SkyWest Inc. has reported a net income of $20.9 million in the third quarter, up from $116,000 in the same period in 2011.
The St. George-Utah-based regional carrier's operating income more than doubled to nearly $55 million this year versus a year earlier.
Operating expenses decreased to $118.9 million, or 12.5% year-on-year. When excluding pass-through costs for fuel and specific reimbursed engine overhaul expenses, operating costs were $24.9 million.
Operating revenues decreased 9.4% to $865.3 million compared to 2011. The decline is primarily due to a "significant" reduction in the reimbursement from its contracted carriers for fuel, which SkyWest records as revenue.
SkyWest says that its partners are increasing the amount of fuel that they purchase directly for SkyWest flights. While the carrier continues to purchase some fuel for its contract flying, the amount will continue to decrease with a majority of its partners purchasing fuel directly by early 2013, says Mike Kraupp, chief financial officer and treasurer of SkyWest.
The carrier recorded $6.2 million in additional revenues that can be tied to an increase in block hour production, better on-time performance metrics and higher completion factors. It also saw a $15.1 million reduction in engine overhaul costs for its United Express CRJ200 overhauls during the quarter.
Total block hours for the third quarter totaled 596,901, which is up 2% from the same period a year earlier.