SkyWest Looks to Invest in Vietnam

 - May 7, 2010, 7:37 AM

St. George, Utah-based SkyWest Airlines is considering investing in a start-up regional airline in Vietnam, the company's CFO, Brad Rich, said yesterday during the company's first-quarter earnings conference call. 

“We have been looking and considering and evaluating additional international opportunities to continue to invest in areas that are seeing rapid economic growth and development of air transportation,” said Rich. “We see Vietnam as being an area of potential investment that would appear at least with our initial assessments to be one of some promising opportunity. So we're doing some significant research and analysis, and putting some work into it, but beyond that no formal announcements are ready to be made.”

SkyWest has actively sought opportunities outside the U.S. ever since it first invested $5 million in Brazil's Trip Airlines in 2008. Six months later it invested another  $15 million, and during the first quarter of this year it invested another $10 million in the airline, bringing its total ownership stake to 20 percent-the most it is permitted to own under Brazilian law. Trip flies ATR turboprops and Embraer E175 jets. 

“As far as their financial performance, it's exactly where we thought it would be at this quarter,” said Rich. “The fleet is growing right according to plan; it's up to around 30 aircraft. They've added some larger aircraft to the fleet and plan to add a few more aircraft in each of the next few years. So all that's on track; we've been able to assist them in getting the fleet financed and things just seem right on track.”

Now flying the sixth largest fleet in the world with 456 aircraft, SkyWest continues to explore “unique opportunities that exist”.

“We have some attractive ownership arrangements, meaning both attractive rents and short-term lease terms on a good portion of this fleet [namely, Bombardier CRJ200s], which puts us in a good position to enter into some unique market opportunities we think exist,” said Rich. “We're watching these markets closely, and as I've indicated previously, the terms and conditions on the fleet give us some unusual flexibility to make some fairly quick decisions with this flying if need be.”