SKYWEST INC, S-3/A, 2000-08-23

SKYWEST INC
S-3/A, 2000-08-23
AIR TRANSPORTATION, SCHEDULED

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<PAGE> 1

AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON AUGUST 23, 2000

REGISTRATION NO. 333-42508
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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AMENDMENT NO. 2

FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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SKYWEST, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

<TABLE>
<S> <C>
UTAH 87-0292166
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NUMBER)
</TABLE>

------------------------

BRADFORD R. RICH
EXECUTIVE VICE PRESIDENT,
CHIEF FINANCIAL OFFICER AND TREASURER
SKYWEST, INC.
444 SOUTH RIVER ROAD
ST. GEORGE, UTAH 84790
(435) 634-3000
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER,
INCLUDING AREA CODE, OF AGENT FOR SERVICE)
------------------------

COPIES TO:

<TABLE>
<S> <C>
BRIAN G. LLOYD, ESQ. JOHN J. KELLEY III, ESQ.
ERIC D. BAWDEN, ESQ. KING & SPALDING
PARR WADDOUPS BROWN GEE & LOVELESS 191 PEACHTREE STREET
185 SOUTH STATE STREET, SUITE 1300 ATLANTA, GEORGIA 30303-1763
SALT LAKE CITY, UTAH 84111 (404) 572-4600
(801) 532-7840
</TABLE>

APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
As soon as practicable after the effective date of this Registration Statement
as determined by market conditions.

If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box: [ ]

If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box: [ ]

If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering: [ ] __________

If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering: [ ]

If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box: [ ]

THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a),
MAY DETERMINE.

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<PAGE> 2

THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED.
THESE SECURITIES MAY NOT BE SOLD UNTIL THE REGISTRATION STATEMENT FILED
WITH THE SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS
PROSPECTUS IS NOT AN OFFER TO SELL THESE SECURITIES AND IT IS NOT
SOLICITING AN OFFER TO BUY THESE SECURITIES IN ANY STATE WHERE THE OFFER
OR SALE IS NOT PERMITTED.

SUBJECT TO COMPLETION, DATED AUGUST 23, 2000

PROSPECTUS

2,636,100 SHARES

SKYWEST LOGO

COMMON STOCK

------------------------

We are offering 2,500,000 shares of common stock of SkyWest, Inc. and the
selling stockholders are offering 136,100 shares of common stock. We will not
receive any proceeds from the sale of common stock by the selling stockholders.

Our common stock is quoted on the Nasdaq National Market under the symbol
"SKYW." On August 21, 2000, the closing price of our common stock, as reported
by the Nasdaq National Market, was $45.13 per share.

YOU SHOULD CONSIDER THE RISKS WHICH WE HAVE DESCRIBED IN "RISK FACTORS" ON PAGE
5 BEFORE DECIDING WHETHER TO INVEST IN SHARES OF OUR COMMON STOCK.
------------------------

<TABLE>
<CAPTION>
PER SHARE TOTAL
--------- -----
<S> <C> <C>
Public offering price....................................... $ $
Underwriting discount and commission........................
Proceeds, before expenses, to us............................
Proceeds to the selling stockholders........................
</TABLE>

------------------------

We have granted the underwriters a 30-day option to purchase up to 395,415
additional shares of common stock solely to cover over-allotments, if any. If
such option is exercised in full, the total public offering price will be
$ , the total underwriting discount will be $ , and the total
proceeds to us will be $ .

NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED UPON THE
ADEQUACY OR ACCURACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.

Raymond James & Associates, Inc., on behalf of the underwriters, expects to
deliver the shares to purchasers on or before , 2000.
------------------------

RAYMOND JAMES & ASSOCIATES, INC.

The date of this prospectus is , 2000
<PAGE> 3

[MAP DISPLAYING SKYWEST ROUTES]

SkyWest's fleet consists of the 30-passenger Embraer EMB-120 Brasilia
turboprop aircraft and the 50-passenger Canadair Regional Jet. Both equipment
types offer in-flight amenities such as snack and beverage service, lavatory and
overhead storage. SkyWest Airlines is a regional carrier with a fleet of 104
aircraft and 3,593 employees.

We operate as United Express(R) in Los Angeles, San Francisco,
Seattle/Tacoma and Portland and as The Delta Connection(R) in Salt Lake City
under code-sharing agreements with United Airlines and Delta Air Lines. We
provide scheduled air service to 63 cities in 13 western states and Canada.
United(R) and United Express(R) are trademarks of United Airlines, Inc.
Delta(R), Delta Connection(R) and The Delta Connection(R) are trademarks of
Delta Air Lines, Inc. All other trademarks and service marks appearing in this
prospectus are the property of their respective holders.

------------------------

IN CONNECTION WITH AN UNDERWRITTEN OFFERING, THE SEC RULES PERMIT THE
UNDERWRITERS TO ENGAGE IN TRANSACTIONS THAT STABILIZE THE PRICE OF OUR COMMON
STOCK. THESE TRANSACTIONS MAY INCLUDE PURCHASES FOR THE PURPOSE OF FIXING OR
MAINTAINING THE PRICE OF THE COMMON STOCK AT A LEVEL THAT IS HIGHER THAN THE
MARKET WOULD DICTATE IN THE ABSENCE OF SUCH TRANSACTIONS.
<PAGE> 4

PROSPECTUS SUMMARY

This summary does not contain all of the information that you should
consider before investing in our common stock. You should read this summary,
together with the entire prospectus, including Risk Factors, for important
information regarding our company and the common stock being sold in this
offering. Unless otherwise indicated, "we," "us," "our" and similar terms refer
to SkyWest, Inc. and our subsidiaries, and "SkyWest" refers to SkyWest Airlines,
Inc., our principal operating subsidiary.

SKYWEST, INC.

We operate SkyWest Airlines, a regional airline offering scheduled
passenger service with approximately 1,000 daily departures to 63 cities in 13
western states and Canada. All of our flights are operated as either United
Express or The Delta Connection under code-sharing arrangements with United
Airlines or Delta Air Lines. For the three months ended March 31, 2000, SkyWest
was the largest regional airline at the San Francisco International Airport
(100% of regional airline passengers), Salt Lake City International Airport (99%
of regional airline passengers) and Los Angeles International Airport (65% of
regional airline passengers). SkyWest offers a convenient schedule and frequent
flights designed to encourage connecting and local traffic. For 17 of the 63
airports that SkyWest serves, it is the only scheduled commercial air service.

SkyWest has been a code-sharing partner with United since 1997 and with
Delta since 1987. SkyWest's development of code-sharing relationships with
multiple major airlines enables us to reduce our reliance on a single major
airline partner and increase the stability of our operating results. For the
year ended March 31, 2000, 64% of SkyWest's operating revenues was derived from
United code-share service and 36% was derived from Delta code-share service.
Approximately 76% of SkyWest's current flights are structured as contract
flights. On contract flights, United or Delta controls scheduling, ticketing,
pricing and seat inventories, and SkyWest is compensated with a fixed fee for
each flight completed and an amount per passenger, and is eligible for
additional compensation if certain service quality levels are achieved. Also,
United and Delta, under contractual arrangements, have agreed to reimburse
SkyWest for the actual cost of fuel on all of SkyWest's contract flights. On
SkyWest-controlled flights, SkyWest controls scheduling, ticketing, pricing and
seat inventories, and shares revenues with United or Delta according to prorate
formulas for those SkyWest passengers connecting to a United- or Delta-operated
flight.

The following are the principal elements of our business strategy:

- Focus on Markets in the Western United States. We believe the market for
air travel in the western United States offers attractive opportunities
for long-term profitable growth for SkyWest. Generally, western air
corridors are less congested than comparable routes in the eastern United
States; longer stage lengths make air travel more attractive than
alternate forms of travel; many western cities are experiencing
significant population and economic growth; and mild year-round weather
is common in many of the markets in which SkyWest operates.

- Build Upon Relationships with Code-Sharing Partners. United is the
world's largest airline, and Delta is the world's fourth-largest airline.
SkyWest's significant recent growth in traffic and profitability are
partially attributable to the success of its code-share relationships
with United and Delta. At the same time, multiple code-sharing agreements
reduce SkyWest's reliance on a single major airline.

- Provide Excellent Customer Service. We strive for excellent customer
service in every aspect of our operations. For the year ended March 31,
2000, our on-time performance ratio was 93.5% and our flight completion
ratio was 98.6%. All aircraft in our fleet offer "cabin class" service,
including a stand-up cabin, overhead and underseat storage, lavatories,
and in-flight snack and beverage service.

1
<PAGE> 5

- Operate Limited Types of Aircraft. We operate two types of aircraft,
Embraer EMB-120 Brasilia turboprop aircraft ("Brasilia Turboprops") and
Canadair Regional Jets. By simplifying our fleet, we believe we gain
efficiencies in training, maintenance and flight operations.

- Emphasize Contract Flying. We believe our emphasis on fixed-fee contract
flying has reduced our exposure to fluctuations in fuel prices, fare
competition and passenger volumes. In the future, we anticipate that our
contract flying operations as a percentage of our total daily flights
will increase as additional United and Delta contract flights are added
to the SkyWest system.

- Foster Our Employees' Best Efforts. With our anticipated growth in
capacity, it is important that we encourage the best efforts of our
employees and minimize turnover in all positions. We have a number of
special employee compensation programs that we believe differentiate
SkyWest as an attractive place to work and build a career. We have never
had a work stoppage, and none of our employees are represented by a
union.

SkyWest's aircraft fleet consists of ninety-two 30-seat Brasilia
Turboprops, which, as of June 30, 2000, had an average age of 5.7 years, and
twelve 50-seat Canadair Regional Jets, which, as of June 30, 2000, had an
average age of 5.0 years. In order to accommodate our expanding operations, we
have placed a firm order to acquire an additional 54 Canadair Regional Jets over
the next four years and a conditional order to acquire an additional 40 Canadair
Regional Jets. If we acquire all such 94 aircraft, we will also be eligible to
exercise options to acquire an additional 155 Canadair Regional Jets, 95 of
which have been assigned scheduled delivery dates through 2005, and the balance
of which have unspecified delivery dates.

Our executive offices are located at 444 South River Road, St. George, Utah
84790. Our telephone number at that location is (435) 634-3000 and our web site
address is www.skywest.com. The information on our web site is not part of this
prospectus.

GROWTH OPPORTUNITIES

During the five fiscal years ended March 31, 2000, our total operating
revenues expanded at an annual growth rate of 20.8%, and we increased the number
of daily flights from approximately 550 in 1995 to approximately 1,000 in 2000.
All of our growth during the five-year period was internally generated. We have
not made any material business acquisitions. We believe that we are
well-positioned for continued growth for several reasons, including the
following:

- 54 New Canadair Regional Jets Under Contract. We have placed firm orders
for 54 additional Canadair Regional Jets to be delivered between
September 2000 and October 2003. We have contracts with Delta covering
our operation of 34 of such Canadair Regional Jets on a fixed-fee basis,
and we have contracts with United covering our operation of an additional
ten of such Canadair Regional Jets on a fixed-fee basis. The assignment
of the remaining ten Canadair Regional Jets that are under firm orders
will be determined upon United's completion of pending labor negotiations
with its pilots and modification of contractual limitations on the number
of regional jets that may be operated by United code-sharing partners.

- 40 Additional Canadair Regional Jets Under a Conditional Order and
Additional Opportunities for Placement. We have placed a conditional
order (which currently expires in January 2001) to acquire an additional
40 Canadair Regional Jets with delivery dates scheduled between March
2002 and December 2004. Although we do not have agreements with United or
Delta with respect to the placement of such Canadair Regional Jets, we
believe that there are numerous opportunities for expansion of our
relationship with both carriers. These opportunities include:

- West Coast for United. United does not currently operate any regional
jets from the Los Angeles, San Francisco, Seattle/Tacoma or Portland
markets. We expect United to deploy most of the 20 Canadair Regional
Jets we have designated for United service, and possibly additional
Canadair Regional Jets, to medium and longer-distance, low-volume
markets from such airports.

2
<PAGE> 6

- Denver for United. We do not currently operate out of Denver
International Airport, but were recently selected by United to commence
Denver operations in October 2000 with two Canadair Regional Jets. In
May 2000, United announced that it will build a new $100 million
regional aircraft terminal in Denver. Construction of the facility is
scheduled to begin in 2001, and the terminal is expected to feature up
to 36 regional aircraft gates. We believe that United's Denver hub could
support up to 100 regional jets over the next several years. Because
SkyWest is the only United Express carrier located west of Denver, we
believe SkyWest is well-positioned to operate as United Express flying
westward out of Denver.

- Intermountain Flights for Delta. During 1999, Delta replaced its service
to six markets with our Canadair Regional Jets as part of its
rationalization process at Salt Lake City. Delta's rationalization
process involves increasing the number of longer-haul east/west Delta
flights into Salt Lake City and the transitioning of its regional
flights to SkyWest. With its smaller aircraft, SkyWest can often
substitute several flights for each Delta flight, providing increased
frequency of service at a lower overall cost. As such rationalization
continues, we believe that Delta could substitute our Canadair Regional
Jets for many of its flights between Salt Lake City and other cities.
Delta currently has no system-wide limitations on the number of regional
jets operated by its code-sharing partners.

THE OFFERING

The following information, which is based on 24,858,904 shares outstanding
as of August 21, 2000, assumes that the underwriters do not exercise their
over-allotment option to purchase 395,415 additional shares. Please see
"Underwriting" for more information concerning this option.

Common stock offered by SkyWest, Inc. ........ 2,500,000 shares

Common stock offered by the selling
stockholders.................................. 136,100 shares

Common stock outstanding after the
offering(1)................................... 27,358,904 shares

Use of proceeds............................... For expansion of our
operations, including the
acquisition of additional
aircraft and related spare
parts and support equipment,
and for general corporate
purposes. We will not receive
any of the proceeds from the
sale of shares of common stock
by the selling stockholders.
See "Use of Proceeds" for more
information concerning our
proposed use of proceeds.

Nasdaq National Market symbol................. "SKYW"
---------------

(1) Excludes 1,547,316 shares issuable upon exercise of outstanding stock
options as of August 21, 2000.

RISK FACTORS

See "Risk Factors" beginning on page 5 for a discussion of certain factors
that should be considered by prospective purchasers of our common stock.

3
<PAGE> 7

SUMMARY CONSOLIDATED FINANCIAL AND OPERATING DATA

<TABLE>
<CAPTION>
THREE MONTHS ENDED
FISCAL YEAR ENDED MARCH 31, JUNE 30,
-------------------------------------------------------------- -----------------------
1996 1997 1998 1999 2000 1999 2000
---------- ---------- ---------- ---------- ---------- ---------- ----------
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C> <C> <C> <C>
CONSOLIDATED STATEMENTS OF INCOME
DATA(1):
Operating revenues................. $ 212,483 $ 245,766 $ 266,135 $ 388,626 $ 474,778 $ 111,562 $ 130,387
Operating income................... 5,636 16,025 32,819 64,305 86,680 20,476 25,174
Net income......................... 4,366 10,111 21,944 41,835 57,104 13,581 16,547
Net income per common share:
Basic............................ $ 0.21 $ 0.50 $ 1.06 $ 1.73 $ 2.32 $ 0.55 $ 0.67
Diluted.......................... $ 0.21 $ 0.50 $ 1.04 $ 1.69 $ 2.29 $ 0.55 $ 0.65
Dividends declared per common
share............................ $ 0.13 $ 0.12 $ 0.10 $ 0.12 $ 0.13 $ 0.03 $ 0.04
OTHER FINANCIAL DATA:
EBITDA(2).......................... $ 24,827 $ 38,388 $ 57,360 $ 95,747 $ 125,126 $ 29,408 $ 35,767
EBITDAR(2)......................... 53,094 70,378 91,061 143,721 179,399 42,629 49,691
Cash flows from (used by):
Operating activities............. 26,864 31,971 48,407 78,006 86,499 18,401 40,546
Investing activities............. (50,090) (11,627) (15,224) (181,480) (105,328) (41,741) (43,068)
Financing activities............. 20,339 (7,087) 68,803 15,939 (8,864) (2,894) 12,729
AIRLINE OPERATING DATA(3):
Passengers carried................. 2,340,366 2,656,602 2,989,062 4,900,921 5,503,290 1,365,706 1,401,113
Revenue passenger miles (000s)..... 617,136 717,322 745,386 1,015,872 1,196,680 290,590 319,830
Available seat miles (000s)........ 1,254,334 1,413,170 1,463,975 1,844,123 2,165,380 525,104 565,409
Passenger load factor.............. 49.2% 50.8% 50.9% 55.1% 55.3% 55.3% 56.6%
Breakeven load factor.............. 48.4% 47.9% 45.0% 46.3% 45.5% 45.4% 45.9%
Yield per revenue passenger mile... 33.2c 33.3c 34.8c 37.5c 39.0c 37.8c 40.1c
Revenue per available seat mile.... 16.9c 17.3c 18.1c 21.0c 21.8c 21.1c 23.0c
Cost per available seat mile....... 16.6c 16.3c 16.0c 17.6c 18.0c 17.4c 18.6c
Average passenger trip length
(miles).......................... 264 270 249 207 217 213 228
Number of aircraft (end of period):
Canadair Regional Jet............ 10 10 10 11 11 11 12
Embraer Brasilia Turboprop....... 35 50 50 88 92 89 92
Fairchild Metroliner III......... 18 -- -- -- -- -- --
---------- ---------- ---------- ---------- ---------- ---------- ----------
Total aircraft................. 63 60 60 99 103 100 104
========== ========== ========== ========== ========== ========== ==========
</TABLE>

<TABLE>
<CAPTION>
AS OF JUNE 30, 2000
--------------------------
ACTUAL AS ADJUSTED(4)
-------- --------------
<S> <C> <C>
CONSOLIDATED BALANCE SHEET DATA:
Cash and marketable securities............................ $189,675 $296,472
Working capital........................................... 160,692 267,489
Property and equipment, net............................... 260,734 260,734
Total assets.............................................. 515,260 622,057
Long-term debt, including current maturities(5)........... 74,043 74,043
Stockholders' equity...................................... 328,324 435,121
</TABLE>

---------------
(1) Reflects the reclassification of consolidated statements of income data to
reflect the operations of Scenic Airlines, Inc., a subsidiary we sold in
1999 which provided sight-seeing tours of the Grand Canyon area, as
discontinued operations.

(2) EBITDA represents earnings before interest expense, income taxes,
depreciation and amortization. EBITDAR represents earnings before interest
expense, income taxes, depreciation, amortization and rental expense. EBITDA
and EBITDAR are widely accepted financial indicators of a company's ability
to incur and service debt. Neither EBITDA nor EBITDAR should, however, be
considered in isolation, as a substitute for net income or cash flow
prepared in accordance with generally accepted accounting principles or as a
measure of a company's profitability or liquidity. For the fiscal year ended
March 31, 1996, EBITDA and EBITDAR data have not been reduced to reflect
$6.2 million of fleet restructuring and transition expenses.

(3) Excludes the operations of Scenic Airlines, Inc., a subsidiary we sold in
1999, and National Parks Transportation, Inc., a subsidiary we sold on July
21, 2000, which operates a rental car business serving small regional
airports.

(4) Adjusted to reflect the sale of 2,500,000 shares we are offering hereby at
an assumed price of $45.13 per share and the application of the estimated
net proceeds therefrom.

(5) At June 30, 2000, 82 of the aircraft operated by SkyWest were financed
through operating leases. In addition to our indebtedness, we had $554.2
million of mandatory future payments under operating leases, primarily for
aircraft and ground facilities. At an 8% discount factor, the present value
of these obligations would be equal to approximately $365.5 million at June
30, 2000.

4
<PAGE> 8

RISK FACTORS

Before you invest in the common stock offered with this prospectus, you
should be aware that such investment involves a high degree of risk, including
those risks described below. You should consider carefully these risk factors,
together with all of the other information included in this prospectus, before
you decide to purchase any shares of our common stock. Additional risks and
uncertainties not presently known to us or that we currently do not deem
material may also impair our business operations. If any of the risks we
describe below occur, or if any unforeseen risk develops, our operating results
may suffer, our financial condition may deteriorate, the trading price of our
common stock may decline and you may lose all or part of your investment.

This prospectus contains various "forward-looking statements" within the
meaning of Section 27A of the Securities Act of 1933, as amended, and Section
21E of the Securities Exchange Act of 1934, as amended. Such statements can be
identified by the use of the forward-looking words "anticipate," "estimate,"
"project," "likely," "believe," "intend," "expect," "hope" or similar words.
These statements discuss future expectations, contain projections regarding
future developments, operations or financial conditions, or state other
forward-looking information. When considering such forward-looking statements,
you should keep in mind the risks noted in this "Risk Factors" section and other
cautionary statements throughout this prospectus, any prospectus supplement, and
our periodic filings with the SEC that are incorporated by reference. You should
also keep in mind that all forward-looking statements are based on our existing
beliefs about present and future events outside of our control and on
assumptions that may prove to be incorrect. If one or more risks identified in
this prospectus, a prospectus supplement, or any applicable filings
materializes, or any other underlying assumptions prove incorrect, our actual
results may vary materially from those anticipated, estimated, projected or
intended.

RISKS RELATED TO OUR OPERATIONS

WE ARE DEPENDENT ON OUR CODE-SHARING RELATIONSHIPS WITH UNITED AND DELTA.

Termination of Relationship. We depend on relationships created by
code-sharing agreements with United and Delta for a substantial portion of our
business. Our code-sharing agreement with United terminates on May 31, 2008.
Nevertheless, the United code-sharing agreement is subject to termination by
United upon 180 days' prior notice for any or no reason. The term of the Delta
code-sharing agreement continues until June 20, 2010, but is subject to
termination in various circumstances including 180 days' notice by either party
for any or no reason. Any material modification to, or termination of, our code-
sharing agreements with United or Delta could have a material adverse effect on
our operations and the price of our common stock. Delta Air Lines has adopted a
policy of orderly monetization of minority ownership positions it holds in
various companies. Consistent with this policy, Delta has already sold all or
portions of its stakes in at least three other travel-related businesses. Delta
has advised us that it may in the future consider the sale of all or a portion
of its 3,107,798 shares of common stock in our company. Delta's stockholdings in
our company may serve as a disincentive for Delta to terminate its code-sharing
relationship with SkyWest or take other actions adverse to SkyWest. If Delta
significantly reduces or completely liquidates its stock ownership in our
company, Delta may be more likely to take actions, including terminating the
code-sharing agreement, which would have an adverse effect on our share price.

Direct Operation of Regional Jets by Majors. Our code-sharing relationships
depend on major airlines like United and Delta electing to contract with us
instead of purchasing and operating their own regional jets. However, these
major airlines possess the resources to acquire and operate their own regional
jets instead of entering into contracts with us. For example, American Airlines
has acquired many regional jets. We have no guarantee that in the future our
code-sharing partners will choose to enter into contracts with us instead of
purchasing their own regional jets or entering into relationships with competing
regional airlines. They are not prohibited from doing so under our code-sharing
agreements. A decision by United or Delta to phase out contract-based
code-sharing relationships and instead acquire and operate their own regional
jets would have a material adverse effect on our business.

5
<PAGE> 9

Passenger Volume and Strength of Code-Sharing Partners. We are directly
affected by the financial and operational strength of our code-sharing partners.
If United and/or Delta were to experience a sustained downturn in passenger
volume or significantly reduce its ticket prices, our revenues would be
negatively affected. In addition, in the event of a decrease in the financial or
operational strength of one or both of our code-sharing partners, the respective
code-sharing partner may terminate its relationship with us with respect to some
or all of the flights we fly under its code. Any such event would have an
adverse effect on our operations and the price of our common stock.

OUR BUSINESS SUCCESS DEPENDS ON OUR PERFORMANCE IN A FEW HUB CITIES AND
ROUTES.

Our financial success is directly tied to the amount of air traffic flowing
through Los Angeles (34% of our flights), Salt Lake City (25% of our flights)
and San Francisco (21% of our flights). Any decrease in demand for regional
flights in any of these cities, any natural disaster significantly affecting air
travel to or from one of these cities or any political decision (such as the
imposition of regulations or taxes adverse to regional airlines) in any of these
cities may have a material adverse effect on our business operations and the
price of our common stock. There can be no assurance that we will maintain our
current market share in these cities, that the demand for air travel in these
cities will not diminish or that governing laws and regulations in these cities
will be favorable to us.

WE FLY AND DEPEND UPON A LIMITED NUMBER OF AIRCRAFT TYPES.

Our fleet consists of 92 Brasilia Turboprops and 12 Canadair Regional Jets.
During the fiscal year ended March 31, 2000, 71% of our available seat miles
(calculated by multiplying passenger seats available by miles flown) were
generated by Brasilia Turboprops and 29% were generated by Canadair Regional
Jets. Our operations could be materially adversely affected by, among other
factors:

- the failure or inability of Embraer-Empresa Brasileira de Aeronautica
S.A. (the manufacturer of the Brasilia Turboprops) or Bombardier, Inc.
(the manufacturer of the Canadair Regional Jets) to provide sufficient
aircraft, parts or related support services on a timely basis,

- the interruption of fleet service as a result of unscheduled or
unanticipated maintenance requirements for these aircraft,

- the issuance of FAA directives restricting or prohibiting the use of
Brasilia Turboprops or Canadair Regional Jets, or

- the adverse public perception of an aircraft type as a result of an
accident or other adverse publicity.

The risks associated with operating a limited number of aircraft types will
increase since we have decided to exclusively acquire Canadair Regional Jets in
our next 94 planned aircraft acquisitions.

NEGATIVE PERCEPTION OF SMALLER AIRCRAFT MAY ADVERSELY AFFECT OUR OPERATIONS
AND BUSINESS.

Many air travelers may perceive smaller, regional aircraft, like our
Brasilia Turboprops and Canadair Regional Jets, as unsafe, unstable or
uncomfortable in comparison to the larger aircraft primarily used by major
airline companies. The public's refusal to fly in the types of aircraft that we
operate could cause us to lose our code-sharing agreements and could adversely
affect our operations and the price of our common stock.

THE LIMITED SIZE OF OUR FLEET MAY BE A DISADVANTAGE.

We have substantially fewer aircraft and operate on substantially fewer
routes than many of our current or potential competitors. Our ability to compete
effectively with larger carriers may be materially and adversely affected by our
size. If aircraft were removed from scheduled service for repairs or other
reasons (other than for routine maintenance), any resulting interruption in
service could materially and adversely affect our operations and the price of
our common stock.

6
<PAGE> 10

WE ARE AT RISK OF LOSSES STEMMING FROM AN ACCIDENT INVOLVING ONE OF OUR
AIRCRAFT.

For various reasons, one or more of our aircraft may crash, causing death
or injury to individual air travelers and destroying the aircraft. Because of
the limited number of aircraft that we operate and because of our relatively
smaller size, any accident involving one of our aircraft would have a
significant adverse effect on our business operations. Many factors can
contribute to the occurrence of an accident, including:

- pilot error,

- air traffic or ground control error,

- terrorism or other acts of sabotage,

- manufacturing or similar product defects,

- mechanical or maintenance error, and

- adverse weather conditions.

If one of our aircraft were to crash or be involved in an accident, we
would be exposed to significant tort liability. Passengers, or their estates,
may seek to recover damages for death or injury. Accidents could also result in
unforeseen mechanical and maintenance costs. In addition, any accident involving
an aircraft that we operate could create a public perception that our aircraft
are not safe, which could result in air travelers being reluctant to fly on our
aircraft.

DELTA HAS RIGHTS UNDER AN OPTION AGREEMENT THAT SIGNIFICANTLY IMPACT OUR
COMPANY.

Under the terms of a Stock Option Agreement we have executed with Delta,
Delta acquired shares of our common stock, which currently represent 12.5% of
the outstanding common stock (without giving effect to the issuance of
additional shares to be sold in this offering). In addition, Delta has the right
to be offered a percentage of our common stock each time we sell voting
securities in order to maintain its percentage ownership of our common stock and
the right to have us register shares of common stock on Delta's behalf. Delta
also has the right to have management nominate a Delta designee to serve on our
board of directors. Delta's rights under the Delta Stock Option Agreement may
permit Delta to influence our management and policies, and Delta's ownership of
shares of common stock may give it the ability to affect the outcome of matters
submitted to a vote of our stockholders.

UNITED HAS A RIGHT OF FIRST REFUSAL WITH RESPECT TO ANY SALE OF OUR
BUSINESS.

Under our code-sharing agreement with United, if we desire to merge with
another company, sell or otherwise transfer our assets to a third party, or
issue capital stock exceeding 5% of our outstanding capital stock (30% if the
stock is issued in a public offering) to such third party, we are required to
give United notice of the proposed transaction, offer to complete such
transaction with United instead of such third party, negotiate with United in
good faith terms and conditions on which we could complete such transaction with
United and offer United any terms and conditions we offer to such third party.
If we are unable to agree with United, we may enter into negotiations with other
parties, but we may not enter into any agreement on terms more favorable to any
such third party than those we offered to United. The existence of this right of
first refusal may adversely affect our ability to negotiate or consummate the
sale of all or part of our business to a company other than United and may
adversely affect the terms of a sale to any company, including United.

THE BRAZILIAN GOVERNMENT MAY FAIL TO HONOR ITS AGREEMENT TO PAY US
SUBSIDIES.

In connection with the acquisition of substantially all of our Brasilia
Turboprops, we were granted a contractual right to receive subsidy payments
through the export support program sponsored by the Federative Republic of
Brazil. The amount of these subsidies, which are offered by the Brazilian
government as an economic incentive to purchasers of the Brazilian-based Embraer
aircraft and are

7
<PAGE> 11

currently payable through January 2006, fluctuates based upon the number and age
of the Brasilia aircraft eligible for subsidy payments. During the fiscal year
ended March 31, 2000, the subsidy represented approximately $6 million in annual
credits against our interest expense and aircraft rental expense related to
Brasilia Turboprops. The subsidies would be jeopardized if the Brazilian
government failed to meet its obligations under the export support program. From
time to time, the Brazilian government has experienced economic conditions that
have impaired its creditworthiness. There can be no assurance that a default
will not occur under the Brazilian export support program. Any termination or
significant interruption of the Brazilian subsidy payments could have a material
adverse affect on our financial condition and operations.

OUR FLEET EXPANSION PROGRAM WILL REQUIRE A SIGNIFICANT INCREASE IN OUR
LEVERAGE.

The airline business is very capital intensive and, as a result, many
airline companies are highly leveraged. During the fiscal year ended March 31,
2000, our mandatory debt service payments totaled $9.6 million and our mandatory
lease payments totaled $59.1 million. Our current growth strategy involves the
acquisition of 94 more Canadair Regional Jets between September 2000 and
December 2004. We estimate that the price of each new Canadair Regional Jet will
be approximately $22 million. We expect to lease or otherwise acquire on credit
all, or substantially all, such 94 Canadair Regional Jets, which leases or debt
credit will significantly increase our mandatory debt and lease payments.

There can be no assurance that our operations will generate sufficient cash
flow to make such payments. If we default under our loan or lease agreements,
the lender/lessor has available extensive remedies, including, without
limitation, repossession of the respective aircraft or exertion of control over
how we allocate our revenues. Even if we are able to timely service our debt,
the size of our long-term debt and lease obligations could negatively affect our
operations and the price of our common stock in many ways, including:

- increasing the cost, or limiting the availability of, additional
financing for working capital, capital acquisitions or other purposes,
and

- limiting the ways in which we can use our cash flow, much of which may
have to be used to satisfy debt and lease obligations.

OUR OPERATING REVENUES AND/OR PROFITS COULD DECREASE OR CEASE TO EXIST.

There is no guarantee that we will generate profits in the future. Many
factors will impact our ability to generate a profit, including:

- the strength of the U.S. economy,

- fluctuations in ticket prices and demand for air travel,

- the price and supply of labor,

- government regulation,

- our ability to satisfy customers and business partners such as United and
Delta,

- supply and cost of aircraft fuel, and

- competition in the airline industry.

We could experience operating losses in the future based on unexpected
conditions that arise in these and other areas. There is no assurance that our
growth plans and overall business strategy will be successful. Failure to
produce profits, or a reduction in the level of profits, would have a material
adverse effect on our operations and the price of our common stock.

8
<PAGE> 12

WE ARE DEPENDENT UPON KEY PERSONNEL.

Our success depends in part on our ability to retain our key executive
officers and directors. Jerry C. Atkin is our current chief executive officer.
His decision-making skills and leadership have been vital to our operations to
date. The departure of Mr. Atkin could have a significant material adverse
effect on our operations and the price of our common stock.

UNIONIZATION OF OUR EMPLOYEES MAY ADVERSELY AFFECT OUR PROFITABILITY.

Our employees are not currently represented by any union. We are aware,
however, that collective bargaining group organization efforts among our
employees occur from time to time and expect that such efforts will continue in
the future. During August 1999, the question of whether or not to join the Air
Line Pilots Association was submitted to our pilots, who voted against joining
the union by a narrow margin. Under governing rules, our pilots may again vote
on this issue as early as August 2000. If unionizing efforts are successful, we
may be subjected to risks of work interruption or stoppage and/or incur
additional administrative expenses associated with union representation of our
employees. We recognize that such efforts will likely continue in the future and
may ultimately result in some or all of our employees being represented by a
union. In connection with our proposed expansion, we anticipate hiring between
2,300 and 3,000 new employees, many of whom may be represented by a union in
their current employment and who may, therefore, influence efforts to organize
into a collective bargaining group.

RISKS ASSOCIATED WITH OUR EXPANSION PLANS

SUBSTANTIAL RISKS ACCOMPANY OUR CURRENT GROWTH PLANS.

We have contracted to add a substantial number of aircraft over the next
few years. Substantial risks accompany our growth plans. Some factors that may
impact our growth plans include:

- demand for regional air transportation,

- the likelihood of continued business relations with our current
code-sharing partners,

- the condition of the United States economy generally, particularly the
economy in California and other western states,

- our ability to hire and retain enough flight crews and mechanics for our
aircraft,

- our ability to acquire enough new Canadair Regional Jets and other
aircraft, and

- our ability to obtain the financing necessary to pay for expansion at
acceptable rates.

Many of these factors are beyond our control. If we are incorrect in our
assessment of the profitability and feasibility of our growth plans, or if
circumstances change in a way that was unforeseen to us, we may not be able to
grow as planned or growth may have an adverse effect on operations and the price
of our common stock.

WE MAY NOT BE ABLE TO IMPLEMENT OUR EXPANSION PLANS.

We have agreed with both United and Delta to increase the number of flight
segments we operate on their behalf. Our expansion plans over the next five
years include the acquisition of at least 94 Canadair Regional Jets and related
additional ground and maintenance facilities and support equipment, the
employment of more than 2,500 additional employees and the integration of those
aircraft, facilities and employees into our existing operations.

There is no assurance that we will be able to obtain the facilities,
aircraft, gates and personnel required for our proposed expansion on a timely
basis. The failure to obtain such aircraft, facilities, gates or personnel could
adversely affect our financial condition and results of operations. Due to the
limited supply of Canadair Regional Jets and airport facilities, among other
factors, there can be no assurance that

9
<PAGE> 13

our current estimates of the cost of our proposed expansion will be accurate.
Any material deviation from our current estimates could adversely affect our
financial condition and results of operations.

WE MAY EXPERIENCE DIFFICULTY FINDING AND RETAINING EMPLOYEES.

Our business is labor-intensive; we require large numbers of pilots, flight
attendants, mechanics and other personnel. As of June 30, 2000, we employed
3,593 full-time equivalent employees, including 1,487 pilots and flight
attendants, 1,425 customer service personnel, 443 mechanics and other
maintenance personnel and 238 administration and support personnel. We
anticipate that our expansion plans will require us to find, hire and train
approximately 2,500 new employees, including 1,035 pilots and flight attendants,
990 customer service personnel, 310 mechanics and other maintenance personnel
and 165 administration and support personnel.

There is no assurance that we will be able to locate, hire and retain the
qualified employees that we need in order to carry out our expansion plans.
Current labor market conditions generally favor employees. Companies are finding
it difficult to hire and retain qualified employees, and wages and salaries are
generally increasing. If we are unable to hire and retain qualified employees at
a reasonable cost, we may be unable to complete our expansion plans, which would
adversely affect our operations and the price of our common stock.

UNITED'S CONTRACT WITH ITS PILOTS MAY INHIBIT EXPANSION OF OUR RELATIONSHIP
WITH UNITED.

Our expansion plans depend primarily on our ability to increase the number
of flights we operate for United and Delta. Employees at major airlines
generally oppose efforts by their companies to outsource flights to regional
airlines because of their perception that such outsourcing leads to layoffs at
the major airline, and lower wages and salaries. A "scope" clause in United's
current collective bargaining agreement with its pilots prevents United from
using (directly or indirectly) more than 65 regional jets in its operations.
Currently, United uses approximately 30 regional jets. We hope to use the
majority of the aircraft we intend to acquire over the next five years in United
Express service. This can be achieved only if United's current limit of 65
regional jets is changed as part of the new United labor contract currently
under negotiation. There can be no assurance that United will succeed in
expanding the scope clause. Furthermore, United's recently announced plans to
merge with U.S. Airways may prevent them from addressing the scope clause issue
in a timely manner. United's failure to timely modify its regional jet scope
clause in order to permit the full implementation of our and United's expansion
plans could have a material adverse effect on our operations and the price of
our common stock.

THERE IS A RISK OF NONDELIVERY OF AIRCRAFT WE INTEND TO ACQUIRE.

We anticipate adding at least 94 Canadair Regional Jets to our fleet over
the next five years. This almost doubles our current fleet. A number of factors
may limit or preclude our planned expansion, including:

- breach by Bombardier, Inc. of our firm order contracts for the delivery
of 54 Canadair Regional Jets or our conditional order for 40 additional
Canadair Regional Jets,

- a fire, strike or other event which affects the ability of Bombardier,
Inc. to completely or timely fulfill its contractual obligations, and

- our ability to obtain necessary financing or to fulfill our contractual
obligations related to the acquisition of the Canadair Regional Jets.

Any disruption or change in the delivery schedule of such Canadair Regional
Jets would affect our overall operations and could have a material adverse
impact on our operating results and the price of our common stock.

10
<PAGE> 14

RISKS ASSOCIATED WITH THE AIRLINE INDUSTRY

OUR INDUSTRY IS HIGHLY COMPETITIVE.

The airline industry is highly competitive. We not only compete with other
regional airlines, some of which are owned by or operated as code-sharing
partners of major airlines, but we also face competition from low-fare airlines
and major airlines on many of our routes. Southwest Airlines, a national
low-fare airline, serves the Salt Lake City International Airport, which results
in significant price competition at the Salt Lake City hub. Competition in the
California and Pacific Northwest markets, which we service from our hubs in Los
Angeles, San Francisco, Seattle/Tacoma and Portland is particularly intense,
with a large number of carriers in these markets.

Certain of our competitors are larger and have significantly greater
financial and other resources than we do. Moreover, federal deregulation of the
industry allows competitors to rapidly enter our markets and to quickly discount
and restructure fares. The airline industry is particularly susceptible to price
discounting because airlines incur only nominal costs to provide service to
passengers occupying otherwise unsold seats. Increased fare competition could
adversely affect our operations and the price of our common stock.

ADVERSE WEATHER MAY HAVE A MATERIAL ADVERSE EFFECT ON OUR REVENUES.

On SkyWest-controlled routes, our revenues depend upon the number of
passengers we carry on each flight, the fare paid by each passenger and our
proration of such fare. On contract flights, our revenues depend primarily on
our completion of the flight and secondarily on service factors such as
timeliness of departure and arrival. During periods of fog, low temperatures,
storms or other adverse weather, our flights may be canceled or significantly
delayed. Because our revenues are dependent upon successful and timely
completion of each scheduled flight, any sustained period of adverse weather at
one or more of the airports we serve would have a material adverse effect on our
operations and the price of our common stock.

AVAILABILITY AND COST OF FUEL IMPACTS OUR OPERATIONS.

One of our principal cost components is fuel. Fuel prices have increased
significantly during the last year, from $0.73 per gallon as of June 30, 1999 to
$1.05 per gallon as of June 30, 2000. At our current rate of consumption, for
every one cent increase in the price of fuel, our annual operating income would
decrease by approximately $192,000, after giving effect to our fuel
reimbursement arrangements related to United and Delta contract flights. In
addition, an increase in the price of fuel may lead to higher airfares, which
would tend to decrease the passenger load of our code-sharing partners. In the
long run, such decrease will have an adverse effect on the number of flights
such partner will ask us to provide and the revenues associated with such
flights.

Both the cost and the availability of fuel are subject to many economic and
political factors and events occurring throughout the world. We have no
agreement with any fuel supplier assuring the availability or price of fuel. Our
ability to pass on increased fuel costs through fare increases on SkyWest-
controlled flights may be limited by several factors, including, without
limitation, economic and competitive conditions. The future cost and
availability of fuel to us cannot be predicted, and substantial fuel cost
increases or the unavailability of adequate supplies of fuel may have a material
adverse effect on our results of operations.

THE AIRLINE INDUSTRY IS HEAVILY REGULATED.

We incur substantial costs in maintaining our current certifications and
otherwise complying with the laws, rules and regulations to which we are
subject. We cannot predict whether we will be able to comply with all present
and future laws, rules, regulations and certification requirements or that the
cost of continued compliance will not have a material adverse effect on us.

We are subject to regulation by the FAA, which has the authority to issue
mandatory orders relating to, among other things, the grounding of aircraft,
inspection of aircraft, installation of new safety-related

11
<PAGE> 15

items and removal and replacement of aircraft parts that have failed or may fail
in the future. A decision by the FAA to ground, or require time-consuming
inspections of or maintenance on, all or any of our Brasilia Turboprops or
Canadair Regional Jets, for any reason, may have a material adverse effect on
our operations and the price of our common stock.

In addition to state and federal regulation, airports and municipalities
enact rules and regulations that affect our operations. From time to time,
various airports throughout the country have considered limiting the use of
smaller aircraft, such as Brasilia Turboprops and Canadair Regional Jets, at
such airports. The imposition of any limits on the use of Brasilia Turboprops or
Canadair Regional Jets at any airport at which we operate could have a material
adverse effect on our operations and the price of our common stock.

RISKS RELATED TO OUR COMMON STOCK

WE CAN ISSUE ADDITIONAL SHARES WITHOUT STOCKHOLDER APPROVAL.

Our Restated Articles of Incorporation, as amended on August 9, 2000,
authorize the issuance of up to 120,000,000 shares of common stock. All such
shares may be issued without any action or approval by our stockholders. We have
two stock option plans under which approximately 1,059,000 shares are reserved
for issuance, and an employee stock purchase plan under which approximately
594,000 shares are reserved for issuance. On August 8, 2000, our stockholders
approved two new stock option plans that will become effective January 1, 2001,
and will supersede our two current stock option plans. We have reserved up to
4,000,000 shares for issuance under the new stock option plans. The number of
shares reserved for issuance under the new plans could potentially increase by
the number of shares subject to options previously granted under the current
stock option plans that are forfeited, cancelled or expired. This potential
increase could result in an aggregate number of shares available for issuance
under the new plans of approximately 5,569,000 shares. The issuance of any
additional shares of common stock would further dilute the percentage ownership
of existing stockholders.

DISTRIBUTION OF DIVIDENDS MAY DECREASE OR CEASE.

Historically, we have paid dividends in varying amounts on our common
stock. The future payment and amount of cash dividends will depend upon our
financial condition and results of operations, loan covenants and other factors
deemed relevant by our board of directors. There can be no assurance that we
will continue our practice of paying dividends on the common stock or that we
will have the financial resources to pay such dividends.

ANTI-TAKEOVER PROVISIONS AFFECT THE ABILITY OF OTHERS TO GAIN CONTROL OF
OUR COMPANY.

Certain provisions of our Restated Articles of Incorporation and Bylaws,
including provisions authorizing the issuance of shares of preferred stock from
time to time without stockholder approval, may have the effect of delaying or
preventing a change in control and may adversely affect the voting and other
rights of the holders of common stock, even in circumstances where such a change
in control would be viewed as desirable by most investors. In addition, the
provisions of the Utah Control Shares Acquisition Act may discourage persons or
entities interested in acquiring a significant interest in or control of our
company.

SALES OF STOCK BY DELTA AIR LINES.

Delta Air Lines has adopted a policy of orderly monetization of minority
ownership positions it holds in various companies. Consistent with this policy,
Delta has already sold all or portions of its stakes in at least three other
travel-related businesses. Delta has advised us that it may in the future
consider the sale of all or a portion of its 3,107,798 shares of common stock in
our company. Sales of stock by Delta in meaningful amounts may have the effect
of depressing the market price of our common stock.

12
<PAGE> 16

USE OF PROCEEDS

The net proceeds we will receive from the sale of the 2,500,000 shares of
common stock offered by us, assuming a public offering price of $45.13 per share
and after deducting estimated underwriting discounts and offering expenses, are
estimated to be $106.8 million ($123.7 million if the underwriters'
over-allotment option is exercised in full).

We currently intend to use the net proceeds of the offering to fund
expansion of our operations, including the acquisition of additional aircraft
and related spare parts and support equipment, and for general corporate
purposes. With respect to the acquisition of aircraft, we will determine on a
case-by-case basis whether to purchase an aircraft with a portion of the net
proceeds from the offering or to finance the acquisition of the aircraft through
long-term loans or lease arrangements. We believe that the expenses of obtaining
the loans or leases may be reduced, and the availability of the loans or leases
may be facilitated, by the increase in stockholders' equity resulting from the
offering.

Pending the use of our net proceeds as described above, the net proceeds
will be invested in short-term, investment grade, interest-bearing securities.

We will not receive any proceeds from the sale of common stock by the
selling stockholders.

PRICE RANGE OF COMMON STOCK AND DIVIDENDS

Our common stock is quoted on the Nasdaq National Market under the symbol
"SKYW." The following table sets forth, for the periods indicated, the high and
low closing sale prices per share for our common stock, as reported by the
Nasdaq National Market, and the cash dividends we have declared.

<TABLE>
<CAPTION>
CASH
DIVIDENDS
HIGH LOW DECLARED
------ ------ ---------
<S> <C> <C> <C>
FISCAL YEAR ENDED MARCH 31, 1999:
First Quarter......................................... $29.75 $17.69 $0.03
Second Quarter........................................ 34.00 15.00 0.03
Third Quarter......................................... 32.69 16.06 0.03
Fourth Quarter........................................ 38.00 25.13 0.03
FISCAL YEAR ENDED MARCH 31, 2000:
First Quarter......................................... $30.25 $21.50 $0.03
Second Quarter........................................ 27.63 20.13 0.03
Third Quarter......................................... 29.00 21.44 0.03
Fourth Quarter........................................ 39.13 27.50 0.04
FISCAL YEAR ENDING MARCH 31, 2001:
First Quarter......................................... $46.50 $33.88 $0.04
Second Quarter (through August 21, 2000).............. 49.38 37.38 $0.04
</TABLE>

The closing sale price of our common stock on August 21, 2000, was $45.13.
As of August 21, 2000, there were 24,858,904 shares of common stock outstanding,
held by approximately 1,000 stockholders of record, which does not include
shares held in securities position listings.

We have historically paid cash dividends on our common stock. In fiscal
1997, we revised our dividend policy from paying a regular annual dividend,
supplemented by special dividends paid from time to time, to a policy of paying
a regular quarterly cash dividend. The future payment and amount of cash
dividends will depend upon our financial condition and results of operations,
applicable loan covenants and other factors deemed relevant by our board of
directors.

13
<PAGE> 17

CAPITALIZATION

The following table sets forth our capitalization at June 30, 2000, and as
adjusted to give effect to the sale of the 2,500,000 shares of common stock
offered by us at an assumed offering price of $45.13 per share and the
application of the estimated net proceeds therefrom, as described under "Use of
Proceeds." The following table should be read in conjunction with "Management's
Discussion and Analysis of Financial Condition and Results of Operations" and
the Consolidated Financial Statements, including the Notes thereto, appearing
elsewhere in this prospectus or incorporated herein by reference.

<TABLE>
<CAPTION>
JUNE 30, 2000
-----------------------
ACTUAL AS ADJUSTED
-------- -----------
(IN THOUSANDS)
<S> <C> <C>
Current portion of long-term debt(1)........................ $ 12,836 $ 12,836
======== ========

Long-term debt, net of current portion(1)................... $ 61,207 $ 61,207
-------- --------
Stockholders' equity:
Preferred stock, no par value; 5,000,000 shares
authorized; none outstanding........................... -- --
Common stock, no par value; 40,000,000 shares authorized;
27,739,454 shares issued; 30,239,454 shares issued, as
adjusted(2)............................................ 166,198 272,995
Retained earnings......................................... 183,887 183,887
Treasury stock; 2,949,200 shares.......................... (20,285) (20,285)
Net unrealized depreciation on available-for-sale
securities............................................. (1,476) (1,476)
-------- --------
Total stockholders' equity............................. 328,324 435,121
-------- --------
Total capitalization................................... $389,531 $496,328
======== ========
</TABLE>

---------------
(1) As of June 30, 2000, we had financed 82 of our aircraft and certain of our
airport and maintenance facilities through operating leases. In addition to
our indebtedness, we had $554.2 million of mandatory future payments under
operating leases, primarily for aircraft and ground facilities. At an 8%
discount factor, the present value of these obligations would be equal to
approximately $365.5 million at June 30, 2000. See Note 4 of the Notes to
our Consolidated Financial Statements incorporated herein by reference.

(2) Assumes underwriters' over-allotment option of 395,415 shares is not
exercised and excludes 1,615,966 shares issuable upon exercise of
outstanding stock options we have granted at a weighted average exercise
price of $23.50 per share as of June 30, 2000.

14
<PAGE> 18

SELECTED CONSOLIDATED FINANCIAL AND OPERATING DATA

The following table sets forth our selected consolidated financial and
airline operating data with respect to the periods indicated. This information
should be read in conjunction with "Management's Discussion and Analysis of
Financial Condition and Results of Operations" and our Consolidated Financial
Statements, including the Notes thereto, appearing elsewhere in this prospectus
or incorporated by reference herein. The selected consolidated financial data as
of and for each of the fiscal years ended March 31, 1996 through March 31, 2000
have been derived from our Consolidated Financial Statements, which statements
have been audited by Arthur Andersen LLP, independent public accountants. The
airline operating data set forth below is unaudited. The selected consolidated
financial data as of and for the three months ended June 30, 1999 and 2000 have
been derived from our unaudited Consolidated Financial Statements which, in our
opinion, reflect all adjustments (consisting only of normal recurring
adjustments) necessary to present fairly the information contained therein. Data
for the three months ended June 30, 2000 are not necessarily indicative of
results to be expected for the fiscal year ending March 31, 2001.

<TABLE>
<CAPTION>
THREE MONTHS ENDED
FISCAL YEAR ENDED MARCH 31, JUNE 30,
-------------------------------------------------------------- ------------------------
1996 1997 1998 1999 2000 1999 2000
---------- ---------- ---------- ---------- ---------- ---------- ----------
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C> <C> <C> <C>
CONSOLIDATED STATEMENTS OF INCOME
DATA(1):
Operating revenues:
Passenger...................... $ 205,034 $ 239,222 $ 259,314 $ 381,409 $ 466,733 $ 109,713 $ 128,403
Freight and other.............. 7,449 6,544 6,821 7,217 8,045 1,849 1,984
---------- ---------- ---------- ---------- ---------- ---------- ----------
Total operating revenues..... 212,483 245,766 266,135 388,626 474,778 111,562 130,387
---------- ---------- ---------- ---------- ---------- ---------- ----------
Operating expenses:
Flying operations.............. 85,117 101,689 103,636 137,231 176,159 39,584 49,338
Aircraft, traffic and passenger
service...................... 32,522 37,044 38,957 58,826 65,822 16,010 17,517
Maintenance.................... 28,713 29,149 29,299 51,370 60,400 14,409 15,118
Promotion and sales............ 25,965 29,606 25,505 29,432 27,698 7,692 6,954
Depreciation and
amortization................. 15,392 18,481 19,305 23,237 28,463 6,487 7,827
General and administrative..... 11,962 12,577 14,992 22,460 27,601 6,387 8,012
Fleet restructuring and
transition................... 6,247 -- -- -- -- -- --
Other.......................... 929 1,195 1,622 1,765 1,955 517 447
---------- ---------- ---------- ---------- ---------- ---------- ----------
Total operating expenses..... 206,847 229,741 233,316 324,321 388,098 91,086 105,213
---------- ---------- ---------- ---------- ---------- ---------- ----------
Operating income................. 5,636 16,025 32,819 64,305 86,680 20,476 25,174
---------- ---------- ---------- ---------- ---------- ---------- ----------
Other income (expense):
Interest expense............... (2,160) (2,431) (1,639) (2,376) (2,726) (563) (579)
Interest income................ 2,500 2,328 4,090 7,553 8,575 2,084 2,450
Gain on sales of property and
equipment.................... 556 936 (45) 419 309 90 80
---------- ---------- ---------- ---------- ---------- ---------- ----------
Total other income........... 896 833 2,406 5,596 6,158 1,611 1,951
---------- ---------- ---------- ---------- ---------- ---------- ----------
Income before provision for
income taxes................... 6,532 16,858 35,225 69,901 92,838 22,087 27,125
Provision for income taxes....... 2,341 6,572 13,565 27,273 35,734 8,506 10,578
---------- ---------- ---------- ---------- ---------- ---------- ----------
Income from continuing
operations..................... 4,191 10,286 21,660 42,628 57,104 13,581 16,547
---------- ---------- ---------- ---------- ---------- ---------- ----------
Discontinued operations:
Income (loss) from operations
of Scenic Airlines........... 175 (175) 284 (168) -- -- --
Loss on disposition of Scenic
Airlines..................... -- -- -- (625) -- -- --
---------- ---------- ---------- ---------- ---------- ---------- ----------
Total income (loss) from
discontinued operations.... 175 (175) 284 (793) -- -- --
---------- ---------- ---------- ---------- ---------- ---------- ----------
Net income....................... $ 4,366 $ 10,111 $ 21,944 $ 41,835 $ 57,104 $ 13,581 $ 16,547
========== ========== ========== ========== ========== ========== ==========
Net income per common share:
Basic.......................... $ 0.21 $ 0.50 $ 1.06 $ 1.73 $ 2.32 $ 0.55 $ 0.67
========== ========== ========== ========== ========== ========== ==========
Diluted........................ $ 0.21 $ 0.50 $ 1.04 $ 1.69 $ 2.29 $ 0.55 $ 0.65
========== ========== ========== ========== ========== ========== ==========
Dividends declared per common
share.......................... $ 0.13 $ 0.12 $ 0.10 $ 0.12 $ 0.13 $ 0.03 $ 0.04
========== ========== ========== ========== ========== ========== ==========
Weighted average common shares
outstanding:
Basic.......................... 20,568 20,170 20,799 24,199 24,563 24,488 24,761
========== ========== ========== ========== ========== ========== ==========
Diluted........................ 20,736 20,248 21,168 24,787 24,961 24,707 25,276
========== ========== ========== ========== ========== ========== ==========
</TABLE>

15
<PAGE> 19

<TABLE>
<CAPTION>
AS OF MARCH 31,
---------------------------------------------------- AS OF JUNE 30,
1996 1997 1998 1999 2000 2000
-------- -------- -------- -------- -------- --------------
<S> <C> <C> <C> <C> <C> <C>
CONSOLIDATED BALANCE SHEET DATA:
Cash and marketable securities..................... $ 43,626 $ 55,756 $154,399 $161,817 $171,348 $189,675
Working capital.................................... 32,818 45,278 143,109 142,358 154,179 160,692
Property and equipment, net........................ 145,071 137,743 133,470 198,924 233,954 260,734
Total assets....................................... 226,996 231,934 318,914 417,660 470,183 515,260
Long-term debt, including current maturities(11)... 59,972 53,736 57,809 70,327 60,758 74,043
Stockholders' equity............................... 115,800 124,552 211,133 256,256 312,220 328,324
</TABLE>

(2) EBITDA represents earnings before interest expense, income taxes,
depreciation and amortization. EBITDAR represents earnings before interest
expense, income taxes, depreciation, amortization and rental expense.
EBITDA and EBITDAR are widely accepted financial indicators of a company's
ability to incur and service debt. Neither EBITDA nor EBITDAR should,
however, be considered in isolation, as a substitute for net income or cash
flow prepared in accordance with generally accepted accounting principles
or as a measure of a company's profitability or liquidity. For the fiscal
year ended March 31, 1996, EBITDA and EBITDAR data have not been reduced to
reflect $6.2 million of fleet restructuring and transition expenses.

(3) Excludes the operations of Scenic Airlines, Inc. and National Parks
Transportation, Inc., a subsidiary we sold on July 21, 2000, which operates
a rental car business serving small regional airports.

(4) Revenue passengers multiplied by miles flown.

(5) Passenger seats available multiplied by miles flown.

(6) Revenue passenger miles divided by available seat miles.

(7) Passenger load factor at which total airline operating revenues equals
total airline operating expenses, including interest expense. Calculated by
dividing airline operating expenses plus interest expense by airline
operating revenues and multiplying the result by passenger load factor.

(8) Passenger revenues divided by revenue passenger miles flown.

(9) Total airline operating revenues divided by available seat miles.

(10) Airline operating expenses plus interest expense divided by available seat
miles.

(11) At June 30, 2000, 82 of the aircraft operated by SkyWest were financed
through operating leases. In addition to our indebtedness, we had $554.2
million of mandatory future payments under operating leases, primarily for
aircraft and ground facilities. At an 8% discount factor, the present value
of these obligations would be equal to approximately $365.5 million at June
30, 2000.

16
<PAGE> 20

MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

OVERVIEW

SkyWest operates a regional airline offering scheduled passenger service
with approximately 1,000 daily departures to 63 cities in 13 western states and
Canada. Total operating revenues and passengers carried have grown from fiscal
1995 through fiscal 2000 at annual growth rates of approximately 20.8% and
21.6%, respectively. All of our growth has been internally generated without any
material acquisitions. In fiscal 1995, SkyWest generated approximately 976
million available seat miles and had a fleet of twenty-six 19-seat Fairchild
Metroliners, twenty-eight 30-seat Brasilia Turboprops and six Canadair Regional
Jets at fiscal year end. As a result of additional aircraft acquisitions,
SkyWest generated approximately 2.2 billion available seat miles in fiscal 2000
with a fleet of 92 Brasilia Turboprops and 11 Canadair Regional Jets at fiscal
year end. The transition out of the Fairchild Metroliner aircraft, completed in
December 1996, enabled SkyWest to upgrade its aircraft to an all cabin class
fleet of Brasilia Turboprops and Canadair Regional Jets, which offer increased
passenger acceptance and capacity and higher operating efficiencies.

In fiscal 2000, we generated net income of $57.1 million, compared to $41.8
million in fiscal 1999 and $21.9 million in fiscal 1998. During fiscal 1999, we
sold the operations of Scenic Airlines, Inc., and recorded a net loss of
$625,000 on the sale. The amount has been reflected as discontinued operations
in our consolidated financial statements incorporated by reference herein. The
improvement since fiscal 1998 reflects, among other factors, the addition of
United as a code-sharing partner in October 1997.

The percentage of our available seat miles operated under fixed-fee
contracts has increased from 25% in fiscal 1998 to 65% in fiscal 2000. The shift
to fixed-fee contract flying has reduced SkyWest's exposure to fluctuations in
fuel prices, fare competition and passenger volumes. We anticipate that our
contract flying operations will increase as a percentage of our total daily
flights as additional United and Delta routes are added to the SkyWest system;
however, we anticipate that margins associated with contract routes will be less
than the margins we have historically generated on mature SkyWest-controlled
routes.

We have continued to emphasize cost management and better utilization of
existing resources. During fiscal 2000, SkyWest experienced only a 2.3% increase
in cost per available seat mile in spite of a 45% increase in the average cost
of fuel during the year. Fuel costs are currently 12.5% of total airline
operating expenses. Cost per available seat mile was 18.0c for fiscal 2000
compared to 17.6c for fiscal 1999.

17
<PAGE> 21

RESULTS OF OPERATIONS

The following table sets forth information regarding our operating expense
components. Airline operating expenses are expressed as a percentage of total
airline operating revenues. Nonairline expenses are expressed as a percentage of
total nonairline revenues. Total operating expenses and interest are expressed
as a percentage of total consolidated revenues. Individual expense components
are also expressed as cents per available seat mile.
<TABLE>
<CAPTION>
FISCAL YEAR ENDED MARCH 31,
---------------------------------------------------------------------------------------
1998 1999 2000
--------------------------- --------------------------- ---------------------------
PERCENT CENTS PERCENT CENTS PERCENT CENTS
OF PER OF PER OF PER
AMOUNT REVENUES ASM AMOUNT REVENUES ASM AMOUNT REVENUES ASM
-------- -------- ----- -------- -------- ----- -------- -------- -----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Salaries, wages and
employee benefits......... $ 67,591 25.5% 4.6c $101,243 26.2% 5.5c $122,617 25.9% 5.7c
Aircraft costs............. 52,357 19.8 3.6 70,561 18.2 3.8 82,102 17.4 3.8
Maintenance................ 20,535 7.8 1.4 36,563 9.5 2.0 42,611 9.0 2.0
Fuel....................... 28,510 10.8 2.0 29,477 7.6 1.6 48,424 10.2 2.2
Other airline expenses..... 62,701 23.7 4.3 84,712 21.9 4.6 90,389 19.1 4.2
Interest................... 1,639 0.6 0.1 2,376 0.6 0.1 2,726 0.6 0.1
-------- ---- ---- -------- ---- ---- -------- ---- ----
Total airline expenses..... 233,333 88.3 16.0c 324,932 84.0 17.6c 388,869 82.2 18.0c
==== ==== ====
Other...................... 1,622 93.6 1,765 94.1 1,955 93.8
-------- -------- --------
Total operating expenses
and interest.............. $234,955 88.3% $326,697 84.1% $390,824 82.3%
======== ======== ========

<CAPTION>
THREE MONTHS ENDED JUNE 30,
--------------------------------------------------------
1999 2000
-------------------------- ---------------------------
PERCENT CENTS PERCENT CENTS
OF PER OF PER
AMOUNT REVENUES ASM AMOUNT REVENUES ASM
------- -------- ----- -------- -------- -----
<S> <C> <C> <C> <C> <C> <C>
Salaries, wages and
employee benefits......... $28,708 25.9% 5.5c $ 33,088 25.5% 5.8c
Aircraft costs............. 19,546 17.6 3.7 21,589 16.6 3.8
Maintenance................ 10,251 9.2 2.0 10,307 7.9 1.8
Fuel....................... 9,122 8.2 1.7 15,029 11.6 2.7
Other airline expenses..... 22,943 20.7 4.4 24,753 19.1 4.4
Interest................... 563 0.5 0.1 579 0.4 0.1
------- ---- ---- -------- ---- ----
Total airline expenses..... 91,133 82.1 17.4c 105,345 81.1 18.6c
==== ====
Other...................... 518 89.2 448 95.8
------- --------
Total operating expenses
and interest.............. $91,651 82.2% $105,793 81.1%
======= ========
</TABLE>

THREE MONTHS ENDED JUNE 30, 2000 COMPARED TO THREE MONTHS ENDED JUNE 30, 1999

For the three months ended June 30, 2000, we continued to develop our
code-sharing relationships with our code-sharing partners and took delivery of
the first of 55 Canadair Regional Jets on order. Net income increased to $16.5
million, or $0.65 per diluted share, for the three months ended June 30, 2000,
compared to $13.6 million, or $0.55 per diluted share, for the three months
ended June 30, 1999. Consolidated operating revenues increased 16.9% to $130.4
million for the three months ended June 30, 2000, from $111.6 million for the
three months ended June 30, 1999.

Passenger revenues, which represented 98.5% of consolidated operating
revenues, increased 17.0% to $128.4 million for the three months ended June 30,
2000 from $109.7 million, or 98.3% of consolidated operating revenues, for the
three months ended June 30, 1999. The increase was due primarily to a 10.1%
increase in revenue passenger miles and a 6.1% increase in yield per revenue
passenger mile. The increase in yield per revenue passenger mile was principally
the result of competitors eliminating and reducing scheduled service in the San
Francisco and Los Angeles markets. Additionally, SkyWest implemented selected
fare increases during the 2000 fiscal year which have remained intact. Fuel
surcharges have also been added to fares to mitigate the increase in fuel
prices. On SkyWest-controlled flights, SkyWest also continues its efforts to
maximize revenue by use of a sophisticated revenue management and control system
which utilizes historical booking data and trends to optimize revenue. Together
these factors increased revenue per available seat mile 9.0% to 23.0c for the
three months ended June 30, 2000 from 21.1c for the three months ended June 30,
1999.

Passenger load factor increased to 56.6% for the three months ended June
30, 2000 from 55.3% for the three months ended June 30, 1999. The increase in
load factor was due primarily to the further development of code-sharing
relationships with United and Delta whereby SkyWest is experiencing high load
factors in many markets. The increase was also due, in part, to refinements in
SkyWest's flight schedules and continued operational improvements.

Total operating expenses and interest increased 15.4% to $105.8 million for
the three months ended June 30, 2000 compared to $91.6 million for the three
months ended June 30, 1999. As a percentage of consolidated operating revenues,
total operating expenses and interest decreased to 81.1% for the three months
ended June 30, 2000, from 82.2% for the comparable period of fiscal 2000. For
the three months ended June 30, 2000, total airline operating expenses and
interest (excluding nonairline expenses) were

18
<PAGE> 22

81.1% of airline operating revenues, compared to 82.1% for the three months
ended June 30, 1999. The improved margin was largely the result of increased
passenger enplanements, growth in yield per revenue passenger mile and operating
revenues which outpaced the increase in operating expenses.

Airline operating costs per available seat mile (including interest
expense) increased 6.9% to 18.6c for the three months ended June 30, 2000 from
17.4c for the three months ended June 30, 1999. The increase was primarily due
to increased fuel costs and higher employee incentive payments based on
increased profitability. Factors relating to the change in operating expenses
are discussed below.

Salaries, wages and employee benefits decreased as a percentage of airline
operating revenues to 25.5% for the three months ended June 30, 2000, from 25.9%
for the three months ended June 30, 1999. The decrease was principally the
result of airline operating revenues increasing 17.1% period over period, and
salaries, wages and employee benefits increasing only 15.2% period over period.
The average number of full-time equivalent employees for the three months ended
June 30, 2000 was 3,500, compared to 3,180 for the three months ended June 30,
1999, an increase of 10.1%. The increase in number of personnel was due, in
large part, to the addition of personnel required for SkyWest's expansion.
Salaries, wages and employee benefits per available seat mile increased to 5.8c
for the three months ended June 30, 2000, compared to 5.5c for the three months
ended June 30, 1999, principally as a result of additional employees and higher
employee incentive payments based on increased profitability.

Aircraft costs, including aircraft rent and depreciation, decreased as a
percentage of airline operating revenues to 16.6% for the three months ended
June 30, 2000, from 17.6% for the three months ended June 30, 1999. The decrease
was due primarily to airline operating revenues increasing 17.1% period over
period and aircraft costs increasing only 10.5% period over period. Aircraft
costs per available seat mile increased slightly to 3.8c for the three months
ended June 30, 2000 from 3.7c for the three months ended June 30, 1999.

Maintenance expense decreased as a percentage of airline operating revenues
to 7.9% for the three months ended June 30, 2000, compared to 9.2% for the three
months ended June 30, 1999. The decrease was due primarily to airline operating
revenues increasing 17.1% period over period and maintenance expense increasing
only 0.5% period over period. Maintenance expense per available seat mile
decreased to 1.8c for the three months ended June 30, 2000, from 2.0c for the
three months ended June 30, 1999.

Fuel costs increased as a percentage of airline operating revenues to 11.6%
for the three months ended June 30, 2000, from 8.2% for the three months ended
June 30, 1999. The increase was due primarily to a 43.8% increase in the average
fuel price per gallon to $1.05 from $0.73. Fuel costs per available seat mile
increased to 2.7c for the three months ended June 30, 2000, from 1.7c for the
three months ended June 30, 1999.

Other expenses, primarily consisting of commissions, landing fees, station
rentals, computer reservation system fees and hull and liability insurance,
decreased as a percentage of airline operating revenues to 19.1% for the three
months ended June 30, 2000, from 20.7% for the three months ended June 30, 1999.
The decrease was primarily the result of SkyWest not incurring commissions on
United Express passenger related revenues. Other expenses per available seat
mile were 4.4c for both periods ended June 30, 2000 and 1999.

FISCAL 2000 COMPARED TO FISCAL 1999

During fiscal 2000, SkyWest continued to develop its code-sharing
relationships with its code-sharing partners and took delivery of the last five
Brasilia Turboprops ordered. SkyWest experienced growth in available seat miles,
revenue passenger miles, passengers carried and load factors. In fiscal 2000,
net income increased 36.5% to $57.1 million, or $2.29 per diluted share,
compared to $41.8 million, or $1.69 per diluted share, in fiscal 1999.
Consolidated operating revenues increased 22.2% to a record $474.8 million in
fiscal 2000 compared to $388.6 million in fiscal 1999.

Passenger revenues, which represented 98.3% of total operating revenues,
increased 22.4% to $466.7 million in fiscal 2000 compared to $381.4 million, or
98.1% of total operating revenues, in fiscal
19
<PAGE> 23

1999. The increase was due to a 17.8% increase in revenue passenger miles and a
4.0% increase in yield per revenue passenger mile. The increase in yield per
revenue passenger mile was principally the result of competitors eliminating or
reducing scheduled service in the San Francisco and Los Angeles markets.
Additionally, SkyWest implemented selected fare increases during the 2000 fiscal
year, which have remained intact. Fuel surcharges were also added to fares to
mitigate the increase in fuel prices during the last half of the year. With
respect to SkyWest-controlled flying, SkyWest also continued its efforts to
maximize revenue by use of a sophisticated revenue management and control system
which utilizes historical booking data and trends to optimize revenue. Together,
these factors increased revenue per available seat mile 3.8% to 21.8c in fiscal
2000 compared to 21.0c in fiscal 1999.

During fiscal 2000, total airline operating revenues increased 22.2% and
total airline operating expenses increased only 19.7%. As a result, total
airline operating expenses and interest were 82.2% of total airline operating
revenues in fiscal 2000 compared to 84.0% in fiscal 1999.

Salaries, wages and employee benefits decreased as a percentage of airline
operating revenues to 25.9% in fiscal 2000 from 26.2% in fiscal 1999. The
decrease was the result of airline operating revenues increasing 22.2% year over
year and salaries, wages and employee benefits increasing only 21.1% year over
year. The average number of employees was 3,302 for fiscal 2000 compared to
3,092 for fiscal 1999, an increase of 6.8%. The increase was due to the addition
of personnel required for SkyWest's expansion. Salaries, wages and employee
benefits per available seat mile increased to 5.7c in fiscal 2000 from 5.5c in
fiscal 1999.

Aircraft costs, including aircraft rent and depreciation, decreased as a
percentage of airline operating revenues to 17.4% in fiscal 2000 from 18.2% in
fiscal 1999. The decrease was due to airline operating revenues increasing 22.2%
year over year and aircraft costs increasing only 16.4% year over year. Aircraft
costs per available seat mile were 3.8c for both fiscal 2000 and 1999.

Maintenance expense decreased slightly as a percentage of airline operating
revenues to 9.0% in fiscal 2000 from 9.5% in fiscal 1999. The decrease was due
to airline operating revenues increasing 22.2% year over year and maintenance
expenses increasing only 16.5% year over year. Maintenance cost per available
seat mile was 2.0c for both fiscal 2000 and 1999.

Fuel costs increased as a percentage of airline operating revenues to 10.2%
in fiscal 2000 from 7.6% in fiscal 1999. The increase was due to an increase in
the average cost of fuel per gallon to 93.0c in fiscal 2000 from 64.0c in fiscal
1999. As a result, fuel costs per available seat mile increased to 2.2c in
fiscal 2000 from 1.6c in fiscal 1999.

Other expenses, which consist primarily of commissions, landing fees,
station rents, computer reservation systems and hull and liability insurance,
decreased as a percentage of airline operating revenues to 19.1% in fiscal 2000
compared to 21.9% in fiscal 1999. The decrease was primarily the result of
SkyWest not incurring commissions on United Express related passenger revenues.
As a result, cost per available seat mile decreased to 4.2c in fiscal 2000 from
4.6c in fiscal 1999.

FISCAL 1999 COMPARED TO FISCAL 1998

During fiscal 1999, SkyWest dramatically expanded its code-sharing
relationships with United and added a record number of aircraft to the fleet.
SkyWest experienced high growth factors in available seat miles, revenue
passenger miles, passengers carried and load factors. In fiscal 1999, net income
increased 90.6% to $41.8 million, or $1.69 per diluted share, compared to $21.9
million, or $1.04 per diluted share in fiscal 1998. Consolidated operating
revenues increased 46.0% to $388.6 million in fiscal 1999 compared to $266.1
million in fiscal 1998.

Passenger revenues, which represented 98.1% of total operating revenues,
increased 47.1% to $381.4 million in fiscal 1999, compared to $259.3 million or
97.4% of total operating revenues in fiscal 1998. The increase was due to a
36.3% increase in revenue passenger miles and a 7.8% increase in yield per
revenue passenger mile. Effective April 23, 1998, SkyWest expanded its
code-sharing relationship with United, as United Express, and began operating
flights to and from Seattle/Tacoma and Portland.
20
<PAGE> 24

SkyWest also expanded its United Express operations at Los Angeles at the same
time. Effective June 1, 1998, SkyWest further expanded its United Express
operations and began operating flights to and from San Francisco. The increase
in yield per revenue passenger mile was also the result of improved revenue
management resulting from schedule refinements and fleet rationalization.
SkyWest also continued its efforts to maximize revenue by use of a sophisticated
revenue management and control system which utilizes historical booking data and
trends to optimize revenue. Together, these factors increased revenue per
available seat mile 16.0% to 21.0c in fiscal 1999 compared to 18.1c in fiscal
1998.

During fiscal 1999, total airline operating revenues increased 46.3% and
total airline operating expenses increased only 39.0%. As a result, total
airline operating expenses and interest were 84.0% of total airline operating
revenues in fiscal 1999 compared to 88.4% in fiscal 1998.

Salaries, wages and employee benefits increased as a percentage of airline
operating revenues to 26.2% in fiscal 1999 from 25.5% in fiscal 1998. The
increase was primarily the result of incentive payments to employees, which are
based on SkyWest's profitability. The average number of employees was 3,092 for
fiscal 1999 compared to 1,915 for fiscal 1998, an increase of 61.5%. The large
increase was due primarily to the addition of personnel required for SkyWest's
expansion. Salaries, wages and employee benefits per available seat mile
increased to 5.5c in fiscal 1999 from 4.6c in fiscal 1998.

Aircraft costs, including aircraft rent and depreciation, decreased
slightly as a percentage of airline operating revenues to 18.2% in fiscal 1999
from 19.8% in fiscal 1998. The decrease was due to airline operating revenues
increasing at 46.3% year over year and aircraft costs increasing only 34.8% year
over year. Aircraft costs per available seat mile were 3.8c in fiscal 1999
compared to 3.6c in fiscal 1998.

Maintenance expense increased slightly as a percentage of airline operating
revenues to 9.5% in fiscal 1999 from 7.8% in fiscal 1998. The increase was due
to initial heavy maintenance charges to bring the acquired used Brasilia
Turboprops up to SkyWest's maintenance standards. Maintenance cost per available
seat mile was 2.0c in fiscal 1999, compared to 1.4c in fiscal 1998.

Fuel costs decreased as a percentage of airline operating revenues to 7.6%
in fiscal 1999 from 10.8% in fiscal 1998. The decrease was due primarily to a
decrease in the average cost of fuel per gallon to 64.0c in fiscal 1999 from
81.0c in fiscal 1998. As a result, fuel costs per available seat mile decreased
to 1.6c in fiscal 1999 from 2.0c in fiscal 1998.

Other expenses, which consist primarily of commissions, landing fees,
station rents, computer reservation systems and hull and liability insurance,
decreased as a percentage of airline operating revenues to 21.9 % in fiscal 1999
compared to 23.7 % in fiscal 1998. The decrease was primarily the result of
SkyWest not incurring commissions on United Express related passenger revenues.
However, due to a 17% decrease in the average passenger trip length, cost per
available seat mile increased to 4.6c in fiscal 1999 from 4.3c in fiscal 1998.

LIQUIDITY AND CAPITAL RESOURCES

We had working capital of $160.7 million and a current ratio of 2.8:1 at
June 30, 2000, compared to working capital of $154.2 million and a current ratio
of 2.9:1 at March 31, 2000. During the three months ended June 30, 2000 the
principal sources of funds were $40.5 million generated from operations,
$778,000 of proceeds from the sale of property and equipment and $433,000 from
the issuance of common stock upon exercise of stock options. During the three
months ended June 30, 2000 we invested $28.8 million in flight equipment, $8.1
million in available-for-sale securities, $3.8 million in aircraft deposits,
$2.4 million in buildings and ground equipment and other, $875,000 in rental
vehicles, reduced long-term debt by $2.5 million, and paid cash dividends of
$989,000. These factors resulted in an increase of $10.2 million in cash and
cash equivalents.

Our position in available-for-sale securities, consisting primarily of
investment grade bonds, bond funds and commercial paper, increased to $154.9
million at June 30, 2000, compared to $146.8 million at March 31, 2000. At June
30, 2000, our ratio of long-term debt to stockholders' equity was 16%, compared
to 13% at March 31, 2000.
21
<PAGE> 25

In May 2000, SkyWest took delivery of one new Canadair Regional Jet in
connection with SkyWest's expansion and financed the aircraft with long-term
debt. SkyWest has agreed to acquire 54 more Canadair Regional Jets at an
aggregate purchase price of approximately $1.2 billion. SkyWest also has options
to acquire an additional 75 Canadair Regional Jets, of which 55 are at fixed
prices (subject to cost escalations), have delivery schedules, are exercisable
in blocks of five aircraft and expire at varying dates between January 2002 and
February 2008. The 20 remaining options are at fixed prices (subject to cost
escalations), do not have delivery schedules and do not carry an expiration
date. SkyWest has also entered into a conditional agreement for 40 additional
Canadair Regional Jets at an aggregate cost of $880 million. The conditional
agreement is subject to the final resolution of the scope clause negotiations
between United and their pilot union and expires on January 15, 2001. We have
also secured options on an additional 80 Canadair Regional Jets, of which 40 are
at fixed prices (subject to cost escalations), have delivery schedules, are
exercisable in blocks of five aircraft and expire at varying dates between July
2003 and June 2006. The 40 remaining options are at fixed prices (subject to
cost escalations), do not have delivery schedules and do not carry an expiration
date. Depending on the state of the aircraft financing market at the time of
delivery, we will determine whether to acquire the remaining Canadair Regional
Jets through third-party, long-term loans or operating lease arrangements.

We have significant long-term lease obligations primarily relating to our
aircraft fleet. These leases are classified as operating leases and therefore
are not reflected as liabilities in our consolidated balance sheets. At June 30,
2000, SkyWest leased 82 aircraft under leases with an average remaining term of
approximately 8.8 years. Future minimum lease payments due under all long-term
operating leases were approximately $554.2 million at June 30, 2000. At an 8%
discount factor, the present value of these obligations would be equal to
approximately $365.5 million at June 30, 2000.

Our total long-term debt of $74.0 million was incurred in connection with
the acquisition of Brasilia Turboprops and Canadair Regional Jets. Certain
amounts related to the Brasilia Turboprops are supported by continuing subsidy
payments through the export support program of the Federative Republic of
Brazil. The subsidy payments reduced the stated interest rates to an average
effective rate of approximately 4.07% on $32.8 million of the long-term debt at
June 30, 2000. The continuing subsidy payments are at risk if the Federative
Republic of Brazil does not meet its obligations under the export support
program. While we have no reason to believe, based on information currently
available, that we will not continue to receive these subsidy payments from the
Federative Republic of Brazil in the future, there can be no assurance that such
a default will not occur. On the remaining Brasilia Turboprop long-term debt of
$25.4 million, the average effective rate is 3.82% at June 30, 2000 and the
lender has assumed the risk of the subsidy payments. The average effective rate
on the debt related to the Canadair Regional Jets of $15.8 million was 7.66% at
June 30, 2000 and is not subject to subsidy payments.

We spent approximately $13.5 million for nonaircraft capital expenditures
during the three months ended June 30, 2000, consisting primarily of aircraft
engine overhauls, rotable spare parts, buildings and ground equipment and rental
vehicles.

We have available $10.0 million in an unsecured bank line of credit with
interest payable at the bank's base rate less one-quarter percent, which was a
net rate of 9.25% at June 30, 2000. We believe that, in the absence of unusual
circumstances, the working capital available to us will be sufficient to meet
our present requirements, including expansion, capital expenditures, lease
payments and debt service requirements for at least the next 12 months.

SEASONALITY

As is common in the airline industry, SkyWest's operations are favorably
affected by increased travel, historically occurring in the summer months, and
are unfavorably affected by decreased business travel during the months from
November through January and by inclement weather which occasionally results in
cancelled flights, principally during the winter months. However, SkyWest does
expect some mitigation of the historical seasonal trends due to an increase in
the portion of its operations in contract flying.

22
<PAGE> 26

QUARTERLY RESULTS OF OPERATIONS

The following table sets forth certain quarterly financial and operating
data for the periods indicated:
<TABLE>
<CAPTION>

FISCAL 1999 FISCAL 2000
------------------------------------------------- ----------
JUNE 30, SEPT. 30, DEC. 31, MAR. 31, JUNE 30,
1998 1998 1998 1999 1999
---------- ---------- ---------- ---------- ----------
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C> <C>
Operating revenues.............. $ 81,959 $ 101,229 $ 102,255 $ 103,183 $ 111,562
Operating income................ 13,502 17,708 15,276 17,819 20,476
Net income...................... 9,741 12,854 8,525 10,715 13,581
Net income per common share:
Basic.......................... $ 0.41 $ 0.53 $ 0.35 $ 0.44 $ 0.55
Diluted........................ $ 0.40 $ 0.52 $ 0.34 $ 0.43 $ 0.55
Passengers carried.............. 1,017,312 1,321,955 1,322,740 1,238,914 1,365,706
Revenue passenger miles
(000s)......................... 215,726 278,281 266,216 255,649 290,590
Available seat miles (000s)..... 393,755 473,025 495,063 482,279 525,104
Passenger load factor........... 54.8% 58.8% 53.8% 53.0% 55.3%
Passenger breakeven load
factor......................... 45.9% 49.0% 45.9% 44.3% 45.4%
Yield per revenue passenger
mile........................... 37.3c 35.7c 37.7c 39.6c 37.8c
Revenue per available seat
mile........................... 20.7c 21.3c 20.6c 21.3c 21.1c
Cost per available seat mile.... 17.3c 17.7c 17.5c 17.8c 17.4c
Average passenger trip
(miles)........................ 212 211 201 206 213

<CAPTION>
FISCAL
FISCAL 2000 2001
------------------------------------ ----------
SEPT. 30, DEC. 31, MAR. 31, JUNE 30,
1999 1999 2000 2000
---------- ---------- ---------- ----------
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C>
Operating revenues.............. $ 122,737 $ 117,381 $ 123,098 $ 130,387
Operating income................ 24,661 20,180 21,363 25,174
Net income...................... 15,944 13,618 13,961 16,547
Net income per common share:
Basic.......................... $ 0.65 $ 0.55 $ 0.57 $ 0.67
Diluted........................ $ 0.64 $ 0.54 $ 0.55 $ 0.65
Passengers carried.............. 1,487,297 1,354,955 1,295,332 1,401,113
Revenue passenger miles
(000s)......................... 323,282 292,397 290,411 319,830
Available seat miles (000s)..... 550,629 542,050 547,597 565,409
Passenger load factor........... 58.7% 53.9% 53.0% 56.6%
Passenger breakeven load
factor......................... 47.3% 44.8% 44.1% 45.9%
Yield per revenue passenger
mile........................... 37.3c 39.5c 41.7c 40.1c
Revenue per available seat
mile........................... 22.2c 21.6c 22.4c 23.0c
Cost per available seat mile.... 17.9c 17.9c 18.7c 18.6c
Average passenger trip
(miles)........................ 217 216 224 228
</TABLE>

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Aircraft Fuel

We are exposed to fluctuations in the price and availability of aircraft
fuel that affect our earnings. Our financial statements reflect both the cost of
fuel we purchase for SkyWest-controlled flights, as well as fuel we purchase for
contract flights, which is subject to reimbursement by our code-sharing
partners. Currently, we have limited our exposure to fuel price increases with
respect to approximately 65% of available seat miles produced, due to
contractual arrangements with Delta and United. These major airlines reimburse
us for the actual cost of fuel on contracted flights. For illustrative purposes
only, we have estimated the impact of market risk using a hypothetical increase
in fuel price per gallon of 10% for the three months ended June 30, 2000 and
1999. Based on this hypothetical assumption, and after considering the impact of
the contractual arrangements, we would have experienced an increase in fuel
expense of approximately $517,000 for the three months ended June 30, 2000 and
$323,000 for the three months ended June 30, 1999. We currently intend to use
cash generated by operating activities to fund any adverse change in the price
of fuel.

Interest Rates

Our earnings are affected by changes in interest rates due to the amounts
of variable rate long-term debt and the amount of cash and securities held. The
interest rate applicable to variable rate notes may rise and increase the amount
of interest expense. We would also receive higher amounts of interest income on
our cash and securities held at the time; however, the market value of our
available-for-sale securities would decline. At June 30, 2000, we had variable
rate notes representing 27% of our total long-term debt and 8% at June 30, 1999.
For illustrative purposes only, we have estimated the impact of market risk
using a hypothetical increase in interest rates of one percentage point for both
our variable rate long-term debt and cash and securities. Based on this
hypothetical assumption, we would have incurred an additional $31,000 in
interest expense and received $451,000 in additional interest income for the
three months ended June 30, 2000 and an additional $14,000 in interest expense
and received $393,000 in additional interest income for the three months ended
June 30, 1999. As a result of this hypothetical assumption, we believe we could
fund interest rate increases on our variable rate long-term debt with the
increased amounts of interest income. We do not believe we have significant
exposure to the changing interest rates on our fixed-rate, long-term debt
instruments, which represented 73% of our total long-term debt at June 30, 2000
and 92% of our total long-term debt at June 30, 1999.

23
<PAGE> 27

BUSINESS

GENERAL

SkyWest's fleet consists of:

- Ninety-two 30-seat Brasilia Turboprops, with an average age of 5.7 years;
and

- Twelve 50-seat Canadair Regional Jets, with an average age of 5.0 years.

All of our aircraft are "cabin class" planes, which means they offer
stand-up headroom, overhead and underseat storage, lavatories and in-flight
attendant service.

In order to accommodate our expanding operations, we have placed a firm
order to acquire an additional 54 Canadair Regional Jets over the next four
years, and a conditional order to acquire an additional 40 Canadair Regional
Jets. We believe we will be able to place all 94 firm and conditional-order
aircraft into code-sharing service under fixed-fee contract-flying arrangements
with United, Delta or other major carriers. If we acquire all such 94 aircraft,
we will also be eligible to exercise options to acquire an additional 155
Canadair Regional Jets, 95 of which have been assigned scheduled delivery dates
through 2005, and the balance of which have unspecified delivery dates.

For the fiscal year ended March 31, 2000, we generated record operating
revenues of $474.8 million and net income of $57.1 million, as compared to
operating revenues of $388.6 million and net income of $41.8 million for the
fiscal year ended March 31, 1999.

INDUSTRY OVERVIEW

Major, Low-fare and Regional Airlines

The airline industry in the United States has traditionally been dominated
by between five and ten "major airlines," including United, Delta, American
Airlines, Continental Airlines, Northwest Airlines and US Airways. The major
airlines offer scheduled flights to most major cities within the United States
and throughout all or part of the world and also serve numerous smaller cities.
The major airlines benefit from wide name recognition, a multi-decade operating
history, control over gates and substantial financial resources. According to
the Air Transport Association, during 1999, the major airlines collectively
reported revenues of $84.2 billion.

24
<PAGE> 28

"Low-fare" airlines, such as Southwest Airlines and Frontier Airlines,
generally offer fewer conveniences to travelers and have lower cost structures
than major airlines, which permits them to offer flights to and from many of the
same markets as the major airlines, but at lower prices.

Regional airlines, including SkyWest, Comair, Atlantic Southeast Airlines,
Mesa, Mesaba, Midway, Midwest Express, Horizon Airlines and Atlantic Coast
Airlines, typically operate smaller aircraft on lower-volume routes than major
airlines. Several regional airlines, including Comair, Atlantic Southeast
Airlines and Horizon Airlines, are wholly-owned subsidiaries of major airlines.
In contrast to low-fare airlines, regional airlines generally do not try to
establish an independent route system to compete with the major airlines.
Rather, regional airlines typically enter into relationships with one or more
major airlines, pursuant to which the regional airline agrees to use its
smaller, lower-cost aircraft to carry passengers booked and ticketed by the
major airline between a hub of the major airline and a smaller outlying city. In
exchange for such services, the regional airline is either paid a fixed
per-flight fee by the major airline or receives a percentage of applicable
ticket revenues. See "-- Relationship of Regional and Major Airlines."

Growth of the Regional Airline Industry

According to the Regional Airline Association, the regional airline sector
of the airline industry experienced annual passenger growth of 7.6% between 1989
and 1999. We believe that the growth of the number of passengers using regional
airlines and the revenues of regional airlines during the last decade is
attributable to a number of factors, including:

- Regional airlines work with, and often benefit from the strength of, the
major airlines. Since many major airlines have incorporated increased use
of regional airlines into their future growth strategies, many regional
airlines have expanded, and may continue to expand, with the major
airlines they serve.

- Regional airlines tend to have a more favorable cost structure and leaner
corporate culture than many major airlines. Many regional airlines were
founded in the midst of the highly competitive market that developed
following deregulation of the airline industry in 1978.

- Many major airlines have determined that an effective method for
retaining customer loyalty and maximizing system revenue, while lowering
costs, is to outsource shorter, low-volume routes to more cost-efficient
regional airlines flying under the major airline's code and name.

- The regional airlines are gradually replacing smaller turboprop planes
with 32- to 79-seat regional jets. Such regional jets feature cabin class
comfort, low noise levels, high speed and range similar to the 120-seat
plus aircraft operated by the major airlines, but are cheaper to acquire
and operate because of their smaller size. We believe the increasing use
of regional jets has led, and may continue to lead, to greater public
acceptance of regional airlines.

Relationship of Regional and Major Airlines

Regional airlines generally enter into code-sharing agreements with major
airlines, pursuant to which the regional airline is authorized to use the major
airline's two-letter flight designator codes to identify the regional airline's
flights and fares in the central reservation systems, to paint its aircraft with
the colors and/or logos of its code-sharing partner and to market and advertise
its status as a carrier for the code-sharing partner. For example, SkyWest flies
out of Los Angeles, San Francisco, Seattle/Tacoma and Portland as United Express
and out of Salt Lake City as The Delta Connection. In addition, the major
airline generally provides reservation services, ticket stock, certain ticketing
services, ground support services and gate access to the regional airline, and
both partners often coordinate marketing, advertising and other promotional
efforts. In exchange, the regional airline provides a designated number of low
capacity (usually between 30 and 70 seats) flights between larger airports
served by the major airline and surrounding cities, usually lower-volume
markets.

The financial arrangements between the regional airlines and their
code-sharing partners usually involve either a revenue-sharing or a per-flight
fixed-fee arrangement.
25
<PAGE> 29

- Revenue-Sharing Arrangements. Under a revenue-sharing arrangement, the
major airline and regional airline negotiate a proration formula,
pursuant to which the regional airline receives a percentage of the
ticket revenues for those passengers traveling for one portion of their
trip on the regional airline and the other portion of their trip on the
major airline. Substantially all costs associated with the regional
airline flight are borne by the regional airline. In such a revenue-
sharing arrangement, the regional airline realizes increased profits as
ticket prices and passenger loads increase or fuel prices decrease and,
correspondingly, realizes decreased profits as ticket prices and
passenger loads decrease or fuel prices increase.

- Fixed-Fee Arrangements. Under a fixed-fee arrangement, the major airline
generally pays the regional airline a fixed fee per flight, with
additional incentives based on completion of flights, on-time performance
and correct baggage handling. In addition, the major and regional airline
often enter into an arrangement pursuant to which the major airline bears
the risk of changes in the price of fuel. Regional airlines benefit from
a fixed-fee arrangement because they are sheltered from most of the
elements that cause volatility in airline earnings -- variations in
ticket prices, passenger loads and fuel prices. However, regional
airlines in fixed-fee arrangements do not benefit from a positive trend
in ticket prices, passenger loads or fuel prices and, because the major
airlines absorb most of the risks, the margin between the per-flight
fixed fee and expected per-flight costs tends to be smaller than the
margins associated with revenue-sharing arrangements.

BUSINESS STRATEGY

Our business strategy consists of the following elements:

- Focus on Markets in the Western United States. For the three months ended
March 31, 2000, SkyWest held the largest market share of regional airline
traffic at San Francisco International Airport (100% of regional airline
passengers), Salt Lake City International Airport (99% of regional
airline passengers) and Los Angeles International Airport (65% of
regional airline passengers). We believe these markets, as well as the
Pacific Northwest markets which SkyWest began serving in 1998 and the
Denver market which SkyWest will begin serving in October 2000, offer
attractive opportunities for long-term, profitable growth. Generally,
western routes are less congested and, due to longer stage lengths than
many eastern routes, offer significant time savings and convenience over
alternate forms of travel. Many western cities are experiencing
significant population and economic growth, and benefit from mild
year-round weather. We also believe SkyWest is well positioned to
capitalize on United's recently increased presence in western markets.

- Build Upon Relationships With Code-Sharing Partners. We attribute
significant growth in traffic and profitability to SkyWest's code-sharing
agreements with United and Delta, two of the world's four largest
airlines. SkyWest views the development of these relationships as a
significant opportunity to achieve stable, long-term growth. SkyWest
works closely with its code-sharing partners to expand service to
existing markets, open new markets and schedule convenient and frequent
flights. We believe that the principal reason SkyWest has attracted
multiple code-sharing partners is its delivery of high quality customer
service with an all-cabin class fleet. SkyWest's competitive fares and
ability to offer passengers participation in frequent flyer programs of
United and Delta are attractive incentives for passengers to fly on
SkyWest. We also believe that multiple code-sharing agreements with major
carriers diversifies operating risk by reducing reliance on a single
major carrier.

- Provide Excellent Customer Service. We believe SkyWest's insistence on
excellent customer service in every aspect of its operations (personnel,
flight equipment, in-flight amenities, on-time performance, flight
completion ratios and baggage handling) has resulted in customer loyalty
and preference for SkyWest as a regional carrier. We also believe that
excellent customer service is largely responsible for SkyWest's multiple
code-sharing relationships as United and Delta seek to build customer
loyalty and preference for major carriers through high quality customer
service provided by their regional partners. SkyWest believes that, for
the year ended March 31, 2000, its

26
<PAGE> 30

flight completion ratio was among the highest of all regional airlines at
98.6%. SkyWest also believes its on-time performance ratio was among the
highest of all regional carriers at 93.5%. Maintaining high performance
ratios increases customer satisfaction and adds to SkyWest's
profitability by meeting incentive payment standards included in its
contract-flying arrangements with United and Delta. SkyWest has achieved
these performance measures by:

- operating a modern fleet of aircraft,

- maintaining spare aircraft to assure a high rate of flight completion,
and

- pursuing its commitment to high quality maintenance.

- Operate Limited Types of Aircraft. SkyWest operates two types of
aircraft, Brasilia Turboprops and Canadair Regional Jets. By simplifying
its fleet, SkyWest has gained efficiencies in training, maintenance and
flight operations. Generally, Canadair Regional Jets are utilized on
longer routes to supplement existing service by major carriers, to
replace larger jets on routes where service is discontinued by major
carriers, to replace Brasilia Turboprops as markets develop and demand
increases, and to develop new markets. The design of the Canadair
Regional Jets gives SkyWest the flexibility to configure seating
arrangements and capacities to match market demands. SkyWest believes
that Brasilia Turboprops are most efficiently used on shorter stage
lengths to provide frequent and convenient service. For example, as
SkyWest expanded service in Los Angeles with United in October 1997,
Brasilia Turboprops were shifted from less efficient, non-hub based
routes to more efficient Los Angeles hub and spoke routes connecting with
code-sharing partners. Expansion into additional hubs will offer similar
opportunities.

- Emphasize Contract Flying. We believe that the shift from revenue-sharing
arrangements to fixed-fee contract flying has reduced SkyWest's exposure
to fluctuations in fuel prices, fare competition and passenger volumes.
In some circumstances, contract flying also enables SkyWest to operate
routes selected by United or Delta for strategic purposes, even though
those routes might not offer margins that are attractive enough to
motivate SkyWest to offer SkyWest-controlled flights. Approximately 65%
of SkyWest's current operations are conducted under contract-flying
arrangements with United and Delta. SkyWest anticipates that its contract
flying operations will increase as a percentage of its total daily
flights as additional United and Delta routes are added to the SkyWest
system; however, we anticipate that margins associated with contract
routes will be less than the margins SkyWest has historically generated
on mature SkyWest-controlled routes.

- Foster Our Employees' Best Efforts. With our anticipated growth in
capacity, it is important that we encourage the best efforts of our
employees and minimize turnover in all positions, particularly those
positions that require us to bear significant training expenses. In
addition to offering competitive compensation and benefits, we take a
number of steps to make SkyWest an attractive place to work and build a
career. For example, we have made company-wide stock option grants twice
since 1995; we contribute 5% of net income to employees' accounts within
our 401(k) plan; and we match employee contributions to those accounts,
up to a maximum of 6% of the employee's compensation. We also have an
incentive plan that allows every employee to benefit from our success. In
fiscal 2000, we contributed 10% of our net income to this incentive plan,
in which all employees with two years of service (excluding management)
participate equally. That year, each full-time employee received $4,176
in incentive checks. We have never had a work stoppage, and none of our
employees is represented by a union.

GROWTH OPPORTUNITIES

During the five years ended March 31, 2000, our total operating revenues
expanded at an annual rate of 20.8%, and we increased the number of daily
flights from approximately 550 in 1995 to approximately 1,000 in 2000. All of
our growth during the five-year period was internally generated. We have not
made

27
<PAGE> 31

any material business acquisitions. We believe that we are well-positioned for
continued growth for several reasons, including the following:

- West Coast For United. United does not currently operate any regional
jets from the Los Angeles, San Francisco, Seattle/Tacoma or Portland
markets. We expect United to deploy most of the 20 Canadair Regional Jets
we have designated for United service, and possibly additional Canadair
Regional Jets, to medium and longer-distance, low-volume markets from
such airports.

- Denver For United. We do not currently operate out of Denver
International Airport, but were recently selected by United to commence
Denver operations in October 2000 with two Canadair Regional Jets. In May
2000, United announced that it will build a new $100 million regional
aircraft terminal in Denver. Construction of the facility is scheduled to
begin in 2001, and the terminal is expected to feature up to 36 regional
aircraft gates. We believe that United's Denver hub could support up to
100 regional jets over the next several years. Because SkyWest is the
only United Express carrier located west of Denver, we believe SkyWest is
well-positioned to operate as United Express flying westward out of
Denver.

- Intermountain Flights For Delta. During 1999, Delta replaced its service
to six markets with our Canadair Regional Jets as part of its
rationalization process at Salt Lake City. Delta's rationalization
process involves an increase in the number of longer-haul east/west Delta
flights into Salt Lake City, and the transitioning of its regional
flights to SkyWest. With its smaller aircraft, SkyWest can often
substitute several flights for each Delta flight, providing increased
frequency of service at a lower overall cost. As such rationalization
continues, we believe that Delta could substitute our Canadair Regional
Jets for many of its flights between Salt Lake City and other cities.
Delta currently has no system-wide limitations on the number of regional
jets operated by its code-sharing partners.

CODE-SHARING AGREEMENTS

Our code-sharing agreements with United and Delta authorize us to use their
two-letter flight designator codes ("UA" and "DL") to identify our flights and
fares in the central reservation systems, to paint our aircraft with their
colors and/or logos and to market and advertise our status as United Express or
The Delta Connection carrier. Under our code-sharing agreement with United, we
are compensated on a fixed-fee per-flight basis on 96% of our United Express
flights and on a revenue-sharing basis for the remaining 4% of our United
Express flights. Under our code-sharing agreement with Delta, we are compensated
on a revenue-sharing basis for approximately 86% of our Delta Connection
Flights, and on a fixed-fee per-flight basis on the remaining 14% of our Delta
Connection flights. In addition, under both our United and our Delta
code-sharing agreements, our passengers participate in frequent flyer programs
of the major airline, and the major airline provides additional services such as
reservations, ticket issuance, ground support services and gate access. We pay
negotiated fees with respect to such services. We also coordinate our marketing,
advertising and other promotional efforts with United and Delta.

The significant terms of each of our code-sharing agreements are as
follows:

The United Code-Sharing Agreement. We provide a designated number of
flights per day as United Express between Los Angeles, San Francisco,
Seattle/Tacoma, Portland and designated outlying cities. United provides
reservation services, tickets, baggage tags, ticket wallets and similar items
with respect to such flights and also controls scheduling, ticket prices and
seat inventories with respect to such flights. In exchange for providing the
designated number of flights and performing our other obligations under the
United agreement, we receive from United a fixed fee per flight, an additional
amount per passenger, and per-passenger incentives based upon on-time
performance, flight completion rates and correct baggage handling. We have also
entered into a fuel reimbursement arrangement with United, pursuant to which
United has agreed to reimburse SkyWest for the actual cost of fuel for all of
SkyWest's contract flights. We presently operate 706 flights per day (96% of our
United Express flights) pursuant to such provisions.

28
<PAGE> 32

We also operate as a United Express carrier between certain cities with
respect to which we do not receive a fixed fee per flight. With respect to such
flights, we control scheduling, inventory and pricing subject to United's
concurrence that such service does not adversely affect its other operations in
the region. In lieu of a fixed fee with respect to such flights, we share
revenues with United based upon a portion of passenger fares. We presently
operate 26 flights per day (4% of our United Express flights) pursuant to such
provisions.

The United agreement terminates on May 31, 2008; however, United may
terminate the United agreement in whole or in part at any time for any or no
reason upon 180 days' notice. The United agreement may also be terminated upon
30 days' notice for cause and in the event of a merger or other transaction in
which substantially all of the assets of SkyWest are transferred to another
entity.

Under the United agreement, if we desire to merge with another company,
sell or otherwise transfer our assets to a third party, or issue capital stock
exceeding 5% of our outstanding capital stock (30% if the stock is issued in a
public offering) to such third party, we are required to give United notice of
the proposed transaction, offer to complete such transaction with United instead
of such third party, negotiate with United in good faith terms and conditions on
which we could complete such transaction with United and offer United any terms
and conditions we offer to such third party. If we are unable to agree with
United, we may enter into negotiations with other parties, but we may not enter
into any agreement on terms more favorable to any such party than those we
offered to United. The United agreement also provides that United must concur in
any marketing or code-sharing relationship with any other carrier with respect
to city pairs served by United.

The Delta Code-Sharing Agreement. We have operated as The Delta Connection
from Delta's Salt Lake City and Los Angeles hubs since 1987. As of June 30,
2000, 204 of our Delta flights per day (86% of our Delta flights) are subject to
a revenue-sharing arrangement, and the remaining 34 Delta flights per day (14%
of our Delta flights) are subject to a fixed-fee arrangement. Delta has entered
into a fuel reimbursement arrangement with respect to flights subject to the
fixed-fee arrangement, pursuant to which Delta has agreed to reimburse SkyWest
for the actual cost of fuel for all of SkyWest's contract flights.

The Delta agreement establishes procedures, allocates responsibility and
sets standards for such matters as schedule publication, billing and accounting
procedures, ticketing, customer services, inconvenienced customers and
insurance. The Delta agreement continues until June 20, 2010, but is subject to
earlier termination under various circumstances, including upon 180 days'
advance notice by either party for any or no reason or upon the occurrence of a
merger or similar transaction in which our company or business is acquired.
Delta currently owns approximately 12.5% of our outstanding common stock
(without giving effect to the issuance of additional shares of common stock to
be sold in this offering), which was acquired under the Delta Stock Option
Agreement entered into in January 1987, concurrently with the initial Delta
agreement.

MARKETS AND ROUTES

Markets. We believe that our development of hub operations in Los Angeles,
San Francisco, Seattle/ Tacoma and Portland with United, and Salt Lake City with
Delta, has been a principal factor in the growth of our flight operations and
will facilitate implementation of our growth and operating strategy. As of June
30, 2000, we scheduled 326 daily flights to or from Los Angeles International
Airport, 200 daily flights to or from San Francisco International Airport, 238
daily flights to or from Salt Lake City International Airport and 180 daily
flights to or from Seattle/Tacoma International Airport and Portland
International Airport combined. We expect to commence operations with two
Canadair Regional Jets from Denver International Airport on behalf of United in
October 2000.

At the San Francisco International Airport, Salt Lake City International
Airport and Los Angeles International Airport, SkyWest is the largest regional
airline, with market shares as of March 31, 2000 of 100% of regional airline
passengers in San Francisco, 99% of regional airline passengers in Salt Lake
City and 65% of regional airline passengers in Los Angeles. As of June 30, 2000,
our primary code-sharing partner in such cities, United, operated 492 daily
flights to or from San Francisco, with 54% of total traffic,
29
<PAGE> 33

and 438 daily flights to or from Los Angeles, with 23% of total traffic. As of
the same date, Delta operated 290 daily flights to or from Salt Lake City, with
67% of total traffic. In 17 of the 63 cities that SkyWest serves, it is the only
scheduled commercial air service.

Routes. The following tables identify the cities we served as of June 30,
2000:

ARIZONA:
Yuma
CALIFORNIA:
Bakersfield
Carlsbad
Chico
Crescent City
Eureka/Arcata
Fresno*
Imperial/El Centro
Inyokern
Los Angeles
Merced
Modesto
Monterey
Ontario
Orange County*
Oxnard
Palm Springs*
Redding
Sacramento
San Diego
San Francisco*
San Jose

San Luis Obispo

Santa Barbara
Santa Maria
Santa Rosa
Visalia
COLORADO:
Colorado Springs*
Denver*+

Grand Junction

IDAHO:
Boise*
Idaho Falls*
Pocatello
Sun Valley
Twin Falls
MONTANA:
Billings*
Bozeman*
Butte*
Helena*
Missoula*
West Yellowstone
NEBRASKA
Omaha*
NEW MEXICO:
Albuquerque*
NEVADA:
Elko
Las Vegas
Reno*
OREGON:
Eugene
Medford
Portland*

Redmond/Bend

SOUTH DAKOTA:
Rapid City*
UTAH:
Cedar City

Salt Lake City*

St. George
WASHINGTON:
Bellingham
Pasco*
Seattle/Tacoma
Spokane
Yakima
WYOMING:
Casper*
Cody
Jackson Hole
CANADA:
Calgary*
Vancouver, B.C.*

---------------
* Service provided by SkyWest utilizing one or more Canadair Regional Jets.

+ Effective October 1, 2000.

30
<PAGE> 34

FLIGHT EQUIPMENT

As of June 30, 2000, we operated a fleet of 104 aircraft, consisting of 92
Brasilia Turboprops and 12 Canadair Regional Jets, as described in the following
table:

<TABLE>
<CAPTION>
SCHEDULED AVERAGE
AIRCRAFT FLIGHT CRUISING AVERAGE
--------------- PASSENGER RANGE SPEED AGE
OWNED LEASED CAPACITY (MILES) (MPH) (YEARS)
----- ------ --------- --------- -------- -------
<S> <C> <C> <C> <C> <C> <C>
Brasilia Turboprop................. 21 71 30 300 300 5.7
Canadair Regional Jet.............. 1 11 50 850 530 5.0
</TABLE>

In addition, United has agreed to contract for the use of 10 additional
Canadair Regional Jets on a fixed-fee basis, and Delta has agreed to contract
for the use of 34 additional Canadair Regional Jets on a fixed-fee basis. Based
on such agreements, we have placed a firm order to acquire an additional 54
Canadair Regional Jets over the next four years, and a conditional order to
acquire an additional 40 Canadair Regional Jets. If we acquire all such 94
aircraft, we will also be eligible to exercise options to acquire an additional
155 Canadair Regional Jets, 95 of which have been assigned scheduled delivery
dates through 2005, and the balance of which have unspecified delivery dates. We
have no orders for additional aircraft other than the Canadair Regional Jets.

The following table outlines the number of Canadair Regional Jets we are
scheduled to receive during each of the next four fiscal years and the expected
size and composition of our fleet following the receipt of such Canadair
Regional Jets. The information presented in the table is based on our firm order
for 54 Canadair Regional Jets and does not include any of the 40 Canadair
Regional Jets subject to our conditional order or any aircraft subject to
options. If we acquire any Canadair Regional Jets that are subject to
conditional orders or options, the number of Brasilia Turboprops in flight will
be reduced from the number indicated below.

<TABLE>
<CAPTION>
DURING THE FISCAL YEAR ENDED MARCH 31,
-----------------------------------------
2000 2001 2002 2003 2004
----- ----- ----- ----- -----
<S> <C> <C> <C> <C> <C>
Additional 50-seat Canadair Regional Jets................. -- 7 15 26 7
Total Canadair Regional Jets.............................. 11 18 33 59 66
Total Brasilia Turboprops................................. 92 91 86 75 70
</TABLE>

The Canadair Regional Jets are the quietest commercial jet currently
available and offer many of the amenities of larger commercial jet aircraft,
including a stand-up cabin, overhead and underseat storage, lavatories,
in-flight snack and beverage service, and, in many cases, more leg room than
larger jets. The speed of Canadair Regional Jets is comparable to larger
aircraft operated by the major airlines, and they have a range of up to 1,200
miles; however, because of their smaller size and efficient design, the
per-flight cost of operating a Canadair Regional Jet is less than that of a
120-seat or larger jet aircraft. As of June 30, 2000, we operated our 12
Canadair Regional Jets out of Salt Lake City to approximately 22 destinations,
generally on longer stage lengths.

The Brasilia Turboprops are 30-seat, pressurized aircraft designed to
operate more economically over short-haul routes with lower passenger load
factors than larger jet aircraft. These factors make it economically feasible
for SkyWest to provide high frequency service in markets with relatively low
volumes of passenger traffic. Passenger comfort features of the Brasilia
Turboprop aircraft include stand-up headroom, a lavatory, overhead baggage
compartments and flight attendant service. We expect that United and Delta will
want us to continue to operate Brasilia Turboprops in markets where passenger
load and other factors make the operation of a Canadair Regional Jet
impractical. As of June 30, 2000, we operated 92 Brasilia Turboprops out of Salt
Lake City, Los Angeles, San Francisco, Seattle/Tacoma and Portland to
approximately 52 destinations. Our Brasilia Turboprops are generally used in our
California markets, which are characterized by high frequency service on shorter
stage lengths.

31
<PAGE> 35

GROUND OPERATIONS

Our employees perform substantially all routine airframe and engine
maintenance and periodic inspection of equipment. Maintenance is performed
primarily at facilities in Salt Lake City, Utah and Fresno and Palm Springs,
California. We lease a 90,000 square foot aircraft maintenance and training
facility at the Salt Lake City International Airport and own a 56,600 square
foot maintenance facility in Palm Springs. Our Salt Lake City facility consists
of a 40,000 square foot maintenance hangar and 50,000 square feet of training
and other facilities to support our growing hub operations. The facility was
constructed and is owned by the Salt Lake City Airport Authority. We are leasing
the facility under an operating lease arrangement over a 36-year term, expiring
in August 2021. The Palm Springs maintenance facility supports our expanding
Southern California operations. We also lease a 90,000 square-foot maintenance
hangar and 15,000 square-foot administrative and support facility in Fresno,
California.

We lease ticket counters and check-in, boarding and other facilities in the
passenger terminal areas in the majority of the airports we serve and staff
these facilities with our personnel. United and Delta provide ticket handling
and ground support services for SkyWest in 32 of the 63 airports SkyWest serves.
Our employees provide substantially all training to SkyWest pilots and
maintenance personnel, utilizing our training facilities located at Salt Lake
City, Utah and Fresno, California.

We also own our corporate headquarters, located in a 63,000 square foot
building in St. George, Utah.

NATIONAL PARKS TRANSPORTATION

In order to maintain our focus on our core business, on July 21, 2000 we
completed the sale of National Parks Transportation, Inc., which provides car
rental services at six airports served by SkyWest, including Page, Arizona, Ely
and Elko, Nevada and St. George, Cedar City and Vernal, Utah. Revenues from the
operations of National Parks Transportation, Inc. represented less than 1% of
our revenues during the fiscal year ended March 31, 2000.

EMPLOYEES

As of June 30, 2000, we employed 3,593 full-time equivalent employees,
including 1,487 pilots and flight attendants, 1,425 customer service personnel,
443 mechanics and other maintenance personnel and 238 administration and support
personnel. Our employees are not currently represented by any union. We are
aware, however, that collective bargaining group organization efforts among our
employees occur from time to time and expect that such efforts will continue in
the future. During August 1999, the question of whether or not to join the Air
Line Pilots Association was submitted to our pilots, who voted against joining
the association by a narrow margin. Under governing rules, our pilots may again
vote on this issue as early as August 2000. If unionizing efforts are
successful, we may be subjected to risks of work interruption or stoppage and/or
incur additional expenses associated with union representation of our employees.
In connection with our proposed acquisition of at least 54 Canadair Regional
Jets and related expansion, we anticipate hiring approximately 2,500 additional
employees, many of whom may be represented by a union in their current
employment. We have never experienced any work stoppages and consider our
relationship with our employees to be good.

COMPETITION AND ECONOMIC CONDITIONS

The airline industry is highly competitive. We not only compete with other
regional airlines, some of which are owned by or are operated as code-sharing
partners of major airlines, but also face competition from low-fare airlines and
major airlines on many of our routes. We are the dominant regional airline
operating out of the Salt Lake City International Airport; however, Southwest
Airlines, a national low-fare airline, also operates out of the Salt Lake City
International Airport, which results in significant price competition at the
Salt Lake City hub. Competition in the Southern California and Pacific Northwest
markets, which we service from our hubs in Los Angeles, Seattle/Tacoma and
Portland, is particularly intense, with a large number of carriers in these
markets. In our markets served from Los Angeles

32
<PAGE> 36

International Airport, our principal competitor is American Eagle. In our
markets served from airports in Seattle/Tacoma and Portland, our principal
competitor is Horizon Airlines.

The principal competitive factors in the regional airline industry are fare
pricing, customer service, routes served, flight schedules, aircraft types and
code-sharing relationships. Certain of our competitors are larger and have
significantly greater financial and other resources than we do. Moreover,
federal deregulation of the industry allows competitors to rapidly enter our
markets and to quickly discount and restructure fares. The airline industry is
particularly susceptible to price discounting because airlines incur only
nominal costs to provide service to passengers occupying otherwise unsold seats.

Generally, the airline industry is highly sensitive to general economic
conditions, in large part due to the discretionary nature of a substantial
percentage of both business and pleasure travel. In the past, many airlines have
reported decreased earnings or substantial losses resulting from periods of
economic recession, heavy fare discounting and other factors. Economic downturns
combined with competitive pressures have contributed to a number of bankruptcies
and liquidations among major and regional carriers. The effect of economic
downturns is somewhat mitigated by our fixed-fee arrangements with respect to
certain flights. Nonetheless, the per passenger component in such fee structure
would be affected by a economic downturn. In addition, if our major airline
code-sharing partners experience longer-term decline in passenger load or are
injured by low ticket prices or high fuel prices, they will likely seek to
reduce our fixed fees or cancel a number of flights in order to reduce their
costs.

REGULATION

All interstate air carriers, including SkyWest, are subject to regulation
by the DOT, the FAA and certain other governmental agencies. Regulations
promulgated by the DOT primarily relate to economic aspects of air service. The
FAA requires operating, air worthiness and other certificates; approval of
personnel who may engage in flight maintenance or operations activities; record
keeping procedures in accordance with FAA requirements; and FAA approval of
flight training and retraining programs. Generally, governmental agencies
enforce their regulations through, among other mechanisms, certifications, which
are necessary for our continued operations, and proceedings, which can result in
civil or criminal penalties or revocation of operating authority. The FAA can
also issue maintenance directives and other mandatory orders relating to, among
other things, grounding of aircraft, inspection of aircraft, installation of new
safety-related items and the mandatory removal and replacement of aircraft parts
that have failed or may fail in the future.

We believe that we are operating in material compliance with FAA
regulations and hold all necessary operating and air worthiness certificates and
licenses. We incur substantial costs in maintaining our current certifications
and otherwise complying with the laws, rules and regulations to which we are
subject. Our flight operations, maintenance programs, record keeping and
training programs are conducted under FAA approved procedures. We do not operate
at any airports where landing slots are restricted.

All air carriers are required to comply with federal law and regulations
pertaining to noise abatement and engine emissions. All air carriers are also
subject to certain provisions of the Federal Communications Act of 1934, as
amended, because of their extensive use of radio and other communication
facilities. We are also subject to certain other federal and state laws relating
to protection of the environment, labor relations and equal employment
opportunity. Management believes that we are in compliance in all material
respects with these laws and regulations.

INSURANCE

We maintain insurance policies that we believe are of types customary in
the industry and in amounts we believe are adequate to protect us against
material loss. The policies principally provide coverage for public liability,
passenger liability, baggage and cargo liability, property damage, including
coverages for loss or damage to our flight equipment, and workers' compensation
insurance. There is no assurance, however, that the amount of insurance we carry
will be sufficient to protect us from material loss.

33
<PAGE> 37

LEGAL PROCEEDINGS

We are subject to certain legal and administrative actions which we
consider routine to our business activities. As of June 30, 2000 we believe,
after consultation with our legal counsel, that the ultimate outcome of any
pending legal matters will not have a material adverse effect on our financial
position, liquidity or results of operation.

34
<PAGE> 38

MANAGEMENT

EXECUTIVE OFFICERS AND DIRECTORS

The following are our executive officers and directors:

<TABLE>
<CAPTION>
NAME AGE POSITION
---- --- --------
<S> <C> <C>
Jerry C. Atkin............................ 51 Chairman, President and Chief Executive Officer
Ron B. Reber.............................. 46 Executive Vice President and Chief Operating Officer
Bradford R. Rich.......................... 39 Executive Vice President, Chief Financial Officer
and Treasurer
Sidney J. Atkin........................... 66 Vice Chairman
J. Ralph Atkin............................ 57 Director
Mervyn K. Cox............................. 63 Director
Ian M. Cumming............................ 59 Director
Henry J. Eyring........................... 36 Director
Robert G. Sarver.......................... 38 Director
Hyrum W. Smith............................ 56 Director
Steven F. Udvar-Hazy...................... 54 Director
</TABLE>

Jerry C. Atkin joined us in July 1974 as a member of our Board of Directors
and as our Director of Finance. In 1975, he assumed the office of President and
Chief Executive Officer. He was elected Chairman of our Board of Directors in
1991. Prior to employment with us, Mr. Atkin was employed by a public accounting
firm and is a certified public accountant. Mr. Atkin is a board member of each
of (i) The Regence Group, a medical insurance holding company, and (ii) Zions
Bancorporation, a Utah bank holding company. He also serves as the 2000 Chairman
of the Regional Airline Association.

Ron B. Reber has served in various capacities since joining us in 1977. He
is currently Executive Vice President and Chief Operating Officer of SkyWest
Airlines, Inc. with general responsibility for flight operations, maintenance,
customer service, market planning, marketing, revenue control and pricing.

Bradford R. Rich joined us in 1987 as Corporate Controller. He was
previously employed with Arthur Andersen LLP and is a certified public
accountant. He is currently Executive Vice President, Chief Financial Officer
and Treasurer with responsibility for financial accounting, treasury, public
reporting, investor relations, internal audit and information technology.

Sidney J. Atkin has served as a member of our Board of Directors since
1973, and was elected Vice Chairman of our Board of Directors in 1988. From 1984
to 1988, he served as our Senior Vice President. For more than five years, Mr.
Atkin has been president of Sugarloaf Corp., a Utah corporation involved in the
operation of restaurants and hotels.

J. Ralph Atkin is the founder of our company, served as our President and
Chief Executive Officer from 1972 to 1975, and has served as a member of our
Board of Directors since 1972. He served as Chairman of our Board of Directors
from 1972 to 1991. From 1984 to 1988 he served as our Senior Vice President. He
served as chief executive officer of EuroSky, a company organized to explore the
feasibility of a regional airline in Austria, during 1994 and 1995. From March
1991 to January 1993, he was director of business and economic development for
the State of Utah. Mr. Atkin is an attorney and is currently engaged in the
private practice of law in St. George, Utah.

Mervyn K. Cox has served as a member of our Board of Directors since 1974.
He is an orthodontist engaged in private practice, and has also engaged in the
development and management of real estate.

Ian M. Cumming has served as a member of our Board of Directors since 1986.
He is chairman of Leucadia National Corporation, a diversified financial
services holding company principally engaged in personal and commercial lines of
property and casualty insurance, life and health insurance, banking and lending
and manufacturing. Mr. Cumming is also a director of Allcity Insurance Company,
a property and

35
<PAGE> 39

casualty insurer, and MK Gold Company, a gold mining and exploration company. In
addition, he is the chairman of Barbados Light & Power Co., a Caribbean
utilities company.

Henry J. Eyring has served as a member of our Board of Directors since
1995. He is also the director of the MBA Program at Brigham Young University's
Marriott School of Management. From 1989 to 1998, he was employed by the Monitor
Company, an international management consulting firm based in Cambridge,
Massachusetts, and he continues to serve as a consultant to the Monitor Company.
From June 1986 to June 1990, he was chief financial officer for the Huntsman
Cancer Foundation. He is also a member of the Board of Trustees of Southern Utah
University.

Robert G. Sarver has served as a member of our Board of Directors since
January 2000. He also serves as chairman of the board and chief executive
officer of California Bank and Trust, positions he has held since 1995. He has
been the executive vice president of Zions Bancorporation, a bank holding
company, since October 1998 and is currently on its board of directors. Mr.
Sarver also serves as an executive director of Southwest Value Partners, a real
estate investment company. He is also a director of Meritage Corporation, a
builder of single-family homes.

Hyrum W. Smith has served as a member of our Board of Directors since 1996.
He is also co-founder and current vice chairman of Franklin Covey Co., a
publicly-held learning and performance solutions company dedicated to increasing
the effectiveness of individuals and organizations. Mr. Smith served as chief
executive officer and chairman of Franklin Covey Co. from February 1997 to March
1998, a position he also held from April 1991 to September 1996. Mr. Smith was
senior vice president of Franklin Quest Co. from December 1984 to April 1991.
Franklin Covey Co. was formerly known as Franklin Quest Co. until its merger
with Covey Leadership Center, Inc. in May 1997.

Steven F. Udvar-Hazy has served as a member of our Board of Directors since
1986. He is also currently president, director and chief executive officer of
International Lease Finance Corporation, a wholly owned subsidiary of American
International Group, Inc., which leases and finances commercial jet aircraft
worldwide. Mr. Udvar-Hazy has been engaged in aircraft leasing and finance for
35 years.

J. Ralph Atkin and Sidney J. Atkin are brothers. Jerry C. Atkin is their
nephew.

KEY EMPLOYEES

In addition to the executive officers listed above, the following are
certain of our key employees:

<TABLE>
<CAPTION>
NAME AGE POSITION
---- --- --------
<S> <C> <C>
James K. Boyd............................. 43 Vice President -- Customer Service
Eric D. Christensen....................... 42 Vice President -- Planning and Secretary
H. Michael Gibson......................... 50 Vice President -- Maintenance
Steven L. Hart............................ 39 Vice President -- Market Development
Brad Holt................................. 40 Vice President -- Flight Operations
Michael J. Kraupp......................... 39 Vice President -- Controller
</TABLE>

James K. Boyd joined us in 1981. He is currently Vice President -- Customer
Service with responsibility for SkyWest ticket counter, gate and ramp personnel.
He also has served as Director of Stations and Station Manager.

Eric D. Christensen joined us in 1985. He is currently Vice
President -- Planning and Secretary with responsibility for aircraft
acquisitions, fleet planning and risk management. He has also served as
Assistant to the President and Director of Finance.

H. Michael Gibson joined us in 1988. He is currently Vice
President -- Maintenance with responsibility for aircraft maintenance, parts,
inventory control and maintenance personnel training. He also has served as
Director of Quality Assurance for SkyWest.

36
<PAGE> 40

Steven L. Hart joined us in 1986. He is currently Vice President -- Market
Development with responsibility for flight scheduling, revenue control and
pricing. He also has served as Director of Market Planning, Market Analyst and
Director of Marketing.

Brad Holt joined us in 1983. He is currently Vice President -- Flight
Operations with responsibility for flight crew supervision and dispatch, flight
safety and flight quality standards. He also has served as Director of Flight
Standards, Chief Flight Instructor, Check Airman and Line Pilot.

Michael J. Kraupp joined us in 1991. He has been Vice
President -- Controller since 1993 with responsibility for financial accounting
and public reporting. He previously was employed by Arthur Andersen LLP and is a
certified public accountant.

37
<PAGE> 41

PRINCIPAL AND SELLING STOCKHOLDERS

The following table sets forth information with respect to the beneficial
ownership of our common stock as of August 21, 2000, and as adjusted to reflect
the sale of the shares of our common stock offered hereby, by:

- each selling stockholder;

- each person known by us to be a beneficial owner of more than 5% of the
outstanding shares of our common stock;

- each of our directors; and

- all directors and executive officers as a group.

Unless otherwise indicated, each of the stockholders has sole voting and
investment power with respect to the shares indicated. The address for each of
the directors and officers listed below is 444 South River Road, St. George,
Utah 84790.

<TABLE>
<CAPTION>
BENEFICIAL OWNERSHIP BENEFICIAL OWNERSHIP
PRIOR TO THE OFFERING AFTER THE OFFERING
---------------------- SHARES --------------------
NAME AND ADDRESS OF BENEFICIAL OWNERS SHARES PERCENT OFFERED SHARES PERCENT
------------------------------------- ---------- -------- ------- --------- -------
<S> <C> <C> <C> <C> <C>
Delta Air Holdings, Inc. ............... 3,107,798 12.5% -- 3,107,798 11.4%
Hartsfield Atlanta International
Airport
Atlanta, Georgia 30320
Wellington Management Co. LLP(1)........ 1,705,800 6.9 -- 1,705,800 6.2
75 State Street
Boston, Massachusetts 02109
Nicholas-Applegate Capital Management... 1,353,243 5.4 -- 1,353,243 4.9
600 West Broadway, 29th Floor
San Diego, California 92101
Jerry C. Atkin.......................... 1,030,899(2) 4.1 30,000 1,000,899 3.6
Sidney J. Atkin......................... 886,528(3) 3.6 30,000 856,528 3.1
Mervyn K. Cox........................... 332,500(4) 1.3 30,000 302,500 1.1
Bradford R. Rich........................ 64,401(5) * -- 64,401 *
Ron B. Reber............................ 63,026(6) * -- 63,026 *
Ian M. Cumming.......................... 34,000(4) * 33,000 1,000 *
Steven F. Udvar-Hazy.................... 16,500(7) * -- 16,500 *
Hyrum W. Smith.......................... 16,000(8) * -- 16,000 *
Henry J. Eyring......................... 15,100(7) * 9,100 6,000 *
Robert G. Sarver........................ 8,500 * -- 8,500 *
J. Ralph Atkin.......................... 4,000(7) * 4,000 -- --
All executive officers and directors, as
a group (11 persons).................. 2,471,454(9) 9.8% 136,100 2,335,354 8.5%
</TABLE>

---------------
* Represents less than 1% of total outstanding shares.

(1) Data for Wellington Management Co. LLP is as of March 31, 2000, the most
recent publicly available data for their stockholdings.

(2) Includes 414,470 shares held separately by Carolyn J. Atkin, Mr. Atkin's
wife, and 105,000 shares issuable upon exercise of options.

(3) Includes 604,000 shares held by a family limited partnership of which Mr.
Atkin and his wife are the general partners, 265,744 shares held by Mr.
Atkin as trustee of a trust for the benefit of his family, 8,784 shares held
by his wife and 8,000 shares issuable upon exercise of options.

(4) Includes 16,000 shares issuable upon exercise of options.

(5) Includes 63,000 shares issuable upon exercise of options.

(6) Includes 38,000 shares issuable upon exercise of options.

(7) Includes 4,000 shares issuable upon exercise of options.

(8) Includes 12,000 shares issuable upon exercise of options.

(9) Includes 270,000 shares issuable upon exercise of options.

38
<PAGE> 42

DESCRIPTION OF CAPITAL STOCK

Our authorized capital stock consists of 120,000,000 shares of common
stock, no par value, and 5,000,000 shares of preferred stock, no par value.

COMMON STOCK

As of August 21, 2000, there were 24,858,904 shares of our common stock
issued and outstanding that were held by approximately 1,000 stockholders of
record. No shares of our preferred stock have been issued.

Subject to the rights of the holders of our preferred stock, each holder of
our common stock has equal ratable rights to dividends from funds legally
available therefor, if, as and when declared by our board of directors. The
declaration and payment of all dividends, however, is subject to the discretion
of our board of directors. In the event of our liquidation or dissolution or the
winding up of our affairs, the holders of our common stock are entitled to share
ratably in all assets remaining after payment of liabilities and amounts, if
any, due to holders of our preferred stock. Holders of our common stock are
entitled to one vote per share on all matters that stockholders may vote on at
all meetings of our stockholders. The holders of our common stock do not have
cumulative voting rights. The holders of our common stock do not have
preemptive, subscription or conversion rights, and there are no redemption or
sinking fund provisions applicable thereto. All the outstanding shares of our
common stock are fully paid and nonassessable, and the shares of our common
stock to be outstanding upon completion of this offering will be fully paid and
nonassessable.

Pursuant to the terms of the Stock Option Agreement we have executed with
Delta, if we propose to issue any additional voting securities while Delta owns
at least 10% of the outstanding shares of our common stock and our code-sharing
agreement with Delta or a substantially similar agreement with Delta remains in
effect, then Delta has a preemptive right to acquire, on the same terms and
conditions as the proposed issuance of securities, the number of voting
securities that, when added to all voting securities then owned by Delta, would
provide Delta with the number of votes necessary to preserve Delta's percentage
voting interest. Delta also has the right to require us to register its shares
of our common stock for re-sale under the Securities Act and has the right to
piggyback on any registration we initiate other than at Delta's request. The
Stock Option Agreement also provides us with a right of first refusal to
purchase shares of our common stock proposed to be sold by Delta in certain
types of transactions. Delta has elected not to exercise its preemptive or
registration rights under the Stock Option Agreement in connection with this
offering and we have agreed to permanently waive our right of first refusal
under the Stock Option Agreement.

PREFERRED STOCK

We are authorized to issue preferred stock from time to time in one or more
series without stockholder approval. No shares of preferred stock are presently
outstanding. With respect to our preferred stock, our board of directors is
authorized, without any further action by our stockholders, to: (i) divide the
preferred stock into series; (ii) designate each such series; (iii) fix and
determine dividend rights; (iv) determine the price, terms and conditions on
which shares of preferred stock may be redeemed; (v) determine the amount
payable to holders of preferred stock in the event of voluntary or involuntary
liquidation; (vi) determine any sinking fund provisions; and (vii) establish any
conversion privileges. Thus, our board of directors, without stockholder
approval, could authorize the issuance of preferred stock with rights which
could decrease the amount of earnings and assets available for distribution to
holders of shares of our common stock or otherwise adversely affect the rights
of the holders of our common stock. Any future issuance of preferred stock may
have the effect of delaying or preventing a change in control of our company and
may adversely affect the voting and other rights of the holders of our common
stock. At present, we have no plans to issue any preferred stock.

BOARD OF DIRECTORS

Our board of directors currently consists of nine directors who are elected
for one-year terms at the annual meetings of our stockholders. Pursuant to the
terms of the Delta Stock Option Agreement, for as long as Delta owns at least
10% of the outstanding shares of our common stock, it has the right to require
us to include at least one Delta designee, reasonably acceptable to us, on the
slate of nominees for election as directors nominated by our board of directors,
and we are further required to use our reasonable best efforts to assure that
such

39
<PAGE> 43

individual is elected to our board of directors. From August 9, 1988 to April 1,
1997, the date of the resignation of Delta's most recent nominee, Delta had
continuous representation on our board of directors through such nominees. Since
April 1997, Delta has not designated a nominee to serve on our board of
directors.

UTAH CONTROL SHARES ACQUISITION ACT

The Utah Control Shares Acquisition Act (the "Control Shares Act") provides
that any person or entity that acquires "control shares" of a publicly held Utah
corporation in a "control share acquisition" is denied voting rights with
respect to the acquired shares, unless a majority of the disinterested
stockholders of the corporation elects to restore such voting rights. The
Control Shares Act provides that a person or entity acquires "control shares"
whenever it acquires shares that, but for the operation for the Control Shares
Act would bring its voting power within any of the following three ranges: (i)
20% to 33 1/3%, (ii) 33 1/3% to 50%, or (iii) 50% or more. A "control share
acquisition" is generally defined as the direct or indirect acquisition of
either ownership or voting power associated with issued and outstanding control
shares. The directors or stockholders of a corporation may elect to exempt the
stock of the corporation from the provisions of the Control Shares Act through
adoption of a provision to that effect in the articles of incorporation or
bylaws of the corporation. Our Restated Articles of Incorporation and Bylaws do
not exempt our common stock from the provisions of the Control Shares Act.

The stockholders of a corporation must consider the status of the voting
rights of control shares of the corporation acquired in a control share
acquisition at the next annual or special meeting of stockholders held following
such acquisition. The acquiror may accelerate the decision and require the
corporation to hold a special meeting of stockholders for the purpose of
considering the status of those rights if the acquiror (i) files an "acquiring
person statement" with the corporation, and (ii) agrees to pay all expenses of
the meeting. If the stockholders do not vote to restore voting rights to the
control shares, the corporation may, if its articles of incorporation or bylaws
so provide, redeem the control shares from the acquiror at fair market value. If
the acquiror fails to file an acquiring person statement, the corporation may,
if its articles of incorporation or bylaws so provide, redeem the control shares
at any time within 60 days of the acquiror's last acquisition of control shares,
regardless of the decision of the stockholders to restore voting rights. Our
Restated Articles of Incorporation and Bylaws do not provide for such
redemption. Unless otherwise provided in the articles of incorporation or bylaws
of a corporation, stockholders are entitled to dissenters' rights if the control
shares are accorded full voting rights and the acquiror has obtained majority or
more control shares. Our Restated Articles of Incorporation and Bylaws do not
deny such dissenters' rights to our stockholders.

The provisions of the Control Shares Act may discourage companies
interested in acquiring a significant interest in or control of us.

UNITED'S RIGHT OF FIRST REFUSAL

Under our code-sharing agreement with United, if we desire to merge with
another company, sell or otherwise transfer our assets to a third party, or
issue capital stock exceeding 5% of our outstanding capital stock (30% if the
stock is issued in a public offering) to such third party, we are required to
give United notice of the proposed transaction, offer to complete such
transaction with United instead of such third party, negotiate with United in
good faith terms and conditions on which we could complete such transaction with
United and offer United any terms and conditions we offer such third party. If
we are unable to agree with United, we may enter into negotiations with other
parties, but we may not enter into any agreement on terms more favorable to any
such party than those we offered to United. The existence of this right of first
refusal may adversely affect our ability to negotiate or consummate the sale of
all or part of our business to a company other than United and may adversely
affect the terms of a sale to any company, including United.

TRANSFER AGENT AND REGISTRAR

The transfer agent and registrar for our common stock is Zions First
National Bank, N.A., Salt Lake City, Utah.

40
<PAGE> 44

UNDERWRITING

Subject to the terms and conditions of an underwriting agreement dated
, 2000, the underwriters named below, through their representative,
Raymond James & Associates, Inc., have severally agreed to purchase from us and
the selling stockholders the respective number of shares of common stock set
forth opposite their names below:

<TABLE>
<CAPTION>
NUMBER OF
UNDERWRITERS SHARES
------------ ---------
<S> <C>
Raymond James & Associates, Inc. ...........................
</TABLE>

<TABLE>
<S> <C>
---------
Total..................................................... 2,636,100
=========
</TABLE>

The underwriting agreement provides that the obligations of the
underwriters are subject to certain conditions precedent, including the absence
of any materially adverse change in our business and the receipt of certain
certificates, opinions and letters from us and our attorneys and independent
auditors. The nature of the underwriters' obligation is such that they are
committed to purchase all shares of common stock offered hereby if any of the
shares are purchased.

We have granted an option to the underwriters, exercisable for 30 days
after the date of this prospectus, to purchase up to an aggregate of 395,415
shares of our common stock at the public offering price, less the underwriting
discounts and commissions set forth on the cover page of this prospectus. The
underwriters may exercise this option solely to cover over-allotments, if any,
in connection with the sale of our common stock. If the underwriters exercise
this option, each underwriter will be obligated, subject to certain conditions,
to purchase a number of additional shares of our common stock proportionate to
the underwriter's initial amount set forth in the table above.

The following table summarizes the underwriting discounts and commissions
to be paid by us to the underwriters and the expenses payable by us for each
share of our common stock and in total. This information is presented assuming
either no exercise or full exercise of the underwriters' option to purchase
additional shares of common stock.

<TABLE>
<CAPTION>
PER WITHOUT WITH
SHARE OPTION OPTION
------- ------- -------
<S> <C> <C> <C>
Underwriting discounts and commissions payable by us........ $ $ $
Underwriting discounts and commissions payable by the
selling stockholders...................................... $ $ $
Expenses payable by us...................................... $ $ $
</TABLE>

We have been advised that the underwriters propose to offer the shares of
our common stock to the public at the public offering price set forth on the
cover page of this prospectus and to certain dealers at that price less a
concession not in excess of $ per share. The underwriters may allow, and
such dealers may re-allow, a concession not in excess of $ per share to
certain other dealers. The offering of the shares of common stock is made for
delivery when, as and if accepted by the underwriters and subject to prior sale
and to withdrawal, cancellation or modification of this offering without notice.
The underwriters reserve the right to reject an order for the purchase of
shares, in whole or in part.

We, our executive officers, our directors, the selling stockholders and
Delta Air Lines, Inc. have agreed that for a period of 90 days after the date of
this prospectus we and they will not, without the prior written consent of
Raymond James & Associates, Inc., directly or indirectly: offer, offer to sell,
sell, pledge, contract to sell, grant any option to purchase, or otherwise
dispose or transfer (or announce any offer, offer of sale, sale, contract of
sale, grant of any option to purchase, or any other disposition or transfer) of
(i) any shares of our common stock or of securities substantially similar
thereto or (ii) any other securities convertible into, exchangeable, or
exercisable for, shares of our common stock or such similar securities,
beneficially owned (within the meaning of Rule 13d-3 under the Securities
Exchange Act of 1934, as amended) by such person whether owned as of the date of
this prospectus, acquired after

41
<PAGE> 45

the date of this prospectus, other than (A) an exercise of stock options or sale
of our common stock pursuant to a "cashless exercise" of stock options which are
either (x) outstanding on the date of this prospectus, (y) issued under our
Amended and Combined Incentive and Nonstatutory Stock Option Plan, or (z) issued
under our AllShare Incentive Stock Option Plan, (B) a bona fide gift of our
common stock, provided that the donee agrees in writing to be bound by the
foregoing terms or (C) the offer and/or sale of shares of our common stock in
the offering.

Until the offering is completed, rules of the SEC may limit the ability of
the underwriters and certain selling group members to bid for and purchase our
common stock. As an exception to these rules, the underwriters may engage in
certain transactions that stabilize the price of our common stock. These
transactions may include short sales, stabilizing transactions and purchases to
cover positions created by short sales. Short sales involve the sale by the
underwriters of a greater number of shares of our common stock than they are
required to purchase in the offering. Stabilizing transactions consist of
certain bids or purchases made for the purpose of preventing or retarding a
decline in the market price of our common stock while the offering is in
progress.

The underwriters also may impose a penalty bid. This occurs when a
particular underwriter repays to the other underwriters a portion of the
underwriting discount received by it because the representatives have
repurchased shares sold by or for the account of such underwriter in stabilizing
or short covering transactions.

These activities by the underwriters may stabilize, maintain or otherwise
affect the market price of our common stock. As a result, the price of our
common stock may be higher than the price that otherwise might exist in the open
market. If these activities are commenced, they may be discontinued by the
underwriters without notice at any time. These transactions may be effected on
the Nasdaq National Market, or otherwise.

We and the selling stockholders have agreed to indemnify the underwriters
against certain liabilities, including liabilities under the Securities Act, and
to contribute to payments which the underwriters may be required to make in
respect thereof.

LEGAL MATTERS

The legality of our common stock offered hereby will be passed upon for us
by Parr Waddoups Brown Gee & Loveless, a professional corporation, Salt Lake
City, Utah and for the underwriters by King & Spalding. King & Spalding will
rely upon the opinion of Parr Waddoups as to all matters of Utah law.

EXPERTS

The consolidated financial statements and schedules incorporated by
reference in this Prospectus and elsewhere in the Registration Statement, to the
extent and for the periods indicated in their reports, have been audited by
Arthur Andersen LLP, independent public accountants, and are incorporated herein
in reliance upon the authority of said firm as experts in accounting and
auditing in giving said reports.

INCORPORATION OF CERTAIN INFORMATION BY REFERENCE

As permitted by SEC rules, this prospectus does not contain all of the
information that prospective investors can find in the registration statement of
which it is a part or the exhibits to the registration statement. The SEC
permits us to incorporate by reference, into this prospectus, information filed
separately with the SEC. The information incorporated by reference is deemed to
be part of this prospectus, except as superseded or modified by information
contained directly in this prospectus or in a subsequently filed document that
also is (or is deemed to be) incorporated herein by reference.

42
<PAGE> 46

This prospectus incorporates by reference the documents set forth below
that we previously have filed (File No. 0-14719) with the SEC pursuant to the
Securities Exchange Act of 1934, as amended. These documents contain important
information about us and our financial condition.

1. Our Quarterly Report on Form 10-Q for the three months ended June 30,
2000.

2. Our Annual Report on Form 10-K for the fiscal year ended March 31, 2000.

3. The description of our common stock contained in our Registration
Statement on Form 8-A as filed on June 15, 1986 with the SEC under the
Exchange Act, including any amendment or report filed for the purpose of
updating such description.

We hereby incorporate by reference all reports and other documents filed by
us pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act after the
date of this prospectus and prior to the termination of this offering.

WHERE YOU CAN FIND MORE INFORMATION

We file annual, quarterly, and current reports, proxy statements, and other
information with the SEC. You may read and copy any reports, statements, or
other information that we file at the SEC's Public Reference Room at 450 Fifth
Street, N.W., Washington, D.C. 20549. Please call the SEC at 1-800-SEC-0330 for
further information on the Public Reference Room. The SEC also maintains an
Internet site (http://www.sec.gov) that makes available to the public reports,
proxy statements, and other information regarding issuers that file
electronically with the SEC.

In addition, we will provide, without charge, to each person to whom this
prospectus is delivered, upon written or oral request of any such person, a copy
of any or all of the foregoing documents (other than exhibits to such documents
that are not specifically incorporated by reference in such documents). Please
direct written requests for such copies to SkyWest, Inc., 444 South River Road,
St. George, Utah 84790, Attention: Bradford R. Rich, Executive Vice President,
Chief Financial Officer and Treasurer. Telephone requests may be directed to the
office of our Chief Financial Officer at (435) 634-3000.

Shares of our common stock are quoted on the Nasdaq National Market.
Reports, proxy statements and other information concerning us can be inspected
and copied at the Public Reference Room of the National Association of
Securities Dealers, 1735 K Street, N.W., Washington, D.C. 20006.

43
<PAGE> 47

INSIDE BACK COVER

Photo of United Express and Delta Connection aircraft in flight.

[SkyWest Airlines Logo]
<PAGE> 48

------------------------------------------------------
------------------------------------------------------

YOU SHOULD RELY ONLY ON THE INFORMATION CONTAINED IN THIS PROSPECTUS. WE
HAVE NOT, AND THE UNDERWRITERS HAVE NOT, AUTHORIZED ANY OTHER PERSON TO PROVIDE
YOU WITH DIFFERENT INFORMATION. IF ANYONE PROVIDES YOU WITH DIFFERENT OR
INCONSISTENT INFORMATION, YOU SHOULD NOT RELY ON IT. WE ARE NOT, AND THE
UNDERWRITERS ARE NOT, MAKING AN OFFER TO SELL THESE SECURITIES IN ANY
JURISDICTION WHERE THE OFFER OR SALE IS NOT PERMITTED. YOU SHOULD ASSUME THAT
THE INFORMATION IN THIS PROSPECTUS IS ACCURATE ONLY AS OF THE DATE ON THE FRONT
COVER OF THIS PROSPECTUS. OUR BUSINESS, FINANCIAL CONDITION AND PROSPECTS MAY
HAVE CHANGED SINCE THAT DATE.

------------------------

TABLE OF CONTENTS

<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Prospectus Summary..................... 1
Risk Factors........................... 5
Use of Proceeds........................ 13
Price Range of Common Stock and
Dividends............................ 13
Capitalization......................... 14
Selected Consolidated Financial and
Operating Data....................... 15
Management's Discussion and Analysis of
Financial Condition and Results of
Operations........................... 17
Business............................... 24
Management............................. 35
Principal and Selling Stockholders..... 38
Description of Capital Stock........... 39
Underwriting........................... 41
Legal Matters.......................... 42
Experts................................ 42
Incorporation of Certain Information by
Reference............................ 42
Where You Can Find More Information.... 43
</TABLE>

------------------------------------------------------
------------------------------------------------------
------------------------------------------------------
------------------------------------------------------
2,636,100 SHARES

[SKYWST LOGO]
COMMON STOCK
------------------------

PROSPECTUS
------------------------
RAYMOND JAMES &
ASSOCIATES, INC.
, 2000
------------------------------------------------------
------------------------------------------------------
<PAGE> 49

PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION

The following table sets forth the costs and expenses in connection with
the issuance and distribution of the common stock being registered, other than
underwriting discounts and commissions payable by us. We will bear all of the
expenses listed below. All of the amounts shown are estimates, except the
registration fee and the NASD filing and listing fees.

<TABLE>
<CAPTION>
AMOUNT
--------
<S> <C>
SEC registration fee........................................ $ 39,371
NASD filing fee............................................. 16,000
NASD listing fee............................................ 17,500
Accounting fees and expenses................................ 90,000
Legal fees and expenses..................................... 75,000
Printing expenses........................................... 100,000
Blue sky fees and expenses.................................. 10,000
Transfer agent fees and expenses............................ 1,000
Miscellaneous expenses...................................... 32,129
--------
Total..................................................... $375,000
========
</TABLE>

ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS

We are a Utah corporation. Section 16-10a-902 of the Utah Revised Business
Corporation Act (the "Revised Act") provides that a corporation may indemnify
any individual who was, is, or is threatened to be made a named defendant or
respondent (a "Party") in any threatened, pending or completed action, suit or
proceeding, whether civil, criminal, administrative or investigative and whether
formal or informal (a "Proceeding"), because he or she is or was a director of
the corporation or, while a director of the corporation, is or was serving at
its request as a director, officer, partner, trustee, employee, fiduciary or
agent of another corporation or other person or of an employee benefit plan (an
"Indemnifiable Director"), against any obligation incurred with respect to a
Proceeding, including any judgment, settlement, penalty, fine or reasonable
expenses (including attorneys' fees), incurred in the Proceeding if his or her
conduct was in good faith, he or she reasonably believed that his or her conduct
was in, or not opposed to, the best interests of the corporation, and, in the
case of any criminal Proceeding, had no reasonable cause to believe such conduct
was unlawful; provided, however, that pursuant to Subsection 902(4): (i)
indemnification under Section 902 in connection with a Proceeding by or in the
right of the corporation is limited to payment of reasonable expenses (including
attorneys' fees) incurred in connection with the Proceeding and (ii) the
corporation may not indemnify an Indemnifiable Director in connection with a
Proceeding by or in the right of the corporation in which the Indemnifiable
Director was adjudged liable to the corporation, or in connection with any other
Proceeding charging that the Indemnifiable Director derived an improper personal
benefit, whether or not involving action in his or her official capacity, in
which Proceeding he or she was adjudged liable on the basis that he or she
derived an improper personal benefit.

Section 16-10a-903 of the Revised Act provides that, unless limited by its
articles of incorporation, a corporation shall indemnify an Indemnifiable
Director who was successful, on the merits or otherwise, in the defense of any
Proceeding, or in the defense of any claim, issue or matter in the Proceeding,
to which he or she was a Party because he or she is or was an Indemnifiable
Director of the corporation, against reasonable expenses (including attorneys'
fees) incurred in connection with the Proceeding or claim with respect to which
he or she has been successful.

In addition to the indemnification provided by Sections 902 and 903,
Section 16-10a-905 of the Revised Act provides that, unless otherwise limited by
a corporation's articles of incorporation, an

II-1
<PAGE> 50

Indemnifiable Director may apply for indemnification to the court conducting the
Proceeding or to another court of competent jurisdiction.

Section 16-10a-904 of the Revised Act provides that a corporation may pay
for or reimburse the reasonable expenses (including attorneys' fees) incurred by
an Indemnifiable Director who is a Party to a Proceeding in advance of the final
disposition of the Proceeding upon the satisfaction of certain conditions.

Section 16-10a-907 of the Revised Act provides that, unless a corporation's
articles of incorporation provide otherwise, (i) an officer of the corporation
is entitled to mandatory indemnification under Section 903 and is entitled to
apply for court-ordered indemnification under Section 905, in each case to the
same extent as an Indemnifiable Director, (ii) the corporation may indemnify and
advance expenses to an officer, employee, fiduciary or agent of the corporation
to the same extent as an Indemnifiable Director, and (iii) a corporation may
also indemnify and advance expenses to an officer, employee, fiduciary or agent
who is not an Indemnifiable Director to a greater extent than the right of
indemnification granted to an Indemnifiable Director, if not inconsistent with
public policy, and if provided for by its articles of incorporation, bylaws,
general or specific action of its board of directors or contract.

Our Amended and Restated Bylaws (the "Bylaws") provide that, subject to the
limitations described below, we shall, to the maximum extent and in the manner
permitted by the Revised Act, indemnify any individual made party to a
proceeding because he or she is or was one of our directors or officers against
liability incurred in the proceeding if his or her conduct was in good faith, he
or she reasonably believed that his or her conduct was in, or not opposed to,
our best interests and, in the case of any criminal proceeding, he or she had no
reasonable cause to believe such conduct was unlawful. We may not, however,
extend such indemnification to an officer or director in connection with a
proceeding by us or in our right in which such officer or director was adjudged
liable to us, or in connection with any other proceeding charging that such
person derived an improper personal benefit, whether or not involving action in
his or her official capacity, in which proceeding he or she was adjudged liable
on the basis that he or she derived an improper personal benefit, unless ordered
by a court of competent jurisdiction. Notwithstanding the foregoing, the Bylaws
obligate us to indemnify an officer or director who was successful on the merits
or otherwise, in the defense of any proceeding or the defense of any claim,
issue or matter in the proceeding to which the officer or director was a party
because he or she is or was one of our directors or officers against reasonable
expenses that he or she incurred in connection with the proceeding or claim with
respect to which he or she was successful. The Bylaws also permit us to pay for
or reimburse the reasonable expenses incurred by an officer or director who is
party to a proceeding in advance of final disposition of the proceeding if (i)
the officer or director furnishes to us a written affirmation of a good faith
belief that he or she has met the applicable standard of conduct necessary for
indemnification, (ii) the officer or director furnishes to us a written
undertaking to repay the advance if it is ultimately determined that he or she
did not meet the standard of conduct, and (iii) a determination is made that the
facts then known to those making the determination would not preclude
indemnification pursuant to the Bylaws. The Bylaws also provide that any
indemnification or advancement of expenses provided thereby shall not be deemed
exclusive of any other rights to which those seeking indemnification or
advancement of expenses may be entitled under any articles of incorporation,
bylaw, agreement, vote of stockholders or disinterested directors, or otherwise,
both as to action in such person's official capacity and as to action in another
capacity while holding such office.

Utah law permits director liability to be eliminated in accordance with
Section 16-10a-841 of the Revised Act, which provides that the liability of a
director to the corporation or its stockholders for monetary damages for any
action taken or any failure to take any action, as a director, may be limited or
eliminated by the corporation except for liability for (i) the amount of
financial benefit received by a director to which he is not entitled; (ii) an
intentional infliction of harm on the corporation or its stockholders; (iii) a
violation of Section 16-10a-842 of the Revised Act, which prohibits unlawful
distributions by a corporation to its stockholders; or (iv) an intentional
violation of criminal law. Such a provision may appear either in a corporation's
articles of incorporation or bylaws; however, to be effective, such a provision
must be approved by the corporation's stockholders.

II-2
<PAGE> 51

Our Restated Articles of Incorporation, as amended (the "Restated
Articles"), provide that the personal liability of any director to SkyWest, Inc.
or its stockholders for monetary damages for any action taken or the failure to
take any action, as a director, is eliminated to the fullest extent permitted by
Utah law.

The Bylaws provide that we may purchase and maintain insurance on behalf of
any person who is or was one of our directors, officers, employees, fiduciaries
or agents, or is or was serving at our request as a director, officer, employee,
fiduciary or agent of another corporation, partnership, joint venture, trust or
other enterprise against any liability asserted against him or her or incurred
by him or her in such capacity or arising out of his or her status in such
capacity, whether or not we would have the power to indemnify him or her against
such liability under the indemnification provisions of the Bylaws or the laws of
the State of Utah, as the same are amended or modified. We maintain insurance
from commercial carriers against certain liabilities that may be incurred by our
directors and officers.

Indemnification may be granted pursuant to any other agreement, bylaw or
vote of stockholders or directors. Reference is also made to the Underwriting
Agreement filed herewith pursuant to which the underwriters have agreed to
indemnify us and our officers and directors against certain liabilities,
including liabilities under the Securities Act. The foregoing description is
necessarily general and does not describe all details regarding the
indemnification of our officers, directors or controlling persons.

ITEM 16. EXHIBITS

<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------- -----------
<C> <S>
1.1 Form of Underwriting Agreement.
4.1+ Specimen Form of Common Stock Certificate.
4.2 Restated Articles of Incorporation, as amended.(1)
4.3+ Articles of Amendment to Restated Articles of Incorporation.
4.4 Amended and Restated Bylaws.(2)
4.5 Stock Option Agreement, dated January 28, 1987, between
Delta Air Lines, Inc. and SkyWest, Inc.(3)
5.1+ Opinion of Parr Waddoups Brown Gee & Loveless as to the
legality of the securities being registered.
23.1 Consent of Arthur Andersen LLP.
23.2+ Consent of Parr Waddoups Brown Gee & Loveless (included in
Item 5.1 above).
24.1+ Power of Attorney.
</TABLE>

---------------

+ Previously filed.

(1) Incorporated by reference to the Exhibits to a Registration Statement filed
as of June 12, 1995, on Form S-8, File No. 33-60173.

(2) Incorporated by reference to the Exhibits to a Registration Statement filed
on January 20, 1994, on Form S-3, File No. 33-74290.

(3) Incorporated by reference to the Exhibits to a Registration Statement filed
on January 21, 1998, on Form S-3, as amended, File No. 333-44619.

ITEM 17. UNDERTAKINGS

The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of
registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Exchange Act of 1934 (and, where applicable, each filing of an employee benefit
plan's annual report pursuant to Section 15(d) of the Exchange Act of 1934) that
is incorporated by reference in the registration statement shall be deemed to be
a new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.

Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of
registrant pursuant to the foregoing provisions, or otherwise,

II-3
<PAGE> 52

registrant has been advised that in the opinion of the SEC such indemnification
is against public policy as expressed in the Securities Act of 1933 and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the registrant of expenses incurred
or paid by a director, officer or controlling person of the registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act of 1933 and will be governed by the
final adjudication of such issue.

The undersigned registrant hereby undertakes that:

(1) For purposes of determining any liability under the Securities Act
of 1933, the information omitted from the form of prospectus filed as part
of this registration statement in reliance upon Rule 430A and contained in
a form of prospectus filed by the registrant pursuant to Rule 424(b)(1) or
(4) or 497(h) under the Securities Act of 1933 shall be deemed to be part
of this registration statement as of the time it was declared effective.

(2) For the purpose of determining any liability under the Securities
Act of 1933, each post-effective amendment that contains a form of
prospectus shall be deemed to be a new registration statement relating to
the securities offered therein, and the offering of such securities at that
time shall be deemed to be the initial bona fide offering thereof.

II-4
<PAGE> 53

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this Amendment No. 2 to
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of St. George, State of Utah, on August 23, 2000.

SKYWEST, INC.

By: /s/ JERRY C. ATKIN
------------------------------------
Jerry C. Atkin
Chairman of the Board, President
and Chief Executive Officer

<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<C> <C> <S>
/s/ JERRY C. ATKIN Chairman of the Board, August 23, 2000
----------------------------------------------------- President
Jerry C. Atkin and Chief Executive Officer
(principal executive officer)

/s/ SIDNEY J. ATKIN* Vice Chairman of the Board August 23, 2000
-----------------------------------------------------
Sidney J. Atkin

/s/ BRADFORD R. RICH* Executive Vice President, Chief August 23, 2000
----------------------------------------------------- Financial Officer and Treasurer
Bradford R. Rich (principal financial and
accounting officer)

Director
-----------------------------------------------------
J. Ralph Atkin

/s/ MERVYN K. COX* Director August 23, 2000
-----------------------------------------------------
Mervyn K. Cox

/s/ IAN M. CUMMING* Director August 23, 2000
-----------------------------------------------------
Ian M. Cumming

/s/ HENRY J. EYRING* Director August 23, 2000
-----------------------------------------------------
Henry J. Eyring

/s/ ROBERT G. SARVER* Director August 23, 2000
-----------------------------------------------------
Robert G. Sarver

/s/ HYRUM W. SMITH* Director August 23, 2000
-----------------------------------------------------
Hyrum W. Smith

Director
-----------------------------------------------------
Steven F. Udvar-Hazy

*By: /s/ JERRY C. ATKIN
------------------------------------------------
Jerry C. Atkin
Attorney-in-fact
</TABLE>

II-5
<PAGE> 54

EXHIBIT INDEX

<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------- -----------
<C> <S>
1.1 Form of Underwriting Agreement.
4.1+ Specimen Form of Common Stock Certificate.
4.2 Restated Articles of Incorporation, as amended.(1)
4.3+ Article of Amendment to Restated Articles of Incorporation.
4.4 Amended and Restated Bylaws.(2)
4.5 Stock Option Agreement, dated January 28, 1987, between
Delta Air Lines, Inc. and SkyWest, Inc.(3)
5.1+ Opinion of Parr Waddoups Brown Gee & Loveless as to the
legality of the securities being registered.
23.1 Consent of Arthur Andersen LLP.
23.2+ Consent of Parr Waddoups Brown Gee & Loveless (included in
Item 5.1 above).
24.1+ Power of Attorney.
</TABLE>

---------------

+ Previously filed.

(1) Incorporated by reference to the Exhibits to a Registration Statement filed
as of June 12, 1995, on Form S-8, File No. 33-60173.

(2) Incorporated by reference to the Exhibits to a Registration Statement filed
on January 20, 1994, on Form S-3, File No. 33-74290.

(3) Incorporated by reference to the Exhibits to a Registration Statement filed
on January 21, 1998, on Form S-3, as amended, File No. 333-44619.