Perth based Skywest says that it expects its profit for the year ending June 30 to come in lower than the previous year as a result of “significantly abnormal” aircraft cross hire charges and startup costs for its wet lease operations for Virgin Australia.
Although stating that it did not as a matter of policy release profit guidance, it expects net profit after tax to come in at S$2m (A$1.54m), while earnings before interest, tax, depreciation and amortisation should come in at S$47m (A$36m).
Skywest says that during the second half of the financial year it incurred S$10m (A$7.7m) in cross hire charges, compared to S$4m (A$3m) the previous year, while one-off charges charges associated with the start of its ATR 72 operations for Virgin Australia under its Australian Regional Airline Network (ARAN) agreement also would drive down its bottom line.
While profit is expected to be lower due to those one-off charges, Skywest says that the start of the ARAN arrangement in October last year should see its revenue for the full year grow by 35 per cent to S$300m (A$231m).
The company expects the ARAN will continue to grow over the coming year and contribute more revenue, with a further six ATR 72s to be added to the fleet by June 2013.
The airline also said that it expects revenue from charter operations this year to be up by 15 per cent, despite of losing major contracts with Fortescue Metals Group and Rio Tinto’s Argyle Diamond mine in recent months. Skywest added that it “continues to receive interest from current and potential future customers for additional charter work.”