Q: What is the current status of the company’s code-sharing agreement with United?
A: SkyWest recently agreed to and announced a memorandum of understanding (MOU) with United Airlines. The MOU awarded SkyWest rights to continue to fly all of its current United Express operations and awarded growth aircraft of 117 regional jets. The agreement further specifies that United wishes for SkyWest to firm order 30 regional jet aircraft with 70 seats. United will determine the time frame for ordering the optioned aircraft which are to consist of a combination of 50/70 regional jet aircraft. The MOU will shortly be moved to a definitive agreement covering SkyWest United Express flying for several years into the future.

Q: What is the current status of the company’s code-sharing agreement with Delta?
A: As a closing condition to the recent ASA acquisition deal, SkyWest, Inc. secured new 15-year Delta Connection operating agreements for both SkyWest Airlines and ASA. Each carrier’s new code-sharing agreements remain essentially as their prior respective agreement.

Q: How does SkyWest derive its revenue?
A: SkyWest currently derives its revenue from long-term codes-sharing agreements with major U.S. airlines. We provide flights on a fee-for-departure and or cost/plus basis and charge our partners accordingly. Our partners assume responsibility for setting fares and determining where the aircraft will operate. These agreements provide base margin and incentive margin amounts over and above our costs. These incentive programs are designed to maintain quality in our operation by being awarded higher margin points and amounts based on achieving higher completion of flight and on-time performance numbers and lower mishandled baggage per thousand customer’s numbers.

Q: What is the company’s current growth rate and how many aircraft are currently being delivered?
A: SkyWest is currently growing its available seat miles (ASM) by about 35% on an annual basis. This is the result of taking delivery of about three regional jet aircraft (50-seat) on a monthly basis. The company has firm deliveries at this rate scheduled through January 2004. As noted above we are currently working on firming additional aircraft deliveries (70-seat) hopefully beginning in the spring of 2004. By securing additional aircraft the company estimates that available seat miles for the next 2-3 years could grow at the rate of about 20-25% on an annual basis.

Q: How does SkyWest finance its growth?
A: As a result of our excellent credit standing and solid balance sheet and financial performance, SkyWest primarily enters into U.S. Tax Leveraged Leases as the principal source of financing. These types of leases carry good economic terms ensuring that SkyWest is best in class in sourcing and financing aircraft. Doing so allows us to be very competitive and offer amongst the lowest departure rates in the industry bringing benefits to our major code-sharing partners. From time to time, SkyWest will also “mortgage style” debt finance aircraft in order to obtain tax benefits under Federal and State tax provisions.

Q: How has the current negative condition of the US majors impacted our business?
A: Traditionally, our business models under fee-for-departure and cost/plus arrangements have generated operating margins in the 13% range. As a result of significant losses at the major level in the airline industry, it has created pressure on SkyWest to continue to produce operating margins at previous levels. During the 2003 time frame, SkyWest is providing some concessions to our major partners in the form of reduced departure rates which will lower our expectations of operating margins. We encourage you to review our public filings that include our current financial results to review current financial and operational performance.

Q: Will SkyWest seek to enter additional code-sharing agreements with partners other than those it currently does business with?
A: In the course of our business, SkyWest will seek for additional growth opportunities as well as remain committed to offering a competitive return to our shareholders. As a result, SkyWest may seek to further diversify our existing business by exploring opportunities as they arise.