SkyWest expects big 4Q loss on unexpected costs

[CRJDriver]

SkyWest expects big 4Q loss on unexpected costs

ST. GEORGE, Utah (AP) -- Regional airline SkyWest Inc. said Wednesday that it expects to post a sizeable fourth-quarter loss because of aircraft maintenance issues and other unexpected costs.

The stock fell nearly 5 percent in morning trading.

The airline, which flies for US Airways, United and Delta, predicts a quarterly loss of $17 million to $18.5 million, or 34 cents to 37 cents per share for the three months ending Dec. 31.

Analysts had expected the airline to post a loss of a penny per share, according to a FactSet survey.
SkyWest said the loss is due to a few main factors: higher maintenance, pilot training and crew costs. Altogether, SkyWest thinks these added costs will hit net income by about $12 million. SkyWest is also bracing for bigger-than-expected losses from two international regional airlines it owns. Those losses are expected to be $5.5 million more than it originally predicted.

The maintenance expenses stem from aging aircraft issues, timing and cost of airframe inspections and engine overhauls. The pilot training and crew costs are in part due to the company's new contract with US Airways. SkyWest started flying under the US Airways Express banner in December.

SkyWest, based in St. George, Utah, said the forecasts are preliminary and could change prior to when it reports official fourth-quarter results in mid-February.
Its shares fell 63 cents, or 4.6 percent, to $13.13 in morning trading.

http://finance.yahoo.com/news/SkyWest-expects-big-4Q-loss-apf-520083812.html?x=0

 

[Roger Roger]

Wait so... Pilot training costs for a contract that THEY BID ON were "unexpected"?

 

[jtrain609]

Wait so... Pilot training costs for a contract that THEY BID ON were "unexpected"?

They were probably told that we were properly staffed.

We were nothing of the sort.

 

[Screaming_Emu]

How can they be "unexpected costs" when the pilot group has been screaming about those 3 issues (really only two) for the past year!

 

[Trip7]

I don't get why they are having unexpected pilot costs due to new flying. Skywest never lost money when they expanded like crazy during the mid 2000s and upgrade dropped to 1.5 years.

 

[surreal1221]

In this case, I really suggest folks mentally think about - especially those of us at the ExpressJet (ugh) Company - what they are not saying.

And even more importantly, those of us on the CRJ side of the operation.

The reason SkyWest Inc. is losing money isn't necessarily because of growing costs related to maintenance expenditures or pilot training or crew "related" costs.

The reason SkyWest Inc. is losing money is because of a poor financial agreement with our (re: CRJ operation) mainline partners, principally Delta Air Lines Inc.

Of course SkyWest Inc. will not say this publicly in the press release or pre-financial call statements, but listen to the calls gentlemen (and women, I suppose) - for fear of pissing off one of their customers, because in the end - that is what we are to all of our mainline partners - we are their customer making sure they can achieve market dominance. The inability to renegotiate some of our CPA's with our mainline partners continues to drive revenue down internally for the Company and her subsidiaries.

I ask you all to look back to prior to the fall of 2010, prior to a significant rate reset - which was expected mind you by management and SkyWest Inc. leadership, and evaluate the amount of revenue this company was receiving on a quarterly basis. The merger, timely as it may be, is providing some well timed strategic financial cover for the folks in St. George.

In the end, I would imagine, if we are unable to find a way to really "realize" whatever sort of cost savings from this monstrosity of a merger, SkyWest Inc. will be left with very little room to stand on in the world of Regional Airline leadership. They've done a good job so far, but if when the cover is exposed and the merger excuse is no longer available - I sure hope they are making good on following through on their "initiatives" to return to profitability.

 

[aevfo]

When they clean out the idiots in the GO that waste millions a year, or when they merge lists with SKYW to save costs and eliminate an entire management team; I'll know they are serious about cost savings. Until then it's just a bunch of BS that floats from the GO (9-5 M-F with about a 2 hr lunch break) in their never ending quest to take more from us.