I can see ACAI and SKYW agreeing to cost reductions coupled with volume increases above plan. The end result is more revenue and income for the regionals, although at a lower rate of return. UAL will shed as much flying as they can get away with. SKYW at the current rate is more profitable for UAL, than than UAL's own flying is for UAL. Of course, one of us is right and one wrong. The market will let us know soon enough. Let us know when you close out your short position. I have been long SKYW since 1991. There have been many big dips in the road but the 10 year record of SKYW is pretty hard to beat.
Like you, I have been in and out of the stock since the early days. it has been a good ride. My only issue is that I think that the market is valuing in a perfect world senario for SKYW which, given the issues lurking around the industry, I believe is overly optimistic. If the stock pulls back to the $18-$19 level, I'd close my short and if it drops to -$15, I'd go long.