SkyWest Airlines 2004 Annual Report Download - page 2

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As a result of the regional jet aircraft acquired during 2004, we had a total fleet of 210
aircraft at year end. The fleet consisted of 125 CRJ200 aircraft, 12 CRJ700 aircraft and
73 EMB-120 Brasilia turboprop aircraft. As previously noted, we were selected by
United Airlines to acquire an additional 20 CRJ700 regional jet aircraft. We anticipate
that we will complete deliveries of our previously ordered aircraft and acquire 27
additional CRJ700 regional jet aircraft during 2005.
We have continued to remain diligent in efforts to control our cost per available seat mile.
For calendar year 2004, we achieved a cost per available seat mile of $0.136, compared
to $0.134 for calendar year 2003. We accomplished this in spite of a 29.5% increase in
the average cost per gallon for fuel. Through controlling labor, maintenance and other
costs and adding larger more cost efficient aircraft, we have been able to virtually offset
the increase in fuel charges and maintain a very competitive overall cost per available
seat mile.
Our already strong balance sheet became even stronger during 2004. We ended the year
with $549.7 million in cash and marketable securities, a 14.4% increase from the $480.4
reported last year. During 2004, we invested approximately $119.1 million of cash in
capital expenditures, approximately $32.3 million in long-term debt reductions,
approximately $12.3 million in treasury stock repurchases and approximately $6.4
million in dividends. After considering these items, the total combined balance of cash
and marketable securities increased approximately $69.3 million from 2003 to 2004.
This is a significant achievement considering that most other airlines are depleting cash
reserves rather than increasing them.
Our performance during 2004 can be characterized as a year in which we stayed true to
our previously stated objectives of being the highest quality airline in the industry while
at the same time maintaining a very competitive cost structure. We have also stayed true
to our strategic objective of providing the highest level of service possible to our
customers so that they continue to return and give us the opportunity to serve them again
and again. We have and continue to recognize our responsibility to our major partners
and believe we have stayed true to our objective of providing service on their behalf that
will create long-term value. We have also stayed true to our objective of enhancing
shareholder value by creating quality earnings on their behalf. We will continue to watch
for developing opportunities and explore those that are consistent with our objectives and
provide long-term value. The abilities of our dedicated work force, coupled with our
financial strength, puts us in a position that will allow us to take full advantage of
additional growth and diversification opportunities as they become available.
Sincerely,
Jerry C. Atkin
Chairman, President and Chief Executive Officer