UPDATE 3-Regional US carrier SkyWest profit edges higher

* Net income rises 9.2 percent

* Lower costs, more flying hours boost results

* SkyWest shares jump 5 pct on Nasdaq (Recasts with stock activity, analyst comment)

NEW YORK, Nov 5 (Reuters) - Regional airline SkyWest Inc (SKYW.O) posted higher quarterly earnings on Thursday, exceeding analysts' expectations, helped by a drop in fuel costs, and its shares rose as much as 7 percent.

The carrier's net income rose 9.2 percent to $28.6 million, or 50 cents per share, from $26.2 million, or 45 cents per share, a year earlier.

Analysts, on average, expected a profit of 45 cents per share, according to Thomson Reuters I/B/E/S.

Revenue fell to $637.8 million, missing analysts' forecast of $781.3 million. Expenses cropped by roughly one-third.

Shares of SkyWest rose as high as $14.99 on the Nasdaq. They were 5 percent higher in afternoon trading at $14.71.

St. George, Utah-based SkyWest said the number of hours it flew during the quarter rose 3.2 percent.

"We think domestic capacity reductions by major airlines over the past two years could provide some opportunity for regional growth in '10 if air travel demand improves," S&P equity analyst Jim Corridore said in a note.

SkyWest, whose jets fly for Delta Air Lines (DAL.N) and UAL Corp's United (UAUA.O), pinned the drop in revenue on lower reimbursements for fuel costs paid by the major airlines. It includes fuel reimbursements as part of its operating revenue.

The company's quarterly earnings comes on the heels of results from Republic Airways Holdings (RJET.O), which operates several regional airlines and bought Frontier Airlines and Midwest Airlines this year.

Republic's earnings of 9 cents per share, reported after the close of the market on Wednesday, fell short of analyst estimates of 29 cents per share. Its shares dropped 3.6 percent to $7.75 on the Nasdaq. (Reporting by Deepa Seetharaman; Editing by Derek Caney, Maureen Bavdek and Steve Orlofsky)