Fleet and contract changes at SkyWest, Inc subsidiaries

SkyWest, Inc. has announced fleet transitions and contract updates designed to improve the Group’s overall efficiency and long-term profitability, with plans for SkyWest Airlines to transition to an all-jet fleet and revisions to ExpressJet Airlines’ contract with United.

All remaining 30-seat Embraer 120 Brasilia turboprop aircraft at SkyWest Airlines will be removed from service by summer 2015. The EMB 120 fleet retirement comes, in part, in response to increased costs and additional challenges associated with new FAR117 flight and duty rules for pilots, implemented in January 2014.

Meanwhile, ExpressJet Airlines has executed an agreement with United Airlines to reduce the term of the existing 50-seat ERJ 145 contract between the parties from November 2020 to December 2017, subject to certain extension rights by United. ExpressJet Airlines anticipates the reduction in the ERJ145 operations will improve its overall operational reliability and financial results.

As a result of the decision to remove the EMB 120s from service by June 2015 and as a result of the reduced term to operate the ERJ145s, SkyWest, Inc. anticipates recording pre-tax special charges (primarily non-cash) ranging from $55-70 million in the fourth quarter of 2014.

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