SkyWest Inc. has brokered a deal with partner United Airlines to operate Bombardier CRJ200s the regional operator previously flew for Midwest Airlines under a pro-rate agreement starting in June.
Midwest cut 9 CRJ200s from its air services agreement with SkyWest in late 2008, and SkyWest initially said it was attempting to sell the displaced aircraft.
But during an earnings call today SkyWest chief financial officer Brad Rich disclosed an agreement the company reached with United for the operation of the aircraft. Unlike more common fixed fee for departure arrangements between regional and US network carriers, pro-rate deals require the regional carrier to assume more risk, rather than passing through expenses such as fuel to the major airline.
SkyWest Airlines President Chip Childs explains the carrier plans to place the CRJ200s into service on 4 June, noting a "fair amount" will be deployed from Chicago.
Some of the routes were previously operated by SkyWest under a fixed for departure arrangement, but Childs notes that SkyWest will not compete with any other United Express carriers in the pro-rate markets.
Responding to a query regarding the duration of the new pro-rate deal Childs says it is indefinite, adding it gives United flexibility to adjust its summer flying among its regional partners.
SkyWest CFO Rich emphasizes the company has no desire to fly the CRJ200s independently. "None of us think that is a good idea." The pro-rate markets are both a mix of proven markets and some developing routes, he adds.
As the carrier readies the 50-seat jets for pro-rate operations Rich says SkyWest is still exploring options to sublease or sell the aircraft.
Source: Air Transport Intelligence news
