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Item 2. Management’s Discussion and Analysis

2026-04-24 compared with 2025-10-31 · 127 added, 282 removed, 169 unchanged (71% 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 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.

(“SkyWest,” “we” or “us”) during the three-month periods ended March 31, 2026 and 2025.

Also discussed is our financial condition as of March 31, 2026, and December 31, 2025.

You should read this discussion in conjunction with our condensed consolidated financial statements for the three months ended March 31, 2026, including the notes thereto, appearing elsewhere in this Report.

This discussion and analysis contains forward-looking statements.

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These forward-looking statements may be identified by words such as “may,” “will,” “expect,” “intend,” “forecast,” “anticipate,” “believe,” “estimate,” “plan,” “project,” “could,” “should,” “hope,” “likely,” and “continue” and similar terms used in connection with statements regarding our outlook, anticipated operations, the revenue environment, our contractual relationships, and our anticipated financial performance.

These statements include, but are not limited to, statements about the continued demand for our product, the effect of economic conditions on SkyWest’s business, financial condition and results of operations, the timing of scheduled aircraft deliveries, fleet expansion and transition and anticipated fleet size for SkyWest in upcoming periods, expected production levels in future periods and associated staffing challenges, pilot attrition trends, SkyWest’s coordination with United Airlines, Inc.

These statements include, but are not limited to, statements about the continued demand for our product, the effect of economic conditions on SkyWest’s business, financial condition and results of operations, the timing of scheduled aircraft deliveries and returns, fleet expansion, changes in aircraft seat configurations, transition and anticipated fleet size for SkyWest in upcoming periods, expected production levels in future periods and associated recovery from captain staffing challenges, pilot attrition trends, SkyWest’s coordination with United Airlines, Inc.

(“United”), Delta Air Lines, Inc.

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(“American”) and Alaska Airlines, 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.

(“Alaska”) (each, a “major airline partner” and together, “major airline partners”) regarding the delivery of aircraft under previously announced agreements and timing of placing new aircraft deliveries into service, the expected terms, timing and benefits related to SkyWest’s leasing, strategic arrangements, strategic agreements and equity investments in third parties, the potential use of SkyWest Charter, LLC (“SWC”) as a commuter air carrier, SkyWest’s provision of assets to Corporate Flight Management, Inc.

d/b/a Contour Airlines, 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.

All forward-looking statements included in this Report are made as of the date hereof and are based on information available to SkyWest as of such date.

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uncertainties regarding operation of new aircraft;

the ability to attract and retain qualified pilots, including captains, and related staffing challenges;

the ability to attract and retain qualified pilots, mechanics and other personnel in operations;

the impact of regulatory issues such as pilot rest rules and qualification requirements;

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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;

significant aircraft debt commitments;

estimated useful life of long-lived assets, residual aircraft values and related asset impairments;

labor relations and costs;

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aircraft deliveries;

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;

uncertainty regarding ongoing international hostilities, including those between Russia and Ukraine, Israel and Hamas, and Israel, the United States and Iran, and the related impacts on macroeconomic conditions, fuel costs and 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;

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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;

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 potential future U.S.

government shutdowns on air traffic controller staffing, flight cancellations 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, 2025, 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 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.

As of March 31, 2026, we offered scheduled passenger and air freight service with approximately 2,370 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 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

SWC offers on-demand charter services using CRJ200 aircraft in a 30-seat configuration.

As of March 31, 2026, we had 639 total aircraft in our fleet, including 500 aircraft in scheduled service or under contract pursuant to our code-share agreements, summarized as follows:

Aircraft in scheduled service or under contract

Leased to third parties

(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.

Operational spares (1)

In storage (2)

(1) Includes supplemental spare aircraft supporting our code-share agreements or aircraft undergoing cabin reconfigurations.

(2) Aircraft in storage may be available for future flying opportunities.

Our business model is based on providing scheduled regional airline service under code-share agreements (commercial agreements between airlines that, among other things, allow one airline to use another airline’s flight designator codes on its flights) with our major airline partners.

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 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.

From March 31, 2025, to March 31, 2026, we made changes to our fleet, including the addition of eight 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 eight new E175 aircraft with United in 2026 and 16 new E175 aircraft with Delta between 2027 and 2028 (which are expected to replace 15 CRJ900s and two CRJ700s we are currently flying under contract with Delta).

We also have multiple agreements with United to place 18 used CRJ550 aircraft into service between 2026 and 2027.

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 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.

As of March 31, 2026, we operated 19 CRJ900s owned by Delta, and we anticipate returning these 19 aircraft to Delta over the next two years.

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 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.

Additionally, during the three months ended March 31, 2026, we announced a new configuration of the CRJ200 aircraft that will have 41 seats, including seven first-class seats (referred to as a “CRJ450” aircraft).

We anticipate operating the first CRJ450 in scheduled service by the end of 2026.

We anticipate completing the conversion of approximately 50 CRJ200s to the CRJ450 configuration by 2028.

As of March 31, 2026, approximately 45.2% of our aircraft in scheduled service or under contract were operated for United, approximately 27.8% were operated for Delta, approximately 18.4% were operated for American and approximately 8.6% 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 our capacity purchase agreements and our prorate agreements.

For the three months ended March 31, 2026, our capacity purchase revenue represented approximately 82.8% of our total flying agreements revenue and our prorate and SWC revenue, combined, represented approximately 17.2% 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.

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:

First Quarter Summary

We had total operating revenues of $1.0 billion for the three months ended March 31, 2026, a 6.8% increase compared to total operating revenues of $948.5 million for the three months ended March 31, 2025.

We had net income of $101.7 million, or $2.50 per diluted share, for the three months ended March 31, 2026, compared to net income of $100.6 million, or $2.42 per diluted share, for the three months ended March 31, 2025.

The significant items affecting our revenue and operating expenses during the three months ended March 31, 2026, 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 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 $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.

The number of aircraft we have in scheduled service or under contract pursuant to our code-share agreements increased from 488 as of March 31, 2025 to 500 as of March 31, 2026, or by 2.5%;

and the number of block hours increased from 352,155 for the three months ended March 31, 2025 to 362,933 for the three months ended March 31, 2026, or by 3.1%, primarily due to an increase in the number of aircraft operating under our capacity purchase agreements .

Our capacity purchase revenue increased $24.5 million, or 3.1%, for the three months ended March 31, 2026, as compared to the three months ended March 31, 2025, 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 $37.4 million, or 28.6%, for the three months ended March 31, 2026, as compared to the three months ended March 31, 2025.

Operating Expenses

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.

Our total operating expenses increased $80.4 million, or 9.9%, for the three months ended March 31, 2026, compared to the three months ended March 31, 2025.

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 and higher

pilot training costs for the three months ended March 31, 2026, compared to the three months ended March 31, 2025.

Departures increased from 201,838 for the three months ended March 31, 2025 to 204,019 for the three months ended March 31, 2026, or by 1.1%, and our total block hours increased 3.1% for the three months ended March 31, 2026, as compared to the three months ended March 31, 2025.

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

September 30, 2025

March 31, 2026

December 31, 2025

September 30, 2024

CRJ700s/CRJ550s

March 31, 2025

Critical Accounting Policies and Estimates

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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 nine months ended September 30, 2025.

There have been no significant changes in our critical accounting estimates during the three months ended March 31, 2026.

Recent Accounting Pronounceme nts

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Results of Operations

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 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:

CRJ700s/CRJ550s

Total block hours

Passengers carried

Passenger load factor

Average passenger trip length (miles)

Operating Revenues

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

For the three months ended September 30,

Flying agreements

Lease, airport services and other

Total operating revenues

Flying agreements revenue primarily consists of revenue earned on flights we operate under our capacity purchase agreements and prorate agreements with our major airline partners and on-demand charter flights.

Lease, airport services and other revenues consist of revenue earned from leasing aircraft and spare engines to third parties separate from our capacity purchase agreements, maintenance services provided to third parties and providing airport counter, gate and ramp services.

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

For the three months ended September 30,

Capacity purchase agreements flight operations revenue

Capacity purchase agreements aircraft lease revenue

Prorate agreements and SWC revenue

Flying agreements revenue

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.

We recognize the total projected fixed monthly payments per aircraft as revenue proportionately to the number of block hours we complete for each reporting period, relative to the estimated number of block hours we anticipate completing over the remaining contract term.

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 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 $5.8 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 $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 September 30,

Salaries, wages and benefits

Aircraft maintenance, materials and repairs

Depreciation and amortization

Airport-related expenses

Aircraft fuel

Other operating expenses

Total operating expenses

Salaries, wages and benefits.

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 $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 $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.

Aircraft fuel.

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.

All fuel costs incurred under our capacity purchase agreements are either purchased directly by our major airline partner, or if purchased by us, we record the direct reimbursement as a reduction to our fuel expense.

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 September 30,

(in thousands)

Fuel gallons purchased

Other operating expenses.

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 $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 $2.2 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 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 $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 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 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 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

Three Months Ended March 31, 2026 and 2025

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 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,

The increase in block hours and departures during the three months ended March 31, 2026, compared to the three months ended March 31, 2025, was primarily due to additional aircraft operating under our capacity purchase agreements and an increase in the number of block hours incurred per aircraft due to the higher scheduled utilization of our aircraft during the three months ended March 31, 2026, compared to the three months ended March 31, 2025.

For the three months ended March 31,

Block hours by aircraft type:

CRJ700s/CRJ550s

Total block hours

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

For the nine months ended September 30,

For the three months ended March 31,

Flying agreements

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Lease, airport services and other revenues consist of revenue earned from leasing aircraft and spare engines to third parties separate from our capacity purchase agreements and providing airport counter, gate and ramp services.

Lease, airport services and other revenues consist of revenue earned from leasing aircraft and spare engines to third parties separate from our capacity purchase agreements, providing maintenance services to other airlines and providing airport counter, gate and ramp services.

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

For the nine months ended September 30,

For the three months ended March 31,

Capacity purchase agreements flight operations revenue

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Flying agreements revenue

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.

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 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 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 $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 $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 $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.

Combined “Capacity purchase agreements flight operations revenue” and “Capacity purchase agreements aircraft lease revenue” increased 3.1% for the three months ended March 31, 2026, compared to the three months ended March 31, 2025, driven primarily by a 3.1% increase in block hour production during the three months ended March 31, 2026, compared to the three months ended March 31, 2025.

The increase in aircraft lease revenue and decrease in flight operations revenue was primarily due to a reallocation of variable consideration between non-lease and lease components based on relative standalone selling prices as a result of capacity purchase agreement contract amendments entered into since March 31, 2025.

The increase in prorate agreements and SWC revenue of $37.4 million, or 28.6%, for the three months ended March 31, 2026, compared to the three months ended March 31, 2025, was primarily due to an increase in prorate departures, passengers and passenger revenue we received on routes we operated under our prorate agreements during the three months ended March 31, 2026, compared to the three months ended March 31, 2025.

The increase in lease, airport services and other revenues of $2.8 million, or 8.7%, for the three months ended March 31, 2026, compared to the three months ended March 31, 2025, was primarily due to an increase in the number of

leased assets and an increase in lease rates during the three months ended March 31, 2026, compared to the three months ended March 31, 2025.

Operating Expenses

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

For the nine months ended September 30,

For the three months ended March 31,

Salaries, wages and benefits

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Salaries, wages and benefits.

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.

The $44.8 million, or 11.9%, increase in salaries, wages and benefits for the three months ended March 31, 2026, compared to the three months ended March 31, 2025, was primarily due to an increase in direct labor costs supporting the higher number of flights we operated during the three months ended March 31, 2026, compared to the three months ended March 31, 2025, and due to an increase in pilot training costs associated with higher attrition rates since March 31, 2025 .

Aircraft maintenance, materials and repairs.

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 .

The $3.9 million, or 1.9%, increase in aircraft maintenance expense for the three months ended March 31, 2026, compared to the three months ended March 31, 2025, was primarily due to an increase in our flight volume, which increased our maintenance activity and related expenses for the three months ended March 31, 2026, compared to the three months ended March 31, 2025 .

Depreciation and amortization.

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.

The $0.8 million, or 0.9%, increase in depreciation and amortization expense for the three months ended March 31, 2026, compared to the three months ended March 31, 2025, was primarily due to an increase in depreciation expense related to the acquisition of eight new E175 aircraft and spare engines since March 31, 2025, offset by certain CRJ aircraft and engines that were depreciated to their estimated residual value since March 31, 2025.

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 $8.3 million, or 30.0%, increase in airport-related expenses for the three months ended March 31, 2026, compared to the three months ended March 31, 2025, 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 $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.

The $14.4 million, or 58.9%, increase in fuel cost for the three months ended March 31, 2026, compared to the three months ended March 31, 2025, 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, and an increase in our average fuel cost per gallon from $3.03 for the three months ended March 31, 2025 to $3.40 for the three months ended March 31, 2026.

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

1 unchanged sentence

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

For the nine months ended September 30,

For the three months ended March 31,

(in thousands)

2 unchanged sentences

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 $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

The $8.2 million, or 10.1%, increase in other operating expenses was primarily due to higher training‑related hotel costs, driven by pilot training, and an increase in other operating costs as a result of the higher number of flights we operated during the three months ended March 31, 2026, compared to the three months ended March 31, 2025.

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

Interest expense.

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 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.

The $2.7 million, or 9.8%, decrease in interest expense for the three months ended March 31, 2026 as compared to the three months ended March 31, 2025 was primarily related to a decrease in outstanding debt.

At March 31, 2026 we had $2.4 billion of outstanding debt, compared to $2.6 billion at March 31, 2025.

Our average effective interest rate for the three months ended March 31, 2026 and 2025, was 4.4% and 4.3%, respectively.

Interest income.

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 $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 nine months ended September 30, 2025, compared to the nine months ended September 30, 2024.

Interest income decreased $1.5 million, from $10.1 million for the three months ended March 31, 2025, to $8.6 million for the three months ended March 31, 2026.

The decrease in interest income was primarily related to a decrease in interest rates on our marketable securities from March 31, 2025 to March 31, 2026.

Other expense, net.

Other expense, net of income decreased $1.6 million for the three months ended March 31, 2026, compared to the three months ended March 31, 2025.

Other 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 decrease in other expense, net of income was primarily the result of a smaller decrease in the fair value of our investments in other companies for the three months ended March 31, 2026, compared to the three months ended March 31, 2025.

Provision for income taxes.

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.

For the three months ended March 31, 2026 and 2025, our effective income tax rates were 5.6% and 16.7%, 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 three months ended March 31, 2026, compared to the three months ended March 31, 2025.

Primarily due to the factors described above, we generated net income of $101.7 million, or $2.50 per diluted share, for the three months ended March 31, 2026, compared to net income of $100.6 million, or $2.42 per diluted share, for the three months ended March 31, 2025.

Our Business Segments

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 September 30, 2025 and 2024 (in thousands):

For the three months ended September 30,

(dollar amounts in thousands)

Operating revenues

Salaries, wages and benefits

Aircraft maintenance, materials and repairs

Depreciation and amortization

Interest expense

Other segment items (1)

SkyWest Airlines and SWC Segment profit (2)

(1) Other segment items for SkyWest Airlines and SWC include aircraft fuel;

airport related expenses;

other operating expenses consisting primarily of property taxes, hull and liability insurance, simulator costs, crew per diem and crew hotel costs;

interest income and other income (expense) , net.

(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 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 $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)

Operating revenues

Salaries, wages and benefits

Aircraft maintenance, materials and repairs

Depreciation and amortization

Interest expense

Other segment items (1)

SkyWest Leasing Segment profit (2)

(1) Other segment items for SkyWest Leasing include other operating expenses consisting primarily of property taxes and credit loss reserves;

aircraft rentals;

interest income and other income (expense) , net.

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

SkyWest Leasing Segment Profit.

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.

Three Months Ended March 31, 2026 and 2025

For the three months ended March 31, 2026, 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 nine months ended September 30, 2025 and 2024 (in thousands):

For the nine months ended September 30,

The following table sets forth our SkyWest Airlines and SWC segment data for the three months ended March 31, 2026 and 2025 (in thousands):

For the three months ended March 31,

(dollar amounts in thousands)

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airport related expenses;

other operating expenses consisting primarily of property taxes, hull and liability insurance, simulator costs, crew per diem and crew hotel costs;

interest income and other income (expense) , net.

other operating expenses consisting primarily of property taxes, hull and liability insurance, simulator costs, crew per diem and crew hotel costs and credit loss reserves;

interest income and other expense , net.

(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 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 $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,

SkyWest Airlines and SWC segment profit was $25.5 million for the three months ended March 31, 2026, compared to $54.3 million for the three months ended March 31, 2025.

SkyWest Airlines and SWC block hour production increased 3.1%, from 352,155 for the three months ended March 31, 2025 to 362,933 for the three months ended March 31, 2026, primarily due to additional aircraft operating under our capacity purchase agreements and an increase in the utilization of our aircraft.

Significant items contributing to the SkyWest Airlines and SWC segment profit for the three months ended March 31, 2026 are set forth below.

SkyWest Airlines and SWC operating revenues increased $53.5 million, or 6.7%, for the three months ended March 31, 2026, compared to the three months ended March 31, 2025, primarily due to an increase in block hour production and higher prorate revenue during the three months ended March 31, 2026, compared to the three months ended March 31, 2025.

SkyWest Airlines and SWC’s salaries, wages and benefits expense increased $44.8 million, or 11.9%, for the three months ended March 31, 2026, compared to the three months ended March 31, 2025, primarily due to an increase in direct labor costs that resulted from the higher number of flights we operated during the three months ended March 31, 2026, compared to the three months ended March 31, 2025, and due to an increase in pilot training costs associated with higher attrition rates since March 31, 2025.

SkyWest Airlines and SWC’s aircraft maintenance, materials and repairs expense increased $5.0 million, or 2.5%, for the three months ended March 31, 2026, compared to the three months ended March 31, 2025, primarily due to higher flight volume, which increased the maintenance activity and related expenses, for the three months ended March 31, 2026, compared to the three months ended March 31, 2025.

SkyWest Airlines and SWC’s depreciation and amortization expense decreased $0.4 million, or 1.1%, for the three months ended March 31, 2026, compared to the three months ended March 31, 2025, primarily due to certain CRJ aircraft and engines that were depreciated to their estimated residual value since March 31, 2025, offset by an increase in depreciation from the acquisition of additional assets, including engines and used CRJ900 airframes, since March 31, 2025.

SkyWest Airlines and SWC’s interest expense decreased $0.2 million, or 8.3%, for the three months ended March 31, 2026, compared to the three months ended March 31, 2025, primarily due to a decrease in outstanding debt from March 31, 2025 to March 31, 2026.

SkyWest Airlines and SWC’s other segment items increased $33.1 million, or 25.8%, for the three months ended March 31, 2026, compared to the three months ended March 31, 2025, 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 March 31, 2026, compared to the three months ended March 31, 2025.

The following table sets forth our SkyWest Leasing segment data for the three months ended March 31, 2026 and 2025 (in thousands):

For the three months ended March 31,

(dollar amounts in thousands)

8 unchanged sentences

aircraft rentals;

interest income and other income (expense) , net.

interest income and other expense , net.

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

SkyWest Leasing Segment Profit.

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.

SkyWest Leasing profit increased $15.8 million, or 23.8%, for the three months ended March 31, 2026, compared to the three months ended March 31, 2025 , primarily due to an increase in revenue earned under our capacity purchase agreements attributed to the ownership of new E175 aircraft acquired since March 31, 2025 and a decrease in interest expense due to a decrease in outstanding debt from March 31, 2025 to March 31, 2026.

Liquidity and Capital Resources

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.

As of March 31, 2026, we had $627.3 million in cash and cash equivalents and marketable securities.

As of March 31, 2026, we had $75.4 million available for borrowings under our line of credit.

Given our available liquidity as of March 31, 2026, 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 $706.9 million as of December 31, 2025 to $627.3 million as of March 31, 2026, or by $79.6 million.

Our total long-term debt, including current maturities, was $2.4 billion as of both March 31, 2026 and December 31, 2025.

Additionally, during the three months ended March 31, 2026, we repurchased 782,900 shares of our common stock for $75.3 million under a share repurchase program authorized by our Board of Directors.

At March 31, 2026, our total capital mix (measured as a ratio of total stockholder equity and total long-term debt, including current maturities) was 53.3% equity and 46.7% total long-term debt, compared to 53.4% equity and 46.6% total long-term debt at December 31, 2025.

As of March 31, 2026, and December 31, 2025, we had $47.5 million and $47.2 million, respectively, in letters of credit and surety bonds outstanding with various banks and surety institutions.

We had no restricted cash as of March 31, 2026, and December 31, 2025.

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 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,

The following table provides a summary of the net cash provided by (used in) our operating, investing and financing activities for the three months ended March 31, 2026 and 2025, and our total cash and marketable securities positions as of March 31, 2026, and December 31, 2025 (in thousands):

For the three months ended March 31,

Net cash provided by operating activities

1 unchanged sentence

Net cash used in financing activities

September 30,

Cash and cash equivalents

1 unchanged sentence

Cash Flows provided by Operating Activities

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 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.

Our cash flows provided by operating activities was $144.5 million for the three months ended March 31, 2026, compared to $171.0 million for the three months ended March 31, 2025.

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, 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, income taxes, accrued liabilities, deferred revenue and unbilled revenue.

The decrease in our cash flow from operations for the three months ended March 31, 2026, compared to the three months ended March 31, 2025, was primarily due to a decrease in income before income taxes for the three months ended March 31, 2026, compared the three months ended March 31, 2025, and an increase in accounts payable 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 $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 cash flows used in investing activities was $82.8 million for the three months ended March 31, 2026, compared to cash flows used in investing activities of $66.1 million for the three months ended March 31, 2025.

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 $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.

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 $68.4 million for the three months ended March 31, 2025, to $105.0 million for the three months ended March 31, 2026.

Excluding the transfer of dollars between our investments in marketable securities and our cash accounts, the remaining increase in cash used in investing activities was primarily due to an increase of $29.0 million used in the acquisition of property and equipment for the three months ended March 31, 2026, compared to the three months ended March 31, 2025, primarily due to the acquisition of one new E175 aircraft and spare engines during the three months ended March 31, 2026.

Cash Flows used in Financing Activities

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 $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.

Our cash flows used in financing activities was $118.5 million for the three months ended March 31, 2026, compared to cash used in financing activities of $153.3 million for the three months ended March 31, 2025.

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

The $34.8 million decrease in cash used in financing activities for the three months ended March 31, 2026, compared to the three months ended March 31, 2025, was primarily due to an increase of $115.0 million in proceeds from the issuance of long-term debt for the purchase of one new E175 aircraft and engine financings, net of principal payments on long-term debt, offset by an increase of $18.4 million in cash used for employee income taxes paid on vested equity awards in lieu of shares and an increase of $61.7 million in cash used to purchase treasury stock during the three months ended March 31, 2026, compared to the three months ended March 31, 2025.

Significant Commitments and Obligations

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Purchase Commitments and Options

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.

As of March 31, 2026, we had a firm purchase commitment for 68 new E175 aircraft from Embraer with delivery dates anticipated into 2032.

At the time of each aircraft acquisition, we evaluate the financing alternatives available to us, and select one or more of these methods to fund the acquisition.

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We intend to finance the firm purchase commitment for 68 E175 aircraft with approximately 75-85% debt and the remaining balance with cash.

We intend to use cash to purchase the 12 used CRJ900 airframes.

Aircraft Lease and Facility Obligations

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 September 30, 2025.

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 three years to four years as of March 31, 2026.

These eight leased aircraft are subleased to a third party.

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.

Future minimum lease payments due under all long-term operating leases were approximately $119.4 million at March 31, 2026.

Long-term Debt Obligations

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.

As of March 31, 2026, 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 September 30, 2025.

The average effective interest rate on our debt obligations was approximately 4.4% at March 31, 2026.

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

The aircraft compensation structure varies by agreement, but is intended to cover either our aircraft principal and interest debt service costs, our aircraft depreciation and interest expense or our aircraft lease expense costs while the aircraft is under contract.

The consideration for aircraft ownership costs we receive varies by agreement but is intended to compensate us for our ownership of the aircraft while the aircraft is under contract.

We have guaranteed the obligations of SkyWest Airlines under the United Express Agreement and the Delta Connection Agreement for the E175 aircraft.

In addition, we have guaranteed certain other obligations under our aircraft financing and leasing agreements.

We have guaranteed $13.0 million in promissory notes of a third party in the event the third party defaults on their payments.

We have guaranteed $12.2 million in promissory notes of a third party in the event the third party defaults on its payments.

The third party’s loans are secured by aircraft and engines.

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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