SkyWest Airlines 2011 Annual Report Download - page 17

aircraft costs. Additionally, certain of SkyWest Airlines’ operating costs are reimbursed or paid directly
by Alaska, including costs related to fuel and aircraft ownership.
The SkyWest Airlines Alaska Capacity Purchase Agreement is subject to early termination in
various circumstances including:
• if SkyWest Airlines or Alaska fails to fulfill an obligation under the SkyWest Airlines Alaska
Capacity Purchase Agreement for a period of 30 days after written notice to cure;
• if SkyWest Airlines’ operations fall below certain performance levels;
• subject to limitations imposed by the U.S. Bankruptcy Code, if the other party becomes
insolvent, fails to pay its debts when due, takes action leading to its cessation as a going concern,
makes an assignment of substantially all of its assets, or ceases or suspends operations; or
• if bankruptcy proceedings are commenced against the other party (subject to limitations imposed
by the U.S. Bankruptcy Code) and certain specified conditions are not satisfied.
SkyWest Airlines US Airways Express Agreement
On November 17, 2011, SkyWest Airlines and US Airways entered into the SkyWest Airlines US
Airways Express Agreement. As of December 31, 2011, SkyWest Airlines operated two CRJ200s under
the SkyWest Airlines US Airways Express Agreement, flying a total of approximately ten US Airways
Express flights per day between Phoenix and designated outlying destinations. Generally, under the
SkyWest Airlines US Airways Express Agreement, US Airways retains all air fares, cargo rates, mail
charges and other revenues associated with each flight.
In exchange for providing the designated number of flights and performing SkyWest Airlines’
obligations under the SkyWest Airlines US Airways Express Agreement, SkyWest Airlines receives from
US Airways compensation (subject to an annual adjustment) of a fixed fee per completed block hour, a
fixed fee per completed departure, a fixed fee per passenger, and a fixed fee for overhead and aircraft
costs. The SkyWest Airlines US Airways Express Agreement provides for incentives and penalties based
upon SkyWest Airlines’ performance, including on-time arrival performance and completion percentage
rates. Additionally, certain of SkyWest Airlines’ operating costs are reimbursed by US Airways,
including costs related to fuel and insurance.
The SkyWest Airlines US Airways Express Agreement is subject to early termination in various
circumstances including:
• if SkyWest Airlines or US Airways fails to fulfill an obligation under the SkyWest Airlines US
Airways Express Agreement for a period of 30 days after written notice to cure;
• if SkyWest Airlines’ operations fall below certain performance levels;
• subject to limitations imposed by the U.S. Bankruptcy Code, if the other party becomes
insolvent, fails to pay its debts when due, takes action leading to its cessation as a going concern,
makes an assignment of substantially all of its assets, or ceases or suspends operations; or
• if bankruptcy proceedings are commenced against the other party (subject to limitations imposed
by the U.S. Bankruptcy Code) and certain specified conditions are not satisfied.
Markets and Routes
As of December 31, 2011, SkyWest Airlines, Atlantic Southeast and ExpressJet Delaware
scheduled the following daily flights as Delta Connection carriers: 530 flights to or from Hartsfield—
Jackson Atlanta International Airport, 316 flights to or from Salt Lake City International Airport,
132 flights to or from Minneapolis International Airport, 94 flights to or from Memphis International
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