Category Archives: SkyWest Airlines

SkyWest to receive $438 million through Payroll Support Program under CARES Act

SkyWest, Inc. has announced that its wholly-owned subsidiary SkyWest Airlines has entered into a Payroll Support Program Agreement with the U.S. Treasury Department to receive a total of approximately $438 million under the Coronavirus Aid, Relief, and Economic Security Act (CARES Act). Of the $438 million, approximately $337 million will be a direct grant and approximately $101 million will be in the form of a ten-year, low interest unsecured term loan.

SkyWest has elected to receive the funds in four disbursements. In consideration for the funding, SkyWest will issue to the U.S. Treasury Department warrants to purchase approximately 357,000 shares of SkyWest common stock.

The funds received under the Payroll Support Program will be used to pay for the wages, salaries and benefits of thousands of SkyWest Airlines employees. The Payroll Support Program includes certain restrictions, including limitations on involuntary terminations and furloughs through September 30, 2020, requirements to maintain certain levels of scheduled service, restrictions on the payment of dividends and the repurchase of shares through September 30, 2021, and certain limitations on executive compensation.

“We appreciate Congress and the Administration for quickly passing legislation to help support our people,” said SkyWest Chief Executive Officer Chip Childs. “These funds will cover important payroll expenses as we work together with our people to provide critical air service during this difficult time, and prepare for when demand returns.”

Route Map:

SkyWest Airlines aircraft photo gallery:

SkyWest announces new flying agreement for 25 E175s with United Airlines

SkyWest, Inc. today announced an agreement with United Airlines to operate 25 Embraer E175 aircraft under a multi-year contract. These aircraft are scheduled to be placed into service ratably over a 12-month period beginning in the second quarter of 2020 through the first quarter of 2021. The aircraft are financed by United and are to be sourced from another United Express operator.

Commenting on the agreement, Chip Childs, Chief Executive Officer and President of SkyWest, said, “As their initial E175 launch partner, we are excited to become United’s largest E175 operator and the largest operator of the E175 aircraft in the United States. We are pleased to continue strengthening our United partnership through this new agreement.”

Route Map (United):

United Express-SkyWest Airlines aircraft photo gallery:

United to drop San Francisco – Paine Field service

United Express-SkyWest Airlines Embraer ERJ 170-200LR (ERJ 175) N152SY (msn 17000549) PAE (Nick Dean). Image: 948984.

United Airlines will drop United Express (SkyWest Airlines) service from its San Francisco hub to Everett, WA (Paine Field) on March 4, 2020.

The route is operating with three roundtrips daily with Embraer 175 aircraft.

United will continue to serve PAE from its Denver hub.

Top Copyright Photo: United Express-SkyWest Airlines Embraer ERJ 170-200LR (ERJ 175) N152SY (msn 17000549) PAE (Nick Dean). Image: 948984.

United Express-SkyWest aircraft slide show:

Embraer and SkyWest, Inc. sign contract for 20 E175 jets

Embraer and SkyWest, Inc. signed a firm order for 20 E175 jets in a 76-seat configuration. The order has a value of USD $972 million, based on 2019 list prices, and is already included in Embraer’s 2019 fourth-quarter backlog. Deliveries are expected to begin in the second half of 2020.

Embraer’s relationship with SkyWest dates back to 1986, when SkyWest began operating the EMB 120 Brasilia turboprop.

With this additional order for the E175, SkyWest has purchased more than 180 aircraft of this model since 2013 alone.

 

SkyWest, Inc. announces fourth quarter 2019 profit

SkyWest, Inc. made this announcement:

Fourth Quarter Highlights:

  • $1.43 earnings per diluted share, up 12% from $1.28 in Q4 2018
  • Pre-tax income of $98 million, up from $91 million in Q4 2018; net income of $73 million, up from $67 million in Q4 2018
  • Secured new flying contract for 20 new E175 aircraft with American Airlines (“American”)

SkyWest, Inc. reported financial and operating results for Q4 2019, including net income of $73 million, or $1.43 per diluted share, compared to net income of $67 million, or $1.28 per diluted share, for Q4 2018. Earnings per diluted share increased 12% in Q4 2019 from Q4 2018, primarily due to SkyWest’s ongoing fleet transition. SkyWest has added ten new E175 aircraft and seven new CRJ900 aircraft since Q4 2018 and reduced aircraft ownership costs through early lease buyouts on 56 aircraft executed in 2019.

SkyWest reported net income of $340 million, or $6.62 per diluted share for the 2019 year.  Adjusted net income for the 2019 year was $321 million, or $6.25 per diluted share, excluding the gain on the sale of ExpressJet Airlines (“ExpressJet”) and other special items recorded in Q1 20191.  Net income for the 2018 year was $280 million or $5.30 per diluted share.

Commenting on the results, Chip Childs, Chief Executive Officer and President of SkyWest, said “2020 represents the start of the next phase of our fleet transition as we increase new E175 aircraft and invest in our older CRJ fleet, driven by strong demand for both aircraft types. We expect this will make 2020 a pivot year to position us for a new trajectory in 2021 and 2022.”

Financial Highlights
Revenue was $744 million in Q4 2019, down from $803 million in Q4 2018 due to the sale of ExpressJet in January 2019. Excluding ExpressJet revenue in Q4 2018, Q4 2019 revenue increased $59 million, primarily from adding 17 new aircraft since Q4 2018.

Operating expenses were $618 million in Q4 2019, down from $682 million in Q4 2018, also due to the sale of ExpressJet. Excluding ExpressJet operating expenses in Q4 2018, Q4 2019 operating expenses increased $59 million, primarily from growth in operations as a result of additional aircraft placed into service since Q4 2018 and an increase in maintenance expense.

Operational Update
New flying contract with American for 20 new E175 aircraft

  • SkyWest awarded 20 aircraft under a ten-year contract, with the anticipated delivery of ten aircraft in late 2020 and ten aircraft during the first half of 2021
  • SkyWest anticipates financing the aircraft through debt
  • Financial terms of the contract were not disclosed

Aircraft deliveries under previously announced deals for Delta Air Lines (“Delta”)
New E175 aircraft to be financed and operated by SkyWest:

  • Five aircraft were delivered in Q4 2019
  • Six aircraft are scheduled for delivery from early to mid-2020

Upcoming new and used aircraft to be financed by Delta and operated by SkyWest:

  • One new CRJ900 aircraft scheduled for delivery in mid-2020
  • Six used E175 aircraft scheduled for in-service dates from early to mid-2020

In conjunction with new aircraft deliveries for Delta, SkyWest anticipates removing eight CRJ700 and four CRJ900 aircraft from its flying agreement with Delta by the end of 2020. Following the respective agreement expirations, SkyWest anticipates utilizing these 12 aircraft in various ways: placing them with other partners, using the airframes/engines as spares and/or leasing the airframes/engines to third parties.

Aircraft deliveries under a previously announced deal with American
SkyWest placed two of ten used CRJ700s with American during Q4 2019. SkyWest is scheduled to place the remaining eight CRJ700 aircraft with American throughout 2020. SkyWest anticipates acquiring five used CRJ700s from a third party and internally sourcing three CRJ700s through contract expirations.

Lease agreement with a third party for 29 CRJ700 aircraft
As of December 31, 2019, SkyWest has placed ten of 29 CRJ700 aircraft under a previously announced lease agreement with a third party under a ten-year lease term. SkyWest anticipates the remaining aircraft will be placed under the lease in increments through mid-2020.

Capital and Liquidity
SkyWest had $520 million in cash and marketable securities at December 31, 2019, down from $572 million at September 30, 2019. During the fourth quarter of 2019, SkyWest:

  • Used $18 million in cash toward the purchase of five new E175 aircraft (total capital expenditure of $118 million on the acquired aircraft with $100 million of debt financing)
  • Used $39 million toward the purchase of spare engines and used airframes and $24 million for other capital investments, primarily related to spare aircraft parts
  • Used $10 million to repurchase stock under SkyWest’s $250 million repurchase program

Total debt was $3.0 billion at December 31, 2019 and September 30, 2019.

SkyWest, Inc. announces third quarter 2019 profit

SkyWest, Inc. made this announcement:

Third Quarter Highlights:

  • $1.79 earnings per diluted share, up 14% from $1.57 in Q3 2018
  • Pre-tax income of $119 million, up from $110 million in Q3 2018; net income of $91 million, up from $83 million in Q3 2018
  • Five new E175 aircraft scheduled for delivery in Q4 2019 under a previously announced agreement

SkyWest, Inc. has reported financial and operating results for Q3 2019, including net income of $91 million, or $1.79 per diluted share, compared to net income of $83 million, or $1.57 per diluted share, for Q3 2018. Earnings per diluted share increased 14% in Q3 2019 from Q3 2018, primarily due to SkyWest’s ongoing fleet transition. SkyWest has added 13 new E175 aircraft and 11 new CRJ900 aircraft since Q3 2018 and reduced aircraft ownership costs through early lease buyouts on 52 aircraft executed in 2019.

Commenting on the results, Chip Childs, Chief Executive Officer and President of SkyWest, said, “We were pleased to deliver another solid quarter as we continue executing our fleet strategy and remain positioned for future opportunity based on strong demand for our product. I want to thank our SkyWest professionals for their excellent work during the quarter.”

Financial Highlights
Revenue was $760 million in Q3 2019, down from $829 million in Q3 2018 due to the sale of ExpressJet Airlines (“ExpressJet”) in January 2019. Excluding ExpressJet revenue in Q3 2018, Q3 2019 revenue increased $71 million, primarily from adding 24 new aircraft since Q3 2018.

Operating expenses were $614 million in Q3 2019, down from $691 million in Q3 2018, also due to the sale of ExpressJet. Excluding ExpressJet operating expenses in Q3 2018, Q3 2019 operating expenses increased $62 million, primarily from growth in operations as a result of additional aircraft placed into service since Q3 2018.

Operational Update
Aircraft deliveries under previously announced deals for Delta
New E175 aircraft to be financed and operated by SkyWest:

  • Five aircraft scheduled for delivery in Q4 2019
  • Six aircraft scheduled for delivery from early to mid-2020

New CRJ900 aircraft to be financed by Delta and operated by SkyWest:

  • One aircraft delivered in Q3 2019
  • One aircraft scheduled for delivery in mid-2020

Used E175 aircraft financed by Delta and operated by SkyWest:

  • Six aircraft scheduled for in-service dates from early to mid-2020

During Q3 2019, SkyWest acquired four CRJ900 aircraft under an early lease buyout. These four aircraft are scheduled to expire under SkyWest’s flying agreement with Delta in 2020.

SkyWest also anticipates removing eight CRJ700s from its flying agreement with Delta by the end of 2020. As previously announced, SkyWest has an agreement with Delta to replace these 12 used CRJ aircraft with 12 new aircraft. Following their agreement expirations, SkyWest anticipates utilizing these 12 used aircraft in various ways: placing them with other partners, using the airframe/engines as spare parts and/or leasing the airframes/engines to third parties.

Aircraft deliveries under previously announced deals for American
SkyWest is scheduled to place ten used CRJ700 aircraft with American throughout 2020 including seven used aircraft that SkyWest anticipates acquiring from a third party and three used aircraft that SkyWest expects to source through upcoming contract expirations with another SkyWest partner.

Lease agreement with a third party for 29 CRJ700 aircraft
SkyWest has placed four of 29 CRJ700 aircraft under a previously announced lease agreement with a third party for a ten-year term as of September 30, 2019. SkyWest anticipates the remaining aircraft will be placed under lease in increments through mid-2020.

Capital and Liquidity

SkyWest had $572 million in cash and marketable securities at September 30, 2019, up from $550 million at June 30, 2019. During the third quarter of 2019, SkyWest:

  • Used $25 million to repurchase stock under SkyWest’s $250 million share repurchase program
  • Used $30 million to acquire four CRJ900 aircraft under an early lease buyout
  • Used $39 million to acquire spare engines and $33 million for other spare aircraft parts and maintenance assets

Total debt at September 30, 2019 was $3.0 billion, down from $3.1 billion as of June 30, 2019.

SkyWest starts Delta Connection service between Santa Barbara and Salt Lake City

Delta Connection-SkyWest Airlines Embraer ERJ 170-200LR (ERJ 175) N256SY (msn 17000647) SNA (Michael B. Ing). Image: 947315.

Delta Air Lines has added a new destination to its route map with the start of three daily year-round flights from Salt Lake City International Airport hub to Santa Barbara Airport on August 12, 2019.

Santa Barbara is the 330th destination in Delta’s expanding network and the 13th city in California served by the airline. Combined with the start of other new routes – including Detroit-San Jose in November 2018, Atlanta-Ontario in April, Detroit-Sacramento in June, and Atlanta-Burbank in July – the number of seats Delta offers from California has grown by over five percent.

For Delta’s hub in Salt Lake City, Santa Barbara is the latest in a series of destinations that have been added in the last two years, including Cleveland, Ohio; Columbus, Ohio; Fort Lauderdale, Fla.; Milwaukee, Wis.; Pittsburgh, Penn.; and Tampa, Fla.

The flights will operate on the following schedule and are now available for sale:

Departs                                                     Arrives
Salt Lake City (SLC) at 11:05 a.m.         Santa Barbara (SBA) at 12:16 p.m.
Salt Lake City (SLC) at 3 p.m.                Santa Barbara (SBA) at 4:11 p.m.
Salt Lake City (SLC) at 8:30 p.m.           Santa Barbara (SBA) at 9:39 p.m.
Santa Barbara (SBA) at 6 a.m.*              Salt Lake City (SLC) at 8:57 a.m.
Santa Barbara (SBA) at 1:05 p.m.          Salt Lake City (SLC) at 4 p.m.
Santa Barbara (SBA) at 4:45 p.m.          Salt Lake City (SLC) at 7:40 p.m.
*First flight departing SBA is on Aug. 13, 2019.

Salt Lake City-Santa Barbara service will be operated by Delta Connection carrier SkyWest on a 76-seat Embraer E175 aircraft with 12 seats in First Class, 20 seats in Delta Comfort+ and 44 seats in the Main Cabin.

Delta offers more than 280 departures to more than 90 destinations from its Salt Lake City hub.

Route Map: Delta Connection routes operated by SkyWest Airlines. With the recent Delta Connection realignment announcement, SkyWest will become the primary Delta Connection carrier in Los Angeles, Salt Lake City and Seattle/Tacoma.

Top Copyright Photo (all others by the airline): Delta Connection-SkyWest Airlines Embraer ERJ 170-200LR (ERJ 175) N256SY (msn 17000647) SNA (Michael B. Ing). Image: 947315.

Delta Connection-SkyWest aircraft slide show:

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SkyWest to secure six Embraer 175s from Compass Airlines

Delta Connection-SkyWest Airlines Embraer ERJ 170-200LR (ERJ 175) N254SY (msn 17000621) LGB (Michael B. Ing). Image: 947251.

SkyWest, Inc. today announced an agreement with Delta Air Lines to operate six used Embraer 175 aircraft under a multi-year contract scheduled to begin in early 2020. The aircraft are financed by Delta and to be sourced from a regional operator transitioning out of Delta Connection (Compass Airlines).

SkyWest has also agreed to purchase and operate seven new E175 aircraft for Delta instead of SkyWest operating seven new CRJ900 aircraft that were to be financed by Delta and scheduled for delivery in 2020. The seven E175 aircraft have delivery dates scheduled from late 2019 to mid-2020.

Under Delta’s initiative to reduce the number of Delta Connection operators, SkyWest anticipates becoming one of just three carriers under the Delta Connection portfolio and Delta’s primary regional operator in several western U.S cities by mid-2020, including Los Angeles, Salt Lake City and Seattle.

Separately, SkyWest cancelled its previously announced order for three new E175 aircraft scheduled for service with Alaska Airlines in 2021.

Top Copyright Photo: Delta Connection-SkyWest Airlines Embraer ERJ 170-200LR (ERJ 175) N254SY (msn 17000621) LGB (Michael B. Ing). Image: 947251.

Delta Connection-SkyWest aircraft slide show:

Route Map: Current routes operated from Delta:

Embraer and SkyWest, Inc. sign contract for seven E175 jets

Embraer announced today that it has signed a contract with SkyWest, Inc. for a firm order of seven E175 jets in a 70-seat configuration.

SkyWest will operate the aircraft for Delta. The order has a value of $340 million, based on 2019 list prices, and was already included in Embraer’s 2019 second-quarter backlog as customer “undisclosed.” Deliveries are expected to begin in the fourth quarter of 2019.

 

SkyWest, Inc. announces a second quarter 2019 profit

SkyWest, Inc. issued this financial report:

Second Quarter Highlights:

  • Net income of $88 million, or $1.71 per diluted share, up from $76 million, or $1.43 per diluted share in Q2 2018
  • Pre-tax income of $115 million, up from $98 million in Q2 2018
  • Placing ten used CRJ700s into a flying contract with American Airlines beginning early 2020

SkyWest, Inc. has reported its financial and operating results for Q2 2019, including net income of $88 million, or $1.71 per diluted share, compared to net income of $76 million, or $1.43 per diluted share, for Q2 2018. Pre-tax income in Q2 2019 was $115 million, a 17% increase from Q2 2018 primarily due to SkyWest’s ongoing fleet transition. SkyWest has added 25 new E175 aircraft and 11 new CRJ900 aircraft since Q2 2018 and has reduced aircraft ownership costs through early lease buyouts on 52 aircraft executed in early 2019.

Commenting on the results, Chip Childs, Chief Executive Officer and President of SkyWest, said, “This quarter we were pleased to demonstrate our ability to deploy capital and unlock growth opportunities within our partners’ existing scope constraints. I want to thank our outstanding SkyWest professionals for the service they provide to our customers.”

Financial Highlights
Revenue was $744 million in Q2 2019, down from $806 million in Q2 2018 due to the sale of ExpressJet Airlines (“ExpressJet”) in January 2019. Excluding ExpressJet revenue in Q2 2018, Q2 2019 revenue increased $82 million, primarily from adding 36 new aircraft since Q2 2018.

Operating expenses were $600 million in Q2 2019, down from $679 million in Q2 2018 also due to the sale of ExpressJet. Excluding ExpressJet operating expenses in Q2 2018, Q2 2019 operating expenses increased $70 million, primarily from growth in operations as a result of additional aircraft placed into service since Q2 2018 and from higher labor costs.

Operational Update
Flying contract updates
SkyWest announced an agreement with American Airlines to place ten used CRJ700s under a multi-year contract beginning early 2020. SkyWest anticipates acquiring seven CRJ700 aircraft from a third party and internally sourcing three CRJ700 aircraft through upcoming scheduled contract expirations.

Delivery update on new aircraft for Delta
E175 aircraft to be financed by SkyWest and operated by SkyWest:

  • Four aircraft delivered in Q2 2019
  • Four aircraft scheduled for delivery in mid-2020

 

SkyWest expects to remove four CRJ900 aircraft under its Delta agreement in 2020 and to return those aircraft to the lessor. SkyWest has previously removed five CRJ900s from service under its agreement with Delta and is leasing these five aircraft to a third party under a six-year term.

CRJ900 aircraft to be financed by Delta and operated by SkyWest for Delta:

  • Three aircraft delivered in Q2 2019
  • One aircraft scheduled for delivery in Q3 2019
  • Eight aircraft scheduled for delivery in 2020

SkyWest expects to remove a used CRJ700 from its contract with Delta as each of these CRJ900 financed by Delta is placed into service. As previously announced, SkyWest anticipates transitioning the CRJ700s removed under this arrangement with Delta to an agreement with American.

Lease agreement with a third party for 29 CRJ700 aircraft
SkyWest placed one of 29 CRJ700 aircraft under a previously announced lease agreement to a third party for a ten-year term during Q2 2019. SkyWest anticipates the remaining aircraft will be placed under lease in increments through mid-2020.

Capital and Liquidity

SkyWest had $550 million in cash and marketable securities at June 30, 2019, up from $544 millionat March 31, 2019. During the second quarter of 2019, SkyWest:

  • Used $35 million to repurchase stock under SkyWest’s $250 million share repurchase program
  • Used $14 million toward the purchase of four E175 aircraft (total capital expenditure of $88 million on the acquired aircraft including debt issued)
  • Used $23 million for other capital investments, primarily related to spare engines, aircraft parts and maintenance assets, net of proceeds from sale of fixed assets

Total debt at June 30, 2019 and March 31, 2019 was $3.1 billion. Q2 2019 ending debt balance included debt issued for four E175 aircraft acquired during the quarter, offset by principal payments.

All photos by the airline.