SKYW SkyWest Inc

Second Quarter 2024 Summary

• Q2 2024 pre-tax income of $102 million, net income of $76 million, or $1.82 per diluted share
• SkyWest took delivery of eight of the 20 E175 partner-financed aircraft under a previously announced agreement with United Airlines
• Block hour production increased 12% in Q2 2024 compared to Q2 2023

SkyWest, Inc. (NASDAQ: SKYW) (“SkyWest”) today reported financial and operating results for Q2 2024, including net income of $76 million, or $1.82 per diluted share, compared to net income of $15 million, or $0.35 per diluted share, for Q2 2023.

Commenting on the results, Chip Childs, Chief Executive Officer of SkyWest, said, “We are pleased with our continuing progress towards organically rebuilding our levels of captain availability. This opens the door to pursue and monetize the multiple pathways available to us to recapture and regrow small and underserved markets over the coming years. I want to thank our people for their solid operational execution.”

Financial Results

Revenue was $867 million in Q2 2024, up $141 million, or 19%, from $726 million in Q2 2023. SkyWest’s block hour production increased 12% in Q2 2024 compared to Q2 2023, which reflects improvements in captain availability since Q2 2023.

For purposes of revenue comparability year-over-year, SkyWest recognized $6 million of previously deferred revenue during Q2 2024 under its flying contracts, compared to deferring $60 million of revenue under its flying contracts during Q2 2023. As of June 30, 2024, SkyWest had cumulative deferred revenue of $361 million on its balance sheet.

Operating expenses were $747 million in Q2 2024, up $53 million, or 8%, from $694 million in Q2 2023. The increase in operating expenses was primarily driven by the 12% increase in block hour production year-over-year.

Capital and Liquidity

SkyWest had $834 million in cash and marketable securities at June 30, 2024, down from $835 million at December 31, 2023.

Total debt at June 30, 2024 was $2.8 billion, down from $3.0 billion at December 31, 2023. Capital expenditures during Q2 2024 were $19 million for the purchase of spare engines and other fixed assets.

Under its previously announced share repurchase program authorized by the SkyWest Board of Directors in May 2023, SkyWest repurchased 177,000 shares of common stock for $13.3 million during Q2 2024 at an average price per share of $75.23. As of June 30, 2024, SkyWest had $69 million of remaining availability under its current share repurchase program.

Commercial Agreements

SkyWest is coordinating with its major airline partners to optimize the timing of upcoming announced fleet deliveries. The table below summarizes E175 aircraft deliveries SkyWest received during the first half of 2024 and anticipated future deliveries during the periods indicated based on currently available information, which is subject to change.

 

Q1 & Q2 2024

Q3 & Q4 2024

2025

2026

Total

Delta Air Lines

ꟷ

1

ꟷ

ꟷ

1

United Airlines(1)

11

13

7

8

39

Alaska Airlines

ꟷ

ꟷ

1

ꟷ

1

Total

11

14

8

8

41

 

(1) Includes 11 partner-financed E175s delivered in the first half of 2024 and 9 partner-financed deliveries expected in the second half of 2024.

By the end of 2026, SkyWest is scheduled to operate a total of 278 E175 aircraft.

About SkyWest

SkyWest, Inc. is the holding company for SkyWest Airlines, SkyWest Charter (“SWC”) and SkyWest Leasing, an aircraft leasing company. SkyWest Airlines has a fleet of approximately 500 aircraft connecting passengers to over 240 destinations throughout North America. SkyWest Airlines operates through partnerships with United Airlines, Delta Air Lines, American Airlines, and Alaska Airlines carrying more than 38 million passengers in 2023.

SkyWest will host its conference call to discuss its second quarter 2024 results today, July 25, 2024, at 2:30 p.m. Mountain Time. The conference call number is 1-888-330-2455 for domestic callers, and 1-240-789-2717 for international callers. Please call up to ten minutes in advance to ensure you are connected prior to the start of the call. The conference call will also be available live on the Internet at https://events.q4inc.com/attendee/662090633. This press release and additional information regarding SkyWest, including access information for the digital rebroadcast of the second quarter 2024 results call, participation at investor conferences and investor presentations can be accessed at inc.skywest.com.

Forward Looking-Statements

In addition to historical information, this release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Words such as "forecasts," "expects," "intends," "believes," "anticipates," "estimates," "should," "likely" and similar expressions identify forward-looking statements. Such statements include, but are not limited to, statements about the continued demand for our product, the effect of economic conditions on SkyWest’s business, financial condition and results of operations, the scheduled aircraft deliveries and fleet size for SkyWest in upcoming periods and the related execution of SkyWest’s fleet transition strategy and expected timing thereof, expected production levels in future periods and associated staffing challenges, pilot attrition trends, SkyWest’s coordination with major airline partners to optimize the delivery of aircraft under previously announced agreements, the expected terms, timing and benefits related to SkyWest’s leasing and joint venture transactions, as well as SkyWest’s future financial and operating results, plans, objectives, expectations, estimates, intentions and outlook, and other statements that are not historical facts. All forward-looking statements included in this release are made as of the date hereof and are based on information available to SkyWest as of such date. SkyWest assumes no obligation to update any forward-looking statements unless required by law. Readers should note that many factors could affect the future operating and financial results of SkyWest and could cause actual results to vary materially from those expressed in forward-looking statements set forth in this release. These factors include, but are not limited to: the challenges of competing successfully in a highly competitive and rapidly changing industry; developments associated with fluctuations in the economy and the demand for air travel, including related to inflationary pressures, and related decreases in customer demand and spending; uncertainty regarding continued recovery from the COVID-19 pandemic and other potential future outbreaks of infectious diseases or other health concerns, and the consequences of such outbreaks to the travel industry, including travel demand and travel behavior, and our major airline partners in general and the financial condition and operating results of SkyWest in particular; the prospects of entering into agreements with existing or other carriers to fly new aircraft; ongoing negotiations between SkyWest and its major airline partners regarding their contractual obligations; uncertainties regarding operation of new aircraft; the ability to attract and retain qualified pilots, including captains, and related staffing challenges; the impact of regulatory issues such as pilot rest rules and qualification requirements; the ability to obtain aircraft financing; the financial stability of SkyWest’s major airline partners and any potential impact of their financial condition on the operations of SkyWest; fluctuations in flight schedules, which are determined by the major airline partners for whom SkyWest conducts flight operations; variations in market and economic conditions; significant aircraft lease and debt commitments; estimated useful life of long-lived assets, residual aircraft values and related impairment charges; labor relations and costs and labor shortages; the impact of global instability; rapidly fluctuating fuel costs and potential fuel shortages; the impact of weather-related, natural disasters and other air safety incidents on air travel and airline costs; aircraft deliveries; uncertainty regarding ongoing hostility between Russia and the Ukraine, as well as Israel and Hamas, and the related impacts on macroeconomic conditions and on the international operations of any of our major airline partners as a result of such conflict; and other unanticipated factors. Risk factors, cautionary statements and other conditions which could cause SkyWest’s actual results to differ materially from management’s current expectations are contained in SkyWest’s filings with the Securities and Exchange Commission, including its most recent Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K.

SkyWest, Inc. and Subsidiaries

Condensed Consolidated Statements of Income (Loss)

(Dollars and Shares in Thousands, Except per Share Amounts)

(Unaudited)

 

 

Three Months Ended

Six Months Ended

 

June 30,

June 30,

 

2024

2023

2024

2023

OPERATING REVENUES:

 

 

 

 

 

 

 

 

Flying agreements

$

838,170

 

$

700,394

 

$

1,616,459

 

$

1,364,232

 

Lease, airport services and other

 

28,948

 

 

25,249

 

 

54,273

 

 

53,242

 

Total operating revenues

 

867,118

 

 

725,643

 

 

1,670,732

 

 

1,417,474

 

 

 

 

 

 

 

 

 

 

OPERATING EXPENSES:

 

 

 

 

 

 

 

 

Salaries, wages and benefits

 

355,005

 

 

322,441

 

 

706,004

 

 

657,642

 

Aircraft maintenance, materials and repairs

 

183,267

 

 

162,491

 

 

328,682

 

 

304,717

 

Depreciation and amortization

 

96,814

 

 

97,169

 

 

192,684

 

 

191,318

 

Aircraft fuel

 

21,328

 

 

18,279

 

 

42,492

 

 

39,243

 

Airport-related expenses

 

17,535

 

 

16,955

 

 

38,423

 

 

35,250

 

Aircraft rentals

 

1,310

 

 

2,428

 

 

2,586

 

 

21,956

 

Other operating expenses

 

72,219

 

 

74,020

 

 

140,715

 

 

140,192

 

Total operating expenses

 

747,478

 

 

693,783

 

 

1,451,586

 

 

1,390,318

 

OPERATING INCOME

 

119,640

 

 

31,860

 

 

219,146

 

 

27,156

 

 

 

 

 

 

 

 

 

 

OTHER INCOME (EXPENSE):

 

 

 

 

 

 

 

 

Interest income

 

12,040

 

 

10,494

 

 

23,666

 

 

20,527

 

Interest expense

 

(28,966

)

 

(33,718

)

 

(58,795

)

 

(67,338

)

Other income (loss), net

 

(548

)

 

9,001

 

 

(1,676

)

 

11,175

 

Total other expense, net

 

(17,474

)

 

(14,223

)

 

(36,805

)

 

(35,636

)

 

 

 

 

 

 

 

 

 

INCOME (LOSS) BEFORE INCOME TAXES

 

102,166

 

 

17,637

 

 

182,341

 

 

(8,480

)

PROVISION (BENEFIT) FOR INCOME TAXES

 

26,588

 

 

2,218

 

 

46,465

 

 

(1,828

)

NET INCOME (LOSS)

$

75,578

 

$

15,419

 

$

135,876

 

$

(6,652

)

 

 

 

 

 

 

 

 

 

BASIC EARNINGS (LOSS) PER SHARE

$

1.88

 

$

0.35

 

$

3.38

 

$

(0.14

)

DILUTED EARNINGS (LOSS) PER SHARE

$

1.82

 

$

0.35

 

$

3.28

 

$

(0.14

)

 

 

 

 

 

 

 

 

 

Weighted average common shares:

 

 

 

 

 

 

 

 

Basic

 

40,179

 

 

43,837

 

 

40,239

 

 

46,614

 

Diluted

 

41,431

 

 

44,219

 

 

41,462

 

 

46,614

 

SkyWest, Inc. and Subsidiaries

Summary of Consolidated Balance Sheets

(Dollars in Thousands)

(Unaudited)

 

 

June 30,

December 31,

 

2024

2023

Cash and marketable securities

$

834,269

$

835,223

Other current assets

 

280,887

 

296,673

Total current assets

 

1,115,156

 

1,131,896

 

 

 

 

 

Property and equipment, net

 

5,357,468

 

5,405,685

Deposits on aircraft

 

77,282

 

77,282

Other long-term assets

 

412,533

 

411,430

Total assets

$

6,962,439

$

7,026,293

 

 

 

 

 

Current portion, long-term debt

$

497,744

$

443,869

Other current liabilities

 

826,184

 

810,423

Total current liabilities

 

1,323,928

 

1,254,292

 

 

 

 

 

Long-term debt, net of current maturities

 

2,284,375

 

2,562,183

Other long-term liabilities

 

1,122,956

 

1,096,316

Stockholders' equity

 

2,231,180

 

2,113,502

Total liabilities and stockholders' equity

$

6,962,439

$

7,026,293

SkyWest, Inc. and Subsidiaries

Additional Operational Information (unaudited)

 

SkyWest’s fleet in scheduled service or under contract by aircraft type:

 

June 30, 2024

December 31, 2023

June 30, 2023

E175 aircraft

248

237

235

CRJ900 aircraft

41

41

41

CRJ700 aircraft

99

118

110

CRJ200 aircraft

87

89

106

Total aircraft in service or under contract

475

485

492

As of June 30, 2024, SkyWest leased 35 CRJ700s and five CRJ900s to third parties and had 16 CRJ200s that are ready for service under SWC operations (these aircraft are excluded from the table above).

Selected operational data:

 

 

For the three months ended June 30,

For the six months ended June 30,

Block hours by aircraft type:

2024

2023

% Change

2024

2023

% Change

E175s

195,207

 

168,416

 

15.9

 

%

374,192

 

329,167

 

13.7

 

%

CRJ900s

20,823

 

19,698

 

5.7

 

%

38,215

 

40,411

 

(5.4

)

%

CRJ700s

58,311

 

50,094

 

16.4

 

%

116,596

 

102,122

 

14.2

 

%

CRJ200s

43,121

 

44,409

 

(2.9

)

%

78,260

 

87,159

 

(10.2

)

%

Total block hours

317,462

 

282,617

 

12.3

 

%

607,263

 

558,859

 

8.7

 

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Departures

189,325

 

173,837

 

8.9

 

%

358,757

 

334,460

 

7.3

 

%

Passengers carried

10,691,017

 

9,887,779

 

8.1

 

%

19,840,470

 

18,463,649

 

7.5

 

%

Adjusted flight completion

99.9

%

99.9

%

—

 

pts

99.9

%

99.9

%

—

 

pts

Raw flight completion

99.0

%

98.9

%

0.1

 

pts

98.4

%

98.2

%

0.2

 

pts

Passenger load factor

84.4

%

85.5

%

(1.1

)

pts

82.7

%

83.0

%

(0.3

)

pts

Average trip length

460

 

451

 

2.0

 

%

461

 

461

 

—

 

%

Adjusted flight completion percent excludes weather cancellations. Raw flight completion includes weather cancellations.

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Investor Relations 435.634.3200 Investor.relations@skywest.com

Corporate Communications 435.634.3553 corporate.communications@skywest.com