28 April, 2023

Latest results from SkyWest

The U.S. regional airline SkyWest has just reported some impressive financial and operating results for the first quarter of 2023, including a net loss of $22 million compared to a net income of $18 million, for Q1 2022.

Commenting on the results, Chip Childs, Chief Executive Officer of SkyWest, said, “We are making solid headway in our production and performance objectives. We continue to experience exceptionally high demand for our products and appreciate the ongoing engagement from each of our partners. I also want to thank our people for their great work in delivering both an outstanding product and exceptional reliability through the challenging first quarter.”

During Q1 2023, SkyWest repurchased 5.1 million shares of common stock for $100 million, which represented 10% of SkyWest’s outstanding shares as of December 31, 2022. The shares were repurchased under SkyWest’s previously announced share repurchase program.

Additionally, during Q1 2023, SkyWest acquired 24 CRJ700 aircraft and eight CRJ200 aircraft under an early lease buyout for $125 million. Pursuant to this transaction, SkyWest avoids making future lease and lease return cash payments of approximately $90 million, and SkyWest now owns these aircraft and engines.

Financial Results

Revenue was $692 million in Q1 2023, down $43 million, or 6%, from $735 million in Q1 2022. SkyWest deferred recognizing $63 million of revenue during Q1 2023 compared to recognizing previously deferred revenue of $11 million during Q1 2022. The increase in deferred revenue during Q1 2023 was driven by the terms relating to fixed monthly cash payments under SkyWest’s previously announced amended flying contracts. See the “Other Supplemental Cash Flow Information” section of this release for more information. The reduction in revenue attributed to deferred revenue was partially offset by production-driven rate increases under SkyWest’s flying contracts in Q1 2023 compared to Q1 2022.

Operating expenses were $697 million in Q1 2023, up $14 million, or 2%, from $683 million in Q1 2022, driven by increases in employee compensation, including higher pilot pay scales, partially offset by decreases in other operating costs as a result of lower Q1 2023 production compared to Q1 2022.

Capital and Liquidity

SkyWest had $936 million in cash and marketable securities at March 31, 2023, compared to $1.0 billion at December 31, 2022.

Total debt at March 31, 2023 was $3.3 billion, down from $3.4 billion at December 31, 2022. Capital expenditures during Q1 2023 were $103 million, including $86 million capitalized for the 32 CRJ aircraft acquired under the early lease buyout and other fixed assets.

Status Update on Previously Announced Agreements

SkyWest anticipates adding two E175 aircraft in Q4 2023 and one E175 aircraft in 2024 under a flying contract with Delta Air Lines. SkyWest also anticipates adding one E175 aircraft in 2025 under a flying contract with Alaska Airlines. Timing of future deliveries is subject to change.

By the end of 2025, SkyWest is scheduled to operate a total of 240 E175 aircraft.