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Item 2. Management’s Discussion and Analysis

2025-10-31 compared with 2025-07-25 · 168 added, 165 removed, 283 unchanged (54% of the section changed)

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The following discussion and analysis presents factors that had a material effect on the results of operations of SkyWest, Inc.

(“SkyWest” “we” or “us”) during the three- and six-month periods ended June 30, 2025 and 2024.

Also discussed is our financial condition as of June 30, 2025, and December 31, 2024.

You should read this discussion in conjunction with our condensed consolidated financial statements for the three and six months ended June 30, 2025, including the notes thereto, appearing elsewhere in this Report.

(“SkyWest” “we” or “us”) during the three- and nine-month periods ended September 30, 2025 and 2024.

Also discussed is our financial condition as of September 30, 2025, and December 31, 2024.

You should read this discussion in conjunction with our condensed consolidated financial statements for the three and nine months ended September 30, 2025, including the notes thereto, appearing elsewhere in this Report.

This discussion and analysis contains forward-looking statements.

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(“American”) and Alaska Airlines, Inc.

(“Alaska”) (each, a “major airline partner” and together, “major airline partners”) to optimize the delivery of aircraft under previously announced agreements and quickly placing new aircraft deliveries into service, the expected terms, timing and benefits related to SkyWest’s leasing, strategic partnership and joint venture transactions, SkyWest’s provision of assets to Corporate Flight Management, Inc.

(“Alaska”) (each, a “major airline partner” and together, “major airline partners”) regarding the delivery of aircraft under previously announced agreements and quickly placing new aircraft deliveries into service, the expected terms, timing and benefits related to SkyWest’s leasing, strategic partnership and joint venture transactions, SkyWest’s provision of assets to Corporate Flight Management, Inc.

d/b/a Contour Airlines (“Contour”), scheduled flight service to smaller communities, increasing the utilization and efficiency of all fleet types 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.

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aircraft deliveries;

uncertainty regarding ongoing international hostilities, including those between Russia and the Ukraine, Israel and Hamas, and Israel and Iran, and the related impacts on macroeconomic conditions and on the international operations of any of our major airline partners as a result of such conflicts;

uncertainty regarding ongoing international hostilities, including those between Russia and Ukraine, Israel and Hamas, and Israel and Iran, and the related impacts on macroeconomic conditions and on the international operations of any of our major airline partners as a result of such conflicts;

the availability of parts used in connection with maintenance and repairs of the aircraft;

the availability of suitable replacement aircraft for aging aircraft;

the impact of recently enacted and proposed U.S.

tariffs on global economic conditions and the financial markets, passenger demand, the cost of aircraft parts and supplies sourced

internationally and the cost of service providers located outside of the United States;

the impact of enacted and proposed U.S.

tariffs on global economic

conditions and the financial markets, passenger demand, the cost of aircraft parts and supplies sourced internationally and the cost of service providers located outside of the United States;

the potential impact of a U.S.

government shut-down on air traffic controller staffing and federal Essential Air Service subsidies;

as well as the other factors identified under the heading “Risk Factors” in Part I, Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2024, under the heading “Risk Factors” in Part II, Item 1A of this Report, elsewhere in this Report, in our other filings with the Securities and Exchange Commission (the “SEC”) and other unanticipated factors.

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(“SkyWest Airlines”).

As of June 30, 2025, we offered scheduled passenger and air freight service with approximately 2,530 total daily departures to destinations in the United States, Canada and Mexico.

As of September 30, 2025, we offered scheduled passenger and air freight service with approximately 2,400 total daily departures to destinations in the United States, Canada and Mexico.

Our fleet of Embraer E175 regional jet aircraft (“E175”), Canadair CRJ900 regional jet aircraft (“CRJ900”) and Canadair CRJ700 regional jet aircraft (“CRJ700”), including a 50-seat configuration of the CRJ700 aircraft, commonly referred to as a “CRJ550,” have a multiple-class seat configuration, whereas our Canadair CRJ200 regional jet aircraft (“CRJ200”) have a single-class seat configuration.

During 2022, we formed SkyWest Charter, LLC (“SWC”), which offers on-demand charter services using CRJ200 aircraft in a 30-seat configuration.

As of June 30, 2025, we had 632 total aircraft in our fleet, including 502 aircraft in scheduled service or under contract pursuant to our code-share agreements, summarized as follows:

As of September 30, 2025, we had 634 total aircraft in our fleet, including 498 aircraft in scheduled service or under contract pursuant to our code-share agreements, summarized as follows:

CRJ700/CRJ550

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Leased to third parties

(1) As of June 30, 2025, other aircraft included:

(1) As of September 30, 2025, other aircraft included:

supplemental spare aircraft supporting our code-share agreements that may be placed under future code-share or leasing agreements, aircraft transitioning between code-share agreements with our major airline partners or aircraft that are scheduled to be disassembled for use as spare parts.

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In exchange for such services, our major airline partners pay us either fixed fees to operate the flight, referred to as “capacity purchase agreement,” or we receive a percentage of applicable passenger ticket revenues on the designated flights we operate, referred to as “prorate agreement.” Our success is principally centered on our ability to meet the needs of our major airline partners by providing a reliable and safe operation at attractive economics.

From June 30, 2024, to June 30, 2025, we made changes to our fleet, including the addition of seven new E175 aircraft and 10 partner-financed E175 aircraft.

We anticipate our fleet will continue to evolve, as we are scheduled to add a total of 13 new E175 aircraft with United from 2025 to 2026, 16 new E175 aircraft with Delta from 2027 to 2028 (which are expected to replace 11 CRJ900s and five CRJ700s SkyWest is currently flying under contract with Delta) and one new E175 aircraft with Alaska in 2025.

We also have multiple agreements with United to place 32 used CRJ550 aircraft into service throughout 2025 and 2026.

Timing of placing these additional aircraft into service, including delivery timing on acquired aircraft, may be subject to change as we are coordinating with our major airline partners in response to labor availability or other factors.

Our primary objective in the fleet changes is to improve our profitability by adding new E175 aircraft and used CRJ700, CRJ550, CRJ900 and E175 aircraft, commonly referred to as “dual-class CRJ aircraft” to capacity purchase

agreements or prorate agreements, and potentially removing older aircraft from service that typically require higher maintenance costs.

As of June 30, 2025, approximately 45.6% of our aircraft in scheduled service or under contract were operated for United, approximately 28.3% were operated for Delta, approximately 17.7% were operated for American and approximately 8.4% were operated for Alaska.

From September 30, 2024, to September 30, 2025, we made changes to our fleet, including the addition of six new E175 aircraft and one partner-financed E175 aircraft.

We anticipate our fleet will continue to evolve, as we are scheduled to add a total of 13 new E175 aircraft with United between the fourth quarter of 2025 and the end of 2026, 16 new E175 aircraft with Delta from 2027 to 2028 (which are expected to replace 11 CRJ900s and five CRJ700s SkyWest is currently flying under contract with Delta) and one new E175 aircraft with Alaska in 2026.

We also have multiple agreements with United to place 29 used CRJ550 aircraft into service between the fourth quarter of 2025 and the end of 2026.

Timing of placing these additional aircraft into service, including delivery timing on acquired aircraft, may be subject to change as we are coordinating with our

major airline partners in response to labor availability or other factors.

Our primary objective in the fleet changes is to improve our profitability by adding new E175 aircraft and used CRJ700, CRJ550 and CRJ900 aircraft, commonly referred to as “dual-class aircraft” due to the first-class seat offerings, to our capacity purchase agreements or prorate agreements, and potentially removing older aircraft from service that typically require higher maintenance costs.

As of September 30, 2025, approximately 44.8% of our aircraft in scheduled service or under contract were operated for United, approximately 28.3% were operated for Delta, approximately 18.5% were operated for American and approximately 8.4% were operated for Alaska.

Historically, multiple contractual relationships with major airlines have enabled us to reduce our reliance on any single major airline code and to enhance and stabilize operating results through a mix of capacity purchase agreements and prorate agreements.

For the six months ended June 30, 2025, our capacity purchase revenue represented approximately 85.5% of our total flying agreements revenue and our prorate and SWC revenue, combined, represented approximately 14.5% of our total flying agreements revenue.

For the nine months ended September 30, 2025, our capacity purchase revenue represented approximately 84.8% of our total flying agreements revenue and our prorate and SWC revenue, combined, represented approximately 15.2% of our total flying agreements revenue.

On capacity purchase routes, the major airline partner controls scheduling, ticketing, pricing and seat inventories and we are compensated by the major airline partner at contracted rates based on completed block hours (measured from takeoff to landing, including taxi time), flight departures, the number of aircraft under contract and other operating measures.

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We are also responsible for the operating costs of the prorate flights, including fuel and airport costs.

Second Quarter Summary

We had total operating revenues of $1.0 billion for the three months ended June 30, 2025, a 19.4% increase compared to total operating revenues of $867.1 million for the three months ended June 30, 2024.

We had net income of $120.3 million, or $2.91 per diluted share, for the three months ended June 30, 2025, compared to net income of $75.6 million, or $1.82 per diluted share, for the three months ended June 30, 2024.

The significant items affecting our revenue and operating expenses during the three months ended June 30, 2025, are outlined below:

Third Quarter Summary

We had total operating revenues of $1.1 billion for the three months ended September 30, 2025, a 15.0% increase compared to total operating revenues of $912.8 million for the three months ended September 30, 2024.

We had net income of $116.4 million, or $2.81 per diluted share, for the three months ended September 30, 2025, compared to net income of $89.7 million, or $2.16 per diluted share, for the three months ended September 30, 2024.

The significant items affecting our revenue and operating expenses during the three months ended September 30, 2025, are outlined below:

The number of aircraft we have in scheduled service or under contract pursuant to our code-share agreements and the number of block hours we incur on our flights are primary drivers of our flying agreements revenue under our capacity purchase agreements.

The number of flights we operate and the corresponding number of passengers we carry are the primary drivers of our revenue under our prorate agreements.

The number of aircraft we have in scheduled service or under contract pursuant to our code-share agreements increased from 475 as of June 30, 2024 to 502 as of June 30, 2025, or by 5.7%;

and the number of block hours increased from 317,462 for the three months ended June 30, 2024 to 376,269 for the three months ended June 30, 2025, or by 18.5%, due to an increase in the number of aircraft operating under our capacity purchase agreements and an increase in the scheduled daily utilization of our aircraft driven by an increase in the number of available captains.

The number of aircraft we have in scheduled service or under contract pursuant to our code-share agreements increased from 484 as of September 30, 2024 to 498 as of September 30, 2025, or by 2.9%;

and the number of block hours increased from 334,459 for the three months ended September 30, 2024 to 384,247 for the three months ended September 30, 2025, or by 14.9%, due to an increase in the number of aircraft operating under our capacity purchase agreements and an increase in the scheduled daily utilization of our aircraft driven by an increase in the number of available captains.

As of the date of this Quarterly Report on Form 10-Q, the Company believes its scheduled aircraft utilization is no longer constrained by the number of available captains.

Our capacity purchase revenue increased $111.0 million, or 15.2%, for the three months ended June 30, 2025, as compared to the three months ended June 30, 2024, primarily as a result of an increase in completed block hours for the comparable periods.

As a result of a higher number of passengers carried on our prorate routes and an increase in the number of prorate and charter flights operated year-over-year, our prorate and SWC revenue increased $38.4 million, or 35.8%, for the three months ended June 30, 2025, as compared to the three months ended June 30, 2024.

Our capacity purchase revenue increased $83.5 million, or 11.0%, for the three months ended September 30, 2025, as compared to the three months ended September 30, 2024, primarily as a result of an increase in completed block hours for the comparable periods.

As a result of a higher number of passengers carried on our prorate routes and an increase in the number of prorate and charter flights operated year-over-year, our prorate and SWC revenue increased $44.3 million, or 36.1%, for the three months ended September 30, 2025, as compared to the three months ended September 30, 2024.

Operating Expenses

Our total operating expenses increased $117.6 million, or 15.7%, for the three months ended June 30, 2025, compared to the three months ended June 30, 2024.

The increase in operating expenses was primarily due to an increase in our direct operating expenses associated with the increase in the number of flights we operated for the three months ended June 30, 2025, compared to the three months ended June 30, 2024.

Departures increased from 189,325 for the three months ended June 30, 2024 to 222,874 for the three months ended June 30, 2025, or by 17.7%, and our total block hours increased 18.5% for the three months ended June 30, 2025, as compared to the three months ended June 30, 2024.

Our total operating expenses increased $94.5 million, or 12.1%, for the three months ended September 30, 2025, compared to the three months ended September 30, 2024.

The increase in operating expenses was primarily due to an increase in our direct operating expenses associated with the increase in the number of flights we operated for the

three months ended September 30, 2025, compared to the three months ended September 30, 2024.

Departures increased from 201,397 for the three months ended September 30, 2024 to 226,305 for the three months ended September 30, 2025, or by 12.4%, and our total block hours increased 14.9% for the three months ended September 30, 2025, as compared to the three months ended September 30, 2024.

Additional details regarding the increase in our operating expenses are described in the section of this Report entitled “Results of Operations.”

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Aircraft in Service or Under Contract

June 30, 2025

September 30, 2025

December 31, 2024

June 30, 2024

September 30, 2024

CRJ700s/CRJ550s

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The application of these accounting policies involves the exercise of judgment and the use of assumptions as to future uncertainties and, as a result, actual results will likely differ, and may differ materially, from such estimates.

There have been no significant changes in our critical accounting estimates during the six months ended June 30, 2025.

There have been no significant changes in our critical accounting estimates during the nine months ended September 30, 2025.

Recent Accounting Pronounceme nts

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Results of Operations

Three Months Ended June 30, 2025 and 2024

Three Months Ended September 30, 2025 and 2024

Operational Statistics

The following table sets forth our major operational statistics and the associated percentage changes for the periods identified below.

The increase in block hours, departures and passengers carried during the three months ended June 30, 2025, compared to the three months ended June 30, 2024, was primarily due to additional aircraft operating under our capacity purchase agreements and an increase in the number of available captains during the three months ended June 30, 2025, compared to the three months ended June 30, 2024, which allowed for a higher scheduled utilization of our aircraft.

For the three months ended June 30,

The increase in block hours, departures and passengers carried during the three months ended September 30, 2025, compared to the three months ended September 30, 2024, was primarily due to additional aircraft operating under our capacity purchase agreements and an increase in the number of block hours incurred per aircraft as the number of available captains did not limit our flight schedules during the three months ended September 30, 2025, compared to the three months ended September 30, 2024, which allowed for a higher scheduled utilization of our aircraft.

For the three months ended September 30,

Block hours by aircraft type:

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The following table summarizes our operating revenue for the periods indicated (dollar amounts in thousands):

For the three months ended June 30,

For the three months ended September 30,

Flying agreements

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We disaggregate our flying agreements revenue into the following categories (dollar amounts in thousands):

For the three months ended June 30,

For the three months ended September 30,

Capacity purchase agreements flight operations revenue

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Flying agreements revenue

The increase in “Capacity purchase agreements flight operations revenue” of $87.8 million, or 14.8%, was primarily due to an 18.5% increase in block hour production and an increase in the recognition of revenue that was previously deferred related to fixed monthly payments for flight operations received under our capacity purchase agreements for the three months ended June 30, 2025, compared to the three months ended June 30, 2024.

The increase in “Capacity purchase agreements flight operations revenue” of $48.2 million, or 7.7%, was primarily due to an increase in block hour production from aircraft under our capacity purchase agreements, offset by a decrease in the recognition of revenue that was previously deferred related to fixed monthly payments for flight operations received under our capacity purchase agreements for the three months ended September 30, 2025, compared to the three months ended September 30, 2024.

Under our capacity purchase agreements, we are paid a fixed amount per month per aircraft over the contract term.

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Under our capacity purchase agreements, the performance obligation of each completed flight is measured in block hours incurred for each completed flight.

Based on the number of completed block hours during the three months ended June 30, 2025, we recognized $17.4 million of previously deferred revenue, net of unbilled revenue, related to the non-lease fixed monthly payments we received associated with our flight operations revenues.

For the three months ended June 30, 2024, we recognized $5.0 million of previously deferred revenue, net of unbilled revenue, related to non-lease fixed monthly payments received associated with our flight operations revenues.

The timing of our revenue recognition related to the fixed payments associated with our flight operations will be adjusted over the remaining contract term for each capacity purchase agreement based on the number of block hours we complete each reporting period relative to the number of block hours we anticipate completing over the remaining contract term of each capacity purchase agreement.

The increase in “Capacity purchase agreements aircraft lease revenue” of $23.1 million, or 17.0%, was primarily due to the addition of aircraft under our capacity purchase agreements from June 30, 2024 and a contract extension that reallocated certain fixed monthly lease revenue from flight operations revenue under one of our capacity purchase agreements in 2025 based on relative standalone selling prices of the lease and non-lease components.

Based on the number of completed block hours during the three months ended September 30, 2025, we recognized $11.3 million of previously deferred revenue, net of unbilled revenue, related to the non-lease fixed monthly payments we received associated with our flight operations revenues.

For the three months ended September 30, 2024, we recognized $18.2 million of previously deferred revenue, net of unbilled revenue, related to non-lease fixed monthly payments received associated with our flight operations revenues.

The timing of our revenue recognition related to the fixed payments associated with our flight operations will be adjusted over the remaining contract term for each capacity

purchase agreement based on the number of block hours we complete each reporting period relative to the number of block hours we anticipate completing over the remaining contract term of each capacity purchase agreement.

The increase in “Capacity purchase agreements aircraft lease revenue” of $35.2 million, or 25.8%, was primarily due to the addition of aircraft under our capacity purchase agreements from September 30, 2024 and a contract extension that reallocated certain fixed monthly lease revenue from flight operations revenue under one of our capacity purchase agreements in 2025 based on relative standalone selling prices of the lease and non-lease components.

Under our capacity purchase agreements, a portion of the consideration we are paid is designed as reimbursement for certain aircraft ownership costs and is considered lease revenue, including fixed monthly payments and variable payments.

We recognize the fixed monthly lease payments as lease revenue using the straight-line basis over the capacity purchase agreement term and variable lease payments are recognized in the period when the block hours are completed.

Additionally, we recognized $5.6 million of previously deferred lease revenue, net of unbilled revenue, during the three months ended June 30, 2025, using the straight-line basis for fixed monthly lease payments, compared to recognizing $0.5 million of previously deferred revenue during the three months ended June 30, 2024.

Additionally, we recognized $5.8 million of previously deferred lease revenue, net of unbilled revenue, during the three months ended September 30, 2025, using the straight-line basis for fixed monthly lease payments, compared to recognizing $0.5 million of previously deferred revenue, net of unbilled revenue, during the three months ended September 30, 2024.

The deferred revenue balance applicable to each contract will be recorded as revenue over the term of each respective contract.

For clarity, under our “Capacity purchase agreements flight operations revenue” and “Capacity purchase agreements aircraft lease revenue” combined, we recognized $23.0 million of previously deferred revenue, net of unbilled revenue, during the three months ended June 30, 2025, compared to recognizing $5.5 million of deferred revenue, net of unbilled revenue, during the three months ended June 30, 2024.

Our total deferred revenue balance associated with our “Capacity purchase agreements flight operations revenue” and our “Capacity purchase agreements aircraft lease revenue,” net of unbilled revenue, was $286.5 million as of June 30, 2025, compared to total deferred revenue, net of unbilled revenue, of $322.4 million as of December 31, 2024.

The increase in prorate agreements and SWC revenue of $38.4 million, or 35.8%, was primarily due to an increase in prorate passengers and passenger revenue we received on routes we operated under our prorate agreements during the three months ended June 30, 2025, compared to the three months ended June 30, 2024, primarily driven by an increase in available captains.

The increase in lease, airport services and other revenues of $18.8 million, or 64.8%, for the three months ended June 30, 2025, compared to the three months ended June 30, 2024, was primarily due to an increase in revenue from maintenance services provided to third parties.

For clarity, under our “Capacity purchase agreements flight operations revenue” and “Capacity purchase agreements aircraft lease revenue” combined, we recognized $17.1 million of previously deferred revenue, net of unbilled revenue, during the three months ended September 30, 2025, compared to recognizing $18.7 million of deferred revenue, net of unbilled revenue, during the three months ended September 30, 2024.

Our total deferred revenue balance associated with our “Capacity purchase agreements flight operations revenue” and our “Capacity purchase agreements aircraft lease revenue,” net of unbilled revenue, was $269.4 million as of September 30, 2025, compared to total deferred revenue, net of unbilled revenue, of $322.4 million as of December 31, 2024.

The increase in prorate agreements and SWC revenue of $44.3 million, or 36.1%, was primarily due to an increase in prorate passengers and passenger revenue we received on routes we operated under our prorate agreements during the three months ended September 30, 2025, compared to the three months ended September 30, 2024.

The increase in prorate passengers as compared to the prior year period was primarily driven by an increase in departures due to the improvement in the number of available captains during the three months ended September 30, 2025.

The increase in lease, airport services and other revenues of $9.5 million, or 32.3%, for the three months ended September 30, 2025, compared to the three months ended September 30, 2024, was primarily due to an increase in revenue from maintenance services provided to third parties.

Operating Expenses

Individual expense components attributable to our operations are set forth in the following table (dollar amounts in thousands):

For the three months ended June 30,

For the three months ended September 30,

Salaries, wages and benefits

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Salaries, wages and benefits.

The $35.2 million, or 9.9%, increase in salaries, wages and benefits was primarily due to an increase in direct labor costs that resulted from the higher number of flights we operated during the three months ended June 30, 2025, compared to the three months ended June 30, 2024.

The $14.2 million, or 3.8%, increase in salaries, wages and benefits was primarily due to an increase in direct labor costs that resulted from the higher number of flights we operated, partially offset by operating efficiencies from higher utilization of our aircraft, during the three months ended September 30, 2025, compared to the three months ended September 30, 2024.

Aircraft maintenance, materials and repairs.

The $55.6 million, or 30.3%, increase in aircraft maintenance expense was primarily due to incremental maintenance costs incurred on our CRJ fleet and an increase in our flight volume, which increased our maintenance activity and related expenses, including maintenance services provided to third parties, for the three months ended June 30, 2025, compared to the three months ended June 30, 2024 .

The $66.3 million, or 36.5%, increase in aircraft maintenance expense was primarily due to incremental maintenance costs incurred on our CRJ fleet, an increase in our flight volume, which increased our maintenance activity and related expenses, and maintenance services provided to third parties for the three months ended September 30, 2025, compared to the three months ended September 30, 2024 .

Depreciation and amortization.

The $6.7 million, or 6.9%, decrease in depreciation and amortization expense was primarily a result of extending the estimated useful lives on our CRJ700/CRJ550 fleet by an average of three years and revising the residual values of the assets accordingly during the fourth quarter of 2024, offset by an increase in depreciation expense related to the acquisition of seven new E175 aircraft and spare engines since June 30, 2024.

The $4.2 million, or 4.3%, decrease in depreciation and amortization expense was primarily a result of extending the estimated useful lives on our CRJ700/CRJ550 fleet by an average of three years and revising the residual values of the assets accordingly during the fourth quarter of 2024, offset by an increase in depreciation expense related to the acquisition of six new E175 aircraft and spare engines since September 30, 2024.

Airport-related expenses.

Airport-related expenses include airport-related customer service costs such as outsourced airport gate and ramp agent services, airport security fees, passenger interruption costs, deicing, landing fees and station rents.

The $9.2 million, or 40.8%, increase in airport-related expenses for the three months ended September 30, 2025, compared to the three months ended September 30, 2024, was primarily due to an increase in subcontracted airport services, station rents and landing fees as a result of an increase in the number of flights we operated under our prorate agreements.

For clarity, our employee airport customer service labor costs are reflected in salaries, wages and benefits and customer service labor costs we outsource to third parties are included in airport-related expenses.

The $9.6 million, or 54.6%, increase in airport-related expenses for the three months ended June 30, 2025, compared to the three months ended June 30, 2024, was primarily due to an increase in subcontracted airport services, station rents, weather-related aircraft deicing costs and landing fees as a result of an increase in the number of flights we operated under our prorate agreements.

Aircraft fuel.

The $6.1 million, or 28.7%, increase in fuel cost was primarily due to an increase in the number of flights we operated under our prorate agreements and under SWC and the corresponding increase in gallons of fuel we purchased, offset by a decrease in our average fuel cost per gallon from $3.32 for the three months ended June 30, 2024 to $2.88 for the three months ended June 30, 2025.

The $11.5 million, or 50.6%, increase in fuel cost was primarily due to an increase in the number of flights we operated under our prorate agreements and under SWC and the corresponding increase in gallons of fuel we purchased, offset by a decrease in our average fuel cost per gallon from $3.10 for the three months ended September 30, 2024 to $3.04 for the three months ended September 30, 2025.

We purchase and incur expense for all fuel on flights operated under our prorate agreements and SWC.

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The following table summarizes the gallons of fuel we purchased under our prorate agreements and SWC, for the periods indicated:

For the three months ended June 30,

For the three months ended September 30,

(in thousands)

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Other operating expenses primarily consist of aircraft rentals, property taxes, hull and liability insurance, simulator costs, crew per diem, crew hotel costs and credit loss reserves.

The $17.7 million, or 24.1%, increase in other operating expenses was primarily related to an increase in our credit loss reserve as a result of our assessment of higher credit risk of certain outstanding receivables as of June 30, 2025 and an increase in other operating costs, such as crew per diem and crew hotel costs, as a result of the higher number of flights we operated during the three months ended June 30, 2025, compared to the three months ended June 30, 2024.

The $2.5 million, or 3.2%, decrease in other operating expenses was primarily related to a decrease in simulator and other training costs attributed to a reduction in newly hired pilots, partially offset by an increase in other operating costs, such as crew per diem and crew hotel costs, as a result of the higher number of flights we operated during the three months ended September 30, 2025, compared to the three months ended September 30, 2024.

Summary of interest expense, interest income, other income (expense), net and provision for income taxes

Interest Expense.

Interest expense decreased $2.4 million, or 8.3%, for the three months ended June 30, 2025 as compared to the three months ended June 30, 2024.

Interest expense decreased $2.2 million, or 7.9%, for the three months ended September 30, 2025 as compared to the three months ended September 30, 2024.

The decrease in interest expense was primarily related to a decrease in outstanding debt.

At June 30, 2025 we had $2.5 billion of outstanding debt, compared to $2.8 billion at June 30, 2024.

Our average effective interest rate for the three months ended June 30, 2025 and 2024, was 4.3% and 4.1%, respectively.

At September 30, 2025 we had $2.4 billion of outstanding debt, compared to $2.7 billion at September 30, 2024.

Our average effective interest rate for the three months ended September 30, 2025 and 2024, was 4.3% and 4.1%, respectively.

Interest income.

Interest income decreased $0.9 million, from $12.0 million for the three months ended June 30, 2024, to $11.1 million for the three months ended June 30, 2025.

The decrease in interest income was primarily related to a decrease in our marketable securities balance from $692.5 million at June 30, 2024, to $678.7 million at June 30, 2025.

Interest income decreased $1.9 million, from $12.5 million for the three months ended September 30, 2024, to $10.6 million for the three months ended September 30, 2025.

The decrease in interest income was primarily related to a decrease in interest rates on our marketable securities from September 30, 2024 to September 30, 2025.

Other income (expense), net.

Other income, net of expenses increased $9.1 million during the three months ended June 30, 2025, compared to the three months ended June 30, 2024.

Other income, net of expenses decreased $2.0 million during the three months ended September 30, 2025, compared to the three months ended September 30, 2024.

Other income (expense) , net primarily consists of the unrealized and realized gains and losses on our investments in other companies, income or loss related to our equity method investments and gains or losses on the sale of assets.

The increase in other income, net of expenses was primarily a result of an increase in the fair value of our investments in other companies and gains on the sale of assets for the three months ended June 30, 2025, compared to the three months ended June 30, 2024.

The decrease in other income, net of expenses was primarily a result of a decrease in the fair value of our investments in other companies, offset by gains on the sale of assets for the three months ended September 30, 2025, compared to the three months ended September 30, 2024.

Provision for income taxes.

For the three months ended June 30, 2025 and 2024, our effective income tax rates were 26.3% and 26.0%, respectively, which included the statutory federal income tax rate of 21% and other reconciling income tax items, including state income taxes, and the impact of non-deductible expenses.

The effective tax rate for the comparable periods did not significantly change.

Primarily due to the factors described above, we generated net income of $120.3 million, or $2.91 per diluted share, for the three months ended June 30, 2025, compared to net income of $75.6 million, or $1.82 per diluted share, for the three months ended June 30, 2024.

Six Months Ended June 30, 2025 and 2024

For the three months ended September 30, 2025 and 2024, our effective income tax rates were 26.0% and 22.8%, respectively, which included the statutory federal income tax rate of 21% and other reconciling income tax items, including state income taxes, and the impact of non-deductible expenses.

The increase in the effective tax rate was primarily related to a discrete tax benefit from the release of a previously recorded uncertain tax position liability and a discrete tax benefit from a release of the valuation allowance on state net operating losses anticipated to be utilized prior to expiration for the three months ended September 30, 2024, compared to no benefits for such items for the three months ended September 30, 2025.

Primarily due to the factors described above, we generated net income of $116.4 million, or $2.81 per diluted share, for the three months ended September 30, 2025, compared to net income of $89.7 million, or $2.16 per diluted share, for the three months ended September 30, 2024.

Nine Months Ended September 30, 2025 and 2024

Operational Statistics

The following table sets forth our major operational statistics and the associated percentage changes for the periods identified below.

The increase in block hours, departures and passengers carried during the six months ended June 30, 2025, compared to the six months ended June 30, 2024, was primarily due to additional aircraft operating under

our capacity purchase agreements and an increase in the number of available captains during the six months ended June 30, 2025, compared to the six months ended June 30, 2024, which allowed for a higher scheduled utilization of our aircraft.

For the six months ended June 30,

The increase in block hours, departures and passengers carried during the nine months ended September 30, 2025, compared to the nine months ended September 30, 2024, was primarily due to additional aircraft operating under our capacity purchase agreements and an increase in the number of block hours incurred per aircraft as the number of available captains did not limit our flight schedules during the nine months ended September 30, 2025, compared to the nine months ended September 30, 2024, which allowed for a higher scheduled utilization of our aircraft.

For the nine months ended September 30,

Block hours by aircraft type:

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The following table summarizes our operating revenue for the periods indicated (dollar amounts in thousands):

For the six months ended June 30,

For the nine months ended September 30,

Flying agreements

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We disaggregate our flying agreements revenue into the following categories (dollar amounts in thousands):

For the six months ended June 30,

For the nine months ended September 30,

Capacity purchase agreements flight operations revenue

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Flying agreements revenue

The increase in “Capacity purchase agreements flight operations revenue” of $182.8 million, or 16.0%, was primarily due to a 20.0% increase in block hour production and an increase in the recognition of revenue that was previously deferred related to fixed monthly payments for flight operations received under our capacity purchase agreements for the six months ended June 30, 2025, compared to the six months ended June 30, 2024.

The increase in “Capacity purchase agreements flight operations revenue” of $231.0 million, or 13.1%, was primarily due to an increase in block hour production from aircraft under our capacity purchase agreements and an increase in the recognition of revenue that was previously deferred related to fixed monthly payments for flight operations received under our capacity purchase agreements for the nine months ended September 30, 2025, compared to the nine months ended September 30, 2024.

Under our capacity purchase agreements, we are paid a fixed amount per month per aircraft over the contract term.

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Under our capacity purchase agreements, the performance obligation of each completed flight is measured in block hours incurred for each completed flight.

Based on the number of completed block hours during the six months ended June 30, 2025, we recognized $27.0 million of previously deferred revenue, net of unbilled revenue, related to the non-lease fixed monthly payments we received associated with our flight operations revenues.

For the six months ended June 30, 2024, we recognized $5.4 million of previously deferred revenue, net of unbilled revenue, related to non-lease fixed monthly payments received associated with our flight operations revenues.

The timing of our revenue

recognition related to the fixed payments associated with our flight operations will be adjusted over the remaining contract term for each capacity purchase agreement based on the number of block hours we complete each reporting period relative to the number of block hours we anticipate completing over the remaining contract term of each capacity purchase agreement.

The increase in “Capacity purchase agreements aircraft lease revenue” of $36.1 million, or 13.4%, was primarily due to the addition of aircraft under our capacity purchase agreements from June 30, 2024 and a contract extension that reallocated certain fixed monthly lease revenue from flight operations revenue based on relative standalone selling prices of the lease and non-lease components under one of our capacity purchase agreements during the six months ended June 30, 2025.

Based on the number of completed block hours during the nine months ended September 30, 2025, we recognized $38.3 million of previously deferred revenue, net of unbilled revenue, related to the non-lease fixed monthly payments we received associated with our flight operations revenues.

For the nine months ended September 30, 2024, we recognized $23.6 million of previously deferred revenue, net of unbilled revenue, related to non-lease fixed monthly payments received associated with our flight operations revenues.

The increase in “Capacity purchase agreements aircraft lease revenue” of $71.4 million, or 17.6%, was primarily due to the addition of aircraft under our capacity purchase agreements from September 30, 2024 and a contract extension that reallocated certain fixed monthly lease revenue from flight operations revenue based on relative standalone selling prices of the lease and non-lease components under one of our capacity purchase agreements during the nine months ended September 30, 2025.

Additionally, we recognized $8.9 million of previously deferred lease revenue, net of unbilled revenue, during the six months ended June 30, 2025, using the straight-line basis for fixed monthly lease payments, compared to recognizing $1.0 million of previously deferred revenue during the six months ended June 30, 2024.

Additionally, we recognized $14.7 million of previously deferred lease revenue, net of unbilled revenue, during the nine months ended September 30, 2025, using the straight-line basis for fixed monthly lease payments, compared to recognizing $1.5 million of previously deferred revenue, net of unbilled revenue, during the nine months ended September 30, 2024.

The deferred revenue balance applicable to each contract will be recorded as revenue over the term of each respective contract.

For clarity, under our “Capacity purchase agreements flight operations revenue” and “Capacity purchase agreements aircraft lease revenue” combined, we recognized $35.9 million of previously deferred revenue, net of unbilled revenue, during the six months ended June 30, 2025, compared to recognizing $6.4 million of deferred revenue, net of unbilled revenue, during the six months ended June 30, 2024.

The increase in prorate agreements and SWC revenue of $68.1 million, or 32.7%, was primarily due to an increase in prorate passengers and passenger revenue we received on routes we operated under our prorate agreements driven by an increase in available captains during the six months ended June 30, 2025, compared to the six months ended June 30, 2024.

Additionally, a portion of the increase was attributed to an increase in SWC revenue during the six months ended June 30, 2025, compared to the six months ended June 30, 2024.

The increase in lease, airport services and other revenues of $25.9 million, or 47.7%, was primarily due to an increase in maintenance services provided to third parties and an increase in the number of leased assets and lease rates for leases to third parties during the six months ended June 30, 2025, compared to the six months ended June 30, 2024.

For clarity, under our “Capacity purchase agreements flight operations revenue” and “Capacity purchase agreements aircraft lease revenue” combined, we recognized $53.0 million of previously deferred revenue, net of unbilled revenue, during the nine months ended September 30, 2025, compared to recognizing $25.1 million of deferred revenue, net of unbilled revenue, during the nine months ended September 30, 2024.

The increase in prorate agreements and SWC revenue of $112.4 million, or 34.0%, was primarily due to an increase in prorate departures, passengers and passenger revenue we received on routes we operated under our prorate agreements driven by an improvement in the number of available captains during the nine months ended September 30, 2025, compared to the nine months ended September 30, 2024.

Additionally, a portion of the increase was attributed to

an increase in SWC revenue during the nine months ended September 30, 2025, compared to the nine months ended September 30, 2024.

The increase in lease, airport services and other revenues of $35.4 million, or 42.3%, was primarily due to an increase in maintenance services provided to third parties, an increase in the number of leased assets, and an increase in lease rates during the nine months ended September 30, 2025, compared to the nine months ended September 30, 2024.

Operating Expenses

Individual expense components attributable to our operations are set forth in the following table (dollar amounts in thousands):

For the six months ended June 30,

For the nine months ended September 30,

Salaries, wages and benefits

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Salaries, wages and benefits.

The $61.6 million, or 8.7%, increase in salaries, wages and benefits was primarily due to an increase in direct labor costs that resulted from the higher number of flights we operated during the six months ended June 30, 2025, compared to the six months ended June 30, 2024.

The $75.7 million, or 7.0%, increase in salaries, wages and benefits was primarily due to an increase in direct labor costs that resulted from the higher number of flights we operated, partially offset by operating efficiencies from higher utilization of our aircraft during the nine months ended September 30, 2025, compared to the nine months ended September 30, 2024.

Aircraft maintenance, materials and repairs.

The $119.3 million, or 36.3%, increase in aircraft maintenance expense was primarily due incremental maintenance costs incurred on our CRJ fleet and an increase in our flight volume, which increased our maintenance activity and related expenses, and an increase in maintenance service activities provided to third parties for the six months ended June 30, 2025, compared to the six months ended June 30, 2024 .

The $185.6 million, or 36.4%, increase in aircraft maintenance expense was primarily due incremental maintenance costs incurred on our CRJ fleet, an increase in our flight volume, which increased our maintenance activity and related expenses, and an increase in maintenance service activities provided to third parties for the nine months ended September 30, 2025, compared to the nine months ended September 30, 2024 .

Depreciation and amortization.

The $13.1 million, or 6.8%, decrease in depreciation and amortization expense was primarily a result of extending the estimated useful lives on our CRJ700/CRJ550 fleet by an average of three years and revising the residual values of the assets accordingly during the fourth quarter of 2024, offset by an increase in depreciation expense related to the acquisition of seven new E175 aircraft and spare engines since June 30, 2024.

The $17.3 million, or 6.0%, decrease in depreciation and amortization expense was primarily a result of extending the estimated useful lives on our CRJ700/CRJ550 fleet by an average of three years and revising the residual values of the assets accordingly during the fourth quarter of 2024, offset by an increase in depreciation expense related to the acquisition of six new E175 aircraft and spare engines since September 30, 2024.

Airport-related expenses.

The $25.8 million, or 42.2%, increase in airport-related expenses for the nine months ended September 30, 2025, compared to the nine months ended September 30, 2024, was primarily due to an increase in subcontracted airport services, station rents, weather-related aircraft deicing costs and landing fees as a result of an increase in the number of flights we operated under our prorate agreements.

The $16.5 million, or 43.0%, increase in airport-related expenses for the six months ended June 30, 2025, compared to the six months ended June 30, 2024, was primarily due to an increase in subcontracted airport services, station rents, weather-related aircraft deicing costs and landing fees as a result of an increase in the number of flights we operated under our prorate agreements.

Aircraft fuel.

The $9.5 million, or 22.3%, increase in fuel cost was primarily due to an increase in the number of flights we operated under our prorate agreements and under SWC and the corresponding increase in gallons of fuel we purchased, offset by a decrease in our average fuel cost per gallon from $3.42 for the six months ended June 30, 2024 to $2.95 for the six months ended June 30, 2025.

The $20.9 million, or 32.1%, increase in fuel cost was primarily due to an increase in the number of flights we operated under our prorate agreements and under SWC and the corresponding increase in gallons of fuel we purchased, offset by a decrease in our average fuel cost per gallon from $3.30 for the nine months ended September 30, 2024 to $2.98 for the nine months ended September 30, 2025.

We purchase and incur expense for all fuel on flights operated under our prorate agreements and SWC.

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The following table summarizes the gallons of fuel we purchased under our prorate agreements and SWC, for the periods indicated:

For the six months ended June 30,

For the nine months ended September 30,

(in thousands)

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Other operating expenses primarily consist of aircraft rentals, property taxes, hull and liability insurance, simulator costs, crew per diem, crew hotel costs and credit loss reserves.

The $28.9 million, or 20.1%, increase in other operating expenses was primarily related to an increase in our credit loss reserve as a result of our assessment of higher credit risk of certain outstanding receivables and an increase in other operating costs, such as crew per diem and crew hotel costs, as a result of the higher number of flights we operated during the six months ended June 30, 2025, compared to the six months ended June 30, 2024.

The $26.3 million, or 11.8%, increase in other operating expenses was primarily related to an increase in our credit loss reserve as a result of our assessment of higher credit risk of certain outstanding receivables and an increase in other operating costs, such as crew per diem and crew hotel costs, as a result of the higher number of flights we operated during the nine months ended September 30, 2025, compared to the nine months ended September 30, 2024.

Summary of interest expense, interest income, other income (expense), net and provision for income taxes

Interest Expense.

Interest expense decreased $5.1 million, or 8.7%, for the six months ended June 30, 2025 as compared to the six months ended June 30, 2024.

Interest expense decreased $7.3 million, or 8.4%, for the nine months ended September 30, 2025 as compared to the nine months ended September 30, 2024.

The decrease in interest expense was primarily related to a decrease in outstanding debt.

At June 30, 2025 we had $2.5 billion of outstanding debt, compared to $2.8 billion at June 30, 2024.

Our average effective interest rate for the three and six months ended June 30, 2025 and 2024, was 4.3% and 4.1%, respectively.

At September 30, 2025 we had $2.4 billion of outstanding debt, compared to $2.7 billion at September 30, 2024.

Our average effective interest rate for the nine months ended September 30, 2025 and 2024, was 4.3% and 4.1%, respectively.

Interest income.

Interest income decreased $2.5 million, from $23.6 million for the six months ended June 30, 2024, to $21.1 million for the six months ended June 30, 2025.

The decrease in interest income was primarily related to a decrease in our marketable securities balance from $692.5 million at June 30, 2024, to $678.7 million at June 30, 2025.

Interest income decreased $4.4 million, from $36.1 million for the nine months ended September 30, 2024, to $31.7 million for the nine months ended September 30, 2025.

The decrease in interest income was primarily related to a decrease in interest rates from September 30, 2024 to September 30, 2025.

Other income (expense), net.

Other income, net of expenses increased $8.6 million during the six months ended June 30, 2025, compared to the six months ended June 30, 2024.

Other income, net of expenses increased $6.5 million during the nine months ended September 30, 2025, compared to the nine months ended September 30, 2024.

Other income (expense), net primarily consists of the unrealized and realized gains and losses on our investments in other companies, income or loss related to our equity method investments and gains or losses on the sale of assets.

The increase in other income, net of expenses was primarily a result of an increase in the fair value of our investments in other companies for the six months ended June 30, 2025, compared to the six months ended June 30, 2024.

The increase in other income, net of expenses was primarily a result of an increase in the fair value of our investments in other companies for the nine months ended September 30, 2025, compared to the nine months ended September 30, 2024.

Provision for income taxes.

For the six months ended June 30, 2025 and 2024, our effective income tax rates were 22.2% and 25.5%, respectively, which included the statutory federal income tax rate of 21% and other reconciling income tax items, including state income taxes, the impact of non-deductible expenses and a discrete tax benefit on employee equity awards that vested during the period.

The decrease in the effective tax rate was primarily related to a higher discrete tax benefit from additional tax deductions generated from employee equity awards that vested for the six months ended June 30, 2025, compared to the six months ended June 30, 2024.

Primarily due to the factors described above, we generated net income of $220.8 million, or $5.32 per diluted share, for the six months ended June 30, 2025, compared to net income of $135.9 million, or $3.28 per diluted share, for the six months ended June 30, 2024.

For the nine months ended September 30, 2025 and 2024, our effective income tax rates were 23.5% and 24.4%, respectively, which included the statutory federal income tax rate of 21% and other reconciling income tax items, including state income taxes, the impact of non-deductible expenses and a discrete tax benefit on employee equity awards that vested during the period.

The decrease in the effective tax rate was primarily related to a higher discrete tax benefit from additional tax deductions generated from employee equity awards that vested for the nine months ended September 30, 2025, compared to the nine months ended September 30, 2024.

Primarily due to the factors described above, we generated net income of $337.2 million, or $8.14 per diluted share, for the nine months ended September 30, 2025, compared to net income of $225.6 million, or $5.44 per diluted share, for the nine months ended September 30, 2024.

Our Business Segments

Three Months Ended June 30, 2025 and 2024

For the three months ended June 30, 2025, our reportable segments, which were the basis of our internal financial reporting, consisted of (1) the operations of SkyWest Airlines and SWC (collectively, “SkyWest Airlines and SWC”) and (2) SkyWest Leasing activities.

Three Months Ended September 30, 2025 and 2024

For the three months ended September 30, 2025, our reportable segments, which were the basis of our internal financial reporting, consisted of (1) the operations of SkyWest Airlines and SWC (collectively, “SkyWest Airlines and SWC”) and (2) SkyWest Leasing activities.

Our segment disclosure relates to components of our business for which separate financial information is available to, and regularly evaluated by, our chief operating decision maker.

The following table sets forth our SkyWest Airlines and SWC segment data for the three months ended June 30, 2025 and 2024 (in thousands):

For the three months ended June 30,

The following table sets forth our SkyWest Airlines and SWC segment data for the three months ended September 30, 2025 and 2024 (in thousands):

For the three months ended September 30,

(dollar amounts in thousands)

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(2) Segment profit is equal to income before income taxes.

As a result of adopting ASC 2023-07, we included interest income and other income (expense), net in the recast segment profit for each segment for the three months ended June 30, 2024, consistent with the presentation for the three months ended June 30, 2025.

As a result of adopting ASC 2023-07, we included interest income and other income (expense), net in the recast segment profit for each segment for the three months ended September 30, 2024, consistent with the presentation for the three months ended September 30, 2025.

SkyWest Airlines and SWC Segment Profit.

SkyWest Airlines and SWC segment profit was $90.3 million for the three months ended June 30, 2025, compared to $32.0 million for the three months ended June 30, 2024.

SkyWest Airlines and SWC block hour production increased 18.5%, from 317,462 for the three months ended June 30, 2024 to 376,269 for the three months ended June 30, 2025, primarily due to additional aircraft operating under our capacity purchase agreements and an increase in the number of available captains, which allowed for a higher

scheduled utilization of our aircraft.

Significant items contributing to the SkyWest Airlines and SWC segment profit for the three months ended June 30, 2025 are set forth below.

SkyWest Airlines and SWC operating revenues increased $157.6 million, or 22.1%, from the three months ended June 30, 2024, to the three months ended June 30, 2025, primarily as a result of an increase in block hour production during the three months ended June 30, 2025, compared to the three months ended June 30, 2024.

SkyWest Airlines and SWC’s salaries, wages and benefits expense increased $35.2 million, or 9.9%, primarily due to an increase in direct labor costs that resulted from the higher number of flights we operated during the three months ended June 30, 2025, compared to the three months ended June 30, 2024.

SkyWest Airlines and SWC’s aircraft maintenance, materials and repairs expense increased $41.0 million, or 23.4%, primarily due to an increase in incremental maintenance costs incurred on our CRJ fleet and higher flight volume, which increased the maintenance activity and related expenses, for the three months ended June 30, 2025, compared to the three months ended June 30, 2024.

SkyWest Airlines and SWC’s depreciation and amortization expense increased $2.0 million, or 5.4%, primarily due to acquiring additional assets, including engines and CRJ550 aircraft since June 30, 2024.

SkyWest Airlines and SWC’s interest expense decreased $0.1 million, or 2.1%, primarily due to a decrease in outstanding debt from June 30, 2024 to June 30, 2025.

SkyWest Airlines and SWC’s other segment items increased $21.1 million, or 19.2%, primarily related to an increase in fuel costs, airport-related expenses, such as subcontracted airport services, station rents, weather-related aircraft deicing costs and landing fees and other operating costs, such as crew per diem and crew hotel costs, as a result of the higher number of flights we operated during the three months ended June 30, 2025, compared to the three months ended June 30, 2024.

The following table sets forth our SkyWest Leasing segment data for the three months ended June 30, 2025 and 2024 (in thousands):

For the three months ended June 30,

SkyWest Airlines and SWC segment profit was $76.5 million for the three months ended September 30, 2025, compared to $44.6 million for the three months ended September 30, 2024.

SkyWest Airlines and SWC block hour production increased 14.9%, from 334,459 for the three months ended September 30, 2024 to 384,247 for the three months ended September 30, 2025, primarily due to additional aircraft operating under our capacity purchase agreements and an increase in the number of available captains, which allowed for a higher scheduled utilization of our aircraft.

Significant items contributing to the SkyWest Airlines and SWC segment profit for the three months ended September 30, 2025 are set forth below.

SkyWest Airlines and SWC operating revenues increased $134.2 million, or 17.7%, from the three months ended September 30, 2024, to the three months ended September 30, 2025, primarily as a result of an increase in block hour production during the three months ended September 30, 2025, compared to the three months ended September 30, 2024.

SkyWest Airlines and SWC’s salaries, wages and benefits expense increased $14.2 million, or 3.8%, primarily due to an increase in direct labor costs that resulted from the higher number of flights we operated, partially offset by operating efficiencies from higher utilization of our aircraft during the three months ended September 30, 2025, compared to the three months ended September 30, 2024.

SkyWest Airlines and SWC’s aircraft maintenance, materials and repairs expense increased $63.0 million, or 36.3%, primarily due to an increase in incremental maintenance costs incurred on our CRJ fleet and higher flight volume, which increased the maintenance activity and related expenses, for the three months ended September 30, 2025, compared to the three months ended September 30, 2024.

SkyWest Airlines and SWC’s depreciation and amortization expense increased $3.7 million, or 9.9%, primarily due to acquiring additional assets, including engines and CRJ550 aircraft since September 30, 2024.

SkyWest Airlines and SWC’s interest expense decreased $0.2 million, or 7.1%, primarily due to a decrease in outstanding debt from September 30, 2024 to September 30, 2025.

SkyWest Airlines and SWC’s other segment items increased $21.6 million, or 17.5%, primarily related to an increase in fuel costs, airport-related expenses, such as subcontracted airport services, station rents and landing fees and other operating costs, such as crew per diem and crew hotel costs, as a result of the higher number of flights we operated during the three months ended September 30, 2025, compared to the three months ended September 30, 2024.

The following table sets forth our SkyWest Leasing segment data for the three months ended September 30, 2025 and 2024 (in thousands):

For the three months ended September 30,

(dollar amounts in thousands)

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(2) Segment profit is equal to income before income taxes.

SkyWest Leasing Segment Profit.

SkyWest Leasing profit increased $2.7 million, or 3.8%, during the three months ended June 30, 2025, compared to the three months ended June 30, 2024 , primarily due to an increase in revenue from maintenance services provided to third parties and a decrease in depreciation and amortization expense primarily as a result of extending the estimated useful lives on our CRJ700/CRJ550 fleet during the fourth quarter of 2024.

The increase was offset by incremental maintenance services provided to third parties and an increase in our credit loss reserves on certain outstanding receivables for the three months ended June 30, 2025, compared to the three months ended June 30, 2024.

Six Months Ended June 30, 2025 and 2024

For the six months ended June 30, 2025, our reportable segments, which were the basis of our internal financial reporting, consisted of (1) the operations of SkyWest Airlines and SWC and (2) SkyWest Leasing activities.

SkyWest Leasing profit increased $9.1 million, or 12.6%, during the three months ended September 30, 2025, compared to the three months ended September 30, 2024 , primarily due to an increase in revenue from maintenance services provided to third parties, a decrease in depreciation and amortization expense primarily as a result of extending the estimated useful lives on our CRJ700/CRJ550 fleet during the fourth quarter of 2024 and a decrease in interest expense driven by a decrease in outstanding debt.

These increases in segment profit were partially offset by incremental maintenance services provided to third parties and an increase in our credit loss reserves on certain outstanding receivables for the three months ended September 30, 2025, compared to the three months ended September 30, 2024.

Nine Months Ended September 30, 2025 and 2024

For the nine months ended September 30, 2025, our reportable segments, which were the basis of our internal financial reporting, consisted of (1) the operations of SkyWest Airlines and SWC and (2) SkyWest Leasing activities.

Our segment disclosure relates to components of our business for which separate financial information is available to, and regularly evaluated by, our chief operating decision maker.

The following table sets forth our SkyWest Airlines and SWC segment data for the six months ended June 30, 2025 and 2024 (in thousands):

For the six months ended June 30,

The following table sets forth our SkyWest Airlines and SWC segment data for the nine months ended September 30, 2025 and 2024 (in thousands):

For the nine months ended September 30,

(dollar amounts in thousands)

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(2) Segment profit is equal to income before income taxes.

As a result of adopting ASC 2023-07, we included interest income and other income (expense), net in the recast segment profit for each segment for the six months ended June 30, 2024, consistent with the presentation for the six months ended June 30, 2025.

As a result of adopting ASC 2023-07, we included interest income and other income (expense), net in the recast segment profit for each segment for the nine months ended September 30, 2024, consistent with the presentation for the nine months ended September 30, 2025.

SkyWest Airlines and SWC Segment Profit.

SkyWest Airlines and SWC segment profit was $144.5 million for the six months ended June 30, 2025, compared to $37.0 million for the six months ended June 30, 2024.

SkyWest Airlines and SWC block hour production increased 20.0%, from 607,263 for the six months ended June 30, 2024 to 728,424 for the six months ended June 30, 2025, primarily due to additional aircraft operating under our capacity purchase agreements and an increase in the number of available captains, which allowed for a higher scheduled utilization of our aircraft.

Significant items contributing to the SkyWest Airlines and SWC segment profit for the six months ended June 30, 2025 are set forth below.

SkyWest Airlines and SWC operating revenues increased $312.4 million, or 23.0%, from the six months ended June 30, 2024, to the six months ended June 30, 2025, primarily as a result of an increase in block hour production during the six months ended June 30, 2025, compared to the six months ended June 30, 2024.

SkyWest Airlines and SWC’s salaries, wages and benefits expense increased $61.6 million, or 8.7%, primarily due to an increase in direct labor costs that resulted from the higher number of flights we operated during the six months ended June 30, 2025, compared to the six months ended June 30, 2024.

SkyWest Airlines and SWC’s aircraft maintenance, materials and repairs expense increased $101.4 million, or 32.0%, primarily due to incremental maintenance costs incurred on our CRJ fleet and higher flight volume, which increased the maintenance activity and related expenses, for the six months ended June 30, 2025, compared to the six months ended June 30, 2024.

SkyWest Airlines and SWC’s depreciation and amortization expense increased $3.6 million, or 5.0%, primarily due to acquiring additional assets, including engines and CRJ550 aircraft since June 30, 2024.

SkyWest Airlines and SWC’s interest expense decreased $0.6 million, or 8.4%, primarily due to a decrease in outstanding debt from June 30, 2024 to June 30, 2025.

SkyWest Airlines and SWC’s other segment items increased $38.8 million, or 17.6%, primarily related to an increase in fuel costs, airport-related expenses, such as subcontracted airport services, station rents, weather-related aircraft deicing costs and landing fees and other operating costs, such as crew per diem and crew hotel costs, as a result of the higher number of flights we operated during the six months ended June 30, 2025, compared to the six months ended June 30, 2024.

The following table sets forth our SkyWest Leasing segment data for the six months ended June 30, 2025 and 2024 (in thousands):

For the six months ended June 30,

SkyWest Airlines and SWC segment profit was $221.0 million for the nine months ended September 30, 2025, compared to $81.6 million for the nine months ended September 30, 2024.

SkyWest Airlines and SWC block hour production increased 18.2%, from 941,722 for the nine months ended September 30, 2024 to 1,112,671 for the nine months ended September 30, 2025, primarily due to additional aircraft operating under our capacity purchase agreements and an increase in the number of available captains, which allowed for a higher scheduled utilization of our aircraft.

Significant items contributing to the SkyWest Airlines and SWC segment profit for the nine months ended September 30, 2025 are set forth below.

SkyWest Airlines and SWC operating revenues increased $446.6 million, or 21.1%, from the nine months ended September 30, 2024, to the nine months ended September 30, 2025, primarily as a result of an increase in block hour production during the nine months ended September 30, 2025, compared to the nine months ended September 30, 2024.

SkyWest Airlines and SWC’s salaries, wages and benefits expense increased $75.7 million, or 7.0%, primarily due to an increase in direct labor costs that resulted from the higher number of flights we operated, partially offset by operating efficiencies from higher utilization of our aircraft during the nine months ended September 30, 2025, compared to the nine months ended September 30, 2024.

SkyWest Airlines and SWC’s aircraft maintenance, materials and repairs expense increased $164.4 million, or 33.5%, primarily due to incremental maintenance costs incurred on our CRJ fleet and higher flight volume, which increased the maintenance activity and related expenses, for the nine months ended September 30, 2025, compared to the nine months ended September 30, 2024.

SkyWest Airlines and SWC’s depreciation and amortization expense increased $7.3 million, or 6.6%, primarily due to acquiring additional assets, including engines and CRJ550 aircraft since September 30, 2024.

SkyWest Airlines and SWC’s interest expense decreased $0.8 million, or 8.0%, primarily due to a decrease in outstanding debt from September 30, 2024 to September 30, 2025.

SkyWest Airlines and SWC’s other segment items increased $60.4 million, or 17.6%, primarily related to an increase in fuel costs, airport-related expenses, such as subcontracted airport services, station rents, weather-related aircraft deicing costs and landing fees and other operating costs, such as crew per diem and crew hotel costs, as a result of the higher number of flights we operated during the nine months ended September 30, 2025, compared to the nine months ended September 30, 2024.

The following table sets forth our SkyWest Leasing segment data for the nine months ended September 30, 2025 and 2024 (in thousands):

For the nine months ended September 30,

(dollar amounts in thousands)

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(2) Segment profit is equal to income before income taxes.

SkyWest Leasing Segment Profit.

SkyWest Leasing profit decreased $6.1 million, or 4.2%, during the six months ended June 30, 2025, compared to the six months ended June 30, 2024 , primarily due to an increase in our credit loss reserve as a result of our assessment of the credit risk of the outstanding receivables , partially offset by a decrease in interest expense due to a decrease in outstanding debt from June 30, 2024 to June 30, 2025.

The increase in aircraft maintenance, materials and repairs was due to incremental maintenance services provided to third parties and an increase in our credit loss reserves on certain outstanding receivables, offset by a decrease in depreciation and amortization expense primarily as a result of extending the estimated useful lives on our CRJ700/CRJ550 fleet during the fourth quarter of 2024.

SkyWest Leasing profit increased $3.0 million, or 1.4%, during the nine months ended September 30, 2025, compared to the nine months ended September 30, 2024 , primarily due to an increase in revenue from maintenance services provided to third parties, a decrease in interest expense due to a decrease in outstanding debt from September 30, 2024 to September 30, 2025, and a decrease in depreciation and amortization expense primarily as a result of extending the estimated useful lives on our CRJ700/CRJ550 fleet during the fourth quarter of 2024.

These increases in segment profit were partially offset by an increase in our credit loss reserve as a result of our assessment of the credit risk of the outstanding receivables and an increase in aircraft maintenance, materials and repairs due to incremental maintenance services provided to third parties.

Liquidity and Capital Resources

As of June 30, 2025, we had $727.0 million in cash and cash equivalents and marketable securities.

As of June 30, 2025, we had $75.0 million available for borrowings under our line of credit.

Given our available liquidity as of June 30, 2025, we believe the working capital currently available to us will be sufficient to meet our present financial requirements, including planned capital expenditures, scheduled lease payments and debt service obligations for at least the next 12 months.

Our total cash, cash equivalents and marketable securities decreased from $801.6 million as of December 31, 2024 to $727.0 million as of June 30, 2025, or by $74.6 million.

At June 30, 2025, our total capital mix (measured as a ratio of total stockholder equity and total long-term debt, including current maturities) was 50.8% equity and 49.2% total long-term debt, compared to 47.4% equity and 52.6% total long-term debt at December 31, 2024.

During the six months ended June 30, 2025, we repurchased 335,843 shares of our common stock for $31.0 million under a share repurchase program authorized by our Board of Directors.

As of June 30, 2025, and December 31, 2024, we had $49.1 million and $47.1 million, respectively, in letters of credit and surety bonds outstanding with various banks and surety institutions.

We had no restricted cash as of June 30, 2025, and December 31, 2024.

As of September 30, 2025, we had $753.4 million in cash and cash equivalents and marketable securities.

As of September 30, 2025, we had $75.5 million available for borrowings under our line of credit.

Given our available liquidity as of September 30, 2025, we believe the working capital currently available to us will be sufficient to meet our present financial requirements, including planned capital expenditures, scheduled lease payments and debt service obligations for at least the next 12 months.

Our total cash, cash equivalents and marketable securities decreased from $801.6 million as of December 31, 2024 to $753.4 million as of September 30, 2025, or by $48.2 million.

At September 30, 2025, our total capital mix (measured as a ratio of total stockholder equity and total long-term debt, including current maturities) was 52.9% equity and 47.1% total long-term debt, compared to 47.4% equity and 52.6% total long-term debt at December 31, 2024.

During the nine months ended September 30, 2025, we repurchased 580,257 shares of our common stock for $57.6 million under a share repurchase program authorized by our Board of Directors.

As of September 30, 2025, and December 31, 2024, we had $47.3 million and $47.1 million, respectively, in letters of credit and surety bonds outstanding with various banks and surety institutions.

We had no restricted cash as of September 30, 2025, and December 31, 2024.

Sources and Uses of Cash

Cash Position and Liquidity.

The following table provides a summary of the net cash provided by (used in) our operating, investing and financing activities for the six months ended June 30, 2025 and 2024, and our total cash and marketable securities positions as of June 30, 2025, and December 31, 2024 (in thousands):

For the six months ended June 30,

The following table provides a summary of the net cash provided by (used in) our operating, investing and financing activities for the nine months ended September 30, 2025 and 2024, and our total cash and marketable securities positions as of September 30, 2025, and December 31, 2024 (in thousands):

For the nine months ended September 30,

Net cash provided by operating activities

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Net cash used in financing activities

September 30,

Cash and cash equivalents

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Cash Flows provided by Operating Activities

Our cash flows provided by operating activities was $428.1 million for the six months ended June 30, 2025, compared to $323.0 million for the six months ended June 30, 2024.

Our cash flows provided by operating activities was $708.9 million for the nine months ended September 30, 2025, compared to $506.6 million for the nine months ended September 30, 2024.

Our operating cash flows are typically impacted by various factors including our net income, adjusted for non-cash expenses and gains such as depreciation expense, asset impairment charges, stock-based compensation expense and gains or losses on the disposal of assets;

and timing of cash payments and cash receipts attributed to our various current asset and liability accounts, such as accounts receivable, inventory, accounts payable, accrued liabilities, deferred revenue and unbilled revenue.

The increase in our cash flow from operations for the six months ended June 30, 2025, compared to the six months ended June 30, 2024, was primarily due to an increase in income before income taxes for the six months ended June 30, 2025, compared the six months ended June 30, 2024, and an increase in certain current liability accounts due to the timing of cash payments for the comparable periods.

The increase in our cash flow from operations for the nine months ended September 30, 2025, compared to the nine months ended September 30, 2024, was primarily due to an increase in income before income taxes for the nine months ended September 30, 2025, compared the nine months ended September 30, 2024, and an increase in accounts payable and other liabilities due to the timing of cash payments for the comparable periods.

Cash Flows used in Investing Activities

Our cash flows used in investing activities was $372.7 million for the six months ended June 30, 2025, compared to cash flows used in investing activities of $76.0 million for the six months ended June 30, 2024.

Our cash flows used in investing activities was $519.2 million for the nine months ended September 30, 2025, compared to cash flows used in investing activities of $119.0 million for the nine months ended September 30, 2024.

Our investing cash flows are typically impacted by various factors including our capital expenditures, such as the acquisition of aircraft and spare engines;

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and timing of cash payments and cash receipts attributed to our various long-term asset and long-term liability accounts.

Excluding the purchase and sale of marketable securities, which results in the transfer of dollars between our investments in marketable securities and our cash accounts, our cash used in investing activities increased from $69.6 million for the six months ended June 30, 2024, to $268.1 million for the six months ended June 30, 2025.

in cash used in investing activities, excluding the transfer of dollars between our investments in marketable securities and our cash accounts, was primarily due to an increase of $184.8 million used in the acquisition of property and equipment and an increase of $31.1 million used for aircraft deposits for the six months ended June 30, 2025, compared to the six months ended June 30, 2024.

This was offset by a decrease in our cash used to acquire other long-term assets fo r the six months ended June 30, 2025.

Excluding the purchase and sale of marketable securities, which results in the transfer of dollars between our investments in marketable securities and our cash accounts, our cash used in investing activities increased from $147.6 million for the nine months ended September 30, 2024, to $384.8 million for the nine months ended September 30, 2025.

The increase in cash used in investing activities, excluding the transfer of dollars between our investments in marketable securities and our cash accounts, was primarily due to an increase of $216.4 million used in the acquisition of property and equipment and an increase of $31.1 million used for aircraft deposits for the nine months ended September 30, 2025, compared to the nine months ended September 30, 2024.

Cash Flows used in Financing Activities

Our cash flows used in financing activities was $234.5 million for the six months ended June 30, 2025, compared to cash used in financing activities of $253.5 million for the six months ended June 30, 2024.

Our cash flows used in financing activities was $372.5 million for the nine months ended September 30, 2025, compared to cash used in financing activities of $358.2 million for the nine months ended September 30, 2024.

Our financing cash flows are typically impacted by various factors including proceeds from issuance of debt, principal payments on debt obligations, repurchases of our common stock and payment of cash dividends.

The $19.0 million decrease in cash used in financing activities for the six months ended June 30, 2025, compared to the six months ended June 30, 2024, was primarily due an increase of $47.1 million in proceeds from the issuance of long-term debt for the purchase of two new E175 aircraft, offset by an increase of $20.3 million in cash used for employee income taxes paid on vested equity awards in lieu of shares and an increase of $8.8 million in cash used to purchase treasury stock during the six months ended June 30, 2025, compared to the six months ended June 30, 2024.

The $14.3 million decrease in cash used in financing activities for the nine months ended September 30, 2025, compared to the nine months ended September 30, 2024, was primarily due an increase of $20.3 million in cash used for employee income taxes paid on vested equity awards in lieu of shares and an increase of $19.1 million in cash used to purchase treasury stock, offset by an increase of $24.0 million in proceeds from the issuance of long-term debt for the

purchase of two new E175 aircraft during the nine months ended September 30, 2025, compared to the nine months ended September 30, 2024.

Significant Commitments and Obligations

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Purchase Commitments and Options

As of June 30, 2025, we had a firm purchase commitment for 74 new E175 aircraft from Embraer with delivery dates anticipated into 2032.

As of September 30, 2025, we had a firm purchase commitment for 74 new E175 aircraft from Embraer with delivery dates anticipated into 2032.

We also had a firm purchase commitment to purchase 12 used CRJ900 airframes with anticipated delivery dates in 2025.

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We also have long-term lease obligations, primarily relating to our facilities, aircraft and engines.

Excluding aircraft financed by our major airline partners that we operate for them under contract, we had eight aircraft under lease with remaining terms ranging from four years to five years as of June 30, 2025.

These eight leased aircraft are subleased to a third party.

Future minimum lease payments due under all long-term operating leases were approximately $118.7 million at June 30, 2025.

Assuming a 6.3% discount rate, which is the average incremental borrowing rate we anticipate we would have incurred on debt obtained over a similar term to acquire these assets, the present value of these lease obligations would have been equal to approximately $79.9 million at June 30, 2025.

Future minimum lease payments due under all long-term operating leases were approximately $123.0 million at September 30, 2025.

Assuming a 6.2% discount rate, which is the average incremental borrowing rate we anticipate we would have incurred on debt obtained over a similar term to acquire these assets, the present value of these lease obligations would have been equal to approximately $84.8 million at September 30, 2025.

Long-term Debt Obligations

As of June 30, 2025, we had $2.5 billion of long-term debt, which consisted of $2.3 billion of debt used to finance aircraft and spare engines and $200.6 million of unsecured debt payable to the U.S.

As of September 30, 2025, we had $2.4 billion of long-term debt, which consisted of $2.2 billion of debt used to finance aircraft and spare engines and $200.6 million of unsecured debt payable to the U.S.

Department of the Treasury (“Treasury”).

The average effective interest rate on our debt obligations was approximately 4.3% at June 30, 2025.

The average effective interest rate on our debt obligations was approximately 4.3% at September 30, 2025.

Under our capacity purchase agreements, our major airline partners compensate us for our costs of the aircraft on a monthly basis.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 2. Management’s Discussion and Analysis