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To: Dale Baker who wrote (30813)8/15/2002 2:35:52 AM
From: Dale BakerRead Replies (1) of 118717
 
Some facts about SKYW's UAL relationship (surely the cause of the latest panic drop):

Let's look at the real numbers. First, only 1/3 of SKYW's business is UAL-driven, according to the latest 10-Q:

"As of June 30, 2002, approximately 68% of SkyWest’s capacity was under the Delta code and 32% was under the United code. "

Now, total accounts receivable are $35 million compared to $350 million in cash and short-term investments. If 1/3 of the A/R is UAL, it is less than $12 million, or less than 4% of total cash and investments.

In the worst case, UAL would continue to operate and pay its suppliers at least part of what is owed. Also, future SKYW flights would probably be on a cash and carry basis authorized by a bankruptcy court.

So what is the danger? SKYW may have to write off a few million in receivables compared to the $90 million in profits they expect to make this year.

Those are the facts.
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