SkyWest Airlines 2014 Annual Report Download - page 20

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SkyWest Airlines US Airways Agreement
On November 17, 2011, SkyWest Airlines and US Airways entered into the SkyWest Airlines US
Airways Agreement. Additionally, as of December 31, 2014, SkyWest Airlines operated one CRJ200
under a revenue-sharing arrangement.
The SkyWest Airlines US Airways Agreement is scheduled to terminate in 2015. The SkyWest
Airlines US Airways 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 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.
Segment Financial Information
See Management’s Discussion and Analysis of Financial Condition and Results of Operations, set
forth in Item 7 of this Report, and Note 2 to our Consolidated Financial Statements for the fiscal year
ended December 31, 2014, included in Item 8 of this Report, for financial information regarding our
business segments.
Training and Aircraft Maintenance
SkyWest Airlines and ExpressJet employees perform substantially all routine airframe and engine
maintenance and periodic inspection of equipment at their respective maintenance facilities, and
provide substantially all training to SkyWest Airlines and ExpressJet crew members and maintenance
personnel at their respective training facilities. SkyWest Airlines and ExpressJet also contract with
third-party vendors for non-routine airframe and engine maintenance.
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 fixed-fee agreements with Delta,
United, American, Alaska and US Airways provide for fuel used in the performance of those
agreements to be reimbursed by our major partners, thereby reducing our exposure to fuel price
fluctuations. During the year ended December 31, 2014, United purchased the majority of the fuel for
our United aircraft under contract directly from its fuel vendors; and Delta purchased the majority of
the fuel for our Delta aircraft under contract directly from its fuel vendors. A substantial increase in
the price of jet fuel, to the extent our fuel costs are not reimbursed, or our lack of adequate fuel
supplies in the future, could have a material adverse effect on our business, financial condition, results
of operations or liquidity.
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