First Quarter 2022 Profit for SkyWest

The U.S. regional carrier, SkyWest, has just reported financial and operating results for the first quarter of 2022, including net income of $18 million, compared to a net income of $36 million for the same period last year.  

Commenting on the results, Chip Childs, Chief Executive Officer of SkyWest, said, “Demand for our product remained strong during the first quarter and we were able to generate results slightly ahead of our expectations. We a

re pleased to have the liquidity and resources to position us for long-term success and to continue to invest in our fleet transition. We continue working through an imbalance of pilots, which is our current constraint in monetizing the exceptionally strong demand for our product. I want to thank our people for their creativity and flexibility as we navigate this transition.”

First Quarter 2022 Highlights

Pre-tax income of $25 million, net income of $18 million, or $0.35 per diluted share

Took delivery of four E175 aircraft for Alaska Airlines under a previously announced agreement

Placed seven E175 aircraft into service with American Airlines under a previously announced agreement

Named one of “America’s Best Large Employers” by Forbes for the second year in a row in 2022

Financial Results

Revenue was $735 million in Q1 2022, up from $535 million in Q1 2021, or 38%, as a result of SkyWest’s Q1 2022 block hours on completed flights up 13% from Q1 2021, with the remaining increase largely due to COVID-19 revenue concessions given to our major airline partners in Q1 2021.

Operating expenses were $683 million in Q1 2022, up from $454 million in Q1 2021, or 51%. The increase in operating expenses was primarily due to $193 million in payroll support program grants received from U.S. Treasury reflected as an offset to Q1 2021 operating expenses. Salaries, wages and benefits were up $80 million from Q1 2021 and maintenance costs were down $55 million from Q1 2021.

Capital and Liquidity

SkyWest had $856 million in cash and marketable securities at March 31, 2022, similar to $860 million at December 31, 2021.

Total debt at March 31, 2022 was $3.2 billion, up from $3.1 billion at December 31, 2021, reflecting the financing of four new E175 aircraft delivered in Q1 2022. Capital expenditures during Q1 2022 were $114 million for the purchase of the four E175s and other fixed assets.

Status Update on Previously Announced Agreements

SkyWest is coordinating with its major airline partners to optimize the timing of upcoming fleet deliveries under previously announced agreements. The anticipated future delivery dates summarized below are based on currently available information and are subject to change.

Flying contract with American for 20 E175 aircraft

• 18 aircraft were delivered in 2021 and two deliveries are expected in Q2 2022.
• Seven aircraft were in scheduled service as of Q1 2022 and 13 aircraft are expected to be placed into service by the end of 2022.

Flying contract with Delta for 16 E175 aircraft

• 16 aircraft deliveries are anticipated in the second half of 2022.
• SkyWest anticipates financing the aircraft through debt.
• The 16 aircraft are expected to be placed into service by early 2023

Flying contract with Alaska for 11 E175 aircraft

• Four aircraft were delivered in Q1 2022, six deliveries are anticipated in Q2 2022, and one delivery is expected in the first half of 2023.
• 10 aircraft are scheduled to be placed into service in 2022 and one aircraft in 2023.
• SkyWest anticipates financing the aircraft through debt.

Combined, SkyWest anticipates placing 47 E175 aircraft into service under these previously announced agreements by early 2023. As of March 31, 2022, 22 aircraft were delivered and 25 aircraft have deliveries scheduled through early 2023.

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