Skip to main content

SkyWest, Inc. Announces Second Quarter 2023 Profit

Second Quarter 2023 Summary

  • Q2 2023 pre-tax income of $18 million, net income of $15 million, or $0.35 per diluted share
  • Second quarter results reflect the deferral of $60 million in revenue
  • Repurchased 3.3 million shares of common stock for $94 million during Q2 2023 at an average price of $28 per share

SkyWest, Inc. (NASDAQ: SKYW) (“SkyWest”) today reported financial and operating results for Q2 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.

Commenting on the results, 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.”

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.

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 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.

SkyWest will host its conference call to discuss its second quarter 2023 results today, July 27, 2023, at 2:30 p.m. Mountain Time. The conference call number is 1-888-330-2380 for domestic callers, and 1-240-789-2724 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/393092687. This press release and additional information regarding SkyWest, including access information for the digital rebroadcast of the second quarter 2023 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 impact of the COVID-19 pandemic, economic conditions and the captain shortage 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, uncertainty regarding 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 and our major 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 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, and the ability to obtain aircraft financing.

Actual operational and financial results of SkyWest will likely also vary, and may vary materially, from those anticipated, estimated, projected or expected for a number of other reasons, including, in addition to those identified above: 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 the COVID-19 pandemic, inflationary pressures, and related decreases in customer demand and spending; the financial stability of SkyWest’s major partners and any potential impact of their financial condition on the operations of SkyWest; fluctuations in flight schedules, which are determined by the major 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 or other natural disasters on air travel and airline costs; aircraft deliveries; uncertainty regarding ongoing hostility between Russia and the Ukraine and the related impacts on macroeconomic conditions and on the international operations of any of our major airline partners as a result of such conflict; the existing global COVID-19 pandemic and the outbreak of any other disease or similar public health threat that affects travel demand or travel behavior; and other unanticipated factors. Risk factors, cautionary statements and other conditions which could cause SkyWest’s actual results to differ materially from management’s current expectations are contained in SkyWest’s filings with the Securities and Exchange Commission, including its most recent Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K.

SkyWest, Inc. and Subsidiaries

Condensed Consolidated Statements of Income (Loss)

(Dollars and Shares in Thousands, Except per Share Amounts)

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three months ended

 

Six months ended

 

 

June 30,

 

June 30,

 

 

2023

 

2022

 

2023

 

2022

OPERATING REVENUES:

 

 

 

 

 

 

 

 

 

 

 

 

Flying agreements

 

$

700,394

 

 

$

773,774

 

 

$

1,364,232

 

 

$

1,481,837

 

Lease, airport services and other

 

 

25,249

 

 

 

25,311

 

 

 

53,242

 

 

 

52,400

 

Total operating revenues

 

 

725,643

 

 

 

799,085

 

 

 

1,417,474

 

 

 

1,534,237

 

 

 

 

 

 

 

 

 

 

 

 

 

 

OPERATING EXPENSES:

 

 

 

 

 

 

 

 

 

 

 

 

Salaries, wages and benefits

 

 

322,441

 

 

 

288,562

 

 

 

657,642

 

 

 

588,620

 

Aircraft maintenance, materials and repairs

 

 

162,491

 

 

 

174,883

 

 

 

304,717

 

 

 

323,296

 

Depreciation and amortization

 

 

97,169

 

 

 

97,249

 

 

 

191,318

 

 

 

199,994

 

Aircraft fuel

 

 

18,279

 

 

 

31,820

 

 

 

39,243

 

 

 

56,910

 

Airport-related expenses

 

 

16,955

 

 

 

17,490

 

 

 

35,250

 

 

 

36,695

 

Aircraft rentals

 

 

2,428

 

 

 

16,024

 

 

 

21,956

 

 

 

32,020

 

Other operating expenses

 

 

74,020

 

 

 

84,455

 

 

 

140,192

 

 

 

156,052

 

Total operating expenses

 

 

693,783

 

 

 

710,483

 

 

 

1,390,318

 

 

 

1,393,587

 

OPERATING INCOME

 

 

31,860

 

 

 

88,602

 

 

 

27,156

 

 

 

140,650

 

 

 

 

 

 

 

 

 

 

 

 

 

 

OTHER INCOME (EXPENSE):

 

 

 

 

 

 

 

 

 

 

 

 

Interest income

 

 

10,494

 

 

 

2,559

 

 

 

20,527

 

 

 

2,984

 

Interest expense

 

 

(33,718

)

 

 

(30,433

)

 

 

(67,338

)

 

 

(59,025

)

Other income, net

 

 

9,001

 

 

 

12,019

 

 

 

11,175

 

 

 

12,899

 

Total other expense, net

 

 

(14,223

)

 

 

(15,855

)

 

 

(35,636

)

 

 

(43,142

)

 

 

 

 

 

 

 

 

 

 

 

 

 

INCOME (LOSS) BEFORE INCOME TAXES

 

 

17,637

 

 

 

72,747

 

 

 

(8,480

)

 

 

97,508

 

PROVISION (BENEFIT) FOR INCOME TAXES

 

 

2,218

 

 

 

18,796

 

 

 

(1,828

)

 

 

25,823

 

NET INCOME (LOSS)

 

$

15,419

 

 

$

53,951

 

 

$

(6,652

)

 

$

71,685

 

 

 

 

 

 

 

 

 

 

 

 

 

 

BASIC EARNINGS (LOSS) PER SHARE

 

$

0.35

 

 

$

1.07

 

 

$

(0.14

)

 

$

1.42

 

DILUTED EARNINGS (LOSS) PER SHARE

 

$

0.35

 

 

$

1.07

 

 

$

(0.14

)

 

$

1.42

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average common shares:

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

43,837

 

 

 

50,522

 

 

 

46,614

 

 

 

50,501

 

Diluted

44,219

 

50,566

 

46,614

 

50,637

SkyWest, Inc. and Subsidiaries

Summary of Consolidated Balance Sheets

(Dollars in Thousands)

(Unaudited)

 

 

 

 

 

 

 

June 30,

 

December 31,

 

2023

 

2022

Cash and marketable securities

$

862,349

 

$

1,047,215

Other current assets

 

320,784

 

 

324,066

Total current assets

 

1,183,133

 

 

1,371,281

 

 

 

 

 

 

Property and equipment, net

 

5,467,212

 

 

5,524,549

Deposits on aircraft

 

23,931

 

 

23,931

Other long-term assets

 

441,498

 

 

494,792

Total assets

$

7,115,774

 

$

7,414,553

 

 

 

 

 

 

Current portion, long-term debt

$

442,155

 

$

438,502

Other current liabilities

 

723,839

 

 

734,041

Total current liabilities

 

1,165,994

 

 

1,172,543

 

 

 

 

 

 

Long-term debt, net of current maturities

 

2,743,804

 

 

2,941,772

Other long-term liabilities

 

1,048,737

 

 

952,607

Stockholders' equity

 

2,157,239

 

 

2,347,631

Total liabilities and stockholders' equity

$

7,115,774

$

7,414,553

SkyWest, Inc. and Subsidiaries

Additional Operational Information (unaudited)

SkyWest’s fleet in scheduled service or under contract by aircraft type:

 

 

 

 

 

 

 

 

 

June 30, 2023

 

December 31, 2022

 

June 30, 2022

E175 aircraft

 

235

 

236

 

223

CRJ900 aircraft

 

41

 

41

 

44

CRJ700 aircraft

 

110

 

104

 

114

CRJ200 aircraft

 

106

 

136

 

140

Total aircraft in service or under contract

 

492

 

517

 

521

As of June 30, 2023, SkyWest leased 35 CRJ700s and five CRJ900s to third parties and had nine CRJ200s that are ready for service under SkyWest Charter operations (these aircraft are excluded from the table above).

Selected operational data:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For the three months ended June 30,

 

For the six months ended June 30,

Block hours by aircraft type:

 

2023

 

 

2022

 

 

% Change

 

2023

 

 

2022

 

 

% Change

E175s

 

168,416

 

 

165,224

 

 

1.9

%

 

329,167

 

 

311,401

 

 

5.7

%

CRJ900s

 

19,698

 

 

27,479

 

 

(28.3

)%

 

40,411

 

 

53,334

 

 

(24.2

)%

CRJ700s

 

50,094

 

 

72,120

 

 

(30.5

)%

 

102,122

 

 

139,998

 

 

(27.1

)%

CRJ200s

 

44,409

 

 

69,930

 

 

(36.5

)%

 

87,159

 

 

141,013

 

 

(38.2

)%

Total block hours

 

282,617

 

 

334,753

 

 

(15.6

)%

 

558,859

 

 

645,746

 

 

(13.5

)%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Departures

 

173,837

 

 

199,678

 

 

(12.9

)%

 

334,460

 

 

375,889

 

 

(11.0

)%

Passengers carried

 

9,887,779

 

 

11,124,468

 

 

(11.1

)%

 

18,463,649

 

 

19,911,835

 

 

(7.3

)%

Adjusted flight completion

 

99.9

%

 

99.9

%

 

pts

 

99.9

%

 

99.4

%

 

0.5

pts

Raw flight completion

 

98.9

%

 

99.1

%

 

(0.2

) pts

 

98.2

%

 

97.7

%

 

0.5

pts

Passenger load factor

 

85.5

%

 

86.0

%

 

(0.5

) pts

 

83.0

%

 

82.1

%

 

0.9

pts

Average trip length

 

451

 

 

491

 

 

(8.1

)%

 

461

 

 

503

 

 

(8.3

)%

Adjusted flight completion percent excludes weather cancellations. Raw flight completion includes weather cancellations.

Supplemental Cash Flow Information

SkyWest receives certain fixed monthly cash payments under its capacity purchase agreements (“CPAs”) that are attributed to SkyWest’s overhead costs and certain fixed monthly cash payments associated with SkyWest’s aircraft ownership costs. Fixed payments allocated to the non-lease portion are recognized as revenue on a completed block hour basis over the applicable contract term. Fixed payments allocated to the lease portion are accounted for as lease revenue under the CPAs and are recognized on a straight-line basis over the applicable contract term. Fixed monthly cash payments received in excess of revenue recognized during the reporting period are recorded as deferred revenue and revenue recognized in excess of fixed monthly cash payments during the reporting period are recorded as unbilled revenue on SkyWest’s consolidated balance sheet. Recent amendments to certain CPAs modified the fixed rate structure and resulted in higher deferred revenue amounts in 2023 compared to 2022. The following supplemental cash flow schedule summarizes the total revenue recognized in excess of (or less than) the fixed monthly cash received during the indicated reporting periods and the cumulative difference as of June 30, 2023 and December 31, 2022 (dollars in thousands, unaudited).

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three months ended

 

Six months ended

 

 

June 30,

 

June 30,

 

 

2023

 

2022

 

2023

 

2022

Revenue recognized in excess of (less than) fixed cash payments received

 

$

(60,203

)

 

$

15,742

 

$

(123,398

)

 

$

26,880

 

 

 

 

 

 

 

 

 

 

 

 

 

 

As of June 30, 2023

 

As of December 31, 2022

Cumulative revenue recognized less than fixed cash payments received

 

$

(248,211

)

 

$

(124,813

)

 

Contacts

Data & News supplied by www.cloudquote.io
Stock quotes supplied by Barchart
Quotes delayed at least 20 minutes.
By accessing this page, you agree to the following
Privacy Policy and Terms and Conditions.