ST. GEORGE, Utah, Sept. 29, 2020 /PRNewswire/ -- SkyWest, Inc.
(NASDAQ: SKYW) ("SkyWest") today announced that it and its
wholly-owned subsidiary SkyWest Airlines, Inc. have entered into a
five-year Loan and Guarantee Agreement with the U.S. Treasury
Department which provides SkyWest Airlines with a secured
term loan facility to borrow up to $573
million under the Coronavirus Aid, Relief, and Economic
Security Act (CARES Act). On September 29,
2020, upon entry into the Loan Agreement, SkyWest Airlines
borrowed $60 million under the
facility and has until March 26,
2021 to determine if it will borrow additional amounts in up
to two subsequent borrowings.
The interest rate under the secured term loan facility is LIBOR
plus 3.0% with no amortization. In consideration for the loan,
SkyWest is obligated to issue warrants to the U.S. Treasury
Department to purchase shares of common stock based on, and in
connection with, amounts drawn under the secured term loan
facility. In connection with the initial $60
million draw under the facility, SkyWest issued warrants to
purchase 211,416 shares of common stock at an exercise price of
$28.38 per share.
The Loan and Guarantee Agreement also includes certain
restrictions, including restrictions on the payment of dividends
and the repurchase of SkyWest shares. The Secured Loan is
collateralized by aircraft engines and aircraft parts.
About SkyWest
SkyWest, Inc. is the holding company for SkyWest Airlines and
SkyWest Leasing, an aircraft leasing company. SkyWest Airlines has
a fleet of nearly 500 aircraft connecting passengers to over 250
destinations throughout North
America. SkyWest Airlines operates through partnerships with
United Airlines, Delta Air Lines, American Airlines and Alaska
Airlines carrying more than 43 million passengers in 2019.
Forward Looking-Statements
In addition to historical information, this release contains
forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995. Words such as
"forecasts," "expects," "intends," "believes," "anticipates,"
"estimates," "should," "likely" and similar expressions identify
forward-looking statements. Such statements include, but are not
limited to, statements about the expected terms, timing and
benefits of the secured term loan facility under the CARES
Act, the impact of the COVID-19 outbreak on SkyWest's business,
financial condition and results of operations, as well as SkyWest's
future financial and operating results, plans, objectives,
expectations, estimates, intentions and outlook, and other
statements that are not historical facts. All forward-looking
statements included in this release are made as of the date hereof
and are based on information available to SkyWest as of such date.
SkyWest assumes no obligation to update any forward-looking
statements for any reason. Readers should note that many factors
could affect the future operating and financial results of SkyWest
and could cause actual results to vary materially from those
expressed in forward-looking statements set forth in this release.
These factors include, but are not limited to, uncertainties
regarding the impact of the secured term loan facility on SkyWest's
business and operations, the consequences of the COVID-19 outbreak
to economic conditions, the travel industry and our major partners
in general and the financial condition and operating results of
SkyWest in particular, the prospects of entering into agreements
with existing or other carriers to fly new aircraft, ongoing
negotiations between SkyWest and its major partners regarding their
contractual obligations, uncertainties regarding operation of new
aircraft, the ability to attract and retain qualified pilots, the
impact of regulatory issues such as pilot rest rules and
qualification requirements, and the ability to obtain aircraft
financing.
Actual operational and financial results of SkyWest will likely
also vary, and may vary materially, from those anticipated,
estimated, projected or expected for a number of other reasons,
including, in addition to those identified above: the existing
global COVID-19 pandemic and the outbreak of any other disease or
similar public health threat that affects travel demand or travel
behavior; the challenges of competing successfully in a highly
competitive and rapidly changing industry; developments associated
with fluctuations in the economy and the demand for air travel,
including related to the duration and impact of the COVID-19
pandemic, and related decreases in customer demand and spending;
the financial stability of SkyWest's major partners and any
potential impact of their financial condition on the operations of
SkyWest; fluctuations in flight schedules, which are determined by
the major partners for whom SkyWest conducts flight operations;
variations in market and economic conditions; significant aircraft
lease and debt commitments; estimated useful life of long-lived
assets, residual aircraft values and related impairment charges;
labor relations and costs; the impact of global instability;
rapidly fluctuating fuel costs, and potential fuel shortages; the
impact of weather-related or other natural disasters on air travel
and airline costs; aircraft deliveries; and other unanticipated
factors. Risk factors, cautionary statements and other conditions
which could cause SkyWest's actual results to differ materially
from management's current expectations are contained in SkyWest's
filings with the Securities and Exchange Commission, including its
most recent Annual Report on Form 10-K, Quarterly Reports on Form
10-Q and Current Reports on Form 8-K.
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SOURCE SkyWest, Inc.