St. George-based SkyWest Inc. on Wednesday reported a 10.3 percent decrease in net income for the second quarter, compared with the same period a year earlier, due to increased maintenance costs and ongoing disputes with other carriers with which SkyWest has operating agreements, including Delta Air Lines Inc.

SkyWest said second-quarter profits this year were $36.4 million, or 63 cents per share, compared with $40.6 million, or 62 cents per share, for the same period in 2007.

The airline's operating revenues in the second quarter of this year increased 11.2 percent to $950.8 million, compared with $855 million in the second quarter of 2007. SkyWest, in a news release, attributed the rise primarily to increased fuel-cost reimbursements by SkyWest's major partners.

SkyWest also reported a 13 percent drop in profit for the six months ended June 30. The company reported net income of $65.6 million, or $1.10 per share, for the first two quarters of this year, compared with $75.4 million, or $1.15 per share, for the same period last year. Operating revenues for the first two quarters of the year were $1.82 billion, an increase of 10.6 percent from the $1.64 billion in 2007.

The company attributed a 4.4 percent increase in operating expenses to increased maintenance costs.

SkyWest owns and operates SkyWest Airlines, as well as Atlanta-based Atlantic Southeast Airlines Inc. SkyWest Airlines operates as United Express, Delta Connection and Midwest Connect carriers under contractual agreements with United Airlines, Delta Air Lines and Midwest Airlines. Atlantic Southeast operates as a Delta Connection carrier under a contractual agreement with Delta Air Lines.

This past spring, Midwest announced restructuring plans and notified SkyWest. Midwest owes SkyWest $3.3 million, and because of Midwest's "uncertain financial position," SkyWest chose to record the $3.3 million as a reduction to revenue during the second quarter, according to SkyWest's news release.

Meanwhile, SkyWest and Delta this year sued one another over disputes about contract reimbursements relating to the two carriers' flight agreements. SkyWest sued Delta in February, claiming that Delta owed it $25 million after failing to reimburse it for one week's worth of unanticipated passenger expenses. Delta responded by suing SkyWest in March, contending that Atlantic Southeast and SkyWest breached their contract agreements with Delta by charging Delta for the unanticipated passenger expenses.

While those disputes are making their way through court, Delta has continued to withhold $32.5 million in funds that SkyWest believes it is owed, according to SkyWest's news release.

SkyWest's stock rose 17 cents Wednesday to close at $16.71. During the past year, the price has ranged from $10.84 to $29.50.

---

E-mail: jlee@desnews.com