Skywest posts loss ahead of takeover vote

Regional airline Skywest has reported a half-year loss of $S2.2 million ($A1.7 million) as the company prepares for a shareholder meeting to vote on the $A98 million takeover proposal from fellow operator Virgin Australia.

The loss for the six months to December 2012 comes after a profit of $S4.5 million in the previous corresponding period and was blamed on challenging market conditions including a flat FIFO charter market.

“Performance was affected by challenging conditions putting downward pressure on loads and yields,” Skywest said in a statement.

The airline said the carbon tax had impacted the bottom line to the tune of $S2 million and alongside expansion costs had contributed to the company’s reported loss.

The company saw an increase in revenue to $S173 million for the half year, up 13 per cent on the previous corresponding period as the company’s fleet growth and strategic alliance with Virgin Australia contributed significantly.

In particular revenue in its Australian Regional Airline Network (ARAN) strategic alliance with Virgin Australia increased drastically thanks to the arrival of four new ATR-72 aircraft.

A fifth ATR-72 for the ARAN routes is expected in early March 2013, taking the company’s ARAN fleet to 11.

In contrast the airline saw direct passenger revenue fall by $S2 million to $S54.2 million alongside a drop of $S4 million in charter revenue to $S64.7 million.

The operator was upbeat about its future performance, stating that growth in the company’s fleet capacity and workforce coupled with an expected rebound of the charter market in Western Australia painting a positive picture for the company.

“Current trading shows FIFO activity has returned to record levels,” Skywest said.

Virgin Australia’s proposed takeover of the regional operator, announced in October will come to a head in Singapore on the 13^th of March when Skywest shareholders will vote on the deal.