SkyWest Airlines 2006 Annual Report Download - page 11

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We were incorporated in Utah in 1972. Our principal executive offices arelocated at 444South River
Road, St. George, Utah 84790, andour primary telephone number is [phone]. We maintain an
Internet web site at www.skywest.com. Our website provides a link to the web siteof the SEC, through
which ourannual,quarterly and current reports, as well as amendments to those reports, are available. In
addition, we provide electronic or papercopies of our filings free of chargeuponrequest.
Our Operating Platforms
SkyWestAirlines
SkyWest Airlines providesregional jet and turboprop service in the Western United States with the
exception of flying provided to United out of its Chicago (O’Hare) hub. SkyWest Airlines offered
approximately 1,600 daily scheduled departures as of December31,2006, of which approximately 1,200
were United Express flights and approximately 400wereDelta Connection flights. SkyWest Airlines’
operations areconducted from hubs locatedin Chicago (O’Hare), Denver, Los Angeles, San Francisco
and Salt Lake City. SkyWest Airlines’ fleetas of December31, 2006 consisted of nine 70-90-seatCRJ900s,
all of which were flown for Delta, 61 70-seat CRJ700s, of which 52 were flown for United and nine for
Delta;123 50-seat CRJ200s, of which 66 were flown forUnited and 57 were flown for Delta, and 62 30-seat
Brasilia turboprops, of which 48 were flown for United and 14 were flown for Delta. SkyWest Airlines
currently conducts its Delta code-share operations pursuant to the terms of an Amended and Restated
Delta ConnectionAgreement which obligates Delta to compensate SkyWest Airlines for its direct costs
associated with operating DeltaConnection flights, plus apayment based on block hours flown (the
“SkyWestAirlines DeltaConnection Agreement”). In addition, the SkyWest AirlinesDelta Connection
Agreement provides forus to increase our profitability if we reduce our totalcosts. SkyWest Airlines’
United code-shareoperations areconducted under a United Express Agreement pursuant to which
SkyWest Airlinesis paid primarilyon a fee-per-completed block hour anddeparture basis plus amargin
based on performance incentives (the “United Express Agreement”). Under the United Express
Agreement, excess margins over certainpercentages must be returned or shared with United, depending
on various conditions.
On December 20, 2006, SkyWest Airlines entered intoan Airlines Services Agreementwith Midwest
Airlines, Inc (“Midwest”). Under the termsof the Airlines Services Agreement, SkyWest Airlines has
agreed to operate up to 25 CRJ200s. The initial 15 aircraft arescheduled fordelivery beginning in
April 2007 andcontinuingthrough October 2007. Delivery datesof additional aircraft, if any, will be
determined at alater date. Pursuant to the Midwest agreement, Midwest hasagreedto paySkyWest
Airlines primarily on a fee-per-completedblock hour and a fee-per-aircraft in service basis. We anticipate
that the aircraft placed in service for Midwest will serve markets from Midwest’s currenthubs in
Milwaukee and Kansas City.
ASA
ASA provides regional jet service primarily in the United States east of the Mississippi River. ASA
offered more than 750 daily scheduled departures as of December31,2006, allof which were Delta
Connection flights. ASA’s operations are conducted primarily from hubs locatedinAtlanta,Salt Lake City
and Cincinnati. ASA’s fleet as of December 31, 2006, all of which were flown forDelta,consisted of 31
70-seat CRJ700s,112 40 and50-seat CRJ200s, and 12 ATR-72 turboprops(which we expect to remove
from service by December 2008). Under the terms of theSecond Amended and Restated Delta
Connection Agreement executed by ASAand Delta (the“ASA Delta Connection Agreement”), Delta has
agreed to compensate ASA for itsdirect costs associated with operating Delta Connection flights, plus, if
ASA completesacertainminimum percentage of its Delta Connection flights, a specifiedmargin on such
costs. Additionally,the ASADeltaConnection Agreement provides forincentive compensation upon