CHICAGO, June 10 (Reuters) - SkyWest Inc. (SKYW), a regional jet service provider for Delta Air Lines (DAL) and bankrupt United Airlines, on Tuesday said it signed an expanded 11-year deal to provide regional flights for United Express.
Relying on regional carriers that can feed traffic to the mainline system is one of the four points of United's plan to transform itself into a viable competitor in the struggling U.S. airline industry.
The deal provides for a multiyear rate agreement, the terms of which were not disclosed. SkyWest will be reimbursed for operating costs plus a base margin and performance-based incentives.
United, the world's second largest carrier, is a unit of UAL Corp. (UALAQ), which filed for bankruptcy in December.
SkyWest, which is based in St. George, Utah, said the deal calls for it to operate a fleet of 140 aircraft including 55 turbo-props currently serving the United Express fleet. It will also fly another 55 50-seat regional jets that will be in service by the end of the year and 30 70-seat regional jets scheduled to be on United Express routes by summer, 2005.
The agreement also includes an option to operate an unspecified number of additional regional jets.
In a separate statement, United said the terms of the memorandum of understanding are retroactive to January 1, 2003, and provide a "significant economic benefit" to United.
A final contract must be approved by the boards of both companies and the U.S. Bankruptcy Court for the Northern District of Illinois.
Relying on regional carriers that can feed traffic to the mainline system is one of the four points of United's plan to transform itself into a viable competitor in the struggling U.S. airline industry.
The deal provides for a multiyear rate agreement, the terms of which were not disclosed. SkyWest will be reimbursed for operating costs plus a base margin and performance-based incentives.
United, the world's second largest carrier, is a unit of UAL Corp. (UALAQ), which filed for bankruptcy in December.
SkyWest, which is based in St. George, Utah, said the deal calls for it to operate a fleet of 140 aircraft including 55 turbo-props currently serving the United Express fleet. It will also fly another 55 50-seat regional jets that will be in service by the end of the year and 30 70-seat regional jets scheduled to be on United Express routes by summer, 2005.
The agreement also includes an option to operate an unspecified number of additional regional jets.
In a separate statement, United said the terms of the memorandum of understanding are retroactive to January 1, 2003, and provide a "significant economic benefit" to United.
A final contract must be approved by the boards of both companies and the U.S. Bankruptcy Court for the Northern District of Illinois.