SkyWest Inc (SKYW) 2005 Q4 法說會逐字稿

Welcome everyone to the SkyWest announces fourth quarter 2005 annual earnings. After the speakers' remarks, there will there will be a question-and-answer session.

[OPERATOR INSTRUCTIONS].

We will be making statements during this conference call, which are forward-looking such are based on our current beliefs, expectations, and assumptions regarding future events and are subject to risks and uncertainties. Words such as expects, intends believes, anticipates, should, likely, and similar expressions identify forward-looking statements. All forward-looking statements are expressed in this call are made as of the date here of, and are based on information available to us at this time. We assume no obligations to update any forward-looking statement.

Actual results will vary and may vary materially from those anticipated, estimated, projected, or expected for a number of reasons, including those discussed in today's press release. Express during this conference call are set forth in our 2005 form 10 K and other reports and filings with the Securities and Exchange Commission.

I will now turn the call over to Brad Rich. You may go ahead, sir.

Thank you very much, and thank you all for joining us this morning.

As you know we will be discussing this morning both our fourth as well as the 2005 annual earnings. Before we get into that, let me just make some introductions.

I have with me here at SkyWest, Ron Reber, our President and Chief Operating Officer of SkyWest Airlines. We also have with us Bryan LaBrecque in Atlanta, who is the President and Chief Operating Officer of ASA. I also have in the room with me here at SkyWest, Mike Kraupp, VP of Finance, Assistant Treasurer, and also directs all of our Investor Relations. I have as well Chip Childs, our Vice President and Controller with me.

I'm assuming, as we normally do, that most of you have seen this morning the press release. I hope that you have it handy. We will be using that primarily as the agenda for the discussion this morning, and stick pretty much to it.

By way of just review, and again assuming that you've seen this, but as way of review, we reported this morning 742.4 million in total operating revenues for the quarter. That's 127.2% increase compared to the 326.7 million that was reported in the fourth quarter last year. We reported net income of 38.7 million for the quarter just ended, which is $0.64 per diluted share, which is an 82.1% increase, compared to 21.2 million of net income or $0.37 per diluted share for the same period last year.

In looking at the annual results, our operating revenues were 2 billion for the year, which is a 69.9% increase, compared to 1.2 billion for the same last year. We reported for the total year net income of 112.3 million, or $1.90 per diluted share, which is a 37% increase, compared to 82 million of net income, or $1.40 per diluted share for the same period last year.

I think most of you know by now that the results include the results of ASA. Most of you know that on September 7th of 2005 we completed the acquisition. I think those of you that have been following us closely are well aware of some of the details around the purchase price and all of that, so I won't go through that specifically, but just to remind you that as we go through all of these results, and the discussion, that obviously a significant factor in the year over year and period over period changes certainly is the operating activity for ASA during the period of the acquisition through December 31st of '05.

With that in mind, let's now talk about some of the significant factors that affected our performance during the fourth quarter. First of all, relative to total operating revenues for the fourth quarter, which I have already mentioned increase 127%. Obviously a good portion of that was due to a 125% increase in our available seat miles, and again most of that due to the acquisition of ASA, which is in those numbers, as well as increased fuel costs reimbursements from our major partners.

I know that most of you that are -- that follow the company closely are well aware of the impact of fuel. I think most of you understand pretty clearly how fuel goes through our models. It's a direct reimbursement, and goes through our -- both our operating revenues and through our expenses. The other thing I would just remind you of is that because we only get margin on a portion of the fuel expenses, it does have a fairly meaningful and significant impact on our margin. Keep that in mind as we talk about our cost per ASM.

Our total operating expenses and interest for ASM excludes fuel charges of 243.2 million in the quarter, which represented $0.052 of our cost per ASM. Without the fuel charges in our numbers,we decreased our chasm 8.8% to $0.093 from $0.102 in the same quarter of '04. The 243.2 million of fuel charges in the quarter, it's risen to a pretty staggering percentage of our total operating and interest expenses, representing 36% of our total -- of our total costs.

And I'll just talk here somewhat in general numbers just to put some things -- to give some relativity to the impact of that. We really -- the way our models work, get -- the way that things are working out this quarter, we get margin on approximately half of those fuel charges. So if you just do the arithmetic backwards, you can see that it has a pretty meaningful impact on margins, and having said this another way, or to summarize it a different way, we're very pleased with the total dollars of net income generated, but admittedly because the of the way our levels work, it has pulled down our margin.

Let talk a little bit about our production and our capacity. Our total ASMs, available seat miles for the fourth quarter of '05 increased as I said 125.4%, primarily as a result of increasing the size of the fleet from 210 aircraft last year to 380 aircraft this year. During the quarter, we took delivery of five new 70 seat regional jets, and let me just give you the composition of the fleet. At December 31, 2005, the fleet consisted of 306 regional jets. 62 EMB-120s, and 12 ATRs. So during the fourth quarter, we generated 4.7 billion ASMs compared to 2.1 billion ASMs during the same period last year.

In talking a little more specifically about capacity and our ASM production, let me just review with you quickly what we've -- to give you some idea of what we think our estimates for ASMs will be in the next -- I'll give it to you quarterly for this year. The first quarter we would expect another 4.7 billion. In the second quarter, we're estimating 5 billion. Third quarter, 5.1 billion. Fourth quarter 5.2, which comes out to right on 20 billion ASMs for calendar '06. By way of aircraft deliveries, in the quarter we're now in, the first quarter of '06, we'll take 14 deliveries. Q2 we've only got one delivery. Q3, four deliveries, and Q4 we'll have 11 deliveries for a total of 30.

Let me move now to just some of the other significant items during the quarter. Most of you know that on September 14th, '05, Delta filed a voluntary petition for bankruptcy protection under chapter 11. The significance of that to us is is that during the quarter our contracts at both ASA and SkyWest have been affirmed and approved by the bankruptcy courts. One of the issues that certainly that we have had relative to the ASA acquisition, I think most of you have been aware that a portion of the purchase price was held back pending the outcome of certain conditions, and because of the court's approval of those agreements, we released 120 million of money that was previously held back and most of which was placed in escrow.

Some of you may have been -- know that the total amount of the hold back was 125 million. There is 5 million that is still being held that's just part of the agreement and pending the resolution of final adjustments to the acquisition.

At December 31, of '05, we had approximately, meaning SkyWest Inc., 324.5 million in cash and marketable securities. You can read from the details that we've put in the release, there's some of that money that's restricted. Obviously our cash position is down from 549.7 million as of December 31st '04, obviously because the majority of the purchase price for ASA was paid just out of our cash and securities balances that we had on hand.

During the quarter, we took delivery of five new 70-seat regional aircraft from Bombardier, and all five of those aircraft were financed with long term permanent U.S. leverage leases. Obviously because of the capital structure of ASA, combining that with our SkyWest capital structure has created quite a significant change in just our overall capital structure. Our long-term debt is 4 point -- or, excuse we me, 1.4 billion as of December 31st, '05. That compares to 463.2 million at December 31st of '04.

We had significant long-term lease obligations that recorded as operating leases that I'm sure you know as we've been reporting this is every quarter, we have always told you what the present value of the off balance sheet leases is, and at December 31st, '05, that number discounted at a 7% factor is 2.1 billion.

I would just make a quick reference, also, as we have been disclosing each quarter, is this mismatch in the collection of revenue in our contracts for matures maintenance rates versus the actual timing of the recognition of the expense, and in this quarter that number is 5.3 million. I would just remind you, though, that of our total RJ fleet now, which is up to a total of 306 RJs, this mismatch is only on the 50 -- it's on the 200s in our united fleet, which is -- excuse me, which is 65 RJs. So it's -- it's really not -- the -- I'm only pointing this out and adding something emphasis to it, because as the RJ fleet has grown to in excess of 300 aircraft, this is now on a pretty small portion of the total RJ fleet.

Let me just make a quick reference to an item that we have mentioned here in the release, and that is an issue that we ran into on our 423 employee stock purchase plan. We did discover during the quarter that we had issued more shares than were approved and authorized under that plan. This is -- we have been working -- we reported this to the appropriate regulatory agencies. The thing of -- and I think of most -- that's most noteworthy here, on February 8th of '06, which was yesterday, after reviewing the issues associated with the over issuance, including SkyWest amendment to our executive stock incentive plan and our all share plan, in which we reduced the number of shares issuable pursuant to those plans, by the number that exceeded the number of shares issued in excess of the number authorized.

The staff of the Nasdaq stock market notified us that the issuance of the shares of common stock in excess of the number of shares authorized pursuant was in violation of the shareholder approval rule set forth in Nasdaq marketplace rules. But also the Nasdaq staff letter also notified SkyWest that the reduction in the number of shares that, due to the reduction of the shares, that that really put us back in compliance, and the letter also indicated that as of the date of the letter, that the matter was considered closed by Nasdaq.

Let me just reference quickly a few other items that I think are of some significance and worthy of mention here. Obviously with an acquisition the size and magnitude of what we have done with ASA, I know that most of you would be very interested in just how the acquisition is going, is the performance there, are there any unusual or unexpected things that have occurred, and I would just make two general statements here. First of all, relative to the financial performance, I can sum it up very quickly, just to say that the financial performance of ASA has met our projections and our expectations very specifically.

Relative to operational performance, ASA's performance when -- the numbers and the way that our contract work, the financial impact of the operational performance, those numbers are whether an ATC adjusted, and the operational performance of ASA when weather and ATC adjusted has been exceptionally good. I mean driving about a 98.9% adjusted completion factor, 86.9% arrival 14 numbers. So the operational performance has been very good, and I just sum it up then to say operationally we've been very pleased with the results. Financially, it has met our expectations. We have not come across anything in the integration and the administrate kind of things that have been of anyone particular unusual surprise or unexpected in the whole process.

Not to say we certainly have our -- we certainly are working through integration issues and have some challenges and things along the way, but the whole integration and acquisition has gone pretty smooth and has met our expectations to this point.

Let me give you a little bit more information about our balance sheet. I mention already that our cash and marketable securities at the end of the year were 324.5 million. Our current ratio has seen a significant change. We have been -- we have historically reported periods where we've had close to a 4 to 1 current ratio. Our current ratio at the end of the year was 1.1 to 1.

A significant factor in that change is related to some interim debt that was -- that's associated with the ASA acquisition. There were some interim financed aircraft. There's about 185 million of debt there associated with some interim financings that's coming due here in the next few months. And that's had a material impact on the current ratio. The thing that I guess we would just emphasize is that we already have long-term permanent financing commitments in place, so as that debt comes due, it will come out of current, and the commitments are already in place to refinance that debt.

Our shareholders' equity at the end of the period was 913.2 million. Our book value per share was $15.55 per share.

Let me just make a few comments about our future results, and I'm only saying future from the standpoint of -- well, in this context, just to reference the impact of 123R on our future performance. I know that this is something that a lot of you are wondering about. We obviously have been doing a significant amount of research and analysis into the impact. We have been disclosing, as per the regulations and disclosure requirements, the impact in a pro forma on our disclosures, and at this point, as far as guidance on the impact of 123R, the expensing of stock options, I would just make two comments.

Number one, I would refer you back to the pro forma disclosures in our prior periodic reports. Number two, I would just say that at this point is really as good a guidance as we can give you, because the compensation committee of our board has not yet made it a final determination about how we are going to design and implement our program going forward. So, as those things evolve and are developed and determined, we will certainly keep the market aware of the impact as we know more about it, but for the time being I'd just refer you to our previous pro forma disclosures.

I think with that I will go ahead and conclude the formal remarks, and we will now open it for questions.

[OPERATOR INSTRUCTIONS].

We will pause for just a moment to compile the Q&A roster.

Your first question comes from Ray Neidl.

Good morning.

Yeah, hi, Ray.

Just a couple of general questions. Some may pertain to SkyWest than more to the industry. But it looks like there's going to be continuing pressure on your margins going forward. I think that you kind of mentioned that, and then in the future, I know you're tied up with your contracts right now, you're in pretty good shape, but in the future do you see the industry mix changing where the regionals will have to bear a little bit more of the risk? In other words you're taking more fuel risk now. In the future, you do see the partnership with the bigger carriers making the regional bear all the risks, and on ownership, you've got aircraft ownership, but more and more, do you think it's going to be the trend of the future for the industry where the bigger carriers do not want to own the regional aircraft any longer?

That -- you're obviously asking a very good question, Ray, and I'm not sure whether it's as much a question or more of a astute observation about maybe some of the trends in the industry. I'm not really sure which it is. Let me just say that first of all my comments about our margin were meant more to just remind people of the -- just the impact on margin by the way that fuel runs through our models. And I'm making the assumption that most of you know already that we only get a margin on a portion of the fuel, and so we can be producing our expected absolute dollars of net income that we've kind of -- I'll just leave it that we expect, and yet still see margin decline.

And I wouldn't -- I have certainly not said that to indicate that I think there will be continued pressure on margins. Now, having said that, I think most of you know that there is a significant amount of, RFP activity going on at the moment in our industry, and I think the answer to your question lies more in kind of the outcome of some of those current issues and responses to current RFPs that are in the market, rather than our current models that are in place, because I don't see anything -- I mean what we've been doing, how we've explained our contracts to the market, the results that -- I mean, I don't know of anything good or bad that would lead us to, suggest that there's going to be much difference.

I think more of that will be yet to be determined by some of this activity that's in the market.

Okay. And I think you brushed on the acquisition going very well, and hopefully that continues, congratulations on that. Is there anything open with the pilots contract at ASA? Are negotiations still going on, or do you have a settlement there?

Active discussions are going on, and I will. Bryan LaBrecque, I assume that you're on the line, and I'll let you respond to that.

I am. Thanks. It's a good question. The negotiations with our pilots are ongoing. They've been several months now since the acquisition. We've had a renewed interest in both sides in concluding a deal.

We are currently under mediation, and the mediator has put us in negotiating sessions, which we're in the midst of right now, even this month. We've had some movement on the contract, and some positive movement, and I can tell you that we, as a team, both sides, have a renewed interest in concluding this deal in a way that's appropriate, given the economic conditions. So yes, we're moving forward through this process, and we anticipate continued movement.

Okay. Great, thanks. And finally, Brad, last question. This is more of a general question again, drawing upon your industry knowledge. It appears that we might be heading towards maybe a big three regional airline type situation, and the ones that survive are going to be the best operators, and I guess the ones that have the most capital. You did mention that your cash positions are down as a results of the acquisition. Does this mean that you'll be looking to the capital markets anytime in the near-term future?

Very good question. I think first of all, I just remind all of you that on November 18th, we did file registration statement on form S-3 with the commission, specifically to address our capital issue and our decreased cash position, and I'm bringing this up in this context. I know that a lot of the market, and we've taken a lot of calls of people just saying hey, what's happened? I mean you filed on November 18th.

The fact of the matter is we did not receive a comment letter until December 22nd, from the SEC. Simply due to the timing of that comment letter, it made it impossible for us to complete the offering prior to our year-end. Now that we're in year-end, we have no choice but to wait and get all of our year-end numbers compiled and reported, the 10 K filed, so that's the position we're in right now, and given that we're in registration, I think that's really all I can say about that, Ray.

Great, thank you, Brad.

You're welcome.

Your next question comes from Jim Parker.

Good morning to all, Brad. Let me just make sure I understand something. You have no fuel risk. Is that correct?

That's correct.

All right. Now, regarding this -- the mature maintenance. What I would like to know is when that's going to cross the line, and become an expense item, and is there a way that you my be able to change that and begin flatten that item out the near future?

Okay. Let me -- let me respond to that first of all by saying the honest answer is that I -- we don't know exactly, simply because of developments in our maintenance program, developments in time and cycle limits and all of those things that affect the actual timing of those heavy events. I mean on this call, I can't tell you exactly when it will flip and to what degree it will flip at what time.

I think the more relevant issue here, Jim, is, is that with our -- with the size of the fleet now, whenever those events occur, and that flips, it's becoming a lot less significant, and the magnitude of the issue is certainly a declining issue in significance to us. Obviously, the thing that helps mitigate the impact of it is growth. So I mean relative to -- there are things that we're always doing in trying to optimize our maintenance program, looking at any opportunity to extend time and cycle limits, and all of those things that can help to mitigate the impact of it. I just think the whole issue have a little less significant than it has been, simply because of the growth of the fleet.

All right. Do you have a -- an option of actually changing this and flattening it out for the rest of the contract?

That's always an option to us. We have made a conscious decision not to do that at this point.

Okay. The other question is regarding, you mentioned that you have done some leverage lease financing. It appears to me that other regional airlines are having difficult doing that. Is that correct?

Well, I'm sure it is. The leverage leasing that we have done in this quarter is part of a -- what I'll just describe as a -- kind of a portfolio deal transaction that I know some other regionals have have participated as well.

Okay. Thanks very much.

You're welcome.

[OPERATOR INSTRUCTIONS].

Your next question comes from David Livingston.

Good morning, everybody.

Good morning.

Two questions. You mentioned acquisition of new aircraft in the third and fourth quarters. I think for the first and second quarters of this year, that's going to United as 70-seaters, is that correct?

Yeah, in the first and second quarters combined, we have 15 deliveries.

Right. Have you made allocation of the aircraft for the third and fourth quarters, and what type of aircraft are those to be?

I think that at this point I need to just -- the honest answer to this -- is your question on beyond these 15?

Yes.

Have we made a decision about where and --

What type.

Well, number one, the decision about where and who is operating them has not been made yet, and so I think that's really all I can say about it. We have not made that determination yet.

Okay. Do you know the type of aircraft?

We have -- as we have put in our previous disclosures about our purchase order, we have varying options about the size and type of these. So beyond the 15, those are still far enough out that we're -- that we still have a choice, and that has not been determined either.

All right. Second question relative to SkyWest Airlines. Has there been a replacement employee stock purchase program approved?

That is all being discussed right now with our board, and any plan that's approved will require shareholder approval at the annual meeting, which will not happen until the May annual meeting.

Okay. Thanks.

You're welcome.

Your next question comes from Helane Becker.

Thank you very much, operator. Hi, everybody.

Hi, Helane.

Two questions, Brad. One, with respect to the debt, I just kind of want to have a sense of how we should think about that. Is your plan, then, to pay down debt with available cash now flow, or is your plan to kind of leave it the way it is and refinance it, or is your plan to use the potential offering to pay down debt? Maybe you can kind of go through that. And the second question is, with ASA having a pilot -- having pilot representation, is there any risk that that would spill over to SkyWest?

Okay. Thank you. Two very good questions. First of all, relative to the debt, I'll deal with that, and then I'll let Ron Reber respond to the second part of the question about the potential impact of things on the pilots.

First of all, relative to the debt. Our current plan right now would be not to materially change, with the exception of some things that I mentioned earlier, about refinancing something of the -- I mentioned there's 185 million of debt that's coming due in over the next two quarters. That debt we have already have commitments in place to get that out of short-term and into lease commitments.

Relative to the remainder of the debt, we do not have any plans at this time to materially change or refinance or really modify the capital structure. Our plan would be going forward to do as many of the acquisitions as we can through lease financings rather than debt financings. But as we all know, I mean, we have some commitments in place, we have some back stop commitments in place. But our clear preference and priority would be to do the upcoming deliveries through lease financings to the extent that we can, to kind of rebalance the relationship between debt and equity back to more of our historical and optimal type levels. And then I'll let Ron answer the pilot question.

Good morning, Helane. I won't pretend to act like I know what's in the minds of all pilots, but I will suggest that our relationship at SkyWest with our pilot group, I think is good, and we've aligned our interests. So I think that should continue to be a good relationship. No doubt, every regional pilot is wondering what's happening in our industry. They watch closely to see what happened at Comair and what will happen at with the Comair negotiations with their pilots and where that will end up with that operating group, and I'm sure our pilots are watching very closely what's happening at ASA. So the spillover question, I guess is what it has been for 30 years at SkyWest. It all relates to how we treat our pilot group, and my objective is to treat them fairly and to move on with a good relationship.

Okay. Great. Can I just ask one other question, Brad?

Sure.

On the RSTs that are out there, is that of interest to you, or are you kind of consolidating Mr. before you move forward? I mean, I know you've done some arrangements with Continental in the past, so maybe that's of the some interest, but I'm just kind of wondering what your thoughts are, and I know you probably can't tell me specifically what you're bidding on, but maybe just generally what your thoughts are with respect to those RFPs.

Okay. I can. I think it's a very good question, because we've take some phone calls from people just saying, look with the acquisition, you've probably got your hands full, the integration and all of that, you probably just need to kind of get settled on what you've just done. I mean it was a significant transaction, which it was, and all of that is true. But having said that, we are still actively and aggressively participating in the RFP process, and I think most of you know of the RFPs that are out in the market, and we are aggressively responding to those.

I will say given what we've just done, we certainly aren't interested in responding so aggressively that we -- that it compromises our current situation, so we will -- I guess as we've am as we done, be very careful and prudent in how we approach these things, with what we -- with the magnitude of what we've just done, we're certainly not at all motivated to go out and do something that we don't think makes sense, or at rates that we don't think makes sense. So within certain parameters of what we think makes sense from a global achievement of strategic achievements objectives at SkyWest, we are actively participating in those -- in that process and responding to RFPs..

Okay. Great. Thank you. I appreciate your help.

You're welcome.

Your next question comes from Mike Linenberg.

Yeah, hey, Brad, I just a clarification. You indicated that you have no fuel risks. What about some of the business that you to do, the prorate on some of the turboprops.

Thank you for the clarification. As soon as I Sid that, I winced a little bit, because we do have probably five or so percent of our activity that we do have at risk in the turboprop operation.

Okay, good. And then my second question is, I think United has been pretty open about how they have a lot of 50-seaters in their regional express fleet, and they're looking to bring in more 70-seaters, and I was just curious in your relationships with the -- or relationship with the manufacturing, what sort of flexibility to do you have to maybe swap 50-seaters for 70-seaters?

Well, the way you phrased the question relative to flexibility with manufacturers? Not good.

Okay.

I do think that if we found a way to place 50-seaters in noncurrent contracts or operations, whether in contracts or just other market opportunities that we might find or develop, I think they -- and again, I'm out here a little bit on a limb. I suspect, I don't know anything for certain. We don't have any contracts that say this and so I want to be very clear about that. I do suspect that what you said is correct, that our major partners would probably prefer a stronger mix of 70-seat equipment, and to the extent we could replace existing equipment. I think our partners probably would be very accepting in moving something 50-seaters to 70-seaters.

Uh-huh. Okay. And then last -- just a quick one. I know you've talked about operationally and financially you seem to be -- things are going as planned, or maybe even better than planned with the ASA acquisition, and I was just curious, maybe if more specifically, and maybe this is just bringing up some anecdotes. What, maybe, what positive surprises that you've seen as you've started to absorb the operation, and maybe even any negatives, things that you're starting to see that maybe are sort of coming out as a surprise though downside. Any additional color would be great.

Okay. First of all, I think sometimes I get accused of being a little too open and honest sometimes on these calls, to the extent where I think most of you know me well enough to know that if I knew -- if I had an idea of something to the downside, as you phrased it, on the downside, or the potential negative, I would tell you.

Okay.

And we really, honestly, we don't -- there's no boogiemen that have come out of the closets here. Everything really has gone very smooth. Now, in having said that, I mean we have some challenges. We have a -- on one hand an opportunity here to operate this company in way that we can not only maintain the trust and confidence of our SkyWest Airlines work force, but an opportunity to gain the trust and confidence here of the ASA work force by just all of the things that we would do to do that.

At the same time, we have a risk of not doing that, and maybe alienating work forces. We have the issues we've talked about with our crews and things. So I, I mean, that's certainly a challenge, but we just need to be focused, and as Ron said, regardless of whether we're union of nonunion and all of those things, it's just keeping our eye on the ball and doing the things that we're fundamentally principal to, and that is being fair with our employees and honest with our employees in everything that we do, whether we're union or nonunion. So just our total employees relations and gaining the trust and confidence of this now approximately 14,000 employee work force, I wouldn't put that in downside or negative. I would put it in opportunity category to really make a difference here, but I would put it in a challenge category.

And then having said that, as far as opportunity, I still see a lot of opportunity here, just in our ability to tweak and improve and optimize the total platform. Okay? Which we really haven't -- haven't really, I don't think, scratched the surface in a meaningful way. You immediately go after low-hanging fruit, and we're doing that, but then the opportunity here to really optimize this total broad large platform is just a big bucket of opportunity there that I still see as continuing upside.

Okay.

I don't know if Ron or Bryan have anything to add to that. I just -- that's probably all the more color I see to put on it.

Okay. No, thanks, I appreciate it, Brad.

You're welcome.

Ladies and gentlemen, we have reached the allotted time for questions and answer. Mr. Rich, are there any closing remarks?

If there are -- let's see. If there are another question or two in the queue, we'll respond to maybe one or two more, and if there are questions. In there aren't -- Are any more in the queue, operator?

No, sir.

Okay. Good. We've taken enough of your time then. As always, I really sincerely appreciate your interest in SkyWest, and with that, we'll go ahead and conclude the conference call. Thank you very much.

This concludes today's conference call. You may now disconnect.