Net income decreased $3.1 million during the quarter ended September 30, 2010 compared to the quarter ended September 30, 2009. The decrease in net income was primarily due to a reduction in rates paid to SkyWest Airlines, Inc. ("SkyWest Airlines") and Atlantic Southeast Airlines, Inc. ("Atlantic Southeast") under their respective Delta Air Lines ("Delta") Connection Agreements. Those rate reductions decreased SkyWest's revenue during the quarter by approximately $4.9 million (pre-tax). The rate reduction resulted from Delta exercising its contractual right to reduce the rates payable under the flying contracts to the average rates and to the second lowest rate (effective September 8, 2010) within the Delta Connection portfolio. SkyWest and Delta have reached a preliminary understanding on these issues and anticipate reaching a resolution during the fourth quarter of 2010.