Category Archives: SkyWest Airlines

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.

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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.

American to add new domestic routes later this year

American Eagle Airlines (2nd)-SkyWest Airlines Bombardier CRJ200 (CL-600-2B19) N955SW (msn 7817) PHX (Keith Burton). Image: 946556.

American Airlines is planning to add new domestic routes from its hubs later this year according to Airline Route:

Chicago O’Hare – Charleston, WV – daily SkyWest CRJ200 effective September 4, 2019
Dallas/Ft. Worth – St. George – daily SkyWest CRJ200 effective September 26, 2019


Miami – Bentonville/Northwest Arkansas – daily Republic Airline Embraer 175 effective December 18, 2019


Miami – Columbia, SC – daily Envoy Air Embraer ERJ 145 effective December 18, 2019
Miami – Oklahoma City – daily Republic Airline Embraer 175 effective December 18, 2019
Philadelphia – Vail/Eagle, CO – weekly mainline Boeing 757-200 effective December 21, 2019
Phoenix – Rapid City, SD (Black Hills/Mount Rushmore) – daily SkyWest CRJ200 effective September 4, 2019

Top Copyright Photo: American Eagle Airlines (2nd)-SkyWest Airlines Bombardier CRJ200 (CL-600-2B19) N955SW (msn 7817) PHX (Keith Burton). Image: 946556.

American Eagle-SkyWest aircraft slide show:

SkyWest invests in Southern Airways Express, new pilot pipeline established

Southern Airways Corporation, the parent company of Southern Airways Express and Mokulele Airlines, has announced a strategic minority investment by SkyWest, Inc.

Southern now has more than 200 pilots in its combined pilot corps, many of whom are looking to advance their aviation careers to regional and mainline carriers.

SkyWest is the largest regional carrier in the world as measured by fleet size, number of passengers carried and cities served. This strategic investment by SkyWest will enhance Southern’s recruiting capabilities by providing a career pathway from flight school through Southern’s cadet program and ultimately to SkyWest.

Southern, with operational footprints in the Gulf South, the mid-Atlantic and South Florida, recently acquired Mokulele Airlines, a carrier providing service throughout the Hawaiian Islands and in Southern California.

Southern began service in 2013 by offering flights from Memphis, Tenn. to Destin, Fla. using a total of four pilots and three aircraft. In 2015, Southern acquired Executive Express Aviation, an Illinois-based charter company that was previously contracted to operate the Southern flight schedule. In February 2016, Southern acquired Sun Air Express, an airline operating Essential Air Service (EAS) routes in the mid-Atlantic. Three years later, in February of 2019, Southern acquired Mokulele. Following the integration of the two airlines, expected to be complete by mid-summer, the new Southern Airways will operate 1,380 weekly flights, more than any other carrier in the 50 states.
Route Map: