SkyWest, Inc. Announces First Quarter 2024 Profit
- SkyWest reported a net income of $60 million in Q1 2024, a significant improvement from a net loss of $22 million in Q1 2023.
- Revenue increased to $804 million in Q1 2024, up 16% from $692 million in Q1 2023.
- Block hour production rose by 5% in Q1 2024 compared to Q1 2023, indicating improved operational efficiency.
- SkyWest recognized $1 million of previously deferred revenue in Q1 2024, compared to deferring $63 million in Q1 2023.
- Operating expenses were $704 million in Q1 2024, up 1% from $697 million in Q1 2023.
- SkyWest had $821 million in cash and marketable securities at the end of Q1 2024, with total debt of $2.9 billion.
- The company repurchased 136,000 shares of common stock for $8.7 million during Q1 2024.
- SkyWest is scheduled to operate a total of 278 E175 aircraft by the end of 2026.
- None.
Insights
SkyWest, Inc.'s financial results for Q1 2024 show a significant rebound with a net income of
Investors should note the reduction in debt from
However, the cumulative deferred revenue of
As SkyWest continues to grow its fleet with more E175 aircraft, their strategic positioning within the regional airline market is solidified. The E175 is a popular regional jet, offering efficiency and passenger comfort, which is in line with industry trends favoring smaller, fuel-efficient aircraft for short to mid-range flights. The coordination with major airlines such as Delta and United for fleet optimization and delivery schedules enhances SkyWest's operational flexibility and ability to meet market demand.
Dependence on major airline partners for financing and operations does carry risk and investors should consider the implications of airline industry volatility on SkyWest's performance. New delivery schedules and partnership agreements are indicative of SkyWest’s strategic growth and may signal increased market confidence in regional carriers' role post-pandemic.
First Quarter 2024 Summary
-
Q1 2024 pre-tax income of
$80 million $60 million $1.45 - SkyWest took delivery of three of the 20 E175 partner-financed aircraft under a previously announced agreement with United Airlines
-
Block hour production increased
5% in Q1 2024 compared to Q1 2023
Commenting on the results, Chip Childs, Chief Executive Officer of SkyWest, said, “Our ability to meet our partners’ demand for additional production continues to increase as our captain availability has improved. We are also pleased with how our teams performed under challenging winter conditions during the first quarter.”
Financial Results
Revenue was
For purposes of revenue comparability year-over-year, SkyWest recognized
Operating expenses were
Capital and Liquidity
SkyWest had
Total debt at March 31, 2024 was
Under its previously announced share repurchase program authorized by the SkyWest Board of Directors in May 2023, SkyWest repurchased 136,000 shares of common stock for
Commercial Agreements
SkyWest is coordinating with its major airline partners to optimize the timing of upcoming announced fleet deliveries. The anticipated E175 future delivery dates summarized below are based on currently available information and are subject to change.
|
2024 |
2025 |
2026 |
Total |
|||
Delta Air Lines |
1 |
ꟷ |
ꟷ |
1 |
|||
United Airlines(1) |
21 |
7 |
8 |
36 |
|||
Alaska Airlines |
ꟷ |
1 |
ꟷ |
1 |
|||
Total |
22 |
8 |
8 |
38 |
|||
| ____________________ | |||||||
(1) 17 of the E175 deliveries scheduled for 2024 are partner-financed. |
|||||||
By the end of 2026, SkyWest is scheduled to operate a total of 278 E175 aircraft.
About SkyWest
SkyWest, Inc. is the holding company for SkyWest Airlines and SkyWest Leasing, an aircraft leasing company. SkyWest Airlines has a fleet of approximately 500 aircraft connecting passengers to over 240 destinations throughout
SkyWest will host its conference call to discuss its first quarter 2024 results today, April 25, 2024, at 2:30 p.m. Mountain Time. The conference call number is 1-888-330-2455 for domestic callers, and 1-240-789-2717 for international callers. Please call up to ten minutes in advance to ensure you are connected prior to the start of the call. The conference call will also be available live on the Internet at https://events.q4inc.com/attendee/364879427. This press release and additional information regarding SkyWest, including access information for the digital rebroadcast of the first quarter 2024 results call, participation at investor conferences and investor presentations can be accessed at inc.skywest.com.
Forward Looking-Statements
In addition to historical information, this release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Words such as “forecasts,” "expects," "intends," "believes," "anticipates," “estimates,” "should," "likely" and similar expressions identify forward-looking statements. Such statements include, but are not limited to, statements about the continued demand for our product, the effect of economic conditions on SkyWest’s business, financial condition and results of operations, the scheduled aircraft deliveries for SkyWest in upcoming periods and the related execution of SkyWest’s fleet transition strategy and expected timing thereof, expected production levels in future periods and associated staffing challenges, pilot attrition trends, SkyWest’s coordination with major airline partners to optimize the delivery of aircraft under previously announced agreements, the expected terms, timing and benefits related to SkyWest’s leasing and joint venture transactions, as well as SkyWest’s future financial and operating results, plans, objectives, expectations, estimates, intentions and outlook, and other statements that are not historical facts. All forward-looking statements included in this release are made as of the date hereof and are based on information available to SkyWest as of such date. SkyWest assumes no obligation to update any forward-looking statements unless required by law. Readers should note that many factors could affect the future operating and financial results of SkyWest and could cause actual results to vary materially from those expressed in forward-looking statements set forth in this release. These factors include, but are not limited to: the challenges of competing successfully in a highly competitive and rapidly changing industry; developments associated with fluctuations in the economy and the demand for air travel, including related to inflationary pressures, and related decreases in customer demand and spending; uncertainty regarding continued recovery from the COVID-19 pandemic and other potential future outbreaks of infectious diseases or other health concerns, and the consequences of such outbreaks to the travel industry, including travel demand and travel behavior, and our major airline partners in general and the financial condition and operating results of SkyWest in particular; the prospects of entering into agreements with existing or other carriers to fly new aircraft; ongoing negotiations between SkyWest and its major airline partners regarding their contractual obligations; uncertainties regarding operation of new aircraft; the ability to attract and retain qualified pilots, including captains, and related staffing challenges; the impact of regulatory issues such as pilot rest rules and qualification requirements; the ability to obtain aircraft financing; the financial stability of SkyWest’s major airline partners and any potential impact of their financial condition on the operations of SkyWest; fluctuations in flight schedules, which are determined by the major airline partners for whom SkyWest conducts flight operations; variations in market and economic conditions; significant aircraft lease and debt commitments; estimated useful life of long-lived assets, residual aircraft values and related impairment charges; labor relations and costs and labor shortages; the impact of global instability; rapidly fluctuating fuel costs and potential fuel shortages; the impact of weather-related, natural disasters and other air safety incidents on air travel and airline costs; aircraft deliveries; uncertainty regarding ongoing hostility between
SkyWest, Inc. and Subsidiaries |
|||||||
Condensed Consolidated Statements of Income (Loss) |
|||||||
(Dollars and Shares in Thousands, Except per Share Amounts) |
|||||||
(Unaudited) |
|||||||
|
|||||||
|
Three months ended |
||||||
|
March 31, |
||||||
|
2024 |
2023 |
|||||
OPERATING REVENUES: |
|
|
|
|
|||
Flying agreements |
$ |
778,289 |
|
$ |
663,838 |
|
|
Lease, airport services and other |
|
25,325 |
|
|
27,993 |
|
|
Total operating revenues |
|
803,614 |
|
|
691,831 |
|
|
|
|
|
|
|
|||
OPERATING EXPENSES: |
|
|
|
|
|||
Salaries, wages and benefits |
|
350,999 |
|
|
335,201 |
|
|
Aircraft maintenance, materials and repairs |
|
145,415 |
|
|
142,226 |
|
|
Depreciation and amortization |
|
95,870 |
|
|
94,149 |
|
|
Aircraft fuel |
|
21,164 |
|
|
20,964 |
|
|
Airport-related expenses |
|
20,888 |
|
|
18,295 |
|
|
Aircraft rentals |
|
1,276 |
|
|
19,528 |
|
|
Other operating expenses |
|
68,496 |
|
|
66,172 |
|
|
Total operating expenses |
|
704,108 |
|
|
696,535 |
|
|
OPERATING INCOME (LOSS) |
|
99,506 |
|
|
(4,704 |
) |
|
|
|
|
|
|
|||
OTHER INCOME (EXPENSE): |
|
|
|
|
|||
Interest income |
|
11,626 |
|
|
10,033 |
|
|
Interest expense |
|
(29,829 |
) |
|
(33,620 |
) |
|
Other income (loss), net |
|
(1,128 |
) |
|
2,174 |
|
|
Total other expense, net |
|
(19,331 |
) |
|
(21,413 |
) |
|
|
|
|
|
|
|||
INCOME (LOSS) BEFORE INCOME TAXES |
|
80,175 |
|
|
(26,117 |
) |
|
PROVISION (BENEFIT) FOR INCOME TAXES |
|
19,877 |
|
|
(4,046 |
) |
|
NET INCOME (LOSS) |
$ |
60,298 |
|
$ |
(22,071 |
) |
|
|
|
|
|
|
|||
BASIC EARNINGS (LOSS) PER SHARE |
$ |
1.50 |
|
$ |
(0.45 |
) |
|
DILUTED EARNINGS (LOSS) PER SHARE |
$ |
1.45 |
|
$ |
(0.45 |
) |
|
|
|
|
|
|
|||
Weighted average common shares: |
|
|
|
|
|||
Basic |
|
40,299 |
|
|
49,391 |
||
Diluted |
41,492 |
49,391 |
|||||
SkyWest, Inc. and Subsidiaries |
|||||
Summary of Consolidated Balance Sheets |
|||||
(Dollars in Thousands) |
|||||
(Unaudited) |
|||||
|
|||||
|
March 31, |
December 31, |
|||
|
2024 |
2023 |
|||
Cash and marketable securities |
$ |
821,164 |
$ |
835,223 |
|
Other current assets |
|
248,197 |
|
296,673 |
|
Total current assets |
|
1,069,361 |
|
1,131,896 |
|
|
|
|
|
|
|
Property and equipment, net |
|
5,413,537 |
|
5,405,685 |
|
Deposits on aircraft |
|
77,282 |
|
77,282 |
|
Other long-term assets |
|
422,563 |
|
411,430 |
|
Total assets |
$ |
6,982,743 |
$ |
7,026,293 |
|
|
|
|
|
|
|
Current portion, long-term debt |
$ |
506,602 |
$ |
443,869 |
|
Other current liabilities |
|
805,694 |
|
810,423 |
|
Total current liabilities |
|
1,312,296 |
|
1,254,292 |
|
|
|
|
|
|
|
Long-term debt, net of current maturities |
|
2,389,227 |
|
2,562,183 |
|
Other long-term liabilities |
|
1,116,317 |
|
1,096,316 |
|
Stockholders' equity |
|
2,164,903 |
|
2,113,502 |
|
Total liabilities and stockholders' equity |
$ |
6,982,743 |
$ |
7,026,293 |
|
SkyWest, Inc. and Subsidiaries |
|||||
Additional Operational Information (unaudited) |
|||||
|
|||||
| SkyWest’s fleet in scheduled service or under contract by aircraft type: | |||||
|
|||||
|
March 31, 2024 |
December 31, 2023 |
March 31, 2023 |
||
E175 aircraft |
240 |
237 |
236 |
||
CRJ900 aircraft |
41 |
41 |
36 |
||
CRJ700 aircraft |
105 |
118 |
103 |
||
CRJ200 aircraft |
89 |
89 |
116 |
||
Total aircraft in service or under contract |
475 |
485 |
491 |
||
As of March 31, 2024, SkyWest leased 35 CRJ700s and five CRJ900s to third parties and had 16 CRJ200s that are ready for service under SkyWest Charter (“SWC”) operations (these aircraft are excluded from the table above).
| Selected operational data: | |||||||||
|
|||||||||
|
For the three months ended March 31, |
||||||||
Block hours by aircraft type: |
2024 |
2023 |
% Change |
||||||
E175s |
178,985 |
|
160,751 |
|
11.3 |
|
% |
||
CRJ900s |
17,392 |
|
20,713 |
|
(16.0 |
) |
% |
||
CRJ700s |
58,285 |
|
52,028 |
|
12.0 |
|
% |
||
CRJ200s |
35,139 |
|
42,749 |
|
(17.8 |
) |
% |
||
Total block hours |
289,801 |
|
276,241 |
|
4.9 |
|
% |
||
|
|
|
|
|
|
|
|||
|
|
|
|
|
|
|
|||
Departures |
169,432 |
|
160,623 |
|
5.5 |
|
% |
||
Passengers carried |
9,149,453 |
|
8,575,870 |
|
6.7 |
|
% |
||
Adjusted flight completion |
99.9 |
% |
99.7 |
% |
0.2 |
|
pts |
||
Raw flight completion |
97.7 |
% |
97.5 |
% |
0.2 |
|
pts |
||
Passenger load factor |
80.8 |
% |
80.2 |
% |
0.6 |
|
pts |
||
Average trip length |
461 |
|
472 |
|
(2.3 |
) |
% |
||
Adjusted flight completion percent excludes weather cancellations. Raw flight completion includes weather cancellations.
View source version on businesswire.com: https://www.businesswire.com/news/home/20240425747274/en/
Investor Relations
435.634.3200
Investor.relations@skywest.com
Corporate Communications
435.634.3553
corporate.communications@skywest.com
Source: SkyWest, Inc.
FAQ
What was SkyWest's net income in Q1 2024?
How much did SkyWest's revenue increase in Q1 2024 compared to Q1 2023?
What was the percentage increase in block hour production for SkyWest in Q1 2024 compared to Q1 2023?
How much cash and marketable securities did SkyWest have at the end of Q1 2024?
How many E175 aircraft is SkyWest scheduled to operate by the end of 2026?
