SkyWest Announces Sale of Interest in Trip Linhas Aereas S.A.

SkyWest, Inc.

announced today that it entered into an agreement on Wednesday, May 23, 2012, to sell its 26% ownership (20% common and 6% preferred) in the Brazilian airline Trip Linhas Aereas S.A. ("TRIP") for a price of $42 million (USD). SkyWest has agreed to sell its TRIP shares to Trip Investimentos Ltda., a Brazilian limited liability company affiliated with TRIP. The purchase price is scheduled to be paid in three installments over a two-year period and may be accelerated based on certain conditions under the purchase agreement. As part of the agreement, SkyWest also received an option to acquire 15.38% of the ownership in Trip Investimentos Ltda., the purchaser of the shares, which SkyWest may exercise at its discretion. The call option has an initial set price per share, escalates annually at a specified rate and can be exercised up to between four to six years following receipt by SkyWest of the required installment payments from Trip Investimentos Ltda., under the agreement. SkyWest's sale of the TRIP shares, as well as the other transactions governed by the purchase agreement, are contingent on TRIP's receipt of Brazilian regulatory approvals. SkyWest acquired its initial interest in TRIP in August 2008 and has invested a total of $30 million USD for its 26% interest. Due to SkyWest's treatment of its TRIP ownership position under the equity method of accounting, it has decreased its investment in TRIP to a current carrying amount of $23.2 million as of March 31, 2012. SkyWest anticipates recording a net gain on the investment upon closing, however the amount will be contingent on SkyWest recording its share of TRIP's income or loss up until the closing date of the transaction, which is yet to be determined and is subject to TRIP's receipt of regulatory approvals.