SkyWest is closer to cutting an agreement with an unnamed foreign regional airline, according to Chair and CEO Jerry Atkin, speaking before the Merrill Lynch Global Transportation conference. He reiterated the airline is anticipating investing 10 percent of its capacity – or no more then $100 million – with airlines in Mexico, Brazil and China. The one that is getting close calls for a small investment in the first year, larger in the second year and larger still in the third year “all under $30 million,” he said. These are carriers that do not have capacity purchase agreements with mainline operators, do not connect passengers for the most part or have the traditional pro-rate agreement for connecting passengers to larger carriers. The investment would allow them to grow faster than they otherwise would and would enable them to take advantage of SkyWest’s purchasing power.
SkyWest was negotiating a scope clause with ExpressJet pilots when Continental and ExpressJet announced their new capacity purchase agreement. In response to a question, Atkin said SkyWest did not walk away from the XJT deal but Continental and ExpressJet simply reached an agreement. The scope question was never resolved, he said. SkyWest was seeking a clarification in XJT’s pilot contract to ensure that nothing in the contract would require merging XJT with either SkyWest Airlines or Atlantic Southeast Airlines or any future acquired airline. SkyWest would have created a new wholly owned subsidiary for its ExpressJet operations had the acquisition been successful.