SkyWest Airlines has a fleet of over 500 aircraft connecting passengers to over 230 destinations throughout North America. SkyWest Airlines operates through partnerships with United Airlines, Delta Air Lines, American Airlines and Alaska Airlines carrying more than 40 million passengers in 2022. Earlier this week the company released fourth quarter and annual 2022 results.
Fourth Quarter and Annual 2022 Summary
Full year 2022 pre-tax income of $93 million, net income of $73 million, or $1.44 per diluted shareQ4 2022 pre-tax loss of $62 million, net loss of $47 million, or $0.93 loss per shareSecured amendments under the majority of SkyWest’s flying contracts to provide increased compensation for SkyWest’s current pilot pay scalesTook delivery of four E175 aircraft for Delta Air Lines (“Delta”) during Q4 2022 under previously announced agreements
reflect $69 million of deferred revenue related to fixed monthly cash payments received under SkyWest’s newly amended flying contracts;include a $36 million non-cash impairment charge on ten CRJ700 aircraft that were placed under a held-for-sale arrangement; andinclude an $11 million accelerated expense on 21 leased CRJ aircraft that are in the process of being stored prior to the lease expiration.
Financial Results
Capital and Liquidity
Status Update on Previously Announced Agreements
SkyWest, Inc. is the holding company for SkyWest Airlines and SkyWest Leasing, an aircraft leasing company. SkyWest Airlines has a fleet of over 500 aircraft connecting passengers to over 230 destinations throughout North America. SkyWest Airlines operates through partnerships with United Airlines, Delta Air Lines, American Airlines and Alaska Airlines carrying more than 40 million passengers in 2022.
SkyWest, Inc. and Subsidiaries Condensed Consolidated Statements of Income (Loss) (Dollars and Shares in Thousands, Except per Share Amounts) (Unaudited) | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
|
| Three months ended |
| Year ended | ||||||||||||
|
| December 31, |
| December 31, | ||||||||||||
|
| 2022 |
| 2021 |
| 2022 |
| 2021 | ||||||||
OPERATING REVENUES: |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Flying agreements |
| $ | 654,486 |
|
| $ | 751,834 |
|
| $ | 2,899,837 |
|
| $ | 2,615,076 |
|
Lease, airport services and other |
|
| 26,759 |
|
|
| 25,329 |
|
|
| 105,088 |
|
|
| 98,415 |
|
Total operating revenues |
|
| 681,245 |
|
|
| 777,163 |
|
|
| 3,004,925 |
|
|
| 2,713,491 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
OPERATING EXPENSES: |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Salaries, wages and benefits |
|
| 315,204 |
|
|
| 267,796 |
|
|
| 1,211,551 |
|
|
| 986,664 |
|
Aircraft maintenance, materials and repairs |
|
| 137,679 |
|
|
| 213,302 |
|
|
| 644,157 |
|
|
| 817,803 |
|
Depreciation and amortization |
|
| 97,125 |
|
|
| 111,109 |
|
|
| 394,552 |
|
|
| 440,198 |
|
Aircraft fuel |
|
| 23,367 |
|
|
| 29,435 |
|
|
| 108,456 |
|
|
| 107,057 |
|
Aircraft rentals |
|
| 27,244 |
|
|
| 16,046 |
|
|
| 75,353 |
|
|
| 63,357 |
|
Airport-related expenses |
|
| 17,353 |
|
|
| 32,212 |
|
|
| 71,549 |
|
|
| 104,690 |
|
Special items |
|
| — |
|
|
| — |
|
|
| — |
|
|
| 84,592 |
|
Payroll support grant |
|
| — |
|
|
| — |
|
|
| — |
|
|
| (422,669 | ) |
Other operating expenses |
|
| 98,337 |
|
|
| 74,311 |
|
|
| 318,145 |
|
|
| 255,932 |
|
Total operating expenses |
|
| 716,309 |
|
|
| 744,211 |
|
|
| 2,823,763 |
|
|
| 2,437,624 |
|
OPERATING INCOME (LOSS) |
|
| (35,064 | ) |
|
| 32,952 |
|
|
| 181,162 |
|
|
| 275,867 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
OTHER INCOME (EXPENSE): |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Interest income |
|
| 8,273 |
|
|
| 382 |
|
|
| 17,605 |
|
|
| 1,114 |
|
Interest expense |
|
| (34,775 | ) |
|
| (28,848 | ) |
|
| (127,083 | ) |
|
| (123,122 | ) |
Other income (expense), net |
|
| (112 | ) |
|
| 553 |
|
|
| 20,899 |
|
|
| (3,249 | ) |
Total other expense, net |
|
| (26,614 | ) |
|
| (27,913 | ) |
|
| (88,579 | ) |
|
| (125,257 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
INCOME (LOSS) BEFORE INCOME TAXES |
|
| (61,678 | ) |
|
| 5,039 |
|
|
| 92,583 |
|
|
| 150,610 |
|
PROVISION (BENEFIT) FOR INCOME TAXES |
|
| (14,574 | ) |
|
| 707 |
|
|
| 19,630 |
|
|
| 38,700 |
|
NET INCOME (LOSS) |
| $ | (47,104 | ) |
| $ | 4,332 |
|
| $ | 72,953 |
|
| $ | 111,910 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
BASIC EARNINGS (LOSS) PER SHARE |
| $ | (0.93 | ) |
| $ | 0.09 |
|
| $ | 1.44 |
|
| $ | 2.22 |
|
DILUTED EARNINGS (LOSS) PER SHARE |
| $ | (0.93 | ) |
| $ | 0.09 |
|
| $ | 1.44 |
|
| $ | 2.20 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
Weighted average common shares: |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Basic |
|
| 50,598 |
|
|
| 50,380 |
|
|
| 50,548 |
|
|
| 50,348 |
|
Diluted | 50,598 | 50,833 | 50,644 | 50,753 |
SkyWest, Inc. and Subsidiaries Summary of Consolidated Balance Sheets (Dollars in Thousands) (Unaudited) | |||||
|
|
|
|
|
|
| December 31, |
| December 31, | ||
| 2022 |
| 2021 | ||
Cash and marketable securities | $ | 1,047,215 |
| $ | 860,410 |
Other current assets |
| 324,066 |
|
| 208,183 |
Total current assets |
| 1,371,281 |
|
| 1,068,593 |
|
|
|
|
|
|
Property and equipment, net |
| 5,524,549 |
|
| 5,373,635 |
Deposits on aircraft |
| 23,931 |
|
| 124,964 |
Other long-term assets |
| 494,792 |
|
| 558,755 |
Total assets | $ | 7,414,553 |
| $ | 7,125,947 |
|
|
|
|
|
|
Current portion, long-term debt | $ | 438,502 |
| $ | 391,798 |
Other current liabilities |
| 734,041 |
|
| 802,823 |
Total current liabilities |
| 1,172,543 |
|
| 1,194,621 |
|
|
|
|
|
|
Long-term debt, net of current maturities |
| 2,941,772 |
|
| 2,717,420 |
Other long-term liabilities |
| 952,607 |
|
| 946,392 |
Stockholders' equity |
| 2,347,631 |
|
| 2,267,514 |
Total liabilities and stockholders' equity | $ | 7,414,553 |
| $ | 7,125,947 |
SkyWest, Inc. and Subsidiaries Additional Operational Information (unaudited) | ||||||
SkyWest’s fleet in scheduled service or under contract by aircraft type: |
|
|
|
|
|
|
|
| December 31, 2022 |
| September 30, 2022 |
| December 31, 2021 |
E175 aircraft |
| 236 |
| 232 |
| 211 |
CRJ900 aircraft |
| 41 |
| 44 |
| 44 |
CRJ700 aircraft |
| 104 |
| 114 |
| 114 |
CRJ200 aircraft |
| 136 |
| 140 |
| 140 |
Total aircraft in service or under contract |
| 517 |
| 530 |
| 509 |
As of December 31, 2022, SkyWest leased 35 CRJ700s and five CRJ900s to third parties (these aircraft are excluded from the table above). The E175 aircraft counts are based on delivery date.
Selected operational data: | ||||||||||||||||||
|
| For the three months ended |
| For the year ended | ||||||||||||||
Block hours by aircraft type: |
| 2022 |
|
| 2021 |
|
| % Change |
| 2022 |
|
| 2021 |
|
| % Change | ||
E175s |
| 153,959 |
|
| 166,598 |
|
| (7.6 | )% |
| 635,039 |
|
| 613,465 |
|
| 3.5 | % |
CRJ900s |
| 23,194 |
|
| 28,526 |
|
| (18.7 | )% |
| 101,662 |
|
| 116,576 |
|
| (12.8 | )% |
CRJ700s |
| 58,498 |
|
| 74,639 |
|
| (21.6 | )% |
| 261,036 |
|
| 289,902 |
|
| (10.0 | )% |
CRJ200s |
| 49,253 |
|
| 78,876 |
|
| (37.6 | )% |
| 256,655 |
|
| 299,685 |
|
| (14.4 | )% |
Total block hours |
| 284,904 |
|
| 348,639 |
|
| (18.3 | )% |
| 1,254,392 |
|
| 1,319,628 |
|
| (4.9 | )% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||
Departures |
| 168,816 |
|
| 199,300 |
|
| (15.3 | )% |
| 739,388 |
|
| 749,943 |
|
| (1.4 | )% |
Passengers carried |
| 9,437,439 |
|
| 10,736,113 |
|
| (12.1 | )% |
| 40,064,689 |
|
| 36,608,918 |
|
| 9.4 | % |
Adjusted flight completion |
| 99.9 | % |
| 98.6 | % |
| 1.3 | pts |
| 99.7 | % |
| 99.6 | % |
| 0.1 | pts |
Raw flight completion |
| 98.3 | % |
| 97.1 | % |
| 1.2 | pts |
| 98.2 | % |
| 98.2 | % |
| — | pts |
Passenger load factor |
| 84.6 | % |
| 81.9 | % |
| 2.7 | pts |
| 83.4 | % |
| 74.6 | % |
| 8.8 | pts |
Average trip length |
| 479 |
|
| 519 |
|
| (7.7 | )% |
| 493 |
|
| 532 |
|
| (7.3 | )% |
Adjusted flight completion percent excludes weather cancellations. Raw flight completion includes weather cancellations.
Reconciliation to Adjusted Net Income and Diluted Earnings per Share (Dollars in Thousands, Except per Diluted Share Amounts) (Unaudited) | |||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
| For the twelve months ended December 31, 2021 | |||||||||||
|
| Pretax income |
| Income tax |
| Net income |
| Net income per | |||||
GAAP Income |
| $ | 150,610 |
| $ | (38,700 | ) |
| $ | 111,910 |
| $ | 2.20 |
2021 Adjustments (1) |
|
| 84,592 |
|
| (20,683 | ) |
|
| 63,909 |
|
|
|
Non-GAAP Adjusted Income |
| $ | 235,202 |
| $ | (59,383 | ) |
| $ | 175,819 |
| $ | 3.46 |
(1) | Adjusts for a non-cash impairment charge on SkyWest Airlines operated CRJ900 fleet. |