Posted on: 29 October 2014 by Mark Howells
SkyWest, Inc. has reported its financial and operating results for the third quarter ended 30 September 2014 (3Q14) including net income for the quarter of $41.3 million (inclusive of $15.3 million after-tax related to the sale of TRIP shares), which was up from 3Q13 net income of $26.4 million.
The completion of the TRIP Linhas Aereas stock sale resulted in a pre-tax gain of $24.9 million and interest income of $2.1 million
Operating income for 3Q14, which excludes the TRIP gain, increased by $2.9 million from the same period last year, despite the negative financial impact of FAR117 flight and duty rules implemented January 2014
The company’s 3Q14 operating revenues, after excluding a reduction in direct contract reimbursement for pass-through cost expenses, increased 1.9% compared with 3Q13, despite a 6.0% reduction in departures and 3.8% reduction in block hours from the prior period
Commenting on the results, Jerry Atkin, SkyWest's chairman and CEO said, "The increase in operating income from last year is positive news when factoring the significant cost impact of FAR117 we've experienced in 2014 and the reduction in departures and block hours since last year.
“As we pursue opportunities to remove our older 50-seat aircraft from service and add new larger dual-class aircraft, we are optimistic that our operational reliability and financial results will continue to improve,” he added. “We remain committed to our major partners and our process to improve both financial and operating performance."
Total operating revenues, excluding the significant direct contract reimburses for fuel, landing fees, station rents, and engine maintenance, increased by $12.7 million during 3Q14 compared with 3Q13. The improvement was primarily due to certain contract renewals and modifications, operating additional E175s, and increased government subsidies for operating certain routes.
Flight crew costs and related crew hotels expenses associated with FAR117 and training costs for the introduction of the new E175s, that resulted in an increase of $13.8 million in operating costs compared with 3Q13.
Direct maintenance expense, excluding engine maintenance expense, decreased by $12.2 million in 3Q14 compared with 3Q13 due to a reduction in scheduled events and removal of older aircraft after 30 June 2013. Certain other operating expenses, primarily related to the E175s and pro-rate operations, also increased during the three months ended 30 September 2014 compared with the same period last year.