SkyWest, Inc. has revealed its second quarter 2009 results with operating revenues of $698.8 million for the quarter ended 30 June 2009, compared to $950.8 million for the same period last year and net income of $26.2 million compared with $36.4 million of net income in 2Q08.
SkyWest also reported operating revenues of $1.37 billion for the six months ended 30 June 2009, compared with $1.82 billion for the same period last year. Net income in 1H09 was $35.6 million, compared to $65.6 million of net income in 1H08.
Total operating revenues for 2Q09 decreased primarily as a result of decreased fuel cost reimbursements of $232.9 million, paid by SkyWest's major partners. SkyWest is reimbursed for its actual fuel costs and certain other costs by its major partners under its flying arrangements. For financial reporting purposes, these reimbursements are recorded as operating revenues.
Additionally, SkyWest's operating revenues were reduced by approximately $15.2 million due to reductions in the flight schedules made by SkyWest's major partners. During 2Q09, SkyWest experienced a reduction in block hours of 3.0%, compared to the same quarter of 2008. SkyWest produced 343,113 block hours in 2Q09, compared to 353,723 block hours in 2Q08.
Total operating expense and interest per available seat mile (ASM) for 2Q09, excluding fuel expense of $129.0 million or $0.023 per ASM, increased 1.1% to $0.095 from $0.094 for the comparable quarter of 2008. The increase was due primarily to the reduction in SkyWest's block hours, as scheduled by SkyWest's major partners, resulting in a 2.4% reduction in ASM production, without a corresponding reduction in operating expenses.
SkyWest's operating subsidiaries (ASA and SkyWest Airlines) continue to incur significant non-reimbursable maintenance costs and excess crew expenses attributable to reduced block hour schedules as provided by its major partners and as a result of general aging of the fleet. As a result, SkyWest expended an additional $16.3 million for these types of expenses during 2Q09. Total operating expense and interest, excluding fuel expense, was $531.1 million for the quarter ended 30 June 2009, compared to $537.7 million for the quarter ended 30 June 2008.
SkyWest recorded stock-based compensation expense of approximately $1.9 million ($1.2 million after-tax) for 2Q09, compared to $2.6 million ($1.6 million after tax) for 2Q08.
At 30 June 2009, SkyWest had approximately $731.7 million in cash and marketable securities, compared to $705.2 million as of 31 December 2008. The increase in cash and marketable securities is net of the effect of SkyWest's repurchase of $4.9 million of common stock during the quarter ended 30 June 2009.
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