During the quarter ended December 31, 2011, SkyWest experienced a reduction of approximately $79.2 million in pretax earnings (of which $32.8 million relates to items that positively impacted the results for the fourth quarter of 2010) compared to the same period last year. Additionally $6.8 million of the difference between the comparable quarters is non-operational and is related to SkyWest's foreign investments. The combination of these items is $39.6 million or approximately 50% of the difference for the comparable quarters. Following are the significant items that contributed to the pretax reduction:
Recorded $15.6 million gain in the fourth quarter of 2010, attributable to the acquisition of ExpressJet Holdings
Recorded $17.2 million of additional revenue from contract settlement issues in the fourth quarter of 2010
Incurred $15.6 million in additional maintenance costs during the fourth quarter of 2011, primarily related to labor, aircraft paint, parts and airframe heavy check costs
Recorded $15.2 million increase in the pretax loss from ExpressJet operations (acquired in November 2010) for the fourth quarter of 2011
Incurred $8.0 million in additional crew-related costs due to additional staffing needs during the fourth quarter of 2011
Recorded additional $6.8 million loss attributable to SkyWest's minority investments in Trip Linhas Aereas ("TRIP") and Mekong Aviation Joint Stock Company ("Air Mekong")
Jerry C. Atkin, Chairman and CEO said, "We experienced some unanticipated expenses in the fourth quarter, however, I remain confident in our ability to respond to these challenges. We have an action plan in place for 2012 that we have started to execute and is expected to return us to profitability for the year. Having said that, we expect the first quarter of 2012, to be challenged but somewhat mitigated from our fourth quarter 2011 results," Atkin said.
On November 12, 2010, SkyWest completed the acquisition of ExpressJet Holdings, Inc. ("ExpressJet Holdings") and ExpressJet Holdings became a subsidiary of Atlantic Southeast Airlines, Inc. ("Atlantic Southeast"), a wholly-owned subsidiary of SkyWest. During the fourth quarter of 2011, the operations conducted by ExpressJet Holdings and its subsidiaries were combined into Atlantic Southeast, and the combined operations are now conducted as ExpressJet Airlines, Inc. ("ExpressJet Airlines"), which is a wholly-owned subsidiary of SkyWest. The acquisition of ExpressJet Holdings included 244 regional jet aircraft and SkyWest's consolidated operations and financial results for the quarter ended December 31, 2011 include significant increases related to revenues, expenses and statistical data compared to the quarter ended December 31, 2010.
SkyWest, Inc. Fourth Quarter 2011 Financial Report
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