SkyWest Loses Continental Contract

SkyWest Loses Continental Contract

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SALT LAKE CITY (AP) -- SkyWest Airlines has lost its contract with Continental Airlines to provide regional connections in Texas, the St. George-based regional carrier said.

By this spring, Virginia-based Colgan Air will take over SkyWest-operated Continental Connection routes that link Houston with eight Texas cities.

About 200 SkyWest employees, most of them in Texas, will be affected.

Some have been offered transfers within SkyWest, and Colgan plans to hire SkyWest's Texas customer service personnel, said Steven L. Hart, SkyWest vice president of market development.

Five turboprops will be put up for sale, but because SkyWest is taking delivery of several new jets this year, layoffs of crews probably will not be necessary, Hart said Monday. "The timing is rather ideal. Those crews will be absorbed back into our growth."

Continental spokesman Dave Messing said Colgan offers larger aircraft than SkyWest's 30-passenger turboprops and also is willing to add seven 50-passenger aircraft to meet Continental's needs.

"Colgan's 34-seat Saab aircraft is going to give us more revenue opportunity on those routes with the same number of departures," Messing said.

Hart said Texas' hot, humid climate and lengthy routes pushed SkyWest's Brasilia EMB-120 to its limit. Often the 30-passenger Brasilias were forced to fly with seats empty to carry adequate fuel.

"The Brasilia has not been well-suited to the Texas marketplace," Hart said. "In the summer operations -- with the hot temperatures and longer stage lengths -- we would find ourselves weight-restricted. That's not an ideal situation."

Hart said the loss of the Continental contract is not a major blow for SkyWest because it only represented about 2 percent of the carrier's flight capacity. The rest of SkyWest's business comes from agreements it has to act as a regional carrier for Delta and United airlines.

SkyWest shares closed Monday down 55 cents at $16.05. The company's loss of the Continental contract had not been formally announced by the close of trading on the Nasdaq exchange.

(Copyright 2005 by The Associated Press. All Rights Reserved.)

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