19 E175 jets for SkyWest Airlines

SkyWest orders 19 Embraer jets

Brazilian planemaker Embraer said last week its firm order backlog reached $17.8 billion at the end of the third quarter, including a newly announced order by SkyWest for 19 of its E175 jets.  Its backlog grew by $500 million from the previous quarter and Embraer delivered 43 aircraft in the third quarter, compared with 33 in the year-ago period, totalling 105 aircraft delivered year-to-date.

The planemaker confirmed that SkyWest had ordered 19 of its E175 jets for $1.1 billion, with deliveries expected to start in the final quarter of 2024. The new aircraft will be flown by United Airlines under a capacity purchase agreement, Embraer said.

In the third quarter of the year, SkyWest has reported a net income of $23 million, compared to net income of $48 million for the same period in 2022.  Revenue was $766 million in Q3 2023, down $23 million, or 3%, from $789 million in Q3 2022. 

SkyWest deferred recognizing $57 million of revenue during Q3 2023 compared to recognizing previously deferred revenue of $13 million during Q3 2022. The amount of revenue deferred during Q3 2023 was driven by modified terms relating to fixed monthly cash payments under SkyWest’s previously announced amended flying contracts.

 

Commenting on the results, Chip Childs, Chief Executive Officer of SkyWest, said, “Our teams continue to deliver an exceptional product and operating performance. We are pleased with the improving trajectory of our business, strong demand for our product, and steady progress toward stabilization of our pilot hiring and retention. I want to thank our amazing team for delivering outstanding operations in the third quarter.”

SkyWest orders 19 Embraer jets....

SkyWest orders 19 Embraer jets

Brazilian planemaker Embraer said last week its firm order backlog reached $17.8 billion at the end of the third quarter, including a newly announced order by SkyWest for 19 of its E175 jets.  Its backlog grew by $500 million from the previous quarter and Embraer delivered 43 aircraft in the third quarter, compared with 33 in the year-ago period, totalling 105 aircraft delivered year-to-date.

The planemaker confirmed that SkyWest had ordered 19 of its E175 jets for $1.1 billion, with deliveries expected to start in the final quarter of 2024. The new aircraft will be flown by United Airlines under a capacity purchase agreement, Embraer said.

In the third quarter of the year, SkyWest has reported a net income of $23 million, compared to net income of $48 million for the same period in 2022.  Revenue was $766 million in Q3 2023, down $23 million, or 3%, from $789 million in Q3 2022. 

SkyWest deferred recognizing $57 million of revenue during Q3 2023 compared to recognizing previously deferred revenue of $13 million during Q3 2022. The amount of revenue deferred during Q3 2023 was driven by modified terms relating to fixed monthly cash payments under SkyWest’s previously announced amended flying contracts.

 

Commenting on the results, Chip Childs, Chief Executive Officer of SkyWest, said, “Our teams continue to deliver an exceptional product and operating performance. We are pleased with the improving trajectory of our business, strong demand for our product, and steady progress toward stabilization of our pilot hiring and retention. I want to thank our amazing team for delivering outstanding operations in the third quarter.”

Operating expenses were $717 million in Q3 2023, up $3 million from $714 million in Q3 2022, driven by increases in employee compensation, including higher pilot pay scales. Higher labor 

costs were partially offset by lower aircraft rent expenses due to the early lease buyouts on 35 CRJ aircraft for the nine months ended September 30, 2023, and lower operating costs associated with a 10% reduction in Q3 2023 block hour production compared to Q3 2022. 

Extra reporting by Peter Frontini

Embraer backlog reaches $17.8 billion as Sky West orders 19 E175 jets

SkyWest orders 19 Embraer jets

Brazilian planemaker Embraer said on Thursday its firm order backlog reached $17.8 billion at the end of the third quarter, including a newly announced order by SkyWest for 19 of its E175 jets.  Its backlog grew by $500 million from the previous quarter and Embraer delivered 43 aircraft in the third quarter, compared with 33 in the year-ago period, totalling 105 aircraft delivered year-to-date.

Earlier on Thursday, the planemaker said that SkyWest had ordered 19 of its E175 jets for $1.1 billion, with deliveries expected to start in the final quarter of 2024. The new aircraft will be flown by United Airlines under a capacity purchase agreement, Embraer said.

In the third quarter of the year, SkyWest has reported a net income of $23 million, compared to net income of $48 million for the same period in 2022.  Revenue was $766 million in Q3 2023, down $23 million, or 3%, from $789 million in Q3 2022. 

SkyWest deferred recognizing $57 million of revenue during Q3 2023 compared to recognizing previously deferred revenue of $13 million during Q3 2022. The amount of revenue deferred during Q3 2023 was driven by modified terms relating to fixed monthly cash payments under SkyWest’s previously announced amended flying contracts.

 

Commenting on the results, Chip Childs, Chief Executive Officer of SkyWest, said, “Our teams continue to deliver an exceptional product and operating performance. We are pleased with the improving trajectory of our business, strong demand for our product, and steady progress toward stabilization of our pilot hiring and retention. I want to thank our amazing team for delivering outstanding operations in the third quarter.”

Operating expenses were $717 million in Q3 2023, up $3 million from $714 million in Q3 2022, driven by increases in employee compensation, including higher pilot pay scales. Higher labor 

costs were partially offset by lower aircraft rent expenses due to the early lease buyouts on 35 CRJ aircraft for the nine months ended September 30, 2023, and lower operating costs associated with a 10% reduction in Q3 2023 block hour production compared to Q3 2022. 

Extra reporting by Peter Frontini

SkyWest reports pre-tax income of $18 million and net income of $15 million during quarter two of 2023

U.S. airline SkyWest has released details of its financial and operating results for the second quarter of 2023, including net income of $15 million, or $0.35 per diluted share, compared to net income of $54 million, or $1.07 earnings per diluted share, for Q2 2022.

Chip Childs, Chief Executive Officer of SkyWest, said, “We are making steady headway towards reaching our strategic business objectives and remain optimistic as we continue experiencing strong demand for our products. I want to thank our team of professionals for delivering industry-leading performance throughout the second quarter.”

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 40 million passengers in 2022.

Under its previously announced share repurchase programs, SkyWest repurchased 3.3 million shares of common stock for $94 million during Q2 2023. In total, during the first half of 2023, SkyWest repurchased 8.4 million shares of common stock for $194 million, which represented 17% of SkyWest’s outstanding shares as of December 31, 2022. The current share repurchase program authorized by the SkyWest Board of Directors in May 2023 had $186 million of remaining availability as of June 30, 2023.

Financial Results

Revenue was $726 million in Q2 2023, down $73 million, or 9%, from $799 million in Q2 2022. SkyWest deferred recognizing $60 million of revenue during Q2 2023 compared to recognizing previously deferred revenue of $16 million during Q2 2022. The amount of revenue deferred during Q2 2023 was driven by modified 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 remaining reduction in revenue was attributed to a decrease in block hour production in Q2 2023 compared to Q2 2022.

Operating expenses were $694 million in Q2 2023, down $16 million, or 2%, from $710 million in Q2 2022, driven by decreases in operating costs as a result of lower Q2 2023 block hour production compared to Q2 2022, partially offset by increases in employee compensation, including higher pilot pay scales.

Capital and Liquidity

SkyWest had $862 million in cash and marketable securities at June 30, 2023, down from $936 million at March 31, 2023 and $1.0 billion at December 31, 2022.

Total debt at June 30, 2023 was $3.2 billion, down from $3.3 billion at March 31, 2023 and $3.4 billion at December 31, 2022. Capital expenditures during Q2 2023 were $31 million for spare engines 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 239 E175 aircraft.

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

SkyWest releases fourth quarter and annual 2022 results

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 share

Q4 2022 pre-tax loss of $62 million, net loss of $47 million, or $0.93 loss per share

Secured amendments under the majority of SkyWest’s flying contracts to provide increased compensation for SkyWest’s current pilot pay scales

Took delivery of four E175 aircraft for Delta Air Lines (“Delta”) during Q4 2022 under previously announced agreements

SkyWest, Inc. has reported financial and operating results for Q4 2022, including net loss of $47 million, or $0.93 loss per share, compared to a net income of $4 million, or $0.09 per diluted share, for Q4 2021. The Q4 2022 results:

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; and

include an $11 million accelerated expense on 21 leased CRJ aircraft that are in the process of being stored prior to the lease expiration.

SkyWest also reported net income of $73 million, or $1.44 per diluted share, for the 2022 year, compared to net income of $112 million, or $2.20 per diluted share, for the 2021 year and adjusted net income of $176 million1, or $3.46 per diluted share, for the 2021 year.

Commenting on the results, Chip Childs, Chief Executive Officer of SkyWest, said, “We continue to experience strong demand for our product, and our teams performed exceptionally well through the busy holiday season to deliver a solid 99.9% adjusted completion rate for the fourth quarter. Also during the quarter, we were pleased to have finalized amendments to the flying contracts with a majority of our partners to reflect our increased pilot scales. I want to thank our people for their dedicated, world-class efforts to deliver a strong, reliable product.”

Financial Results

SkyWest reports pre-tax income of $57 million during third-quarter

SkyWest, the U.S. regional carrier reported financial and operating results for Q3 2022, including net income of $48 million, or $0.96 per diluted share, compared to net income of $10 million, or $0.19 per diluted share, for Q3 2021 and adjusted net income of $74 million1, or $1.45 per diluted share, for Q3 2021.

Commenting on the results, Chip Childs, Chief Executive Officer of SkyWest, said, “We continue to experience strong demand for our product and our operational performance through the busy summer season was strong with 99.9% adjusted completion this quarter. We were pleased to have finalized new salary scales for our pilots during the quarter and continue efforts to stabilize our crew imbalance. I want to thank our people for their dedicated, world-class efforts.”

Financial Results

Revenue was $789 million in Q3 2022, up $44 million or 6%, from $745 million in Q3 2021. This quarter’s year-over-year increase in revenue under SkyWest’s flying contracts came from adding 33 E175 aircraft to its operations since Q3 2021 and eliminating the COVID-19 partner revenue concessions from Q3 last year.

_______________________

1 See Financial Results and Reconciliation of non-GAAP financial measures sections of this release for more information.

Operating expenses were $714 million in Q3 2022, up 2% from $698 million in Q3 2021. The increase in operating expenses was primarily due to an increase in salaries, wages, and benefits, offset by a decrease in maintenance costs for Q3 2022, compared to Q3 2021.

Capital and Liquidity

SkyWest had $1.0 billion in cash and marketable securities at September 30, 2022, up from $975 million at June 30, 2022, and $860 million at December 31, 2021.

Total debt at September 30, 2022 was $3.4 billion, up from $3.3 billion at June 30, 2022, reflecting the financing of nine new E175 aircraft delivered in Q3 2022. Capital expenditures during Q3 2022 were $224 million for the purchase of these nine 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. SkyWest expects to finance the future E175 deliveries discussed below through debt. 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

Two aircraft were delivered in Q3 2022, completing the 20 E175 aircraft deliveries under this contract.

Flying contract with Delta for 16 E175 aircraft

Seven aircraft were delivered in Q3 2022.

Four aircraft deliveries are anticipated in Q4 2022.

Three aircraft are anticipated to be delivered in 2023 and 2024.

Two aircraft were delivered prior to Q3 2022.

Flying contract with Alaska for 11 E175 aircraft

One aircraft is expected to be delivered in 2025, which will complete the 11 E175 aircraft deliveries under this contract.

Combined, SkyWest anticipates placing 47 E175 aircraft into service under these three previously announced agreements by late 2025. As of September 30, 2022, 39 aircraft were delivered and eight aircraft have deliveries scheduled through 2025. By the end of 2025, SkyWest is scheduled to operate a total of 240 E175 aircraft.

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,
		2022			2021			2022			2021
OPERATING REVENUES:
Flying agreements		$	763,514		$	719,084		$	2,245,351		$	1,863,242
Lease, airport services and other			25,929			25,699			78,329			73,086
Total operating revenues			789,443			744,783			2,323,680			1,936,328
OPERATING EXPENSES:
Salaries, wages and benefits			307,727			265,603			896,347			718,868
Aircraft maintenance, materials and repairs			183,182			209,795			506,478			604,501
Depreciation and amortization			97,433			109,597			297,427			329,089
Aircraft fuel			28,179			32,561			85,089			77,622
Airport-related expenses			17,501			25,992			54,196			72,478
Aircraft rentals			16,089			16,098			48,109			47,311
Special items - impairment charges			—			84,592			—			84,592
Payroll support grant			—			(115,352)			—			(422,669)
Other operating expenses			63,756			68,847			219,808			181,621
Total operating expenses			713,867			697,733			2,107,454			1,693,413
OPERATING INCOME			75,576			47,050			216,226			242,915
OTHER INCOME (EXPENSE):
Interest income			6,348			238			9,332			732
Interest expense			(33,283)			(28,980)			(92,308)			(94,274)
Other income (expense), net			8,112			(4,098)			21,011			(3,802)
Total other expense, net			(18,823)			(32,840)			(61,965)			(97,344)
INCOME BEFORE INCOME TAXES			56,753			14,210			154,261			145,571
PROVISION FOR INCOME TAXES			8,381			4,526			34,204			37,993
NET INCOME		$	48,372		$	9,684		$	120,057		$	107,578
BASIC EARNINGS PER SHARE		$	0.96		$	0.19		$	2.38		$	2.14
DILUTED EARNINGS PER SHARE		$	0.96		$	0.19		$	2.37		$	2.12
Weighted average common shares:
Basic			50,593			50,380			50,531			50,337
Diluted			50,636			50,725			50,636			50,726

SkyWest, Inc. and Subsidiaries Summary of Consolidated Balance Sheets (Dollars in Thousands) (Unaudited)
	September 30,			December 31,
	2022			2021
Cash and marketable securities	$	1,004,197		$	860,410
Other current assets		257,992			208,183
Total current assets		1,262,189			1,068,593
Property and equipment, net		5,591,542			5,373,635
Deposits on aircraft		47,229			124,964
Other long-term assets		553,244			558,755
Total assets	$	7,454,204		$	7,125,947
Current portion, long-term debt	$	429,425		$	391,798
Other current liabilities		730,470			802,823
Total current liabilities		1,159,895			1,194,621
Long-term debt, net of current maturities		2,982,034			2,717,420
Other long-term liabilities		916,327			946,392
Stockholders' equity		2,395,948			2,267,514
Total liabilities and stockholders' equity	$	7,454,204		$	7,125,947

SkyWest, Inc. and Subsidiaries Additional Operational Information (unaudited)
SkyWest’s fleet in scheduled service or under contract by aircraft type:
		September 30, 2022		December 31, 2021		September 30, 2021
E175 aircraft		232		211		199
CRJ900 aircraft		44		44		40
CRJ700 aircraft		114		114		106
CRJ200 aircraft		140		140		141
Total aircraft in service or under contract		530		509		486

As of September 30, 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 September 30,									For the nine months ended September 30,
Block hours by aircraft type:		2022			2021			% Change			2022			2021			% Change
E175s		169,679			169,143			0.3	%		481,080			446,867			7.7	%
CRJ900s		25,134			34,031			(26.1)	%		78,468			87,750			(10.6)	%
CRJ700s		62,540			78,788			(20.6)	%		202,538			215,263			(5.9)	%
CRJ200s		66,389			88,500			(25.0)	%		207,402			220,809			(6.1)	%
Total block hours		323,742			370,462			(12.6)	%		969,488			970,689			(0.1)	%
Departures		194,683			210,251			(7.4)	%		570,572			550,643			3.6	%
Passengers carried		10,715,415			10,862,343			(1.4)	%		30,627,250			25,872,805			18.4	%
Adjusted flight completion		99.9	%		99.8	%		0.1	pts		99.6	%		99.9	%		(0.3)	pts
Raw flight completion		99.1	%		98.8	%		0.3	pts		98.2	%		98.6	%		(0.4)	pts
Passenger load factor		84.6	%		79.1	%		5.5	pts		82.9	%		72.0	%		10.9	pts
Average trip length		488			537			(9.0)	%		498			536			(7.1)	%

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 three months ended September 30, 2021
		Pretax income			Income tax benefit (expense)			Net income			Net income per diluted share
GAAP Income		$	14,210		$	(4,526)		$	9,684		$	0.19
Q3 2021 Adjustments (1)			84,592			(20,683)			63,909
Non-GAAP Adjusted Income		$	98,802		$	(25,209)		$	73,593		$	1.45

		For the nine months ended September 30, 2021
		Pretax income			Income tax benefit (expense)			Net income			Net income per diluted share
GAAP Income		$	145,571		$	(37,993)		$	107,578		$	2.12
2021 Adjustments (1)			84,592			(20,683)			63,909
Non-GAAP Adjusted Income		$	230,163		$	(58,676)		$	171,487		$	3.38

(1)

Adjusts for a non-cash impairment charge on SkyWest Airlines operated CRJ900 aircraft.