SkyWest Airlines 2006 Annual Report Download - page 22

16
Safety and Security
We are committed to thesafety and security of our passengers and employees. Since the
September 11, 2001 terrorist attacks, SkyWestAirlinesand ASAhave taken many steps, both voluntarily
and as mandated by governmental agencies, to increase thesafety andsecurity of their operations. Some of
the safety andsecurity measureswe have taken, along with ourcode-sharepartners,include:aircraft
security and surveillance, positive bag matching procedures, enhanced passenger and baggage screening
and search procedures, andsecuring of cockpit doors. We arecommitted to complying with futuresafety
and security requirements.
Insurance
SkyWest Airlines andASA maintain insurance policies that we believe areof types customary in the
industry and in amounts we believe are adequate to protect against material loss. Thesepolicies principally
provide coverage for public liability, passenger liability, baggageand cargo liability, property damage,
including coverages forloss or damageto our flight equipment, and workers’ compensation insurance. We
cannot assure, however, that the amount of insurance we carry will be sufficient to protect us from material
loss.
Seasonality
Our resultsofoperations for any interim period arenotnecessarily indicative of those for theentire year,
sincethe airline industryissubject to seasonal fluctuations andgeneral economic conditions. Our
operations aresomewhat favorably affected by increased travelon ourpro-rateroutes, historically
occurring in the summer months, and are unfavorably affected by decreasedbusiness travel during the
months from November through January and by inclement weather which occasionally results in cancelled
flights, principally during the winter months.
ITEM 1A. RISK FACTORS
In addition to factors discussed elsewhere in this Report, thefollowing areimportant risks which could
adversely affect our future results. Additional risks anduncertainties not presently known to us or that we
currently do notdeem material may also impair our business operations. If any of the risks we describe below
occur, or if any unforeseen risk develops, our operatingresults maysuffer, our financial condition may
deteriorate, the trading price of our common stock may decline and investors could lose all or part of their
investment in us.
Risks Relatedto Our Operations
We are highly dependent on Delta and United.
If any of our code-share agreements areterminated pursuant to the terms of those agreements, due to
the bankruptcy and restructuring proceedings of Delta, or otherwise, we would be significantly impacted
and likely would not have an immediate source of revenue or earnings to offset such loss. A termination of
any of these agreements would have amaterial adverse effect on our financial condition, operating
revenues and net income unless we areable to enter into satisfactory substitute arrangements for the
utilization of the affected aircraft by other code-share partners, or, alternatively, obtain the airport
facilities andgates and make the other arrangements necessary to fly as an independent airline. We may
not be able to enter into substitute code-sharearrangements, and any such arrangements we might secure
may not be as favorable to us as ourcurrentagreements. Operatingourairline independent frommajor
partners would be asignificant departurefrom our business plan, would likelybe very difficultand may
require significant time and resources, which maynot be available to us at that point.