Skywest Airlines Share Discussion Threads

[cockneyrebel] 07/10/2010 12:21

Chart making a major breakout out in style today.

CR

[wozelbeak] 06/10/2010 18:05

Agreed, something smouldering in the background.

[saint or sinner?] 06/10/2010 17:49

You have to assume that from the price action and looking at the daily trades they are trying to tempt sellers to fill a fairly significant buy order.

Anyone else agree/disagree?

[davydoo] 05/10/2010 21:17

Skywest is a quality co. i'm pleased to see it do well, i just like to be aware of all thats going on. I was a holder, but sold out last time it hit 20p and moved my money into AVAP. I now think CLA is the best prospect from here of these interlinked companies.

[napoleon 14th] 05/10/2010 21:07

Hasn't "cold-showered" the SP, davydoo.....

[davydoo] 02/10/2010 11:06

I just found this statement within the AVAP admission document;

'A320-200 is registered with the Australian Government's Civil Aviation Safety Authority and the issuance of the Certificate of Airworthiness is currently pending with the Australian Government's Civil Aviation Safety Authority. It is leased to Skywest Airlines (Australia) Pty Ltd.'

AVAP are listed on PLUS and are moving to the main market next Wednesday. They were spun out of SKYW 4 years ago and lease most of the planes to SKYW.

'pending' doesnt seem like good news. They expected to have this plane flying by now. So it means they continue to pay the costs of this lease to AVAP as well as wet leasing a 737 from Virgin Blue to continue servicing the contract with Fortescue metals.

This gives the background;

[saint or sinner?] 28/9/2010 18:35

Big chunky trades at the end there too.

Looks promising.

[wozelbeak] 28/9/2010 18:22

nice to see this heading back to its true value. just another 20p to go lol.

news coming soon i think.

[standish11] 24/9/2010 15:43

Sp up last two says but no news or tip so far as I am aware.Wonder what is behind the rise.

[workshy fop] 24/9/2010 13:15

Back up to test 20p I hope.

[stegrego] 26/8/2010 12:26

I sold early doors after a good ride from 10p.

Not as cheap as i thought it was and dont really like the airline sector (although this is a special situations airline i guess)

However, having been twitchy on this for a while, the risks paragraph just reinforced my reasons for twitchyness.

Good luck to those that remain and i will still monitor this going forward, with a possible re-entry point should the climate settle more.

[stluke] 26/8/2010 09:46

Judgement,

On the face of it yes the profit growth year on year looks good but the 2nd half has seen a big slowdown and all the positive talk is regarding the 1st half of the year. The following will back this up:-

Turnover - interims first 6 mths £46.1m, finals second 6 mths £50.8m
EBITDAR - 12.4, 11.4
PBT - 4.36, 2.06
NPAT - 3.05, 1.1
EPS - 1.57p, 0.55p

Im not trying to knock the company i think what they have achieved in the past year is very good compared to its peers but the undeniable fact is the second half has been difficult for them, coupled with the fact they will not give guidance going forward is a concern for me.

[judgement] 26/8/2010 09:34

The results generally look very upbeat to me. It's good to see that there is at least one airline in the world that is expanding consistently and being well managed.


TRADING AND OUTLOOK

Skywest continues to provide conventional airline services to all of the major airports in Western Australia and beyond, as it has done for the last 47 years. This regular airline business, whereby scheduled flights are provided and sold to the flying public, continues its organic growth within a relatively stable retail environment. We believe that the scope for growth in this area of the business is significant thus the Airline continues to stimulate the market by expanding its route network, adding regional routes as and when more aircraft become available through new fleet additions or by virtue of adjusted scheduling in accordance with demand.

During the year, the Airline's total fleet size was 17 aircraft but shareholders should note that the fleet size will shortly increase to 18, as an Airbus A320-200 jet aircraft, with larger passenger capacity than the current Fokker aircraft, is in the process of being added to the fleet. The total cost of adding this new type to the Australian Air Operator's Certificate ("AOC") and deploying the new aircraft in the fleet is approximately AUD 3.2 m. The particular A320-200, which is initially being included on the AOC, was previously operated by Thomas Cook in the UK. Cognisant of the risks associated with over-expansion, the Airline otherwise tempered the fleet's growth this year and therefore has not always deployed as many aircraft as it was potentially able. This conservative strategy had a cost impact, namely an increase in cross hire expenses.

Additionally, an agreement with CITIC Pacific Mining Management Pty Ltd ("CITIC Pacific Mining") was reached for a scheduled airline service between Perth and Karratha for employees of CITIC Pacific Mining. The Agreement's scope of services and revenue may increase should additional services be required and scheduled. The Agreement provides for anticipated revenues to Skywest of AUD 10.4m per year. The Agreement is for an initial term of one year with a term extension option available to CITIC Pacific Mining.

The Airline also reached agreement with Perth's major daily newspaper, The West Australian (ASX: WAN), to distribute copies of the paper, on the same day as printed, throughout Western Australia. These airfreight services are provided overnight to increase utilization of some of the fleet.

The Airline will continue to see additional resources, charter contracts and route expansion. There is a sense that the resources sector has resumed growth, after the issues around the Resources Super Profits Tax issue have apparently been mitigated.

In response to the Western Australian Government's public invitation, the Airline recently delivered a detailed expression of interest to continue its operations on the regulated coastal network of Western Australia. The Company is willing and able to continue to operate a scheduled airline service to the airports that are subject to this regulation and wishes to maintain its service of the Western Australian communities.


AUSTRALIAN AIR OPERATORS CERTIFICATE (AOC)

The Airline is in the process of adding the A320-200 type aircraft to its AOC. Once CASA approves the addition of this aircraft type to the AOC, it is anticipated that the inclusion of further A320-200 aircraft on the AOC will be faster and less costly, thus enabling more fleet expansion opportunities to the Company. This will allow some F100 aircraft to be deployed to alternative routes and allow additional services to be provided to resources clients who wish to utilize the A320-200.

The Airline's AOC was recently amended to include Denpasar, Bali (Indonesia) as a passenger and cargo destination port for its Regular Public Transport Operations. Previously, the Airline was entitled to fly passengers to and from Denpasar on a charter basis only. This extended AOC entitles the Airline to sell commercial, non-charter tickets on routes to that port. The Company understands that, since more than 50% of its shareholder base is Australian, the Airline may be eligible for an Australian International Airline Licence making it possible for the Airline to apply for the inclusion of other international ports in the South East Asian region. To this end, the Airline is now in the process of applying to include the route of Broome-Singapore to its AOC. Furthermore, the Airline is investigating the addition of other domestic routes, such as from the Pilbara to the East Coast of Australia.


LABOUR AND HUMAN RESOURCES

The Airline recently negotiated Enterprise Bargaining Agreements ("EBA") with its pilot and engineering group of employees. The two EBAs provide labour cost certainty to the Group for a period of 3 years in respect to the pilots and 2 years in respect to the engineers. The Board is pleased the Airline reached consensus with its workforce and anticipates greater productivity and better workplace relations in the coming years. The Company endeavours to maintain secure arrangements and collaboration with its workforce to provide certainty of service to the Airline's customers.

The Airline also enhanced its senior management by hiring two senior executives with airline business focus including an experienced Sales Manager to strengthen the commercial focus of the Airline's management.

[I've omitted the risks section, since it was largely quoted earlier]

[judgement] 26/8/2010 09:30

stluke,

That isn't the summing up. You've taken the most downbeat extract from the Risks section of the report. Are you trying to manipulate sentiment to your own advantage by any chance?

[stluke] 26/8/2010 07:15

Slightly early this year!

A rather downbeat set of results and accompaning outlook to me on first view, profits only satisfactory due to poorer then expected second half and the following rounding up was rather concerning.

"The policies of the Western Australian Government may impact access to some of the airports that the Airline currently serves. In the worst case, the Government could potentially restrict access to certain ports or introduce unsustainable levels of competition to airports that cannot support competition. Overall, the Board is unable to provide shareholders with any exact guidance about future profit expectations in light of the unstable global economic outlook, uncertain passenger demands, volatile exchange rates and fuel prices that impact on the Airline's business."

[standish11] 25/8/2010 20:42

Final results due towards end of October if previous year schedule is adhered to.

[saint or sinner?] 25/8/2010 08:33

Anyone know when the next set of results are due out?

[matt] 02/8/2010 08:20

Are we to assume this will save money?

2 August 2010

SKYWEST AIRLINES LTD
("Skywest")

CADET PILOT TRAINING PROGRAM

Skywest is the major airline servicing all major airports and population centres
of Western Australia. Skywest's operational base is in Perth, Australia with
substantial airline network services from Perth. Skywest wishes to advise on a
new Cadet Pilot Training Program to support the airline's expanding operations.

The Cadet Pilot Training Program has been developed in partnership with Altara
Training and Ansett Aviation Training based in Melbourne, Victoria. The program
will offer a limited number of successful applicants a career path into Skywest
Airlines as a Fokker 50 pilot with the opportunity to progress within the
company to other aircraft types such as the Airbus A320. The Cadet Pilot
Training Program, which will accept its first intake of candidates towards the
end of 2010 aims to promote careers in aviation to Western Australians. The
program will be offered to candidates with little or no flying experience who
meet the Skywest Airlines requirements for aptitude, attitude and motivation to
enter the comprehensive training program.

"We are very excited about the program at Skywest and the opportunity that it
will provide to local Western Australians to become involved in a local based
company where our motto is Your State - Your Airline" said Jeff Chatfield,
Executive Chairman.

Cadet applications will be made available later in 2010 through our partners at
Altara Training.

[standish11] 28/7/2010 09:15

T1ps tipped this a while back and anyone who bought on the basis of the tip will be well in profit-not forgetting also a good dividend.

[trendfloor] 28/7/2010 09:10

I see winnies lot at Tips have tipped this today.

Kiss of death if you ask me.

[cockneyrebel] 27/7/2010 19:06

About time these started moving back up properly.

Chart got right down to th support trend here and I hovvered over the sell button - probably more luck than judgement that I held on as they ticked up on a day when I wasn't watcching so held on.

Look very cheap based on the forecasts from UK Anal.

CR

[lunartik] 27/7/2010 18:10

Good to see another rise today after a wobbly few months.

Hopefully we will be making new highs soon.

I think this is a solid investment.

[stegrego] 26/7/2010 21:14

GECR

Skywest Airlines* -Update - Reiterate 'Buy' at 17.75p; Target Price 32.5p


Since we commented on Skywest Airlines* following the company's interim results in February, Western Australia's largest regional airline has reported a further five months of increased regular passenger numbers. The company has additionally announced it is to provide services under a further scheduled charter deal, has leased another aircraft and has extended the licence period for the coastal network licence it operates. We highlight some pertinent risks but consider the current earnings prospects and balance sheet to merit a near 100% uplift in the share price to 32.5p. Currently at 17.75p, our stance remains buy.

For the year to 30th June the company has reported a 1.61% increase in regular passengers carried and a 9.04% increase in charter services flown. Load factor, the company's calculation of which does not include charter passengers, has improved from 51.59% to 54.31%. This performance provides the backdrop for some of the other announcements Skywest has made since its 22nd February interim results announcement.

On 10th March Skywest announced a scheduled charter agreement with CITIC Pacific Mining, the majority shareholder of which is large, diversified Chinese state-owned enterprise, CITIC Group. This is for services between Perth and Karratha and provides for anticipated revenue to Skywest of Australian $10.4 million for the initial one year term, with a term extension option available, scope and revenue to potentially increase should additional services be required and the deal subject to monthly fuel rise and fall calculations. The agreement is significant (Skywest's revenue in the six months ended 31st December 2009, for example, was A$87.04 million) and also allows 10% of seats to be sold to regular travelling members of the public. This latter point also highlights how Skywest is differentiated from typical airlines – with its 'dual' business model enabling it to boost efficiency and being in-line with government transport policies.

This accordance with transport policies has undoubtedly helped the company gain an extension to its coastal network licence – the destinations on which are subject to periodic tendering and review. Skywest's licence has been extended to 27th February 2011, with a Western Australian Government review of Intrastate Airservice Arrangements expected to lead to various requests for proposals and Skywest to, once again, participate in this process. The periodic tendering and review for destinations on the coastal network of Western Australia does mean a degree of risk to Skywest. However, the airline has been providing services in Western Australia for 46 years, offers – as mentioned - the ability to combine regular passenger and charter services in line with government policy and also continues to provide a strong service – being, for example, the leading Australian airline for on time departure punctuality in February according to The Australian Government's Bureau of Infrastructure, Transport and Regional Economics. Skywest thus looks impressively strongly positioned and talks of seeking "the opportunity to extend and increase the services and destinations in its network within the regulatory framework".

Skywest's location of operations means that the company's performance is particularly linked to the resources industry – with its main charter clients being the major mining operators in Western Australia. Whilst we continue to believe the broad sector outlooks remains positive, a further potential risk to Skywest is the well-documented proposed changes in the Australian resources sector tax regime. However, since initially announced, the proposed changes have been altered in a way that has "encouraged" major miners BHP Billiton, Rio Tinto and Xstrata - and we do not believe the Australian government would want to cause too much disruption to an industry which is critical to the country's economy.

As we noted in our analysis of Skywest's February interims, the company's strong performance suggests our forecasts of a pre-tax profit of Singapore $21 million and earnings per share of 3.25p may prove conservative. However, even on these numbers, the shares, at their current 17.75p, trade on an earnings multiple of 5.5. Though a couple of pertinent risks have been highlighted, we still see by far the most likely course is that Skywest grows robustly in the next few years fuelled by continuing demand for commodities. As such, we maintain that an earnings multiple of 10 and resultant 32.5p share price remain more than merited. We note that Chairman Jeff Chatfield and Non-Executive Director John Jost sold shares on 16th April but they retain 16.08% and 1.91% of the issued share capital respectively, clearly aligning their interests with those of shareholders. Together with the company's strong cash generation, a solid balance sheet and potential dividend yield of 3.9%, our stance remains buy.

[stluke] 21/7/2010 09:03

Yes but until the uncertainity over the exclusivity of certain routes is concluded i dont see the share price going to far up or down.

[futre] 21/7/2010 08:51

Yet more good news today....