Font ResizeSkyWest Inc.'s third-quarter net income increased 9.2 percent as the carrier did more flying for its airline customers while lower fuel and labor expenses provoked a sharp drop in operating revenue.
SkyWest, which operates SkyWest Airlines, earned $28.6 million, or 50 cents per diluted share, in the three months ending Sept. 30. The St. George-based airline had a profit of $26.2 million, or 45 cents per share, in the same period of last year.
Revenue totaled $637.8 million in the quarter, compared to $934.1 million.
Revenue fell 31.7 percent, mostly because of reduction in fuel-cost-repayments from big-airline clients Delta Air Lines and United Airlines, Chief Financial Officer Bradford rich said during a teleconference with securities analysts.
Under contracts with Delta and United, SkyWest is reimbursed for the fuel it buys. It records the payments as revenue. Lately, though, Delta and United have increased the amount of fuel they buy for SkyWest, so their fuel repayments have declined.
Rich said SkyWest has seen "a structural change in how [its] fuel is being purchased, and that is that both Delta and United have taken more of a role in the actual purchasing of the fuel."
All the fuel SkyWest uses when flying as Delta Connection is being purchased by Delta, Rich said. United buys 55 percent of the fuel SkyWest burns when it flies as United Express.
Revenue also fell because SkyWest turned over 23 customer
The number of hours SkyWest flew for its airline customers increased 3.2 percent from a year earlier.
