SKYW SkyWest Inc

Third Quarter 2024 Summary

• Q3 2024 pre-tax income of $116 million, net income of $90 million, or $2.16 per diluted share
• SkyWest reached an agreement with United Airlines (“United”) to place 40 CRJ550s under a multi-year contract (SkyWest to acquire 11 used CRJ550s and convert 29 of its CRJ700 fleet to CRJ550s)
• SkyWest took delivery of nine E175 partner-financed aircraft under a previously announced agreement with United

 

SkyWest, Inc. (NASDAQ: SKYW) (“SkyWest”) today reported financial and operating results for Q3 2024, including net income of $90 million, or $2.16 per diluted share, compared to net income of $23 million, or $0.55 per diluted share, for Q3 2023.

Commenting on the results, Chip Childs, Chief Executive Officer of SkyWest, said, “Our ability to organically grow the number of available captains for the first three quarters of 2024 has opened up incremental growth vectors for us. We are making significant progress in recapturing underserved markets, increasing fleet utilization and quickly placing new aircraft deliveries into service. I want to thank our people for their amazing work as we continue to execute on these opportunities, including the expansion of our CRJ550 and E175 fleets.”

Financial Results

Revenue was $913 million in Q3 2024, up $147 million, or 19%, from $766 million in Q3 2023. SkyWest’s block hour production increased 15% in Q3 2024 compared to Q3 2023, which reflects improvements in captain availability since Q3 2023.

For purposes of revenue comparability year-over-year, SkyWest recognized $19 million of previously deferred revenue under its flying contracts during Q3 2024, compared to deferring $57 million of revenue during Q3 2023. As of September 30, 2024, SkyWest had cumulative deferred revenue of $342 million under its flying contracts on its balance sheet.

Operating expenses were $781 million in Q3 2024, up $64 million, or 9%, from $717 million in Q3 2023, driven by an incremental increase in flight production year-over-year.

Capital and Liquidity

SkyWest had $836 million in cash and marketable securities at September 30, 2024, similar to the $835 million balance at December 31, 2023.

Total debt at September 30, 2024 was $2.7 billion, down from $3.0 billion at December 31, 2023. Capital expenditures during Q3 2024 were $97 million for the purchase of aircraft, 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 217,000 shares of common stock for $16.3 million during Q3 2024 at an average price per share of $74.98. As of September 30, 2024, SkyWest had $53 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 three quarters of 2024 and anticipated future deliveries during the periods indicated based on currently available information, which is subject to change.

 

 

 

 

 

 

 

 

 

 

 

 

 

Completed YTD Q3 2024

 

Q4 2024

 

2025

 

2026

 

Total

Delta Air Lines

 

1

 

ꟷ

 

ꟷ

 

ꟷ

 

1

United Airlines(1)

 

20

 

4

 

7

 

8

 

39

Alaska Airlines

 

ꟷ

 

ꟷ

 

1

 

ꟷ

 

1

Total

 

21

 

4

 

8

 

8

 

41

 

(1) The 20 E175 deliveries completed year-to-date Q3 2024 were partner-financed aircraft.

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

As announced today, SkyWest reached an agreement with United to place 40 CRJ550s under a multi-year contract. Pursuant to this agreement, SkyWest will acquire 11 used CRJ550s and convert 29 of its CRJ700s to CRJ550s. The aircraft are anticipated to be placed into service between late 2024 and the end of 2026 based on currently available information, which is subject to change. One of such CRJ550 aircraft was acquired in Q3 2024.

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 third quarter 2024 results today, October 31, 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/618656128. This press release and additional information regarding SkyWest, including access information for the digital rebroadcast of the third 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

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

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

Nine Months Ended

 

 

September 30,

 

September 30,

 

 

2024

 

2023

 

2024

 

2023

OPERATING REVENUES:

 

 

 

 

 

 

 

 

 

 

 

 

Flying agreements

 

$

883,494

 

$

741,898

 

$

2,499,953

 

$

2,106,130

Lease, airport services and other

 

 

29,292

 

 

24,273

 

 

83,565

 

 

77,515

Total operating revenues

 

 

912,786

 

 

766,171

 

 

2,583,518

 

 

2,183,645

 

 

 

 

 

 

 

 

 

 

 

 

 

OPERATING EXPENSES:

 

 

 

 

 

 

 

 

 

 

 

 

Salaries, wages and benefits

 

 

377,435

 

 

333,017

 

 

1,083,439

 

 

990,659

Aircraft maintenance, materials and repairs

 

 

181,652

 

 

178,465

 

 

510,334

 

 

483,182

Depreciation and amortization

 

 

96,662

 

 

96,560

 

 

289,346

 

 

287,878

Aircraft fuel

 

 

22,724

 

 

23,330

 

 

65,216

 

 

62,573

Airport-related expenses

 

 

22,642

 

 

18,398

 

 

61,065

 

 

53,648

Aircraft rentals

 

 

1,339

 

 

2,099

 

 

3,925

 

 

24,055

Other operating expenses

 

 

78,897

 

 

65,011

 

 

219,612

 

 

205,203

Total operating expenses

 

 

781,351

 

 

716,880

 

 

2,232,937

 

 

2,107,198

OPERATING INCOME

 

 

131,435

 

 

49,291

 

 

350,581

 

 

76,447

 

 

 

 

 

 

 

 

 

 

 

 

 

OTHER INCOME (EXPENSE):

 

 

 

 

 

 

 

 

 

 

 

 

Interest income

 

 

12,460

 

 

11,234

 

 

36,126

 

 

31,761

Interest expense

 

 

(27,808)

 

 

(32,543)

 

 

(86,603)

 

 

(99,881)

Other income (loss), net

 

 

109

 

 

(3,631)

 

 

(1,567)

 

 

7,544

Total other expense, net

 

 

(15,239)

 

 

(24,940)

 

 

(52,044)

 

 

(60,576)

 

 

 

 

 

 

 

 

 

 

 

 

 

INCOME BEFORE INCOME TAXES

 

 

116,196

 

 

24,351

 

 

298,537

 

 

15,871

PROVISION (BENEFIT) FOR INCOME TAXES

 

 

26,487

 

 

873

 

 

72,952

 

 

(955)

NET INCOME

 

$

89,709

 

$

23,478

 

$

225,585

 

$

16,826

 

 

 

 

 

 

 

 

 

 

 

 

 

BASIC EARNINGS PER SHARE

 

$

2.23

 

$

0.56

 

$

5.61

 

$

0.37

DILUTED EARNINGS PER SHARE

 

$

2.16

 

$

0.55

 

$

5.44

 

$

0.37

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average common shares:

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

40,253

 

 

41,826

 

 

40,244

 

 

45,018

Diluted

 

 

41,561

 

 

42,580

 

 

41,495

 

 

45,540

SkyWest, Inc. and Subsidiaries

Summary of Consolidated Balance Sheets

(Dollars in Thousands)

(Unaudited)

 

 

 

 

 

 

 

September 30,

 

December 31,

 

2024

 

2023

Cash and marketable securities

$

836,042

 

$

835,223

Other current assets

 

298,175

 

 

296,673

Total current assets

 

1,134,217

 

 

1,131,896

 

 

 

 

 

 

Property and equipment, net

 

5,345,811

 

 

5,405,685

Deposits on aircraft

 

71,457

 

 

77,282

Other long-term assets

 

405,115

 

 

411,430

Total assets

$

6,956,600

 

$

7,026,293

 

 

 

 

 

 

Current portion, long-term debt

$

496,789

 

$

443,869

Other current liabilities

 

817,385

 

 

810,423

Total current liabilities

 

1,314,174

 

 

1,254,292

 

 

 

 

 

 

Long-term debt, net of current maturities

 

2,196,548

 

 

2,562,183

Other long-term liabilities

 

1,134,381

 

 

1,096,316

Stockholders' equity

 

2,311,497

 

 

2,113,502

Total liabilities and stockholders' equity

$

6,956,600

 

$

7,026,293

SkyWest, Inc. and Subsidiaries

Additional Operational Information (unaudited)

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

 

 

 

 

 

 

 

 

 

September 30, 2024

 

December 31, 2023

 

September 30, 2023

E175 aircraft

 

258

 

237

 

235

CRJ900 aircraft

 

36

 

41

 

37

CRJ700 aircraft (1)

 

109

 

118

 

117

CRJ200 aircraft

 

81

 

89

 

104

Total aircraft in service or under contract

 

484

 

485

 

493

___________________________

(1) Includes CRJ550 aircraft, a 50-seat configuration of the CRJ700 aircraft.

As of September 30, 2024, SkyWest leased 35 CRJ700s and five CRJ900s to third parties and had 17 CRJ200s that are configured for service under SWC operations (these aircraft are excluded from the table above).

Selected operational data:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For the three months ended September 30,

 

For the nine months ended September 30,

Block hours by aircraft type:

 

2024

 

 

2023

 

 

% Change

 

2024

 

 

2023

 

 

% Change

E175s

 

206,607

 

 

171,615

 

 

20.4

%

 

580,799

 

 

500,782

 

 

16.0

%

CRJ900s

 

22,957

 

 

18,979

 

 

21.0

%

 

61,172

 

 

59,390

 

 

3.0

%

CRJ700s

 

59,807

 

 

56,117

 

 

6.6

%

 

176,403

 

 

158,239

 

 

11.5

%

CRJ200s

 

45,088

 

 

44,119

 

 

2.2

%

 

123,348

 

 

131,278

 

 

(6.0)

%

Total block hours

 

334,459

 

 

290,830

 

 

15.0

%

 

941,722

 

 

849,689

 

 

10.8

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Departures

 

201,397

 

 

180,069

 

 

11.8

%

 

560,154

 

 

514,529

 

 

8.9

%

Passengers carried

 

11,263,322

 

 

10,208,005

 

 

10.3

%

 

31,103,792

 

 

28,671,654

 

 

8.5

%

Adjusted flight completion

 

99.9

%

 

99.9

%

 

—

pts

 

99.9

%

 

99.9

%

 

—

pts

Raw flight completion

 

99.5

%

 

99.1

%

 

0.4

pts

 

98.8

%

 

98.5

%

 

0.3

pts

Passenger load factor

 

83.7

%

 

85.1

%

 

(1.4)

pts

 

83.0

%

 

83.7

%

 

(0.7)

pts

Average trip length

 

455

 

 

446

 

 

2.0

%

 

467

 

 

456

 

 

2.4

%

 

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

 

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