SkyWest Airlines 2013 Annual Report Download - page 23

Safety and Security
We are committed to the safety and security of our passengers and employees. Since the
September 11, 2001 terrorist attacks, SkyWest Airlines and ExpressJet have taken many steps, both
voluntarily and as mandated by governmental authorities, to increase the safety and security of their
operations. Some of the safety and security measures we have taken with our code-share partners
include: aircraft security and surveillance, positive bag matching procedures, enhanced passenger and
baggage screening and search procedures, and securing of cockpit doors. We are committed to
complying with future safety and security requirements.
Insurance
SkyWest, SkyWest Airlines and ExpressJet maintain insurance policies we believe are of types
customary in the industry and in amounts we believe are adequate to protect against material loss.
These policies principally provide coverage for public liability, passenger liability, baggage and cargo
liability, property damage, including coverage for loss or damage to 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 results of operations for any interim period are not necessarily indicative of those for the
entire year, in part because the airline industry is subject to seasonal fluctuations and general economic
conditions. Our operations are somewhat favorably affected by pleasure travel on our pro-rate routes,
historically contributing to increased travel in the summer months, and are unfavorably affected by
decreased business travel during the months from November through January and by inclement
weather which can result in cancelled flights, principally during the winter months.
ITEM 1A. RISK FACTORS
In addition to factors discussed elsewhere in this Report, the following are important risks which could
adversely affect our future results. Additional risks and uncertainties not presently known to us or that we
currently do not deem material may also impair our business operations. If any of the risks we describe
below occur, or if any unforeseen risk develops, our operating results may suffer, 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 Related to Our Operations
The amounts we receive under our code-share agreements may be less than the corresponding costs we incur.
Under our code-share agreements with Delta, United, American, Alaska and US Airways, we are
compensated for certain costs we incur in providing services. With respect to costs that are defined as
‘‘pass-through’’ costs, our code-share partner is obligated to pay to us the actual amount of the cost.
With respect to other costs, our code-share partner is obligated to pay to us amounts based, in part, on
pre-determined rates for certain costs. During the year ended December 31, 2013, approximately 20%
of our code-share operating costs were pass-through costs and approximately 80% of our code-share
operating costs were reimbursable at pre-determined rates. These pre-determined rates may not be
based on the actual expenses we incur in delivering the associated services. If we incur expenses that
are greater than the pre-determined reimbursement amounts payable by our code-share partners, our
financial results will be negatively affected.
There can be no assurance that the agreed-upon rates contemplated by our code-share agreements
will be higher than the costs SkyWest Airlines and ExpressJet will incur to provide the services required
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