SkyWest Airlines’ decision to
lend United Airlines $80 million in no way signals any particular interest on the part of the St. George, Utah-based regional to help finance the operations of its code-share partners, a point SkyWest executive vice president and CFO Brad Rich clearly wanted to emphasize during the company’s third-quarter earnings conference call last month. “I think it’s [worth pointing] out here that we have no aspirations of diversifying away from our core business, which is the best regional airline flying in the world, to financial services,” said Rich. “We did it because it gave us a significant amount of risk mitigation on [Bombardier] CRJ200s.”
The agreements signed between SkyWest and United in mid-October extend SkyWest Airlines’ existing rights to operate 40 regional jets under the United Express agreement until the end of their current lease terms, which average 8.4 years. “To put this is real terms, we’ve got aircraft extensions that amount to just short of 5,000 months worth of aircraft flying. And at the same time we know with very high precision what our rates are going to be through that whole extension period,” noted Rich.
