) and $(0.28) per share. 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 several primary factors that contributed to SkyWest's determination of the estimated loss. First, SkyWest's operating airlines, SkyWest Airlines, Inc. ("SkyWest Airlines"), Atlantic Southeast Airlines, Inc. ("Atlantic Southeast") and ExpressJet Airlines, Inc. ("ExpressJet") on a consolidated basis, produced approximately 15,000 less block hours during the quarter ended March 31, 2011, primarily as a result of severe winter weather storms, mainly in January and February. As a result of the decreased block hour production, SkyWest experienced a negative impact on revenues currently estimated to be approximately $10.0 million pretax for the quarter ended March 31, 2011. Second, both Atlantic Southeast and ExpressJet have experienced additional crew costs during the quarter ended March 31, 2011. These additional crew costs are principally the result of 1)Atlantic Southeast having the opportunity to take delivery of additional aircraft to be used in contract flying not previously anticipated, 2)increased summer block hour production as scheduled by our major partners, and 3)the reallocation of crews based on major partner schedule changes in certain hubs. The additional cost related to the crew issues is currently anticipated to be approximately $11.5 million pretax for the quarter ended March 31, 2011. Third, Atlantic Southeast incurred expenses for unanticipated heavy checks on certain of its airframes and is incurring costs that are higher than anticipated on those heavy checks. Atlantic Southeast performed additional heavy checks as a result of the block hour schedule being reduced by its major partners, in the current quarter, and performed those heavy checks in advance of planned summer schedule block hour increases. The additional cost associated with these maintenance events is currently estimated to be approximately $8.5 million pretax for the quarter ended March 31, 2011. Fourth, beginning September 2010, Atlantic Southeast was required to reduce its contract rates, as contemplated by its Delta Connection Agreement, which resulted in a negative impact on revenues currently estimated at approximately $7.0 million pretax for the quarter ended March 31, 2011. Fifth, although SkyWest's operating airlines are reimbursed by their major partners for fuel costs associated with flights they operate on a contract basis, SkyWest Airlines is exposed to the effect of fuel cost increases for flights its operates on a pro-rate basis. As a result of recent increases in jet fuel pricing, SkyWest currently estimates that it will incur approximately $5.5 million pretax in additional fuel costs. A more detailed explanation of these items and others affecting the quarter ended March 31, 2011 will be given when SkyWest formally announces its financial results, which is currently estimated to occur in early May 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 and Delta. SkyWest Airlines also operates flights for AirTran under a marketing 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 and is a wholly-owned subsidiary of Atlantic Southeast. 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 704 regional aircraft. This press release and additional information regarding SkyWest 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 "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.