SkyWest Airlines 2008 Annual Report Download - page 18

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Fuel
Historically, we have not experienced problems with the availability of fuel, and believe we will be
able to obtain fuel in quantities sufficient to meet our existing and anticipated future requirements at
competitive prices. Standard industry contracts generally do not provide protection against fuel price
increases, nor do they ensure availability of supply. However, our code-share agreements with Delta,
United and Midwest provide for fuel used in the performance of the code-share agreements to be
reimbursed by our major partners, thereby reducing our exposure to fuel price fluctuations. During the
year ended December 31, 2008, approximately 97.1% of our fuel purchases were associated with our
Delta, United and Midwest code-share agreements and were reimbursed by our major partners. A
substantial increase in the price of jet fuel, to the extent our fuel costs are not reimbursed, or the lack
of adequate fuel supplies in the future, could have a material adverse effect on our business, financial
condition, results of operations and liquidity.
Employees
As of December 31, 2008, SkyWest and SkyWest Airlines collectively employed 8,987 full-time
equivalent employees consisting of 4,229 pilots and flight attendants, 3,201customer service personnel,
1,079 mechanics and other maintenance personnel, and 478 administration and support personnel.
None of these employees are currently represented by a union. We are aware, however, that collective
bargaining group organization efforts among SkyWest Airlines’ employees occur from time to time and
we anticipate that such efforts will continue in the future. If unionization efforts are successful, we may
be subjected to risks of work interruption or stoppage and/or incur additional expenses associated with
increased union representation of our employees. SkyWest Airlines has never experienced a work
stoppage due to a strike or other labor dispute, and we consider SkyWest Airlines’ relationships with its
employees to be good.
As of December 31, 2008, ASA employed approximately 4,348 full-time equivalent employees
consisting of 2,502 pilots and flight attendants, 703 customer service personnel, 884 mechanics and
other maintenance personnel, and 259 administration and support personnel. Three of ASA’s employee
groups are represented by unions. ASA’s pilots are represented by the Air Line Pilots Association
International, ASA’s flight attendants are represented by the Association of Flight Attendants—CNA,
and ASA’s flight controllers are represented by the Professional Airline Flight Control Association.
ASA’s collective bargaining agreement with its pilots will become amendable on November 20, 2010.
ASA’s collective bargaining agreement with its flight attendants will become amendable in 2011. The
collective bargaining agreement between ASA and its flight controllers became amendable in April
2006, and ASA is currently engaged in negotiations with its flight controllers. ASA has never
experienced a work stoppage due to a strike or other labor dispute, and considers its relationships with
employees to be good.
Government Regulation
All interstate air carriers, including SkyWest Airlines and ASA, are subject to regulation by the
U.S. Department of Transportation (the ‘‘DOT’’), the U.S. Federal Aviation Administration (the
‘‘FAA’’) and other governmental agencies. Regulations promulgated by the DOT primarily relate to
economic aspects of air service. The FAA requires operating, air worthiness and other certificates;
approval of personnel who may engage in flight, maintenance or operating activities; record-keeping
procedures in accordance with FAA requirements; and FAA approval of flight training and retraining
programs. Generally, governmental agencies enforce their regulations through, among other ways,
certifications, which are necessary for the continued operations of SkyWest Airlines and ASA, and
proceedings, which can result in civil or criminal penalties or revocation of operating authority. The
FAA can also issue maintenance directives and other mandatory orders relating to, among other things,
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