AS FILED WITH THE
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TABLE OF CONTENTS
As filed with the Securities and Exchange Commission on November 18, 2005
Registration No. 333-
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION ON AUGUST 23, 2000

REGISTRATION NO. 333-42508
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON,
Washington, D.C. 20549
------------------------

AMENDMENT NO. 2

FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF
Under the
Securities Act of 1933
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SKYWEST, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

SkyWest, Inc.
(Exact name of registrant as specified in its charter)

UTAH Utah
(State or other jurisdiction of
incorporation or organization) 87-0292166
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NUMBER)

(I.R.S. employer
identification number)

------------------------

BRADFORD444 South River Road
St. George, Utah 84790
(435) 634-3200
(Address, including zip code, and telephone number, including area code, of registrant's principal executive offices)
Bradford R. RICH
EXECUTIVE VICE PRESIDENT,
CHIEF FINANCIAL OFFICER AND TREASURER
SKYWEST, INC.
Rich
Executive Vice President, Chief Financial Officer and Treasurer
SkyWest, Inc.
444 SOUTH RIVER ROAD
ST. GEORGE, UTAHSouth River Road
St. George, Utah 84790
(435) 634-3000
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER,
INCLUDING AREA CODE, OF AGENT FOR SERVICE)
------------------------

COPIES TO:

634-3200
(Name, address, including zip code, and telephone number, including area code, of agent for service)

BRIAN

Copies to:
Brian G. LLOYD, ESQ. JOHN J. KELLEY III, ESQ.
ERIC D. BAWDEN, ESQ. KING & SPALDING
Lloyd, Esq.
Seth R. King, Esq.
PARR WADDOUPS BROWN GEE & LOVELESS 191 PEACHTREE STREET

185 SOUTH STATE STREET, SUITESouth State Street, Suite 1300 ATLANTA, GEORGIA 30303-1763
SALT LAKE CITY, UTAH
Salt Lake City, Utah 84111 (404) 572-4600

(801) 532-7840 Mark C. Smith, Esq.
Allison R. Schneirov, Esq.
SKADDEN, ARPS, SLATE, MEAGHER & FLOM LLP
Four Times Square
New York, New York 10036
(212) 735-3000

APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
Approximate date of commencement of proposed sale to the public:As soon as practicable after the effective date of this Registration Statement as determined by market conditions.
If the only securities being registered on this Form are being offered pursuant to dividend or interest reinvestment plans, please check the following box: [ ]o
If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, other than securities offered only in connection with dividend or interest reinvestment plans, check the following box: [ ]o
If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering: [ ] __________o
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering: [ ]o
If delivery of the prospectus is expected to be made pursuant to Rule 434, please check the following box: [ ]

THE REGISTRANT HEREBY AMENDS THISo
CALCULATION OF REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a),
MAY DETERMINE.

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2

THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED.
THESE SECURITIES MAY NOT BE SOLD UNTIL THE REGISTRATION STATEMENT FILED
WITH THE SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS
PROSPECTUS IS NOT AN OFFER TO SELL THESE SECURITIES AND IT IS NOT
SOLICITING AN OFFER TO BUY THESE SECURITIES IN ANY STATE WHERE THE OFFER
OR SALE IS NOT PERMITTED.

SUBJECT TO COMPLETION, DATED AUGUST 23, 2000

PROSPECTUS

2,636,100 SHARES

SKYWEST LOGO

COMMON STOCK

------------------------

We are offering 2,500,000FEE
Title of each class of
securities to be registered
Amount to
be registered(1)
Proposed maximum
offering price
per share(2)
Proposed maximum
aggregate
offering price(2)
Amount of
registration fee
Common Stock, no par value 4,600,000 $32.24 $148,304,000 $17,456
(1)
Includes 600,000 shares which the underwriters have the option to purchase solely to cover overallotments, if any.
(2)
Estimated solely for the purpose of calculating the registration fee in accordance with Rule 457(c) based on the average high and low reported sales prices of our common stock on The Nasdaq National Market on November 17, 2005.

The Registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until the Registration Statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a), may determine.
Subject to Completion
Preliminary Prospectus dated November 18, 2005
The information in this prospectus is not complete and may be changed. We may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any state where the offer or sale is not permitted.
P R O S P E C T U S
4,000,000 Shares
Common Stock
SkyWest, Inc. andis selling all of the selling stockholdersshares.
The shares are offering 136,100 shares of common stock. We will not
receive any proceeds from the sale of common stock by the selling stockholders.

Our common stock is quoted on theThe Nasdaq National Market under the symbol "SKYW." On August 21, 2000,November 17, 2005, the closinglast sale price of our common stock,the shares as reported by theThe Nasdaq National Market was $45.13$32.59 per share.

YOU SHOULD CONSIDER THE RISKS WHICH WE HAVE DESCRIBED IN "RISK FACTORS" ON PAGE
5 BEFORE DECIDING WHETHER TO INVEST IN SHARES OF OUR COMMON STOCK.
------------------------

Investing in our common stock involves risks that are described in the "Risk Factors" section beginning on page 11 of this prospectus.

PER SHARE TOTAL
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Per Share Total
Public offering price....................................... price $ $
Underwriting discount and commission........................
$ $
Proceeds, before expenses, to us............................
Proceeds to the selling stockholders........................
SkyWest, Inc. $ $

------------------------

We have granted the
The underwriters a 30-day option tomay also purchase up to 395,415an additional 600,000 shares of common stock solely to cover over-allotments, if any. If
such option is exercised in full,from us at the total public offering price, less the underwriting discount, within 30 days from the date of this prospectus to cover overallotments.
Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.
The shares will be $ , the total underwriting discount will be $ , and the total
proceeds to us will be $ .

NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED UPON THE
ADEQUACY OR ACCURACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.

Raymond James & Associates, Inc., on behalf of the underwriters, expects to
deliver the shares to purchasersready for delivery on or beforeabout , 2000.
------------------------

RAYMOND JAMES & ASSOCIATES, INC.

2005.
Merrill Lynch & Co. Raymond James
The date of this prospectus is , 2000
3

[MAP DISPLAYING SKYWEST ROUTES]

SkyWest's2005.
We are a holding company that operates two independent subsidiaries, SkyWest Airlines and Atlantic Southeast Airlines ("ASA"), with a total fleet of approximately 376 aircraft and approximately 13,550 employees. Our fleet consists of the 30-passengerBombardier CRJ200 Regional Jets seating 40 or 50 passengers ("CRJ200s"), Bombardier CRJ700 Regional Jets seating 66 or 70 passengers ("CRJ700s"), Embraer EMB-120 Brasilia turbopropturboprops seating 30 passengers ("Brasilia turboprops") and Avions de Transport 72-210 turboprops seating 66 passengers ("ATR-72 turboprops"). We provide on each of these aircraft and the 50-passenger Canadair Regional Jet. Both equipment
types offerflight attendant service, as well as in-flight amenities such as snack and beverage service, lavatory facilities and overhead storage. SkyWest Airlines is a regional carrier with a fleet of 104
aircraft and 3,593 employees.
We operate over 2,400 total daily flights as The Delta Connection® in Atlanta, Salt Lake City and Cincinnati, and as United Express(R)Express® in Chicago (O'Hare), Denver, Los Angeles, San Francisco, Seattle/Tacoma and Portland and as The Delta Connection(R) in Salt Lake CitySeattle/Tacoma under code-sharingcode-share agreements with United AirlinesDelta Air Lines and DeltaUnited Air Lines. We provide scheduled air service to 63 cities212 destinations in 13 western statesthe United States, Canada, Mexico and Canada.
United(R)the Caribbean. We have obtained federal registration of the SkyWest®, SkyWest Airlines®, Atlantic Southeast Airlines® and United Express(R)ASA® trademarks. Delta®, Delta Connection® and The Delta Connection® are trademarks of Delta Air Lines, Inc. United® and United Airlines, Inc.
Delta(R), Delta Connection(R) and The Delta Connection(R)Express® are trademarks of DeltaUnited Air Lines, Inc. All other trademarks and service marks appearing in this prospectus are the property of their respective holders.

------------------------

IN CONNECTION WITH AN UNDERWRITTEN OFFERING, THE SEC RULES PERMIT THE
UNDERWRITERS TO ENGAGE IN TRANSACTIONS THAT STABILIZE THE PRICE

TABLE OF OUR COMMON
STOCK. THESE TRANSACTIONS MAY INCLUDE PURCHASES FOR THE PURPOSE OF FIXING OR
MAINTAINING THE PRICE OF THE COMMON STOCK AT A LEVEL THAT IS HIGHER THAN THE
MARKET WOULD DICTATE IN THE ABSENCE OF SUCH TRANSACTIONS.
4

CONTENTS

Page
Prospectus Summary 1
Risk Factors 11
Cautionary Statement Concerning Forward-Looking Statements 21
Use of Proceeds 22
Price Range of Common Stock and Dividends 22
Capitalization 23
Unaudited Pro Forma Consolidated Financial Data 24
Selected Consolidated Financial and Operating Data 28
Management's Discussion and Analysis of Financial Condition and Results of Operations 31
Business 47
Management 67
Principal Stockholders 69
Description of Capital Stock 70
Underwriting 73
Legal Matters 75
Experts 75
Incorporation of Certain Information by Reference 76
Where You Can Find More Information 76
You should rely only on the information contained or incorporated by reference in this prospectus. We have not, and the underwriters have not, authorized any other person to provide you with different information. If anyone provides you with different or inconsistent information, you should not rely on it. We are not, and the underwriters are not, making an offer to sell these securities in any jurisdiction where the offer or sale is not permitted. You should assume that the information in this prospectus is accurate only as of the date on the front cover of this prospectus. Our business, financial condition and prospects may have changed since that date.

PROSPECTUS SUMMARY
This summary contains basic information about our company and this offering, but does not contain all of the information that you should consider before investing in our common stock. You should read this summary, together with the entire prospectus, including Risk Factors,"Risk Factors" and the information incorporated by reference into this prospectus as described below under "Incorporation Of Certain Information By Reference," for important information regarding our company and the common stock being sold in this offering. Unless otherwise indicated, "we,"we," "us," "our"us", "our" and similar terms refer to SkyWest, Inc. and our subsidiaries, and "SkyWest"subsidiaries; "SkyWest Airlines" refers to our wholly-owned subsidiary SkyWest Airlines, Inc.,; and "ASA" refers to our principal operating subsidiary.

SKYWEST, INC.wholly-owned subsidiary Atlantic Southeast Airlines, Inc. Unless otherwise indicated, all information in this prospectus assumes that the underwriters' overallotment option to purchase up to 600,000 shares from us will not be exercised.
Our Company
We operateare a holding company that operates two independent subsidiaries, SkyWest Airlines aand ASA. SkyWest Airlines and ASA are regional airlineairlines offering scheduled passenger service with approximately 1,000over 2,400 daily departures to 63 cities212 destinations in 13
western statesthe United States, Canada, Mexico and Canada. Allthe Caribbean. Substantially all of our flights are operated as either Delta Connection or United Express or The Delta Connection under code-sharingcode-share arrangements with United
Airlines or Delta Air Lines. ForLines, Inc. ("Delta") or United Air Lines, Inc. ("United"), with significant presence in their key domestic hubs and focus cities. SkyWest Airlines and ASA provide regional flying to our partners, primarily under long-term, fixed-fee code-share agreements that we believe improve our ability to accurately forecast our revenue stream. Under this type of agreement, our partners assume many of the three months ended March 31, 2000,most common financial risks inherent to our industry, including those relating to fuel prices, airfares and passenger load factors.
SkyWest wasAirlines and ASA have developed industry-leading reputations for providing quality, low-cost regional airline service during their long operating histories—SkyWest Airlines has been flying since 1972 and ASA since 1979. As of September 30, 2005, our consolidated fleet consisted of a total of 376 aircraft, of which 220 were in service with Delta, 152 were in service with United and four were unassigned. We currently operate one type of regional jet aircraft in two differently sized configurations, the 40- and 50-seat CRJ200s and the 66- and 70-seat CRJ700s, and two types of turboprop aircraft, the 30-seat Brasilia turboprops and the 66-seat ATR-72 turboprops (which we expect to remove from service by August 2007). SkyWest Airlines and ASA have combined firm orders to acquire an additional 37 CRJ700s over the next two years and ASA is committed to sublease six additional CRJ200s from Delta commencing in early 2006. We have agreements with Delta or United to place all of these aircraft into service upon their delivery. In addition, we have options to acquire an additional 80 Bombardier Regional Jets over the next two years. We believe the option aircraft, which we can elect to take in configurations ranging between 66 and 90 seats, position us to capitalize on additional growth opportunities with our existing and other potential code-share partners.

The following table summarizes certain key elements of the SkyWest Airlines and ASA operations as of September 30, 2005.

SkyWest Airlines Atlantic Southeast Airlines
Partners Delta, United Delta

Contract Terms

Delta—Effective through September 2020
Assumed by Delta with Bankruptcy Court approval

United—Expires incrementally in December 2011, 2013 and 2015
Approved in Bankruptcy Court

Aircraft (number of planes)

66-passenger CRJ700s (37)
(all United)

70-passenger CRJ700s (35)

50-passenger CRJ200s (125)
(56 Delta, 65 United, 4 unassigned)

40- and 50-passenger CRJ200s (104)

30-passenger Brasilia turboprops (63)
(13 Delta, 50 United)

66-passenger ATR-72 turboprops (12)

Average daily scheduled departures

United:1,019
Delta:482
Total:1,501

Delta:919
Total:919

Hubs/Focus Cities

Chicago (O'Hare), Denver, Los Angeles, San Francisco, Portland, Seattle/Tacoma, Salt Lake City

Atlanta, Salt Lake City, Cincinnati

Employees

Approximately 8,050 employees(1)

Approximately 5,500 employees(1)

Passengers carried in 2004

13.4 million

10.4 million
(1)
Full-time equivalent

Our Acquisition of Atlantic Southeast Airlines
On September 7, 2005, we completed the acquisition of ASA from Delta for $425 million in cash. Additionally, as part of the purchase, we paid $6.6 million of transaction fees and ASA retained approximately $1.25 billion in long-term debt. In addition, we returned to Delta $50 million in deposits that Delta had previously paid on future ASA aircraft deliveries. The combination of SkyWest Airlines and ASA created the largest regional airline atin the San Francisco International Airport
(100%United States, with over $2 billion in pro forma 2004 revenues. In addition to the potential benefits of scale that our increased size provides us, the combination of SkyWest Airlines and ASA presents our company with new opportunities for growth through our two separate, geographically-focused regional airline platforms—SkyWest Airlines in the Western United States and ASA in the Eastern United States. Although we currently intend to operate the two subsidiaries as separate and independent entities, the skills and knowledge built by these organizations over the years will be available to benefit both. We believe the ASA acquisition also established us as Delta's most important regional airline partner, based on our percentage of Delta's

total regional capacity. We now provide the vast majority of regional airline passengers),service for Delta in Atlanta, its most important eastern hub, and Salt Lake City, its most important western hub. In connection with the ASA acquisition, we have established new, separate, but substantially similar, long-term fixed-fee Delta Connection Agreements with Delta for both SkyWest Airlines and ASA. Under the agreements, which have initial terms of 15 years (subject to certain extension and termination rights), Delta has agreed that ASA will provide at least 80% of all Delta Connection departures from Atlanta, and that at least 50% of ASA's Delta Connection departures will be from Atlanta. We also obtained control of 26 gates in the Hartsfield-Jackson International Airport (99%located in Atlanta, from which we currently provide service to Delta. Delta has committed to provide to us opportunities to utilize 28 additional regional jets in our fleet by the end of 2007. Delta has also agreed that, starting in 2008, ASA is guaranteed to maintain its percentage of total Delta Connection flights that it has in 2007, so long as its bid for additional regional flying is competitive with other regional carriers.
We believe our primary strengths are:
• Largest U.S. Regional Airline with Strong Partner Relationships. As a result of our acquisition of ASA, we are the largest regional airline passengers)in the United States, measured by the number of passengers carried. On a combined pro forma basis for the year ended December 31, 2004, SkyWest Airlines and Los Angeles International Airport (65%ASA carried in excess of 23.8 million passengers and produced more than 14.4 billion "available seat miles," which represents the number of seats available for passengers, multiplied by the number of miles those seats are flown ("ASMs"). We believe the increased scale of our operations will enable us to further reduce our unit costs by more efficiently spreading our overhead and leveraging our operations, which in turn will allow us to offer our services to our partners at even more competitive costs going forward. Based on our consistent provision of high quality, low-cost regional airline passengers).services, we have established strong code-share relationships with our current partners Delta and United, who are currently the world's second and third-largest airlines, respectively, measured by the number of passengers carried. SkyWest offers a convenient schedule and frequent
flights designed to encourage connecting and local traffic. For 17 of the 63
airports that SkyWest serves, it is the only scheduled commercial air service.

SkyWestAirlines has been a code-sharingcode-share partner with Delta since 1987 and with United since 1997, andwhile ASA has been a code-share partner with Delta since 1987. SkyWest's development1984. Through these two platforms, we currently account for approximately 50% of code-sharing relationshipsDelta's and approximately 58% of United's regional flight departures, which, we believe, makes us the most important regional partner of both airlines. In addition, our dominant position in our partners' hubs and focus cities, including ASA's position in Atlanta, further reinforces our importance as an integral part of our partners' networks.
��• Two Strong Operating Platforms with multiple major airlinesSignificant Growth Opportunities. During more than 30 years of flight operations, SkyWest Airlines has established a strong regional airline platform in the Western United States. ASA has established its operational strength in the Eastern United States, where it holds the largest market share of all regional carriers serving Atlanta's Hartsfield-Jackson International Airport. Concentrating our operations geographically, with one platform serving the Western United States and another serving the Eastern United States, enables us to reduce our relianceunit costs by minimizing our number of crew bases and maintenance and other facilities, and by utilizing our human and capital resources more efficiently. We believe our code-share agreements position us for continued growth of both platforms. For instance, beyond the 43 committed aircraft additions in our contracts, the ASA Delta Connection Agreement contains provisions enabling ASA to maintain its percentage of total Delta Connection flights that it has in 2007, so long as its bid for additional regional flying is competitive with other regional carriers. Moreover, we believe the combination of the two platforms will allow us to capitalize on operational efficiencies in order to reduce costs, which, coupled with our strong financial resources, will provide us with opportunities to expand service to our existing partners or add new partners.
• Long-Term, Fixed-Fee Code-Share Agreements. We have entered into long-term, fixed-fee code-share agreements with both Delta and United that are subject to us maintaining specified

performance levels. Our Delta Connection Agreements provide for minimum aircraft utilization at fixed rates, reimbursement of direct operating costs (such as fuel) and provide a single major
airline partnermore predictable revenue stream than the historically utilized "pro-rate" revenue-sharing arrangements. Under our code-share agreements, we authorize our partners to identify our flights and fares under their flight designation codes in the central reservation systems, and we are authorized to paint our aircraft in the livery of our partners, to use their service marks and to market ourselves as a code-share carrier for our partners. Notably, our Delta Connection Agreements have been assumed by Delta with U.S. Bankruptcy Court approval, and SkyWest Airlines' United Express Agreement was approved by the U.S. Bankruptcy Court prior to its execution. We believe these court orders significantly reduce the possibility that our code-share agreements will be disrupted by the Delta and United bankruptcy proceedings, and increase theour prospects for long-term revenue stability and visibility.
• Experienced Management Team. The four members of our senior management team possess an average of 25.5 years of operating results. For the
year ended March 31, 2000, 64% of SkyWest's operating revenues was derived from
United code-share service and 36% was derived from Delta code-share service.
Approximately 76% of SkyWest's current flights are structured as contract
flights. On contract flights, United or Delta controls scheduling, ticketing,
pricing and seat inventories, and SkyWest is compensated with a fixed fee for
each flight completed and an amount per passenger, and is eligible for
additional compensation if certain service quality levels are achieved. Also,
United and Delta, under contractual arrangements, have agreed to reimburse
SkyWest for the actual cost of fuel on all of SkyWest's contract flights. On
SkyWest-controlled flights, SkyWest controls scheduling, ticketing, pricing and
seat inventories, and shares revenues with United or Delta according to prorate
formulas for those SkyWest passengers connecting to a United- or Delta-operated
flight.

The following are the principal elements of our business strategy:

- Focus on Marketsexperience in the Western United States. We believe the market for
air travel in the western United States offers attractive opportunities
for long-term profitable growth for SkyWest. Generally, western air
corridors are less congested than comparable routes in the eastern United
States; longer stage lengths make air travel more attractive than
alternate forms of travel; many western cities are experiencingairline industry. Since 1987, SkyWest Airlines' management team has successfully managed through several industry cycles while delivering industry-leading operational performance, consistent profitability and significant population and economic growth; and mild year-round weather
is common in many of the markets in which SkyWest operates.

- Build Upon Relationships with Code-Sharing Partners. United is the
world's largest airline, and Delta is the world's fourth-largest airline.
SkyWest's significant recent growth in traffic and profitability are
partially attributablevalue to the success of its code-share relationships
with United and Delta. At the same time, multiple code-sharing agreements
reduce SkyWest's reliance on a single major airline.

- Provide Excellent Customershareholders.
• High-Quality Service. We strive for excellent customerto deliver high-quality service in every aspect of our operations. For the yearnine months ended March 31,
2000, ourSeptember 30, 2005, SkyWest Airlines' average on-time performance ratio was 93.5%85.5% and ourits flight completion ratio was 98.6%. AllAlso for the nine months ended September 30, 2005, SkyWest Airlines' aircraft in revenue service operated an average of 10.0 hours per day, which we believe is among the highest aircraft utilization rates in the regional airline industry. In March 2005, SkyWest Airlines was named the 2004 Regional Airline of the Year byRegional Airline World Magazine. In February 2005, SkyWest Airlines was named the number one on-time mainland airline in the United States for 2004 by the U.S. Department of Transportation. ASA is committed to high-quality service, and we believe the combination of the SkyWest Airlines and ASA platforms presents an opportunity for both carriers to enhance the quality of their service.
• Financial Resources and Flexibility. Due in part to our success in implementing our business strategy, we possess financial resources and flexibility which distinguish us from many other regional and major carriers and which constitute a competitive advantage. At September 30, 2005, after giving effect to this offering, we would have had cash and marketable securities of approximately $337.4 million, which would have represented 21.8% of our revenues over the twelve months ending September 30, 2005. The strength of our balance sheet and credit profile have enabled us to enter into lease and other financing transactions on terms we believe are more favorable than the terms available to many other carriers. Many major carriers currently face significant financial challenges and are experiencing difficulty financing the acquisition and operation of aircraft for themselves and their regional partners. As a result, regional carriers themselves are increasingly financing the expansion and operation of the fleet offer "cabin class"serving the major carrier's passengers. Our lower aircraft ownership costs can be shared with our partners, which we believe represents a competitive advantage when we seek additional growth. We believe our financial flexibility also allows us to take advantage of growth opportunities—such as the acquisition of ASA or placing a large aircraft order—that we might otherwise be unable to pursue if we did not possess these financial resources.
Our business strategy consists of the following elements:
• Capitalize on the ASA Acquisition to Reduce Operating Costs. We believe our acquisition of ASA provides a number of significant opportunities to reduce the unit operating costs of both the SkyWest Airlines and ASA platforms without compromising passenger safety, service including a stand-up cabin,quality or

operational reliability. Among those opportunities, we intend to focus our initial cost reduction efforts in four key areas:
•
improve the utilization of our equipment and facilities through the refinement of operational processes, elimination of redundancies and collaborative identification and implementation of operational best practices;

•
increase employee productivity by incorporating best practices, efficiently utilizing our employees to support both operating platforms, and providing incentive-based compensation and benefits that are competitive with packages offered by other regional carriers with whom we compete;

•
leverage our position as the largest U.S. regional carrier to allocate overhead and underseat storage, lavatories,administrative expenses over a substantially larger platform, thereby reducing unit costs; and in-flight snack

•
reduce our aircraft acquisition and beveragefinancing costs by continuing to strengthen our balance sheet through the proceeds raised from this offering and by refinancing our debt and lease obligations where appropriate.
• Expand Existing and Develop New Code-Share Agreements. We enjoy strong relationships with our existing code-share partners and work closely with these partners to expand service to their existing markets, open new markets and schedule convenient and frequent flights. We view the continued development of our Delta and United relationships as significant opportunities to achieve stable, long-term growth of our business. We believe the principal reason SkyWest Airlines has attracted multiple code-share partners is its ability to maintain a competitive cost structure while delivering high-quality customer service. 1
5

-We believe that multiple code-share agreements with major carriers diversifies financial and operating risks by reducing reliance on a single major carrier. This diversification may also allow us to grow at a faster rate and not be limited by the rate at which any single partner can, or wishes to, grow. We intend to explore opportunities to develop additional code-share relationships with other carriers to the extent they are consistent with our business strategy.
• Focus on Larger Gauge Aircraft. We operate a greater number of large gauge regional jets than any other U.S. carrier. Large gauge regional jets, which seat approximately 70 or more passengers, offer significant opportunities for revenue and profitability growth among major and regional carriers. Most major carriers, including Delta and United, have recognized the growth opportunities created by larger regional aircraft and are exploring opportunities to add larger gauge regional jets, flown by themselves or their regional partners, to their flight systems. As of September 30, 2005, we operated a total of 72 CRJ700s, and we believe the expansion of our CRJ700 fleet will create growth opportunities in many markets in which we are the most competitive provider. For us, the operational commonality of CRJ700s and CRJ200s, which we have been flying and maintaining for more then eleven years, offers additional operating efficiencies which we believe will enable us to provide larger gauge services at lower costs than our competitors. SkyWest Airlines and ASA currently have combined firm orders to acquire an additional 37 CRJ700s (which can be configured to seat between 66 and 70 passengers) over the next two years and ASA is committed to sublease six additional CRJ200s from Delta commencing in early 2006. In addition, we have options to acquire an additional 80 Bombardier Regional Jets which we can elect to be delivered in configurations ranging between 66 and 90 seats. We believe the strength of our balance sheet has provided us the flexibility to place aircraft orders on a scale and timetable not easily matched by our competitors.
• Operate Limited TypesFleet Types. As of Aircraft. We operateSeptember 30, 2005, we operated 376 aircraft, principally of just two types, of aircraft,
Embraer EMB-120Bombardier Regional Jets and Brasilia turboprop aircraft ("Brasilia Turboprops") and
Canadair Regional Jets.turboprops. By simplifying our fleet, we believe we gainare able to limit our operating costs due to efficiencies in employee training, aircraft maintenance, lower spare parts inventory requirements and flight operations.

- Emphasize Contract Flying.aircraft scheduling. While ASA

currently operates twelve ATR-72 turboprops, we expect these aircraft to be removed from service by August 2007.
• Maintain a Positive Employee Culture. We believe our emphasis on fixed-fee contract
flying has reducedemployees have been, and will continue to be, a key to our exposure to fluctuations in fuel prices, fare
competitionsuccess. While none of the employees of SkyWest Airlines are represented by a union and passenger volumes. In the future,ASA's pilots, flight attendants and flight controllers are all unionized, we anticipate that our
contract flying operations as a percentage of our total daily flights
will increase as additional United and Delta contract flights are added
to the SkyWest system.

- Foster Our Employees' Best Efforts. With our anticipated growth in
capacity, it is importantbelieve that we encourage the best efforts ofoffer our employees in both our operating subsidiaries substantially similar compensation and minimize turnover in all positions. We have a number of
special employee compensation programsbenefits packages that we believe differentiate SkyWest asus from other carriers and make us an attractive place to work and build a career. With the expansion of our operations resulting from our acquisition of ASA, the best efforts of all of our employees will be required to achieve the potential benefits envisioned by the transaction and continue to make our business successful. We have neverbelieve that these factors, in combination with our historically low employee turnover rate, are a significant reason that neither SkyWest Airlines nor ASA has ever had a work stoppage and none of our employees are represented bydue to a union.

SkyWest's aircraft fleet consists of ninety-two 30-seat Brasilia
Turboprops, which, as of June 30, 2000, had an average age of 5.7 years, and
twelve 50-seat Canadair Regional Jets, which, as of June 30, 2000, had an
average age of 5.0 years. In order to accommodate our expanding operations, we
have placed a firm order to acquire an additional 54 Canadair Regional Jets over
the next four years and a conditional order to acquire an additional 40 Canadair
Regional Jets. If we acquire all such 94 aircraft, we will also be eligible to
exercise options to acquire an additional 155 Canadair Regional Jets, 95 of
which have been assigned scheduled delivery dates through 2005, and the balance
of which have unspecified delivery dates.strike or other labor dispute.
Our executive offices, which also serve as the executive offices of SkyWest Airlines, are located at 444 South River Road, St. George, Utah 84790. Our primary telephone number at that location is (435) 634-3000 and our web sitewebsite address is www.skywest.com. ASA's executive offices are located at 100 Hartsfield Centre Parkway, Suite 800, Atlanta, Georgia 30354. ASA's primary telephone number is (404) 766-1400, and its website address is www.flyasa.com. The information on our web sitethese websites is not part of this prospectus.

GROWTH OPPORTUNITIES

During the five fiscal years ended March 31, 2000, our total operating
revenues expanded at an annual growth rate

Our Operating Platforms
SkyWest Airlines offered approximately 1,501 daily scheduled departures as of 20.8%September 30, 2005, of which approximately 1,019 were United Express flights and approximately 482 were Delta Connection flights. SkyWest Airlines' operations are conducted from hubs located in Chicago (O'Hare), and we increased the number
of daily flights from approximately 550 in 1995 to approximately 1,000 in 2000.
All of our growth during the five-year period was internally generated. We have
not made any material business acquisitions. We believe that we are
well-positioned for continued growth for several reasons, including the
following:

- 54 New Canadair Regional Jets Under Contract. We have placed firm orders
for 54 additional Canadair Regional Jets to be delivered between
September 2000 and October 2003. We have contracts with Delta covering
our operation of 34 of such Canadair Regional Jets on a fixed-fee basis,
and we have contracts with United covering our operation of an additional
ten of such Canadair Regional Jets on a fixed-fee basis. The assignment
of the remaining ten Canadair Regional Jets that are under firm orders
will be determined upon United's completion of pending labor negotiations
with its pilots and modification of contractual limitations on the number
of regional jets that may be operated by United code-sharing partners.

- 40 Additional Canadair Regional Jets Under a Conditional Order and
Additional Opportunities for Placement. We have placed a conditional
order (which currently expires in January 2001) to acquire an additional
40 Canadair Regional Jets with delivery dates scheduled between March
2002 and December 2004. Although we do not have agreements with United or
Delta with respect to the placement of such Canadair Regional Jets, we
believe that there are numerous opportunities for expansion of our
relationship with both carriers. These opportunities include:

- West Coast for United. United does not currently operate any regional
jets from theDenver, Los Angeles, San Francisco, Portland, Seattle/Tacoma or Portland
markets. We expect United to deploy most of the 20 Canadair Regional
Jets we have designated for United service, and possibly additional
Canadair Regional Jets, to medium and longer-distance, low-volume
markets from such airports.

2
6

- Denver for United. We do not currently operate out of Denver
International Airport, but were recently selected by United to commence
Denver operations in October 2000 with two Canadair Regional Jets. In
May 2000, United announced that it will build a new $100 million
regional aircraft terminal in Denver. Construction of the facility is
scheduled to begin in 2001, and the terminal is expected to feature up
to 36 regional aircraft gates. We believe that United's Denver hub could
support up to 100 regional jets over the next several years. Because
SkyWest is the only United Express carrier located west of Denver, we
believe SkyWest is well-positioned to operate as United Express flying
westward out of Denver.

- Intermountain Flights for Delta. During 1999, Delta replaced its service
to six markets with our Canadair Regional Jets as part of its
rationalization process at Salt Lake City. Delta's rationalization
process involves increasingFor the numberyear ended December 31, 2004, SkyWest Airlines generated operating revenues of longer-haul east/westapproximately $1.16 billion, of which approximately 58% was attributable to United code-share service and 38% was attributable to Delta code-share service. The balance of our operating revenues was derived from code-share service we previously provided to Continental Airlines, Inc. as well as ground handling and other services. SkyWest Airlines' fleet as of September 30, 2005 consisted of 37 CRJ700s, all of which were flown for United; 125 CRJ200s, of which 65 were flown for United, 56 were flown for Delta and four were unassigned; and 63 Brasilia turboprops, of which 50 were flown for United and 13 were flown for Delta. SkyWest Airlines conducts its Delta code-share operations pursuant to the terms of a Delta Connection Agreement which obligates Delta to primarily compensate SkyWest Airlines for its direct costs associated with operating Delta Connection flights, intoplus a payment based on block hours flown. SkyWest Airlines' United operations are conducted under a United Express Agreement pursuant to which SkyWest Airlines is paid primarily on a fee-per-completed block hour and departure basis plus a margin based on performance incentives, and is reimbursed for fuel and certain other costs. Under the United Express Agreement, excess margins over certain percentages must be returned or shared with United, depending on various conditions.
ASA offered more than 900 daily scheduled departures as of September 30, 2005, all of which were Delta Connection flights. ASA's operations are conducted primarily from hubs located in Atlanta, Salt Lake City and Cincinnati. For the transitioningyear ended December 31, 2004, ASA generated operating revenues of approximately $947.6 million, substantially all of which was attributable to Delta code-share service. ASA's fleet as of September 30, 2005 consisted of 35 CRJ700s, 104 CRJ200s, and twelve ATR-72 turboprops. Under the terms of the ASA Delta Connection Agreement, Delta has agreed to compensate ASA for its direct costs associated with operating Delta Connection flights, plus, if ASA completes a certain minimum percentage of its regionalDelta Connection flights, to SkyWest. With its smaller aircraft, SkyWest can often
substitute several flightsa specified margin on such costs. Additionally, the ASA Delta Connection Agreement provides for eachincentive compensation upon satisfaction of certain performance goals. Under the ASA Delta flight, providing increased
frequency of service at a lower overall cost. As such rationalization
continues, we believe thatConnection Agreement, excess margins over certain percentages must be returned or shared with Delta, could substitute our Canadair Regional
Jets for many of its flights between Salt Lake City and other cities.
Delta currently has no system-wide limitationsdepending on the number of regional
jets operated by its code-sharing partners.

THE OFFERINGvarious conditions.

The Offering
The following information, which is based on 24,858,904the number of shares outstanding as of August 21, 2000,November 10, 2005, assumes that the underwriters do not exercise their over-allotmentoverallotment option to purchase 395,415600,000 additional shares. Please see "Underwriting" for more information concerning this option.

Common stock offered by SkyWest, Inc. ........ 2,500,000 shares

Common stock offered by the selling
stockholders.................................. 136,100 shares

Common stock offered by SkyWest, Inc. 4,000,000 shares

Common stock outstanding after the offering

62,053,904 shares(1)

Use of proceeds

We estimate that our net proceeds from this offering will be approximately $123.5 million. We intend to use these net proceeds for repayment of short-term debt, reduction of amounts outstanding under our revolving credit facility, and working capital and general corporate purposes. See "Use of Proceeds" for more information concerning our proposed use of proceeds.

Risk factors

See "Risk Factors" and other information included in this prospectus for discussion of factors you should carefully consider before deciding to invest in shares of our common stock.

Nasdaq National Market Symbol

"SKYW"

Overallotment option

600,000 shares subject to the underwriters' overallotment option may be sold by us.
(1)
The number of shares outstanding after the offering(1)................................... 27,358,904 shares

Use of proceeds............................... For expansion of our
operations, including the
acquisition of additional
aircraft and related spare
parts and support equipment,
and for general corporate
purposes. We will not receive
any of the proceeds from the
sale ofoffering excludes 6,996,038 shares of common stock by the selling stockholders.
See "Use of Proceeds"reserved for more
information concerning our
proposed use of proceeds.

Nasdaq National Market symbol................. "SKYW"
- ---------------

(1) Excludes 1,547,316 shares issuableissuance upon exercise of outstanding stock options with an estimated weighted average exercise price of $18.66 per share.

Summary Consolidated Financial and Operating Data
Historical
Pro Forma(1)
Nine Months Ended
September 30,
Years Ended December 31,
Nine Months
Ended
September 30,
2005
Year Ended
December 31,
2004
2002(2) 2003(2) 2004(2) 2004(2) 2005(3)
(in thousands, except share, per share and airline operating data)

Consolidated Statements of Income:
Operating revenues $ 774,447 $ 888,026 $ 1,156,044 $ 829,356 $ 1,221,684 $ 2,091,486 $ 2,021,805
Operating income (loss)(4) 119,555 108,480 144,776 107,958 135,038 (261,395 ) 224,168
Net income (loss) 86,866 66,787 81,952 60,703 73,583 (382,567 ) 100,770
Net income (loss) per common share:
Basic 1.52 1.16 1.42 1.05 1.27 (6.61 ) 1.75
Diluted 1.51 1.15 1.40 1.04 1.26 (6.61 ) 1.72
Dividends declared per common share $ 0.08 $ 0.08 $ 0.12 $ 0.09 $ 0.09 — —
Weighted average number of shares outstanding:
Basic 57,229 57,745 57,858 57,991 57,729 57,858 57,729
Diluted 57,551 58,127 58,350 58,478 58,512 58,350 58,512
Other Financial Data:
Net cash from:
Operating activities 173,703 157,743 246,866 129,143 147,254 318,291 199,400
Investing activities (120,592 ) (811,690 ) (237,525 ) (199,703 ) (398,079 ) (484,930 ) (266,452 )
Financing activities 35,157 635,394 (8,728 ) 2,559 248,400 37,129 84,751
Airline Operating Data:
Passengers carried 8,388,935 10,738,691 13,424,520 9,811,577 12,988,939 23,834,850 21,237,052
Revenue passenger miles (000s)(5) 2,990,753 4,222,669 5,546,069 4,013,486 6,000,078 10,314,957 10,047,157
Available seat miles (000s)(6) 4,356,053 5,875,029 7,546,318 5,453,588 8,001,001 14,456,733 13,540,685
Passenger load factor(7) 68.7 % 71.9 % 73.5 % 73.6 % 75.0 % 71.4 % 74.2 %
Revenue per available seat mile(8) 17.8 ¢ 15.1 ¢ 15.3 ¢ 15.2 ¢ 15.3 ¢ 14.4 ¢ 14.9 ¢
Cost per available seat mile(9) 15.1 ¢ 13.4 ¢ 13.6 ¢ 13.5 ¢ 13.9 ¢ 16.6 ¢ 13.8 ¢
EBITDA(10) 198,062 193,797 231,643 171,960 214,856 (103,074 ) 351,962
EBITDAR(10) 301,380 318,733 377,584 277,744 359,408 97,416 529,117
Average passenger trip length (miles) 356 393 413 409 462 433 473
Number of aircraft in service (end of period):
Bombardier Regional Jets:
Owned 6 30 32 32 113 108 113
Leased 67 79 101 96 188 139 188
Brasilia Turboprops:
Owned 21 21 21 21 15 21 15
Leased 55 55 52 53 48 53 48
ATR-72 Turboprops (Leased) 0 0 0 0 12 19 12
Total Aircraft 149 185 206 202 376 340 376

As of September 30, 2005
Actual As Adjusted(11)
(in thousands)

Consolidated Balance Sheet Information:
Cash and marketable securities $ 303,762 $ 337,430
Aircraft and other equipment, net 2,490,785 2,490,785
Total assets 3,376,206 3,409,874
Long-term debt, including current maturities(12) 1,779,779 1,779,779
Lines of credit 90,000 0
Total stockholder's equity 850,068 973,736
(1)
The unaudited pro forma financial information included in these columns has been prepared to illustrate the pro forma effects of the acquisition of ASA as if it had occurred on January 1, 2004 and the pro forma effects of the amended Delta Connection Agreement entered into between ASA and Delta as of August 21, 2000.

RISK FACTORS

See "Risk Factors" beginningSeptember 8, 2005, as if it had been entered into as of January 1, 2004. Such information has been prepared for informational purposes only and does not purport to be indicative of what would have resulted had the acquisition actually occurred on page 5January 1, 2004 or what may result in the future.

(2)
Reflects our operations for periods prior to our acquisition of ASA. Does not reflect the financial or operating performance of ASA.

(3)
Reflects financial and operating performance of ASA for the last 23 days of September, 2005, since the acquisition by SkyWest, Inc.

(4)
The pro forma consolidated operating loss of $261.4 million for the year ended December 31, 2004 includes an impairment of goodwill of $498.7 million. For the year ended December 31, 2004, operating income excluding the impairment of goodwill would have been $237.3 million.

(5)
Revenue passengers multiplied by miles carried.

(6)
Passenger seats available multiplied by miles flown.

(7)
Revenue passenger miles divided by available seat miles.

(8)
Total airline operating revenues divided by available seat miles.

(9)
Total operating and interest expenses divided by available seat miles. Total operating and interest expenses is not a discussion of certain factors
thatcalculation based on generally accepted accounting principles and should not be considered as an alternative to total operating expenses. Cost per available seat mile utilizing this measurement is included as it is a measurement recognized by prospective purchasers of our common stock.

3
7

SUMMARY CONSOLIDATED FINANCIAL AND OPERATING DATA

THREE MONTHS ENDED
FISCAL YEAR ENDED MARCH 31, JUNE 30,
-------------------------------------------------------------- -----------------------
1996 1997 1998 1999 2000 1999 2000
---------- ---------- ---------- ---------- ---------- ---------- ----------
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)

CONSOLIDATED STATEMENTS OF INCOME
DATA(1):
Operating revenues................. $ 212,483 $ 245,766 $ 266,135 $ 388,626 $ 474,778 $ 111,562 $ 130,387
Operating income................... 5,636 16,025 32,819 64,305 86,680 20,476 25,174
Net income......................... 4,366 10,111 21,944 41,835 57,104 13,581 16,547
Net income per common share:
Basic............................ $ 0.21 $ 0.50 $ 1.06 $ 1.73 $ 2.32 $ 0.55 $ 0.67
Diluted.......................... $ 0.21 $ 0.50 $ 1.04 $ 1.69 $ 2.29 $ 0.55 $ 0.65
Dividends declared per common
share............................ $ 0.13 $ 0.12 $ 0.10 $ 0.12 $ 0.13 $ 0.03 $ 0.04
OTHER FINANCIAL DATA:
EBITDA(2).......................... $ 24,827 $ 38,388 $ 57,360 $ 95,747 $ 125,126 $ 29,408 $ 35,767
EBITDAR(2)......................... 53,094 70,378 91,061 143,721 179,399 42,629 49,691
Cash flows from (used by):
Operating activities............. 26,864 31,971 48,407 78,006 86,499 18,401 40,546
Investing activities............. (50,090) (11,627) (15,224) (181,480) (105,328) (41,741) (43,068)
Financing activities............. 20,339 (7,087) 68,803 15,939 (8,864) (2,894) 12,729
AIRLINE OPERATING DATA(3):
Passengers carried................. 2,340,366 2,656,602 2,989,062 4,900,921 5,503,290 1,365,706 1,401,113
Revenue passenger miles (000s)..... 617,136 717,322 745,386 1,015,872 1,196,680 290,590 319,830
Available seat miles (000s)........ 1,254,334 1,413,170 1,463,975 1,844,123 2,165,380 525,104 565,409
Passenger load factor.............. 49.2% 50.8% 50.9% 55.1% 55.3% 55.3% 56.6%
Breakeven load factor.............. 48.4% 47.9% 45.0% 46.3% 45.5% 45.4% 45.9%
Yield per revenue passenger mile... 33.2c 33.3c 34.8c 37.5c 39.0c 37.8c 40.1c
Revenue per available seat mile.... 16.9c 17.3c 18.1c 21.0c 21.8c 21.1c 23.0c
Cost per available seat mile....... 16.6c 16.3c 16.0c 17.6c 18.0c 17.4c 18.6c
Average passenger trip length
(miles).......................... 264 270 249 207 217 213 228
Number of aircraft (end of period):
Canadair Regional Jet............ 10 10 10 11 11 11 12
Embraer Brasilia Turboprop....... 35 50 50 88 92 89 92
Fairchild Metroliner III......... 18 -- -- -- -- -- --
---------- ---------- ---------- ---------- ---------- ---------- ----------
Total aircraft................. 63 60 60 99 103 100 104
========== ========== ========== ========== ========== ========== ==========

AS OF JUNE 30, 2000
--------------------------
ACTUAL AS ADJUSTED(4)
-------- --------------

CONSOLIDATED BALANCE SHEET DATA:
Cash and marketable securities............................ $189,675 $296,472
Working capital........................................... 160,692 267,489
Property and equipment, net............................... 260,734 260,734
Total assets.............................................. 515,260 622,057
Long-term debt, including current maturities(5)........... 74,043 74,043
Stockholders' equity...................................... 328,324 435,121

- ---------------
(1) Reflects the reclassification of consolidated statements of income data to
reflect the operations of Scenic Airlines, Inc., a subsidiary we sold in
1999 which provided sight-seeing tours of the Grand Canyon area, as
discontinued operations.

(2) investing public.

(10)
EBITDA represents earnings before interest expense, income taxes, depreciation and amortization. EBITDAR represents earnings before interest expense, income taxes, depreciation, amortization and rental expense.aircraft rents. See "Selected Consolidated Financial and Operating Data" herein for a reconciliation of EBITDA and EBITDAR to net cash from operating activities for the periods indicated. EBITDA and EBITDAR are widely accepted financial indicators of a company's ability
to incur and service debt. Neither EBITDA nor EBITDAR should, however, be
considered in isolation, as a substitute for net income or cash flow
prepared in accordance withnot calculations based on generally accepted accounting principles orand should not be considered as alternatives to cash flow as a measure of a company's profitability or liquidity. For the fiscal year ended
March 31, 1996,In addition, our calculations may not be comparable to other similarly titled measures of other companies. EBITDA and EBITDAR dataare included as supplemental disclosures because they may provide useful information regarding our ability to service debt and lease payments and to fund capital expenditures. Our ability to service debt and lease payments and to fund capital expenditures in the future, however, may be affected by other operating or legal requirements or uncertainties. Currently, aircraft and engine ownership costs are our most significant cash expenditure. In addition, EBITDA and EBITDAR are well recognized performance measurements in the regional airline industry and, consequently, we have not been reduced to reflect
$6.2 million of fleet restructuring and transition expenses.

(3) Excludes the operations of Scenic Airlines, Inc., a subsidiary we sold in
1999, and National Parks Transportation, Inc., a subsidiary we sold on July
21, 2000, which operates a rental car business serving small regional
airports.

(4) provided this information.

(11)
Adjusted to reflect the sale of 2,500,000 shares we are offering hereby at an assumed offering price of $45.13$32.59 per share, and the application of the estimated net proceeds therefrom.

(5)

(12)
At JuneSeptember 30, 2000, 822005, 248 of the aircraft operated by SkyWest Airlines and ASA were financed through operating leases. In addition to our indebtedness, at September 30, 2005, we had $554.2
millionapproximately $3.2 billion of mandatory future minimum payments under operating leases, primarily for aircraft and ground facilities. At an 8%a 7% discount factor, the present value of these obligations would be equal to approximately $365.5 million at June
30, 2000.

4
8

$2.0 billion.

RISK FACTORS
Before you invest in theour common stock, offered with this prospectus, you should be aware that such investment involves a high degree of risk, including thosethe risks described below. You should consider carefully these risk factors, together with all of the other information included in this prospectus, before you decide to purchase any shares of our common stock. Additional risks and uncertainties not presently known to us or that we currently do not deem material may also impair our business operations. If any of the risks we describe below occur, or if any unforeseen risk develops, our operating results may suffer, our financial condition may deteriorate, the trading price of our common stock may decline and you may lose all or part of your investment.

This prospectus contains various "forward-looking statements" within

Risks Related to Our Operations
We may be negatively impacted by the meaningtroubled financial condition, bankruptcy proceedings and restructurings of Section 27ADelta and United.
Substantially all of our revenues are attributable to our code-share agreements with Delta and United, both of which are currently reorganizing under Chapter 11 of the Securities Act of 1933, as amended, and Section
21EU.S. Bankruptcy Code. The U.S. Bankruptcy Courts charged with administration of the Securities Exchange ActDelta and United bankruptcy cases have entered final orders approving or authorizing the assumption of 1934, as amended. Such statements can be
identifiedour code-share agreements. Notwithstanding those judicial actions, both bankruptcy cases present considerable continuing risks and uncertainties for our code-share agreements and, consequently, for our operations.
Although Delta and United have reported that they intend to reorganize and emerge from Chapter 11, there is no assurance that either of their reorganizations will succeed or that Delta and United ultimately will remain going concerns. Likewise, even though Delta has assumed our Delta Connection Agreements with U.S. Bankruptcy Court approval and the SkyWest Airlines' United Express Agreement was approved by the useU.S. Bankruptcy Court prior to its execution, there is no assurance that these agreements will survive the Chapter 11 cases. A Bankruptcy Court could still approve the termination of our code-share agreements under certain circumstances. For example, either or both of the forward-looking words "anticipate," "estimate,"
"project," "likely," "believe," "intend," "expect," "hope"Delta and United reorganizations could be converted to liquidations, or similar words.
These statements discuss future expectations, contain projections regarding
future developments, operations Delta and/or financial conditions,United could liquidate some or state other
forward-looking information. When considering such forward-looking statements,
you should keep in mind the risks noted in this "Risk Factors" section and other
cautionary statements throughout this prospectus, any prospectus supplement, and
our periodic filings with the SEC that are incorporated by reference. You should
also keep in mind that all forward-looking statements are based on our existing
beliefs about present and future events outside of our control and on
assumptions that may prove to be incorrect. Iftheir assets through one or more risks identified in
this prospectus, a prospectus supplement,transactions with one or any applicable filings
materializes, more third parties with Bankruptcy Court approval. In addition, Delta and/or any other underlying assumptions prove incorrect, our actual
resultsUnited may vary materially from those anticipated, estimated, projected or
intended.

RISKS RELATED TO OUR OPERATIONS

WE ARE DEPENDENT ON OUR CODE-SHARING RELATIONSHIPS WITH UNITED AND DELTA.

Terminationnot be able to develop, prosecute, confirm and consummate successful plans of Relationship. We depend on relationships created by
code-sharing agreements with United and Deltareorganization that provide for a substantial portioncontinued performance of our
business. Our code-sharing agreement with United terminates on May 31, 2008.
Nevertheless,their obligations under the United code-sharing agreement is subject to termination by
United upon 180 days' prior notice for any or no reason. The termcode-share agreements.
Other aspects of the Delta code-sharing agreement continues until June 20, 2010, but is subjectand United Chapter 11 cases pose additional risks to termination inour code-share agreements. Delta and/or United may not be able to obtain Bankruptcy Court approval of various circumstancesmotions necessary for them to administer their respective bankruptcy cases. As a consequence, they may not be able to maintain normal commercial terms with vendors and service providers, including 180 days' notice by either party
for any or no reason. Any material modificationother code-share partners, that are critical to ortheir operations. They also may be unable to reach satisfactory resolutions of disputes arising out of collective bargaining agreements. In addition, they may not be able to obtain sufficient financing to fund their businesses while they reorganize. These and other factors not identified here of which we are not aware could delay the resolution of the Delta and United Chapter 11 cases significantly and could threaten the ability of Delta and United to emerge from bankruptcy.
In light of the importance of the code-share agreements with Delta and United to our business, the termination of these agreements or the failure of either Delta or United to emerge from bankruptcy could jeopardize our code-
sharing agreements with United or Deltaoperations. Such events could leave us unable to operate much of our current aircraft fleet and the additional aircraft we are obligated to purchase. As a result, they could have a material adverse effect on our operations and financial condition.
Even if Delta and United successfully emerge from bankruptcy, their respective financial positions will continue to pose risks for our operations. Serial bankruptcies are not unprecedented in

the commercial airline industry, and Delta and/or United could file for bankruptcy again after emergence from their present Chapter 11 cases, in which case our code-share agreements could be subject to termination under the Bankruptcy Code. Regardless of whether subsequent bankruptcy filings prove to be necessary, Delta and United have required, and will likely continue to require, our participation in efforts to reduce costs and improve their respective financial positions. These efforts could result in lower utilization rates of our aircraft, lower departure rates on the contract flying portion of our business, and more volatile operating margins. We believe that any of these developments could have a negative effect on many aspects of our operations and financial performance.
We are highly dependent on Delta and United.
The current terms of the SkyWest Airlines and ASA Delta Connection Agreements are subject to certain early termination provisions. Delta's termination rights include cross-termination rights (meaning that a breach by SkyWest Airlines or ASA of its Delta Connection Agreement could, under certain circumstances, permit Delta to terminate both Delta Connection Agreements), the right to terminate each of the Delta Connection Agreements upon the occurrence of certain force majeure events (including certain labor-related events) that prevent SkyWest Airlines or ASA from performance for certain periods and the right to terminate each of the Delta Connection Agreements if SkyWest Airlines or ASA, as applicable, fails to maintain competitive base rate costs, subject to certain rights of SkyWest Airlines or ASA, as applicable, to take corrective action by adjusting its base rate costs. Furthermore, upon certain terminations of our Delta Connection Agreements, Delta could require us to transfer to them certain gates that we control, including the gates at Atlanta's Hartsfield-Jackson International Airport. The current term of our United Express Agreement is subject to certain early termination provisions and subsequent renewals. United may terminate the United Express Agreement due to an uncured breach by SkyWest Airlines of certain operational and performance provisions, including measures and standards related to flight completions, baggage handling and on-time arrivals. Additionally, upon certain terminations of the United Express Agreement, United could require us to transfer aircraft in service under the United Express Agreement to United.
If any of our code-share agreements are terminated pursuant to the terms of those agreements, due to the ultimate resolution of the bankruptcy proceedings of Delta and United, or otherwise, we would be significantly impacted and likely would not have an immediate source of revenue or earnings to offset such loss. A termination of any of these agreements would have a material adverse effect on our financial condition, operating revenues and net income unless we are able to enter into satisfactory substitute arrangements for the utilization of these aircraft by other code-share partners, or, alternatively, obtain the airport facilities and gates and make the other arrangements necessary to fly as an independent airline. We may not be able to enter into substitute code-share arrangements, and any such arrangements we might secure may not be as favorable to us as our current agreements. Operating our airline independent from major partners would be a significant departure from our business plan, would likely be very difficult and may require significant time and resources, which may not be available to us at that point.
We currently use Delta's and United's systems, facilities and services to support a significant portion of our operations, including airport and terminal facilities and operations, information technology support, ticketing and reservations, scheduling, dispatching, fuel purchasing and ground handling services. If Delta or United were to cease any of these operations or no longer provide these services to us, due to termination of one of our code-share agreements, a strike by Delta or United personnel or for any other reason, we may not be able to replace these services on terms and conditions as favorable as those we currently receive, or at all. Since our revenues and operating profits are dependent on our level of flight operations, we could then be forced to significantly reduce our operations. As a result, in order to offer airline service after termination of any of our code-share

agreements, we may have to replace these airport facilities, assets and services. We may be unable to arrange such replacements on satisfactory terms, or at all.
We may not achieve the potential benefits of the ASA acquisition.
Our achievement of the potential benefits of the ASA acquisition will depend, in substantial part, on our ability to successfully implement our business strategy, including improving the utilization of equipment and facilities, increasing employee productivity and allocating overhead and administrative expenses over a larger platform. The implementation of our ASA acquisition strategy may be costly, complex and time-consuming, and the managements of SkyWest Airlines and ASA will have to devote substantial effort to such integration. If we are not able to successfully achieve these objectives, the potential benefits of the ASA acquisition may not be realized fully or at all, or it may take longer to realize than expected. In addition, assumptions underlying estimates of expected cost savings and expected revenues may be inaccurate, or general industry and business conditions may deteriorate. Our combined operations with ASA may experience increased competition that limits our ability to expand our business. We cannot assure you that the ASA acquisition will result in combined results of operations and financial condition consistent with our expectations or superior to what we and ASA could have achieved independently. Nor do we represent to you that any estimates or projections we have developed or presented in connection with the ASA acquisition can or will be achieved.
The amounts we receive under our code-share agreements may be less than the actual amounts of the corresponding costs we incur.
Under our code-share agreements with Delta and United, we are primarily compensated for certain costs we incur in providing services. With respect to costs that are defined as "pass-through" costs, our code-share partner is obligated to pay to us the actual amount of the cost (and, with respect to the ASA Delta Connection Agreement, a pre-determined rate of return based upon the actual cost we incur). With respect to other costs, our code-share partner is obligated to pay to us amounts based, in part, on pre-determined rates for certain costs. During the nine months ended September 30, 2005, approximately 57% of our costs were pass-through costs and 43% of our costs were reimbursable at pre-determined rates. These pre-determined rates may not be based on the actual expenses we incur in delivering the associated services. If we incur expenses that are greater than the pre-determined reimbursement amounts payable by our code-share partners, our financial results will be negatively affected.
We have a significant amount of contractual obligations.
As of September 30, 2005, we had a total of approximately $1.8 billion in total long-term debt obligations. Substantially all of this long-term debt was incurred in connection with the acquisition of aircraft, engines and related spare parts. We also have significant long-term lease obligations primarily relating to our aircraft fleet. These leases are classified as operating leases and therefore are not reflected as liabilities in our condensed consolidated balance sheets. At September 30, 2005, we had 222 aircraft under lease, including 26 aircraft leased from Delta at nominal rates, with remaining terms ranging from one to 17.5 years. Future minimum lease payments due under all long-term operating leases were approximately $3.2 billion at September 30, 2005. At a 7% discount factor, the present value of these lease obligations was equal to approximately $2.0 billion at September 30, 2005. As of September 30, 2005, our total aircraft commitments consisted of 37 CRJ700s and six CRJ200s over the next two years, with gross committed expenditures for these aircraft and related equipment (including amounts for contractual price escalations) estimated to be approximately $1.1 billion. We continued taking delivery of these aircraft in October 2005 and expect to complete these deliveries in April 2007. Our high level of fixed obligations could impact our ability to obtain additional financing to support

additional expansion plans or divert cash flows from operations and expansion plans to service the fixed obligations.
There are risks associated with our regional jet strategy, including potential oversupply and possible passenger dissatisfaction.
Our selection of Bombardier Regional Jets as the primary aircraft for our existing operations and projected growth involves risks, including the possibility that there may be an oversupply of regional jets available for sale in the foreseeable future, due, in part, to the financial difficulties of regional and major airlines, including Delta, United, Northwest, Comair, Mesaba, and FLYi. A large supply of regional jets may allow other carriers, or even new carriers, to acquire aircraft for unusually low acquisition costs, allowing them to compete more effectively in the industry, which may ultimately harm our operations and financial performance.
Our regional jet strategy also presents the risk that passengers may find the Bombardier Regional Jets to be less attractive than other aircraft, including other regional jets. Recently, other models of regional jets have been introduced by manufacturers other than Bombardier. If passengers develop a preference for other regional jet models, our results of operation and financial results could be negatively impacted.
We may be limited from expanding our flying within the Delta and United flight systems, and there are constraints on our ability to provide airline services to airlines other than Delta and United.
Additional growth opportunities within the Delta and United flight systems are limited by various factors. Except as currently contemplated by our existing code-share agreements, we cannot assure that Delta or United will contract with us to fly any additional aircraft. We may not receive additional growth opportunities, or may agree to modifications to our code-share agreements that reduce certain benefits to us in order to obtain additional aircraft, or for other reasons. Furthermore, the troubled financial condition, bankruptcies and restructurings of Delta and United may reduce the growth of regional flying within their flight systems. Given the troubled nature of the airline industry, we believe that some of our competitors may be more inclined to accept reduced margins and less favorable contract terms in order to secure new or additional code-share operations. Even if we are offered growth opportunities by our major partners, those opportunities may involve economic terms or financing commitments that are unacceptable to us. Any one or more of these factors may reduce or eliminate our ability to expand our flight operations with our existing code-share partners. Additionally, even if Delta and/or United choose to expand our fleet on terms acceptable to us, they may be allowed at any time to subsequently reduce the number of aircraft covered by our code-share agreements. We also cannot assure you that we will be able to obtain the additional ground and maintenance facilities, including gates, and support equipment, to expand our operations. The failure to obtain these facilities and equipment would likely impede our efforts to implement our business strategy and could materially adversely affect our operating results and our financial condition.
Delta and/or United may be restricted in increasing their business with us, due to "scope" clauses in the current collective bargaining agreements with their pilots that restrict the number and size of regional jets that may be operated in their flight systems not flown by their pilots. Delta's scope limitations restrict its partners from operating aircraft with over 70 seats even if those aircraft are operated for an airline other than Delta. We cannot assure that these scope clauses will not become more restrictive in the future. Any additional limit on the number of regional jets we can fly for our code-share partners could have a material adverse effect on our expansion plans and the price of our common stock. Delta Air Lines has adopted a
policy of orderly monetization of minority ownership positions it holds in
various companies. Consistent with this policy, Delta has already sold all or
portions of its stakes in at least three other travel-related businesses. Delta
has advised us that it may in the future consider the sale of all or a portion
of its 3,107,798 shares of common stock in our company. Delta's stockholdings in
our company may serve as a disincentive for Delta to terminate its code-sharing
relationship with SkyWest or take other actions adverse to SkyWest. If Delta
significantly reduces or completely liquidates its stock ownership in our
company, Delta may be more likely to take actions, including terminating the
code-sharing agreement, which would have an adverse effect on our share price.

Direct Operation of Regional Jets by Majors.
Our code-sharing relationships
dependbusiness models depends on major airlines, likeincluding Delta and United, and Delta electing to contract with us instead of purchasing and operating their own regional jets. However, theseSome major airlines, possess the resources to acquireincluding Delta,

American, US Airways and JetBlue, own their own regional airlines or operate their own regional jets instead of entering into contracts with us. For example, American Airlines
has acquired many regional jets.carriers. We have no guarantee that in the future our code-sharingcode-share partners will choose to enter into contracts with us instead of purchasingoperating their own regional jets or entering into relationships with competing
regional airlines. Theyjets. Our partners are not prohibited from doing so under our code-sharingcode-share agreements. A decision by UnitedDelta or DeltaUnited to phase out contract-based
code-sharingcode-share relationships and instead acquire and operate their own regional jets wouldcould have a material adverse effect on our business.

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Passenger Volume and Strengthfinancial condition, results of Code-Sharing Partners. We are directly
affected by the financial and operational strength of our code-sharing partners.
If United and/or Delta were to experience a sustained downturn in passenger
volume or significantly reduce its ticket prices, our revenues would be
negatively affected. In addition, in the event of a decrease in the financial or
operational strength of one or both of our code-sharing partners, the respective
code-sharing partner may terminate its relationship with us with respect to some
or all of the flights we fly under its code. Any such event would have an
adverse effect on our operations andor the price of our common stock.

OUR BUSINESS SUCCESS DEPENDS ON OUR PERFORMANCE IN A FEW HUB CITIES AND
ROUTES.

Our financial success
Additionally, our code-share agreements limit our ability to provide airline services to other airlines in certain major airport hubs of each of Delta and United. Under the SkyWest Airlines Delta Connection Agreement, our growth is directly tied tocontractually restricted in Atlanta, Cincinnati, Orlando and Salt Lake City. Under the amount of air traffic flowing
throughASA Delta Connection Agreement, our growth is restricted in Atlanta, Cincinnati, New York (John F. Kennedy International Airport), Orlando and Salt Lake City. Under SkyWest Airlines' United Express Agreement, growth is restricted in Chicago (O'Hare International Airport), Denver, Los Angeles, (34%San Francisco, Seattle/Tacoma and Washington D.C. (Dulles International Airport).
Increased labor costs, strikes, labor disputes and increased unionization of our flights), Salt Lake City (25% of our flights)
and San Francisco (21% of our flights). Any decrease in demand for regional
flights in any of these cities, any natural disaster significantly affecting air
travel to or from one of these cities or any political decision (such as the
imposition of regulations or taxes adverse to regional airlines) in any of these
cities may have a material adverse effect on our business operations and the
price of our common stock. There can be no assurance that we will maintain our
current market share in these cities, that the demand for air travel in these
cities will not diminish or that governing laws and regulations in these cities
will be favorable to us.

WE FLY AND DEPEND UPON A LIMITED NUMBER OF AIRCRAFT TYPES.

Our fleet consists of 92 Brasilia Turboprops and 12 Canadair Regional Jets.
During the fiscal year ended March 31, 2000, 71% of our available seat miles
(calculated by multiplying passenger seats available by miles flown) were
generated by Brasilia Turboprops and 29% were generated by Canadair Regional
Jets. Our operations could be materially adversely affected by, among other
factors:

- the failure or inability of Embraer-Empresa Brasileira de Aeronautica
S.A. (the manufacturer of the Brasilia Turboprops) or Bombardier, Inc.
(the manufacturer of the Canadair Regional Jets) to provide sufficient
aircraft, parts or related support services on a timely basis,

- the interruption of fleet service as a result of unscheduled or
unanticipated maintenance requirements for these aircraft,

- the issuance of FAA directives restricting or prohibiting the use of
Brasilia Turboprops or Canadair Regional Jets, or

- the adverse public perception of an aircraft type as a result of an
accident or other adverse publicity.

The risks associated with operating a limited number of aircraft types will
increase since we have decided to exclusively acquire Canadair Regional Jets in
our next 94 planned aircraft acquisitions.

NEGATIVE PERCEPTION OF SMALLER AIRCRAFT MAY ADVERSELY AFFECT OUR OPERATIONS
AND BUSINESS.

Many air travelers may perceive smaller, regional aircraft, like our
Brasilia Turboprops and Canadair Regional Jets, as unsafe, unstable or
uncomfortable in comparison to the larger aircraft primarily used by major
airline companies. The public's refusal to fly in the types of aircraft that we
operate could cause us to lose our code-sharing agreements and could adversely
affect our operations and the price of our common stock.

THE LIMITED SIZE OF OUR FLEET MAY BE A DISADVANTAGE.

We have substantially fewer aircraft and operate on substantially fewer
routes than many of our current or potential competitors. Our ability to compete
effectively with larger carriers may be materially and adversely affected by our
size. If aircraft were removed from scheduled service for repairs or other
reasons (other than for routine maintenance), any resulting interruption in
service could materially and adversely affect our operations and the price of
our common stock.

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WE ARE AT RISK OF LOSSES STEMMING FROM AN ACCIDENT INVOLVING ONE OF OUR
AIRCRAFT.

For various reasons, one or more of our aircraft may crash, causing death
or injury to individual air travelers and destroying the aircraft. Because of
the limited number of aircraft that we operate and because of our relatively
smaller size, any accident involving one of our aircraft would have a
significant adverse effect on our business operations. Many factors can
contribute to the occurrence of an accident, including:

- pilot error,

- air traffic or ground control error,

- terrorism or other acts of sabotage,

- manufacturing or similar product defects,

- mechanical or maintenance error, and

- adverse weather conditions.

If one of our aircraft were to crash or be involved in an accident, we
would be exposed to significant tort liability. Passengers, or their estates,
may seek to recover damages for death or injury. Accidents could also result in
unforeseen mechanical and maintenance costs. In addition, any accident involving
an aircraft that we operate could create a public perception that our aircraft
are not safe, which could result in air travelers being reluctant to fly on our
aircraft.

DELTA HAS RIGHTS UNDER AN OPTION AGREEMENT THAT SIGNIFICANTLY IMPACT OUR
COMPANY.

Under the terms of a Stock Option Agreement we have executed with Delta,
Delta acquired shares of our common stock, which currently represent 12.5% of
the outstanding common stock (without giving effect to the issuance of
additional shares to be sold in this offering). In addition, Delta has the right
to be offered a percentage of our common stock each time we sell voting
securities in order to maintain its percentage ownership of our common stock and
the right to have us register shares of common stock on Delta's behalf. Delta
also has the right to have management nominate a Delta designee to serve on our
board of directors. Delta's rights under the Delta Stock Option Agreement may
permit Delta to influence our management and policies, and Delta's ownership of
shares of common stock may give it the ability to affect the outcome of matters
submitted to a vote of our stockholders.

UNITED HAS A RIGHT OF FIRST REFUSAL WITH RESPECT TO ANY SALE OF OUR
BUSINESS.

Under our code-sharing agreement with United, if we desire to merge with
another company, sell or otherwise transfer our assets to a third party, or
issue capital stock exceeding 5% of our outstanding capital stock (30% if the
stock is issued in a public offering) to such third party, we are required to
give United notice of the proposed transaction, offer to complete such
transaction with United instead of such third party, negotiate with United in
good faith terms and conditions on which we could complete such transaction with
United and offer United any terms and conditions we offer to such third party.
If we are unable to agree with United, we may enter into negotiations with other
parties, but we may not enter into any agreement on terms more favorable to any
such third party than those we offered to United. The existence of this right of
first refusalworkforces may adversely affect our ability to negotiate or consummate the
saleconduct our business.
Our business is labor intensive, requiring large numbers of all or partpilots, flight attendants, mechanics and other personnel. Labor costs constitute a significant percentage of our business to a company other than United and may
adversely affecttotal operating costs. For example, during the terms of a sale to any company, including United.

THE BRAZILIAN GOVERNMENT MAY FAIL TO HONOR ITS AGREEMENT TO PAY US
SUBSIDIES.

In connection with the acquisition of substantially allnine months ended September 30, 2005, our labor costs constituted approximately 24.7% of our Brasilia
Turboprops, we were granted a contractual right to receive subsidy payments
through the export support program sponsored by the Federative Republic of
Brazil. The amount of these subsidies, which are offered by the Brazilian
government as an economic incentive to purchasers of the Brazilian-based Embraer
aircraft and are

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currently payable through January 2006, fluctuates based upon the number and age
of the Brasilia aircraft eligible for subsidy payments. During the fiscal year
ended March 31, 2000, the subsidy represented approximately $6 milliontotal operating costs. Increases in annual
credits against our interest expense and aircraft rental expense related to
Brasilia Turboprops. The subsidies would be jeopardized if the Brazilian
government failed to meet its obligations under the export support program. From
time to time, the Brazilian government has experienced economic conditions that
have impaired its creditworthiness. There can be no assurance that a default
will not occur under the Brazilian export support program. Any termination or
significant interruption of the Brazilian subsidy paymentsunionized labor costs could haveresult in a material adversereduction in our earnings and affect on our financial condition and operations.

OUR FLEET EXPANSION PROGRAM WILL REQUIRE A SIGNIFICANT INCREASE IN OUR
LEVERAGE.

The airline business is very capital intensive and, as a result, many
airline companies are highly leveraged. During the fiscal year ended March 31,
2000, our mandatory debt service payments totaled $9.6 million and our mandatory
lease payments totaled $59.1 million. Our current growth strategy involves the
acquisition of 94 more Canadair Regional Jets between September 2000 and
December 2004. We estimate that the price of each new Canadair Regional Jet will
be approximately $22 million. We expect to lease or otherwise acquire on credit
all, or substantially all, such 94 Canadair Regional Jets, which leases or debt
credit will significantly increase our mandatory debt and lease payments.

There can be no assurance that our operations will generate sufficient cash
flow to make such payments. If we defaultrevenue under our loan or leasecode-share agreements. Any new collective bargaining agreements entered into by other regional carriers may also result in higher industry wages and increased pressure on us to increase the lender/lessor has available extensive remedies, including, without
limitation, repossession of the respective aircraft or exertion of control over
how we allocate our revenues. Even if we are able to timely service our debt,
the sizewages and benefits of our long-term debtemployees. Future agreements with unionized and lease obligations could negatively affect our
operations and the price of our common stock in many ways, including:

- increasing the cost, or limiting the availability of, additional
financing for working capital, capital acquisitions or other purposes,
and

- limiting the ways in which we can use our cash flow, much of whichnon-unionized employees may have to be used to satisfy debt and lease obligations.

OUR OPERATING REVENUES AND/OR PROFITS COULD DECREASE OR CEASE TO EXIST.

There is no guaranteeon terms that we will generate profits in the future. Many
factors will impact our ability to generate a profit, including:

- the strength of the U.S. economy,

- fluctuations in ticket prices and demand for air travel,

- the price and supply of labor,

- government regulation,

- our ability to satisfy customers and business partners suchare not as United and
Delta,

- supply and cost of aircraft fuel, and

- competition in the airline industry.

We could experience operating losses in the future based on unexpected
conditions that arise in these and other areas. There is no assurance that our
growth plans and overall business strategy will be successful. Failure to
produce profits, or a reduction in the level of profits, would have a material
adverse effect on our operations and the price of our common stock.

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WE ARE DEPENDENT UPON KEY PERSONNEL.

Our success depends in part on our ability to retain our key executive
officers and directors. Jerry C. Atkin isattractive as our current chief executive officer.
His decision-making skills and leadership have been vitalagreements or comparable to agreements entered into by our operations to
date. The departure of Mr. Atkin could have a significant material adverse
effect on our operations and the price of our common stock.

UNIONIZATION OF OUR EMPLOYEES MAY ADVERSELY AFFECT OUR PROFITABILITY.

Ourcompetitors.
SkyWest Airlines' employees are not currently represented by any union. We are aware,union; however, that collective bargaining group organization efforts among ourthose employees occur from time to time and expecttime. We recognize that such efforts will likely continue in the future. During August 1999,future and may ultimately result in some of SkyWest Airlines' employees being represented by one or more unions. Moreover, one or more unions representing ASA employees may seek a single carrier determination by the questionNational Mediation Board, which could require SkyWest Airlines to recognize such union or unions as the certified bargaining representative of whetherSkyWest Airlines' employees. One or notmore unions representing ASA employees may also assert that SkyWest Airlines' employees should be subject to joinASA collective bargaining agreements. If SkyWest Airlines' employees were to unionize or be deemed to be represented by one or more unions, negotiations with unions representing SkyWest Airlines' employees could divert management attention and disrupt operations, which may result in increased operating expenses and lower net income. Moreover, we cannot predict the Air
Line Pilots Association was submittedoutcome of any future negotiations relating to our pilots, who voted against joining
the union by a narrow margin. Under governing rules, our pilotsrepresentation or collective bargaining agreements. Agreements reached in collective bargaining may again vote
on this issue as early as August 2000.increase operating expenses and lower operating results and net income. If unionizing efforts among SkyWest Airlines' employees are successful, we may be subjected to risks of work interruption or stoppage and/or incur additional administrative expenses associated with union representation of our
employees. We recognize that such efforts will likely continue in the future and
may ultimately result in some or all of our employees being represented by a
union. In connection with our proposed expansion, we anticipate hiring between
2,300 and 3,000 new employees, many of whom may be represented by a union in
their current employment and who may, therefore, influence efforts to organize
into a collective bargaining group.

RISKS ASSOCIATED WITH OUR EXPANSION PLANS

SUBSTANTIAL RISKS ACCOMPANY OUR CURRENT GROWTH PLANS.

We have contracted to add a substantial number of aircraft over the next
few years. Substantial risks accompany our growth plans. Some factors that may
impact our growth plans include:

- demand for regional air transportation,

- the likelihood of continued business relations with our current
code-sharing partners,

- the condition of the United States economy generally, particularly the
economy in California and other western states,

- our ability to hire and retain enough flight crews and mechanics for our
aircraft,

- our ability to acquire enough new Canadair Regional Jets and other
aircraft, and

- our ability to obtain the financing necessary to pay for expansion at
acceptable rates.

Many of these factors are beyond our control. If we are incorrect in our
assessment of the profitability and feasibility of our growth plans, or if
circumstances change in a way that was unforeseen to us, we may not be able to
grow as planned or growth may have an adverse effect on operations and the price
of our common stock.

WE MAY NOT BE ABLE TO IMPLEMENT OUR EXPANSION PLANS.

We have agreed with both United and Delta to increase the number of flight
segments we operate on their behalf. Our expansion plans over the next five
years include the acquisition of at least 94 Canadair Regional Jets and related
additional ground and maintenance facilities and support equipment, the
employment of more than 2,500 additional employees and the integration of those
aircraft, facilities and employees into our existing operations.

There is no assurance that we will be able to obtain the facilities,
aircraft, gates and personnel required for our proposed expansion on a timely
basis. The failure to obtain such aircraft, facilities, gates or personnel could
adversely affect our financial condition and results of operations. Due to the
limited supply of Canadair Regional Jets and airport facilities, among other
factors, there can be no assurance that

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our current estimates of the cost of our proposed expansion will be accurate.
Any material deviation from our current estimates could adversely affect our
financial condition and results of operations.

WE MAY EXPERIENCE DIFFICULTY FINDING AND RETAINING EMPLOYEES.

Our business is labor-intensive; we require large numbers ofrepresentation.
ASA's pilots, flight attendants mechanics and other personnel. Asflight controllers are represented by the following unions: The Air Line Pilots Association, International, the Association of June 30, 2000, we employed
3,593 full-time equivalent employees, including 1,487Flight Attendants—CNA and the Professional Airline Flight Control Association. ASA's pilots and flight attendants 1,425 customer service personnel, 443 mechanicsare currently working under open labor contracts, and other
maintenance personnel and 238 administration and support personnel. We
anticipate that our expansion plans will require usASA has been in negotiations with respect to find, hire and train
approximately 2,500 new employees, including 1,035such contracts since 2002, in the case of ASA's pilots, and 2003, in the case of ASA's flight attendants,
990 customer service personnel, 310 mechanicsattendants. Negotiations with unions representing ASA's employees could divert management attention and other maintenance personneldisrupt operations, which

may result in increased operating expenses and 165 administration and support personnel.

There is no assurance thatlower net income. Moreover, we will be ablecannot predict the outcome of any future negotiations relating to locate, hire and retain the
qualified employees that we need in order to carry out our expansion plans.
Current labor market conditions generally favor employees. Companies are finding
it difficult to hire and retain qualified employees, and wages and salaries are
generally increasing.union representation or collective bargaining agreements.
If we are unable to hirereach labor agreements with any current or future unionized work groups, we may be subject to work interruptions or stoppages, which may adversely affect our ability to conduct our operations and retain qualified employees at
a reasonable cost, wemay even allow Delta or United to terminate their respective code-share agreements.
We may be unable to complete our expansion plans, which would
adversely affect our operations and the price of our common stock.

UNITED'S CONTRACT WITH ITS PILOTS MAY INHIBIT EXPANSION OF OUR RELATIONSHIP
WITH UNITED.

Our expansion plans depend primarily on our ability to increase the number
of flights we operate for United and Delta. Employees at major airlines
generally oppose efforts by their companies to outsource flights to regional
airlines because of their perception that such outsourcing leads to layoffs at
the major airline, and lower wages and salaries. A "scope" clause in United's
current collective bargaining agreement with its pilots prevents United from
using (directly or indirectly) more than 65 regional jets in its operations.
Currently, United uses approximately 30 regional jets. We hope to use the
majorityobtain all of the aircraft, engines, parts or related maintenance and support services we intend to acquire over the next five years in United
Express service. This can be achieved only if United's current limit of 65
regional jets is changed as part of the new United labor contract currently
under negotiation. There can be no assurance that United will succeed in
expanding the scope clause. Furthermore, United's recently announced plans to
merge with U.S. Airways may prevent them from addressing the scope clause issue
in a timely manner. United's failure to timely modify its regional jet scope
clause in order to permit the full implementation of our and United's expansion
plansrequire, which could have a material adverse effectimpact on our operationsbusiness.
We rely on a limited number of aircraft types, and are dependent on Bombardier as the pricesole manufacturer of our common stock.

THERE IS A RISK OF NONDELIVERY OF AIRCRAFT WE INTEND TO ACQUIRE.

We anticipate adding at least 94 Canadairregional jets. For the month ended September 30, 2005, 64.8% of our available seat miles were flown using CRJ200s, 26.6% of our available seat miles were flown using CRJ700s, 8.0% of our available seat miles were flown using Brasilia turboprops and 0.6% of our available seat miles were flown using ATR-72 turboprops. Additionally, as of September 30, 2005, we had firm agreements to acquire 37 CRJ700s, ASA was committed to sublease six additional CRJ200s from Delta, and SkyWest Airlines and ASA had obtained options to acquire another 80 Bombardier Regional Jets that can be delivered in configurations ranging between 66 and 90 seats. Delivery dates for these option aircraft remain subject to final determination as agreed upon by us and our fleet over
the next five years. This almost doubles our current fleet. A number of factors
may limit or preclude our planned expansion, including:

- breach by Bombardier, Inc. of our firm order contracts for the delivery
of 54 Canadair Regional Jets or our conditional order for 40 additional
Canadair Regional Jets,

- a fire, strike or other event which affects the ability of Bombardier,
Inc. to completely or timely fulfill its contractual obligations, and

- our ability to obtain necessary financing or to fulfill our contractual
obligations related to the acquisition of the Canadair Regional Jets.code-share partners.
Any significant disruption or changedelay in the expected delivery schedule of such Canadair Regional
Jetsour fleet would adversely affect our business strategy and overall operations and could have a material adverse impact on our operating results or our financial condition. Certain of Bombardier's aerospace workers are represented by unions and have participated in at least one strike in recent history. Any future prolonged strike at Bombardier or delay in Bombardier's production schedule as a result of labor matters could disrupt the delivery of regional jets to us, which could adversely affect our planned fleet growth. We are also dependent on General Electric as the manufacturer of our aircraft engines. General Electric also provides parts, repair and overhaul services, and other types of support services on our engines. Our operations could be materially and adversely affected by the failure or inability of Bombardier or General Electric to provide sufficient parts or related maintenance and support services to us on a timely or economical basis, or the interruption of our flight operations as a result of unscheduled or unanticipated maintenance requirements for our aircraft or engines. In addition, the issuance of Federal Aviation Administration directives restricting or prohibiting the use of Bombardier aircraft types we operate would have a material adverse effect on our business and operations.
Maintenance costs will likely increase as the age of our regional jet fleet increases.
Because the average age of our CRJ700s and CRJ200s is approximately 1.3 and 3.9 years, respectively, our regional jet fleet requires less maintenance now than it will in the future. We have incurred relatively low maintenance expenses on our regional jet fleet because most of the parts on our regional jet aircraft are under multi-year warranties and a limited number of heavy airframe checks and engine overhauls have occurred. Our maintenance costs will increase significantly, both on an absolute basis and as a percentage of our operating expenses, as our fleet ages and these warranties expire. Under our United Express Agreement, specific amounts are included in the rates for future maintenance on CRJ200 engines used in our United Express operations. The actual cost of maintenance on CRJ200 engines may vary from the estimated rates.

If we incur problems with any of our third-party service providers, our operations could be adversely affected.
Our reliance upon others to provide essential services on behalf of our operations may limit our ability to control the efficiency and timeliness of contract services. We have entered into agreements with contractors to provide various facilities and services required for our operations, including fuel supply and delivery, aircraft maintenance, services and ground facilities, and expect to enter into additional similar agreements in the future. These agreements are subject to termination after notice. Any material problems with the efficiency and timeliness of our automated or contract services could have a material adverse effect on our business, financial condition and results of operations.
Interruptions or disruptions in service at one of our hub airports, due to adverse weather or for any other reason, could have a material adverse impact on our operations.
We expect that we will operate primarily through hubs in Atlanta, Chicago (O'Hare), Denver, Los Angeles, San Francisco, Salt Lake City, Cincinnati, Portland and Seattle/Tacoma. Nearly all of our flights will either originate or fly into one of these hubs. Our revenues depend primarily on our completion of flights and secondarily on service factors such as timeliness of departure and arrival. Any interruptions or disruptions could, therefore, severely and adversely affect us. Extreme weather can cause flight disruptions, and during periods of storms or adverse weather, fog, low temperatures, etc., our flights may be canceled or significantly delayed. Hurricanes Katrina and Rita, in particular, caused severe disruption to air travel in the affected areas and adversely affected airlines operating in the region, including ASA. We operate a significant number of flights to and from airports with particular weather difficulties, including Atlanta, Chicago (O'Hare), Denver and Salt Lake City. A significant interruption or disruption in service at one of our hubs, due to adverse weather or otherwise, could result in the cancellation or delay of a significant portion of our flights and, as a result, could have a severe impact on our business, operations and financial performance.
Fluctuations in interest rates could adversely affect our liquidity, operating expenses and results.
A substantial portion of our indebtedness bears interest at fluctuating interest rates. These are primarily based on the London interbank offered rate for deposits of U.S. dollars, or LIBOR. LIBOR tends to fluctuate based on general economic conditions, general interest rates, federal reserve rates and the pricesupply of and demand for credit in the London interbank market. We have not hedged our interest rate exposure and, accordingly, our interest expense for any particular period may fluctuate based on LIBOR and other variable interest rates. To the extent these interest rates increase, and if the increased costs are not passed-through to our code-share partners, our interest expense will increase, in which event, we may have difficulty making interest payments and funding our other fixed costs and our available cash flow for general corporate requirements may be adversely affected.
Our business could be harmed if we lose the services of our common stock.

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RISKS ASSOCIATED WITH THE AIRLINE INDUSTRY

OUR INDUSTRY IS HIGHLY COMPETITIVE.key personnel.
Our business depends upon the efforts of our chief executive officer, Jerry C. Atkin, and our other key management and operating personnel. We may have difficulty replacing management or other key personnel who leave and, therefore, the loss of the services of any of these individuals could harm our business. We do not maintain key-man insurance on any of our executives.
The Securities and Exchange Commission staff is investigating our accounting treatment of certain maintenance costs.
Effective January 1, 2002, we changed our method of accounting for certain engine overhaul expenses. In connection with this change, we restated our financial statements for the year ended

December 31, 2001 and the first and second quarters of the year ended December 31, 2002. The staff of the SEC has been investigating the facts pertaining to this change in accounting method and the related restatements. We have cooperated with this investigation, and have offered to enter into a cease and desist order pursuant to which we would agree not to violate federal securities laws in the future. The SEC is currently reviewing our offer. If our offer is not accepted, we may be required to devote additional time and resources in responding to the investigation, and we could experience other adverse consequences.

Risks Related to the Airline Industry
We may be materially affected by the uncertainty of the airline industry.
The airline industry has experienced tremendous challenges in recent years and will likely remain volatile for the foreseeable future. Among other factors, the financial challenges faced by major carriers, including Delta, United and Northwest, the slowing U.S. economy and increased hostilities in Iraq, the Middle East and other regions have significantly affected, and are likely to continue to affect, the U.S. airline industry. These events have resulted in declines and shifts in passenger demand, increased insurance costs, increased government regulations and tightened credit markets, all of which have affected, and will continue to affect, the operations and financial condition of participants in the industry, including us, major carriers (including our major partners), competitors and aircraft manufacturers. These industry developments raise substantial risks and uncertainties which will affect us, major carriers (including our major partners), competitors and aircraft manufacturers in ways that we are unable to currently predict.
The airline industry is highly competitive and has undergone a period of consolidation and transition leaving fewer potential code-share partners.
The airline industry is highly competitive. We not only compete with other regional airlines, some of which are owned by or operated as code-sharingcode-share partners of major airlines, but we also face competition from low-fare airlineslow cost carriers and major airlines on many of our routes. Low cost carriers such as Southwest Airlines, a national
low-fare airline, serves the Salt Lake City International Airport, which resultsJetBlue, US Airways, and AirTran Airways, among others, operate at many of our hubs, resulting in significant price competition at the Salt Lake City hub. Competition in the
California and Pacific Northwest markets, which we service from our hubs in Los
Angeles, San Francisco, Seattle/Tacoma and Portland is particularly intense,
withcompetition. Additionally, a large number of other carriers in these markets.operate at our hubs, creating intense competition. Certain of our competitors are larger and have significantly greater financial and other resources than we do. Moreover, federal deregulation of the industry allows competitors to rapidly enter our markets and to quickly discount and restructure fares. The airline industry is particularly susceptible to price discounting because airlines incur only nominal costs to provide service to passengers occupying otherwise unsold seats. Increased fare competition could adversely affect our operations and the price of our common stock. ADVERSE WEATHER MAY HAVE A MATERIAL ADVERSE EFFECT ON OUR REVENUES.

On SkyWest-controlled routes, our revenues depend uponThe airline industry has undergone substantial consolidation, and it may in the future undergo additional consolidation. Recent examples include the merger between America West Airlines and US Airways in September 2005, and American Airlines' acquisition of the majority of Trans World Airlines' assets in 2001. Other developments include domestic and international code-share alliances between major carriers, such as the "SkyTeam Alliance," that includes Delta, Continental and Northwest, among others. Any additional consolidation or significant alliance activity within the airline industry could limit the number of passengerspotential partners with whom we carry on each flight,could enter into code-share relationships and materially adversely affect our relationship with our code-share partners.
Terrorist activities or warnings have dramatically impacted the fare paidairline industry, and will likely continue to do so.
The terrorist attacks of September 11, 2001 and their aftermath have negatively impacted the airline industry in general, including our operations. The primary effects experienced by eachthe airline industry include a substantial loss of passenger traffic and our
prorationrevenue. Although, to some degree, airline

passenger traffic and revenue have recovered since the September 11^th attacks, additional terrorist attacks could have a similar or even more pronounced effect. Even if additional terrorist attacks are not launched against the airline industry, there will be lasting consequences of the attacks, including increased security and insurance costs, increased concerns about future terrorist attacks, increased government regulation and airport delays due to heightened security. Additional terrorist attacks and the fear of such fare. On contract flights,attacks could negatively impact the airline industry, and result in further decreased passenger traffic and yields, increased flight delays or cancellations associated with new government mandates, as well as increased security, fuel and other costs. We cannot provide any assurance that these events will not harm the airline industry generally or our revenues depend primarily on
our completionoperations or financial condition in particular.
Rapidly increasing fuel costs have adversely affected, and will likely continue to adversely affect, the operations and financial performance of the flight and secondarily on service factors such as
timeliness of departure and arrival. During periods of fog, low temperatures,
storms or other adverse weather, our flights may be canceled or significantly
delayed. Because our revenues are dependent upon successful and timely
completion of each scheduled flight, any sustained period of adverse weather at
one or more of the airports we serve would have a material adverse effect on our
operations and theairline industry.
The price of our common stock.

AVAILABILITY AND COST OF FUEL IMPACTS OUR OPERATIONS.

One of our principal cost componentsaircraft fuel is fuel. Fuel prices haveunpredictable and has increased significantly during the last year, from $0.73 per gallon as of June 30, 1999 to
$1.05 per gallon as of June 30, 2000. At our current rate of consumption, for
every one cent increase in the price ofrecent periods. Higher fuel our annual operating income would
decrease by approximately $192,000, after giving effect to our fuel
reimbursement arrangements related to United and Delta contract flights. In
addition, an increase in the price of fuelprices may lead to higher airfares, which would tend to decrease the passenger load of our code-sharingcode-share partners. In the long run, such decrease will have an adverse effect on the number of flights such partner will ask us to provide and the revenues associated with such flights. Both the cost and the availability ofAdditionally, fuel are subject to many economic and
political factors and events occurring throughout the world. Weshortages have no
agreement with any fuel supplier assuring the availability or price of fuel. Our
ability to pass on increased fuel costs through fare increases on SkyWest-
controlled flights may be limited by several factors, including, without
limitation, economic and competitive conditions.been threatened. The future cost and availability of fuel to us cannot be predicted, and substantial fuel cost increases or the unavailability of adequate supplies of fuel may have a material adverse effect on our results of operations. THE AIRLINE INDUSTRY IS HEAVILY REGULATED.

During periods of increasing fuel costs, our operating margins have been, and will likely continue to be, adversely affected.
We incur substantial costsare subject to significant governmental regulation.
All interstate air carriers, including SkyWest Airlines and ASA, are subject to regulation by the DOT, the FAA and other governmental agencies. Regulations promulgated by the DOT primarily relate to economic aspects of air service. The FAA requires operating, air worthiness and other certificates; approval of personnel who may engage in maintaining our current certificationsflight, maintenance or operation activities; record keeping procedures in accordance with FAA requirements; and otherwise complying with the laws, rulesFAA approval of flight training and regulations to which we are
subject.retraining programs. We cannot predict whether we will be able to comply with all present and future laws, rules, regulations and certification requirements or that the cost of continued compliance will not have a material adverse effect on us.our operations. We incur substantial costs in maintaining our current certifications and otherwise complying with the laws, rules and regulations to which we are subject to regulation by the FAA, which has the authority to issue
mandatory orders relating to, among other things, the grounding of aircraft,
inspection of aircraft, installation of new safety-related

11
15

items and removal and replacement of aircraft parts that have failed or may fail
in the future.subject. A decision by the FAA to ground, or require time-consuming inspections of or maintenance on, all or any of our Brasilia Turboprops or
Canadair Regional Jets,aircraft for any reason may have a material adverse effect on our operations and the price of our common stock.operations. In addition to state and federal regulation, airports and municipalities enact rules and regulations that affect our operations. From time to time, various airports throughout the country have considered limiting the use of smaller aircraft, such as Brasilia Turboprops and Canadair Regional Jets,our aircraft, at such airports. The imposition of any limits on the use of Brasilia Turboprops or
Canadair Regional Jetsour aircraft at any airport at which we operate could have a material adverse effect on our operations.
The occurrence of an aviation accident would negatively impact our operations and the pricefinancial condition.
An accident or incident involving one of our common stock.

RISKS RELATED TO OUR COMMON STOCK

WE CAN ISSUE ADDITIONAL SHARES WITHOUT STOCKHOLDER APPROVAL.aircraft could involve significant potential claims of injured passengers and others, as well as repair or replacement of a damaged aircraft and its consequential temporary or permanent loss from service. In the event of an accident, our liability insurance may not be adequate to offset our exposure to potential claims and we may be forced to bear substantial losses from the accident. Substantial claims resulting from an accident in excess of our related insurance coverage would harm our operational and financial results. Moreover, any aircraft accident or incident, even if fully insured, could cause a public perception that our operations are less safe or reliable than other airlines.

Risks Related to Our Common Stock
We can issue additional shares without shareholder approval.
Our Restated Articles of Incorporation, as amended on August 9, 2000,(the "Restated Articles"), authorize the issuance of up to 120,000,000 shares of common stock. All such
sharesstock, all of which may be issued without any action or approval by our stockholders. Weshareholders. As of November 10, 2005, we had 58,053,904 shares outstanding. In addition, we have
two stock option plans under which approximately 1,059,000573,950 shares are reserved for issuance and an employee stock purchase plan underfor which approximately
594,000 shares are reserved for issuance. On August 8, 2000,options have not been granted, which may dilute the ownership interests of our stockholders
approved two new stock option plans that will become effective January 1, 2001,
and will supersede our two current stock option plans. We have reserved up to
4,000,000 shares for issuance under the new stock option plans. The number of
shares reserved for issuance under the new plans could potentially increase by
the number of shares subject to options previously granted under the current
stock option plans that are forfeited, cancelled or expired. This potential
increase could result in an aggregate number of shares available for issuance
under the new plans of approximately 5,569,000 shares.shareholders. The issuance of any additional shares of common stock would further dilute the percentage ownership of existing stockholders.

DISTRIBUTION OF DIVIDENDS MAY DECREASE OR CEASE.shareholders. Our Restated Articles also authorize the issuance of up to 5,000,000 shares of preferred stock. Our board of directors has the authority to issue preferred stock with the rights and preferences, and at the price, which it determines. Any shares of preferred stock issued would likely be senior to shares of our common stock in various regards, including dividends, payments upon liquidation and voting. The value of our common stock could be negatively affected by the issuance of any shares of preferred stock.
Distribution of dividends may decrease or cease.
Historically, we have paid dividends in varying amounts on our common stock. The future payment and amount of cash dividends will depend upon our financial condition and results of operations, loan covenants and other factors deemed relevant by our board of directors. There can be no assurance that we will continue our practice of paying dividends on theour common stock or that we will have the financial resources to pay such dividends.

ANTI-TAKEOVER PROVISIONS AFFECT THE ABILITY OF OTHERS TO GAIN CONTROL OF
OUR COMPANY.

Certain provisions
Provisions of our Restated Articlescharter documents and code-share agreements may affect the ability or desire of Incorporationothers to gain control of our company.
Our ability to issue preferred and Bylaws,
including provisions authorizing the issuance ofcommon shares of preferred stock from
time to time without stockholdershareholder approval may have the effect of delaying or preventing a change in control and may adversely affect the voting and other rights of the holders of our common stock, even in circumstances where such a change in control would be viewed as desirable by most investors. In addition, theThe provisions of the Utah Control Shares Acquisition Act may also discourage persons or
entities interested in acquiringthe acquisition of a significant interest in or control of our company. SALES OF STOCK BY DELTA AIR LINES.

Delta Air Lines has adopted a policy of orderly monetization of minority
ownership positions it holdsAdditionally, our code-share agreements contain termination and extension trigger provisions related to change in various companies. Consistent with this policy,
Delta has already sold all or portions of its stakes in at least three other
travel-related businesses. Delta has advised uscontrol type transactions that it may in the future
consider the sale of all or a portion of its 3,107,798 shares of common stock in
our company. Sales of stock by Delta in meaningful amounts may have the effect of depressing the market pricedeterring a change in control of our common stock.

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company.

CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING STATEMENTS
Certain of the statements contained in this registration statement should be considered "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements may be identified by words such as "may," "will," "expect," "intend," "anticipate," "believe," "estimate," "plan," "project," "could," "should," "hope," "likely," and "continue" and similar terms used in connection with statements regarding our outlook, the revenue environment, our contract relationships, and our expected financial performance. These statements include, but are not limited to, statements about the benefits of our acquisition of ASA, including our future financial and operating results, our plans for SkyWest Airlines and ASA, our objectives, expectations and intentions and other statements that are not historical facts. You should also keep in mind that all forward-looking statements are based on our existing beliefs about present and future events outside of our control and on assumptions that may prove to be incorrect. If one or more risks identified in this prospectus, a prospectus supplement, or any applicable filings materializes, or any other underlying assumptions prove incorrect, our actual results may vary materially from those anticipated, estimated, projected, or intended. These risks and uncertainties include, but are not limited to, those described below under the heading "Risk Factors" and the following:
•
our ability to achieve anticipated potential benefits with respect to our acquisition of ASA;

•
our ability to obtain and maintain financing necessary for operations and other purposes;

•
our ability to maintain adequate liquidity;

•
the impact of high fuel prices on the airline industry;

•
the impact of global instability, including the continued impact of the United States military presence in foreign countries, the September 11, 2001 terrorist attacks and the potential impact of future hostilities, terrorist attacks or other global events;

•
our ability to attract and retain code-share partners;

•
changes in our code-share relationships;

•
the cyclical nature of the airline industry;

•
competitive practices in the airline industry, including significant fare-restructuring activities, capacity reductions and bankruptcy and other airline restructurings by major and regional carriers, including Delta and United;

•
global and national economic conditions;

•
labor costs;

•
security-related and insurance costs;

•
weather conditions;

•
government legislation and regulation;

•
unfavorable resolution of negotiations with municipalities for the leasing of facilities;

•
relations with ASA's unionized employees and the impact and outcome of labor negotiations;

•
unionization efforts among SkyWest Airlines' employees; and

•
other risks and uncertainties listed from time to time in our reports filed with the SEC.
There may be other factors not identified above of which we are not currently aware that may affect matters discussed in the forward-looking statements, and may also cause actual results to differ materially from those discussed. We assume no obligation to publicly update any forward-looking statement to reflect actual results, changes in assumptions or changes in other factors affecting these statements other than as required by law.

USE OF PROCEEDS
The net proceeds we will receive from the sale of the 2,500,0004,000,000 shares of common stock offered by us, assuming a public offering price of $45.13$32.59 per share and after deducting estimated underwriting discounts and offering expenses, are estimated to be $106.8$123.7 million ($123.7142.3 million if the underwriters' over-allotmentoverallotment option is exercised in full).
We currently intend to use approximately $60,000,000 of the net proceeds of thethis offering to fund
expansionrepay all outstanding amounts borrowed by SkyWest Airlines from C.I.T. Leasing Corporation and approximately $30,000,000 of the proceeds of this offering to reduce the outstanding balance on our operations, includingline of credit with Zions Bank. The C.I.T. debt facility bears interest at an adjustable rate that was equal to 6.31% as of September 30, 2005 and is due in full on March 21, 2006. We have used the acquisitionloan proceeds primarily for working capital purposes. The Zions Bank line of additional aircraftcredit bears interest at a rate equal to the prime rate less 0.25%, which was 6.25% as of September 30, 2005. After discharging the outstanding amounts under these debt obligations, we currently intend to use the remainder of the proceeds from this offering for working capital and related spare parts and support equipment, and for general corporate purposes. With respect
Pending such utilization, we intend to invest the acquisition of aircraft, we will determine on a
case-by-case basis whether to purchase an aircraft with a portion of the net
proceeds from the offering or to finance the acquisition of the aircraft through
long-term loans or lease arrangements. We believe that the expenses of obtaining
the loans or leases may be reduced, and the availability of the loans or leases
may be facilitated, by the increase in stockholders' equity resulting from the
offering.

Pending the use of our net proceeds as described above, the net proceeds
will be invested in short-term, investment grade, interest-bearing securities.

We will not receive any proceeds from the sale of common stock by the
selling stockholders.

PRICE RANGE OF COMMON STOCK AND DIVIDENDS
Our common stock is quoted on theThe Nasdaq National Market under the symbol "SKYW." The following table sets forth, for the periods indicated, the high and low closing sale prices per share for our common stock, as reported by theThe Nasdaq National Market, and the cash dividends we have declared.
CASH
DIVIDENDS
HIGH LOW DECLARED
------ ------ ---------

FISCAL YEAR ENDED MARCH 31, 1999:
First Quarter......................................... $29.75 $17.69 $0.03
Second Quarter........................................ 34.00 15.00 0.03
Third Quarter......................................... 32.69 16.06 0.03
Fourth Quarter........................................ 38.00 25.13 0.03
FISCAL YEAR ENDED MARCH 31, 2000:
First Quarter......................................... $30.25 $21.50 $0.03
Second Quarter........................................ 27.63 20.13 0.03
Third Quarter......................................... 29.00 21.44 0.03
Fourth Quarter........................................ 39.13 27.50 0.04
FISCAL YEAR ENDING MARCH 31, 2001:
First Quarter......................................... $46.50 $33.88 $0.04
Second Quarter (through August 21, 2000).............. 49.38 37.38 $0.04
High Low Cash
Dividends
Declared
Year Ended December 31, 2003:
First Quarter
$
14.89
$
8.80
$
0.02
Second Quarter 19.08 10.25 0.02
Third Quarter 20.35 16.83 0.02
Fourth Quarter 19.24 15.46 0.02

Year Ended December 31, 2004:
First Quarter
$
20.51
$
17.11
$
0.03
Second Quarter 19.91 16.00 0.03
Third Quarter 16.88 13.07 0.03
Fourth Quarter 20.35 14.49 0.03

Year Ending December 31, 2005:
First Quarter
$
20.30
$
16.05
$
0.03
Second Quarter 19.76 17.35 0.03
Third Quarter 26.82 18.08 0.03
Fourth Quarter (through November 17, 2005) 32.84 26.25 0.03
The closinglast reported sale price of our common stock on August 21, 2000,The Nasdaq National Market on November 17, 2005 was $45.13.$32.59 per share. As of August 21, 2000,November 10, 2005, there were 24,858,90458,053,904 shares of our common stock outstanding, held by approximately 1,000 stockholders1,176 shareholders of record, which does not include shares held in securities position listings.
We have historically paid a regular quarterly cash dividendsdividend on our common stock. In fiscal
1997, we revised ourOur most recent quarterly dividend, policy from paying a regular annual dividend,
supplemented by special dividends paid from time to time, to a policy of paying
a regular quarterly cash dividend.declared November 2, 2005, was $0.03 per share. The future payment and amount of cash dividends will depend upon our financial condition and results of operations, applicable loan covenants and other factors deemed relevant by our board of directors.

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CAPITALIZATION
The following table sets forth our capitalization at JuneSeptember 30, 2000,2005 and as adjusted to give effect to the sale of the 2,500,0004,000,000 shares of common stock offered by us at an assumed offering price of $45.13$32.59 per share pursuant to this offering and the application of the estimated net proceeds therefrom, as described under "Use of Proceeds." The following table should be read in conjunction with "Management's Discussion and Analysis of Financial Condition and Results of Operations" and the Consolidated Financial Statements,consolidated financial statements, including the Notesnotes thereto, appearing elsewhere in this prospectus or incorporated herein by reference.
JUNE 30, 2000
-----------------------
ACTUAL AS ADJUSTED
-------- -----------
(IN THOUSANDS)

Current portion of long-term debt(1)........................ $ 12,836 $ 12,836
======== ========

Long-term debt, net of current portion(1)................... $ 61,207 $ 61,207
-------- --------
Stockholders' equity:
Preferred stock, no par value; 5,000,000 shares
authorized; none outstanding........................... -- --
Common stock, no par value; 40,000,000 shares authorized;
27,739,454 shares issued; 30,239,454 shares issued, as
adjusted(2)............................................ 166,198 272,995
Retained earnings......................................... 183,887 183,887
Treasury stock; 2,949,200 shares.......................... (20,285) (20,285)
Net unrealized depreciation on available-for-sale
securities............................................. (1,476) (1,476)
-------- --------
Total stockholders' equity............................. 328,324 435,121
-------- --------
Total capitalization................................... $389,531 $496,328
======== ========

- ---------------
September 30, 2005
Actual As
Adjusted
(in thousands)

Cash and marketable securities $ 303,762 $ 337,430
Debt:
Current portion of long-term debt(1) $ 255,653 $ 255,653
Long-term debt, net of current portion(1) 1,524,126 1,524,126
Current line of credit 60,000 —
Long-term line of credit 30,000 —
Total debt $ 1,869,779 $ 1,779,779
Stockholders' equity:
Preferred Stock, no par value; 5,000,000 shares authorized; None outstanding — —
Common Stock, no par value; 120,000,000 shares authorized; 57,864,566 shares outstanding; 61,864,566 shares, as adjusted(2) 338,051 461,719
Retained earnings 545,725 545,725
Treasury stock; 6,794,056 shares (32,551 ) (32,551 )
Net unrealized depreciation on available-for-sale securities (1,157 ) (1,157 )
Total stockholders' equity 850,068 973,736
Total capitalization $ 2,719,847 $ 2,753,515
(1)
As of JuneSeptember 30, 2000,2005, we had financed 82248 of our aircraft and certain of our airport and maintenance facilities through operating leases. In addition to our indebtedness, as of September 30, 2005, we had $554.2 millionapproximately $3.2 billion of mandatory future payments under operating leases, primarily for aircraft and ground facilities. At an 8%a 7.0% discount factor, the present value of these obligations would be equal to approximately $365.5 million at June 30, 2000.$2.0 billion. See Note 4 of the Notesnotes to our Consolidated Financial Statementsconsolidated financial statements incorporated herein by reference.

(2) Assumes
The total number of our shares of common stock outstanding after this offering is based on 57,864,566 shares issued and outstanding on September 30, 2005. This number of issued and outstanding shares assumes that the underwriters' over-allotmentoverallotment option of 395,415600,000 shares is not exercised and excludes 1,615,9667,199,031 shares issuableof common stock reserved for issuance upon exercise of outstanding stock options we have granted at aan estimated weighted average exercise price of $23.50$18.84 per share as of JuneSeptember 30, 2000.

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18

2005.

UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL DATA
The following unaudited pro forma consolidated financial data is based upon our historical financial statements included elsewhere in this prospectus or incorporated herein, adjusted to give effect to our acquisition of ASA on September 7, 2005.
The pro forma adjustments are based upon available information and certain assumptions that we believe are reasonable. The unaudited consolidated statements of income are not necessarily indicative of the future results of our operations, our financial position or the results of our operations which may have occurred had we completed the acquisition of ASA at the beginning of 2004.
The unaudited pro forma consolidated statements of income should be read in conjunction with our consolidated financial statements and related notes thereto, and Management's Discussion and Analysis of Financial Condition and Results of Operations, included elsewhere in this prospectus or incorporated herein.

PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS
(Unaudited)
For the year ended December 31, 2004
(In thousands, except per share amounts)
Historical
Pro Forma
Adjustments Pro Forma
Combined
SkyWest, Inc. ASA
OPERATING REVENUES:
Passenger $ 1,139,580 $ 947,608 $ (12,177) (A) $ 2,075,011
Ground handling and other 16,464 11 — 16,475
Total operating revenues 1,156,044 947,619 (12,177 ) 2,091,486

OPERATING EXPENSES:
Flying operations 577,492 — 436,982 (B) 1,014,474
Customer service 180,578 — 162,677 (C) 343,255
Maintenance 113,537 — 134,275 (C) 247,812
Depreciation and amortization 76,817 71,707 742 (D) 149,266
Promotion and sales 4,608 600 379 (C) 5,587
General and administrative 58,236 — 35,515 (C) 93,751
Salaries & related costs — 292,258 (292,258 )(E) —
Aircraft fuel — 197,541 (197,541 )(C) —
Aircraft maintenance materials and outside repairs — 87,394 (87,394 )(C) —
Aircraft rent — 68,670 (68,670 )(C) —
Contracted services — 65,973 (65,973 )(C) —
Landing fees and other rents — 44,623 (44,623 )(C) —
Impairment of goodwill — 498,736 — 498,736
Other — 33,594 (33,594 )(C) —
Total operating expenses 1,011,268 1,361,096 (19,483 ) 2,352,881

OPERATING INCOME (LOSS)
144,776
(413,477
)
7,306
(261,395
)
OTHER INCOME (EXPENSE):
Interest income 10,050 3,092 (7,450 )(F) 5,692
Interest expense (18,239 ) (38,218 ) 6,900 (G) (49,557 )
Other — 140 — 140
Total other income (expense), net (8,189 ) (34,986 ) (550 ) (43,725 )

INCOME (LOSS) BEFORE INCOME TAXES
136,587
(448,463
)
6,756
(305,120
)
PROVISION FOR INCOME TAXES 54,635 20,119 2,693 (H) 77,447
NET INCOME (LOSS) $ 81,952 $ (468,582 ) $ 4,063 $ (382,567 )
BASIC EARNINGS (LOSS) PER SHARE $ 1.42 $ (6.61 )
DILUTED EARNINGS (LOSS) PER SHARE $ 1.40 $ (6.61 )

WEIGHTED AVERAGE OF COMMON SHARES:
Basic 57,858 57,858
Diluted 58,350 58,350

PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS
(Unaudited)
For the nine months ended September 30, 2005
(In thousands, except per share amounts)
Historical
SkyWest, Inc. January 1, 2005 -
June 30, 2005
ASA July 1, 2005 -
September 7, 2005
ASA Pro Forma
Adjustments Pro Forma
Combined
OPERATING REVENUES:
Passenger $ 1,203,991 $ 551,323 $ 224,543 $ 22,218 (A) $ 2,002,075
Ground handling and other 17,693 — 2,037 — 19,730
Total operating revenues 1,221,684 551,323 226,580 22,218 2,021,805

OPERATING EXPENSES:
Flying operations 669,964 — — 394,236 (I) 1,064,200
Customer service 177,387 — — 131,964 (C) 309,351
Maintenance 107,686 — — 106,806 (C) 214,492
Depreciation and amortization 70,238 40,633 12,517 (5,449 )(J) 117,939
Promotion and sales 2,874 — — 255 (C) 3,129
General and administrative 58,497 — — 30,029 (C) 88,526
Salaries & related costs — 150,092 56,816 (206,908 )(K) —
Aircraft fuel — 143,806 69,200 (213,006 )(C) —
Aircraft maintenance materials and outside repairs — 51,773 18,619 (70,392 )(C) —
Aircraft rent — 31,914 11,279 (43,193 )(C) —
Contracted services — 46,441 18,470 (64,911 )(C) —
Landing fees and other rents — 25,052 10,820 (35,872 )(C) —
Other — 29,082 13,661 (42,743 )(C) —
Total operating expenses 1,086,646 518,793 211,382 (19,184 ) 1,797,637

OPERATING INCOME
135,038
32,530
15,198
41,402
224,168
OTHER INCOME (EXPENSE):
Interest income 10,165 2,628 579 (5,082 )(F) 8,290
Interest expense (25,510 ) (32,017 ) (14,276 ) 5,175 (G) (66,628 )
Other (585 ) 101 (150 ) — (634 )
Total other income (expense), net (15,930 ) (29,288 ) (13,847 ) 93 (58,972 )

INCOME BEFORE INCOME TAXES
119,108
3,242
1,351
41,495
165,196
PROVISION FOR INCOME TAXES 45,525 1,308 1,150 16,443 (H) 64,426
NET INCOME $ 73,583 $ 1,934 $ 201 $ 25,052 $ 100,770
BASIC EARNINGS PER SHARE $ 1.27 $ 1.75
DILUTED EARNINGS PER SHARE $ 1.26 $ 1.72

WEIGHTED AVERAGE OF COMMON SHARES:
Basic 57,729 57,729
Diluted 58,512 58,512

NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENTS OF OPERATIONS
(in thousands)
1.
Basis of Presentation
On September 7, 2005, we completed the acquisition of all of the issued and outstanding capital stock of ASA from ASA Holdings, Inc., a subsidiary of Delta. In connection with the acquisition of ASA, SkyWest Airlines and Delta entered into an Amended and Restated Delta Connection Agreement, and ASA and Delta entered into a Second Amended and Restated Delta Connection Agreement, whereby SkyWest Airlines and ASA have agreed to provide regional airline service in the Delta flight system. The Delta Connection Agreements became effective September 8, 2005.
The unaudited pro forma condensed combined statements of operations for the nine months ended September 30, 2005 and for the fiscal year ended December 31, 2004 have been prepared to illustrate the pro forma effects of the ASA acquisition as if it had occurred on January 1, 2004 and as if the ASA Delta Connection Agreement was effective January 1, 2004. The operations of ASA commencing on September 8, 2005 and through September 30, 2005, are included in our historical statement of operations. No pro forma effect has been given to the Amended and Restated SkyWest Airlines Delta Connection Agreement prior to the effective date of September 8, 2005.
2.
Pro Forma Financial Statements and Adjustments
The pro forma condensed combined information set forth in the preceding table is presented for illustrative purposes only. Such information does not purport to be indicative of the results of operations and financial position that actually would have resulted had the acquisition occurred on the date indicated, nor is it indicative of the results that may be expected in future periods. The pro forma adjustments are based upon information and assumptions available as of the date of this prospectus.
The pro forma condensed combined statements of operations give effect to the following pro forma adjustments:
(A) Reflects the restatement of ASA revenues from the ASA historical code-share agreement with Delta to the ASA Delta Connection Agreement as if the ASA Delta Connection Agreement was effective January 1, 2004. Under the terms of the ASA Delta Connection Agreement, Delta has agreed to compensate ASA for certain direct costs associated with operating the Delta Connection flights, as defined in the ASA Delta Connection Agreement, plus, if ASA completes a certain minimum percentage of its Delta Connection flights, a specified margin on such costs. Additionally, the ASA Delta Connection Agreement provides for incentive compensation upon satisfaction of certain performance goals. Under the ASA Delta Connection Agreement, excess margins over certain percentages must be returned or shared with Delta, depending on various conditions. The pro forma revenue adjustment assumes no incentive compensation was achieved for either the year ended December 31, 2004 or for the interim period ended September 7, 2005.
(B) Reflects a reclassification of ASA expenses reported under the ASA financial statement classification to our financial statement classification of $451,103 for consistency purposes and a reduction of aircraft lease expense on aircraft lease obligations retained by Delta in connection with our acquisition of ASA of $(14,121).
(C) Reflects a reclassification of ASA expenses reported under the ASA financial statement classifications to our financial statement classifications for consistency purposes.
(D) Reflects an adjustment to ASA depreciation for changes in estimated useful lives for property and equipment using our accounting policies and reflects an adjustment to the depreciable basis of property and equipment and intangible assets resulting from the preliminary valuation and purchase price adjustments of $7,400 and a reduction of depreciation expense on aircraft retained by Delta in connection with our acquisition of ASA of $(6,658).

(E) Reflects a reclassification of ASA expenses reported under the ASA financial statement classification to our financial statement classification of $286,154 for consistency purposes and a reduction of accrued wage expense of $6,104 to reflect amounts expected to be paid.
(F) Reflects a reduction of interest income resulting from net cash paid to Delta of $376,912 for the acquisition of ASA.
(G) Reflects the elimination of interest expense on aircraft debt obligations retained by Delta in connection with our acquisition of ASA.
(H) Reflects the income tax effects of the pro forma adjustments.
(I) Reflects a reclassification of ASA expenses report under the ASA financial statement classification to our financial statement classification of $404,826 for consistency purposes and a reduction of aircraft lease expense on aircraft lease obligations retained by Delta in connection with our acquisition of ASA of $(10,590).
(J) Reflects an adjustment to ASA depreciation for changes in estimated useful lives for property and equipment using our accounting policies and reflects an adjustment to the depreciable basis of property and equipment and intangible assets resulting from the preliminary valuation and purchase price adjustments of $(455) and a reduction of depreciation expense on aircraft retained by Delta in connection with our acquisition of ASA of $(4,994).
(K) Reflects a reclassification of ASA expenses reported under the ASA financial statement classification to our financial statement classification of $203,762 for consistency purposes and a reduction of accrued wage expense of $3,146 to reflect amounts expected to be paid.

SELECTED CONSOLIDATED FINANCIAL AND OPERATING DATA
The following table sets forth our selected consolidated financial and airline operating data with respect to the periods indicated. This information should be read in conjunction with "Management's Discussion and Analysis of Financial Condition and Results of Operations" and our Consolidated Financial
Statements,consolidated financial statements, including the Notesnotes thereto, appearing elsewhere in this prospectus or incorporated herein by reference herein.reference. The selected consolidated financial data as
of and for each of the fiscal years ended MarchDecember 31, 1996 through March 31, 2000, 2001, 2002, 2003 and 2004 have been derived from our Consolidated Financial Statements, whichaudited consolidated financial statements, have been audited by Arthur Andersen LLP, independent public accountants.but does not reflect the operations of ASA. The airline operating data set forth below is unaudited.unaudited and the airline operating data for the years ended December 31, 2000, 2001, 2002, 2003 and 2004, does not reflect the operations of ASA. The airline operating data for the nine months ended September 30, 2005 reflects the operations of SkyWest Airlines for the entire period and the operations of ASA for the period subsequent to September 7, 2005. The selected consolidated financial data as of andinformation for the three monthsnine-month periods ended JuneSeptember 30, 19992004 and 20002005 have been derived from our unaudited Consolidated Financial Statementsconsolidated financial statements incorporated herein by reference which, in our opinion, reflecthave been prepared on the same basis as the audited financial statements and include all adjustments, (consistingconsisting only of normal and recurring adjustments)adjustments, necessary to present fairlyfor a fair presentation of the information containedincluded therein. DataThe selected consolidated financial information for the threenine-month period ended September 30, 2004 does not reflect the operations of ASA. Our results of operations for the nine months ended JuneSeptember 30, 20002005 are not necessarily indicative of results to be expectedachieved for the fiscalfull year ending MarchDecember 31, 2001.

THREE MONTHS ENDED
FISCAL YEAR ENDED MARCH 31, JUNE 30,
-------------------------------------------------------------- ------------------------
1996 1997 1998 1999 2000 1999 2000
---------- ---------- ---------- ---------- ---------- ---------- ----------
(IN THOUSANDS, EXCEPT PER SHARE DATA)

CONSOLIDATED STATEMENTS OF INCOME
DATA(1):
Operating revenues:
Passenger...................... $ 205,034 $ 239,222 $ 259,314 $ 381,409 $ 466,733 $ 109,713 $ 128,403
Freight and other.............. 7,449 6,544 6,821 7,217 8,045 1,849 1,984
---------- ---------- ---------- ---------- ---------- ---------- ----------
Total operating revenues..... 212,483 245,766 266,135 388,626 474,778 111,562 130,387
---------- ---------- ---------- ---------- ---------- ---------- ----------
Operating expenses:
Flying operations.............. 85,117 101,689 103,636 137,231 176,159 39,584 49,338
Aircraft, traffic and passenger
service...................... 32,522 37,044 38,957 58,826 65,822 16,010 17,517
Maintenance.................... 28,713 29,149 29,299 51,370 60,400 14,409 15,118
Promotion and sales............ 25,965 29,606 25,505 29,432 27,698 7,692 6,954
Depreciation and
amortization................. 15,392 18,481 19,305 23,237 28,463 6,487 7,827
General and administrative..... 11,962 12,577 14,992 22,460 27,601 6,387 8,012
Fleet restructuring and
transition................... 6,247 -- -- -- -- -- --
Other.......................... 929 1,195 1,622 1,765 1,955 517 447
---------- ---------- ---------- ---------- ---------- ---------- ----------
Total operating expenses..... 206,847 229,741 233,316 324,321 388,098 91,086 105,213
---------- ---------- ---------- ---------- ---------- ---------- ----------
Operating income................. 5,636 16,025 32,819 64,305 86,680 20,476 25,174
---------- ---------- ---------- ---------- ---------- ---------- ----------
Other income (expense):
Interest expense............... (2,160) (2,431) (1,639) (2,376) (2,726) (563) (579)
Interest income................ 2,500 2,328 4,090 7,553 8,575 2,084 2,450
Gain on sales of property and
equipment.................... 556 936 (45) 419 309 90 80
---------- ---------- ---------- ---------- ---------- ---------- ----------
Total other income........... 896 833 2,406 5,596 6,158 1,611 1,951
---------- ---------- ---------- ---------- ---------- ---------- ----------
Income before provision for
income taxes................... 6,532 16,858 35,225 69,901 92,838 22,087 27,125
Provision for income taxes....... 2,341 6,572 13,565 27,273 35,734 8,506 10,578
---------- ---------- ---------- ---------- ---------- ---------- ----------
Income from continuing
operations..................... 4,191 10,286 21,660 42,628 57,104 13,581 16,547
---------- ---------- ---------- ---------- ---------- ---------- ----------
Discontinued operations:
Income (loss) from operations
of Scenic Airlines........... 175 (175) 284 (168) -- -- --
Loss on disposition of Scenic
Airlines..................... -- -- -- (625) -- -- --
---------- ---------- ---------- ---------- ---------- ---------- ----------
Total income (loss) from
discontinued operations.... 175 (175) 284 (793) -- -- --
---------- ---------- ---------- ---------- ---------- ---------- ----------
Net income....................... $ 4,366 $ 10,111 $ 21,944 $ 41,835 $ 57,104 $ 13,581 $ 16,547
========== ========== ========== ========== ========== ========== ==========
Net income per common share:
Basic.......................... $ 0.21 $ 0.50 $ 1.06 $ 1.73 $ 2.32 $ 0.55 $ 0.67
========== ========== ========== ========== ========== ========== ==========
Diluted........................ $ 0.21 $ 0.50 $ 1.04 $ 1.69 $ 2.29 $ 0.55 $ 0.65
========== ========== ========== ========== ========== ========== ==========
Dividends declared per common
share.......................... $ 0.13 $ 0.12 $ 0.10 $ 0.12 $ 0.13 $ 0.03 $ 0.04
========== ========== ========== ========== ========== ========== ==========
Weighted average common shares
outstanding:
Basic.......................... 20,568 20,170 20,799 24,199 24,563 24,488 24,761
========== ========== ========== ========== ========== ========== ==========
Diluted........................ 20,736 20,248 21,168 24,787 24,961 24,707 25,276
========== ========== ========== ========== ========== ========== ==========

15
19

OTHER FINANCIAL DATA:
EBITDA(2)........................ $ 24,827 $ 38,388 $ 57,360 $ 95,747 $ 125,126 $ 29,408 $ 35,767
EBITDAR(2)....................... 53,094 70,378 91,061 143,721 179,399 42,629 49,691
Cash flows from (used by):
Operating activities........... 26,864 31,971 48,407 78,006 86,499 18,401 40,546
Investing activities........... (50,090) (11,627) (15,224) (181,480) (105,328) (41,741) (43,068)
Financing activities........... 20,339 (7,087) 68,803 15,939 (8,864) (2,894) 12,729
AIRLINE OPERATING DATA(3):
Passengers carried............... 2,340,366 2,656,602 2,989,062 4,900,921 5,503,290 1,365,706 1,401,113
Revenue passenger miles
(000s)(4)...................... 617,136 717,322 745,386 1,015,872 1,196,680 290,590 319,830
Available seat miles (000s)(5)... 1,254,334 1,413,170 1,463,975 1,844,123 2,165,380 525,104 565,409
Passenger load factor(6)......... 49.2% 50.8% 50.9% 55.1% 55.3% 55.3% 56.6%
Breakeven load factor(7)......... 48.4% 47.9% 45.0% 46.3% 45.5% 45.4% 45.9%
Yield per revenue passenger
mile(8)........................ 33.2c 33.3c 34.8c 37.5c 39.0c 37.8c 40.1c
Revenue per available seat
mile(9)........................ 16.9c 17.3c 18.1c 21.0c 21.8c 21.1c 23.0c
Cost per available seat
mile(10)....................... 16.6c 16.3c 16.6c 17.6c 18.0c 17.4c 18.6c
Average passenger trip length
(miles)........................ 264 270 249 207 217 213 228
Number of aircraft (end of
period):
Canadair Regional Jet.......... 10 10 10 11 11 11 12
Embraer Brasilia Turboprop..... 35 50 50 88 92 89 92
Fairchild Metroliner III....... 18 -- -- -- -- -- --
---------- ---------- ---------- ---------- ---------- ---------- ----------
Total aircraft............. 63 60 60 99 103 100 104
========== ========== ========== ========== ========== ========== ==========

AS OF MARCH 31,
---------------------------------------------------- AS OF JUNE 30,
1996 1997 1998 1999 2000 2000
-------- -------- -------- -------- -------- --------------

CONSOLIDATED BALANCE SHEET DATA:
Cash and marketable securities..................... $ 43,626 $ 55,756 $154,399 $161,817 $171,348 $189,675
Working capital.................................... 32,818 45,278 143,109 142,358 154,179 160,692
Property and equipment, net........................ 145,071 137,743 133,470 198,924 233,954 260,734
Total assets....................................... 226,996 231,934 318,914 417,660 470,183 515,260
Long-term debt, including current maturities(11)... 59,972 53,736 57,809 70,327 60,758 74,043
Stockholders' equity............................... 115,800 124,552 211,133 256,256 312,220 328,324

- ---------------
2005.
Selected Consolidated Financial Information
Years Ended December 31, Nine Months Ended September 30,
2000 2001 2002 2003 2004 2004 2005
(in thousands, except share, per share and airline operating data)

Consolidated Statements of Income:
Operating revenues:
Passenger $ 516,159 $ 595,985 $ 769,427 $ 882,062 $ 1,139,580 $ 816,677 $ 1,203,991
Freight and Other 6,838 5,880 5,020 5,964 16,464 12,679 17,693
Total operating revenues 522,997 601,865 774,447 888,026 1,156,044 829,356 1,221,684
Operating expenses:
Flying Operations 208,932 252,346 330,198 417,801 577,492 406,244 669,964
Aircraft, traffic and passenger service 72,079 97,827 123,453 139,125 180,578 129,922 177,387
Maintenance 63,318 87,577 82,786 83,829 113,537 81,365 107,686
Promotion and Sales 26,593 25,747 16,871 13,572 4,608 3,422 2,874
Depreciation and amortization 32,575 45,888 57,535 74,419 76,817 57,448 70,238
General and Administrative 29,529 35,097 45,487 50,800 58,236 42,997 58,497
U.S. Governmental airline assistance — (8,181 ) (1,438 ) — — — —
Other 924 — — — — — —
Total operating expenses 433,950 536,301 654,892 779,546 1,011,268 721,398 1,086,646
Operating income 89,047 65,564 119,555 108,480 144,776 107,958 135,038
Other income (expense):
Interest expense (2,511 ) — (3,611 ) (9,891 ) (18,239 ) (13,340 ) (25,510 )
Interest income 12,532 17,249 12,383 10,492 10,050 6,554 9,580
Gain on sales of property and equipment 518 — — 406 — — —
Total other income (expense) 10,539 17,249 8,772 1,007 (8,189 ) (6,786 ) (15,930 )
Income before provision for income taxes 99,586 82,813 128,327 109,487 136,587 101,172 119,108
Provision for income tax 38,712 32,297 50,050 42,700 54,635 40,469 45,525
Income before cumulative effect of change in accounting principle 60,874 50,516 78,277 66,787 81,952 60,703 73,583
Cumulative effect of change in accounting principle, net of tax of $5,492 — — 8,589 — — — —
Net Income 60,874 50,516 86,866 66,787 81,952 60,703 73,583
Basic 1.18 .90 1.52 1.16 1.42 1.05 1.27
Diluted 1.16 .88 1.51 1.15 1.40 1.04 1.26
Weighted average common shares outstanding:
Basic 51,521 56,365 57,229 57,745 57,858 57,991 57,729
Diluted 52,644 57,237 57,551 58,127 58,350 58,478 58,512
Other Financial Data:
Net cash from:
Operating activities 82,521 150,791 173,703 157,743 246,866 129,143 147,254
Investing activities (198,204 ) (219,624 ) (120,592 ) (811,690 ) (237,525 ) (199,703 ) (398,079 )
Financing activities 146,217 45,335 35,157 635,394 (8,728 ) 2,559 248,400
Airline Operating Data:
Passengers carried 5,598,499 6,229,867 8,388,935 10,738,691 13,424,520 9,811,577 12,988,939
Revenue passenger miles(1) 1,277,001 1,732,180 2,990,753 4,222,669 5,546,069 4,013,486 6,000,078
Available seat miles(2) 2,256,635 2,837,278 4,356,053 5,875,029 7,546,318 5,453,588 8,001,001
Passenger load factor(3) 56.6 % 61.1 % 68.7 % 71.9 % 73.5 % 73.6 % 75.0 %
Revenue per available seat mile(4) 23.2 ¢ 21.2 ¢ 17.8 ¢ 15.1 ¢ 15.3 ¢ 15.2 ¢ 15.3 ¢
Cost per available seat mile(5) 19.2 ¢ 18.9 ¢ 15.1 ¢ 13.4 ¢ 13.6 ¢ 13.4 ¢ 13.9 ¢
EBITDA(6) 135,170 128,701 198,062 193,797 231,643 171,960 214,856
EBITDAR(6) 190,875 201,968 301,380 318,733 377,584 277,744 359,408
Average passenger trip length (miles) 228 278 356 393 413 409 462
Number of aircraft in service (end of period):
Bombardier Regional Jets:
Owned — 5 6 30 32 32 113
Leased 16 44 67 79 101 96 188
Brasilia Turboprops
Owned 21 21 21 21 21 21 15
Leased 70 61 55 55 52 53 48
ATR—72 Turboprops (Leased) — — — — — — 12
Total aircraft 107 131 149 185 206 202 376
As of December 31,
As of
September
30, 2005
2000 2001 2002 2003 2004
(in thousands)

Consolidated Balance Sheet Data:
Cash and marketable securities $ 293,630 $ 310,714 $ 425,424 $ 471,234 $ 540,537 $ 303,762
Working capital 279,667 270,818 391,845 518,409 536,506 62,182
Property and equipment, net 312,187 441,706 455,998 843,918 932,547 2,553,636
Total assets 676,412 831,566 999,384 1,529,210 1,662,287 3,376,206
Long-term debt, including current maturities(7) 85,925 125,839 137,911 493,650 495,818 1,779,779
Total stockholder's equity 484,953 545,840 638,686 709,063 779,055 850,068
(1) Reflects
Revenue passengers multiplied by miles flown.

(2)
Passenger seats available multiplied by miles flown.

(3)
Revenue passenger miles divided by available seat miles.

(4)
Total airline operating revenues divided by available seat miles.

(5)
Total operating and interest expenses divided by available seat miles. Total operating and interest expenses is not a calculation based on generally accepted accounting principles and should not be considered as an alternative to total operating expenses. Cost per available seat mile utilizing this measurement is included as it is a measurement recognized by the reclassification of consolidated statements of income data to
reflect the operations of Scenic Airlines, Inc., a subsidiary we sold in
1999 which provided sight-seeing tours of the Grand Canyon area, as
discontinued operations.

(2) investing public.

(6)
EBITDA represents earnings before interest expense, income taxes, depreciation and amortization. EBITDAR represents earnings before interest expense, income taxes, depreciation, amortization and rental expense.aircraft rents. EBITDA and EBITDAR are widelynot calculations based on generally accepted financial indicators of a company's
ability to incurprinciples and service debt. Neither EBITDA nor EBITDAR should however,not be considered in isolation, as a substitute for net income oralternatives to cash flow prepared in accordance with generally accepted accounting principles
or as a measure of a company's profitability or liquidity. For the fiscal
year ended March 31, 1996,In addition, our calculations may not be comparable to other similarly titled measures of other companies. EBITDA and EBITDAR dataare not included as supplemental disclosures because they may provide useful information regarding our ability to service debt and lease payments and to fund capital expenditures. Our ability to service debt and lease payments and to fund capital expenditures in the future, however, may be affected by other operating or legal requirements or uncertainties. Currently, aircraft and engine ownership costs are our most significant cash expenditure. In addition, EBITDA and EBITDAR are well recognized performance measurements in the regional airline industry and, consequently, we have not been reduced to
reflect $6.2 million of fleet restructuring and transition expenses.

(3) Excludes the operations of Scenic Airlines, Inc. and National Parks
Transportation, Inc., a subsidiary we sold on July 21, 2000, which operates
a rental car business serving small regional airports.

(4) Revenue passengers multiplied by miles flown.

(5) Passenger seats available multiplied by miles flown.

(6) Revenue passenger miles divided by available seat miles.

provided this information.

(7) Passenger load factor at which total airline operating revenues equals
total airline operating expenses, including interest expense. Calculated by
dividing airline operating expenses plus interest expense by airline
operating revenues and multiplying the result by passenger load factor.

(8) Passenger revenues divided by revenue passenger miles flown.

(9) Total airline operating revenues divided by available seat miles.

(10) Airline operating expenses plus interest expense divided by available seat
miles.

(11)
At JuneSeptember 30, 2000, 822005, 248 of the aircraft operated by SkyWest Airlines and ASA were financed through operating leases. In addition to our indebtedness, at September 30, 2005, we had $554.2
millionapproximately $3.2 billion of mandatory future minimum payments under operating leases, primarily for aircraft and ground facilities. At an 8%a 7% discount factor, the present value of these obligations would be equal to approximately $365.5 million at June
30, 2000.

16
20

$2.0 billion.

The following represents a reconciliation of EBITDA and EBITDAR to net cash from operating activities for the periods indicated (dollars in thousands):
Nine Months Ended September 30, Pro forma
Year Ended December 31,
Year Ended Dec. 31, 2004 Nine Months Ended Sept. 30, 2005
2000 2001 2002 2003 2004 2004 2005
EBITDAR $ 190,875 $ 201,968 $ 301,380 $ 318,733 $ 377,584 $ 277,744 $ 359,408 $ 97,416 $ 529,117
Aircraft Rents (55,705 ) (73,267 ) (103,318 ) (124,936 ) (145,941 ) (105,784 ) (144,552 ) (200,490 ) (177,155 )
EBITDA $ 135,170 $ 128,701 $ 198,062 $ 193,797 $ 231,643 $ 171,960 $ 214,856 $ (103,074 ) $ 351,962
Interest Expense (2,511 ) — (3,611 ) (9,891 ) (18,239 ) (13,340 ) (25,510 ) (49,557 ) (66,628 )
Provision for income taxes (38,712 ) (32,297 ) (50,050 ) (42,700 ) (54,635 ) (40,469 ) (45,525 ) (77,447 ) (64,426 )
Impairment of Goodwill — — — — — — — 498,736 —
Maintenance expense related to disposition of rotable spares 2,235 1,947 1,379 834 — — — — —
Gain (loss) on sale of property and equipment (518 ) — — 406 — — — (1,684 ) (1,158 )
Increase (decrease) in allowance for doubtful accounts (144 ) 5 661 (664 ) (34 ) 500 (9 ) (34 ) (9 )
Net increase in deferred income taxes 6,374 6,948 22,206 91,085 29,598 24,890 12,083 49,717 13,390
Rent expense less than payment — — — — — — — (13,036 ) (15,485 )
Tax benefit from exercise of common stock options 4,105 5,584 1,525 129 442 408 43 442 43
Deferred aircraft credits, net of accretion — 15,127 10,903 22,751 4,444 1,258 19,577 4,444 19,577
Changes in operating assets and liabilities:
Increase in restricted cash — — — (9,160 ) — — (104,524 ) — (99,910 )
Decrease (increase) in receivables (17,916 ) 3,091 (6,890 ) 14,813 (15,738 ) (37,105 ) (4,435 ) (35,799 ) 15,626
Decrease (increase) in income tax receivable — — — (62,908 ) 53,909 17,304 8,999 53,909 8,999
Decrease (increase) in inventories (3,518 ) (4,301 ) (3,750 ) 953 (7,842 ) (7,164 ) (5,367 ) (11,513 ) (2,345 )
Decrease (increase) in other current assets and prepaid aircraft rents (2,379 ) (5,820 ) (1,988 ) (53,917 ) 1,750 (3,002 ) (51,983 ) 1,750 (53,201 )
(Decrease) Increase in accounts payable and accrued aircraft rents (6,428 ) 12,783 3,313 5,641 13,921 3,963 99,421 (2,710 ) 54,968
(Decrease) increase in engine overhaul accrual 2,722 1,091 (14,081 ) — — — — (3,500 ) —
Increase in other current liabilities 4,041 17,932 16,024 6,574 7,647 9,940 29,628 7,647 37,997
Net cash provided by operating activities $ 82,521 $ 150,791 $ 173,703 $ 157,743 $ 246,866 $ 129,143 $ 147,254 $ 318,291 $ 199,400

MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

OVERVIEW

SkyWest operates a regional airline offering scheduled passenger service
with approximately 1,000 daily departures to 63 cities in 13 western states
The following discussion and Canada. Total operating revenues and passengers carried have grown from fiscal
1995 through fiscal 2000 at annual growth rates of approximately 20.8% and
21.6%, respectively. All of our growth has been internally generated without any
material acquisitions. In fiscal 1995, SkyWest generated approximately 976
million available seat miles andanalysis presents factors that had a fleetmaterial effect on our results of twenty-six 19-seat Fairchild
Metroliners, twenty-eight 30-seat Brasilia Turbopropsoperations during the nine months ended September 30, 2005 and six Canadair Regional
Jets at fiscal year end. As a result of additional aircraft acquisitions,
SkyWest generated approximately 2.2 billion available seat miles in fiscal 2000
with a fleet of 92 Brasilia Turboprops2004 and 11 Canadair Regional Jets at fiscal
year end. The transition outthe years ended December 31, 2004, 2003 and 2002. Also discussed is our financial position as of the Fairchild Metroliner aircraft, completedend of those periods. You should read this discussion in December 1996, enabled SkyWest to upgrade its aircraft to an all cabin class
fleet of Brasilia Turboprops and Canadair Regional Jets, which offer increased
passenger acceptance and capacity and higher operating efficiencies.

In fiscal 2000, we generated net income of $57.1 million, compared to $41.8
million in fiscal 1999 and $21.9 million in fiscal 1998. During fiscal 1999, we
sold the operations of Scenic Airlines, Inc., and recorded a net loss of
$625,000 on the sale. The amount has been reflected as discontinued operations
inconjunction with our consolidated financial statements, including the notes thereto, appearing elsewhere in this prospectus or incorporated herein by reference herein. The
improvementreference. This discussion and analysis contains forward-looking statements. Please refer to the section entitled "Cautionary Statement Concerning Forward-Looking Statements" for a discussion of the uncertainties, risks and assumptions associated with these statements.
Overview
Through SkyWest Airlines and ASA, we operate the largest regional airline in the United States. As of September 30, 2005, SkyWest Airlines and ASA offered scheduled passenger and air freight service with more than 2,400 total daily departures to 212 different destinations in the United States, Canada, Mexico and the Caribbean. Additionally, we provide ground handling services for approximately ten other airlines throughout our system. As of September 30, 2005, our fleet consisted of 229 CRJ200s (65 assigned to United, 160 assigned to Delta, and four unassigned), 72 CRJ700s (37 United, 35 Delta), 63 Brasilia turboprops (50 United, 13 Delta), and 12 ATR turboprops (all assigned to Delta, which we expect to remove from service by August 2007). During September 2005, approximately 59.3% of our combined capacity was operated under the Delta code and approximately 40.7% was operated under the United code. All of ASA's capacity during September 2005 was operated under the Delta code.
SkyWest Airlines has been a partner with Delta in Salt Lake City and United in Los Angeles since fiscal1987 and 1997, respectively. In 1998, reflects, among other factors,SkyWest Airlines expanded its relationship with United to provide service in Portland, Seattle/Tacoma, San Francisco and additional Los Angeles markets. In 2001, SkyWest Airlines expanded its operations to serve as the addition of
UnitedDelta Connection in Dallas/Fort Worth. However, effective January 31, 2005, SkyWest Airlines re-deployed all its Delta Connection flights to Salt Lake City as a code-sharing partnerresult of Delta's decision to "de-hub" its Dallas/Fort Worth operations. In 2004, SkyWest Airlines expanded its United Express operations to provide service in October 1997.

The percentageChicago (O'Hare). As of our available seat milesSeptember 30, 2005, SkyWest Airlines operated under fixed-fee
contracts has increased from 25% in fiscal 1998 to 65% in fiscal 2000. The shift
to fixed-fee contract flying has reduced SkyWest's exposure to fluctuations in
fuel prices, fare competition and passenger volumes. We anticipate that our
contract flying operations will increase as a percentage of ourapproximately 1,500 total daily flights as additionala Delta Connection carrier in Salt Lake City, and a United Express carrier in Chicago (O'Hare), Denver, Los Angeles, San Francisco, Portland and Seattle/Tacoma. SkyWest Airlines believes its success in attracting multiple contractual relationships with major airline partners is attributable to its delivery of high-quality regional airline service at a competitive cost structure. In April 2003, SkyWest Airlines signed an agreement with Continental to supply Continental with regional airline feed into Continental's Houston hub beginning on July 1, 2003. The Continental flying represented only approximately 1.5% of our 2004 ASM production and generated less than 1.0% of our 2004 operating income. In January 2005, we announced the mutual decision with Continental to end our operations as a Continental Connection carrier and we completed the phase-out process on July 1, 2005.
ASA has been a code-share partner with Delta in Atlanta since 1984. ASA expanded its operations as a Delta Connection carrier to also include Cincinnati/Northern Kentucky and Salt Lake City in September 2002 and April 2003, respectively. ASA operates more than 900 daily flights, all in the Delta Connection system.
Historically, multiple contractual relationships have enabled us to reduce reliance on any single major airline code and to enhance and stabilize operating results through a mix of our controlled or "pro-rate" flying and contract flying. On contract routes, the major airline partner controls scheduling, ticketing, pricing and seat inventories and we are addedcompensated by the major airline partner at

contracted rates based on the completed block hours, flight departures and other operating measures. On pro-rate flights, we control scheduling, ticketing, pricing and seat inventories and receive a pro-rated portion of passenger fares. Since August 1, 2003, substantially all of our flights have been contract flights. For the quarter ended September 30, 2005, our Brasilia turboprops flown for Delta were flown under pro-rate arrangements while approximately 91% of our Brasilia turboprops flown in the United system were flown under contractual arrangements, with the remaining nine percent flown under pro-rate arrangements.
In September 2005, Delta filed for reorganization under Chapter 11 of the United States Bankruptcy Code. Prior to the date of Delta's bankruptcy filing, each of SkyWest system;
however,Airlines and ASA entered into an amended Delta Connection Agreement with a 15-year term, subject to certain termination and extension rights. Delta received all necessary approvals from the U.S. Bankruptcy Court, and the Delta Connection Agreements were assumed by Delta on October 6, 2005. Under the terms of its Delta Connection Agreement, SkyWest Airlines is compensated primarily on a fee-per-completed-block hour and departure basis, and is reimbursed for fuel and certain other costs. Under the terms of its Delta Connection Agreement, ASA is reimbursed for fuel and certain other costs, and, if ASA completes a certain percentage of its Delta Connection flights, Delta is obligated to pay ASA a specified margin on such costs. Additionally, the ASA Delta Connection Agreement provides for incentive compensation upon satisfaction of certain performance goals. Notwithstanding Delta's assumption of the Delta Connection Agreements, Delta's bankruptcy filing could still lead to many other unforeseen expenses, risks and uncertainties for SkyWest Airlines, ASA or both.
In December 2002, United filed for reorganization under Chapter 11 of the United States Bankruptcy Code. Effective July 2003, we entered into a new United Express Agreement, which sets forth the principal terms and conditions governing our United Express operations. The United Express Agreement received all necessary approvals from the U.S. Bankruptcy Court, the creditors' committee operating on behalf of United under bankruptcy protection and United's pilot union. Under the terms of the United Express Agreement, we are compensated primarily on a fee-per-completed-block hour and departure basis, plus a margin based on performance incentives, and reimbursed for fuel and other costs. Notwithstanding the execution of the United Express Agreement, United's bankruptcy filing could still lead to many other unforeseen expenses, risks and uncertainties.
Although both Delta and United have reported that they intend to emerge from their ongoing Chapter 11 bankruptcies, either or both could still file for liquidation under the Bankruptcy Code, or liquidate some or all of their assets through one or more transactions with third parties. Such events, individually or singly, could jeopardize our Delta Connection and United Express operations, leave us unable to efficiently utilize the additional aircraft which we are currently obligated to purchase, or result in other outcomes which could have a material adverse effect on our operations and financial condition.
On February 4, 2005, we announced that we had been selected by United to operate 20 new CRJ700s in our United Express operations, and that we had placed a firm order for these CRJ700s with Bombardier. Deliveries of these aircraft began in the third quarter of 2005 and we expect these deliveries to be completed by the first quarter of 2006. Our total aircraft commitments, as of September 30, 2005, consisted of 37 CRJ700s and six CRJ200s over the next two years, with gross committed expenditures for these aircraft and related equipment including amounts for contractual price escalations estimated to be approximately $1.1 billion. Additionally, our agreement with Bombardier includes options for another 80 Bombardier Regional Jets that can be delivered in configurations ranging between 66 and 90 seats. We presently anticipate that marginsdelivery dates for these aircraft could start in January 2007 and continue through December 2008; however, actual delivery dates remain subject to final determination as agreed upon by us and our code-share partners.

Critical Accounting Policies
Our significant accounting policies are more fully described in Note 1 to our consolidated financial statements for the year ended December 31, 2004, which are presented in our Annual Report on Form 10-K filed with the SEC on March 10, 2005. Critical accounting policies are those policies that are most important to the preparation of our condensed consolidated financial statements and require management's subjective and complex judgments due to the need to make estimates about the effect of matters that are inherently uncertain. Our critical accounting policies relate to revenue recognition, aircraft maintenance, aircraft leases and impairment of long-lived assets as discussed below. The application of these accounting policies involves the exercise of judgment and the use of assumptions as to future uncertainties and, as a result, actual results will differ, and could differ materially from such estimates.
Revenue Recognition
Passenger and ground handling revenues are recognized when service is provided. Under our contract and pro-rate flying agreements with our code-share partners, revenue is considered earned when the flight is completed. In the event that our contractual rates have not been finalized at quarterly or annual financial statement dates, we record revenues based on a prior period's approved rates, adjusted to reflect management's current estimate of the results of the then-current contract negotiations. Our agreements with our code-share partners contain certain provisions pursuant to which the parties could terminate the respective agreements, subject to certain rights of the other party, if certain performance criteria are not maintained. Our revenues could be impacted by a number of factors, including changes to the code-share agreements, contract modifications resulting from contract renegotiations and our ability to earn incentive payments contemplated under applicable agreements.
Maintenance
We use the direct-expense method of accounting for our regional jet aircraft engine overhaul costs. Under this method, the maintenance liability is not recorded until the maintenance services are performed, thus substantially reducing significant estimates and judgments inherent under the accrual method. We use the "deferral method" of accounting for our Brasilia turboprops engine overhauls, which provides for engine overhaul costs to be capitalized and depreciated over the estimated useful life of the engine. For leased aircraft, we are subject to lease return provisions that require a minimum portion of the "life" of an overhaul be remaining on the engine at the lease return date. With respect to engine overhauls related to leased Brasilia turboprops to be returned, we adjust the estimated useful lives of the final engine overhauls based on the respective lease return dates. With respect to SkyWest Airlines, a third-party vendor provides our long-term engine services covering the scheduled and unscheduled repairs for engines on our CRJ700s. Under the terms of the agreement, we pay a set dollar amount per engine hour flown on a monthly basis and the third party vendor assumes the obligation to repair the engines at no additional cost to us, subject to certain specified exclusions. During the nine months ended September 30, 2005, we recorded expenses of approximately $8.1 million under the agreement.
Aircraft Leases
The majority of SkyWest Airlines' aircraft are leased from third parties, while ASA's aircraft are primarily debt-financed on a long-term basis. In order to determine the proper classification of our leased aircraft as either operating leases or capital leases, we must make certain estimates at the inception of the lease relating to the economic useful life and the fair value of an asset as well as select an appropriate discount rate to be used in discounting future lease payments. These estimates are utilized by management in making computations as required by existing accounting standards that determine whether the lease is classified as an operating lease or a capital lease. All of our aircraft

leases have been classified as operating leases, which results in rental payments being charged to expense over the terms of the related leases. Additionally, operating leases are not reflected in our condensed consolidated balance sheet and accordingly, neither a lease asset nor an obligation for future lease payments is reflected in our condensed consolidated balance sheet. The aircraft which we own or which are debt-financed appear on our consolidated balance sheets as assets, along with accompanying liabilities, as applicable.
Impairment of Long-Lived and Intangible Assets
�� As of September 30, 2005, we had approximately $2.6 billion of property and equipment and related assets. Additionally, as of September 30, 2005, we had approximately $34.3 million in intangible assets. In accounting for these long-lived and intangible assets, we make estimates about the expected useful lives of the assets, the expected residual values of certain of these assets, and the potential for impairment based on the fair value of the assets and the cash flows they generate. Factors indicating potential impairment include, but are not limited to, significant decreases in the market value of the long-lived assets, a significant change in the condition of the long-lived assets and operating cash flow losses associated with contract routes will be less
than the marginsuse of the long-lived assets. On a periodic basis, we have historically generatedevaluate whether the book value of our aircraft is impaired in accordance with SFAS No. 144, "Accounting for the Impairment or Disposal of Long-Lived Assets." Based on mature SkyWest-controlled
routes.

We have continued to emphasize costthe results of the evaluations, our management and better utilizationconcluded no impairment was necessary as of existing resources. During fiscal 2000, SkyWest experienced only a 2.3% increaseSeptember 30, 2005. However, there is inherent risk in cost per available seat mile in spite of a 45% increaseestimating the future cash flows used in the average costimpairment test. If cash flows do not materialize as estimated, there is a risk the impairment charges recognized to date may be inaccurate, or further impairment charges may be necessary in the future.
Results of fuel during the year. Fuel costs are currently 12.5% of total airline
operating expenses. Cost per available seat mile was 18.0c for fiscal 2000
comparedOperations
Nine Months Ended September 30, 2005 Compared to 17.6c for fiscal 1999.

17
21

RESULTS OF OPERATIONSNine Months Ended September 30, 2004
The following table sets forth information regarding our operating expense
components. Airline operating expenses are expressed as a percentage of total
airline operating revenues. Nonairline expenses are expressed as a percentage of
total nonairline revenues. Total operating expensesmajor operational statistics and interest are expressed
as a percentage of total consolidated revenues. Individual expense components
are also expressed as cents per available seat mile.

FISCAL YEAR ENDED MARCH 31,
---------------------------------------------------------------------------------------
1998 1999 2000
--------------------------- --------------------------- ---------------------------
PERCENT CENTS PERCENT CENTS PERCENT CENTS
OF PER OF PER OF PER
AMOUNT REVENUES ASM AMOUNT REVENUES ASM AMOUNT REVENUES ASM
-------- -------- ----- -------- -------- ----- -------- -------- -----

Salaries, wages and
employee benefits......... $ 67,591 25.5% 4.6c $101,243 26.2% 5.5c $122,617 25.9% 5.7c
Aircraft costs............. 52,357 19.8 3.6 70,561 18.2 3.8 82,102 17.4 3.8
Maintenance................ 20,535 7.8 1.4 36,563 9.5 2.0 42,611 9.0 2.0
Fuel....................... 28,510 10.8 2.0 29,477 7.6 1.6 48,424 10.2 2.2
Other airline expenses..... 62,701 23.7 4.3 84,712 21.9 4.6 90,389 19.1 4.2
Interest................... 1,639 0.6 0.1 2,376 0.6 0.1 2,726 0.6 0.1
-------- ---- ---- -------- ---- ---- -------- ---- ----
Total airline expenses..... 233,333 88.3 16.0c 324,932 84.0 17.6c 388,869 82.2 18.0c
==== ==== ====
Other...................... 1,622 93.6 1,765 94.1 1,955 93.8
-------- -------- --------
Total operating expenses
and interest.............. $234,955 88.3% $326,697 84.1% $390,824 82.3%
======== ======== ========

THREE MONTHS ENDED JUNE 30,
--------------------------------------------------------
1999 2000
-------------------------- ---------------------------
PERCENT CENTS PERCENT CENTS
OF PER OF PER
AMOUNT REVENUES ASM AMOUNT REVENUES ASM
------- -------- ----- -------- -------- -----

Salaries, wages and
employee benefits......... $28,708 25.9% 5.5c $ 33,088 25.5% 5.8c
Aircraft costs............. 19,546 17.6 3.7 21,589 16.6 3.8
Maintenance................ 10,251 9.2 2.0 10,307 7.9 1.8
Fuel....................... 9,122 8.2 1.7 15,029 11.6 2.7
Other airline expenses..... 22,943 20.7 4.4 24,753 19.1 4.4
Interest................... 563 0.5 0.1 579 0.4 0.1
------- ---- ---- -------- ---- ----
Total airline expenses..... 91,133 82.1 17.4c 105,345 81.1 18.6c
==== ====
Other...................... 518 89.2 448 95.8
------- --------
Total operating expenses
and interest.............. $91,651 82.2% $105,793 81.1%
======= ========

THREE MONTHS ENDED JUNE 30, 2000 COMPARED TO THREE MONTHS ENDED JUNE 30, 1999

For the threepercentage-of-change for the nine months ended Juneidentified below.
Nine months ended September 30,
2005 2004 % Change
Passengers carried 12,988,939 9,811,577 32.4 %
Revenue passenger miles (000) 6,000,078 4,013,486 49.5 %
Available seat miles (000) 8,001,001 5,453,588 46.7 %
Passenger load factor 75.0 % 73.6 % 1.4 pts
Passenger breakeven load factor 68.3 % 65.2 % 3.1 pts
Revenue per available seat mile 15.3 ¢ 15.2 ¢ 0.6 %
Cost per available seat mile 13.8 ¢ 13.4 ¢ 3.7 %
Fuel cost per available seat mile 4.3 ¢ 3.1 ¢ 38.7 %
Average passenger trip length (miles) 462 409 13.0 %
Our total ASMs generated during the nine months ended September 30, 2000, we continued to develop our
code-sharing relationships with our code-sharing partners and took delivery2005 increased 46.7% from the nine months ended September 30, 2004. The increase in ASMs was primarily a result of the firstincrease in our aircraft fleet, including our acquisition of 55 Canadair Regional Jets on order.ASA, to 376 as of September 30, 2005, from 202 aircraft as of September 30, 2004, and the increase in seat capacity and stage lengths flown by our CRJ700s.
Net Income. Net income increased to $16.5$73.6 million, or $0.65$1.26 per diluted share, for the threenine months ended JuneSeptember 30, 2000,2005, compared to $13.6$60.7 million, or $0.55$1.04 per diluted share, for the threenine months ended JuneSeptember 30, 1999. Consolidated2004. Factors relating to the change in net income are discussed below.

Total Operating Revenue. Total operating revenues increased 16.9% to $130.4
million for the threenine months ended JuneSeptember 30, 2000,2005 increased 47.3% compared to the nine months ended September 30, 2005. The increase was primarily due to the acquisition of ASA on September 7, 2005 as total operating revenues include revenues from $111.6 millionan additional 151 aircraft operated by ASA for the three months ended June 30, 1999.last 23 days of the quarter.
Passenger revenue. Passenger revenues, which represented 98.5% of consolidated operating
revenues, increased 17.0% to $128.4 million for the three months ended June 30,
2000 from $109.7 million, or 98.3%98.6% of consolidated operating revenues for the threenine months ended JuneSeptember 30, 1999. The increase was due primarily2005, increased 47.4% to a 10.1%
increase in revenue passenger miles and a 6.1% increase in yield per revenue
passenger mile.$1.2 billion, from $816.7 million, or 98.5% of consolidated operating revenues, for the nine months ended September 30, 2004. Passenger revenues, excluding fuel reimbursements from code-share partners, increased 32.6% for the nine months ended September 30, 2005. The increase in yield per revenue passenger milerevenues excluding fuel was primarily due to a 46.7% increase in ASMs, principally theas a result of competitors eliminating and reducing scheduled service in the San
Francisco and Los Angeles markets. Additionally, SkyWest implemented selected
fare increases during the 2000 fiscal year which have remained intact. Fuel
surcharges have also been added to fares to mitigate the increase in fuel
prices. On SkyWest-controlled flights, SkyWest also continues its effortsour operating aircraft due to maximize revenuethe acquisition of ASA on September 7, 2005. This increase was partially offset, however, by usethe economic efficiencies of a sophisticated revenue managementflying new, incremental regional jet aircraft, since these efficiencies are passed on to our code-share partners through the rates contemplated by their respective contracts. We placed 12 CRJ700s and control system
which utilizes historical booking data and trends12 CRJ200s into service under our United Express operations during the nine months ended September 30, 2004. Revenue per ASM increased 0.6% to optimize revenue. Together
these factors increased revenue per available seat mile 9.0% to 23.0c15.3¢, from 15.2¢ for the threenine months ended JuneSeptember 30, 20002004, primarily due to an increase in fuel reimbursements from 21.1ccode-share partners. Passenger revenues include an amount designed to reimburse us for aircraft ownership costs. The amount deemed to be rental income for the threenine months ended JuneSeptember 30, 1999.2005 was $193.0 million.
Passenger Load Factor. Passenger load factor increased to 56.6%75.0% for the threenine months ended JuneSeptember 30, 20002005, from 55.3%73.6% for the threenine months ended JuneSeptember 30, 1999.2004. The increase in load factor was due primarily to the further development of code-sharingour relationships with Delta and United whereby we supplement mainline service in previously established and Delta whereby SkyWest isdeveloped markets. Additionally, we are experiencing high load
factors in many markets.higher passenger acceptance of our regional jet aircraft.
Total Airline Expenses Excluding Fuel. Total airline expenses for the nine months ended September 30, 2005, excluding fuel charges (which are substantially reimbursable by our code-share partners), increased approximately 35.6% from the nine months ended September 30, 2004. The increase was also due,primarily a result of a 46.7% increase in part, to refinementsASMs (which resulted principally from the expansion of our regional jet fleet from 2004, in SkyWest's flight schedules and continued operational improvements.connection with our acquisition of ASA). Total operating expenses for the nine months ended September 30, 2005 increased at a lower rate than ASM growth, primarily due to the increased operating efficiencies obtained from the new regional jets that were added to our fleet during the year and from increased stage lengths flown by the new regional jets.
Operating and Interest Expenses. Operating and interest expenses increased 15.4%51.4% to $105.8$1.11 billion for the nine months ended September 30, 2005, compared to $734.7 million for the threenine months ended JuneSeptember 30, 2000 compared2004. The increase in total operating and interest expenses was due principally to $91.6 million for the three
months ended June 30, 1999.growth in our regional jet fleet from 2004. As a percentage of consolidated operating revenues, total operating expenses and interest decreasedexpenses increased to 81.1%91.0% for the threenine months ended JuneSeptember 30, 2000,2005, from 82.2%88.6% for the comparable period of fiscal 2000. For
the threenine months ended JuneSeptember 30, 2000, total airline operating expenses and
interest (excluding nonairline expenses) were

18
22

81.1% of airline operating revenues, compared to 82.1% for the three months
ended June 30, 1999.2004. The improved margin was largely the result of increased
passenger enplanements, growth in yield per revenue passenger mile and operating
revenues which outpaced the increase in operating expenses.

Airlineand interest expenses as a percentage of consolidated operating costs per available seat mile (including interest
expense) increased 6.9% to 18.6c for the three months ended June 30, 2000 from
17.4c for the three months ended June 30, 1999. The increaserevenues was primarily due to increasedsignificant increases in fuel costs and higher employee incentive payments based onyear-over-year. Operating revenues increased profitability. Factors relating47.3% for the nine months ended September 30, 2005, compared to the changenine months ended September 30, 2004, while total operating and interest expenses increased 51.4% over the same period. The increase in total operating revenues was primarily due to the growth in our regional jet fleet from 2004 (including our acquisition of ASA). Airline operating and interest expenses, excluding fuel charges, per ASM decreased 7.7% to 9.6¢ for the nine months ended September 30, 2005, from 10.4¢ for the nine months ended September 30, 2004. The primary reason for the decrease was the increased capacity of our regional jet aircraft and the increase in stage lengths flown by our regional jet aircraft.

The following table sets forth information regarding our operating expense components and interest expense for the nine-month periods ended September 30, 2005 and 2004. Operating and interest expenses are discussed below.

Salaries,expressed as a percentage of operating revenues. Individual expense components are also expressed as cents per ASM.
Nine months ended September 30,
2005 2004
Amount Percentage
of
Revenue Cents
per
ASM Amount Percentage
of
Revenue Cents
Per
ASM
(in thousands)

(in thousands)

Salaries, wages and employee benefits $ 275,170 22.5 % 3.4 $ 206,668 24.9 % 3.8
Aircraft costs 214,790 17.6 % 2.7 163,232 19.7 % 3.0
Maintenance 73,204 6.0 % 0.9 55,112 6.6 % 1.0
Fuel 347,536 28.4 % 4.3 170,884 20.6 % 3.1
Other airline expenses 175,946 14.4 % 2.2 125,502 15.1 % 2.3
Interest 25,510 2.1 % 0.3 13,340 1.6 % 0.2
Total airline expenses $ 1,112,156 13.8 $ 734,738 13.4
The cost per ASM of salaries, wages and employee benefits decreased as a percentage of airline
operating revenues to 25.5%3.4¢ for the threenine months ended JuneSeptember 30, 2000,2005, from 25.9%3.8¢ for the threenine months ended JuneSeptember 30, 1999.2004. The decrease was principally the
resultin cost per ASM of airline operating revenues increasing 17.1% period over period, and salaries, wages and employee benefits increasing only 15.2% period over period.was primarily due to the acquisition of ASA on September 7, 2005, as the number of CRJ700s and CRJ200s we operate increased by 35 and 104 aircraft, respectively. The decrease in cost per ASM was also partially due to the 13.0% increase in stage lengths flown by these regional jets. The average number of full-time equivalent employees increased 33.3% to approximately 8,051 for the threenine months ended JuneSeptember 30, 2000 was 3,500, compared to 3,1802005 from 6,042 for the threenine months ended JuneSeptember 30, 1999, an increase of 10.1%.2004. The increase in number of personnelemployees was due, in large part, to the addition of personnel required for SkyWest's expansion.
Salaries, wagesthe additional regional jet flying and employee benefitsground handling operations within our United Express operations.
The cost per available seat mile increased to 5.8cASM for the three months ended June 30, 2000, compared to 5.5c for the three months
ended June 30, 1999, principally as a result of additional employees and higher
employee incentive payments based on increased profitability.

Aircraftaircraft costs, including aircraft rent and depreciation, decreased as a
percentage of airline operating revenues to 16.6%2.7¢ for the threenine months ended JuneSeptember 30, 2000,2005, from 17.6%3.0¢ for the threenine months ended JuneSeptember 30, 1999.2004. The decrease in cost per ASM was primarily due primarily to airlinethe operation of 14 incremental CRJ200s and 32 incremental CRJ700s period-over-period, which have a lower operating revenues increasing 17.1% period over
period and aircraft costs increasing only 10.5% period over period. Aircraft
costscost per available seat mile increased slightlyASM than our existing turboprop fleet.
The cost per ASM for maintenance expense decreased to 3.8c0.9¢ for the threenine months ended JuneSeptember 30, 20002005, from 3.7c1.0¢ for the threenine months ended JuneSeptember 30, 1999.2004. The decrease in cost per ASM for maintenance expense was primarily due to the timing of certain maintenance events and the relatively low age of a large portion of our regional jet fleet (the average age of our CRJ700s and CRJ200s is 1.3 and 3.9 years, respectively), which results in lower initial maintenance expenses. Under our United Express Agreement, specific amounts are included in the rates and charges for mature maintenance on regional jet engines that we record as revenue. However, consistent with the direct expense maintenance policy, we record maintenance expense on our CRJ200 engines as it is incurred. As a result, during the nine months ended September 30, 2005 we collected and recorded as revenue $19.8 million (pretax) under the United Express Agreement, with no corresponding offset for CRJ200 engine maintenance overhauls since none were incurred. Because the "Maintenance" caption in the table set forth above does not include salaries, wages and employee benefits associated with our maintenance operations (those costs are stated separately in the table), the Maintenance expense decreased as a percentagecaption in the above table differs from the Maintenance caption in our condensed consolidated statements of airline operating revenuesincome.
The cost per ASM for fuel increased to 7.9%4.3¢ for the threenine months ended JuneSeptember 30, 2000, compared to 9.2%2005, from 3.1¢ for the threenine months ended JuneSeptember 30, 1999. The decrease2004. This increase was primarily due primarily to airline operating
revenuesthe

average price of fuel increasing 17.1% period over period and maintenance expense increasing
only 0.5% period over period. Maintenance expense41.9% to $1.93 per available seat mile
decreased to 1.8cgallon during the nine months ended September 30, 2005, from $1.36 per gallon for the threenine months ended JuneSeptember 30, 2000, from 2.0c2004.
The cost per ASM for the
three months ended June 30, 1999.

Fuel costs increased as a percentage of airline operating revenues to 11.6%
for the three months ended June 30, 2000, from 8.2% for the three months ended
June 30, 1999. The increase was due primarily to a 43.8% increase in the average
fuel price per gallon to $1.05 from $0.73. Fuel costs per available seat mile
increased to 2.7c for the three months ended June 30, 2000, from 1.7c for the
three months ended June 30, 1999.

Otherother expenses, primarily consisting of commissions, landing fees, station rentals, computer reservation system fees and hull and liability insurance, decreased to 2.2¢ for the nine months ended September 30, 2005, from 2.3¢ for the nine months ended September 30, 2004. The decrease was primarily due to the 46.7% increase in ASMs produced by the new incremental regional jet aircraft that have been added to our fleet during the past twelve months and the acquisition of ASA on September 7, 2005.
Interest expense increased to approximately $25.5 million during the nine months ended September 30, 2005, from approximately $13.3 million during the nine months ended September 30, 2004. The increase in interest expense was primarily due to the acquisition of ASA and its related aircraft debt.
TheEmergency War Time Supplemental Appropriations Act of 2003 became effective on May 15, 2003, and we received approximately $6.5 million under the act. This legislation provides for compensation to domestic airlines based on their proportional share of passenger security and infrastructure security fees paid, as well as reimbursement for installing fortified flight deck doors. This legislation also provides for the suspension of passenger and infrastructure fees from June 1, 2003 through October 31, 2003 and an extension of war risk liability and hull insurance coverage through December 31, 2004. Pursuant to the Consolidated Appropriations Act of 2005, Congress further extended the government's mandate to provide war-risk insurance through December 31, 2005. We are unable to predict whether the government will extend this insurance coverage past December 31, 2005. Under terms of our contracts with our code-share partners, however, such insurance expense is a "pass-through" cost and is not anticipated to have a material impact on our ongoing operations or future financial results.
2004 Compared to 2003
Operating Statistics. The following table sets forth our major operational statistics and the percentage-of-change for the years identified below.
Year ended December 31,
2004 2003 % Change
Passengers carried 13,424,520 10,738,691 25.0 %
Revenue passenger miles (000) 5,546,069 4,222,669 31.3 %
Available seat miles (000) 7,546,318 5,875,029 28.4 %
Passenger load factor 73.5 % 71.9 % 1.6 pts
Passenger breakeven load factor 65.5 % 63.9 % 1.6 pts
Yield per revenue passenger mile 20.5 ¢ 20.9 ¢ (1.9 )%
Revenue per available seat mile 15.3 ¢ 15.1 ¢ 1.3 %
Cost per available seat mile 13.6 ¢ 13.4 ¢ 1.5 %
Fuel cost per available seat mile 3.3 ¢ 2.5 ¢ 32.0 %
Average passenger trip length (miles) 413 393 5.1 %
The total ASMs we generated during the year ended December 31, 2004 increased 28.4% from the year ended December 31, 2003. The increase in ASMs was primarily a result of the increase in our operating aircraft to 206 aircraft as of December 31, 2004, from 185 aircraft as of December 31, 2003. During the year ended December 31, 2004, we took delivery of 12 new CRJ200s, four used CRJ200s with an average age of less than one year and 12 new CRJ700s.

Net Income. Net income increased to $81.9 million, or $1.40 per diluted share, for the year ended December 31, 2004, compared to $66.8 million, or $1.15 per diluted share, for the year ended December 31, 2003. Factors relating to the change in net income are discussed below.
Passenger Revenues. Passenger revenues include an amount designed to reimburse us for aircraft ownership costs. The amount deemed to be rental income for the year ended 2004 was $187.0 million. Passenger revenues, which represented 98.6% of consolidated operating revenues for the year ended December 31, 2004, increased 29.2% to $1.14 billion for the year ended December 31, 2004, from $882.1 million, or 99.3% of consolidated operating revenues, for the year ended December 31, 2003. Passenger revenues, excluding fuel reimbursements from major partners, increased 21.1% for the year ended December 31, 2004. The increase in passenger revenues excluding fuel was primarily due to a 28.4% increase in ASMs, principally as a result of the increase in our operating aircraft to 206 aircraft as of December 31, 2004, from 185 aircraft as of December 31, 2003. However, this increase was partially offset by the economic efficiencies of flying new, incremental regional jet aircraft, since these efficiencies are passed on to our major partners through the rates contemplated by their respective contracts. Twelve CRJ700s and 12 additional CRJ200s were placed into service under our United Express operations during the year ended December 31, 2004. Revenue per ASM increased 1.3% to 15.3¢, from 15.1¢ for the year ended December 31, 2003, primarily due to an increase in fuel reimbursements from major partners.
Passenger Load Factor. Passenger load factor increased to 73.5% for the year ended December 31, 2004, from 71.9% for the year ended December 31, 2003. The increase in load factor was due primarily to the further development of our relationships with Delta and United whereby we supplement mainline service in previously established and developed markets. Additionally, we are experiencing higher passenger acceptance of our regional jet aircraft.
Total Airline Expenses Excluding Fuel. Total airline expenses for the year ended December 31, 2004, excluding fuel charges (which are substantially reimbursable by our major partners), increased approximately 21.4% from the same period of 2003. The increase was primarily a result of a 28.4% increase in ASMs (which resulted principally from the expansion of our regional jet fleet from 2003). Total operating expenses for the year ended December 31, 2004 increased at a lower rate than ASM growth, primarily due to the increased operating efficiencies obtained from the new regional jets that were added to our fleet during the year and from increased stage lengths flown by the new regional jets.
Operating and Interest Expenses. Operating and interest expenses increased 30.4% to $1.03 billion for the year ended December 31, 2004, compared to $789.4 million for the year ended December 31, 2003. The increase in total operating and interest expenses was due principally to the growth in our regional jet fleet from 2003. As a percentage of consolidated operating revenues, total operating and interest expenses increased to 89.1% for the year ended December 31, 2004, from 88.9% for the year ended December 31, 2003. The increase in operating and interest expenses as a percentage of airlineconsolidated operating revenues was primarily due to 19.1%significant increases in fuel costs year-over-year. Operating revenues increased 30.2% for the three
monthsyear ended June 30, 2000,December 31, 2004, compared to the year ended December 31, 2003, while total operating and interest expenses increased 30.4% over the same period. The increase in total operating revenues was primarily due to the growth in our regional jet fleet from 20.7%2003. Airline operating and interest expenses, excluding fuel charges, per ASM decreased 5.5% to 10.3¢ for the three monthsyear ended June 30, 1999.December 31, 2004, from 10.9¢ for the year ended December 31, 2003. The primary reason for the decrease was the increased capacity of our regional jet aircraft and the increase in stage lengths flown by our regional jet aircraft.

The following table sets forth information regarding our operating expense components for the years ended December 31, 2004 and 2003. Operating expenses are expressed as a percentage of operating revenues. Individual expense components are also expressed as cents per ASM.
Year ended December 31,
2004 2003
Amount Percentage
of Revenue Cents
per
ASM Amount Percentage
of
Revenue Cents
per
ASM
(in thousands)

(in thousands)

Salaries, wages and employee benefits $ 282,676 24.5 3.8 $ 225,545 25.4 3.8
Aircraft costs 222,837 19.3 3.0 199,355 22.4 3.4
Maintenance 77,514 6.7 1.0 54,151 6.1 0.9
Fuel 252,556 21.8 3.3 149,429 16.8 2.5
Other airline expenses 175,686 15.2 2.3 151,066 17.0 2.6
Interest 18,239 1.6 0.2 9,891 1.1 0.2
Total airline expenses $ 1,029,508 13.6 $ 789,437 13.4
The cost per ASM of salaries, wages and employee benefits remained constant at 3.8¢ for the year ended December 31, 2004 and December 31, 2003. The average number of full-time equivalent employees increased 28.3% to 6,747 for the year ended December 31, 2004 from 5,257 for the year ended December 31, 2003. The increase in number of employees was due, in large part, to the addition of personnel required for the new regional jet flying and ground handling operations within our United Express operations.
The cost per ASM for aircraft costs, including aircraft rent and depreciation, decreased to 3.0¢ for the year ended December 31, 2004, from 3.4¢ for the year ended December 31, 2003. The decrease in cost per ASM was primarily due to the addition of twelve CRJ700s, which have a lower operating cost per ASM than our existing aircraft. Additionally, the decrease was due, in part, to our changing the estimate on depreciable lives of rotable spares from five years to ten years effective January 2004. This change in estimate increased our pretax income by $11,455,000 for the year ended December 31, 2004. The impact of this change on costs per ASM for the year ended December 31, 2004 was 0.002¢ and the remaining decrease was primarily due to the increase in the number of regional jets that were added to our fleet during 2004.
The cost per ASM for maintenance expense increased to 1.0¢ for the year ended December 31, 2004, from 0.9¢ the year ended December 31, 2003. The increase in cost per ASM was primarily due to the timing of certain maintenance events. Under our United Express Agreement, specific amounts are included in the rates and charges for mature maintenance on regional jet engines that we record as revenue. However, consistent with the change to a direct expense maintenance policy, we record maintenance expense on its CRJ200 engines as it is incurred. As a result, during the year ended December 31, 2004, we collected and recorded as revenue $23.3 million (pretax) under the United Express Agreement, with no corresponding offset for CRJ200 engine maintenance overhauls since none were incurred. Because the "Maintenance" line in the table set forth above does not include salaries, wages and employee benefits associated with our maintenance operations (those costs are stated separately in the table), the Maintenance caption in the above table differs from the Maintenance caption in our condensed consolidated statements of income.
The cost per ASM for fuel increased to 3.3¢ for the year ended December 31, 2004, from 2.5¢ for the year ended December 31, 2003. This increase was primarily due to the average price of fuel increasing to $1.45 per gallon during the year ended December 31, 2004, from $1.12 per gallon for the year ended December 31, 2003.

The cost per ASM for other expenses, primarily consisting of landing fees, station rentals, computer reservation system fees and hull and liability insurance, decreased 11.5% to 2.3¢ for the year ended December 31, 2004, from 2.6¢ for the year ended December 31, 2003. The decrease was primarily related to our elimination of certain reservation and distribution costs which were previously associated with the United Express Agreement that are now handled directly by United, along with the increase in stage lengths flown by our regional jets.
Interest expense increased to approximately $18.2 million during the year ended December 31, 2004, from approximately $9.9 million during the year ended December 31, 2003. The increase in interest expense was primarily due to the long-debt financing of the new regional jets we acquired.
2003 Compared to 2002
Operating Statistics. The following table sets forth the major operational statistics and the percentage-of-change for the years ended identified below:
Year ended December 31,
2003 2002 % Change
Passengers carried 10,738,691 8,388,935 28.0 %
Revenue passenger miles (000) 4,222,669 2,990,753 41.2 %
Available seat miles (000) 5,875,029 4,356,053 34.9 %
Passenger load factor 71.9 % 68.7 % 3.2 pts
Passenger breakeven load factor 63.9 % 58.4 % 5.5 pts
Yield per revenue passenger mile 20.9 ¢ 25.7 ¢ (18.7 )%
Revenue per available seat mile 15.1 ¢ 17.8 ¢ (15.2 )%
Cost per available seat mile 13.4 ¢ 15.1 ¢ (11.3 )%
Fuel cost per available seat mile 2.5 ¢ 2.2 ¢ 13.6 %
Average passenger trip length (miles) 393 356 10.4 % The total ASMs we generated during the year ended December 31, 2003 increased 34.9% from the year ended December 31, 2002. The increase in ASMs was primarily a result of the increase of our operating aircraft to 185 aircraft as of December 31, 2003, from 149 aircraft as of December 31, 2002. During the year ended December 31, 2003, we took delivery of 39 additional CRJ200s.
Net Income. Net income decreased to $66.8 million, or $1.15 per diluted share, for the year ended December 31, 2003, compared to $86.9 million, or $1.51 per diluted share, for the year ended December 31, 2002. Factors relating to the change in net income are discussed below.
Passenger Revenues. Passenger revenues, which represented 99.3% of consolidated operating revenues for the year ended December 31, 2003, increased 14.6% to $882.1 million for the year ended December 31, 2003, from $769.4 million or 99.4% of consolidated operating revenues for the year ended December 31, 2002. Passenger revenues, excluding fuel costs, increased 9.1% for the year ended December 31, 2003. The increase in passenger revenue excluding fuel was primarily due to a 34.9% increase in ASMs, principally as a result of the increase in operating aircraft to 185 aircraft as of December 31, 2003, from 149 aircraft as of December 31, 2002. However, this increase was partially offset by the economic efficiencies of flying new, incremental regional jet aircraft, since these efficiencies are passed on to our major partners through decreases in the rates contemplated by their respective contracts. Twenty-eight additional CRJ200s were placed into service under our United Express operations and 11 additional CRJ200s were placed in service under the Delta Connection operations during the year ended December 31, 2003. Revenue per ASM decreased 15.2% to 15.1¢ from 17.8¢ for the year ended December 31, 2002, primarily due to an increase in ASMs produced by CRJ200s and CRJ700s (resulting in lower revenue per ASM pursuant to the terms of our agreements with Delta and United).

Passenger Load Factor. Passenger load factor increased to 71.9% for the year ended December 31, 2003, from 68.7% for the year ended December 31, 2002. The increase in load factor was due primarily to the further development of our relationships with Delta and United whereby we supplement mainline service in previously established and developed markets. Additionally, we are experiencing higher passenger acceptance of our regional jet aircraft.
Total Airline Expenses Excluding Fuel. Total airline expenses for the year ended December 31, 2003, excluding fuel charges (which are reimbursable by our major partners), increased approximately 14.2% from the same period of 2002. The increase was primarily a result of a 34.9% increase in ASMs (which resulted principally from the expansion of our regional jet fleet from 2002). Total operating expenses for the year ended December 31, 2003 increased at a lower rate than ASMs due to the increased stage lengths flown by our regional jets and the cost reduction initiatives we implemented during the year ended December 31, 2003.
Operating and Interest Expenses. Operating and interest expenses increased 19.9% to $789.4 million for the year ended December 31, 2003, compared to $658.5 million for the year ended December 31, 2002. The increase in total operating and interest expenses was due principally to the growth in our regional jet fleet from 2002. As a percentage of consolidated operating revenues, total operating and interest expenses increased to 88.9% for the year ended December 31, 2003, from 85.0% for the year ended December 31, 2002. The increase in operating and interest expenses as a percentage of consolidated operating revenues was primarily due to the reduction in our departure rates as operating revenues increased 14.7% year-over-year, while total operating expenses and interest increased 19.9% from 2002. The increase in interest expense was also primarily due to the increase in debt financing of our new regional jets. Airline operating and interest expense excluding fuel charges, per ASM decreased 15.5% to 10.9¢ for the year ended December 31, 2003, from 12.9¢ for the year ended December 31, 2002. The primary reason for the decrease was the increased capacity of our regional jet aircraft, which are less expensive to operate on a per-ASM basis than Brasilia turboprops.
The following table sets forth information regarding the Company's operating expense components for the years ended December 31, 2003 and 2002. Operating expenses are expressed as a percentage of operating revenues. Individual expense components are also expressed as cents per ASM.
Year ended December 31,
2003 2002
Amount Percentage
of Revenue Cents
per
ASM Amount Percentage
of
Revenue Cents
per
ASM
(in thousands)

(in thousands)

Salaries, wages and employee benefits $ 225,545 25.4 3.8 $ 200,715 25.9 4.6
Aircraft costs 199,355 22.4 3.4 160,853 20.8 3.7
Maintenance 54,151 6.1 0.9 54,041 7.0 1.2
Fuel 149,429 16.8 2.5 97,899 12.6 2.2
Other airline expenses 151,066 17.0 2.6 142,822 18.4 3.3
US Government assistance — 0.0 0.0 (1,438 ) (0.2 ) 0.0
Interest 9,891 1.1 0.2 3,611 0.5 0.1
Total airline expenses $ 789,437 13.4 $ 658,503 15.1
The cost per ASM of salaries, wages and employee benefits decreased to 3.8¢ for the year ended December 31, 2003, compared to 4.6¢ for the year ended December 31, 2002. The decrease was primarily the result of SkyWest not incurring commissions on
United Express passenger related revenues. Other expenses per available seat
mile were 4.4c for both periods ended June 30, 2000 and 1999.

FISCAL 2000 COMPARED TO FISCAL 1999

During fiscal 2000, SkyWest continued to develop its code-sharing
relationships with its code-sharing partners and took delivery of the last five
Brasilia Turboprops ordered. SkyWest experienced growth in available seat miles,
revenue passenger miles, passengers carried and load factors. In fiscal 2000,
net income increased 36.5% to $57.1 million, or $2.29 per diluted share,
compared to $41.8 million, or $1.69 per diluted share, in fiscal 1999.
Consolidated operating revenues increased 22.2% to a record $474.8 million in
fiscal 2000 compared to $388.6 million in fiscal 1999.

Passenger revenues, which represented 98.3% of total operating revenues,
increased 22.4% to $466.7 million in fiscal 2000 compared to $381.4 million, or
98.1% of total operating revenues, in fiscal
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1999. The increase was due to a 17.8% increase in revenue passenger miles and a
4.0% increase in yield per revenue passenger mile. The increase in yield per
revenue passenger mile was principally the result of competitors eliminating or
reducing scheduled service in the San Francisco and Los Angeles markets.
Additionally, SkyWest implemented selected fare increases during the 2000 fiscal
year, which have remained intact. Fuel surcharges were also added to fares to
mitigate the increase in fuel prices during the last half of the year. With
respect to SkyWest-controlled flying, SkyWest also continued its efforts to
maximize revenuestage lengths flown by use of a sophisticated revenue management and control system
which utilizes historical booking data and trends to optimize revenue. Together,
these factors increased revenue per available seat mile 3.8% to 21.8c in fiscal
2000 compared to 21.0c in fiscal 1999.

During fiscal 2000, total airline operating revenues increased 22.2% and
total airline operating expenses increased only 19.7%. As a result, total
airline operating expenses and interest were 82.2% of total airline operating
revenues in fiscal 2000 compared to 84.0% in fiscal 1999.

Salaries, wages and employee benefits decreased as a percentage of airline
operating revenues to 25.9% in fiscal 2000 from 26.2% in fiscal 1999. The
decrease was the result of airline operating revenues increasing 22.2% year over
year and salaries, wages and employee benefits increasing only 21.1% year over
year.regional jets. The average number of full-time equivalent employees increased 3.5% to 5,257 for the year ended December 31, 2003 from 5,079 for the year ended December 31, 2002. The increase in number of employees was 3,302 for fiscal 2000 compared to
3,092 for fiscal 1999, an increase of 6.8%. The increase was due, in large

part, to the addition of personnel required for SkyWest's expansion. Salaries, wagesthe new flying and employee
benefitsground handling operations within our United Express operations.
The cost per available seat mile increased to 5.7c in fiscal 2000 from 5.5c in
fiscal 1999.

AircraftASM for aircraft costs, including aircraft rent and depreciation, decreased as a
percentage of airline operating revenues to 17.4% in fiscal 20003.4¢ for the year ended December 31, 2003, from 18.2% in
fiscal 1999.3.7¢ for the year ended December 31, 2002. The decrease in costs per ASM was primarily due to airline operating revenues increasing 22.2%the increase in the number of CRJ200s that were added to our fleet during the year over year and aircraft costs increasing only 16.4% year over year. Aircraft
costs per available seat mile were 3.8c for both fiscal 2000 and 1999.

Maintenance expense decreased slightly as a percentage of airline operating
revenues to 9.0%ended December 31, 2003, resulting in fiscal 2000 from 9.5% in fiscal 1999. The decrease was due
to airline operating revenues increasing 22.2% year over year and maintenance
expenses increasing only 16.5% year over year. Maintenance cost per available
seat mile was 2.0c for both fiscal 2000 and 1999.

Fuel costs increased as a percentage of airline operating revenues to 10.2%
in fiscal 2000 from 7.6% in fiscal 1999. The increase was due to an increase in stage lengths year-over-year.
The cost per ASM for maintenance expense decreased to 0.9¢ for the averageyear ended December 31, 2003, compared to 1.2¢ for the year ended December 31, 2002. The decrease in cost per ASM was primarily attributable to the increase in stage lengths flown by CRJ200s, a higher mix of fuel per gallon to 93.0cnew aircraft with our fleet and the timing of certain maintenance-related events. Under our United Express Agreement, specific amounts are included in fiscal 2000 from 64.0c in fiscal
1999.the rates and charges for mature maintenance on regional jet engines that we record as revenue. As a result, fuelduring the year ended December 31, 2003, we collected and recorded as revenue $15.9 million (pretax) under the United Express Agreement, with no corresponding offset for CRJ200 engine maintenance overhauls since none were incurred. Because the "Maintenance" line in the table set forth above does not include salaries, wages and employee benefits associated with our maintenance operations (those costs are stated separately in the table), the maintenance caption in the above table differs from the Maintenance caption in the Company's condensed consolidated statements of income.
The cost per available seat mileASM for fuel increased to 2.2c in
fiscal 20002.5¢ for the year ended December 31, 2003, from 1.6c in fiscal 1999.

Other2.2¢ for the year ended December 31, 2002. This was primarily due to the average price of fuel increasing to $1.12 per gallon during the year ended December 31, 2003, from $0.97 per gallon for the year ended December 31, 2002.
The cost per ASM for other expenses, which consist primarily consisting of commissions, landing fees, station rents,rentals, computer reservation systemssystem fees and hull and liability insurance, decreased as a percentage of airline operating revenues21.2% to 19.1% in fiscal 2000
compared to 21.9% in fiscal 1999.2.6¢ for the year ended December 31, 2003, from 3.3¢ for the year ended December 31, 2002. The decrease was primarily the resultrelated to our elimination of SkyWest not incurring commissions oncertain reservation and distribution costs which were previously associated with the United Express related passenger revenues.
As a result, cost per available seat mile decreased to 4.2c in fiscal 2000 from
4.6c in fiscal 1999.

FISCAL 1999 COMPARED TO FISCAL 1998

During fiscal 1999, SkyWest dramatically expanded its code-sharing
relationshipsAgreement, along with United and added a record number of aircraft to the fleet.
SkyWest experienced high growth factors in available seat miles, revenue
passenger miles, passengers carried and load factors. In fiscal 1999, net income
increased 90.6% to $41.8 million, or $1.69 per diluted share, compared to $21.9
million, or $1.04 per diluted share in fiscal 1998. Consolidated operating
revenues increased 46.0% to $388.6 million in fiscal 1999 compared to $266.1
million in fiscal 1998.

Passenger revenues, which represented 98.1% of total operating revenues,
increased 47.1% to $381.4 million in fiscal 1999, compared to $259.3 million or
97.4% of total operating revenues in fiscal 1998. The increase was due to a
36.3% increase in revenue passenger miles and a 7.8% increase in yield per
revenue passenger mile. Effective April 23, 1998, SkyWest expanded its
code-sharing relationship with United, as United Express, and began operating
flightsstage lengths flown by our regional jets.
Interest expense increased to andapproximately $9.9 million during the year ended December 31, 2003, from Seattle/Tacoma and Portland.
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24

SkyWest also expanded its United Express operations at Los Angeles atapproximately $3.6 million during the same
time. Effective June 1, 1998, SkyWest further expanded its United Express
operations and began operating flights to and from San Francisco.year ended December 31, 2002. The increase in yield per revenue passenger mile was also the result of improved revenue
management resulting from schedule refinements and fleet rationalization.
SkyWest also continued its efforts to maximize revenue by use of a sophisticated
revenue management and control system which utilizes historical booking data and
trends to optimize revenue. Together, these factors increased revenue per
available seat mile 16.0% to 21.0c in fiscal 1999 compared to 18.1c in fiscal
1998.

During fiscal 1999, total airline operating revenues increased 46.3% and
total airline operating expenses increased only 39.0%. As a result, total
airline operating expenses and interest were 84.0% of total airline operating
revenues in fiscal 1999 compared to 88.4% in fiscal 1998.

Salaries, wages and employee benefits increased as a percentage of airline
operating revenues to 26.2% in fiscal 1999 from 25.5% in fiscal 1998. The
increaseexpense was primarily the result of incentive payments to employees, which are
based on SkyWest's profitability. The average number of employees was 3,092 for
fiscal 1999 compared to 1,915 for fiscal 1998, an increase of 61.5%. The large
increase was due primarily to the additiontemporary long-debt financing of personnel required for SkyWest's
expansion. Salaries, wagesthe regional jets we acquired during the twelve-month period ended December 31, 2003.
Liquidity and employee benefits per available seat mile
increased to 5.5c in fiscal 1999 from 4.6c in fiscal 1998.

Aircraft costs, including aircraft rent and depreciation, decreased
slightly as a percentage of airline operating revenues to 18.2% in fiscal 1999
from 19.8% in fiscal 1998. The decrease was due to airline operating revenues
increasing at 46.3% year over year and aircraft costs increasing only 34.8% year
over year. Aircraft costs per available seat mile were 3.8c in fiscal 1999
compared to 3.6c in fiscal 1998.

Maintenance expense increased slightly as a percentage of airline operating
revenues to 9.5% in fiscal 1999 from 7.8% in fiscal 1998. The increase was due
to initial heavy maintenance charges to bring the acquired used Brasilia
Turboprops up to SkyWest's maintenance standards. Maintenance cost per available
seat mile was 2.0c in fiscal 1999, compared to 1.4c in fiscal 1998.

Fuel costs decreased as a percentage of airline operating revenues to 7.6%
in fiscal 1999 from 10.8% in fiscal 1998. The decrease was due primarily to a
decrease in the average cost of fuel per gallon to 64.0c in fiscal 1999 from
81.0c in fiscal 1998. As a result, fuel costs per available seat mile decreased
to 1.6c in fiscal 1999 from 2.0c in fiscal 1998.

Other expenses, which consist primarily of commissions, landing fees,
station rents, computer reservation systems and hull and liability insurance,
decreased as a percentage of airline operating revenues to 21.9 % in fiscal 1999
compared to 23.7 % in fiscal 1998. The decrease was primarily the result of
SkyWest not incurring commissions on United Express related passenger revenues.
However, due to a 17% decrease in the average passenger trip length, cost per
available seat mile increased to 4.6c in fiscal 1999 from 4.3c in fiscal 1998.

LIQUIDITY AND CAPITAL RESOURCESCapital Resources
We had working capital of $160.7$62.2 million and a current ratio of 2.8:1.1:1 at JuneSeptember 30, 2000,2005, compared to working capital of $154.2$536.5 million and a current ratio of 2.9:4.1:1 at MarchDecember 31, 2000. During2004 with the three months ended June 30, 2000decrease principally caused by the use of cash to fund the acquisition of ASA. The principal sources of fundscash during the nine months ended September 30, 2005 were $40.5$234.2 million generatedin net proceeds from operations,
$778,000the sale and purchase of marketable securities, $147.3 million provided by operating activities, $141.0 million of proceeds from the issuance of long-term debt, $90.0 million of proceeds from draws under new and existing lines of credit, $32.3 million of proceeds from returns on aircraft deposits, $13.1 million from proceeds from sale of propertyaircraft, and equipment and $433,000$2.8 million from the issuancesale of common stock uponin connection with the exercise of stock options.options under our stock option and employee stock purchase plans. During the threenine months ended JuneSeptember 30, 20002005, we paid net cash of $376.9 million ($431.6 million less cash acquired of ASA of $54.7 million) as the purchase price of ASA, together with transaction expenses of $6.6 million, and deposited $90 million into escrow, which deposit was subsequently released to Delta pursuant to the terms of an escrow agreement executed at the time of the consummation of the ASA acquisition. We invested $28.8$186.3 million in flight equipment, $8.1$57.0 million

in available-for-sale securities, $3.8 million indeposits for aircraft, deposits,
$2.4$7.6 million in buildings and ground equipment and $4.6 million in other $875,000 in rental
vehicles, reducedassets. We made principal payments on long-term debt by $2.5of $25.5 million and paid $5.2 million in cash dividends of
$989,000.dividends. These factors resulted in an increase of $10.2a $2.4 million decrease in cash and cash equivalents.equivalents during the three months ended September 30, 2005.
Our position in available-for-salemarketable securities, consisting primarily of
investment grade bonds, bond funds and commercial paper, increaseddecreased to $154.9$193.2 million at JuneSeptember 30, 2000,2005, compared to $146.8$427.5 million at MarchDecember 31, 2000. At June
30, 2000, our ratio2004. The decrease in marketable securities was due primarily to the $425.0 million in purchase price, $6.6 million in transaction fees, and $50 million in returns of long-term debtaircraft deposits we paid to stockholders' equity was 16%, compared
to 13% at March 31, 2000.
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25

In May 2000, SkyWest took delivery of one new Canadair Regional JetDelta in connection with SkyWest'sour acquisition of ASA on September 7, 2005. At September 30, 2005, our total capital mix was 35.5% equity and 64.5% debt, compared to 62.7% equity and 37.3% debt at December 31, 2004. The change in the total capital mix during nine months ended September 30, 2005 was primarily due to our acquisition of ASA, and the interim debt financing of our new CRJ700s delivered during the nine months ended September 30, 2005. We expended approximately $52.9 million for aircraft-related capital expenditures during the nine months ended September 30, 2005. These expenditures consisted primarily of $14.2 million for rotable spares, $22.4 million for engine overhauls, $8.7 million for aircraft improvements, and $7.6 million for buildings, ground equipment and other assets.
Our total long-term debt at September 30, 2005 was $1,780.0 million, of which $1,772.5 million related to the acquisition of regional jet aircraft and $7.5 million related to the acquisition of our corporate office building in St. George, Utah. The average effective rate on the debt related to the regional jets was approximately 5.6% at September 30, 2005. As part of our leverage lease agreements, we typically indemnify the equity/owner participant against liabilities that may arise due to changes in benefits from tax ownership of the respective leased aircraft.
During the quarter ended September 30, 2005, SkyWest Airlines entered into two separate borrowing arrangements, both of which we have guaranteed. SkyWest Airlines increased an existing $10.0 million line-of-credit facility, with a bank, to $40.0 million. Concurrent with closing the ASA acquisition, SkyWest Airlines borrowed $30.0 million under the facility. The facility, which bears interest at a rate equal to prime less 0.25%, expires on January 31, 2007. Additionally, SkyWest Airlines entered into another borrowing facility with a financing company and borrowed $60.0 million. The facility expires on March 21, 2006. The amounts borrowed under both arrangements were utilized for general corporate purposes. Additionally, we had $60.0 million of letters of credit outstanding with another bank as of September 30, 2005. We believe that in the absence of unusual circumstances, the working capital available to us will be sufficient to meet our present financial requirements, including expansion, capital expenditures, lease payments and financeddebt service obligations for at least the aircraft with long-term
debt. SkyWest has agreednext 12 months. On September 30, 2005, we classified $114.8 million as restricted cash on our condensed consolidated balance sheets, of which $90 million related to the acquisition of ASA and $24.8 million related to our workers compensation policies. On September 30, 2004, we classified $9.2 million as restricted cash as required by our workers compensation policy.
Significant Commitments and Obligations
The following table summarizes our commitments and obligations stated in calendar years except as noted for each of the next five years and thereafter (in thousands):
Total Sept-Dec
2005 2006 2007 2008 2009 2010 Thereafter
Firm aircraft commitments $ 1,051,000 $ 100,000 $ 751,000 $ 200,000 $ — $ — $ — $ —
Operating lease payments for aircraft and facility obligations 3,184,529 73,927 297,810 276,009 255,955 279,788 273,205 1,727,835
Principal maturities on long-term debt 1,779,779 26,007 330,526 98,754 102,696 106,925 111,332 1,003,539
Total commitments and obligations $ 6,015,308 $ 199,934 $ 1,379,336 $ 574,763 $ 358,651 $ 386,713 $ 384,537 $ 2,731,374
On September 30, 2005, we had commitments of approximately $1.1 billion to acquire 54 more Canadair Regional Jets at an
aggregate purchase price37 additional CRJ700s and to sublease six additional CRJ200s, together with related flight equipment. We currently anticipate that we will complete the delivery of approximately $1.2 billion. SkyWestthese aircraft in March 2007. We have also hasobtained options to acquire an additional 75 Canadairanother 80 Bombardier Regional Jets of which 55 are at fixed
prices (subject to cost escalations), havethat can be delivered in configurations ranging between 66 and 90 seats. We presently anticipate that delivery schedules, are exercisabledates for these aircraft could start in blocks of five aircraftJanuary 2007 and expire at varyingcontinue through December 2008; however, actual delivery dates between January 2002 and
February 2008. The 20 remaining options are at fixed prices (subject to cost
escalations), do not have delivery schedules and do not carry an expiration
date. SkyWest has also entered into a conditional agreement for 40 additional
Canadair Regional Jets at an aggregate cost of $880 million. The conditional
agreement isremain subject to the final resolutiondetermination as agreed upon by us and our code-share partners.
SkyWest Airlines has not historically funded a substantial portion of the scope clause negotiations
between Unitedits aircraft acquisitions with working capital. Rather, it has generally funded its aircraft acquisitions through a combination of operating leases and their pilot union and expires on January 15, 2001. We have
also secured options on an additional 80 Canadair Regional Jets, of which 40 are
at fixed prices (subject to cost escalations), have delivery schedules, are
exercisable in blocks of five aircraft and expire at varying dates between July
2003 and June 2006. The 40 remaining options are at fixed prices (subject to
cost escalations), do not have delivery schedules and do not carry an expiration
date. Depending on the state of the aircraft financing market atdebt financing. At the time of delivery,each aircraft acquisition, we evaluate the financing alternatives available, and select one or more of these methods to fund the acquisition. Subsequent to this initial acquisition of an aircraft, we may also refinance the aircraft or convert one form of financing to another (e.g., replacing debt financing with leveraged lease financing). ASA has generally funded its aircraft acquisitions by issuing long-term debt secured by the aircraft.
At present, we intend to satisfy our 2005 and 2006 firm aircraft purchase commitments, as well as our acquisition of any additional aircraft, through a combination of operating leases and debt financing, consistent with our historical practices. Based on current market conditions and discussions with prospective leasing organizations and financial institutions, we currently believe that we will determine whetherbe able to acquireobtain financing for the remaining Canadair Regional
Jets through third-party, long-term loans orcommitted acquisitions, as well as additional aircraft, without materially reducing the amount of working capital available for our operating lease arrangements.activities.
We also have significant long-term lease obligations primarily relating to our aircraft fleet. These leases are classified as operating leases and therefore are not reflected as liabilities in our condensed consolidated balance sheets. At JuneSeptember 30, 2000, SkyWest leased 822005, we had 222 aircraft under leaseslease, including 26 aircraft leased from Delta at nominal rates, with an average remaining term of
approximately 8.8terms ranging from one to 17.5 years. Future minimum lease payments due under all long-term operating leases were approximately $554.2 million$3.2 billion at JuneSeptember 30, 2000.2005. At an 8%a 7% discount factor, the present value of these lease obligations would bewas equal to approximately $365.5 million$2.0 billion at JuneSeptember 30, 2000.2005. As part of our leveraged lease agreements, we typically agree to indemnify the equity/owner participant against liabilities that may arise due to changes in benefits from tax ownership of the respective leased aircraft.
Our total long-term debt at September 30, 2005 was $1,780 million, of $74.0which $1,772.5 million was incurred in connection withrelated to the acquisition of Brasilia Turbopropsaircraft and Canadair Regional Jets. Certain
amounts$7.5 million related to our corporate office building. During the Brasilia Turboprops are supported by continuing subsidy
payments through the export support program of the Federative Republic of
Brazil. The subsidy payments reduced the stated interest rates to an average
effective rate of approximately 4.07% on $32.8 million of the long-term debt at
Junenine months ended September 30, 2000. The continuing subsidy payments are at risk if the Federative
Republic of Brazil does not meet its obligations under the export support
program. While2005, we have no reason to believe, based on information currently
available, that we will not continue to receive these subsidy paymentsacquired seven new CRJ700s from proceeds from the Federative Republicissuance of Brazil in the future, there can be no assurance that such
a default will not occur. On the remaining Brasilia Turboprop long-term debt of $25.4 million, the average effective rate is 3.82% at June 30, 2000 and the
lender has assumed the risk of the subsidy payments.$140.9 million. The average effective rate on the debt related to the Canadair Regional Jets of $15.8 millionaircraft was 7.66%approximately 5.6% at JuneSeptember 30, 2000 and is not subject to subsidy payments.

We spent approximately $13.5 million for nonaircraft capital expenditures
during the three months ended June 30, 2000, consisting primarily of aircraft
engine overhauls, rotable spare parts, buildings and ground equipment and rental
vehicles.

We have available $10.0 million in an unsecured bank line of credit with
interest payable at the bank's base rate less one-quarter percent, which was a
net rate of 9.25% at June 30, 2000. We believe that, in the absence of unusual
circumstances, the working capital available to us will be sufficient to meet
our present requirements, including expansion, capital expenditures, lease
payments and debt service requirements for at least the next 12 months.

SEASONALITY2005.
Seasonality
As is common in the airline industry, SkyWest'sour pro-rate operations are favorably affected by increased travel, historically occurring in the summer months, and are unfavorably affected by decreased business travel during the months from November through January and by inclement weather which occasionally results in cancelled flights, principally during the winter months. However, SkyWest does
expect some mitigationDuring the first quarter of the2005, we experienced significant weather-related cancellations, primarily in January, of 1,325 flights which were approximately 3.1% of total scheduled departures. Based on historical seasonal trends dueaverages for weather-related cancellations of 0.5%, it is estimated that we experienced approximately 1,100 more cancellations than normal during January 2005. The cancellations contributed to an increase in certain cost components, while we were unable to record the portion of its operations in contract flying.

22
26

QUARTERLY RESULTS OF OPERATIONSrevenue for the cancelled flights.

Quarterly Information
The datainformation

Operating revenues.............. $ Operating income................ Net income...................... Net income per common share: Basic.......................... $ Diluted........................ $ Passengers carried.............. Revenue passenger miles (000s)......................... Available seat miles (000s)..... Passenger load factor........... Passenger breakeven load factor......................... Yield per revenue passenger mile........................... Revenue per available seat mile........................... Cost per available seat mile.... Average passenger trip (miles)........................

Operating revenues.............. Operating income................ Net income...................... Net income per common share: Basic.......................... $ Diluted........................ $ Passengers carried.............. Revenue passenger miles (000s)......................... Available seat miles (000s)..... Passenger load factor........... Passenger breakeven load factor......................... Yield per revenue passenger mile........................... Revenue per available seat mile........................... Cost per available seat mile.... Average passenger trip (miles)........................

QUANTITATIVE AND QUALITATIVE

Aircraft Fuel

We are exposedyears

following table sets forth certainsummary quarterly financial and operating for the periods indicated: FISCAL 1999 FISCAL 2000 ------------------------------------------------- ---------- JUNE 30, SEPT. 30, DEC. 31, MAR. 31, JUNE 30, 1998 1998 1998 1999 1999 ---------- ---------- ---------- ---------- ---------- (DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA) 81,959 $ 101,229 $ 102,255 $ 103,183 $ 111,562 13,502 17,708 15,276 17,819 20,476 9,741 12,854 8,525 10,715 13,581 0.41 $ 0.53 $ 0.35 $ 0.44 $ 0.55 0.40 $ 0.52 $ 0.34 $ 0.43 $ 0.55 1,017,312 1,321,955 1,322,740 1,238,914 1,365,706 215,726 278,281 266,216 255,649 290,590 393,755 473,025 495,063 482,279 525,104 54.8% 58.8% 53.8% 53.0% 55.3% 45.9% 49.0% 45.9% 44.3% 45.4% 37.3c 35.7c 37.7c 39.6c 37.8c 20.7c 21.3c 20.6c 21.3c 21.1c 17.3c 17.7c 17.5c 17.8c 17.4c 212 211 201 206 213 FISCAL FISCAL 2000 2001 ------------------------------------ ---------- SEPT. 30, DEC. 31, MAR. 31, JUNE 30, 1999 1999 2000 2000 ---------- ---------- ---------- ---------- (DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA) $ 122,737 $ 117,381 $ 123,098 $ 130,387 24,661 20,180 21,363 25,174 15,944 13,618 13,961 16,547 0.65 $ 0.55 $ 0.57 $ 0.67 0.64 $ 0.54 $ 0.55 $ 0.65 1,487,297 1,354,955 1,295,332 1,401,113 323,282 292,397 290,411 319,830 550,629 542,050 547,597 565,409 58.7% 53.9% 53.0% 56.6% 47.3% 44.8% 44.1% 45.9% 37.3c 39.5c 41.7c 40.1c 22.2c 21.6c 22.4c 23.0c 17.9c 17.9c 18.7c 18.6c 217 216 224 228 DISCLOSURES ABOUT MARKET RISK ended December 31, 2003 and 2004 and the quarters ended March 31, 2005, June 30, 2005 and September 30, 2005.
Year Ended December 31, 2005
First
Quarter Second
Quarter Third
Quarter
Year to date
Operating revenues (000) $ 340,292 $ 384,043 $ 497,349 $ 1,221,684
Operating income (000) 34,446 44,596 55,994 135,036

Net income (000)
18,765
24,757
30,060
73,583
Net income per common share:
Basic $ 0.33 $ 0.43 $ 0.52 $ 1.27
Diluted 0.32 0.42 0.51 1.26
Basic
57,668
57,671
57,846
57,729
Diluted 58,197 58,323 59,016 58,512

Year Ended December 31, 2004
First
Quarter Second
Quarter Third
Quarter Fourth
Quarter Year
Operating revenues (000) $ 253,704 $ 267,387 $ 308,265 $ 326,688 $ 1,156,044
Operating income (000) 34,857 35,159 37,942 36,818 144,776

Net income (000)
19,370
20,054
21,279
21,249
81,952
Net income per common share:
Basic $ 0.33 $ 0.35 $ 0.37 $ 0.37 $ 1.42
Diluted 0.33 0.34 0.37 0.37 1.40
Basic
58,008
58,056
57,909
57,458
57,858
Diluted 58,633 58,595 58,206 57,967 58,350

Year Ended December 31, 2003
First
Quarter Second
Quarter Third
Quarter Fourth
Quarter Year
Operating revenues (000) $ 207,362 $ 212,694 $ 230,490 $ 237,480 $ 888,026
Operating income (000) 20,149 24,252 35,233 28,846 108,480

Net income (000)
13,300
14,896
21,128
17,463
66,787
Net income per common share:
Basic $ 0.23 $ 0.26 $ 0.37 $ 0.30 $ 1.16
Diluted 0.23 0.26 0.36 0.30 1.15
Basic
57,641
57,648
57,837
57,853
57,745
Diluted 57,649 57,974 58,423 58,397 58,127Accounting for Stock-Based Compensation
As contemplated by SFAS Statement 123,Accounting for Stock-Based Compensation, we currently account for share-based payments to fluctuationsemployees using the intrinsic value method set forth in Opinion 25,Accounting for Stock Issued to Employees and, as such, we do not recognize compensation cost for employee stock options. Accordingly, the adoption of the fair value method set forth in Statement 123(R) is likely to have a significant impact on our results of operations, although it is not

anticipated to have a significant impact on our overall financial position. The impact of the adoption of Statement 123(R) cannot be predicted at this time because it will depend on levels of share-based payments granted in the price and availability of aircraft
fuel that affect our earnings. Our financial statements reflect both the cost of
fuelfuture. However, had we purchase for SkyWest-controlled flights, as well as fuel we purchase for
contract flights, which is subject to reimbursement by our code-sharing
partners. Currently, we have limited our exposure to fuel price increases with
respect to approximately 65% of available seat miles produced, due to
contractual arrangements with Delta and United. These major airlines reimburse
us for the actual cost of fuel on contracted flights. For illustrative purposes
only, we have estimatedadopted Statement 123(R) in prior periods, the impact of market risk using a hypothetical increase
in fuel price per gallon of 10% for the three months ended June 30, 2000 and
1999. Based on this hypothetical assumption, and after consideringthat standard would have approximated the impact of the contractual arrangements, we would have experienced an increase in fuel
expense of approximately $517,000 for the three months ended June 30, 2000 and
$323,000 for the three months ended June 30, 1999. We currently intend to use
cash generated by operating activities to fund any adverse changeStatement 123 as described in the disclosure of pro forma net income and earnings per share in Note C to our condensed consolidated financial statements. Statement 123(R) also requires the benefits of tax deductions in excess of recognized compensation cost to be reported as a financing cash flow, rather than as an operating cash flow as required under current literature. This requirement will reduce net operating cash flows and increase net financing cash flows in periods after adoption.
Quantitative and Qualitative Disclosures About Market Risk
We have been and are subject to market risks, including commodity price risk (such as, to a limited extent, aircraft fuel prices) and interest rate risk.
Aircraft Fuel
In the past, we have not experienced difficulties with fuel availability and currently expect to be able to obtain fuel at prevailing prices in quantities sufficient to meet its future needs. Pursuant to our contract flying arrangements, United bears the economic risk of fuel.

fuel price fluctuations on our United Express flights. On our Delta Connection regional jet flights, Delta bears the economic risk of fuel price fluctuations. On the majority of our Delta Connection routes flown with Brasilia turboprops, we will bear the economic risk of fuel fluctuations. At present, we believe that our results from operations will not be materially and adversely affected by fuel price volatility.
Interest Rates
Our earnings are affected by changes in interest rates due to the amounts of variable rate long-term debt and the amount of cash and securities held. The interest raterates applicable to variable rate notes may rise and increase the amount of interest expense. We would also receive higher amounts of interest income on our cash and securities held at the time; however, the market value of our available-for-sale securities would likely decline. At JuneSeptember 30, 2000,2005, we had variable rate notes representing 27%75.0% of our total long-term debt and 8%compared to 73.1% of our long-term debt at June 30, 1999.December 31, 2004. For illustrative purposes only, we have estimated the impact of market risk using a hypothetical increase in interest rates of one percentage point for both our variable rate long-term debt and cash and securities. Based on this hypothetical assumption, we would have incurred an additional $31,000$1,922,000 in interest expense and received $451,000$1,220,000 in additional interest income for the threenine months ended JuneSeptember 30, 2000 and2005. We would have incurred an additional $14,000$3,391,000 in interest expense and received $393,000$3,965,000 in additional interest income for the threenine months ended JuneSeptember 30, 1999. As a result of this hypothetical assumption, we believe we could
fund2005.
We have an interest rate increasesswap agreement designed to manage our interest rate exposure on the debt instrument related to our variableheadquarters. Our policies do not permit management to enter into derivative instruments for any purpose other than cash flow hedging purposes. Accordingly, we do not speculate using derivative instruments. We assess interest rate long-term debtcash flow risk by identifying and monitoring changes in interest rate exposures that may adversely impact expected future cash flows and by evaluating hedging opportunities. The fair values of our derivative instruments are recognized as other current liabilities in our accompanying balance sheet. In accordance with the increased amountsprovisions of SFAS No. 133, we decreased liabilities by $201,620 at September 30, 2005. We decreased interest income.expense by $201,620 during the nine months ended September 30, 2005 in accordance with the interest rate swap agreement.

BUSINESS
General
We do not believe we have significant
exposure to the changing interest rates on our fixed-rate, long-term debt
instruments, which represented 73% of our total long-term debt at June 30, 2000
and 92% of our total long-term debt at June 30, 1999.

23
27

BUSINESS

GENERAL

We operateare a holding company that operates two independent subsidiaries, SkyWest Airlines aand ASA. SkyWest Airlines and ASA are regional airlineairlines offering scheduled passenger service with approximately 1,000over 2,400 daily departures to 63 cities212 destinations in 13
western statesthe United States, Canada, Mexico and Canada. Allthe Caribbean. Substantially all of our flights are operated as either Delta Connection or United Express under code-share arrangements with Delta or TheUnited, with significant presence in their key domestic hubs and focus cities. SkyWest Airlines and ASA provide regional flying to our partners under long-term, fixed-fee code-share agreements. Among other features of our fixed-fee agreements, our partners reimburse us for specified direct operating expenses (including fuel expense, which is passed through to our partners), and pay us a fee for operating the aircraft.
SkyWest Airlines and ASA have developed industry-leading reputations for providing quality, low-cost regional airline service during their long operating histories—SkyWest Airlines has been flying since 1972 and ASA since 1979. As of September 30, 2005, our consolidated fleet consisted of a total of 376 aircraft, of which 220 were in service with Delta, 152 were in service with United and four were unassigned. We currently operate one type of regional jet aircraft in two differently sized configurations, the 40- and 50-seat CRJ200s and the 66- and 70-seat CRJ700s, and two types of turboprop aircraft, the 30-seat Embraer Brasilia turboprops and the 66-seat ATR-72 turboprops (which we expect to be removed from service by August 2007). SkyWest Airlines and ASA have combined firm orders to acquire an additional 37 CRJ700s over the next two years and ASA is committed to sublease six additional CRJ200s from Delta commencing in early 2006. In addition, we have options to acquire an additional 80 Bombardier Regional Jets over the next two years. We believe the option aircraft, which we can elect to take in configurations ranging between 66 and 90 seats, position us to capitalize on additional growth opportunities with our existing and other potential code-share partners.
Our Operating Platforms
SkyWest Airlines
SkyWest Airlines provides regional jet and turboprop service in the Western United States with the exception of flying provided to United out of its Chicago (O'Hare) hub. SkyWest Airlines offered approximately 1,501 daily scheduled departures as of September 30, 2005, of which approximately 1,019 were United Express flights and approximately 482 were Delta Connection flights. SkyWest Airlines' operations are conducted from hubs located in Chicago (O'Hare), Denver, Los Angeles, San Francisco, Portland, Seattle/Tacoma and Salt Lake City. For the year ended December 31, 2004, SkyWest Airlines generated operating revenues of approximately $1.16 billion, of which approximately 58% was attributable to United code-share service and 38% was attributable to Delta code-share service. The balance of our operating revenues was derived from code-share service we previously provided to Continental Airlines, Inc., as well as ground handling and other services. SkyWest Airlines' fleet as of September 30, 2005 consisted of 37 70-seat CRJ700s, all of which were flown for United; 125 50-seat CRJ200s, of which 65 were flown for United, 56 were flown for Delta and four were unassigned; and 63 30-seat Brasilia turboprops, of which 50 were flown for United and 13 were flown for Delta. SkyWest Airlines conducts its Delta code-share operations pursuant to the terms of a Delta Connection Agreement which obligates Delta to compensate SkyWest Airlines for its direct costs associated with operating Delta Connection flights, plus a payment based on block hours flown. In addition, the SkyWest Airlines Delta Connection Agreement provides for us to increase our profitability if we reduce our total costs. SkyWest Airlines' United operations are conducted under code-sharing arrangementsa United Express Agreement pursuant to which SkyWest Airlines is paid primarily on a fee-per-completed block hour and departure basis plus a margin based on performance incentives. Under the United Express Agreement, excess

margins over certain percentages must be returned or shared with United, depending on various conditions.
ASA
ASA largely provides regional jet service in the United States east of the Mississippi River, with the exception of flying provided to Delta out of its Salt Lake City hub. ASA offered more than 900 daily scheduled departures as of September 30, 2005, all of which were Delta Connection flights. ASA's operations are conducted primarily from hubs located in Atlanta, Salt Lake City and Cincinnati. For the year ended December 31, 2004, ASA generated operating revenues of approximately $947.6 million, substantially all of which was attributable to Delta code-share service. ASA's fleet as of September 30, 2005, all of which were flown for Delta, consisted of 35 66-seat CRJ700s, 104 40 and 50-seat CRJ200s, and twelve ATR-72 turboprops (which we expect to remove from service by August 2007). Under the terms of the ASA Delta Connection Agreement, Delta has agreed to compensate ASA for its direct costs associated with operating Delta Connection flights, plus, if ASA completes a certain minimum percentage of its Delta Connection flights, a specified margin on such costs. Additionally, the ASA Delta Connection Agreement provides for incentive compensation upon satisfaction of certain performance goals. Under the ASA Delta Connection Agreement, excess margins over certain percentages must be returned or shared with Delta, depending on various conditions.
Business Strengths
We believe our primary strengths are:
• Largest U.S. Regional Airline with Strong Partner Relationships. As a result of our acquisition of ASA, we are the largest regional airline in the United States, measured by the number of passengers carried. On a combined pro forma basis for the year ended December 31, 2004, SkyWest Airlines orand ASA carried in excess of 23.8 million passengers and produced more than 14.4 billion ASMs. We believe the increased scale of our operations will enable us to further reduce our unit costs by more efficiently spreading our overhead and leveraging our operations, which in turn will allow us to offer our services to our partners at even more competitive costs going forward. Based on our consistent provision of high quality, low-cost regional airline services, we have established strong code-share relationships with our current partners Delta Air Lines.and United, who are currently the world's second and third-largest airlines, respectively, measured by the number of passengers carried. SkyWest Airlines has been a code-sharingcode-share partner with Delta since 1987 and with United since 1997, andwhile ASA has been a code-share partner with Delta since 1987. SkyWest's development1984. Through these two platforms, we currently account for approximately 50% of code-sharing relationshipsDelta's and approximately 58% of United's regional flight departures, which, we believe, makes us the most important regional partner of both airlines. In addition, our dominant position in our partners' hubs and focus cities, including ASA's position in Atlanta, further reinforces our importance as an integral part of our partners' networks.
• Two Strong Operating Platforms with multiple major airlinesSignificant Growth Opportunities. During more than 30 years of flight operations, SkyWest Airlines has established a strong regional airline platform in the Western United States. ASA has established its operational strength in the Eastern United States, where it holds the largest market share of all regional carriers serving Atlanta's Hartsfield-Jackson International Airport. Concentrating our operations geographically, with one platform serving the Western United States and another serving the Eastern United States, enables us to reduce our unit costs by minimizing our number of crew bases and maintenance and other facilities, and by utilizing our human and capital resources more efficiently. We believe our code-share agreements position us for continued growth of both platforms. For instance, beyond the 43 committed aircraft additions in our contracts, the ASA Delta Connection Agreement contains provisions enabling ASA to maintain its percentage of total Delta Connection flights that it has in 2007, so long as its bid for additional regional flying is competitive with other regional carriers. Moreover, we believe the combination of the

two platforms will allow us to capitalize on operational efficiencies in order to reduce costs, which, coupled with our strong financial resources, will provide us with opportunities to expand service to our existing partners or add new partners.
• Long-Term, Fixed-Fee Code-Share Agreements. We have entered into long-term, fixed-fee code-share agreements with both Delta and United that are subject to us maintaining specified performance levels. Our Delta Connection Agreements provide for minimum aircraft utilization at fixed rates, reimbursement of direct operating costs (such as fuel) and provide a more predictable revenue stream than the historically utilized "pro-rate" revenue-sharing arrangements. Under our code-share agreements, we authorize our partners to identify our flights and fares under their flight designation codes in their computer reservation systems, and we are authorized to paint our aircraft in the livery of our partners, to use their service marks and to market ourselves as a code-share carrier for our partners. Notably, our Delta Connection Agreements have been assumed by Delta with U.S. Bankruptcy Court approval, and SkyWest Airlines' United Express Agreement was approved by the U.S. Bankruptcy Court prior to its execution. We believe these court orders significantly reduce the possibility that our code-share agreements will be disrupted by the Delta and United bankruptcy proceedings, and increase our prospects for long-term revenue stability and visibility.
• Experienced Management Team. The four members of our senior management team possess an average of 25.5 years of operating experience in the airline industry. Since 1987, SkyWest Airlines' management team has successfully managed through several industry cycles while delivering industry-leading operational performance, consistent profitability and significant value to shareholders.
• High-Quality Service. We strive to deliver high-quality service in every aspect of our operations. For the nine months ended September 30, 2005, SkyWest Airlines' average on-time performance ratio was 85.5% and its flight completion ratio was 98.6%. Also for the nine months ended September 30, 2005, SkyWest Airlines' aircraft in revenue service operated an average of 10.0 hours per day, which we believe is among the highest aircraft utilization rates in the regional airline industry. In March 2005, SkyWest Airlines was named the 2004 Regional Airline of the Year byRegional Airline World Magazine. In February 2005, SkyWest Airlines was named the number one on-time mainland airline in the United States for 2004 by the U.S. Department of Transportation. ASA is committed to high-quality service, and we believe the combination of the SkyWest Airlines and ASA platforms presents an opportunity for both carriers to enhance the quality of their service.
• Financial Resources and Flexibility. Due in part to our success in implementing our business strategy, we possess financial resources and flexibility which distinguish us from many other regional and major carriers and which constitute a competitive advantage. At September 30, 2005, after giving effect to this offering, we would have had cash and marketable securities of $337.4 million, which would have represented 21.8% of our revenues over the twelve months ending September 30, 2005. The strength of our balance sheet and credit profile have enabled us to enter into lease and other financing transactions on terms we believe are more favorable than the terms available to many other carriers. Due in part to the financial challenges faced by their major code-share partners, regional carriers are increasingly financing the growth of their own fleets rather than operating aircraft owned by their major code-share partners. Our lower aircraft ownership costs can be shared with our partners, which we believe represents a competitive advantage when we seek additional growth. We believe our financial flexibility also allows us to take advantage of growth opportunities—such as the acquisition of ASA or placing a large aircraft order—that we might otherwise be unable to pursue if we did not possess these financial resources.

Business Strategy
Our business strategy consists of the following elements:
• Capitalize on the ASA Acquisition to Reduce Operating Costs. We believe our acquisition of ASA provides a number of significant opportunities to reduce the unit operating costs of both the SkyWest Airlines and ASA platforms without compromising passenger safety, service quality or operational reliability. Among those opportunities, we intend to focus our initial cost reduction efforts in four key areas:
•
improve the utilization of our equipment and facilities through the refinement of operational processes, elimination of redundancies and collaborative identification and implementation of operational best practices;

•
leverage our position as the largest U.S. regional carrier to allocate overhead and administrative expenses over a substantially larger platform, thereby reducing unit costs; and

•
reduce our aircraft acquisition and financing costs by continuing to strengthen our balance sheet through the proceeds raised from this offering and by refinancing our debt and lease obligations where appropriate.
• Expand Existing and Develop New Code-Share Agreements. We enjoy strong relationships with our existing code-share partners and work closely with these partners to expand service to their existing markets, open new markets and schedule convenient and frequent flights. We view the continued development of our Delta and United relationships as significant opportunities to achieve stable, long-term growth of our business. We believe the principal reason SkyWest Airlines has attracted multiple code-share partners is its ability to maintain a competitive cost structure while delivering high-quality customer service. We believe that multiple code-share agreements with major carriers diversifies financial and operating risks by reducing reliance on a single major airlinecarrier. This diversification may also allow us to grow at a faster rate and not be limited by the rate at which any single partner can, or wishes to, grow. We intend to explore opportunities to develop additional code-share relationships with other carriers to the extent they are consistent with our business strategy.
• Focus on Larger Gauge Aircraft. We operate a greater number of large gauge regional jets than any other U.S. carrier. Large gauge regional jets, which seat approximately 70 or more passengers, offer significant opportunities for revenue and increaseprofitability growth among major and regional carriers. Most major carriers, including Delta and United, have recognized the stabilitygrowth opportunities created by larger regional aircraft and are exploring opportunities to add larger gauge regional jets, flown by themselves or their regional partners, to their flight systems. As of September 30, 2005, we were operating a total of 72 CRJ700s, and we believe the expansion of our operating results.CRJ700 fleet will create growth opportunities in many markets in which we are the most competitive provider. For us, the year ended March 31, 2000, 64%operational commonality of SkyWest's operating revenues was derived from
United code-share serviceCRJ700s and 36% was derived from Delta code-share service.
Approximately 76% of SkyWest's current flights are structured as contract
flights. On contract flights, United or Delta controls scheduling, ticketing,
pricing and seat inventories, and SkyWest is compensated with a fixed fee for
each flight completed and an amount per passenger, and is eligible for
additional compensation if certain service quality levels are achieved. Also,
United and Delta, under contractual arrangements, have agreed to reimburse
SkyWest for the actual cost of fuel on all of SkyWest's contract flights. On
SkyWest-controlled flights, SkyWest controls scheduling, ticketing, pricing and
seat inventories, and shares revenues with United or Delta according to prorate
formulas for those SkyWest passengers connecting to a United- or Delta-operated
flight.

SkyWest's fleet consists of:

- Ninety-two 30-seat Brasilia Turboprops, with an average age of 5.7 years;
and

- Twelve 50-seat Canadair Regional Jets, with an average age of 5.0 years.

All of our aircraft are "cabin class" planes,CRJ200s, which means they offer
stand-up headroom, overhead and underseat storage, lavatories and in-flight
attendant service.

In order to accommodate our expanding operations, we have placed abeen flying and maintaining for more then eleven years, offers additional operating efficiencies which we believe will enable us to provide larger gauge services at lower costs than our competitors. SkyWest Airlines and ASA currently have combined firm orderorders to acquire an additional 54 Canadair Regional Jets37 CRJ700s (which can be configured to seat between 66 and 70 passengers) over the next fourtwo years, and a conditional orderASA is committed to acquire ansublease six additional 40 Canadair Regional
Jets. We believeCRJ200s from Delta commencing in early 2006. In addition, we will be able to place all 94 firm and conditional-order
aircraft into code-sharing service under fixed-fee contract-flying arrangements
with United, Delta or other major carriers. If we acquire all such 94 aircraft,
we will also be eligible to exercisehave options to acquire an additional 155
Canadair80 Bombardier Regional Jets 95which we can elect to be delivered in configurations ranging between 66 and 90 seats. We believe the strength of whichour balance sheet has provided us the flexibility to place aircraft orders on a scale and timetable not easily matched by our competitors.

• Operate Limited Fleet Types. As of September 30, 2005, we operated 376 aircraft, principally of just two types, Bombardier Regional Jets and Brasilia turboprops. By simplifying our fleet, we believe we are able to limit our operating costs due to efficiencies in employee training, aircraft maintenance, lower spare parts inventory requirements and aircraft scheduling. While ASA currently operates twelve ATR-72 turboprops, we expect these aircraft to be removed from service by August 2007.
• Maintain a Positive Employee Culture. We believe our employees have been, assigned scheduled delivery dates
through 2005,and will continue to be, a key to our success. While none of the employees of SkyWest Airlines are represented by a union, and ASA's pilots, flight attendants and flight controllers are all unionized, we believe that we offer our employees in both our operating subsidiaries substantially similar compensation and benefits packages that we believe differentiate us from other carriers and make us an attractive place to work and build a career. With the expansion of our operations resulting from our acquisition of ASA, the best efforts of all of our employees will be required to achieve the potential benefits envisioned by the transaction and continue to make our business successful. We believe that these factors, in combination with our historically low employee turnover rate, are a significant reason that neither SkyWest Airlines nor ASA has ever had a work stoppage due to a strike or other labor dispute.
Growth Opportunities
During the five years ended December 31, 2004, SkyWest Airlines' total operating revenues expanded at a compounded annual rate of 21.9%, and the balancenumber of which have unspecified delivery dates.

Fordaily flights SkyWest Airlines operated increased from approximately 950 at the fiscal yearend of 1999 to approximately 1,500 as of September 30, 2005. All of SkyWest Airlines' growth during that five-year period was internally generated. During the five years ended MarchDecember 31, 2000, we generated record2004, ASA's total operating revenues expanded at a compounded annual rate of $474.8 million11%, and net incomethe number of $57.1 million,daily flights ASA operated increased from approximately 600 at the end of 1999 to over 900 as comparedof September 30, 2005. All of ASA's growth during that five-year period was internally generated.
• Take Delivery of Aircraft Under Firm Order. During the two-year period after September 30, 2005, we have firm orders to acquire an additional 37 CRJ700s and the right to sublease from Delta six additional CRJ200s. We have agreements with Delta or United to place all 43 of these aircraft into revenue service, under long term fix-fee type contracts, promptly following their delivery.
• Potential Opportunities from Delta's Restructuring. As Delta restructures its fleet under bankruptcy protection, there may be new regional flying contracts that become available for qualified regional carriers. ASA holds certain rights to maintain its proportion of overall Delta regional flights, as well as its proportion of Atlanta regional flights. This may help ASA compete for new flying mandates, if any, that come into existence at Delta.
• Scope Clause Relief. "Scope clauses" are elements of major airlines' labor contracts with their own pilots that place restrictions on the number and size of aircraft, or the amount of flight activity, that can be operated by major airlines' regional airline contractors such as ASA and SkyWest Airlines. Greater liberalization of scope clauses generally creates more business opportunities for regional airlines. Since 2001, five of the six major national airlines (American, Delta, Northwest, United and US Airways) have successfully achieved some scope clause liberalization. If further efforts by major airlines to relax scope clause restrictions are successful, it may create incremental opportunities for regional airlines.
• Narrowbody Replacement Flying. A meaningful portion of the recent growth of the regional airline industry stems from the replacement of major airline-operated narrowbody jet aircraft (such as 737s, DC9s, MD80s and A319s) with regional airline-operated jets on the same route. The major airline affects this change in equipment to achieve an advantage in trip costs, unit costs, frequency or a

combination of these benefits. At present, the six major national airlines have a significant number of narrowbody aircraft that are more than 15 years old in their fleets. Such older aircraft are frequently less fuel- and maintenance-efficient than new aircraft. If major airlines decide to substitute newer regional airline-operated equipment for any portion of these older narrowbody aircraft under their retirement, it may create incremental opportunities for regional airlines.
Competition and Economic Conditions
The airline industry is highly competitive. SkyWest Airlines and ASA compete principally with other code-sharing regional airlines, but also with regional airlines operating revenueswithout code-share agreements, low cost carriers and major airlines. The combined operations of $388.6 millionSkyWest Airlines and net incomeASA extend nationally throughout nearly every major geographic market in the United States. Our competition includes, therefore, nearly every other regional airline, and to a certain extent, also the major and low cost carriers. The primary competitors of $41.8 millionSkyWest Airlines and ASA among regional airlines with code-share arrangements include Air Wisconsin Airlines Corporation, American Eagle Airlines, Inc. ("American Eagle") (owned by American Airlines, Inc.), Comair, Inc. ("Comair") (owned by Delta), ExpressJet Holdings, Inc. ("ExpressJet"), Horizon Air Industries, Inc. ("Horizon") (owned by Alaska Air Group, Inc.), Mesa Air Group, Inc. ("Mesa"), MAIR Holdings, Inc. ("MAIR"), Pinnacle Airlines Corp. ("Pinnacle"), Republic Airways Holdings Inc. ("Republic") and Trans State Airlines, Inc. Major airlines award contract flying to these regional airlines based upon, but not limited to, the following criteria: low cost, financial resources, overall customer service levels relating to on-time arrival and departure statistics, cancellation of flights, baggage handling performance and the overall image of the regional airline as a whole. The principal competitive factors on pro-rate flying include fare pricing, customer service, routes served, flight schedules, aircraft types and relationships with major partners.
The principal competitive factors for code-share partner regional airlines are code-share agreement terms, customer service, aircraft types, fare pricing, flight schedules and markets and routes served. Based on the fiscal year ended March 31, 1999.

INDUSTRY OVERVIEW

Major, Low-faresize of the combined operations of SkyWest Airlines and ASA, we are the largest regional airline in the United States. However, some of the major and low-cost carriers are larger, and may have greater financial and other resources than SkyWest Airlines and ASA. Additionally, regional carriers owned by major airlines, such as American Eagle and Comair, may have access to greater resources at the parent level than SkyWest Airlines and ASA, and may have enhanced competitive advantages since they are subsidiaries of major airlines. Moreover, federal deregulation of the industry allows competitors to rapidly enter our markets and to quickly discount and restructure fares. The airline industry is particularly susceptible to price discounting because airlines incur only nominal costs to provide service to passengers occupying otherwise unsold seats.
Generally, the airline industry is highly sensitive to general economic conditions, in large part due to the discretionary nature of a substantial percentage of both business and leisure travel. Many airlines have historically reported lower earnings or substantial losses during periods of economic recession, heavy fare discounting, high fuel costs and other disadvantageous environments. Economic downturns combined with competitive pressures have contributed to a number of reorganizations, bankruptcies, liquidations and business combinations among major and regional carriers. The effect of economic downturns is somewhat mitigated by the predominantly contract-based flying arrangements of SkyWest Airlines and ASA. Nevertheless, the per passenger component in such fee structure would be affected by an economic downturn. In addition, if Delta or United, or other code-share partners we may secure in the future, experience prolonged decline in passenger load or are harmed by low ticket prices or high fuel prices, they will likely seek to renegotiate their code-share agreements with SkyWest Airlines and ASA or cancel a number of flights in order to reduce their costs.

Industry Overview
Majors, Low Cost Carriers and Regional Airlines
The airline industry in the United States has traditionally been dominated by between five and ten "majorseveral major airlines," including United, Delta, American Airlines, Inc., Continental Airlines, Inc., Northwest Airlines, Inc., Delta and US Airways.United. The major airlines offer scheduled flights to most major U.S. cities, within the United Statesnumerous smaller U.S. cities, and cities throughout all or part of the world through a hub and also serve numerous smaller cities.
The major airlines benefit from wide name recognition, a multi-decade operating
history, control over gates and substantial financial resources. According to
the Air Transport Association, during 1999, the major airlines collectively
reported revenues of $84.2 billion.

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"Low-fare" airlines,spoke network.
Low cost carriers, such as Southwest Airlines andCo., JetBlue Airways Corporation, US Airways, Inc., Frontier Airlines, Inc. and AirTran Airways, Inc., generally offer fewer conveniences to travelers and have lower cost structures than major airlines, which permits them to offer flights to and from many of the same markets as the major airlines, but at lower prices. Low cost carriers typically fly direct flights with limited service to smaller cities, concentrating on higher demand flights to and from major population bases.
Regional airlines, includingsuch as ASA, ExpressJet, Mesa, MAIR, Pinnacle, Republic and SkyWest Comair, Atlantic Southeast Airlines,
Mesa, Mesaba, Midway, Midwest Express, Horizon Airlines and Atlantic Coast Airlines, typically operate smaller aircraft on lower-volume routes than major airlines.and low cost carriers. Several regional airlines, including American Eagle, Comair Atlantic Southeast
Airlines and Horizon, Airlines, are wholly-owned subsidiaries of major airlines. In contrast to low-fare airlines,low cost carriers, regional airlines generally do not try to establish an independent route system to compete with the major airlines. Rather, regional airlines typically enter into relationships with one or more major airlines, pursuant to which the regional airline agrees to use its smaller, lower-cost aircraft to carry passengers booked and ticketed by the major airline between a hub of the major airline and a smaller outlying city. In exchange for such services, the major airline pays the regional airline is either paid a fixed per-flightflight fee, by the major airlinetermed "contract" or "fixed-fee" flights, or receives a percentage of applicable ticket revenues. See "-- Relationship of Regional and Major Airlines."

revenues, termed "pro-rate" or "revenue-sharing" flights.
Growth of the Regional Airline Industry
According to the Regional Airline Association, the regional airline sector of the airline industry experienced compounded annual passenger growth of 7.6%12.3% between 19892000 and 1999.2004. We believe that the growth of the number of passengers using regional airlines and the revenues of regional airlines during the last decade is attributable to a number of factors, including:

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•
Regional airlines work with, and often benefit from the strength of, the major airlines. Since many major airlines have incorporated increased use of regional airlines into their future growth strategies, many regional airlines have expanded, and may continue to expand, with the major airlines they serve.

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Regional airlines tend to have a more favorable cost structure and leaner corporate culturestructure than many major airlines. Many regional airlines were founded in the midst of the highly competitive market that developed following deregulation of the airline industry in 1978.

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Many major airlines have determined that an effective method for retaining customer loyalty and maximizing system revenue, while lowering costs, is to outsource shorter, low-volume routes to more cost-efficient regional airlines flying under the major airline's code and name.

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The regional airlines are gradually replacing smaller turboprop planes with 32-32 to 79-seat110-seat regional jets. Such regional jets feature cabin class comfort, low noise levels highand speed and range similar to the 120-seat plus aircraft operated by the major airlines, but are cheaper to acquire and operate because of their smaller size. We believe the increasing use of regional jets has led, and may continue to lead, to greater public acceptance of regional airlines.

Relationship of Regional and Major Airlines
Regional airlines generally enter into code-sharingcode-share agreements with major airlines, pursuant to which the regional airline is authorized to use the major airline's two-letter flight designator codes to identify the regional airline's flights and fares in the central reservation systems, to paint its aircraft with the colors and/or logos of its code-sharingcode-share partner and to market and advertise its status as a carrier for the code-sharingcode-share partner. For example, SkyWest Airlines flies out of Chicago (O'Hare), Denver, Los Angeles, San Francisco, Portland and Seattle/Tacoma and Portland as United Express and out of Salt Lake City as The Delta Connection. ASA operates as The Delta Connection out of Atlanta, Cincinnati and Salt Lake City. In addition, the major airline generally provides reservation services ticket stock, certainsuch as reservations, ticketing,
services, ground support services and gate access to the regional airline, and both partners often coordinate marketing, advertising and other promotional efforts. In exchange, the regional airline provides a designated number of low
capacitylow-capacity (usually between 30 and 70 seats) flights between larger airports served by the major airline and surrounding cities, usually in lower-volume markets.
The financial arrangements between the regional airlines and their code-sharingcode-share partners usually involve eithercontract, or fixed-fee, payments based on the flights or a revenue-sharing arrangement based on the flight ticket revenues, as explained below:
• Fixed-Fee Arrangements. Under a fixed-fee arrangement, the major airline generally pays the regional airline a fixed-fee based on the flight, with additional incentives based on completion of flights, on-time performance and baggage handling performance. In addition, the major and regional airline often enter into an arrangement pursuant to which the major airline bears the risk of changes in the price of fuel and other such costs that are passed through to the major airline partner. Regional airlines benefit from a fixed-fee arrangement because they are sheltered from most of the elements that cause volatility in airline earnings, including variations in ticket prices, passenger loads and fuel prices. However, regional airlines in fixed-fee arrangements do not benefit from positive trends in ticket prices, passenger loads or fuel prices and, because the major airlines absorb most of the risks, the margin between the fixed-fees for a flight and the expected per-flight fixed-fee arrangement.
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-costs tends to be smaller than the margins associated with revenue-sharing arrangements.
• Revenue-Sharing Arrangements. Under a revenue-sharing arrangement, the major airline and regional airline negotiate a proration formula, pursuant to which the regional airline receives a percentage of the ticket revenues for those passengers traveling for one portion of their trip on the regional airline and the other portion of their trip on the major airline. Substantially all costs associated with the regional airline flight are borne by the regional airline. In such a revenue-
sharingrevenue-sharing arrangement, the regional airline realizes increased profits as ticket prices and passenger loads increase or fuel prices decrease and, correspondingly, realizes decreased profits as ticket prices and passenger loads decrease or fuel prices increase.

- Fixed-Fee Arrangements. Under
Code-Share Agreements
SkyWest Airlines operates under a fixed-fee arrangement, the major airline
generally pays the regional airline a fixed fee per flight, with
additional incentives based on completion of flights, on-time performance
and correct baggage handling. In addition, the major and regional airline
often enter into an arrangement pursuant to which the major airline bears
the risk of changes in the price of fuel. Regional airlines benefit from
a fixed-fee arrangement because they are sheltered from most of the
elements that cause volatility in airline earnings -- variations in
ticket prices, passenger loads and fuel prices. However, regional
airlines in fixed-fee arrangements do not benefit from a positive trend
in ticket prices, passenger loads or fuel prices and, because the major
airlines absorb most of the risks, the margin between the per-flight
fixed fee and expected per-flight costs tends to be smaller than the
margins associated with revenue-sharing arrangements.

BUSINESS STRATEGY

Our business strategy consists of the following elements:

- Focus on Markets in the Western United States. For the three months ended
March 31, 2000, SkyWest held the largest market share of regional airline
traffic at San Francisco International Airport (100% of regional airline
passengers), Salt Lake City International Airport (99% of regional
airline passengers) and Los Angeles International Airport (65% of
regional airline passengers). We believe these markets, as well as the
Pacific Northwest markets which SkyWest began serving in 1998 and the
Denver market which SkyWest will begin serving in October 2000, offer
attractive opportunities for long-term, profitable growth. Generally,
western routes are less congested and, due to longer stage lengths than
many eastern routes, offer significant time savings and convenience over
alternate forms of travel. Many western cities are experiencing
significant population and economic growth, and benefit from mild
year-round weather. We also believe SkyWest is well positioned to
capitalize on United's recently increased presence in western markets.

- Build Upon Relationships With Code-Sharing Partners. We attribute
significant growth in traffic and profitability to SkyWest's code-sharing
agreementsExpress Agreement with United and a Delta two of the world's four largest
airlines. SkyWest views the development of these relationships asConnection Agreement with Delta. ASA operates under a significant opportunity to achieve stable, long-term growth. SkyWest
works closelyDelta Connection Agreement with its code-sharing partners to expand service to
existing markets, open new marketsDelta. These code-share agreements authorize Delta and schedule convenient and frequent
flights. We believe that the principal reason SkyWest has attracted
multiple code-sharing partners is its delivery of high quality customer
service with an all-cabin class fleet. SkyWest's competitive fares and
ability to offer passengers participation in frequent flyer programs of
United and Delta are attractive incentives for passengers to fly on
SkyWest. We also believe that multiple code-sharing agreements with major
carriers diversifies operating risk by reducing reliance on a single
major carrier.

- Provide Excellent Customer Service. We believe SkyWest's insistence on
excellent customer service in every aspect of its operations (personnel,
flight equipment, in-flight amenities, on-time performance, flight
completion ratios and baggage handling) has resulted in customer loyalty
and preference for SkyWest as a regional carrier. We also believe that
excellent customer service is largely responsible for SkyWest's multiple
code-sharing relationships as United and Delta seek to build customer
loyalty and preference for major carriers through high quality customer
service provided by their regional partners. SkyWest believes that, for
the year ended March 31, 2000, its

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flight completion ratio was among the highest of all regional airlines at
98.6%. SkyWest also believes its on-time performance ratio was among the
highest of all regional carriers at 93.5%. Maintaining high performance
ratios increases customer satisfaction and adds to SkyWest's
profitability by meeting incentive payment standards included in its
contract-flying arrangements with United and Delta. SkyWest has achieved
these performance measures by:

- operating a modern fleet of aircraft,

- maintaining spare aircraft to assure a high rate of flight completion,
and

- pursuing its commitment to high quality maintenance.

- Operate Limited Types of Aircraft. SkyWest operates two types of
aircraft, Brasilia Turboprops and Canadair Regional Jets. By simplifying
its fleet, SkyWest has gained efficiencies in training, maintenance and
flight operations. Generally, Canadair Regional Jets are utilized on
longer routes to supplement existing service by major carriers, to
replace larger jets on routes where service is discontinued by major
carriers, to replace Brasilia Turboprops as markets develop and demand
increases, and to develop new markets. The design of the Canadair
Regional Jets gives SkyWest the flexibility to configure seating
arrangements and capacities to match market demands. SkyWest believes
that Brasilia Turboprops are most efficiently used on shorter stage
lengths to provide frequent and convenient service. For example, as
SkyWest expanded service in Los Angeles with United in October 1997,
Brasilia Turboprops were shifted from less efficient, non-hub based
routes to more efficient Los Angeles hub and spoke routes connecting with
code-sharing partners. Expansion into additional hubs will offer similar
opportunities.

- Emphasize Contract Flying. We believe that the shift from revenue-sharing
arrangements to fixed-fee contract flying has reduced SkyWest's exposure
to fluctuations in fuel prices, fare competition and passenger volumes.
In some circumstances, contract flying also enables SkyWest to operate
routes selected by United or Delta for strategic purposes, even though
those routes might not offer margins that are attractive enough to
motivate SkyWest to offer SkyWest-controlled flights. Approximately 65%
of SkyWest's current operations are conducted under contract-flying
arrangements with United and Delta. SkyWest anticipates that its contract
flying operations will increase as a percentage of its total daily
flights as additional United and Delta routes are added to the SkyWest
system; however, we anticipate that margins associated with contract
routes will be less than the margins SkyWest has historically generated
on mature SkyWest-controlled routes.

- Foster Our Employees' Best Efforts. With our anticipated growth in
capacity, it is important that we encourage the best efforts of our
employees and minimize turnover in all positions, particularly those
positions that require us to bear significant training expenses. In
addition to offering competitive compensation and benefits, we take a
number of steps to make SkyWest an attractive place to work and build a
career. For example, we have made company-wide stock option grants twice
since 1995; we contribute 5% of net income to employees' accounts within
our 401(k) plan; and we match employee contributions to those accounts,
up to a maximum of 6% of the employee's compensation. We also have an
incentive plan that allows every employee to benefit from our success. In
fiscal 2000, we contributed 10% of our net income to this incentive plan,
in which all employees with two years of service (excluding management)
participate equally. That year, each full-time employee received $4,176
in incentive checks. We have never had a work stoppage, and none of our
employees is represented by a union.

GROWTH OPPORTUNITIES

During the five years ended March 31, 2000, our total operating revenues
expanded at an annual rate of 20.8%, and we increased the number of daily
flights from approximately 550 in 1995 to approximately 1,000 in 2000. All of
our growth during the five-year period was internally generated. We have not
made

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any material business acquisitions. We believe that we are well-positioned for
continued growth for several reasons, including the following:

- West Coast For United. United does not currently operate any regional
jets from the Los Angeles, San Francisco, Seattle/Tacoma or Portland
markets. We expect United to deploy most of the 20 Canadair Regional Jets
we have designated for United service,identify our flights and possibly additional Canadair
Regional Jets, to medium and longer-distance, low-volume markets from
such airports.

- Denver For United. We do not currently operate out of Denver
International Airport, but were recently selected by United to commence
Denver operations in October 2000 with two Canadair Regional Jets. In May
2000, United announced that it will build a new $100 million regional
aircraft terminal in Denver. Construction of the facility is scheduled to
begin in 2001, and the terminal is expected to feature up to 36 regional
aircraft gates. We believe that United's Denver hub could support up to
100 regional jets over the next several years. Because SkyWest is the
only United Express carrier located west of Denver, we believe SkyWest is
well-positioned to operate as United Express flying westward out of
Denver.

- Intermountain Flights For Delta. During 1999, Delta replaced its service
to six markets with our Canadair Regional Jets as part of its
rationalization process at Salt Lake City. Delta's rationalization
process involves an increase in the number of longer-haul east/west Delta
flights into Salt Lake City, and the transitioning of its regional
flights to SkyWest. With its smaller aircraft, SkyWest can often
substitute several flights for each Delta flight, providing increased
frequency of service at a lower overall cost. As such rationalization
continues, we believe that Delta could substitute our Canadair Regional
Jets for many of its flights between Salt Lake City and other cities.
Delta currently has no system-wide limitations on the number of regional
jets operated by its code-sharing partners.

CODE-SHARING AGREEMENTS

Our code-sharing agreements with United and Delta authorize us to usefares under their two-letter flight designator codes ("UA"DL" and "DL""UA") to identify our flights and
fares in the central reservation systems, and authorize us to paint our aircraft with their colors and/orand logos and to market and advertise our status as United Express or
The Delta Connection carrier.or United Express. Under our code-sharing agreement with United, we
are compensated on a fixed-fee per-flight basis on 96% of our United Express
flights and on a revenue-sharing basis for the remaining 4% of our United
Express flights. Under our code-sharing agreement with Delta, we are compensated
on a revenue-sharing basis for approximately 86%each of our Delta Connection
Flights, and on a fixed-fee per-flight basis on the remaining 14% of our Delta
Connection flights. In addition, under both our United and our Delta
code-sharingcode-share agreements, our passengers participate in the major partner's frequent flyer programs
of the major airline,program, and the major airlinepartner provides additional services such as reservations, ticket issuance, ground support services and gate access. We pay
negotiated fees with respect to such services. We also coordinate our marketing, advertising and other promotional efforts with Delta and United. As of September 30, 2005, approximately 94.1% of SkyWest Airlines' and ASA's total daily flights were structured as contract flights, where Delta or United controls scheduling, ticketing, pricing and Delta.seat

inventories. The significantremainder of our flights are pro-rate flights, where SkyWest Airlines and ASA control scheduling, ticketing, pricing and seat inventories, and share revenues with Delta or United according to pro-rate formulas. The following summaries of our code-share agreements do not purport to be complete and are qualified in their entirety by reference to the applicable agreement. Under our code-share agreements, we have commitments from our major partners to place 43 additional regional jets into service over approximately the next two years.
SkyWest Airlines Delta Connection Agreement
SkyWest Airlines and Delta are parties to an Amended and Restated Delta Connection Agreement, dated as of September 8, 2005 (the "SkyWest Airlines Delta Connection Agreement"). As of September 30, 2005, SkyWest Airlines operated 56 CRJ200s and 13 Brasilia turboprops under the SkyWest Airlines Delta Connection Agreement. Under the terms of eachthe SkyWest Airlines Delta Connection Agreement, SkyWest Airlines operates these aircraft to provide Delta Connection service between Delta hubs and destinations designated by Delta. As of our code-sharing agreements are as
follows:

The United Code-Sharing Agreement. We provide a designated number ofSeptember 30, 2005, SkyWest Airlines was operating approximately 482 Delta Connection flights per day as United Express between Los Angeles, San Francisco,
Seattle/Tacoma, PortlandSalt Lake City and designated outlying cities. Uniteddestinations. With respect to these flights, Delta provides reservation, check-in and other passenger services, signage, tickets, baggage tags ticket wallets and similar items
with respect to such flights and also controls scheduling, ticket prices and seat inventoriesinventories. Delta has the right to determine the manner in which SkyWest Airlines utilizes airport gates in connection with respectDelta Connection flights. Delta is entitled to such flights.all passenger, cargo and other revenues associated with each flight.
In exchange for providing the designated number of flights and performing ourSkyWest Airlines' other obligations under the United agreement, we receiveSkyWest Airlines Delta Connection Agreement, SkyWest Airlines receives from UnitedDelta on a weekly basis (i) reimbursement for 100% of its direct costs related to the Delta Connection flights plus (ii) a fixed feedollar payment per completed flight block hour, subject to annual escalation at an agreed rate. Costs directly reimbursed by Delta under the SkyWest Airlines Delta Connection Agreement include costs related to fuel, landing fees, passenger catering, passenger liability insurance, ground handling, aircraft property tax and aircraft maintenance and ownership.
If SkyWest Airlines is unable to operate any of the aircraft covered by the SkyWest Airlines Delta Connection Agreement or complete any Delta Connection flights (such an event, a "SkyWest Airlines Non-Completion Event") due to circumstances within its control, Delta will not be obligated to pay SkyWest Airlines any amount in connection with the inoperable aircraft or non-completed flights. If a SkyWest Airlines Non-Completion Event results from circumstances within the control of Delta, Delta will obligated to pay to SkyWest Airlines direct costs and block hour payments assuming a certain level of utilization for the non-operated Aircraft. However, if a SkyWest Airlines Non-Completion Event results from circumstances that are not within the control of either SkyWest Airlines or Delta, Delta will only be obligated to pay SkyWest Airlines certain fixed costs, aircraft lease or ownership costs, insurance costs, maintenance costs, and taxes related to the non-operated aircraft and non-completed flights.
SkyWest Airlines may not use the aircraft covered by the SkyWest Airlines Delta Connection Agreement for any other purpose other than flying Delta Connection flights. Additionally, subject to certain exceptions, SkyWest Airlines may only operate a limited number of flights per day, for itself and for any third party (including another code-share partner), under its own flight designator codes or those of another air carrier, into or out of Atlanta, Cincinnati, Orlando and Salt Lake City. Other than the foregoing, the SkyWest Airlines Delta Connection Agreement does not prohibit SkyWest Airlines from operating as a code-share partner with another carrier.
The SkyWest Airlines Delta Connection Agreement terminates on September 8, 2020, unless Delta elects to exercise its option to extend its term for up to four additional amount per passenger, and per-passenger incentives based upon on-time
performance, flight completion rates and correct baggage handling. We have also
enteredfive-year terms by providing SkyWest Airlines written notice thereof no later than 180 days prior to the expiration of the

initial term or any additional term, as applicable. Additionally, if either (i) we or SkyWest Airlines agrees to merge into or with any entity, to be acquired by any entity, to sell substantially all of its assets or to enter into a fuel reimbursement arrangementletter of intent regarding any of the foregoing, unless we are the surviving or acquiring entity or the ultimate beneficial owner thereof immediately following the transaction (such transaction, a "Merger") or (ii) a party acquires more than 49% of the voting power or outstanding common stock of us or SkyWest Airlines, unless we own at least 50% of the voting power of the acquiring party following such transaction (such transaction, a "Change of Control"), then Delta shall have the right to extend the term of the SkyWest Airlines Delta Connection Agreement for up to two additional five-year terms beyond the applicable termination date of such agreement or to terminate such agreement as set forth below.
The SkyWest Airlines Delta Connection Agreement may be subject to early termination by either Delta or SkyWest Airlines under various circumstances including:
•
if the other party files for bankruptcy, reorganization or similar action (or if any such action is imminent) or if either Delta or SkyWest Airlines makes an assignment for the benefit of creditors;

•
if the other party commits a material breach of the SkyWest Airlines Delta Connection Agreement, subject to 30 days notice and cure rights; or

•
upon the occurrence of an event of force majeure (including certain labor-related events) that continues for a period of 30 days after written notice from the other party regarding such event.
In addition, Delta may immediately terminate the SkyWest Airlines Delta Connection Agreement upon the occurrence of any of the following events, among others:
•
if either we or SkyWest Airlines enters into a Merger;

•
if either we or SkyWest Airlines experiences a Change of Control;

•
if SkyWest Airlines' safety level is not reasonably satisfactory to Delta;

•
if SkyWest Airlines fails to conduct all flight operations and maintain all aircraft under the SkyWest Airlines Delta Connection Agreement in compliance in all material respects with United, pursuantapplicable government regulations;

•
if SkyWest Airlines fails to which
Unitedmaintain a specified completion rate with respect to the flights we operate for Delta during a specified period;

•
if, under certain circumstances, Delta has a right to terminate the ASA Delta Connection Agreement; or

•
if SkyWest Airlines fails to maintain competitive base rate costs; provided that SkyWest Airlines has the right to adjust its rates prior to any such termination.
In addition, SkyWest Airlines may terminate the SkyWest Airlines Delta Connection Agreement if ASA has the right to terminate the ASA Delta Connection Agreement.
In general, SkyWest Airlines has agreed to reimburseindemnify Delta, and Delta has agreed to indemnify SkyWest Airlines, for any damages caused by breaches of the actual costparties' respective obligations under the SkyWest Airlines Delta Connection Agreement or caused by their respective actions or inactions under such agreement.
If SkyWest Airlines receives an offer, bid or other expression of fuelinquiry from a third party to purchase, lease, sublease, encumber or otherwise acquire any interest in, or to operate on behalf of a third party, any aircraft, slots, gates or other facilities used in connection with the SkyWest Airlines

Delta Connection Agreement that SkyWest Airlines owns or leases, and which SkyWest Airlines desires to accept, Delta has a right of first refusal to acquire the applicable aircraft, slots, gates or other facilities which SkyWest Airlines desires to dispose of on the same terms as those offered to SkyWest Airlines by the third party.
ASA Delta Connection Agreement
ASA and Delta are parties to a Second Amended and Restated Delta Connection Agreement, dated as of September 8, 2005 (the "ASA Delta Connection Agreement"). As of September 30, 2005, ASA operated 35 CRJ700s, 104 CRJ200s and 12 ATR-72 turboprops for allDelta under the ASA Delta Connection Agreement. We expect to remove the 12 ATR-72 turboprops from the ASA fleet and return them to Delta by August 2007. Under the terms of SkyWest's contract flights. We presently operate 706the ASA Delta Connection Agreement, ASA operates these aircraft to provide Delta Connection service between Delta hubs and destinations designated by Delta. As of September 30, 2005, ASA was operating more than 900 Delta Connection flights per day (96% of our
United Express flights) pursuant to such provisions.

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We also operate as a United Express carrier between certain cities with
respect to which we do not receive a fixed fee per flight.Atlanta, Cincinnati, Salt Lake City and designated outlying destinations. With respect to suchthese flights, weDelta provides reservation, check-in and other passenger services, signage, tickets, baggage tags, ticket wallets and similar items and also controls scheduling, ticket prices and seat inventories. Delta has the right to determine the manner in which ASA utilizes airport gates in connection with Delta Connection flights. Under the ASA Delta Connection Agreement, Delta is entitled to all passenger, cargo and other revenues associated with each flight.
In exchange for providing the designated number of flights and performing ASA's other obligations under the ASA Delta Connection Agreement, ASA receives from Delta on a weekly basis (i) reimbursement for 100% of its direct costs related to Delta Connection flights plus (ii) if ASA completes a certain minimum percentage of its Delta Connection flights, an amount equal to a certain percentage of the direct costs related to the Delta Connection flights (not including fuel costs). Costs directly reimbursed by Delta under the ASA Delta Connection Agreement include costs related to fuel, landing fees, passenger catering, passenger liability insurance, ground handling, aircraft property tax and aircraft maintenance and ownership. The ASA Delta Connection Agreement also provides for incentive compensation based upon ASA's performance, including on-time arrival performance and completion percentage rates.
If ASA is unable to operate any of the aircraft covered by the ASA Delta Connection Agreement or complete any Delta Connection flights (such an event, an "ASA Non-Completion Event") due to circumstances within its control, scheduling, inventoryDelta will not be obligated to pay ASA any amount in connection with the inoperable aircraft or non-completed flights. If an ASA Non-Completion Event results from circumstances within the control of Delta, (i) Delta will be obligated to pay to ASA base costs assuming a certain level of utilization for the non-operated aircraft and pricing subject(ii) ASA's eligibility for incentive compensation under the ASA Delta Connection Agreement will be computed without regard to United's
concurrenceany effects of the non-completed flights. However, if an ASA Non-Completion Event results from circumstances that suchare not within the control of either ASA or Delta, Delta will only be obligated to pay ASA certain fixed costs, aircraft lease or ownership costs, insurance costs, maintenance costs, and taxes related to the non-operated aircraft and non-completed flights.
Commencing in 2008 and continuing thereafter, if Delta conducts a request for proposals (an "RFP") to place additional aircraft into service does not adversely affect its other operations in the region. In lieuDelta Connection program, ASA will be offered the opportunity to bid on such additional aircraft to the extent required to maintain ASA's percentage of aircraft within the Delta Connection program as of December 31, 2007 (such percentage, the "ASA Percentage"). If ASA is not awarded a fixed feeportion of such RFP so as to maintain the ASA Percentage, ASA shall be offered the opportunity to match the economic terms and conditions of the winning bid. If ASA in good faith (i) participates in the RFP and (ii) decides to attempt to match the economic terms and conditions of the winning bid and provides Delta with prompt written notice of such decision, then Delta will provide ASA with a certificate that sets forth the pertinent economic terms

and conditions of such winning bid. If ASA elects to match the winning bid, additional Delta Connection aircraft will be added to the scope of the ASA Delta Connection Agreement (as modified with respect to such flights, we share
revenuesadditional aircraft to account for the economic terms and conditions of the winning bid with United based uponrespect to such aircraft) so as to maintain the ASA Percentage.
ASA may not use the aircraft covered by the ASA Delta Connection Agreement for any purpose other than flying Delta Connection flights. Additionally, ASA may only operate a portionlimited number of passenger fares. We presently
operate 26 flights per day (4%under its own flight designator codes into or out of Atlanta, Cincinnati, New York (John F. Kennedy International Airport), Orlando and Salt Lake City. Subject to reduction as set forth in the ASA Delta Connection Agreement, ASA will be scheduled to operate not less than 80% of all Delta Connection departures in Atlanta and not less than a majority of ASA's flights under the ASA Delta Connection Agreement will be at Atlanta. Further, ASA and its affiliates may not enter into any code-share agreement with any third party that imposes restrictions on ASA relating to the operation of aircraft for any party that is not a party to such code-share agreement, including geographical or flight restrictions. Other than the foregoing, the ASA Delta Connection Agreement does not prohibit ASA from operating as a code-share partner with another carrier.
The ASA Delta Connection Agreement terminates on September 8, 2020, unless Delta elects to exercise its option to extend its term for up to four additional five-year terms by providing ASA written notice thereof no later than 180 days prior the expiration of the initial term or any additional term, as applicable. Additionally, if either (i) we or ASA agree to merge into or with any entity, to be acquired by any entity, to sell substantially all of our or ASA's assets or to enter into a letter of intent regarding any of the foregoing, unless we are the surviving or acquiring entity or the ultimate beneficial owner thereof immediately following the transaction (such transaction, a "Merger") or (ii) a party acquires more than 49% of our voting power or outstanding common stock or that of ASA, unless we own at least 50% of the voting power of the acquiring party following such transaction (such transaction, a "Change of Control"), then Delta shall have the right to extend the term of the ASA Delta Connection Agreement for up to two additional five-year terms beyond the applicable termination date of such agreement or to terminate such agreement as set forth below.
The ASA Delta Connection Agreement may be subject to early termination by either ASA or Delta under various circumstances including:
•
if the other party files for bankruptcy, reorganization or similar action (or if any such action is imminent) or if either Delta or ASA makes an assignment for the benefit of creditors;

•
if the other party commits a material breach of the ASA Delta Connection Agreement, subject to 30 days notice and cure rights; or

•
upon the occurrence of an event of force majeure (including certain labor-related events) that continues for a period of 30 days after written notice from the other party regarding such event.
In addition, Delta may immediately terminate the ASA Delta Connection Agreement upon the occurrence of any of the following events, among others:
•
if either we or ASA enters into a Merger;

•
if either we or ASA experiences a Change of Control;

•
if ASA's safety level is not reasonably satisfactory to Delta;

•
if ASA fails to conduct all flight operations and maintains all aircraft under the ASA Delta Connection Agreement in compliance in all material respects with applicable government regulations;

•
if ASA fails to maintain a specified completion rate with respect to the flights we operate for Delta during a specified period, subject to certain exceptions;

•
if, under certain circumstances, Delta has a right to terminate the SkyWest Airlines Delta Connection Agreement; or

•
if ASA fails to maintain competitive base rate costs; provided that ASA has the right to adjust its rates prior to any such termination.
In addition, ASA may terminate the ASA Delta Connection Agreement if SkyWest Airlines has the right to terminate the SkyWest Airlines Delta Connection Agreement.
In general, ASA has agreed to indemnify Delta, and Delta has agreed to indemnify ASA, for any damages caused by any breaches of the parties' respective obligations under the ASA Delta Connection Agreement or caused by their respective actions or inactions under such agreement.
Subject to certain exceptions, if ASA receives an offer, bid or other expression of inquiry from a third party to purchase, lease, sublease, encumber or otherwise acquire any interest in, or to operate on behalf of a third party, any aircraft, slots, gates or other facilities used in connection with the ASA Delta Connection Agreement that ASA owns or leases, and which ASA desires to accept, Delta has a right of first refusal to acquire the applicable aircraft, slots, gates or other facilities which ASA desires to dispose of on the same terms as those offered to ASA by the third party.
SkyWest Airlines United Express flights) pursuantAgreement
SkyWest Airlines and United are parties to such
provisions.a United Express Agreement entered into on July 31, 2003 (the "United Express Agreement"). As of September 30, 2005, SkyWest Airlines operated 37 CRJ700s, 65 CRJ200s and 50 Brasilia turboprops under the United Express Agreement, flying a total of approximately 1,019 United Express flights per day between Chicago (O'Hare), Denver, Los Angeles, San Francisco, Portland and Seattle/Tacoma and designated outlying destinations. United provides reservation, check-in, ground-support and other passenger services and also controls seat inventories. Generally, under the United Express Agreement, United retains all air fares, cargo rates, mail charges and other revenues associated with each flight.
In exchange for providing the designated number of flights and performing SkyWest Airlines' obligations under the United Express Agreement, SkyWest Airlines receives from United compensation (subject to an annual adjustment) of a fixed-fee per completed block hour, fixed-fee per completed departure, fixed-fee per passenger, fixed-fee for overhead and aircraft costs, and one-time start-up costs for each aircraft delivered. The United agreementExpress Agreement provides for incentives based upon SkyWest Airlines' performance, including controllable flight completion percentage rates, on-time percentage rates, mishandled bags percentage rates and customer responses to surveys about their intent to reuse United Express. The fixed rates that SkyWest Airlines receives from United under the United Express Agreement are annually adjusted in accordance with an agreed escalation formula. Additionally, certain of SkyWest Airlines' operating costs are reimbursed by United. Such reimbursed costs include costs related to fuel, landing fees, war risk insurance, liability insurance, aircraft property taxes and aircraft ownership and maintenance.
The United Express Agreement divides the CRJ700s and CRJ200s into three approximately equal groups (each such group, a "CRJ Group"). The United Express Agreement terminates, subject to certain rights to extension and ramp down, with respect to the first CRJ Group on December 31, 2011, with respect to the second CRJ Group on December 31, 2013 and with respect to the third CRJ Group on December 31, 2015. With respect to the Brasilia turboprops, the United Express Agreement terminates on Maythe earlier of (i) the termination date under the lease agreement relating to each such aircraft and (ii) December 31, 2008; however,2013. United has the option, upon one year's notice, of extending the United Express Agreement for five years for any CRJ Group or Brasilia turboprops.

The United Express Agreement may be terminated by either SkyWest Airlines or United under the following conditions:
•
if the other becomes insolvent, is not regularly paying its bills when due without just cause, takes any step leading to its cessation as a going concern, makes an assignment of substantially all of its assets for the benefit of creditors or a similar disposition of the assets of the business, or either ceases or suspends operations;

•
if bankruptcy proceedings are commenced against the other and certain specified conditions are not satisfied; or

•
if the other fails to fulfill an obligation under the United Express Agreement for a period of 60 days after written notice to cure.
United also may terminate the United agreementExpress Agreement upon at least 30 days notice and subject to SkyWest Airlines' right to cure under the following conditions:
•
SkyWest Airlines' operations fall below a certain performance level for a period of three consecutive months regarding controllable flight completion, mishandled bags and on-time performance; or

•
SkyWest Airlines knowingly maintains falsified books or records or submits false reports of a material nature.

United may immediately terminate the United Express Agreement if either (i) SkyWest Airlines operates, subject to certain exceptions, any additional regional jets or turboprop aircraft pursuant to a marketing or code-share relationship with any party other than United to provide hub service at United's hubs in wholeChicago (O'Hare), Denver, Los Angeles, San Francisco, Seattle/Tacoma, or Washington, D.C. (Dulles International Airport) or (ii) SkyWest Airlines, subject to certain exceptions, uses the services or facilities afforded by United to provide air transportation or related services to other carriers or affiliates of SkyWest Airlines.
In addition, the United Express Agreement will be terminated if:
•
United fails to confirm a plan of reorganization in part at any timeits Chapter 11 bankruptcy case under which United continues to operate as an airline, and thereafter discontinues all flight operations; or

•
United's Chapter 11 bankruptcy case is dismissed or converted to a case under Chapter 7 of the Bankruptcy Code and United suspends or discontinues flight operations.
In the event of such termination as set forth above, United will have breached the United Express Agreement and SkyWest Airlines will have certain claims for (i) administrative expenses, (ii) monies owed (a) to passengers, (b) under interline and clearinghouse agreements, (c) to employees and (iii) monies owed to third parties in connection with the manufacture, purchase, lease or financing of aircraft and maintenance equipment or services or spare parts associated with the aircraft.
United has a call option to assume SkyWest Airlines' ownership or leasehold interest in certain aircraft if SkyWest Airlines wrongfully terminates the United Express Agreement, if SkyWest Airlines' credit rating falls below a certain level or if United terminates the United Express Agreement for SkyWest Airlines' breach for any one of the following reasons:
•
SkyWest Airlines' operations fall below a certain performance level for six consecutive months regarding controllable flight completion, mishandled bags and on-time performance;

•
SkyWest Airlines enters into a new code-share arrangement with another airline in breach of the United Express Agreement; or

•
SkyWest Airlines' operating certificate is revoked or no
reason upon 180 days' notice.suspended by the FAA, for safety issues or concerns, for a period of four consecutive months.
The United agreement may also be terminated upon
30 days'call option is governed by certain limitations relating to, among other factors, the number of aircraft for which the call option is exercised, notice for cause andrequirements, indemnification in the event of a lease assumption, calculation of the purchase price in the event of a sale, payment of aircraft ownership costs, delivery of spare parts and reimbursement of prepaid rent.
SkyWest Airlines granted United a right of first refusal with respect to offers received from third parties to enter into certain corporate transactions, including a merger, or other transaction in
whichsale of substantially all assets, or issuance or sale of SkyWest Airlines stock representing 10% or more of the assetsoutstanding shares of SkyWest are transferred to another
entity.

Under the United agreement, if we desire to merge with another company,
sellAirlines stock, (other than an issuance or otherwise transfer our assets to a third party, or issue capitalsale of stock
exceeding 5% of our outstanding capital stock (30% if the stock is issued in a registered public offering)offering under the Securities Act of 1933, as amended). United has the right to match the economic terms of such third party, we are required to give United noticean offer and enter into the transaction with SkyWest Airlines in lieu of the proposed transaction, offer to complete such transaction with United instead
of such third party, negotiate with United in good faith terms and conditions on
which we could complete such transaction with United and offer United any terms
and conditions we offer to such third party. If we are unable to agree withHowever, if United wedoes exercise its right, SkyWest Airlines may enter into negotiationsthe transaction with other parties, but we may not enter
into any agreementthe third party, provided that it does so on terms no more favorablebeneficial to any suchthe third party than those we
offered to United. The United agreement also provides that United must concur in
any marketing or code-sharing relationship with any other carrier with respect
to city pairs served by United.

The Delta Code-Sharing Agreement. We have operated as The Delta Connection
from Delta's Salt Lake City and Los Angeles hubs since 1987. As of June 30,
2000, 204 of our Delta flights per day (86% of our Delta flights) are subject to
a revenue-sharing arrangement, and the remaining 34 Delta flights per day (14%
of our Delta flights) are subject to a fixed-fee arrangement. Delta has entered
into a fuel reimbursement arrangement with respect to flights subject to the
fixed-fee arrangement, pursuant to which Delta
In general, SkyWest Airlines has agreed to reimburseindemnify United, and United has agreed to indemnify SkyWest for the actual cost of fuel for all of SkyWest's contract flights.

The Delta agreement establishes procedures, allocates responsibility and
sets standards for such matters as schedule publication, billing and accounting
procedures, ticketing, customer services, inconvenienced customers and
insurance. The Delta agreement continues until June 20, 2010, but is subject to
earlier termination under various circumstances, including upon 180 days'
advance notice by either partyAirlines, for any or no reason or upon the occurrencedamages caused by any breaches of a
merger or similar transaction in which our company or business is acquired.
Delta currently owns approximately 12.5% of our outstanding common stock
(without giving effect to the issuance of additional shares of common stock to
be sold in this offering), which was acquiredeach party's respective obligations under the Delta Stock OptionUnited Express Agreement entered into in January 1987, concurrently with the initial Deltaor caused by each party's respective actions or inactions under such agreement.

MARKETS AND ROUTES

Markets. We believe that our development of hub operations in Los Angeles,
San Francisco, Seattle/ Tacoma
Markets and Portland with United, and Salt Lake City with
Delta, has been a principal factor in the growth of our flight operations and
will facilitate implementation of our growth and operating strategy.Routes
As of JuneSeptember 30, 2000, we2005, SkyWest Airlines scheduled 326the following daily flights as a United Express carrier: 240 to or from Chicago O'Hare International Airport, 234 to or from Denver International Airport, 276 to or from Los Angeles International Airport, 200 daily flights42 to or from Portland International Airport, 210 to or from San Francisco International Airport 238and 32 to or from Seattle/Tacoma International Airport. As of September 30, 2005, SkyWest Airlines scheduled 482 daily flights to or from Salt Lake City International Airport and 180as a Delta Connection carrier.
As of September 30, 2005, ASA scheduled the following daily flights as a Delta Connection carrier: 124 to or from Seattle/TacomaCincinnati/Northern Kentucky International Airport, 684 to or from Hartsfield-Jackson Atlanta International Airport and Portland
International Airport combined. We expect to commence operations with two
Canadair Regional Jets from Denver International Airport on behalf of United in
October 2000.

At the San Francisco International Airport, Salt Lake City International
Airport and Los Angeles International Airport, SkyWest is the largest regional
airline, with market shares as of March 31, 2000 of 100% of regional airline
passengers in San Francisco, 99% of regional airline passengers in Salt Lake
City and 65% of regional airline passengers in Los Angeles. As of June 30, 2000,
our primary code-sharing partner in such cities, United, operated 492 daily
flights to or from San Francisco, with 54% of total traffic,
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and 438 daily flights to or from Los Angeles, with 23% of total traffic. As of
the same date, Delta operated 290 daily flights82 to or from Salt Lake City with
67% of total traffic. In 17 of the 63 cities that SkyWest serves, it is the only
scheduled commercial air service.

Routes. The following tables identify the cities we served as of June 30,
2000:

ARIZONA:
Yuma
CALIFORNIA:
Bakersfield
Carlsbad
Chico
Crescent City
Eureka/Arcata
Fresno*
Imperial/El Centro
Inyokern
Los Angeles
Merced
Modesto
Monterey
Ontario
Orange County*
Oxnard
Palm Springs*
Redding
Sacramento
San Diego
San Francisco*
San Jose

San Luis Obispo

Santa Barbara
Santa Maria
Santa Rosa
Visalia
COLORADO:
Colorado Springs*
Denver*+

Grand Junction

IDAHO:
Boise*
Idaho Falls*
Pocatello
Sun Valley
Twin Falls
MONTANA:
Billings*
Bozeman*
Butte*
Helena*
Missoula*
West Yellowstone
NEBRASKA
Omaha*
NEW MEXICO:
Albuquerque*
NEVADA:
Elko
Las Vegas
Reno*
OREGON:
Eugene
Medford
Portland*

Redmond/Bend

SOUTH DAKOTA:
Rapid City*
UTAH:
Cedar City

Salt Lake City*

St. George
WASHINGTON:
Bellingham
Pasco*
Seattle/Tacoma
Spokane
Yakima
WYOMING:
Casper*
Cody
Jackson Hole
CANADA:
Calgary*
Vancouver, B.C.*

- ---------------
* Service provided by SkyWest utilizing one or more Canadair Regional Jets.

+ Effective October 1, 2000.

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FLIGHT EQUIPMENTInternational Airport.
Flight Equipment
As of JuneSeptember 30, 2000, we2005, SkyWest Airlines and ASA operated a combined fleet of 104376 aircraft, consisting of 9272 CRJ700s, 229 CRJ200s, 63 Brasilia Turbopropsturboprops and 12 Canadair Regional Jets, asATR-72 turboprops (which we expect to remove from service by August 2007). More information related to our aircraft fleet is described in the following table:

SCHEDULED AVERAGE
AIRCRAFT FLIGHT CRUISING AVERAGE
--------------- PASSENGER RANGE SPEED AGE
OWNED LEASED CAPACITY (MILES) (MPH) (YEARS)
----- ------ --------- --------- -------- -------

Brasilia Turboprop................. 21 71 30 300 300 5.7
Canadair Regional Jet.............. 1 11 50 850 530 5.0

In addition, United has agreed to contract for the use of 10 additional
Canadair Regional Jets on a fixed-fee basis,tables:
SkyWest Airlines
Aircraft Type
Number of
Owned Aircraft Number of
Leased Aircraft Passenger
Capacity Scheduled Flight
Range (miles) Average Cruising
Speed (mph) Average Age
(years)
CRJ200s 32 93 50 1,100 530 3.6
CRJ700s 7 30 66 1,500 530 0.7
Brasilia Turboprops 15 48 30 500 300 8.7
ASA
Aircraft Type
Number of
Owned Aircraft Number of
Leased Aircraft Passenger
Capacity Scheduled Flight
Range (miles) Average Cruising
Speed (mph) Average Age
(years)
CRJ200s 39 65 40 or 50 1,100 530 4.3
CRJ700s 35 0 70 1,200 530 1.9
ATR-72 Turboprops 0 12 66 300 300 11.9 SkyWest Airlines and Delta has agreed to contract
for the use of 34 additional Canadair Regional Jets on a fixed-fee basis. Based
on such agreements, weASA have placed acombined firm orderorders to acquire an additional 54
Canadair Regional Jets37 CRJ700s (which can be delivered in configurations ranging between 66 and 90 seats) over the next fourtwo years and a conditional orderASA is committed to acquire an additional 40 Canadair Regional Jets. If we acquire all such 94
aircraft, we will also be eligible to exercise options to acquire an additional
155 Canadair Regional Jets, 95 of whichsublease six CRJ200s from Delta commencing in 2006. SkyWest and ASA do not presently have been assigned scheduled delivery
dates through 2005, and the balance of which have unspecified delivery dates. We
have no orders for additional aircraft other than the Canadairthese Bombardier Regional Jets. Gross committed expenditures for these 43 aircraft and related equipment, including estimated amounts for contractual price escalations will be approximately $1.1 billion through April 2007. We presently are receiving these aircraft on an incremental schedule, and anticipate that delivery dates for these aircraft could continue through approximately April 2007; however, actual delivery dates remain subject to final determination based on various factors. SkyWest Airlines and ASA have also obtained combined options for another 80 Bombardier Regional Jets that can be delivered in either 70 or 90-seat configurations.
The following table outlines the number of CanadairBombardier Regional Jets wethat SkyWest Airlines and ASA are scheduled to receive during each of the next four fiscal yearsperiods set forth below and the expected size and composition of our combined fleet following the receipt of such Canadairthese aircraft.
During the fiscal year
ended December 31,
During the three
months ended
December 31, 2005
2006 2007 2008 2009
Additional CRJ200s 0 6 0 0 0
Additional CRJ700s 5 24 8 0 0
Total Bombardier Regional Jets 306 336 344 344 344
Total Brasilia Turboprops 63 61 60 59 57
Total ATR-72 Turboprops 12 12 0 0 0
Total Combined Fleet 381 409 404 403 401Bombardier Regional Jets.Jets
The information presented in the table is based on our firm order
for 54 Canadair Regional Jets and does not include any of the 40 Canadair
Regional Jets subject to our conditional order or any aircraft subject to
options. If we acquire any Canadair Regional Jets that are subject to
conditional orders or options, the number of Brasilia Turboprops in flight will
be reduced from the number indicated below.

DURING THE FISCAL YEAR ENDED MARCH 31,
-----------------------------------------
2000 2001 2002 2003 2004
----- ----- ----- ----- -----

Additional 50-seat Canadair Regional Jets................. -- 7 15 26 7
Total Canadair Regional Jets.............................. 11 18 33 59 66
Total Brasilia Turboprops................................. 92 91 86 75 70

The CanadairBombardier Regional Jets are among the quietest commercial jetjets currently available and offer many of the amenities of larger commercial jet aircraft, including flight attendant service, as well as a stand-up cabin, overhead and underseat storage, lavatories and in-flight snack and beverage service, and, in many cases, more leg room than
larger jets.service. The speed of CanadairBombardier Regional Jets is comparable to larger aircraft operated by the major airlines, and they have a range of up to 1,200approximately 2,000 miles; however, because of their smaller size and efficient design, the per-flight cost of operating a CanadairBombardier Regional Jet is generally less than that of a 120-seat or larger jet aircraft. As of June 30, 2000, we operated our 12
Canadair Regional Jets out of Salt Lake City to approximately 22 destinations,
generally on longer stage lengths.
Brasilia Turboprops
The Brasilia Turbopropsturboprops are 30-seat, pressurized aircraft designed to operate more economically over short-haul routes with lower passenger load
factors than larger jet aircraft. These factors make it economically feasible for SkyWest Airlines to provide high frequency service in markets with relatively low volumes of passenger traffic. Passenger comfort features of the Brasilia Turboprop aircraftturboprops include stand-up headroom, a lavatory, overhead baggage compartments and flight attendant service. We expect that UnitedDelta and DeltaUnited will want us to continue to operate Brasilia Turbopropsturboprops in markets where passenger load and other factors make the operation of a CanadairBombardier Regional Jet impractical. As of JuneSeptember 30, 2000, we 2005, SkyWest Airlines

operated 9263 Brasilia Turbopropsturboprops out of Salt
Lake City, Los Angeles, San Francisco, Salt Lake City, Seattle/Tacoma and Portland to
approximately 52 destinations. OurPortland. SkyWest Airlines' Brasilia Turbopropsturboprops are generally used in ourits California markets, which are characterized by high frequency service on shorter stage lengths.

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GROUND OPERATIONS

Our employees perform substantially all routine airframe
ATR-72 Turboprops
While ASA currently operates twelve ATR-72 turboprops out of Atlanta, we expect that these aircraft will be removed from service by August 2007.
Properties and engineGround Operations
SkyWest Airlines and ASA own or lease the following principal properties:
SkyWest Airlines Facilities
•
SkyWest Airlines owns a 56,600 square foot aircraft maintenance and periodic inspection of equipment. Maintenance is performed
primarilyfacility in Palm Springs, California.

•
SkyWest Airlines leases a 131,300 square foot facility at facilities inthe Salt Lake City, UtahInternational Airport. This facility consists of a 58,400 square foot aircraft maintenance hangar and Fresno72,900 square feet of training and Palm Springs,
California. Weoffice space. In January 2002, we entered into a sale lease-back agreement with the Salt Lake Airport Authority. Under the agreement, we received approximately $18 million in cash in exchange for the newly constructed facility and entered into a 26-year operating lease agreement. The sales price was equal to the construction costs and no gain or loss was recognized.

•
SkyWest Airlines leases a 90,000 square foot aircraft maintenance and training facility at the Salt Lake City International Airport and own a 56,600 square
foot maintenance facility in Palm Springs. OurAirport. The Salt Lake City facility consists of a 40,000 square footfeet of maintenance hangarfacilities and 50,000 square feet of training and other facilitiesfacilities. We originally constructed the Salt Lake City facility which we subsequently sold to support our growing hub operations. The facility was
constructed and is owned byleased back from the Salt Lake City Airport Authority. We areSkyWest Airlines is leasing the facility under an operating lease arrangement over a 36-year term, expiring
in August 2021. The Palm Springs maintenance facility supports our expanding
Southern California operations. We also leaseterm.

•
SkyWest Airlines leases a 90,000 square-footsquare foot maintenance hangarhanger and a 15,000 square-foot administrative and supportsquare foot office facility in Fresno, California.

We lease

•
SkyWest Airlines leases a 28,000 square foot maintenance hanger in Tucson, Arizona.

•
SkyWest Airlines leases ticket counters, check-in and check-in, boarding and other facilities in the passenger terminal areas in the majority of the airports we serveit serves and staff
thesestaffs those facilities with ourSkyWest Airlines personnel. UnitedOther airlines, including Delta and DeltaUnited, provide ticket handling andand/or ground support services for SkyWest Airlines in 3254 of the 63121 airports to which SkyWest Airlines flies.

•
We own the corporate headquarters facilities of SkyWest, Inc. and SkyWest Airlines, located in St. George, Utah, in two adjacent buildings of 63,000 and 55,000 square feet, respectively. Both facilities were internally funded with cash generated from operations and were subsequently refinanced with third-party debt.
ASA Facilities
•
ASA leases 61,000 square feet in an office building located at the Hartsfield-Jackson Atlanta International Airport which serves as ASA's corporate headquarters. The lease expires on April 30, 2008.

•
ASA leases a 78,550 square foot aircraft maintenance facility in Macon, Georgia. The Macon facility also contains a 7,500 square foot training and storage facility. The Macon facility is bond-financed, with the lease expiring in 2018.

•
ASA leases a 39,000 square foot aircraft maintenance facility in Baton Rouge, Louisiana. ASA has the right to occupy the Baton Rouge facility rent-free until 2022.

•
ASA leases a 63,800 square foot parts storage facility located near the Hartsfield-Jackson Atlanta International Airport.

•
ASA leases smaller aircraft line maintenance facilities in Atlanta, Georgia; Salt Lake City, Utah; Columbia, South Carolina; Fort Walton Beach, Florida; Montgomery, Alabama; and Shreveport, Louisiana.

•
ASA uses 26 gates at the Hartsfield-Jackson Atlanta International Airport: 13 gates are leased directly from the airport authority, six gates are subleased from US Air, five gates are subleased from Delta and two gates are used pursuant to a month-to-month arrangement. ASA intends to lease from Delta three additional gates effective December 1, 2005.

•
ASA leases ticket counters, check-in and boarding and other facilities in the passenger terminal areas in the majority of the airports it serves and staffs those facilities with ASA personnel. Other airlines, including Delta, provide ticket handling and/or ground support services for ASA in 84 of 123 airports ASA serves.
Our management deems SkyWest Airlines' and ASA's current facilities as being suitable and necessary to support existing operations and believes these facilities will be adequate for the foreseeable future.
Training and Aircraft Maintenance
SkyWest Airlines' and ASA's employees perform substantially all routine airframe and engine maintenance and periodic inspection of equipment at their respective maintenance facilities, and provide substantially all training to SkyWest Airlines and ASA pilots and maintenance personnel utilizing ourat their respective training facilities located at Salt Lake
City, Utahfacilities. SkyWest Airlines and Fresno, California.

WeASA also own our corporate headquarters, located in a 63,000 square foot
building in St. George, Utah.

NATIONAL PARKS TRANSPORTATION

In order to maintain our focus on our core business, on July 21, 2000 we
completed the sale of National Parks Transportation, Inc., which provides car
rental services at six airports served by SkyWest, including Page, Arizona, Elycontract with third party vendors for non-routine airframe and Elko, Nevada and St. George, Cedar City and Vernal, Utah. Revenues from the
operations of National Parks Transportation, Inc. represented less than 1% of
our revenues during the fiscal year ended March 31, 2000.

EMPLOYEESengine maintenance.
Employees
As of JuneSeptember 30, 2000, we2005, SkyWest, Inc. and SkyWest Airlines collectively employed 3,5938,051 full-time equivalent employees including 1,487consisting of 3,414 pilots and flight attendants, 1,4253,393 customer service personnel, 443780 mechanics and other maintenance personnel, and 238464 administration and support personnel. OurNone of these employees are not currently represented by anya union. We are aware, however, that collective bargaining group organization efforts among ourSkyWest Airlines' employees occur from time to time and expectwe anticipate that such efforts will continue in the future. During August 1999, the question of whether or not2004, SkyWest Airlines' pilots voted against a resolution to join the Air
Line Pilots Association was submitted to our pilots, who voted against joining
the association by a narrow margin.an officially recognized union. Under governing rules, ourSkyWest Airlines' pilots may again vote on this issue as early as August 2000.at any time because one year has passed since the previous vote. If unionizingunionization efforts are successful, we may be subjected to risks of work interruption or stoppage and/or incur additional expenses associated with increased union representation of our employees. In connection with our proposed acquisition of at least 54 Canadair Regional
Jets and related expansion, we anticipate hiring approximately 2,500 additional
employees, many of whom may be represented by a union in their current
employment. We haveSkyWest Airlines has never experienced anya work stoppagesstoppage due to a strike or other labor dispute, and we consider our
relationshipSkyWest Airlines' relationships with ourits employees to be good.

COMPETITION AND ECONOMIC CONDITIONS

The airline industry is highly competitive. We not only compete with other
regional airlines, some
As of which are owned by or are operated as code-sharing
partnersSeptember 30, 2005, ASA employed approximately 5,500 full-time equivalent employees consisting of major airlines, but also face competition from low-fare airlines2,462 pilots and major airlines on many of our routes. We are the dominant regional airline
operating out of the Salt Lake City International Airport; however, Southwest
Airlines, a national low-fare airline, also operates out of the Salt Lake City
International Airport, which results in significant price competition at the
Salt Lake City hub. Competition in the Southern California and Pacific Northwest
markets, which we service from our hubs in Los Angeles, Seattle/Tacoma and
Portland, is particularly intense, with a large number of carriers in these
markets. In our markets served from Los Angeles

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International Airport, our principal competitor is American Eagle. In our
markets served from airports in Seattle/Tacoma and Portland, our principal
competitor is Horizon Airlines.

The principal competitive factors in the regional airline industry are fare
pricing,flight attendants, 1,734 customer service routes served, flight schedules, aircraft types and
code-sharing relationships. Certain of our competitors are larger and have
significantly greater financialpersonnel, 842 mechanics and other resources than we do. Moreover,
federal deregulationmaintenance personnel, and 472 administration and support personnel. Three of ASA's employee groups are represented by unions. ASA's pilots are represented by the industry allows competitors to rapidly enter our
marketsAir Line Pilots Association,

International, ASA's flight attendants are represented by the Association of Flight Attendants—CWA, and to quickly discountASA's flight controllers are represented by the Professional Airline Flight Control Association. The collective bargaining agreements between ASA and restructure fares.its pilots and flight attendants became amendable September 15, 2002 and September 26, 2003, respectively. ASA has been negotiating with the pilots and flight attendants unions since 2002 and 2003, respectively. Each of these negotiations is currently under the jurisdiction of mediators supplied by the National Mediation Board. The airline industry is
particularly susceptible to price discounting because airlines incur only
nominal costs to provide service to passengers occupying otherwise unsold seats.

Generally, the airline industry is highly sensitive to general economic
conditions,collective bargaining agreement between ASA and its flight controllers becomes amendable in large partApril 2006. ASA has never experienced a work stoppage due to the discretionary nature of a substantial
percentage of both businessstrike or other labor dispute, and pleasure travel. In the past, many airlines have
reported decreased earnings or substantial losses resulting from periods of
economic recession, heavy fare discounting and other factors. Economic downturns
combinedconsiders its relationships with competitive pressures have contributedemployees to a number of bankruptcies
and liquidations among major and regional carriers. The effect of economic
downturns is somewhat mitigated by our fixed-fee arrangements with respect to
certain flights. Nonetheless, the per passenger component in such fee structure
would be affected by a economic downturn. In addition, if our major airline
code-sharing partners experience longer-term decline in passenger load or are
injured by low ticket prices or high fuel prices, they will likely seek to
reduce our fixed fees or cancel a number of flights in order to reduce their
costs.

REGULATIONgood.
Government Regulation
All interstate air carriers, including SkyWest Airlines and ASA, are subject to regulation by the DOT, the FAA and certain other governmental agencies. Regulations promulgated by the DOT primarily relate to economic aspects of air service. The FAA requires operating, air worthiness and other certificates; approval of personnel who may engage in flight, maintenance or operationsoperating activities; record
keepingrecord-keeping procedures in accordance with FAA requirements; and FAA approval of flight training and retraining programs. Generally, governmental agencies enforce their regulations through, among other mechanisms,ways, certifications, which are necessary for ourthe continued operations of SkyWest Airlines and ASA, and proceedings, which can result in civil or criminal penalties or revocation of operating authority. The FAA can also issue maintenance directives and other mandatory orders relating to, among other things, grounding of aircraft, inspection of aircraft, installation of new safety-related items and the mandatory removal and replacement of aircraft parts
that have failed or may fail in the future.parts.
We believe that weSkyWest Airlines and ASA are operating in material compliance with FAA regulations and hold all necessary operating and air worthinessairworthiness certificates and licenses. We incur substantial costs in maintaining our current certifications and otherwise complying with the laws, rules and regulations to which weSkyWest Airlines and ASA are subject. OurSkyWest Airlines' and ASA's flight operations, maintenance programs, record keeping and training programs are conducted under FAA approved procedures. WeSkyWest Airlines and ASA do not operate at any airports where landing slots are restricted.
All air carriers are required to comply with federal lawlaws and regulations pertaining to noise abatement and engine emissions. All air carriers are also subject to certain provisions of the Federal Communications Act of 1934, as amended, because of their extensive use of radio and other communication facilities. WeSkyWest Airlines and ASA are also subject to certain other federal and state laws relating to protection of the environment, labor relations and equal employment opportunity. Management believesWe believe that weSkyWest Airlines and ASA are in compliance in all material respects with these laws and regulations.

INSURANCE
Safety and Security
We are committed to the safety and security of our passengers and employees. Since the September 11, 2001 terrorist attacks, SkyWest Airlines and ASA have taken many steps, both voluntarily and as mandated by governmental agencies, to increase the safety and security of their operations. Some of the safety and security measures we have taken, along with our code-share partners, include: aircraft security and surveillance, positive bag matching procedures, enhanced passenger and baggage screening and search procedures, and securing of cockpit doors. We are committed to complying with future safety and security requirements.
Insurance
SkyWest Airlines and ASA maintain insurance policies that we believe are of types customary in the industry and in amounts we believe are adequate to protect us against material loss. TheThese policies

principally provide coverage for public liability, passenger liability, baggage and cargo liability, property damage, including coverages for loss or damage to our flight equipment, and workers' compensation insurance. There is no assurance,We cannot assure, however, that the amount of insurance we carry will be sufficient to protect us from material loss.

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LEGAL PROCEEDINGS
Environmental Proceedings
SkyWest Airlines and ASA are subject to various federal, state, local and foreign laws and regulations relating to environmental protection matters. These laws and regulations govern such matters as environmental reporting, storage and disposal of materials and chemicals and aircraft noise. We are, and expect in the future to be, involved in various environmental matters and conditions at, or related to, our properties. We are not currently subject to any environmental cleanup orders or actions imposed by regulatory authorities. We are not aware of any active material environmental investigations related to our assets or properties.
Legal Proceedings
We are subject to certain legal and administrative actions which we consider routine to our business activities. As of June 30, 2000 we believe,the date hereof, management believes, after consultation with our legal counsel, that the ultimate outcome of any
pendingsuch legal matters will not have a material adverse effect on our financial position, liquidity or results of operation.

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38

operations. The most significant of these matters are as follows:
Michaelena Fitz-Gerald, Romead Neilson, et al., v. SkyWest Airlines, Inc.
In July 2003, two former flight attendants SkyWest Airlines filed a class-action lawsuit in the Superior Court of Santa Barbara, California, alleging failure to pay minimum wage and overtime, and grant meal and rest breaks as required by state law, as well as violations of Section 203 of the California Labor Code and Section 17000 of the Business and California Professions Code. On September 1, 2005, the Superior Court announced that it would grant summary judgment in favor of SkyWest Airlines and has since dismissed the case. The plaintiffs have the ability to appeal the dismissal. Because the amount of a potential loss, if any, resulting from the outcome of this case is neither probable nor reasonably estimable, no amounts related to such have been recorded in the Company's condensed consolidated financial statements.
Securities and Exchange Commission
Effective January 1, 2002, we changed our method of accounting for CRJ200 engine overhaul expenses. In connection with the change in accounting method, we restated our financial statements for the year ended December 31, 2001 and the first and second quarters of the year ended December 31, 2002. The restated financial information, together with a discussion of the change in accounting method, was presented in Amendment No. 1 on our Form 10-K/A for the year ended December 31, 2001 and Amendments No. 1 on our Forms 10-Q/A for the quarters ended June 30, 2002 and June 30, 2002. The staff of the SEC is currently conducting an investigation of the facts pertaining to the change in our accounting method and other changes presented in the restatement of our financial statements. We do not believe that any of the matters under investigation constitute a violation of law. In June 2005, after extensive discussions with the SEC staff, we presented to the SEC an offer to enter into a cease and desist order pursuant to which we would agree not to violate federal securities laws in the future. The SEC is currently evaluating our proposal; however, there can be no assurance that our offer will be accepted. We continue to cooperate with the SEC in an effort to resolve the investigation.

MANAGEMENT

EXECUTIVE OFFICERS AND DIRECTORS
Executive Officers and Directors
The following are our executive officers and directors:

NAME AGE POSITION
---- --- --------
Name
Age Position
Jerry C. Atkin............................ 51 Atkin 56 Chairman President and Chief Executive Officer
Ron B. Reber.............................. 46 Executive Vice President and Chief Operating Officer

Bradford R. Rich.......................... 39 Rich

Executive Vice President, Chief Financial Officer and Treasurer

Ron B. Reber

President and Chief Operating Officer of SkyWest Airlines

Bryan T. LaBrecque

President and Chief Operating Officer of ASA

Sidney J. Atkin........................... 66 Atkin

Vice Chairman

W. Steve Albrecht

Director

J. Ralph Atkin............................ 57 Atkin

Director

Mervyn K. Cox............................. 63 Cox

Director

Ian M. Cumming............................ 59 Cumming

Director
Henry J. Eyring........................... 36 Director

Robert G. Sarver.......................... 38 Sarver

Director

Hyrum W. Smith............................ 56 Smith

Director

Steven F. Udvar-Hazy...................... 54 Udvar-Hazy

Director
Jerry C. Atkin joined us in July 1974 as a member of ourthe Board of Directors and as our Director of Finance. In 1975, he assumed the office of President and Chief Executive Officer. He also serves as Chairman and Chief Executive Officer of ASA. He was elected Chairman of ourthe Board of Directorsour Company in 1991. Prior to employment with us, Mr. Atkinby our company, he was employed by a public accounting firmfirm. He currently serves as a director of Zions Bancorporation, a bank holding company based in Utah.
Bradford R. Rich joined us in 1987 as Corporate Controller. He currently is our Executive Vice President, Chief Financial Officer and Treasurer, and also serves in those positions at ASA, with responsibility for financial accounting, treasury, public reporting, investor relations, internal audit, risk management, contracts and information technology. He is a certified public accountant. Mr. Atkin is a board member of each
of (i) The Regence Group, a medical insurance holding company,accountant and (ii) Zions
Bancorporation, a Utah bank holding company. He also serves as the 2000 Chairman
of the Regional Airline Association.

was previously employed by an international public accounting firm.
Ron B. Reber has served in various capacities since joining us in 1977. He is currently Executive Vice President and Chief Operating Officer of SkyWest Airlines, Inc. with general responsibility for flight operations, maintenance, customer service, market planning, marketing, revenue control and pricing.

Bradford R. Rich
Bryan T. LaBrecque was appointed President and Chief Operating Officer of ASA in September 2005, following our acquisition of ASA. He joined usASA in 1987 as Corporate Controller. He was
previously employed1999, and has held various other positions with Arthur Andersen LLP and is a certified public
accountant. He is currently ExecutiveASA, including Senior Vice President Chief Financial Officerof Operations. Prior to joining ASA, he was employed by Delta for many years in various positions, including director of The Delta Connection program, General Manager-Aircraft Acquisition and Treasurer with responsibility for financial accounting, treasury, public
reporting, investor relations, internal audit and information technology.

General Manager-Fleet Planning.
Sidney J. Atkin has served as a member ofon our Board of Directors since 1973 and was electedas Vice Chairman of our Board of Directors insince 1988. From 1984 to 1988, he served as our Senior Vice President. For more than five years, Mr.
Atkin has been presidentFrom 1958 to 2002, he was the President of Sugarloaf Corp., a Utah corporation involved in the operation of restaurants and hotels.

motels. He is currently retired.

W. Steve Albrecht has served on our Board of Directors since 2003. He is the Associate Dean and Arthur Andersen Professor of Accounting, Marriott School of Management, Brigham Young University, and has been with Brigham Young University since 1977. He is a certified public accountant, certified internal auditor, and certified fraud examiner. He previously taught at Stanford University and the University of Illinois. He has served in various leadership positions, including president of the American Accounting Association, Association of Certified Fraud Examiners and Beta Alpha Psi; as a member of COSO and the Institute of Internal Auditors Board of Regents; and currently serves on the governing council of the AICPA and on FASAC, the advisory group to the FASB. He serves on the boards of directors of ICON Health & Fitness, SunPower Corporation, Red Hat, Inc. and Cypress SemiConductor.
J. Ralph Atkin is thea founder of our company and served as our President and Chief Executive Officer from 1972 to 1975, and1975. He has served as a member ofon our Board of Directors since 1972. He1972, and served as Chairman of ourthe Board of Directors from 1972 to 1991. From 1984 to 1988, he served as our Senior Vice President. He is an attorney and serves as the Chief Executive Officer of Ghana International Airlines, an early-stage enterprise exploring the funding and operation of an airline in Africa. He served as chief executive officerChief Executive Officer of EuroSky, a company organized to explore the feasibility of a regional airline in Austria, during 1994 and 1995. From March 1991 to January 1993, he was directorDirector of businessBusiness and economic developmentEconomic Development for the State of Utah. Mr. Atkin is an attorney and is currently engaged in the
private practice of law in St. George, Utah.

Mervyn K. Cox has served as a member ofon our Board of Directors since 1974. He is an orthodontist engaged in private practice and hasis also engaged in the development and management of real estate.
Ian M. Cumming has served as a member ofon our Board of Directors since 1986. He is chairmanChairman and Chief Executive Officer of Leucadia National Corporation, a diversified financial services holding company principally engaged in personal and commercial lines of property and casualty insurance, life and health insurance, banking and lending and manufacturing. Mr. CummingHe is also Chairman of the Board of the Finova Group, Inc., a middle-market lender, a director of Allcity Insurance Company,
a property and

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39

casualty insurer, and MK Gold Company,Resources Co., a gold mining and exploration company. In
addition, he is the chairman of Barbados Light & Power Co.company, and HomeFed Corp., a Caribbean
utilitiesreal estate investment and development company.

Henry J. Eyring
Robert G. Sarver has served as a member ofon our Board of Directors since 1995.2000. He is alsoChairman and Chief Executive Officer of Western Alliance Bancorporation, a commercial bank holding company doing business in Nevada, California and Arizona, and the directormanaging partner of the MBA Program at Brigham Young University's
Marriott School of Management. From 1989 to 1998, he was employed by the Monitor
Company, an international management consulting firm based in Cambridge,
Massachusetts, and he continues to servePhoenix Suns, a professional basketball team. He served as a consultant to the Monitor Company.
From June 1986 to June 1990, he was chief financial officer for the Huntsman
Cancer Foundation. He is also a memberChairman of the Board of Trustees of Southern Utah
University.

Robert G. Sarver has served as a member of our Board of Directors since
January 2000. He also serves as chairman of the board and chief executive
officerChief Executive Officer of California Bank and Trust positionsfrom 1995 to 2001. Prior to 1995, he has held since 1995.served as the President of National Bank of Arizona. He has
been the executive vice president of Zions Bancorporation, a bank holding
company, since October 1998 and is currently on its board of directors. Mr.
Sarver also serves as an executive director of Southwest Value Partners, a real estate investment company. Hecompany, and is also a director of Meritage Corporation, a builder of single-family homes.
Hyrum W. Smith has served as a member ofon our Board of Directors since 1996.1995. He is alsothe co-founder and current vice chairmanVice Chairman of Franklin Covey Co., a publicly-heldpublicly held learning and performance solutions company dedicated to increasing the effectiveness of individuals and organizations. Mr. Smith served as chief
executive officer and chairmanHe was the Chief Executive Officer of Franklin Covey Co. from February 1997 to March 1998, a position he also held from April 1991 to September 1996. Mr. SmithFrom December 1984 to April 1991, he was senior vice presidentSenior Vice President of Franklin Quest Co. from December 1984 to April 1991., a predecessor of Franklin Covey Co. was formerly known as Franklin Quest Co. until its merger
with Covey Leadership Center, Inc. in May 1997.

Covey.
Steven F. Udvar-Hazy has served as a member ofon our Board of Directors since 1986. He is also currently president, directorChairman and chief executive officerChief Executive Officer of International Lease Finance Corporation, a wholly owned subsidiary of American International Group, Inc., which leases and finances commercial jet aircraft worldwide. Mr. Udvar-HazyHe has been engaged in aircraft leasing and finance for 35more than 36 years.
J. Ralph Atkin and Sidney J. Atkin are brothers.brothers, and Jerry C. Atkin is their nephew.

KEY EMPLOYEES

In addition to the executive officers listed above, the following are
certain of our key employees:

NAME AGE POSITION
---- --- --------

James K. Boyd............................. 43 Vice President -- Customer Service
Eric D. Christensen....................... 42 Vice President -- Planning and Secretary
H. Michael Gibson......................... 50 Vice President -- Maintenance
Steven L. Hart............................ 39 Vice President -- Market Development
Brad Holt................................. 40 Vice President -- Flight Operations
Michael J. Kraupp......................... 39 Vice President -- Controller

James K. Boyd joined us in 1981. He is currently Vice President -- Customer
Service with responsibility for SkyWest ticket counter, gate and ramp personnel.
He also has served as Director of Stations and Station Manager.

Eric D. Christensen joined us in 1985. He is currently Vice
President -- Planning and Secretary with responsibility for aircraft
acquisitions, fleet planning and risk management. He has also served as
Assistant to the President and Director of Finance.

H. Michael Gibson joined us in 1988. He is currently Vice
President -- Maintenance with responsibility for aircraft maintenance, parts,
inventory control and maintenance personnel training. He also has served as
Director of Quality Assurance for SkyWest.

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40

Steven L. Hart joined us in 1986. He is currently Vice President -- Market
Development with responsibility for flight scheduling, revenue control and
pricing. He also has served as Director of Market Planning, Market Analyst and
Director of Marketing.

Brad Holt joined us in 1983. He is currently Vice President -- Flight
Operations with responsibility for flight crew supervision and dispatch, flight
safety and flight quality standards. He also has served as Director of Flight
Standards, Chief Flight Instructor, Check Airman and Line Pilot.

Michael J. Kraupp joined us in 1991. He has been Vice
President -- Controller since 1993 with responsibility for financial accounting
and public reporting. He previously was employed by Arthur Andersen LLP and is a
certified public accountant.

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41

PRINCIPAL AND SELLING STOCKHOLDERS
The following table sets forth information with respect to the beneficial ownership of our common stock as of August 21, 2000,November 10, 2005, and as adjusted to reflect the sale of the shares of our common stock offered hereby, by:

- each selling stockholder;

-
•
each person known by us to be a beneficial owner of more than 5% of the outstanding shares of our common stock;

•
each of our directors;directors and - executive officers; and

•
all directors and executive officers as a group.
Unless otherwise indicated, each of the stockholders has sole voting and investment power with respect to the shares indicated. TheExcept as otherwise set forth below, the business address for each of the directorsfollowing beneficial owners and officers listed belowmembers of management is our corporate office located at 444 South River Road, St. George, Utah 84790.
BENEFICIAL OWNERSHIP BENEFICIAL OWNERSHIP
PRIOR TO THE OFFERING AFTER THE OFFERING
---------------------- SHARES --------------------
NAME AND ADDRESS OF BENEFICIAL OWNERS SHARES PERCENT OFFERED SHARES PERCENT
------------------------------------- ---------- -------- ------- --------- -------

Delta Air Holdings, Inc. ............... 3,107,798 12.5% -- 3,107,798 11.4%
Hartsfield Atlanta International
Airport
Atlanta, Georgia 30320
Wellington Management Co. LLP(1)........ 1,705,800 6.9 -- 1,705,800 6.2
75 State Street
Boston, Massachusetts 02109
Nicholas-Applegate Capital Management... 1,353,243 5.4 -- 1,353,243 4.9
600 West Broadway, 29th Floor
San Diego, California 92101
Jerry C. Atkin.......................... 1,030,899(2) 4.1 30,000 1,000,899 3.6
Sidney J. Atkin......................... 886,528(3) 3.6 30,000 856,528 3.1
Mervyn K. Cox........................... 332,500(4) 1.3 30,000 302,500 1.1
Bradford R. Rich........................ 64,401(5) * -- 64,401 *
Ron B. Reber............................ 63,026(6) * -- 63,026 *
Ian M. Cumming.......................... 34,000(4) * 33,000 1,000 *
Steven F. Udvar-Hazy.................... 16,500(7) * -- 16,500 *
Hyrum W. Smith.......................... 16,000(8) * -- 16,000 *
Henry J. Eyring......................... 15,100(7) * 9,100 6,000 *
Robert G. Sarver........................ 8,500 * -- 8,500 *
J. Ralph Atkin.......................... 4,000(7) * 4,000 -- --
All executive officers and directors, as
a group (11 persons).................. 2,471,454(9) 9.8% 136,100 2,335,354 8.5%

- ---------------

Beneficial Ownership Prior to the Offering Beneficial Ownership After the Offering
Name and Address of Beneficial Owner
Shares Percent(1) Shares Percent(2)
Barclays Global Investors, NA
45 Fremont St.
San Francisco, CA 94105(3) 4,160,528 7.2 % 4,160,528 6.7 %

Jerry C. Atkin(4)
2,384,945
4.1
%
2,384,945
3.8
%

Sidney J. Atkin(5)
1,498,101
2.6
%
1,498,101
2.4
%

Mervyn K. Cox(6)
417,621
*
417,621
*

Bradford R. Rich(7)
359,434
*
359,434
*

Ron B. Reber(8)
209,026
*
209,026
*

Ian M. Cumming(9)
66,000
*
66,000
*

J. Ralph Atkin(9)
50,000
*
50,000
*

Robert G. Sarver(10)
49,000
*
49,000
*

Steven Udvar-Hazy(11)
33,600
*
33,600
*

Hyrum W. Smith(9)
48,000
*
48,000
*

W. Steve Albrecht
—
—
—
—

Bryan T. LaBrecque
—
—
—
—

All Executive Officers and Directors as a group (12 persons)(12)
5,115,727
8.6
%
5,115,727
8.1
%
*
Represents less than 1% of total outstanding shares.

(1)
Based on total outstanding shares of 58,053,904 as of November 10, 2005.

(2)
Assumes that the underwriters do not exercise their overallotment option to purchase 600,000 additional shares.

(3)
Data for Wellington Management Co. LLPBarclays Global Investors is astaken from a Schedule 13G/A, filed by Barclays Global Investors with the Securities and Exchange Commission on August 11, 2005. Based on the

Schedule 13G/A filed by Barclays Global Investors, other shareholders affiliated with Barclays Global Investors hold an additional 1,800,685 shares of March 31, 2000, the most
recent publicly available data for their stockholdings.

(2) our common stock.
(4)
Includes 414,470927,582 shares held separately by Carolyn J.Mr. Atkin as trustee of a trust, 827,070 shares held by Mr. Atkin's wife as trustee of a trust, and 105,000624,000 shares issuable upon exercise of options.

(3)

(5)
Includes 604,0001,140,500 shares held by a family limited partnership of which Mr. Atkin and his wife are the general partners, 265,744309,463 shares held by Mr. Atkin as trustee of a trust for the benefit of his family, 8,784138 shares held by his wife and 8,00048,000 shares issuable upon exercise of options.

(4)

(6)
Includes 16,000199,962 shares held by Mr. Cox's wife as trustee of a trust, 19,264 shares held by Mr. Cox's children, and 32,000 shares issuable upon exercise of options.

(5)

(7)
Includes 63,000352,000 shares issuable upon exercise of options.

(6)

(8)
Includes 38,000184,000 shares issuable upon exercise of options.

(7)

(9)
Includes 4,00048,000 shares issuable upon exercise of options.

(8)

(10)
Includes 12,00032,000 shares issuable upon exercise of options.

(9)

(11)
Includes 270,00032,000 shares issuable upon exercise of options and 1,000 shares held by Mr. Udvar-Hazy's son.

(12)
Includes 1,448,000 shares issuable upon exercise of options.

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42

DESCRIPTION OF CAPITAL STOCK
Our authorized capital stock consists of 120,000,000 shares of common stock, no par value, and 5,000,000 shares of preferred stock, no par value.

COMMON STOCK
Common Stock
As of August 21, 2000,November 10, 2005, there were 24,858,90458,053,904 shares of our common stock issued and outstanding that were held by approximately 1,0001,176 stockholders of record. No shares of our preferred stock have been issued.
Subject to the rights of the holders of our preferred stock, each holder of our common stock has equal ratable rights to dividends from funds legally available therefor, if, as and when declared by our board of directors. The declaration and payment of all dividends, however, is subject to the discretion of our board of directors. In the event of our liquidation or dissolution or the winding up of our affairs, the holders of our common stock are entitled to share ratably in all assets remaining after payment of liabilities and amounts, if any, due to holders of our preferred stock. Holders of our common stock are entitled to one vote per share on all matters that stockholders may vote on at all meetings of our stockholders. The holders of our common stock do not have cumulative voting rights. The holders of our common stock do not have preemptive, subscription or conversion rights, and there are no redemption or sinking fund provisions applicable thereto. All the outstanding shares of our common stock are fully paid and nonassessable, and the shares of our common stock to be outstanding upon completion of this offering will be fully paid and nonassessable.

Pursuant to the terms of the
Preferred Stock Option Agreement we have executed with
Delta, if we propose to issue any additional voting securities while Delta owns
at least 10% of the outstanding shares of our common stock and our code-sharing
agreement with Delta or a substantially similar agreement with Delta remains in
effect, then Delta has a preemptive right to acquire, on the same terms and
conditions as the proposed issuance of securities, the number of voting
securities that, when added to all voting securities then owned by Delta, would
provide Delta with the number of votes necessary to preserve Delta's percentage
voting interest. Delta also has the right to require us to register its shares
of our common stock for re-sale under the Securities Act and has the right to
piggyback on any registration we initiate other than at Delta's request. The
Stock Option Agreement also provides us with a right of first refusal to
purchase shares of our common stock proposed to be sold by Delta in certain
types of transactions. Delta has elected not to exercise its preemptive or
registration rights under the Stock Option Agreement in connection with this
offering and we have agreed to permanently waive our right of first refusal
under the Stock Option Agreement.

PREFERRED STOCK
We are authorized to issue preferred stock from time to time in one or more series without stockholder approval. No shares of preferred stock are presently outstanding. With respect to our preferred stock, our board of directors is authorized, without any further action by our stockholders, to:to (i) divide the preferred stock into series; (ii) designate each such series; (iii) fix and determine dividend rights; (iv) determine the price, terms and conditions on which shares of preferred stock may be redeemed; (v) determine the amount payable to holders of preferred stock in the event of voluntary or involuntary liquidation; (vi) determine any sinking fund provisions; and (vii) establish any conversion privileges. Thus, our board of directors, without stockholder approval, could authorize the issuance of

preferred stock with rights which could decrease the amount of earnings and assets available for distribution to holders of shares of our common stock or otherwise adversely affect the rights of the holders of our common stock. Any future issuance of preferred stock may have the effect of delaying or preventing a change in control of our company and may adversely affect the voting and other rights of the holders of our common stock. At present, we have no plans to issue any preferred stock.

BOARD OF DIRECTORS
Board of Directors
Our board of directors currently consists of nine directors who are elected for one-year terms at the annual meetings of our stockholders. Pursuant to the
terms of the Delta Stock Option Agreement, for as long as Delta owns at least
10% of the outstanding shares of our common stock, it has the right to require
us to include at least one Delta designee, reasonably acceptable to us, on the
slate of nominees for election as directors nominated by our board of directors,
and we are further required to use our reasonable best efforts to assure that
such

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43

individual is elected to our board of directors. From August 9, 1988 to April 1,
1997, the date of the resignation of Delta's most recent nominee, Delta had
continuous representation on our board of directors through such nominees. Since
April 1997, Delta has not designated a nominee to serve on our board of
directors.

UTAH CONTROL SHARES ACQUISITION ACT
Utah Control Shares Acquisitions Act
The Utah Control Shares AcquisitionAcquisitions Act (the "Control Shares Act") provides that any person or entity that acquires "control shares" of a publicly held Utah
corporationan "issuing public corporation" in a "control share acquisition" is denied voting rights with respect to the acquired shares, unless a majority of the disinterested stockholdersshareholders of the issuing public corporation elects to restore such voting rights. The Control Shares Act provides that a person or entity acquires "control shares" whenever it acquires shares that, but for the operation for the Control Shares Act, would bring its voting power following such acquisition within any of the following three ranges:ranges of all voting power of the issuing public corporation: (i) 20% to 33between 1/3%,5 and 1/3; (ii) 33between 1/3% to 50%,3 and a majority; or (iii) 50%a majority or more. An "issuing public corporation" is any Utah corporation that (a) has 100 or more shareholders, (b) has its principal place of business, principal office or substantial assets within the State of Utah and (c) has more than 10% of its shareholders resident in the State of Utah, or more than 10% of its shares owned by Utah residents. A "control share acquisition" is generally defined as the direct or indirect acquisition (including through a series of acquisitions) of either ownership or voting power associated with issued and outstanding control shares.
Under the Control Shares Act, a person or entity that acquires control shares pursuant to a control share acquisition acquires voting rights with respect to those shares only to the extent granted by a majority of the disinterested shareholders of each class of capital stock outstanding prior to the acquisition. The acquiring person may file an "acquiring person statement" with the issuing public corporation setting forth the number of shares acquired and certain other specified information. Upon delivering the statement together with an undertaking to pay the issuing public corporation's expenses of a special shareholders' meeting, the issuing public corporation is required to call a special shareholders' meeting for the purpose of considering the voting rights to be accorded the shares acquired or to be acquired in the control shares acquisition. If no request for a special meeting is made, the voting rights to be accorded the control shares are to be presented at the issuing public corporation's next special or annual meeting of shareholders. If either (i) the acquiring person does not file an acquiring person statement with the issuing public corporation or (ii) the shareholders do not vote to restore voting rights to the control shares, the issuing public corporation may, if its articles of incorporation or bylaws so provide, redeem the control shares from the acquiring person at fair market value. Our Restated Articles and Bylaws do not currently provide for such a redemption right. Unless otherwise provided in the articles of incorporation or bylaws of an issuing public corporation, all shareholders are entitled to dissenters' rights if the control shares are accorded full voting rights and the acquiring person has obtained majority or more control shares. Our Restated Articles and Bylaws do not currently deny such dissenters' rights.
The directors or stockholdersshareholders of a corporation may elect to exempt the stock of the corporation from the provisions of the Control Shares Act through adoption of a provision to that effect in the corporation's articles of incorporation or bylaws of the corporation. Our Restated Articles of Incorporation and Bylaws do
not exempt our common stock from the provisions of the Control Shares Act.

The stockholders of a corporationbylaws. To be effective, such an exemption must consider the status of the voting
rights of control shares of the corporation acquired in a control share
acquisition at the next annual or special meeting of stockholders held following
such acquisition. The acquiror may accelerate the decision and require the
corporation to hold a special meeting of stockholders for the purpose of
considering the status of those rights if the acquiror (i) files an "acquiring
person statement" with the corporation, and (ii) agrees to pay all expenses of
the meeting. If the stockholders do not vote to restore voting rightsbe adopted prior to the control shares the corporation may, if its articles of incorporation or bylaws
so provide, redeem the control shares from the acquiror at fair market value. If
the acquiror fails to file an acquiring person statement, the corporation may,
if its articles of incorporation or bylaws so provide, redeem the control shares
atacquisition. We have not yet taken any time within 60 days of the acquiror's last acquisition of control shares,
regardless of the decision of the stockholders to restore voting rights. Our
Restated Articles of Incorporation and Bylaws do not provide for such redemption. Unless otherwise provided in the articles of incorporation or bylaws
of a corporation, stockholders are entitled to dissenters' rights if the control
shares are accorded full voting rights and the acquiror has obtained majority or
more control shares. Our Restated Articles of Incorporation and Bylaws do not
deny such dissenters' rights to our stockholders.action.

The provisions of the Control Shares Act may discourage companiesindividuals or entities interested in acquiring a significant interest in or control of us.

UNITED'S RIGHT OF FIRST REFUSAL

Under our code-sharing agreement with United, if we desire to merge with
another company, sell or otherwise transfer our assets to a third party, or
issue capital stock exceeding 5% of our outstanding capital stock (30% if the
stock is issued in a public offering) to such third party, we are required to
give United notice of the proposed transaction, offer to complete such
transaction with United instead of such third party, negotiate with United in
good faith terms
Transfer Agent and conditions on which we could complete such transaction with
United and offer United any terms and conditions we offer such third party. If
we are unable to agree with United, we may enter into negotiations with other
parties, but we may not enter into any agreement on terms more favorable to any
such party than those we offered to United. The existence of this right of first
refusal may adversely affect our ability to negotiate or consummate the sale of
all or part of our business to a company other than United and may adversely
affect the terms of a sale to any company, including United.

TRANSFER AGENT AND REGISTRARRegistrar
The transfer agent and registrar for our common stock is Zions First National Bank, N.A., Salt Lake City, Utah.

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UNDERWRITING
Merrill Lynch, Pierce, Fenner & Smith Incorporated and Raymond James & Associates, Inc. are acting as representatives of the underwriters named below. Subject to the terms and conditions of an underwritingdescribed in a purchase agreement dated
, 2000,between us and the underwriters, named below, through their representative,
Raymond James & Associates, Inc.,we have agreed to sell to the underwriters, and the underwriters severally have agreed to purchase from us, and
the selling stockholders the respective number of shares of common stock set forth opposite their names below:

NUMBER OF
UNDERWRITERS SHARES
------------ ---------

Underwriter
Number
of Shares
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
Raymond James & Associates, Inc. ...........................
Total

---------
Total..................................................... 2,636,100
=========
The underwriting agreement provides that the obligations of the
underwriters are subject to certain conditions precedent, including the absence
of any materially adverse change in our business and the receipt of certain
certificates, opinions and letters from us and our attorneys and independent
auditors. The nature of the underwriters' obligation is such that they are
committedhave agreed to purchase all shares of common stock offered herebybeing sold pursuant to the purchase agreement if any of the
shares are purchased.

We have granted an option to the underwriters, exercisable for 30 days
after the date of this prospectus, to purchase up to an aggregate of 395,415
shares of our common stock at the public offering price, less the underwriting
discounts and commissions set forth on the cover page of this prospectus. The
underwriters may exercise this option solely to cover over-allotments, if any,
in connection with the sale of our common stock. If the underwriters exercise
this option, each underwriter will be obligated, subject to certain conditions,
to purchase a number of additional shares of our common stock proportionate to
the underwriter's initial amount set forth in the table above.

The following table summarizes the underwriting discounts and commissions
to be paid by us to the underwriters and the expenses payable by us for each
share of our common stock and in total. This information is presented assuming
either no exercise or full exercise of the underwriters' option to purchase
additional shares of common stock.

PER WITHOUT WITH
SHARE OPTION OPTION
------- ------- -------

Underwriting discounts and commissions payable by us........ $ $ $
Underwriting discounts and commissions payable by the
selling stockholders...................................... $ $ $
Expenses payable by us...................................... $ $ $

We have been advised that the underwriters propose to offer the shares of
our common stock to the public at the public offering price set forth on the
cover page of this prospectus and to certain dealers at that price less a
concession not in excess of $ per share. The underwriters may allow, and
such dealers may re-allow, a concession not in excess of $ per share to
certain other dealers. The offering of thethese shares of common stock is made for
delivery when, as and if accepted by the underwriters and subject to prior sale
and to withdrawal, cancellation or modification of this offering without notice.
The underwriters reserve the right to rejectare purchased. If an order forunderwriter defaults, the purchase of
shares, in whole or in part.

We, our executive officers, our directors,agreement provides that the selling stockholders and
Delta Air Lines, Inc. have agreed that for a period of 90 days after the date of
this prospectus we and they will not, without the prior written consent of
Raymond James & Associates, Inc., directly or indirectly: offer, offer to sell,
sell, pledge, contract to sell, grant any option to purchase or otherwise
dispose or transfer (or announce any offer, offer of sale, sale, contract of
sale, grant of any option to purchase, or any other disposition or transfer) of
(i) any shares of our common stock or of securities substantially similar
thereto or (ii) any other securities convertible into, exchangeable, or
exercisable for, shares of our common stock or such similar securities,
beneficially owned (within the meaning of Rule 13d-3 under the Securities
Exchange Act of 1934, as amended) by such person whether owned ascommitments of the date of
this prospectus, acquired after

41
45

the date of this prospectus, other than (A) an exercise of stock options or sale
of our common stock pursuant to a "cashless exercise" of stock options which are
either (x) outstanding on the date of this prospectus, (y) issued under our
Amended and Combined Incentive and Nonstatutory Stock Option Plan, or (z) issued
under our AllShare Incentive Stock Option Plan, (B) a bona fide gift of our
common stock, provided that the donee agrees in writing to be bound by the
foregoing terms or (C) the offer and/or sale of shares of our common stock in
the offering.

Until the offering is completed, rules of the SEC may limit the ability of
the underwriters and certain selling group members to bid for and purchase our
common stock. As an exception to these rules, thenon-defaulting underwriters may engage in
certain transactions that stabilizebe increased or the price of our common stock. These
transactions may include short sales, stabilizing transactions and purchases to
cover positions created by short sales. Short sales involve the sale by the
underwriters of a greater number of shares of our common stock than they are
required to purchase in the offering. Stabilizing transactions consist of
certain bids or purchases made for the purpose of preventing or retarding a
decline in the market price of our common stock while the offering is in
progress.

The underwriters also may impose a penalty bid. This occurs when a
particular underwriter repays to the other underwriters a portion of the
underwriting discount received by it because the representatives have
repurchased shares sold by or for the account of such underwriter in stabilizing
or short covering transactions.

These activities by the underwriters may stabilize, maintain or otherwise
affect the market price of our common stock. As a result, the price of our
common stockagreement may be higher than the price that otherwise might exist in the open
market. If these activities are commenced, they may be discontinued by the
underwriters without notice at any time. These transactions may be effected on
the Nasdaq National Market, or otherwise.terminated.
We and the selling stockholders have agreed to indemnify the underwriters against certain liabilities, including liabilities under the Securities Act, and to contribute to payments which the underwriters may be required to make in respect thereof.

of those liabilities.
The underwriters are offering the shares, subject to prior sale, when, as and if issued to and accepted by them, subject to approval of legal matters by their counsel, including the validity of the shares, and other conditions contained in the purchase agreement, such as the receipt by the underwriters of officer's certificates and legal opinions. The underwriters reserve the right to withdraw, cancel or modify offers to the public and to reject orders in whole or in part.
Commissions and Discounts
The representatives have advised us that the underwriters propose initially to offer the shares to the public at the public offering price set forth on the cover page of this prospectus and to dealers at that price less a concession not in excess of $ per share. The underwriters may allow, and such dealers may reallow, a concession not in excess of $ per share to other dealers. After the public offering, the public offering price, concession and discount may be changed.
The following table shows the public offering price, underwriting discount and the proceeds before expenses to us.

Per Share Without Option With Option
Public offering price. $ $ $
Underwriting discount $ $ $
Proceeds, before expenses, to SkyWest, Inc. $ $ $
The expenses of the offering, not including the underwriting discount, are estimated at $500,000 and are payable by us.
Overallotment Option
We have granted an option to the underwriters to purchase up to an aggregate of 600,000 additional shares at the public offering price less the underwriting discount. The underwriters may exercise this option for 30 days from the date of this prospectus solely to cover any overallotments. If the underwriters exercise this option, each underwriter will be obligated, subject to certain conditions

contained in the purchase agreement, to purchase a number of additional shares proportionate to that underwriter's initial amount set forth in the table above.
No Sales of Similar Securities
We and our executive officers and directors have agreed, with certain exceptions, not to sell or transfer any of our common stock for 90 days after the date of this prospectus without first obtaining the written consent of Merrill Lynch. Specifically, we and these other individuals have agreed not to directly or indirectly:
•
offer, pledge, sell or contract to sell any of our common stock;

•
sell any option or contract to purchase any of our common stock;

•
purchase any option or contract to sell any of our common stock;

•
grant any option, right or warrant to purchase or otherwise transfer of any of our common stock;

•
lend or otherwise dispose of or transfer any of our common stock;

•
request or demand that we file a registration statement related to our common stock; or

•
enter into any swap or other agreement that transfers, in whole or in part, the economic consequences of ownership of any of our common stock whether any such swap or transaction is to be settled by delivery of shares or other securities, in cash or otherwise.
This lock-up provision applies to our common stock and to securities convertible into or exchangeable or exercisable for or repayable with our common stock. It also applies to our common stock owned now or acquired later by the person executing the agreement or for which the person executing the agreement later acquires the power of disposition.
Price Stabilization and Short Positions
Until the distribution of shares is completed, rules of the SEC may limit the ability of the underwriters and selling group members to bid for and purchase our common stock. However, the representatives may engage in transactions that stabilize the price of our common stock, such as bids or purchases to peg, fix or maintain that price.
If the underwriters create a short position in our common stock in connection with the offering, i.e., if they sell more shares than are listed on the cover of this prospectus, the representatives may reduce that short position by purchasing shares in the open market. The representatives may also elect to reduce any short position by exercising all or part of the overallotment option described above. Purchases of our common stock to stabilize its price or to reduce a short position may cause the price of our common stock to be higher than it might be in the absence of such purchases.
Neither we nor any of the underwriters makes any representation or prediction as to the direction or magnitude of any effect that the transactions described above may have on the price of the common stock. In addition, neither we nor any of the underwriters makes any representation that the U.S. representatives or the lead managers will engage in these transactions or that these transactions, once commenced, will not be discontinued without notice.
Passive Market Making
In connection with this offering, underwriters and selling group members may engage in passive market making transactions in the common stock on The Nasdaq National Market in accordance with Rule 103 of Regulation M under the Exchange Act during a period before the commencement of offers

or sales of common stock and extending through the completion of distribution. A passive market maker must display its bid at a price not in excess of the highest independent bid of that security. However, if all independent bids are lowered below the passive market maker's bid, that bid must then be lowered when specified purchase limits are exceeded.
Other Relationships
Some of the underwriters and their affiliates have engaged in, and may in the future engage in, investment banking and other commercial dealings in the ordinary course of business with us. They have received customary fees and commissions for these transactions.
Merrill Lynch, one of the underwriters, served as our financial advisor in connection with our acquisition of ASA. As part of its engagement, Merrill Lynch agreed that if following our acquisition of ASA we effected a public offering and paid fees to Merrill Lynch in connection with such offering, then it would return to us a portion of the fees that it received for acting as our financial advisor in connection with our acquisition of ASA. Accordingly, in connection with this offering, Merrill Lynch will return $ of its advisory fee to us.

LEGAL MATTERS
The legality of our common stock offered hereby will be passed upon for us by Parr Waddoups Brown Gee & Loveless, a professional corporation, Salt Lake City, Utah andUtah. Certain legal matters related to the offering will be passed upon for the underwriters by KingSkadden, Arps, Slate, Meagher & Spalding. King & Spalding will
rely upon the opinion of Parr Waddoups as to all matters of Utah law.

Flom LLP, New York, New York.

EXPERTS
The consolidated financial statements of SkyWest, Inc., as of December 31, 2004 and schedules incorporated by
reference in this Prospectus and elsewhere in the Registration Statement, to the
extent2003 and for the periods indicatedyears then ended appearing in their reports,SkyWest, Inc.'s Annual Report (Form 10-K) for the year ended December 31, 2004, and SkyWest, Inc. management's assessment of the effectiveness of internal control over financial reporting as of December 31, 2004 included therein, have been audited by Arthur AndersenErnst & Young LLP, independent registered public accountants,accounting firm, as set forth in its reports thereon, included therein, and incorporated by reference herein. Such consolidated financial statements and management's assessment are incorporated herein in reliance upon such reports given on the authority of such firm as experts in accounting and auditing.
The balance sheets of Atlantic Southeast Airlines, Inc. as of December 31, 2004 and 2003 and the related statements of operations, cash flows and shareowner's equity for each of the three years in the period ended December 31, 2004 incorporated in this prospectus by reference from SkyWest, Inc.'s Current Report on Form 8-K/A dated November 14, 2005 have been audited by Deloitte & Touche LLP, independent auditors, as stated in their report (which report expresses an unqualified opinion on the Company's financial statements and includes explanatory paragraphs relating to (1) the Company's ability to continue as a going concern, (2) a change in the method by which the Company is compensated by Delta under the Delta Connection Agreement, effective January 1, 2003, and (3) the Company's change in its method of accounting for goodwill and other intangible assets, effective January 1, 2002, to conform to Statement of Financial Accounting Standards No. 142), which is incorporated herein by reference, and have been so incorporated in reliance upon the report of such firm given upon their authority as experts in accounting and auditing.
The consolidated statements of income, stockholders' equity and comprehensive income and cash flows for the year ended December 31, 2002, and the related financial statement schedule, which report appears in the December 31, 2004 annual report on Form 10-K of SkyWest, Inc., have been incorporated by reference herein and in the registration statement in reliance upon the report of KPMG LLP, independent registered public accounting firm, incorporated by reference herein, and upon

the authority of said firm as experts in accounting and auditingauditing. Our report dated March 27, 2003, refers to a change in giving said reports.

accounting for CRJ200 engine overhaul costs from the accrual method to the direct expense method in 2002.

INCORPORATION OF CERTAIN INFORMATION BY REFERENCE
As permitted by SEC rules, this prospectus does not contain all of the information that prospective investors can find in the registration statement of which it is a part or the exhibits to the registration statement. The SEC permits us to incorporate by reference, into this prospectus, information filed separately with the SEC. The information incorporated by reference is deemed to be part of this prospectus, except as superseded or modified byand future information contained directlythat we file with the SEC after the date of this prospectus and before the termination of the offering will automatically update and supersede the information in this prospectus or in a subsequently filed document that
also is (or is deemed to be) incorporated herein by reference.

42
46prospectus.
This prospectus incorporates by reference the documents set forth below that we previously have filed (File No. 0-14719) with the SEC pursuant to the Securities Exchange Act of 1934, as amended. These documents contain important information about us and our financial condition.
1.
Our Annual Report on Form 10-K for the year ended December 31, 2004.

2.
Our Quarterly Report on Form 10-Q for the three monthsquarter ended March 31, 2005.

3.
Our Quarterly Report on Form 10-Q for the quarter ended June 30, 2000.

2. 2005.

4.
Our AnnualQuarterly Report on Form 10-K10-Q for the fiscal yearquarter ended March 31, 2000.

3. September 30, 2005.

5.
Our Current Report on Form 8-K dated August 16, 2005.

6.
Our Current Report on Form 8-K dated September 13, 2005, as amended by Amendment No. 1 to Current Report on Form 8-K/A dated November 14, 2005.

7.
Our Current Report on Form 8-K dated September 27, 2005.

8.
The description of our common stock contained in our Registration Statement on Form 8-A as filed on June 15, 1986, with the SEC under the
Exchange Act, including any amendment or report filed for the purpose of updating such description.
We hereby incorporate by reference all reports and other documents filed by us pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act after the date of this prospectus and prior to the termination of this offering.

WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly, and current reports, proxy statements, and other
information with the SEC. You may read and copy any reports, statements, or
other information that we file at the SEC's Public Reference Room at 450 Fifth
Street, N.W., Washington, D.C. 20549. Please call the SEC at 1-800-SEC-0330 for
further information on the Public Reference Room. The SEC also maintains an
Internet site (http://www.sec.gov) that makes available to the public reports,
proxy statements, and other information regarding issuers that file
electronically with the SEC.

In addition, we will provide, without charge, to each person to whom this prospectus is delivered, upon written or oral request of any such person, a copy of any or all of the foregoing documents (other than exhibits to such documents that are not specifically incorporated by reference in such documents). Please direct written requests for such copies to SkyWest, Inc., 444 South River Road, St. George, Utah 84790, Attention: Bradford R. Rich, Executive Vice President, Chief Financial Officer and Treasurer. Telephone requests may be directed to the office of our Chief Financial Officer at (435) 634-3000.634-3200.

WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly, and current reports, proxy statements, and other information with the SEC. You may read and copy any reports, statements, or other information that we file at the SEC's Public Reference Room at 100 F Street, NE, Washington, D.C. 20549. Please call the SEC at 1-800-SEC-0330 for further information on the Public Reference Room. The SEC also maintains an Internet site (http://www.sec.gov) that makes available to the public reports, proxy statements, and other information regarding issuers that file electronically with the SEC.

Shares of our common stock are quoted on theThe Nasdaq National Market. Reports, proxy statements and other information concerning us can be inspected and copied at the Public Reference Room of the National Association of Securities Dealers, 1735 K Street, N.W., Washington, D.C. 20006.

43
47

INSIDE BACK COVER

Photo
We maintain an Internet website at www.skywest.com. We currently make our most recent annual report to shareholders available through our website and provide a link to the SEC's website, through which our annual, quarterly and current reports, as well as amendments to those reports, are available. In addition, we provide electronic or paper copies of United Express and Delta Connection aircraft in flight.

[SkyWest Airlines Logo]
48

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------------------------------------------------------

YOU SHOULD RELY ONLY ON THE INFORMATION CONTAINED IN THIS PROSPECTUS. WE
HAVE NOT, AND THE UNDERWRITERS HAVE NOT, AUTHORIZED ANY OTHER PERSON TO PROVIDE
YOU WITH DIFFERENT INFORMATION. IF ANYONE PROVIDES YOU WITH DIFFERENT OR
INCONSISTENT INFORMATION, YOU SHOULD NOT RELY ON IT. WE ARE NOT, AND THE
UNDERWRITERS ARE NOT, MAKING AN OFFER TO SELL THESE SECURITIES IN ANY
JURISDICTION WHERE THE OFFER OR SALE IS NOT PERMITTED. YOU SHOULD ASSUME THAT
THE INFORMATION IN THIS PROSPECTUS IS ACCURATE ONLY AS OF THE DATE ON THE FRONT
COVER OF THIS PROSPECTUS. OUR BUSINESS, FINANCIAL CONDITION AND PROSPECTS MAY
HAVE CHANGED SINCE THAT DATE.

------------------------

TABLE OF CONTENTS

PAGE
----

Prospectus Summary..................... 1
Risk Factors........................... 5
Use of Proceeds........................ 13
Price Range of Common Stock and
Dividends............................ 13
Capitalization......................... 14
Selected Consolidated Financial and
Operating Data....................... 15
Management's Discussion and Analysis of
Financial Condition and Results of
Operations........................... 17
Business............................... 24
Management............................. 35
Principal and Selling Stockholders..... 38
Description of Capital Stock........... 39
Underwriting........................... 41
Legal Matters.......................... 42
Experts................................ 42
Incorporation of Certain Information by
Reference............................ 42
Where You Can Find More Information.... 43

------------------------------------------------------
------------------------------------------------------
------------------------------------------------------
------------------------------------------------------
2,636,100 SHARES

[SKYWST LOGO]
COMMON STOCK
------------------------

PROSPECTUS
------------------------
RAYMOND JAMESits filings free of charge upon request.

4,000,000 Shares
Common Stock
P R O S P E C T U S
Merrill Lynch & ASSOCIATES, INC.Co.
Raymond James
, 2000
------------------------------------------------------
------------------------------------------------------
49

2005

PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM
Item 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTIONOther Expenses of Issuance and Distribution
The following table sets forth the costs and expenses in connection with the issuance and distribution of the common stock being registered, other than underwriting discounts and commissions payable by us. We will bear all of the expenses listed below. All of the amounts shown are estimates, except the registration fee and the NASD filing fee.
Amount
SEC registration fee $ 17,456
NASD filing fee 15,330
Accounting fees and expenses 230,000
Legal fees and expenses 100,000
Printing expenses 120,000
Blue sky fees and expenses 3,000
Transfer agent fees and expenses 1,000
Miscellaneous expenses 13,214
Total $ 500,000

Item 15. Indemnification of Directors and listing fees.

AMOUNT
--------

SEC registration fee........................................ $ 39,371
NASD filing fee............................................. 16,000
NASD listing fee............................................ 17,500
Accounting fees and expenses................................ 90,000
Legal fees and expenses..................................... 75,000
Printing expenses........................................... 100,000
Blue sky fees and expenses.................................. 10,000
Transfer agent fees and expenses............................ 1,000
Miscellaneous expenses...................................... 32,129
--------
Total..................................................... $375,000
========

ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERSOfficers
We are a Utah corporation. Section 16-10a-902 of the Utah Revised Business Corporation Act (the "Revised Act") provides that a corporation may indemnify any individual who was, is, or is threatened to be made a named defendant or respondent (a "Party") in any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative and whether formal or informal (a "Proceeding"), because he or she is or was a director of the corporation or, while a director of the corporation, is or was serving at its request as a director, officer, partner, trustee, employee, fiduciary or agent of another corporation or other person or of an employee benefit plan (an "Indemnifiable Director"), against any obligation incurred with respect to a Proceeding, including any judgment, settlement, penalty, fine or reasonable expenses (including attorneys' fees), incurred in the Proceeding if his or her conduct was in good faith, he or she reasonably believed that his or her conduct was in, or not opposed to, the best interests of the corporation, and, in the case of any criminal Proceeding, had no reasonable cause to believe such conduct was unlawful; provided, however, that pursuant to Subsection 902(4): (i) indemnification under Section 902 in connection with a Proceeding by or in the right of the corporation is limited to payment of reasonable expenses (including attorneys' fees) incurred in connection with the Proceeding and (ii) the corporation may not indemnify an Indemnifiable Director in connection with a Proceeding by or in the right of the corporation in which the Indemnifiable Director was adjudged liable to the corporation, or in connection with any other Proceeding charging that the Indemnifiable Director derived an improper personal benefit, whether or not involving action in his or her official capacity, in which Proceeding he or she was adjudged liable on the basis that he or she derived an improper personal benefit.
Section 16-10a-903 of the Revised Act provides that, unless limited by its articles of incorporation, a corporation shall indemnify an Indemnifiable Director who was successful, on the merits or otherwise, in the defense of any Proceeding, or in the defense of any claim, issue or matter in the Proceeding, to which he or she was a Party because he or she is or was an Indemnifiable Director of the corporation, against reasonable expenses (including attorneys' fees) incurred in connection with the Proceeding or claim with respect to which he or she has been successful.
II-1

In addition to the indemnification provided by Sections 902 and 903, Section 16-10a-905 of the Revised Act provides that, unless otherwise limited by a corporation's articles of incorporation, an II-1
50

Indemnifiable Director may apply for indemnification to the court conducting the Proceeding or to another court of competent jurisdiction.
Section 16-10a-904 of the Revised Act provides that a corporation may pay for or reimburse the reasonable expenses (including attorneys' fees) incurred by an Indemnifiable Director who is a Party to a Proceeding in advance of the final disposition of the Proceeding upon the satisfaction of certain conditions.
Section 16-10a-907 of the Revised Act provides that, unless a corporation's articles of incorporation provide otherwise, (i) an officer of the corporation is entitled to mandatory indemnification under Section 903 and is entitled to apply for court-ordered indemnification under Section 905, in each case to the same extent as an Indemnifiable Director, (ii) the corporation may indemnify and advance expenses to an officer, employee, fiduciary or agent of the corporation to the same extent as an Indemnifiable Director, and (iii) a corporation may also indemnify and advance expenses to an officer, employee, fiduciary or agent who is not an Indemnifiable Director to a greater extent than the right of indemnification granted to an Indemnifiable Director, if not inconsistent with public policy, and if provided for by its articles of incorporation, bylaws, general or specific action of its board of directors or contract.
Our Amended and Restated Bylaws (the "Bylaws") provide that, subject to the limitations described below, we shall, to the maximum extent and in the manner permitted by the Revised Act, indemnify any individual made party to a proceeding because he or she is or was one of our directors or officers against liability incurred in the proceeding if his or her conduct was in good faith, he or she reasonably believed that his or her conduct was in, or not opposed to, our best interests and, in the case of any criminal proceeding, he or she had no reasonable cause to believe such conduct was unlawful. We may not, however, extend such indemnification to an officer or director in connection with a proceeding by us or in our right in which such officer or director was adjudged liable to us, or in connection with any other proceeding charging that such person derived an improper personal benefit, whether or not involving action in his or her official capacity, in which proceeding he or she was adjudged liable on the basis that he or she derived an improper personal benefit, unless ordered by a court of competent jurisdiction. Notwithstanding the foregoing, the Bylaws obligate us to indemnify an officer or director who was successful on the merits or otherwise, in the defense of any proceeding or the defense of any claim, issue or matter in the proceeding to which the officer or director was a party because he or she is or was one of our directors or officers against reasonable expenses that he or she incurred in connection with the proceeding or claim with respect to which he or she was successful. The Bylaws also permit us to pay for or reimburse the reasonable expenses incurred by an officer or director who is party to a proceeding in advance of final disposition of the proceeding if (i) the officer or director furnishes to us a written affirmation of a good faith belief that he or she has met the applicable standard of conduct necessary for indemnification, (ii) the officer or director furnishes to us a written undertaking to repay the advance if it is ultimately determined that he or she did not meet the standard of conduct, and (iii) a determination is made that the facts then known to those making the determination would not preclude indemnification pursuant to the Bylaws. The Bylaws also provide that any indemnification or advancement of expenses provided thereby shall not be deemed exclusive of any other rights to which those seeking indemnification or advancement of expenses may be entitled under any articles of incorporation, bylaw, agreement, vote of stockholdersshareholders or disinterested directors, or otherwise, both as to action in such person's official capacity and as to action in another capacity while holding such office.
Utah law permits director liability to be eliminated in accordance with Section 16-10a-841 of the Revised Act, which provides that the liability of a director to the corporation or its stockholdersshareholders for monetary damages for any action taken or any failure to take any action, as a director, may be limited
II-2

or eliminated by the corporation except for liability for (i) the amount of financial benefit received by a director to which he or she is not entitled; (ii) an intentional infliction of harm on the corporation or its stockholders;shareholders; (iii) a violation of Section 16-10a-842 of the Revised Act, which prohibits unlawful distributions by a corporation to its stockholders;shareholders; or (iv) an intentional violation of criminal law. Such a provision may appear either in a corporation's articles of incorporation or bylaws; however, to be effective, such a provision must be approved by the corporation's stockholders.

II-2
51shareholders.
Our Restated Articles of Incorporation, as amended (the "Restated
Articles"), provide that the personal liability of any director to SkyWest, Inc. or to its stockholdersshareholders for monetary damages for any action taken or the failure to take any action, as a director, is eliminated to the fullest extent permitted by Utah law.
The Bylaws provide that we may purchase and maintain insurance on behalf of any person who is or was one of our directors, officers, employees, fiduciaries or agents, or is or was serving at our request as a director, officer, employee, fiduciary or agent of another corporation, partnership, joint venture, trust or other enterprise against any liability asserted against him or her or incurred by him or her in such capacity or arising out of his or her status in such capacity, whether or not we would have the power to indemnify him or her against such liability under the indemnification provisions of the Bylaws or the laws of the State of Utah, as the same are amended or modified. We maintain insurance from commercial carriers against certain liabilities that may be incurred by our directors and officers.
Indemnification may be granted pursuant to any other agreement, bylaw or vote of stockholdersshareholders or directors. Reference is also made to the Underwriting Agreement filed herewith pursuant to which the underwriters have agreed to indemnify us and our officers and directors against certain liabilities, including liabilities under the Securities Act. The foregoing description is necessarily general and does not describe all details regarding the indemnification of our officers, directors or controlling persons.

ITEM

Item 16. EXHIBITS

Exhibits

EXHIBIT
NUMBER DESCRIPTION
- ------- -----------
Exhibit
Number Description
1.1 Form of Underwriting Agreement.
4.1+ *

3.1

Restated Articles of Incorporation.

3.2

Amended and Restated Bylaws.(1)

4.1

Specimen Form of Common Stock Certificate.
4.2 Restated Articles of Incorporation, as amended.(1)
4.3+ Articles of Amendment to Restated Articles of Incorporation.
4.4 Amended and Restated Bylaws.(2)
4.5 Stock Option Agreement, dated January 28, 1987, between
Delta Air Lines, Inc. and SkyWest, Inc.(3)
5.1+

5.1

Opinion of Parr Waddoups Brown Gee & Loveless as to the legality of the securities being registered.*

21.1

List of Subsidiaries.

23.1

Consent of Arthur AndersenErnst & Young LLP.
23.2+

23.2

Consent of KPMG, LLP.

23.3

Consent of Deloitte & Touche LLP.

23.4

Consent of Parr Waddoups Brown Gee & Loveless (included in Item 5.1 above).
24.1+ *

24.1

Power of Attorney.
Attorney (included on signature page of this Registration Statement).

- ---------------

+ Previously filed.

*
To be filed by amendment.

(1)
Incorporated by reference to the Exhibits to a Registration Statement filed
as of June 12, 1995, on Form S-8,S-3 filed on January 20, 1994, File No. 33-60173.

33-74290.
II-3
(2)
Incorporated by reference to the Exhibits to a Registration Statement filed
on January 20, 1994, on Form S-3 filed on July 28, 2000, File No. 33-74290.

(3) Incorporated by reference to the Exhibits to a Registration Statement filed
on January 21, 1998, on Form S-3, as amended, File No. 333-44619.

ITEM333-42508.

Item 17. UNDERTAKINGSUndertakings
The undersigned registrant hereby undertakes that, for purposes of determining any liability under the Securities Act of 1933, each filing of registrant's annual report pursuant to Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934 (and, where applicable, each filing of an employee benefit plan's annual report pursuant to Section 15(d) of the Securities Exchange Act of 1934) that is incorporated by reference in the registration statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.
Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of registrant pursuant to the foregoing provisions, or otherwise,

II-3
52 registrant has been advised that in the opinion of the SEC such indemnification is against public policy as expressed in the Securities Act of 1933 and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act of 1933 and will be governed by the final adjudication of such issue.
The undersigned registrant hereby undertakes that:
(1) For purposes of determining any liability under the Securities Act of 1933, the information omitted from the form of prospectus filed as part of this registration statement in reliance upon Rule 430A and contained in a form of prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4) or 497(h) under the Securities Act of 1933 shall be deemed to be part of this registration statement as of the time it was declared effective.
(2) For the purpose of determining any liability under the Securities Act of 1933, each post-effective amendment that contains a form of prospectus shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.
II-4 53

SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-3 and has duly caused this Amendment No. 2 to
Registration Statementregistration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of St. George, State of Utah, on August 23, 2000.

SKYWEST, INC.

By: /s/ JERRY C. ATKIN
------------------------------------November 18, 2005.
SkyWest, Inc.

/s/ BRADFORD R. RICH
Bradford R. Rich,
Executive Vice President,
and Chief Financial Officer and Treasurer

POWER OF ATTORNEY
Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons on behalf of the registrant in the capacities and on the dates indicated. Each person whose signature to this registration statement appears below hereby constitutes and appoints Jerry C. Atkin and Bradford R. Rich, and each of them, as his true and lawful attorney-in-fact and agent, with full power of substitution, to sign on his behalf individually and in the capacity stated below and to perform any acts necessary to be done in order to file (i) any and all amendments and post-effective amendments to this registration statement, and any and all exhibits, instruments or documents filed as part of or in connection with this registration statement or the amendments thereto and (ii) a registration statement and any and all amendments thereto, relating to the offering covered hereby filed pursuant to Rule 462(b) under the Securities Act of 1933, as amended, with the Securities and Exchange Commission, and each of the undersigned does hereby ratify and confirm all that said attorney-in-fact and agent, or his substitutes, shall do or cause to be done by virtue hereof.
Signature Title Date

/s/ JERRY C. ATKIN
Jerry C. Atkin Chairman of the Board President
and Chief Executive Officer

SIGNATURE TITLE DATE
--------- ----- ----

/s/ JERRY C. ATKIN Chairman of the Board, August 23, 2000
- ----------------------------------------------------- President
Jerry C. Atkin and Chief Executive Officer (principal executive officer)

/s/ November 18, 2005

/s/ BRADFORD R. RICH
Bradford R. Rich

Executive Vice President, Chief Financial Officer and Treasurer (principal financial and accounting officer)

November 18, 2005

/s/ SIDNEY J. ATKIN* ATKIN
Sidney J. Atkin

Vice Chairman of the Board August 23, 2000
- -----------------------------------------------------
Sidney

November 18, 2005

/s/ W. STEVE ALBRECHT
W. Steve Albrecht

Director

November 18, 2005

II-5

/s/ J. Atkin

/s/ BRADFORD R. RICH* Executive Vice President, Chief August 23, 2000
- ----------------------------------------------------- Financial Officer and Treasurer
Bradford R. Rich (principal financial and
accounting officer)

Director
- -----------------------------------------------------
RALPH ATKIN
J. Ralph Atkin

/s/

Director

November 18, 2005

/s/ MERVYN K. COX* Director August 23, 2000
- -----------------------------------------------------
COX
Mervyn K. Cox

/s/

Director

November 18, 2005

/s/ IAN M. CUMMING* Director August 23, 2000
- -----------------------------------------------------
CUMMING
Ian M. Cumming

/s/ HENRY J. EYRING*

Director August 23, 2000
- -----------------------------------------------------
Henry J. Eyring

/s/

November 18, 2005

/s/ ROBERT G. SARVER* Director August 23, 2000
- -----------------------------------------------------
SARVER
Robert G. Sarver

/s/

Director

November 18, 2005

/s/ HYRUM W. SMITH* Director August 23, 2000
- -----------------------------------------------------
SMITH
Hyrum W. Smith

Director
- -----------------------------------------------------

November 18, 2005

/s/ STEVEN F. UDVAR-HAZY
Steven F. Udvar-Hazy

*By: /s/ JERRY C. ATKIN
------------------------------------------------
Jerry C. Atkin
Attorney-in-fact

Director

November 18, 2005

II-5
54

EXHIBIT INDEX

EXHIBIT
NUMBER DESCRIPTION
- ------- -----------

1.1 Form of Underwriting Agreement.
4.1+ Specimen Form of Common Stock Certificate.
4.2 Restated Articles of Incorporation, as amended.(1)
4.3+ Article of Amendment to Restated Articles of Incorporation.
4.4 Amended and Restated Bylaws.(2)
4.5 Stock Option Agreement, dated January 28, 1987, between
Delta Air Lines, Inc. and SkyWest, Inc.(3)
5.1+ Opinion of Parr Waddoups Brown Gee & Loveless as to the
legality of the securities being registered.
23.1 Consent of Arthur Andersen LLP.
23.2+ Consent of Parr Waddoups Brown Gee & Loveless (included in
Item 5.1 above).
24.1+ Power of Attorney.

- ---------------

+ Previously filed.

(1) Incorporated by reference to the Exhibits to a Registration Statement filed
as of June 12, 1995, on Form S-8, File No. 33-60173.

(2) Incorporated by reference to the Exhibits to a Registration Statement filed
on January 20, 1994, on Form S-3, File No. 33-74290.

(3) Incorporated by reference to the Exhibits to a Registration Statement filed
on January 21, 1998, on Form S-3, as amended, File No. 333-44619.II-6

	Per Share	Total
Public offering ~~price.......................................~~ price	$	$
Underwriting discount ~~and commission........................~~	$	$
Proceeds, before expenses, to ~~us............................ Proceeds to the selling stockholders........................~~ SkyWest, Inc.	$	$

*Copies to:*
Brian G. ~~LLOYD, ESQ. JOHN J. KELLEY III, ESQ. ERIC D. BAWDEN, ESQ. KING & SPALDING~~ Lloyd, Esq. Seth R. King, Esq. PARR WADDOUPS BROWN GEE & LOVELESS ~~191 PEACHTREE STREET~~ 185 ~~SOUTH STATE STREET, SUITE~~South State Street, Suite 1300 ~~ATLANTA, GEORGIA 30303-1763 SALT LAKE CITY, UTAH~~ Salt Lake City, Utah 84111 ~~(404) 572-4600~~ (801) 532-7840		Mark C. Smith, Esq. Allison R. Schneirov, Esq. SKADDEN, ARPS, SLATE, MEAGHER & FLOM LLP Four Times Square New York, New York 10036 (212) 735-3000

Title of each class of securities to be registered	Amount to be registered(1)	Proposed maximum offering price per share(2)	Proposed maximum aggregate offering price(2)	Amount of registration fee


Common Stock, no par value	4,600,000	$32.24	$148,304,000	$17,456

		Page
Prospectus Summary		1
Risk Factors		11
Cautionary Statement Concerning Forward-Looking Statements		21
Use of Proceeds		22
Price Range of Common Stock and Dividends		22
Capitalization		23
Unaudited Pro Forma Consolidated Financial Data		24
Selected Consolidated Financial and Operating Data		28
Management's Discussion and Analysis of Financial Condition and Results of Operations		31
Business		47
Management		67
Principal Stockholders		69
Description of Capital Stock		70
Underwriting		73
Legal Matters		75
Experts		75
Incorporation of Certain Information by Reference		76
Where You Can Find More Information		76

	SkyWest Airlines	Atlantic Southeast Airlines
Partners	Delta, United	Delta
Contract Terms	Delta—Effective through September 2020 Assumed by Delta with Bankruptcy Court approval	Delta—Effective through September 2020 Assumed by Delta with Bankruptcy Court approval
	United—Expires incrementally in December 2011, 2013 and 2015 Approved in Bankruptcy Court
Aircraft (number of planes)	66-passenger CRJ700s (37) (all United)	70-passenger CRJ700s (35)
	50-passenger CRJ200s (125) (56 Delta, 65 United, 4 unassigned)	40- and 50-passenger CRJ200s (104)
	30-passenger Brasilia turboprops (63) (13 Delta, 50 United)	66-passenger ATR-72 turboprops (12)
Average daily scheduled departures	United:1,019 Delta:482 Total:1,501	Delta:919 Total:919
Hubs/Focus Cities	Chicago (O'Hare), Denver, Los Angeles, San Francisco, Portland, Seattle/Tacoma, Salt Lake City	Atlanta, Salt Lake City, Cincinnati
Employees	Approximately 8,050 employees(1)	Approximately 5,500 employees(1)
Passengers carried in 2004	13.4 million	10.4 million

Common stock offered by SkyWest, Inc.		4,000,000 shares
Common stock outstanding after the offering		62,053,904 shares(1)
Use of proceeds		We estimate that our net proceeds from this offering will be approximately $123.5 million. We intend to use these net proceeds for repayment of short-term debt, reduction of amounts outstanding under our revolving credit facility, and working capital and general corporate purposes. See "Use of Proceeds" for more information concerning our proposed use of proceeds.
Risk factors		See "Risk Factors" and other information included in this prospectus for discussion of factors you should carefully consider before deciding to invest in shares of our common stock.
Nasdaq National Market Symbol		"SKYW"
Overallotment option		600,000 shares subject to the underwriters' overallotment option may be sold by us.

			Historical
			Historical															Pro Forma(1)
												Nine Months Ended September 30,						Pro Forma(1)
			Years Ended December 31,																		Nine Months Ended September 30, 2005
			Years Ended December 31,															Year Ended December 31, 2004
			2002(2)			2003(2)			2004(2)			2004(2)			2005(3)			Year Ended December 31, 2004
			(in thousands, except share, per share and airline operating data)
Consolidated Statements of Income:
	Operating revenues		$	774,447		$	888,026		$	1,156,044		$	829,356		$	1,221,684		$	2,091,486		$	2,021,805
	Operating income (loss)(4)			119,555			108,480			144,776			107,958			135,038			(261,395	)		224,168
	Net income (loss)			86,866			66,787			81,952			60,703			73,583			(382,567	)		100,770
	Net income (loss) per common share:
		Basic		1.52			1.16			1.42			1.05			1.27			(6.61	)		1.75
		Diluted		1.51			1.15			1.40			1.04			1.26			(6.61	)		1.72
	Dividends declared per common share		$	0.08		$	0.08		$	0.12		$	0.09		$	0.09			—			—
	Weighted average number of shares outstanding:
		Basic		57,229			57,745			57,858			57,991			57,729			57,858			57,729
		Diluted		57,551			58,127			58,350			58,478			58,512			58,350			58,512
Other Financial Data:
	Net cash from:
		Operating activities		173,703			157,743			246,866			129,143			147,254			318,291			199,400
		Investing activities		(120,592	)		(811,690	)		(237,525	)		(199,703	)		(398,079	)		(484,930	)		(266,452	)
		Financing activities		35,157			635,394			(8,728	)		2,559			248,400			37,129			84,751
Airline Operating Data:
	Passengers carried			8,388,935			10,738,691			13,424,520			9,811,577			12,988,939			23,834,850			21,237,052
	Revenue passenger miles (000s)(5)			2,990,753			4,222,669			5,546,069			4,013,486			6,000,078			10,314,957			10,047,157
	Available seat miles (000s)(6)			4,356,053			5,875,029			7,546,318			5,453,588			8,001,001			14,456,733			13,540,685
	Passenger load factor(7)			68.7	%		71.9	%		73.5	%		73.6	%		75.0	%		71.4	%		74.2	%
	Revenue per available seat mile(8)			17.8	¢		15.1	¢		15.3	¢		15.2	¢		15.3	¢		14.4	¢		14.9	¢
	Cost per available seat mile(9)			15.1	¢		13.4	¢		13.6	¢		13.5	¢		13.9	¢		16.6	¢		13.8	¢
	EBITDA(10)			198,062			193,797			231,643			171,960			214,856			(103,074	)		351,962
	EBITDAR(10)			301,380			318,733			377,584			277,744			359,408			97,416			529,117
	Average passenger trip length (miles)			356			393			413			409			462			433			473
Number of aircraft in service (end of period):
Bombardier Regional Jets:
	Owned			6			30			32			32			113			108			113
	Leased			67			79			101			96			188			139			188
Brasilia Turboprops:
	Owned			21			21			21			21			15			21			15
	Leased			55			55			52			53			48			53			48

ATR-72 Turboprops (Leased)				0			0			0			0			12			19			12

		Total Aircraft		149			185			206			202			376			340			376

	As of September 30, 2005
	Actual		As Adjusted(11)
	(in thousands)
Consolidated Balance Sheet Information:
Cash and marketable securities	$	303,762	$	337,430
Aircraft and other equipment, net		2,490,785		2,490,785
Total assets		3,376,206		3,409,874
Long-term debt, including current maturities(12)		1,779,779		1,779,779
Lines of credit		90,000		0
Total stockholder's equity		850,068		973,736

		High		Low		Cash Dividends Declared
Year Ended December 31, 2003:
	First Quarter	$	14.89	$	8.80	$	0.02
	Second Quarter		19.08		10.25		0.02
	Third Quarter		20.35		16.83		0.02
	Fourth Quarter		19.24		15.46		0.02
Year Ended December 31, 2004:
	First Quarter	$	20.51	$	17.11	$	0.03
	Second Quarter		19.91		16.00		0.03
	Third Quarter		16.88		13.07		0.03
	Fourth Quarter		20.35		14.49		0.03
Year Ending December 31, 2005:
	First Quarter	$	20.30	$	16.05	$	0.03
	Second Quarter		19.76		17.35		0.03
	Third Quarter		26.82		18.08		0.03
	Fourth Quarter (through November 17, 2005)		32.84		26.25		0.03

			September 30, 2005
			Actual			As Adjusted
			(in thousands)
Cash and marketable securities			$	303,762		$	337,430

Debt:
	Current portion of long-term debt(1)		$	255,653		$	255,653
	Long-term debt, net of current portion(1)			1,524,126			1,524,126
	Current line of credit			60,000			—
	Long-term line of credit			30,000			—

	Total debt		$	1,869,779		$	1,779,779

Stockholders' equity:
	Preferred Stock, no par value; 5,000,000 shares authorized; None outstanding			—			—
	Common Stock, no par value; 120,000,000 shares authorized; 57,864,566 shares outstanding; 61,864,566 shares, as adjusted(2)			338,051			461,719
	Retained earnings			545,725			545,725
	Treasury stock; 6,794,056 shares			(32,551	)		(32,551	)
	Net unrealized depreciation on available-for-sale securities			(1,157	)		(1,157	)

		Total stockholders' equity		850,068			973,736

		Total capitalization	$	2,719,847		$	2,753,515

			Historical
			Historical						Pro Forma Adjustments			Pro Forma Combined
			SkyWest, Inc.			ASA			Pro Forma Adjustments			Pro Forma Combined
OPERATING REVENUES:
	Passenger		$	1,139,580		$	947,608		$	(12,177)	(A)	$	2,075,011
	Ground handling and other			16,464			11			—			16,475

		Total operating revenues		1,156,044			947,619			(12,177	)		2,091,486
OPERATING EXPENSES:
	Flying operations			577,492			—			436,982	(B)		1,014,474
	Customer service			180,578			—			162,677	(C)		343,255
	Maintenance			113,537			—			134,275	(C)		247,812
	Depreciation and amortization			76,817			71,707			742	(D)		149,266
	Promotion and sales			4,608			600			379	(C)		5,587
	General and administrative			58,236			—			35,515	(C)		93,751
	Salaries & related costs			—			292,258			(292,258	)(E)		—
	Aircraft fuel			—			197,541			(197,541	)(C)		—
	Aircraft maintenance materials and outside repairs			—			87,394			(87,394	)(C)		—
	Aircraft rent			—			68,670			(68,670	)(C)		—
	Contracted services			—			65,973			(65,973	)(C)		—
	Landing fees and other rents			—			44,623			(44,623	)(C)		—
	Impairment of goodwill			—			498,736			—			498,736
	Other			—			33,594			(33,594	)(C)		—

		Total operating expenses		1,011,268			1,361,096			(19,483	)		2,352,881
OPERATING INCOME (LOSS)				144,776			(413,477	)		7,306			(261,395	)
OTHER INCOME (EXPENSE):
	Interest income			10,050			3,092			(7,450	)(F)		5,692
	Interest expense			(18,239	)		(38,218	)		6,900	(G)		(49,557	)
	Other			—			140			—			140

		Total other income (expense), net		(8,189	)		(34,986	)		(550	)		(43,725	)
INCOME (LOSS) BEFORE INCOME TAXES				136,587			(448,463	)		6,756			(305,120	)
PROVISION FOR INCOME TAXES				54,635			20,119			2,693	(H)		77,447

NET INCOME (LOSS)			$	81,952		$	(468,582	)	$	4,063		$	(382,567	)

BASIC EARNINGS (LOSS) PER SHARE			$	1.42								$	(6.61	)
DILUTED EARNINGS (LOSS) PER SHARE			$	1.40								$	(6.61	)
WEIGHTED AVERAGE OF COMMON SHARES:
	Basic			57,858									57,858
	Diluted			58,350									58,350

			Historical
			SkyWest, Inc.			January 1, 2005 - June 30, 2005 ASA			July 1, 2005 - September 7, 2005 ASA			Pro Forma Adjustments			Pro Forma Combined
OPERATING REVENUES:
	Passenger		$	1,203,991		$	551,323		$	224,543		$	22,218	(A)	$	2,002,075
	Ground handling and other			17,693			—			2,037			—			19,730

		Total operating revenues		1,221,684			551,323			226,580			22,218			2,021,805
OPERATING EXPENSES:
	Flying operations			669,964			—			—			394,236	(I)		1,064,200
	Customer service			177,387			—			—			131,964	(C)		309,351
	Maintenance			107,686			—			—			106,806	(C)		214,492
	Depreciation and amortization			70,238			40,633			12,517			(5,449	)(J)		117,939
	Promotion and sales			2,874			—			—			255	(C)		3,129
	General and administrative			58,497			—			—			30,029	(C)		88,526
	Salaries & related costs			—			150,092			56,816			(206,908	)(K)		—
	Aircraft fuel			—			143,806			69,200			(213,006	)(C)		—
	Aircraft maintenance materials and outside repairs			—			51,773			18,619			(70,392	)(C)		—
	Aircraft rent			—			31,914			11,279			(43,193	)(C)		—
	Contracted services			—			46,441			18,470			(64,911	)(C)		—
	Landing fees and other rents			—			25,052			10,820			(35,872	)(C)		—
	Other			—			29,082			13,661			(42,743	)(C)		—

		Total operating expenses		1,086,646			518,793			211,382			(19,184	)		1,797,637
OPERATING INCOME				135,038			32,530			15,198			41,402			224,168
OTHER INCOME (EXPENSE):
	Interest income			10,165			2,628			579			(5,082	)(F)		8,290
	Interest expense			(25,510	)		(32,017	)		(14,276	)		5,175	(G)		(66,628	)
	Other			(585	)		101			(150	)		—			(634	)

		Total other income (expense), net		(15,930	)		(29,288	)		(13,847	)		93			(58,972	)
INCOME BEFORE INCOME TAXES				119,108			3,242			1,351			41,495			165,196
PROVISION FOR INCOME TAXES				45,525			1,308			1,150			16,443	(H)		64,426

NET INCOME			$	73,583		$	1,934		$	201		$	25,052		$	100,770

BASIC EARNINGS PER SHARE			$	1.27											$	1.75
DILUTED EARNINGS PER SHARE			$	1.26											$	1.72
WEIGHTED AVERAGE OF COMMON SHARES:
	Basic			57,729												57,729
	Diluted			58,512												58,512

				Years Ended December 31,															Nine Months Ended September 30,
				2000			2001			2002			2003			2004			2004			2005
				(in thousands, except share, per share and airline operating data)
Consolidated Statements of Income:
Operating revenues:
	Passenger			$	516,159		$	595,985		$	769,427		$	882,062		$	1,139,580		$	816,677		$	1,203,991
	Freight and Other				6,838			5,880			5,020			5,964			16,464			12,679			17,693

			Total operating revenues		522,997			601,865			774,447			888,026			1,156,044			829,356			1,221,684

Operating expenses:
	Flying Operations				208,932			252,346			330,198			417,801			577,492			406,244			669,964
	Aircraft, traffic and passenger service				72,079			97,827			123,453			139,125			180,578			129,922			177,387
	Maintenance				63,318			87,577			82,786			83,829			113,537			81,365			107,686
	Promotion and Sales				26,593			25,747			16,871			13,572			4,608			3,422			2,874
	Depreciation and amortization				32,575			45,888			57,535			74,419			76,817			57,448			70,238
	General and Administrative				29,529			35,097			45,487			50,800			58,236			42,997			58,497
	U.S. Governmental airline assistance				—			(8,181	)		(1,438	)		—			—			—			—
	Other				924			—			—			—			—			—			—

			Total operating expenses		433,950			536,301			654,892			779,546			1,011,268			721,398			1,086,646

Operating income					89,047			65,564			119,555			108,480			144,776			107,958			135,038

Other income (expense):
Interest expense					(2,511	)		—			(3,611	)		(9,891	)		(18,239	)		(13,340	)		(25,510	)
Interest income					12,532			17,249			12,383			10,492			10,050			6,554			9,580
Gain on sales of property and equipment					518			—			—			406			—			—			—

			Total other income (expense)		10,539			17,249			8,772			1,007			(8,189	)		(6,786	)		(15,930	)

Income before provision for income taxes					99,586			82,813			128,327			109,487			136,587			101,172			119,108
Provision for income tax					38,712			32,297			50,050			42,700			54,635			40,469			45,525

Income before cumulative effect of change in accounting principle					60,874			50,516			78,277			66,787			81,952			60,703			73,583

Cumulative effect of change in accounting principle, net of tax of $5,492					—			—			8,589			—			—			—			—

Net Income					60,874			50,516			86,866			66,787			81,952			60,703			73,583

	Basic				1.18			.90			1.52			1.16			1.42			1.05			1.27
	Diluted				1.16			.88			1.51			1.15			1.40			1.04			1.26
Weighted average common shares outstanding:
	Basic				51,521			56,365			57,229			57,745			57,858			57,991			57,729
	Diluted				52,644			57,237			57,551			58,127			58,350			58,478			58,512
Other Financial Data:
	Net cash from:
		Operating activities			82,521			150,791			173,703			157,743			246,866			129,143			147,254
		Investing activities			(198,204	)		(219,624	)		(120,592	)		(811,690	)		(237,525	)		(199,703	)		(398,079	)
		Financing activities			146,217			45,335			35,157			635,394			(8,728	)		2,559			248,400

Airline Operating Data:
Passengers carried			5,598,499		6,229,867		8,388,935		10,738,691		13,424,520		9,811,577		12,988,939
Revenue passenger miles(1)			1,277,001		1,732,180		2,990,753		4,222,669		5,546,069		4,013,486		6,000,078
Available seat miles(2)			2,256,635		2,837,278		4,356,053		5,875,029		7,546,318		5,453,588		8,001,001
Passenger load factor(3)			56.6	%	61.1	%	68.7	%	71.9	%	73.5	%	73.6	%	75.0	%
Revenue per available seat mile(4)			23.2	¢	21.2	¢	17.8	¢	15.1	¢	15.3	¢	15.2	¢	15.3	¢
Cost per available seat mile(5)			19.2	¢	18.9	¢	15.1	¢	13.4	¢	13.6	¢	13.4	¢	13.9	¢
EBITDA(6)			135,170		128,701		198,062		193,797		231,643		171,960		214,856
EBITDAR(6)			190,875		201,968		301,380		318,733		377,584		277,744		359,408
Average passenger trip length (miles)			228		278		356		393		413		409		462
Number of aircraft in service (end of period):
Bombardier Regional Jets:
	Owned		—		5		6		30		32		32		113
	Leased		16		44		67		79		101		96		188
Brasilia Turboprops
	Owned		21		21		21		21		21		21		15
	Leased		70		61		55		55		52		53		48
ATR—72 Turboprops (Leased)			—		—		—		—		—		—		12

		Total aircraft	107		131		149		185		206		202		376

	As of December 31,
	As of December 31,										As of September 30, 2005
	2000		2001		2002		2003		2004		As of September 30, 2005
	(in thousands)
Consolidated Balance Sheet Data:
Cash and marketable securities	$	293,630	$	310,714	$	425,424	$	471,234	$	540,537	$	303,762
Working capital		279,667		270,818		391,845		518,409		536,506		62,182
Property and equipment, net		312,187		441,706		455,998		843,918		932,547		2,553,636
Total assets		676,412		831,566		999,384		1,529,210		1,662,287		3,376,206
Long-term debt, including current maturities(7)		85,925		125,839		137,911		493,650		495,818		1,779,779
Total stockholder's equity		484,953		545,840		638,686		709,063		779,055		850,068

																		Nine Months Ended September 30,						Pro forma
			Year Ended December 31,																					Pro forma
			Year Ended December 31,																					Year Ended Dec. 31, 2004			Nine Months Ended Sept. 30, 2005
			2000			2001			2002			2003			2004			2004			2005			Year Ended Dec. 31, 2004			Nine Months Ended Sept. 30, 2005
EBITDAR			$	190,875		$	201,968		$	301,380		$	318,733		$	377,584		$	277,744		$	359,408		$	97,416		$	529,117
Aircraft Rents				(55,705	)		(73,267	)		(103,318	)		(124,936	)		(145,941	)		(105,784	)		(144,552	)		(200,490	)		(177,155	)
EBITDA			$	135,170		$	128,701		$	198,062		$	193,797		$	231,643		$	171,960		$	214,856		$	(103,074	)	$	351,962
	Interest Expense			(2,511	)		—			(3,611	)		(9,891	)		(18,239	)		(13,340	)		(25,510	)		(49,557	)		(66,628	)
	Provision for income taxes			(38,712	)		(32,297	)		(50,050	)		(42,700	)		(54,635	)		(40,469	)		(45,525	)		(77,447	)		(64,426	)
	Impairment of Goodwill			—			—			—			—			—			—			—			498,736			—
	Maintenance expense related to disposition of rotable spares			2,235			1,947			1,379			834			—			—			—			—			—
	Gain (loss) on sale of property and equipment			(518	)		—			—			406			—			—			—			(1,684	)		(1,158	)
	Increase (decrease) in allowance for doubtful accounts			(144	)		5			661			(664	)		(34	)		500			(9	)		(34	)		(9	)
	Net increase in deferred income taxes			6,374			6,948			22,206			91,085			29,598			24,890			12,083			49,717			13,390
	Rent expense less than payment			—			—			—			—			—			—			—			(13,036	)		(15,485	)
	Tax benefit from exercise of common stock options			4,105			5,584			1,525			129			442			408			43			442			43
	Deferred aircraft credits, net of accretion			—			15,127			10,903			22,751			4,444			1,258			19,577			4,444			19,577
	Changes in operating assets and liabilities:
		Increase in restricted cash		—			—			—			(9,160	)		—			—			(104,524	)		—			(99,910	)
		Decrease (increase) in receivables		(17,916	)		3,091			(6,890	)		14,813			(15,738	)		(37,105	)		(4,435	)		(35,799	)		15,626
		Decrease (increase) in income tax receivable		—			—			—			(62,908	)		53,909			17,304			8,999			53,909			8,999
		Decrease (increase) in inventories		(3,518	)		(4,301	)		(3,750	)		953			(7,842	)		(7,164	)		(5,367	)		(11,513	)		(2,345	)
	Decrease (increase) in other current assets and prepaid aircraft rents			(2,379	)		(5,820	)		(1,988	)		(53,917	)		1,750			(3,002	)		(51,983	)		1,750			(53,201	)
	(Decrease) Increase in accounts payable and accrued aircraft rents			(6,428	)		12,783			3,313			5,641			13,921			3,963			99,421			(2,710	)		54,968
	(Decrease) increase in engine overhaul accrual			2,722			1,091			(14,081	)		—			—			—			—			(3,500	)		—
	Increase in other current liabilities			4,041			17,932			16,024			6,574			7,647			9,940			29,628			7,647			37,997

Net cash provided by operating activities			$	82,521		$	150,791		$	173,703		$	157,743		$	246,866		$	129,143		$	147,254		$	318,291		$	199,400

	Nine months ended September 30,
	2005		2004		% Change
Passengers carried	12,988,939		9,811,577		32.4	%
Revenue passenger miles (000)	6,000,078		4,013,486		49.5	%
Available seat miles (000)	8,001,001		5,453,588		46.7	%
Passenger load factor	75.0	%	73.6	%	1.4	pts
Passenger breakeven load factor	68.3	%	65.2	%	3.1	pts
Revenue per available seat mile	15.3	¢	15.2	¢	0.6	%
Cost per available seat mile	13.8	¢	13.4	¢	3.7	%
Fuel cost per available seat mile	4.3	¢	3.1	¢	38.7	%
Average passenger trip length (miles)	462		409		13.0	%

	Nine months ended September 30,
	2005					2004
	Amount		Percentage of Revenue		Cents per ASM	Amount		Percentage of Revenue		Cents Per ASM
	(in thousands)					(in thousands)
Salaries, wages and employee benefits	$	275,170	22.5	%	3.4	$	206,668	24.9	%	3.8
Aircraft costs		214,790	17.6	%	2.7		163,232	19.7	%	3.0
Maintenance		73,204	6.0	%	0.9		55,112	6.6	%	1.0
Fuel		347,536	28.4	%	4.3		170,884	20.6	%	3.1
Other airline expenses		175,946	14.4	%	2.2		125,502	15.1	%	2.3
Interest		25,510	2.1	%	0.3		13,340	1.6	%	0.2

Total airline expenses	$	1,112,156			13.8	$	734,738			13.4

	Total		Sept-Dec 2005		2006		2007		2008		2009		2010		Thereafter
Firm aircraft commitments	$	1,051,000	$	100,000	$	751,000	$	200,000	$	—	$	—	$	—	$	—
Operating lease payments for aircraft and facility obligations		3,184,529		73,927		297,810		276,009		255,955		279,788		273,205		1,727,835
Principal maturities on long-term debt		1,779,779		26,007		330,526		98,754		102,696		106,925		111,332		1,003,539

Total commitments and obligations	$	6,015,308	$	199,934	$	1,379,336	$	574,763	$	358,651	$	386,713	$	384,537	$	2,731,374

		Year Ended December 31, 2005
		First Quarter		Second Quarter		Third Quarter				Year to date
Operating revenues (000)		$	340,292	$	384,043	$	497,349			$	1,221,684
Operating income (000)			34,446		44,596		55,994				135,036
Net income (000)			18,765		24,757		30,060				73,583
Net income per common share:
	Basic	$	0.33	$	0.43	$	0.52			$	1.27
	Diluted		0.32		0.42		0.51				1.26
	Basic		57,668		57,671		57,846				57,729
Diluted			58,197		58,323		59,016				58,512
		Year Ended December 31, 2004
		First Quarter		Second Quarter		Third Quarter		Fourth Quarter		Year
Operating revenues (000)		$	253,704	$	267,387	$	308,265	$	326,688	$	1,156,044
Operating income (000)			34,857		35,159		37,942		36,818		144,776
Net income (000)			19,370		20,054		21,279		21,249		81,952
Net income per common share:
	Basic	$	0.33	$	0.35	$	0.37	$	0.37	$	1.42
	Diluted		0.33		0.34		0.37		0.37		1.40
	Basic		58,008		58,056		57,909		57,458		57,858
	Diluted		58,633		58,595		58,206		57,967		58,350
		Year Ended December 31, 2003
		First Quarter		Second Quarter		Third Quarter		Fourth Quarter		Year
Operating revenues (000)		$	207,362	$	212,694	$	230,490	$	237,480	$	888,026
Operating income (000)			20,149		24,252		35,233		28,846		108,480
Net income (000)			13,300		14,896		21,128		17,463		66,787
Net income per common share:
	Basic	$	0.23	$	0.26	$	0.37	$	0.30	$	1.16
	Diluted		0.23		0.26		0.36		0.30		1.15
	Basic		57,641		57,648		57,837		57,853		57,745
	Diluted		57,649		57,974		58,423		58,397		58,127

Aircraft Type	Number of Owned Aircraft	Number of Leased Aircraft	Passenger Capacity	Scheduled Flight Range (miles)	Average Cruising Speed (mph)	Average Age (years)
CRJ200s	32	93	50	1,100	530	3.6
CRJ700s	7	30	66	1,500	530	0.7
Brasilia Turboprops	15	48	30	500	300	8.7

Aircraft Type	Number of Owned Aircraft	Number of Leased Aircraft	Passenger Capacity	Scheduled Flight Range (miles)	Average Cruising Speed (mph)	Average Age (years)
CRJ200s	39	65	40 or 50	1,100	530	4.3
CRJ700s	35	0	70	1,200	530	1.9
ATR-72 Turboprops	0	12	66	300	300	11.9

		During the fiscal year ended December 31,
	During the three months ended December 31, 2005	During the fiscal year ended December 31,
	During the three months ended December 31, 2005	2006	2007	2008	2009
Additional CRJ200s	0	6	0	0	0
Additional CRJ700s	5	24	8	0	0
Total Bombardier Regional Jets	306	336	344	344	344
Total Brasilia Turboprops	63	61	60	59	57
Total ATR-72 Turboprops	12	12	0	0	0
Total Combined Fleet	381	409	404	403	401

Name	Age	Position
Jerry C. ~~Atkin............................ 51~~ Atkin	56	Chairman ~~President~~ and Chief Executive Officer ~~Ron B. Reber.............................. 46 Executive Vice President and Chief Operating Officer~~
Bradford R. ~~Rich.......................... 39~~ Rich	44	Executive Vice President, Chief Financial Officer and Treasurer
Ron B. Reber	52	President and Chief Operating Officer of SkyWest Airlines
Bryan T. LaBrecque	47	President and Chief Operating Officer of ASA
Sidney J. ~~Atkin........................... 66~~ Atkin	71	Vice Chairman
W. Steve Albrecht	58	Director
J. Ralph ~~Atkin............................ 57~~ Atkin	62	Director
Mervyn K. ~~Cox............................. 63~~ Cox	69	Director
Ian M. ~~Cumming............................ 59~~ Cumming	65	Director ~~Henry J. Eyring........................... 36 Director~~
Robert G. ~~Sarver.......................... 38~~ Sarver	44	Director
Hyrum W. ~~Smith............................ 56~~ Smith	62	Director
Steven F. ~~Udvar-Hazy...................... 54~~ Udvar-Hazy	59	Director

	Beneficial Ownership Prior to the Offering			Beneficial Ownership After the Offering
Name and Address of Beneficial Owner	Beneficial Ownership Prior to the Offering			Beneficial Ownership After the Offering
Name and Address of Beneficial Owner	Shares	Percent(1)		Shares	Percent(2)
Barclays Global Investors, NA 45 Fremont St. San Francisco, CA 94105(3)	4,160,528	7.2	%	4,160,528	6.7	%
Jerry C. Atkin(4)	2,384,945	4.1	%	2,384,945	3.8	%
Sidney J. Atkin(5)	1,498,101	2.6	%	1,498,101	2.4	%
Mervyn K. Cox(6)	417,621	*		417,621	*
Bradford R. Rich(7)	359,434	*		359,434	*
Ron B. Reber(8)	209,026	*		209,026	*
Ian M. Cumming(9)	66,000	*		66,000	*
J. Ralph Atkin(9)	50,000	*		50,000	*
Robert G. Sarver(10)	49,000	*		49,000	*
Steven Udvar-Hazy(11)	33,600	*		33,600	*
Hyrum W. Smith(9)	48,000	*		48,000	*
W. Steve Albrecht	—	—		—	—
Bryan T. LaBrecque	—	—		—	—
All Executive Officers and Directors as a group (12 persons)(12)	5,115,727	8.6	%	5,115,727	8.1	%

	Underwriter		Number of Shares
Merrill Lynch, Pierce, Fenner & Smith Incorporated
Raymond James & Associates, Inc. ~~...........................~~
Total

	Per Share	Without Option	With Option
Public offering price.	$	$	$
Underwriting discount	$	$	$
Proceeds, before expenses, to SkyWest, Inc.	$	$	$

		Amount
SEC registration fee		$	17,456
NASD filing fee			15,330
Accounting fees and expenses			230,000
Legal fees and expenses			100,000
Printing expenses			120,000
Blue sky fees and expenses			3,000
Transfer agent fees and expenses			1,000
Miscellaneous expenses			13,214

	Total	$	500,000

Exhibit Number		Description
1.1		Form of Underwriting Agreement. ~~4.1+~~ *
3.1		Restated Articles of Incorporation.
3.2		Amended and Restated Bylaws.(1)
4.1		Specimen ~~Form~~ of Common Stock Certificate. ~~4.2 Restated Articles of Incorporation, as amended.(1) 4.3+ Articles of Amendment to Restated Articles of Incorporation. 4.4 Amended and Restated Bylaws.~~(2) ~~4.5 Stock Option Agreement, dated January 28, 1987, between Delta Air Lines, Inc. and SkyWest, Inc.(3) 5.1+~~
5.1		Opinion of Parr Waddoups Brown Gee & Loveless as to the legality of the securities being registered.*
21.1		List of Subsidiaries.
23.1		Consent of ~~Arthur Andersen~~Ernst & Young LLP. ~~23.2+~~
23.2		Consent of KPMG, LLP.
23.3		Consent of Deloitte & Touche LLP.
23.4		Consent of Parr Waddoups Brown Gee & Loveless (included in Item 5.1 above). ~~24.1+~~ *
24.1		Power of ~~Attorney.~~ Attorney (included on signature page of this Registration Statement).