Hello and welcome to the SkyWest Inc. first quarter 2009 earnings results. All participants will be in listen-only mode. There will be an opportunity for you to ask questions at the end of today’s presentation. (Operator Instructions) Now, I would like to turn the conference over to Bradford Rich, Executive Vice President and CFO. Mr. Rich

Thank you, Amy. Thanks to all of you for joining us this morning for a discussion of our first quarter 2009 results. Before we being, I just like to make some introductions of those who will be participating on the call this morning. We have Chip Childs, the President and Chief Operating Officer of SkyWest Airlines. Unfortunately, Brad Holt, President of Atlantic Southeast Airlines who normally participates with us is traveling this morning and not able to join the call. I also have Mike Kraupp, Vice President of Finance and Treasurer, as well as other members of our staff here at SkyWest headquarters this morning. Before we get into a discussion of the results, I’ve asked Mike Kraupp to read our forward-looking statement.

In addition to historical information, this release and conference call may contain forward-looking statements. SkyWest may from time-to-time make written or oral forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements encompass SkyWest’s beliefs, expectations, hopes or intentions regarding future events. Words such as expects, intends, believes, anticipates, should, likely and similar expressions identify forward-looking statements. All forward-looking statements included in this release and conference call are made as of the date hereof and are based on the information available to SkyWest as of such date. SkyWest assumes no obligation 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.

Okay. Thank you, Mike. Okay, this morning we will use the release as an outline and kind of a text for our discussion, the press release that went out this morning as well as the press release that went out April 15, 2009 where we kind of pre-released the results for the quarter. Now, for two different reasons; one, because we had put the April 15 release out, as well as the fact that we are trying to be sensitive to people’s time, we are going to change really the format of our discussion a little bit this morning from what we have historically done, rather than just taking the press releases and kind of reading through them and discussing them that way. I’d really like to turn our attention really to the issues themselves and just discuss the issues. Again, speaking pretty closely to the context and the text that’s in the releases, but doing it just by the way of more of a discussion and then leaving more time for question-and-answer, so that we make sure that we are discussing the topics and the issues that you would like to discuss. First of all, in referring to or referencing the release this morning, we reported operating revenues of $672.6 million, which is obviously down significantly from the $868 million that we released in the first quarter of last year and I’ll discuss that specifically in just a moment. We also released net income of $9.4 million which is $0.16 and fully diluted earnings per share, relative to $29.1 million of net income, the $0.47 and diluted earnings per share for the same period last year. So, first of all let me just discuss and I’ll do this fairly generally and then if you want to drill into more…

(Operator Instructions) Our first question comes from Mike Linenberg of Bank of America Merrill Lynch. Alex Louanzen [Ph] - Bank of America Merrill Lynch: Hey, everyone this is actually Alex Louanzen [Ph] on behalf of Mike. I just had a quick question regarding your credit facility. I guess it had expired at the end of the March quarter, the $25 million. Was that renewed, can we get any update on that please?

Yes, it has been renewed. Alex Louanzen [Ph] - Bank of America Merrill Lynch: Okay, and then the ASM production, it looks like it was up a little bit from your prior expectations. Can you just kind of go through, the reasons for the increase there?

Okay, now are you talking about the first quarter’s actual results or the ASM estimates that I just gave you? Alex Louanzen [Ph] - Bank of America Merrill Lynch: The ones that you just gave for the remainder of the year

Yes, so I think it’s really three issues. Generally we’re seeing a slight improvement in the schedules relative to the minimum. So, in the prior estimates we gave, seeing that in most cases, particularly in the Delta system, we were really being taken right to the minimums required in the contract, that’s pretty much what we had estimated and we have seen some slight improvements in that. To add to that, now that we’re seeing, we now have a better look at the schedules for the ten additional ASA 900s that are coming in the system; as well as the additional seven CRJ-200s that we have scheduled into the prorate operation that I just referenced. So, when you combine those three issues, that’s what’s driving the slight improvement in the ASM estimates. Alex Louanzen [Ph] - Bank of America Merrill Lynch: Okay great, thanks very much.

You’re welcome.

Our next question on comes from Duane Pfenningwerth of Raymond James.

Hi, thanks. Good morning. Just regarding your costs, I guess controllable costs in the first quarter, I don’t know if you broke it out explicitly, but on costs that you can control, what’s the magnitude of that and given that potential margin improvement, how long before you actually take some steps? How long could it take for you to actually get the business to the right size, more inline with the level of business that you’re seeing today?

Okay, a very good question. Obviously, if you just looked at our non-fuel CASM, I think the numbers were up about 4.1% ex fuel. It’s up from what, $9.07 to $10.01, that’s a 4.1% increase. When you put that in context with the 8.2% year-over-year reduction in block hours produced and I think the number actually is 8% reduction in ASMs. We’ve had to do some management off the controllable costs already, to keep the non-fuel CASM increase below the reduction and capacity, but admittedly there are still some controllable costs relative to both infrastructure overhead and some of the costs with our labor, which everybody kind of assumes that, particularly crew costs to use as an example are variable, but yet once you have crew members and the way that the industry pays crews, we have crews and pay crews really regardless of the exact level of flying. So, all I can tell you is that we all recognize and are very focused that we have to bring back into balance, both our infrastructure costs and our overhead, as well as our overall labor, both in direct labor as well as our overhead labor to appropriately size it to our projections of ongoing capacity. Okay, now your question is I think what are we doing specifically and when will we see the results? So, the things that we can do specifically; I think you saw and announced furlough of ASA pilots that was announced maybe a quarter ago and that’s happened and should help us be more inline with our crews at ASA specifically. Add to that the ten additional aero planes that are coming to ASA and that should get us more appropriately sized and so we should see the impact of that very soon and starting in second the second quarter. On the SkyWest Airlines side, I mean certainly that operation has not been immune to the capacity reductions, the schedule reductions. We’re not doing things as aggressively as furlough and that sort of thing. Under Chip’s direction, they have implemented some very specific things relative to voluntarily leaves, those sorts of things to try to get that part of the workforce more inline. Then all I can say is that we are very focused and I know that’s a kind of a warm and fuzzy abstract kind of statement, but we are very focused on the cost structure and evaluating everything we can evaluate to make sure that we are taking the appropriate and necessary steps to reduce costs appropriately, given the size of the operation today. Now, admittedly as we’re doing some of that, some of that will take till late second quarter, third quarter to see some of the results, but hopefully a combination of that with some of the increases that we just talked about to the ASM production, at least from where we’ve been in the last two quarters, should help all of that come back inline.

That’s helpful; and one follow-up, just regarding the rate adjustment in the first quarter, I guess what’s behind that rate adjustment? Is that essentially you comping yourself off of the entire grouping, including both Northwest and Delta carriers or can you give us any detail behind how you got to the magnitude of the $5 million adjustment? Thanks.

Well, it is basically what you just said. I mean, so the provision calls for us to match the weighted average of the portfolio and that number is taking us pretty close to the weighted average of the whole portfolio, including the Northwest carriers.

Okay, so what’s left to negotiate?

Well, as in all of these things, the actual calculations and how you get an accurate and fair representation of the other carriers’ costs. How you allocate costs? When you throw in a batch of owned carriers, what’s flowing through their cost structure and what’s not? Okay, it’s getting handle on all of that, before you actually settle and agree on a new rate. It’s a process of gaining access to enough information for us to do diligence on it, to substantiate the data.

Very helpful, thanks.

You’re welcome.

(Operator Instructions) Our next question comes from Bob McAdoo at Avondale Partners.

Hi, guys.

Hi, Bob.

On the prorate flying, what’s the effective start date and are all seven airplanes up and running or when did you start it or when will it start?

Okay, I’ll let Chip talk about that.

All of these aircraft went to service on, I believe it’s June 4 and they’re all ready to go. We’re obviously utilizing them as some spares right now, but June 4 is the date and the markets which we’ve analyzed are ones that we have in some respects been flying under contract with United. So, we have some pretty good data and we’d say that we are relatively optimistic about what that’s going to perform.

Could you give us any color on just a couple of examples of what a couple of these markets might be?

I think that we can probably get that to you more in detail a little bit later. There’s a fair amount that’s primarily out of the Chicago region. There are specific markets we can give for you at a later time.

Okay, but they’re Chicago based markets and you say they include some or they’ve actually cutback some of their own contract flying and basically substitute this one. Is that conceptually what’s going on there?

I don’t know that they necessarily cutback their entire portfolio. I think it’s helped adjusting this and initially in June it helps adjust some of the summer flying among carriers. So many other carriers may have some timing events with maintenance; they have to put airplanes down. So, these airplanes are going back into some of the contract markets that we have and then some of our other contract aero planes are going to back fill some of the other carriers. Some is temporary, some is permanent. To be honest with you, we really don’t get into a lot of that with United. We’re happy to have the work and continue to deliver a great product for them.

Is this something they’ve asked you to do for 90 days or…?

No, this is indefinitely, just like the rest of our pro-rate flying. We continue to evaluate the markets, as long as it works from a cost.

As long as you’re happy with it, you’re welcome to do it kind of thing?

As long as both us of are happy with results, there’s no time limit on it.

I assume, since its pro-rate flying, in these markets you’re going to be their only presence. It’s not like you’re going to be flying pro-rate against their contract right?

Correct, that’s why these were selected so there wasn’t any conflict in any of those situations.

Okay. I know you guys have had a dose of pro-rate flying that you’ve had over the last several years, but that’s all Embraer stuff, right; you’ve never had CRJ contract flying before; is that correct?

Well, we can’t say never. I mean long time ago, back and then…

I mean when the planes were first coming out, yes.

Yes, we did then with RJ and then back all of our RJ operations a long time ago started under pro-rate. So, we’re going back to those days with the RJ. We’ve got the models in place where we feel pretty confident about how it’s going to work, but yes, this is a new fleet type to put under pro-rate.

Okay, and let me make sure I understood you. On these new pro-rate markets that you’re going into, did you say you had impacted times, had flown some of these before?

Correct. Under contract, correct. One of the reasons we’re really quite optimistic about this is that we’re not taking these airplanes. Number one; we’re not doing it as independent flying which none of us would think was a good idea and number two, this is not just brand new start up and kind of testing out of new markets. The operation isn’t just a complete startup of brand new markets? There is some market developments in the mix, but it’s also got some already proven developed markets.

Okay, are these in the schedule already, for sale for June?

Yes, they are.

Okay, so if we were to go out and look at the schedule for June and try to back into markets that you’re flying in Chicago and then go back and look at history at some of the those markets, then maybe we could try to get a sense of what some of those were?

No, because a lot of these we’ve been flying for a while. We’re just switching the model out and then some of our aero planes are going into some other contract markets. So, we’ll get you the list of new pro-rate markets that we’re going to be flying, because you wouldn’t be able to go out and dig that out.

You can’t back into it that way. Alright, whatever help you can get that would be great.

Okay, excellent.

Okay. Thanks.

Our next question comes from Helaine Becker [Ph] at (Inaudible).

Thank you very much operator. Thank you for taking my questions.

You’re welcome, Helaine.

So, I just have one that is very mundane. The tax rate of 28.8% versus 34.8%, so going forward for the rest of the year, how should we be thinking about that?

Yes, it will be back to more of a normal run rate. This time we had a little bit of the releases to some FIN48 tax reserves that drove it artificially low. It will be back to more of a normal expected run rate.

Okay and then I know you talked about in your first comments, but I think you said you commented about the change in cost driven by the pass-through items. So if we are to look at your revenue and say well the change in revenue is just under $200 million, can you say what percent of that is pass-through or is that all pass-through?

Okay, so I mean the total reduction, well 164.5 of it was all just the changes in pass through costs and of that, 147 is fuel. I mean the remainder of it generally is due to the 8.2% reduction in block hours.

Okay. I was just trying to get to the breakdown on that. Okay good.

It is kind of sobering. I mean it really drives homes even in our financials, the significance of that run-up in fuel.

Right, right. No absolutely and then so on the pro-rate flying, I don’t want to beat a dead horse here, but I do want to understand what we should think about. So, are you responsible on that for fuel then? Will you be responsible for those costs?

Let me give just very quickly a little bit more perspective about our pro-rate operation. I mean our prorate operation in the first quarter of last year lost about $6 million in pretax. Our total prorate system this time was basically within $1 million of breaking even, so about $1 million pretax loss and of that, then that total loss was within two markets. Now those two markets are markets that we have chosen to continue flying at least for now, because it involves flow of aero planes and things back to maintenance and those sorts of things. So if you look at it, it comes from basically $6 million pretax loss to basically breakeven with the exception of something we have consciously done for flow purposes. Our prorate system is improving. Now we have an opportunity to put some idle 200s into some markets where we do think it’s kind of a unique situation. We’re pretty optimistic about this. At the same time, we will continue to evaluate alternatives for 200s; whether it’s subleasing airplanes, selling airplanes, all of those things at the same time and look at those other alternatives that are created, relative to the productivity of the pro-rate flying. So, I mean that’s kind of how we’re looking at this.

Okay. I mean I personally like the pro-rate model as you know better than the other model; that I understand obviously the fixed contract model and while it makes some sense, it’s just not my personal preference if that matters.

I appreciate your optimism about prorate flying.

Yes, I would rather have you in control of your inventory, because you’re in control of the asset versus having somebody else in control of your inventory and telling you what your margin should be, but I understand why the model works the way it does. Anyway, so with that, thank you very much, you answered all of my questions and I really appreciate the time.

At this time we show no further questions. I would like to turn the conference back over to management for any closing remarks.

Okay, given that there are no more questions, I want to just conclude with an expression of thanks and appreciation for your time and your interest in SkyWest. As always, we’d be remiss if we didn’t take an opportunity. We know that the purpose of the call is basically to have a discussion with the investment and financial community. We also recognize that our employees are paying very close attention to these types of things and these are difficult and challenging times, we all acknowledge; and without the group of people that we have on the frontlines and working at this everyday, which is our employee group, we couldn’t be doing what we’re doing and we think we’re doing it better than anybody in the industry and we’re grateful and appreciative to all of our employees. With that, again, we thank you for your time and interest and we’ll go ahead and conclude. Thank you.

The conference is now concluded. Thank you for attending today’s presentation. You may now disconnect.