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SkyWest shares fall after warning of second-quarter loss


Shares of SkyWest Inc, which operates regional flights for bigger carriers, fell about 8 percent on Monday after the company warned it expected a second-quarter loss.

SkyWest said after markets closed on Friday that results would be lower than expected and forecast a loss of $12 million to $14 million, or 23 cents to 28 cents a share, for the second quarter. Analysts had expected a profit of 14 cents a share, on average, according to Thomson Reuters I/B/E/S.

The parent of SkyWest Airlines and ExpressJet Airlines, which carry passengers on behalf of Delta Air Lines Inc, United Continental Holdings Inc and American Airlines Group Inc, said it expected lower revenues because of missed incentives on metrics such as on-time performance under its contracts with major partners, and it also said the results would include changes in its tax provision because of the expected loss and write-downs of equipment.

SkyWest also said that U.S. Federal Aviation Administration rules requiring more rest for pilots and beefed-up qualifications for pilots to operate commercial jets were increasing its crew costs. Other regional carriers such as Republic Airways Holdings have said the newer FAA rules have hurt them by making qualified pilots harder to find, for example.

Cowen & Co airline analyst Helane Becker said in a note to clients that nearly 61 percent of SkyWest's capacity was operated for United in the first quarter. United said last week that it plans to make changes to its regional flying that include cutting the use of 50-seat jets and replacing some of it with jets that have 70 seats or more.

"It will be important for SkyWest to win this business and prove they can be a reliable operator," Becker said in her note on Monday.

SkyWest shares were off 8.3 percent, or 97 cents, at $10.68 in morning trading.