SkyWest, Inc. today announced an agreement with Delta Air Lines to purchase and operate 16 new E175 aircraft under a multi-year capacity purchase agreement.
These aircraft are scheduled to be placed into service beginning in the first half of 2022, and will be placed into service ratably through year-end 2022.
The aircraft will be purchased by SkyWest from Embraer and delivered new from the factory.
SkyWest continues to be the largest owner/operator of the Embraer E175 aircraft in the world.
SkyWest expects the 16 new E175 aircraft will replace 16 SkyWest-owned or financed CRJ900s currently under its Delta contract, with expirations ranging from the second half of 2022 to early 2023. SkyWest is evaluating the impact of the anticipated displacement of the CRJ900s, including a potential non-cash impairment charge
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.
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.
SkyWest, Inc. today reported financial and operating results for Q1 2019, including net income of $88 million, or $1.69 per diluted share, compared to net income of $54 million, or $1.03 per diluted share, for Q1 2018. Adjusted net income in Q1 2019 was $69 million, up 27% from Q1 2018 primarily due to SkyWest’s ongoing fleet transition, as SkyWest has added 43 new aircraft since Q1 2018, and reduced aircraft ownership costs resulting from early lease buyouts executed in early 2019.
Commenting on the results, Chip Childs, Chief Executive Officer and President of SkyWest, said, “This quarter was significant for SkyWest as we move forward as one airline with a smaller, but more efficient footprint. Our team performed well this quarter through a series of severe weather events. We are encouraged with our progress and are working together with our 14,000 employees to deliver the best possible product to our partners.”
Financial Highlights Revenue was $724 million in Q1 2019, down from $783 million in Q1 2018 due to the sale of ExpressJet Airlines (“ExpressJet”) in January 2019. Excluding ExpressJet revenue in both periods, revenue increased to $700 million in Q1 2019 from $622 million in Q1 2018 primarily from the impact of adding 35 new E175 and eight new CRJ900 aircraft since Q1 2018.
Operating expenses were $627 million in Q1 2019, down from $695 million in Q1 2018 due to the sale of ExpressJet. Excluding ExpressJet operating expenses in both periods, operating expenses increased to $599 million in Q1 2019 from $528 million in Q1 2018, primarily from the additional aircraft placed into service, higher labor costs and special item operating expenses in Q1 2019.
The adjusted results for the quarter exclude $24.7 million of pre-tax earnings comprised of the gain on the sale of ExpressJet of $46.6 million (pre-tax) and a $21.9 million (pre-tax) expense primarily due to a non-cash write-off of aircraft manufacturer part credits forfeited to settle future lease return obligations.
Operational Update Flying contract extension SkyWest announced today that it has agreed to a multi-year extension with American Airlines on 38 CRJ700 aircraft (top). These aircraft previously had contract maturities scheduled to begin in late 2019. SkyWest also expects to add two used CRJ700 aircraft to the American contract in Q2 2019 under a multi-year term.
Lease agreement with a third-party for 29 CRJ700 aircraft SkyWest also announced today that it has agreed to lease 29 CRJ700 aircraft to a third-party for a ten-year term, subject to the finalization of their flying contract. SkyWest anticipates the aircraft will be placed under lease in increments from mid-2019 to mid-2020.
Delivery schedule under previously announced agreements E175 aircraft to be financed by SkyWest and operated for Delta Air Lines and Alaska Airlines:
Took delivery of one aircraft during Q1 2019 (Delta contract)
Scheduled to take delivery of four aircraft in Q2 2019 (Delta contract)
Scheduled to take delivery of four aircraft in mid-2020 (Delta contract)
Scheduled to take delivery of three aircraft in 2021 (Alaska contract)
SkyWest expects to remove a used CRJ900 aircraft from its contract with Delta as each of these ERJ175 aircraft is placed into service with Delta (total of nine CRJ900 expected removals). As previously announced, SkyWest anticipates leasing five CRJ900s to a third party under a six-year term and returning four CRJ900s to a lessor following removal of service with Delta.
CRJ900 aircraft to be financed by Delta and operated by SkyWest for Delta:
Took delivery of three aircraft during Q1 2019
Scheduled to take delivery of four aircraft in mid-2019
Scheduled to take delivery of eight aircraft 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.
Joint venture with Regional One SkyWest entered into a joint venture with Regional One during Q1 2019. The primary purpose of the joint venture is to lease spare engines to third parties. SkyWest anticipates initiating transactions through the joint venture beginning in Q2 2019, including the transfer of 14 engines into the joint venture.
Previously announced transactions that closed in Q1 2019 In January 2019, SkyWest completed the previously announced sale of ExpressJet to ManaAir, LLC. The transaction was completed in two parts, through an asset sale and stock sale, for an aggregate sales price of $77 million. SkyWest loaned $26 million to ManaAir in conjunction with the closing.
SkyWest also completed the previously-announced early leveraged lease buyout on 16 CRJ700s and 36 CRJ200s. SkyWest used $110 million in Q1 2019 to acquire these aircraft off lease. SkyWest assumed no debt on these aircraft.
Capital and Liquidity SkyWest had $544 million in cash and marketable securities at March 31, 2019, down from $689 million at December 31, 2018. During the first quarter of 2019, SkyWest:
Used $110 million to acquire 52 CRJ aircraft under an early lease buyout
Used $90 million to acquire 16 used CRJ700s previously operated and leased by a SkyWest entity. SkyWest anticipates leasing the majority of airframes and engines to third parties and using a portion of aircraft components as spare parts.
Received $51 million net cash from the sale of ExpressJet
Used $25 million to repurchase stock, of which $21 million was purchased under SkyWest’s $250 million share repurchase program approved during Q1 2019
Used $4 million toward the purchase of one E175 aircraft
Used $28 million for other capital investments, primarily related to spare engines, aircraft parts and maintenance assets
Total debt at March 31, 2019 was $3.1 billion, down from $3.2 billion as of December 31, 2018. Q1 2019 ending debt balance included debt issued for one E175 aircraft acquired during the quarter, offset by principal payments.
Top Copyright Photo (all others by the airline): American Eagle Airlines (2nd)-SkyWest Airlines Bombardier CRJ700 (CL-600-2C10) N710SK (msn 10170) LAX (Michael B. Ing). Image: 946297.
Embraer and SkyWest, Inc. have signed a firm order for nine E175 jets, with deliveries expected to begin in 2019. The order has a value of $422 million, based on current list prices, and was already included in Embraer’s 2018 fourth-quarter backlog. SkyWest Airlines will operate all nine E175s, featuring a 76-seat configuration.
“Since 2013, SkyWest has purchased a total of 158 E175s, including these nine, in order to expand their large existing fleet of Embraer aircraft,” said Charlie Hillis, Vice President, Sales & Marketing, North America, Embraer Commercial Aviation. “We are extremely proud of their ongoing support for the E-Jets program and the fact that the E175 continues to outperform in North America. Without a doubt, the E175 has become the backbone of the regional aviation market in the U.S.”
Including this new contract, Embraer has sold more than 565 E175s to airlines in North America, since January 2013, earning more than 80% of all orders in this 70-76-seat jet segment.
SkyWest, Inc. is a premier regional airline company and the holding company of SkyWest Airlines. SkyWest holds a long history with Embraer as early customers for the Embraer EMB 120 Brasilia turboprop aircraft.
Since entering revenue service, the E-Jets family has received more than 1,800 orders and over 1,500 aircraft have been delivered. Today, E-Jets are flying in the fleet of 70 customers in 50 countries. The versatile 70 to 150-seat family is flying with low-cost airlines as well as with regional and mainline carriers.
Delta is making the ‘American Riviera’ more accessible than ever with the launch of three daily year-round flights from Salt Lake City International Airport to Santa Barbara Airport, a new destination on Delta’s route map, on August 12, 2019.
Santa Barbara will become 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 – Delta will grow the number of seats it offers from California by eight 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; El Paso, Texas; Fort Lauderdale, Florida; Milwaukee, Wisconsin; Pittsburgh, Pennsylvania; and Tampa, Florida.
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 E-175 aircraft with 12 seats in First Class, 20 seats in Delta Comfort+ and 44 seats in the Main Cabin. All flights will offer free entertainment through Delta Studio, as well as free messaging, access to Wi-Fi, and complimentary snacks and beverages.
Delta offers more than 280 departures to more than 90 destinations from its Salt Lake City hub, linking Santa Barbara to dozens of West Coast, Mountain West, East Coast and international destinations with a single, easy connection. Salt Lake City is a fast growing hub for Delta with seats up nearly 30 percent since 2014. As Salt Lake City’s largest carrier, Delta has invested in and worked closely with the airport on a multi-billion dollar infrastructure project to build the airport of the future in SLC, with the first phase expected to open in 2020.
Top Copyright Photo (all others by SkyWest): Delta Connection-SkyWest Airlines Embraer ERJ 170-200LR (ERJ 175) N250SY (msn 17000610) SNA (Michael B. Ing). Image: 945472.
Delta Air Lines will add Delta Connection service operated by SkyWest Airlines between Raleigh/Durham and Chicago (O’Hare) next year. According to Airline Route, SkyWest will operate Embraer 175 on the new route commencing on April 2, 2019.
In other news, Delta is also adding New York (JFK) – Antigua flights starting December 22, 2018 for the winter season.
Delta customers will have a new, convenient way to access El Paso, Texas with new nonstop service from the airline’s hub at Salt Lake City International Airport beginning October 1.
Delta’s Salt Lake City hub offers customers more than 250 daily departures to 90 destinations across the Intermountain West, West Coast, Hawaii, Mexico, Canada and Europe, bringing the world to El Paso International Airport with easy, one-stop connections.
The new service will complement existing Delta flying of three peak-day departures from El Paso with global connections via the airline’s hub at Hartsfield-Jackson Atlanta International Airport.
The daily service will operate as follows:
Departs
Arrives
Aircraft
ELP at 8:15 a.m.
SLC at 10:15 a.m.
CRJ-900
SLC at 8:05 p.m.
ELP at 10:25 p.m.
CRJ-900
The Bombardier CRJ900 aircraft operated by Delta Connection carrier SkyWest Airlines is equipped with 12 seats in First Class, 20 in Comfort+ and 44 in the main cabin. Customers will have access to in-flight Wi-Fi as well as streaming in-flight entertainment via Delta Studio.
