ASA Grounding Costs SkyWest $7.6M

 - June 3, 2009, 8:07 AM

Atlantic Southeast Airlines’ unscheduled grounding of 60 CRJ200s on March 31 for engine inspections lowered revenues at parent company SkyWest by $7.6 million during the first quarter. The groundings, which took the airplanes out of service for up to two days, followed an internal audit revealing that ASA might
not have performed required checks on the airplanes’ CF34 turbofans. Overall, St. George, Utah-based SkyWest suffered through a difficult first quarter in terms of revenue performance, as reimbursements paid by its major partners fell by $164.5 million due mainly to decreased fuel costs. SkyWest also saw revenues fall $18.3 million due to schedule cuts, exacerbating a high number of weather-related flight cancellations at ASA. Finally, ongoing rate negotiations with Delta required SkyWest to report lower contract revenues. Nevertheless, SkyWest managed to generate net income of $9.4 million during the period.