Skywest profit hit by rising dollar, fuel costs

The rising Australian dollar and increasing fuel costs have contributed to a 37 per cent drop in interim net profit for Singapore-headquartered Skywest, despite the airline lodging a 16 per cent spike in revenue.

The Singapore and ASX-listed regional air carrier lodged revenue of $S145 million ($A107million ) for the half year ended December 31, compared to $S125 ($A92 million the previous corresponding period.

Net profit came in at $S4.4 ($A3.2) million, down from $S7.1 $(A5.3) million the previous half year.

“The group is experiencing the impact of significant rapid changes in exchange rates and fuel costs,” Skywest said in a statement to the ASX.

“These two factors still represent a significant risk to the business.”

Skywest said it expected revenue to grow in the second half, on the back of its wet-lease agreement with Virgin Australia and the delivery of three more ATR-72 aircraft to its fleet.

“Further growth is expected with certain resource companies planning to expand in the region and the Wheatstone LNG contract underway,” Skywest said in a statement to the ASX.

“The group remains focused on delivering exceptional service to its growing list of fly in and fly out resources clients and to further expand and resource this avenue of business.”

At close of trade today Skywest shares had slipped 2.5 per cent to trade at 39 cents.