Cautionary Statement Concerning Forward-Looking Statements

Certain of the statements contained in this Report should be considered "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements may be identified by words such as "may," "will," "expect," "intend," "anticipate," "believe," "estimate," "plan," "project," "could," "should," "hope," "likely," and "continue" and similar terms used in connection with statements regarding SkyWest's outlook, the revenue environment, SkyWest's contract relationships, and SkyWest's expected financial performance. These statements include, but are not limited to, statements about SkyWest's future growth and development plans, including SkyWest's future financial and operating results, SkyWest's plans for SkyWest Airlines and ASA, SkyWest's objectives, expectations and intentions and other statements that are not historical facts. Readers should keep in mind that all forward-looking statements are based on SkyWest's existing beliefs about present and future events outside of SkyWest's control and on assumptions that may prove to be incorrect. If one or more risks identified in this Report materializes, or any other underlying assumption proves incorrect, SkyWest's actual results will vary, and may vary materially from those anticipated, estimated, projected, or intended. These risks and uncertainties include, but are not limited to, those described below in Item 1A., Risk Factors, and the following:

•                     SkyWest is subject to risks associated with its
development of  a new code sharing relationship with Midwest;

•                     SkyWest may be negatively impacted by the troubled

• SkyWest is subject to increased labor costs, strikes, labor disputes and increased unionization of our workforces; and

• other factors as set forth in SkyWest's filings with the Securities and Exchange Commission, including the detailed factors discussed under the heading "Risk Factors" in SkyWest's Annual Report on Form 10-K for the year ended December 31, 2006.

There may be other factors not identified above of which SkyWest is not currently aware that may affect matters discussed in the forward-looking statements, and may also cause actual results to differ materially from those discussed. SkyWest assumes no obligation to publicly update any forward-looking statement to reflect actual results, changes in assumptions or changes in other factors affecting these statements other than as required by law.

The following discussion and analysis presents factors that had a material effect on the results of operations of SkyWest, Inc. ("SkyWest" "we" or "us") during the three and nine months ended September 30, 2007 and 2006. Also discussed is our financial position as of September 30, 2007 and December 31, 2006. You should read this discussion in conjunction with our consolidated financial statements, including the notes thereto, appearing elsewhere in this Report. This discussion and analysis contains forward-looking statements. Please refer to the sections of this Report entitled "Cautionary Statement Concerning Forward-Looking Statements" and "Risk Factors" for discussion of the uncertainties, risks and assumptions associated with these statements.

Overview

Through our wholly-owned subsidiaries, SkyWest Airlines, Inc. ("SkyWest Airlines") and Atlantic Southeast Airlines, Inc. ("ASA"), we operate the largest regional airline in the United States. As of September 30, 2007, SkyWest Airlines and ASA offered scheduled passenger and air freight service with approximately 2,637 total daily departures to 236 destinations in the United States, Canada, Mexico and the Caribbean. Additionally, we provide ground handling services for ten other airlines. As of September 30, 2007, our consolidated fleet consisted of 437 aircraft, including 246 Bombardier CRJ200 Regional Jets ("CRJ200s") (65 assigned to United Air Lines, Inc. ("United"), 166 assigned to Delta Air Lines, Inc. ("Delta") and 15 assigned to Midwest Airlines, Inc. ("Midwest")), 102 Bombardier CRJ700 Regional Jets ("CRJ700s") (52

assigned to United and 50 assigned to Delta), 17 Bombardier CRJ900 Regional Jets ("CRJ900s") (all assigned to Delta), 60 Embraer EMB-120 Brasilia turboprops ("Brasilia turboprops") (48 assigned to United and 12 assigned to Delta), and 12 Avions de Transport 72-210 turboprops ("ATR-72 turboprops") (all assigned to Delta). We believe our success in attracting multiple contractual relationships with major airline partners is attributable to our delivery of high-quality customer service with an all cabin-class fleet at a competitive cost structure. For the nine months ended September 30, 2007, approximately 60% of our aggregate capacity was operated under the Delta code, approximately 39% was operated under the United code and approximately 1% was operated under the Midwest code.

SkyWest Airlines has been a partner with Delta in Salt Lake City and United in Los Angeles since 1987 and 1997, respectively. In 1998, SkyWest Airlines expanded its relationship with United to provide service in Portland, Seattle/Tacoma, San Francisco and additional Los Angeles markets. In 2004, SkyWest Airlines expanded its United Express operations to provide service in Chicago. As of September 30, 2007, SkyWest Airlines operated as a Delta Connection carrier in Salt Lake City and Atlanta, and as United Express carrier in Los Angeles, San Francisco, Denver, Chicago and the Pacific Northwest, operating approximately 1,800 total daily flights.

ASA has been a code-share partner with Delta in Atlanta since 1984. ASA expanded its operations as a Delta Connection carrier to also include Cincinnati and Salt Lake City in September 2002 and April 2003, respectively. ASA operates approximately 850 daily flights, all in the Delta Connection system.

We provide a substantial majority of regional airline service for Delta in Atlanta and Salt Lake City. In connection with our acquisition of ASA in September 2005, we established new, separate, but substantially similar, long-term fixed-fee Delta Connection Agreements with Delta for both SkyWest Airlines and ASA. We also obtained the right to use 29 gates in the Hartsfield-Jackson International Airport located in Atlanta, from which we currently provide service to Delta. Delta has also agreed that, starting in 2008, if Delta solicits requests for proposals to fly Delta Connection regional aircraft, ASA will be permitted to bid to maintain the same percentage of total Delta Connection regional jet flights that it flies during 2007, and, if ASA does not achieve the winning bid for the proposed flying, ASA will be permitted to match the terms of the winning bid to the extent necessary for ASA to maintain its percentage of Delta Connection regional jet flying that it operated during 2007.

Historically, multiple contractual relationships have enabled us to reduce reliance on any single major airline code and to enhance and stabilize operating results through a mix of contract flying and our controlled or "pro-rate" flying. For the nine months ended September 30, 2007, contract flying revenue and pro-rate revenue represented approximately 95% and 5%, respectively, of our total passenger revenue. On contract routes, the major airline partner controls scheduling, ticketing, pricing and seat inventories and we are compensated by the major airline partner at contracted rates based on the completed block hours, flight departures and other operating measures. On pro-rate flights, we control scheduling, ticketing, pricing and seat inventories and receive a pro-rated portion of passenger fares. As of September 30, 2007, essentially all of our Brasilia turboprops flown for Delta were flown under pro-rate arrangements, while approximately 62% of our Brasilia turboprops flown in the United system were flown under contractual arrangements, with the remaining 38% flown under pro-rate arrangements.

We had operating revenues of $875.6 million for the quarter ended September 30, 2007, a 10.6% increase, compared to $791.8 million for the quarter ended September 30, 2006. We had net income of $42.9 million for the quarter ended September 30, 2007, an increase of 5.5%, or $0.68 per diluted share compared to $40.7 million of net income or $0.63 per diluted share, for the quarter ended September 30, 2006.

We had operating revenues of $2.52 billion for the nine months ended September 30, 2007, an 8.4% increase, compared to $2.33 billion for the nine months ended September 30, 2006. We had net income of $118.3 million for the nine months ended September 30, 2007, an increase of 3.3%, or $1.83 per diluted share compared to $114.6 million of net income or $1.82 per diluted share, for the nine months ended September 30, 2006.

Total ASMs for the nine months ended September 30, 2007 increased 14.0%, compared to the nine months ended September 30, 2006 primarily as a result of an increase in our fleet size to 437 aircraft as of September 30, 2007, from 402 aircraft as of September 30, 2006. During the nine months ended September 30, 2007, we took delivery of eight new CRJ900s and acquired ten used CRJ700s and eleven used CRJ 200s from another operator. During the nine months ended September 30, 2007, we generated 17.16 billion ASMs, compared to 15.05 billion ASMs during the same period of 2006.

At September 30, 2007, we had approximately $728.3 million in cash and cash equivalents, restricted cash and marketable securities, compared to approximately $651.9 million as of December 31, 2006. Of the eight new CRJ900s we acquired during the nine months ended September 30, 2007, we financed seven aircraft under long-term debt arrangements and one aircraft under a lease arrangement. The ten CRJ700s we acquired during the nine months ended September 30, 2007 were acquired under sublease arrangements with a major partner at nominal monthly amounts. Of the eleven CRJ200s, we financed ten aircraft under lease arrangements and one was purchased with cash.

We currently plan to acquire 22 additional regional jet aircraft through 2009, 18 of which we intend to operate for United Express, as part of an aircraft transition plan, allowing United Express to remove 23 EMB-120 30 seat turboprop aircraft from the contract reimbursement model in the United Express Agreement and make room for 66 seat regional jet aircraft for United Express flying. Generally, the turboprop removals are intended to occur in conjunction with deliveries of new regional jet aircraft in order to ensure a smooth transition in existing markets. Additionally, SkyWest Airlines will swap four 50-seat CRJ200s for four regional jet aircraft configured with 76 seats in its Delta Connection operations. We currently have not selected a manufacturer for these aircraft; however we intend to begin discussions with potential suppliers of the aircraft. We anticipate that deliveries would begin in late 2008 and continue through 2009.

Critical Accounting Policies

Our significant accounting policies are summarized in Note 1 to our consolidated financial statements for the year ended December 31, 2006, which are presented in our Annual Report on Form 10-K filed with the SEC on March 1, 2007. Critical accounting policies are those policies that are most important to the preparation of our consolidated financial statements and require management's subjective and complex judgments due to the need to make estimates about the effect of matters that are inherently uncertain. Our critical accounting policies relate to revenue recognition, aircraft maintenance, aircraft leases, impairment of long-lived assets and intangibles and stock-based compensation expense. The application of these accounting policies involves the exercise of judgment and the use of assumptions as to future uncertainties and, as a result, actual results will differ, and could differ materially from such estimates.

Results of Operations

Three Months Ended September 30, 2007 and 2006

Operating Statistics. The following table sets forth our major operational statistics and the percentage-of-change for the quarters identified below.

                                                     For the three months ended September 30,
                                                      2007              2006           % Change

Passengers carried                                    9,137,212         8,171,812            11.8 %
Revenue passenger miles (000)                         4,811,282         4,156,637            15.7 %
Available seat miles (000)                            6,059,501         5,281,794            14.7 %
Passenger load factor                                      79.4 %            78.7 %           0.7 pts
Passenger breakeven load factor                            74.0 %            72.9 %          1.10 pts
Yield per revenue passenger mile                           18.0 ¢            18.9 ¢          (4.8 )%
Revenue per available seat mile                            14.5 ¢            15.0 ¢          (3.3 )%
Cost per available seat mile                               13.5 ¢            13.9 ¢          (2.9 )%
Fuel cost per available seat mile                           4.7 ¢             5.1 ¢          (7.8 )%
Average passenger trip length (miles)                       527               509              35 %

Revenue Passenger Miles and Available Seat Miles. Our total revenue passenger miles, or RPMs, generated during the quarter ended September 30, 2007 increased 15.7% from the quarter ended September 30, 2006. Our total available seat miles, or ASMs, generated during the quarter ended September 30, 2007 increased 14.7% from the quarter ended September 30, 2006. The increase in RPMs and ASMs was primarily a result of increasing the size of our aircraft fleet from 402 as of September 30, 2006 to 437 as of September 30, 2007. Additionally, our average passenger trip length increased from 509 miles as of September 30, 2006 to 527 miles as of September 30, 2007, primarily due to the increased number of CRJ700s and CRJ900s placed into service since September 30, 2006, which typically operate over longer stage lengths.

Passengers Carried and Passenger Load Factor. Our passenger load factor increased to 79.4% for the quarter ended September 30, 2007, from 78.7% for the quarter ended September 30, 2006. During the quarter ended September 30, 2007, approximately 98% of our ASMs were generated by our contract flying, where Delta, United or Midwest controls scheduling, ticketing, pricing and seat inventories. Our contract-flying routes primarily supplement Delta, United and Midwest mainline service in previously established and developed markets. Changes made by Delta, United and Midwest in their respective ticket pricing, scheduling and seat inventories impact our load factor.

Revenue per Available Seat Mile. Our revenue per ASM decreased to 14.5¢ for the quarter ended September 30, 2007 from 15.0¢ for the quarter ended September 30, 2006. Under our contract flying arrangements with Delta and United, we are compensated for our direct fuel expenses, which we record as revenue. The average cost per gallon of fuel increased to $2.50 per gallon during the quarter ended September 30, 2007 from $2.27 during the quarter ended September 30, 2006. During the three months ended September 30, 2007, United purchased fuel directly from a fuel vendor for our aircraft operated out of Chicago, San Francisco, Los Angeles and Denver, which reduced our fuel costs and related passenger revenue compared to the quarter ended September 30, 2006 by approximately $44.3 million.

Our operating revenues increased 10.6% to $875.6 million for the quarter ended September 30, 2007, compared to $791.8 million for the quarter ended September 30, 2006. The increase in operating revenues was primarily due to the increase in our fleet size from 402 aircraft as of September 30, 2006 to 437 aircraft as of September 30, 2007.

Our passenger revenues, which represented 99.0% of our consolidated operating revenues for the quarter ended September 30, 2007, increased 10.5% to $867.1 million for the quarter ended September 30, 2007, from $784.6 million, or 99.1% of consolidated operating revenues, for the quarter ended September 30, 2006. Our passenger revenues, excluding fuel reimbursements from major partners, increased 13.5% for the quarter ended September 30, 2007 compared to the quarter ended September 30, 2006. The increase in passenger revenues (excluding fuel reimbursements) was primarily due to a 14.7% increase in ASMs, principally as a result of our increase in operating aircraft to 437 aircraft as of September 30, 2007, from 402 aircraft as of September 30, 2006. The increase in passenger revenues (excluding fuel reimbursements) was less than the increase in ASMs, primarily due to operating efficiencies obtained from increased stage lengths flown by our regional jets.

Our total ground handling and other revenues for the quarter ended September 30, 2007 increased approximately 17.7% from the quarter ended September 30, 2006. The increase was primarily related to higher volume of flights serviced under ground handling contracts with United and Delta, whereby we perform ground handling services for ten other airlines.

Cost per Available Seat Mile. Our cost per ASM decreased to 13.5¢ for the quarter ended September 30, 2007 from 13.9¢ for the quarter ended September 30, 2006. The decrease in cost per ASM was primarily due to the decrease in our cost of fuel per ASM to 4.7¢ for the quarter ended September 30, 2007, from 5.1¢ for the quarter ended September 30, 2006, as discussed above. Changes in the components of our other operating expenses are discussed in the table below.

The following table sets forth information regarding our operating expense components for the quarters ended September 30, 2007 and 2006. Operating expenses are expressed as a percentage of operating revenues. Individual expense components are also expressed as cents per ASM.

                                                     Three months ended September 30,
                                            2007                                         2006
                                             Percentage      Cents                          Percentage    Cents
                                                 of           per                               of         Per
                               Amount         Revenue         ASM             Amount         Revenue       ASM
                           (in thousands)                                 (in thousands)
Salaries, wages and
employee benefits         $        181,959         20.8 %        3.0     $        168,604         21.3 %     3.4
Aircraft costs                     127,305         14.5 %        2.1              118,189         14.9 %     2.2
Maintenance                         76,095          8.7 %        1.3               55,104          7.0 %     1.0
Fuel                               284,129         32.5 %        4.7              271,058         34.2 %     5.1
Other airline expenses             113,644         13.0 %        1.9               91,115         11.5 %     1.7
Interest                            32,831          3.7 %        0.5               28,987          3.7 %     0.5
Total airline expenses    $        815,963                      13.5     $        733,057                   13.9

Salary Wages and Employee Benefits. The cost per ASM for salaries, wages and employee benefits decreased to 3.0¢ for the quarter ended September 30, 2007, compared to 3.4¢ for the quarter ended September 30, 2006. The average number of full-time equivalent employees increased 2.0% to 14,234 for the quarter ended September 30, 2007, from 13,960 for the quarter ended September 30, 2006. The increase in number of employees was primarily due to the addition of personnel required to operate the additional aircraft placed into service between September 30, 2006 and September 30, 2007, and related ground handling operations. The decrease in the cost per ASM for salaries, wages and employee benefits was primarily due to efficiencies obtained through operating larger aircraft over increased stage lengths.

Aircraft Costs. The cost per ASM for aircraft costs, including aircraft rent and depreciation, decreased to 2.1¢ for the quarter ended September 30, 2007, from 2.2¢ for the quarter ended September 30, 2006. The decrease in cost per ASM was primarily due to the addition of ten CRJ700s and 14 CRJ900s between September 30, 2006 and September 30, 2007. CRJ 700s and CRJ 900s have lower ownership costs per ASM than our CRJ200 and turboprop aircraft.

Maintenance. The cost per ASM for maintenance expense increased to 1.3¢ for the quarter ended September 30, 2007, compared to 1.0¢ for the quarter ended September 30, 2006. The increase was primarily related to the timing of engine overhaul events on aircraft operated under our Delta Connection Agreements and other direct maintenance events during the quarter ended September 30, 2007. Under our United Express and Midwest Agreements, specific amounts are included in the rates and charges for mature maintenance on regional jet engines that we record as revenue. However, consistent with the direct expense maintenance policy, we record maintenance expense on our CRJ200 engines as it is incurred. As a result, during the quarter ended September 30, 2007, we collected and recorded as revenue $7.7 million (pretax) under the United Express and Midwest Agreements to compensate us for future engine maintenance overhauls, with no corresponding expense relative to CRJ200 engine maintenance overhauls. Because the "Maintenance" line in the table above does not include salaries, wages and employee benefits associated with our maintenance operations (those costs are included in the "Salary, wages and employee benefits" line in the table above), the "Maintenance" expense line in the above table differs from the "Maintenance" line in our condensed consolidated statements of income.

Fuel. The cost per ASM for fuel decreased 7.8% to 4.7¢ for the quarter ended September 30, 2007, from 5.1¢ for the quarter ended September 30, 2006. The average cost per gallon of fuel increased to $2.50 per gallon during the quarter ended September 30, 2007 from $2.27 during the quarter ended September 30, 2006. During the three months ended September 30, 2007, United purchased fuel directly from a fuel vendor for our aircraft operated out of Chicago, San Francisco, Los Angeles and Denver, which reduced our fuel costs and related passenger revenue compared to the quarter ended September 30, 2006 by approximately $44.3 million.

Other airline expenses. The cost per ASM for other airline expenses, primarily consisting of landing fees, station rentals, computer reservation system fees and hull and liability insurance, increased 11.8% to 1.9¢ for the quarters ended

September 30, 2007, from 1.7¢ for the quarter ended September 30, 2006. The increase in cost per ASM was primarily due to an increase in landing fees and station rents. These costs are primarily reimbursed from our major partners.

Interest. The cost per ASM for interest expense remained constant at 0.5¢ for the quarter ended September 30, 2007 and 2006.

Total Airline Expenses. Total airline expenses (consisting of total operating and interest expenses) increased 11.3% to $816.0 million for the quarter ended September 30, 2007, compared to $733.1 million for the quarter ended September 30, 2006. The increase in total airline expense was primarily due to a 14.7% increase in ASMs (which resulted principally from the increase in our fleet size and the increase in our average passenger trip length). As a percentage of total operating revenues, total airline expenses increased to 93.2% for the quarter ended September 30, 2007, from 92.6% for the quarter ended September 30, 2006. The increase in total airline expenses as a percentage of consolidated operating revenues was primarily due to increases in salaries, wages and benefits and maintenance costs as described above.

Total Airline Expenses Excluding Fuel. Total airline expenses for the quarter ended September 30, 2007, excluding fuel charges (which are substantially reimbursable by our major partners), increased approximately 15.1% from the quarter ended September 30, 2006. The increase was primarily a result of a 14.7% increase in ASMs (which resulted principally from the increase in our fleet and the increase in the average passenger trip length).

Net Income. Net income increased to $42.9 million, or $0.68 per diluted share, for the quarter ended September 30, 2007, compared to $40.7 million, or $0.63 per diluted share, for the quarter ended September 30, 2006. Factors relating to the change in net income are discussed above.

Nine Months Ended September 30, 2007 and 2006

Operating Statistics.  The following table sets forth our major operational
statistics and the percentage-of-change for the periods identified below.

                                                 For the nine months ended September 30,
                                                  2007             2006          % Change

Passengers carried                               25,892,757       23,725,518            9.1 %
Revenue passenger miles
(000)                                            13,497,141       11,857,945           13.8 %
Available seat miles
(000)                                            17,156,421       15,054,072           14.0 %
Passenger load factor                                  78.7 %           78.8 %         (0.1 )pts
Passenger breakeven load
factor                                                 73.5 %           72.9 %          0.6 pts
Yield per revenue
passenger mile                                         18.5 ¢           19.4 ¢         (4.6 )%
Revenue per available
seat mile                                              14.7 ¢           15.4 ¢         (4.5 )%
Cost per available seat
mile                                                   13.7 ¢           14.3 ¢         (4.2 )%
Fuel cost per available
seat mile                                               4.5 ¢            5.0 ¢        (10.0 )%
Average passenger trip
length (miles)                                          521              500            4.2 %

Revenue Passenger Miles and Available Seat Miles. Our total RPMs generated during the nine months ended September 30, 2007 increased 13.8% from the nine months ended September 30, 2006. Our total ASMs generated during the nine months ended September 30, 2007 increased 14.0% from the nine months ended September 30, 2006. The increase in RPMs and ASMs was primarily a result of increasing the size of our aircraft fleet from 402 as of September 30, 2006 to 437 as of September 30, 2007. Additionally, our average passenger trip length increased from 500 miles as of September 30, 2006 to 521 miles as of September 30, 2007, primarily due to the increased number of CRJ700s and CRJ900s we placed into service since September 30, 2006, which typically operate over longer stage lengths. The decrease in the cost per ASM for salaries, wages and employee . . .