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Item 1. Financial Statements

2026-07-24 compared with 2026-04-24 · 170 added, 113 removed, 444 unchanged (39% of the section changed)

46 unchanged sentences

Common stock, no par value, 120,000,000 shares authorized;

85,373,814 and 84,270,723 shares issued as of March 31, 2026 and December 31, 2025, respectively

85,379,909 and 84,270,723 shares issued as of June 30, 2026 and December 31, 2025, respectively

Retained earnings

Treasury stock, at cost, 45,612,892 and 44,399,241 shares as of March 31, 2026 and December 31, 2025, respectively

Treasury stock, at cost, 46,445,748 and 44,399,241 shares as of June 30, 2026 and December 31, 2025, respectively

( 1,271,117 )

9 unchanged sentences

Three months ended

Six months ended

OPERATING REVENUES:

6 unchanged sentences

Depreciation and amortization

Airport-related expenses

Aircraft fuel

Airport-related expenses

Other operating expenses

4 unchanged sentences

Interest expense

Other expense, net

Other income (expense), net

Total other expense, net

21 unchanged sentences

Stock-based compensation expense

Treasury stock purchases

Treasury stock purchases and related excise tax

Net unrealized depreciation on marketable securities, net of tax of $ 208

1 unchanged sentence

( 1,195,810 )

Stock issued under the long-term incentive plan

Stock-based compensation expense

Treasury stock purchases and related excise tax

Net unrealized depreciation on marketable securities, net of tax of $ 1

Balance at June 30, 2026

( 1,271,117 )

See accompanying notes to condensed consolidated financial statements.

SKYWEST, INC.

AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(In thousands)

Treasury Stock

5 unchanged sentences

Stock-based compensation expense

Treasury stock purchases and related excise tax

Treasury stock purchases

Net unrealized depreciation on marketable securities, net of tax of $ 23

1 unchanged sentence

( 1,003,574 )

Stock issued under the long-term incentive plan

Stock-based compensation expense

Treasury stock purchases

Net unrealized depreciation on marketable securities, net of tax of $ 26

Balance at June 30, 2025

( 1,020,870 )

See accompanying notes to condensed consolidated financial statements.

3 unchanged sentences

(In Thousands)

Three months ended

Six months ended

NET CASH PROVIDED BY OPERATING ACTIVITIES

5 unchanged sentences

Buildings and ground equipment

Deposits on aircraft

Deposits paid on aircraft

Proceeds from the sale of property and equipment

32 unchanged sentences

These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and the notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025.

The results of operations for the three months ended March 31, 2026, are not necessarily indicative of the results that may be expected for the year ending December 31, 2026.

The results of operations for the three and six months ended June 30, 2026, are not necessarily indicative of the results that may be expected for the year ending December 31, 2026.

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period.

15 unchanged sentences

The transaction price for the capacity purchase agreements is determined from the fixed-fee consideration, incentive consideration and directly reimbursed expenses earned as flights are completed over the agreement term.

For the three months ended March 31, 2026 and 2025, capacity

For the six months ended June 30, 2026 and 2025, capacity

purchase agreements represented approximately 81.9 % and 85.5 % of the Company’s flying agreements revenue, respectively.

6 unchanged sentences

In the event the Company receives upfront consideration for an EAS contract, the Company recognizes the revenue on a per-completed flight basis over the EAS contract term.

Under the Company’s charter operations, SWC, the Company negotiates a fare for the charter flight with the customer.

Under the Company’s charter operations, the Company negotiates a fare for the charter flight with the customer.

The performance obligation is met and revenue is recognized upon completion of the flight.

For the three months ended March 31, 2026 and 2025, prorate agreements and SWC revenue represented approximately 17.2 % and 14.3 % of the Company’s flying agreements revenue, respectively.

The following table disaggregates the Company’s flying agreements revenue by type for the three months ended March 31, 2026 and 2025 (in thousands):

For the three months ended March 31,

For the six months ended June 30, 2026 and 2025, prorate agreements and charter revenue represented approximately 18.1 % and 14.5 % of the Company’s flying agreements revenue, respectively.

The following table disaggregates the Company’s flying agreements revenue by type for the three and six months ended June 30, 2026 and 2025 (in thousands):

For the three months ended June 30,

For the six months ended June 30,

Capacity purchase agreements flight operations revenue (non-lease component)

1 unchanged sentence

Capacity purchase agreements variable aircraft lease revenue

Prorate agreements and SWC revenue

Prorate agreements and charter revenue

Flying agreements revenue

9 unchanged sentences

The lease revenue associated with the Company’s capacity purchase agreements is accounted for as an operating lease and is reflected as flying agreements revenue on the Company’s consolidated statements of comprehensive income.

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

The Company has not separately stated aircraft rental income and aircraft rental expense in the consolidated statement of

comprehensive income because the use of the aircraft is not a separate activity of the total service provided under the capacity purchase agreements.

The following table summarizes the amount of deferred revenue, recognition of previously deferred revenue and change in unbilled revenue for revenue recognized that is in excess of (or less than) the fixed monthly non-lease and lease payments received under the Company’s capacity purchase agreements for the three months ended March 31, 2026 and 2025 (in thousands):

For the three months ended March 31,

The Company recognizes fixed monthly lease payments as lease revenue using the straight-line basis over the capacity

purchase agreement term and variable lease payments in the period when the block hours are completed.

The Company has not separately stated aircraft rental income and aircraft rental expense in the consolidated statement of comprehensive income because the use of the aircraft is not a separate activity of the total service provided under the capacity purchase agreements.

The following table summarizes the amount of deferred revenue, recognition of previously deferred revenue and change in unbilled revenue for revenue recognized that is in excess of (or less than) the fixed monthly non-lease and lease payments received under the Company’s capacity purchase agreements for the three and six months ended June 30, 2026 and 2025 (in thousands):

For the three months ended June 30,

For the six months ended June 30,

Non-lease fixed monthly payments:

1 unchanged sentence

Revenue recognized that was deferred in a prior period

Increase (decrease) in unbilled revenue

Increase in unbilled revenue

Total non-lease revenue recognized in excess of fixed monthly payments received during the period

5 unchanged sentences

Total revenue recognized in excess of fixed monthly payments received during the period

The Company's unbilled revenue and deferred revenue balances were reflected in the following balance sheet line items at March 31, 2026 and December 31, 2025 (in thousands):

The Company's unbilled revenue and deferred revenue balances were reflected in the following balance sheet line items at June 30, 2026 and December 31, 2025 (in thousands):

Unbilled revenue - other current assets

10 unchanged sentences

At the end of each period during the term of an agreement, the Company calculates the incentives achieved during that period and recognizes revenue attributable to that agreement accordingly, subject to the variable constraint guidance under ASC Topic 606.

As of March 31, 2026, the Company had 500 aircraft in scheduled service or under contract pursuant to code-share agreements.

The Company’s fleet includes Embraer E175 regional jet aircraft (“E175”), Canadair CRJ900 regional jet aircraft (“CRJ900”), Canadair CRJ700 regional jet aircraft (“CRJ700”), a 50-seat configuration of the CRJ700 aircraft, commonly referred to as a “CRJ550,” and Canadair CRJ200 regional jet aircraft (“CRJ200”).

The following

table summarizes the significant provisions of each code-share agreement the Company has with each major airline partner through SkyWest Airlines:

As of June 30, 2026, the Company had 517 aircraft in scheduled service or under contract pursuant to code-share agreements.

The Company’s fleet includes Embraer E175 regional jet aircraft (“E175”), Canadair CRJ900 regional jet aircraft (“CRJ900”), Embraer E170 regional jet aircraft (“E170”), Canadair CRJ700 regional jet aircraft (“CRJ700”), a 50-seat configuration of the CRJ700 aircraft, commonly referred to as a “CRJ550,” and Canadair CRJ200 regional jet aircraft (“CRJ200”).

The following table summarizes the significant provisions of each code-share agreement the Company has with each major airline partner through SkyWest Airlines:

United Express Agreements

5 unchanged sentences

(capacity purchase agreements)

• CRJ700/E170

removal dates under the agreements

38 unchanged sentences

The number of aircraft listed above for each prorate agreement approximates the number of aircraft the Company uses to serve the prorate routes.

In addition to the contractual agreements described above, as of March 31, 2026, SkyWest Airlines reached agreements with certain major airline partners to place additional aircraft under capacity purchase agreements as summarized below.

The Company is coordinating with its major airline partners regarding the timing of upcoming fleet deliveries and the delivery timing referenced below is subject to change.

● Capacity purchase agreement with United for eight new E175 aircraft, which are scheduled for delivery in 2026.

In addition to the contractual agreements described above, as of June 30, 2026, SkyWest Airlines reached agreements with certain major airline partners to place additional aircraft under capacity purchase agreements as summarized below.

The delivery timing referenced below is subject to change.

● Capacity purchase agreement with United for seven new E175 aircraft, which are scheduled for delivery in 2026.

The Company anticipates financing the aircraft through debt.

● Capacity purchase agreement with American for 11 new E175 aircraft.

Four new E175 aircraft are currently scheduled for delivery in 2026 and seven new E175 aircraft are scheduled for delivery in 2027.

The Company anticipates financing the aircraft through debt.

The Company expects to remove 11 CRJ700 aircraft from the American capacity purchase agreement on a one-for-one basis as these 11 new E175 aircraft are placed into service.

● Capacity purchase agreement with Delta for 16 new E175 aircraft.

1 unchanged sentence

The Company anticipates financing the aircraft through debt.

● Capacity purchase agreement with United for 18 used CRJ550 aircraft that are anticipated to be placed into service by 2027.

The Company expects to remove 16 CRJ aircraft from the Delta capacity purchase agreement on a one-for-one basis as these 16 new E175 aircraft are placed into service.

● Capacity purchase agreement with United for 12 used CRJ550 aircraft that are anticipated to be placed into service by the end of 2026.

Pursuant to this agreement, the Company is in the process of converting its owned CRJ700s to CRJ550s.

2 unchanged sentences

Lease, airport services and other revenues primarily consist of revenue generated from aircraft and spare engines leased to third parties, maintenance services provided to third parties and airport customer service agreements, such as gate and ramp agent services at various airports where the Company has been contracted by third parties to provide such services.

The following table represents the Company’s lease, airport services and other revenues for the three months ended March 31, 2026 and 2025 (in thousands):

For the three months ended March 31,

The following table represents the Company’s lease, airport services and other revenues for the three and six months ended June 30, 2026 and 2025 (in thousands):

For the three months ended June 30,

For the six months ended June 30,

Operating lease fixed revenue

2 unchanged sentences

Lease, airport services and other

The following table summarizes future minimum rental income under operating leases primarily related to leased aircraft and engines that had remaining non-cancelable lease terms as of March 31, 2026 (in thousands):

April 2026 - December 2026

July 2026 - December 2026

Total future minimum rental income under operating leases

Of the Company’s $ 5.9 billion of property and equipment, net of accumulated depreciation, as of March 31, 2026, $ 240.8 million of regional jet aircraft and spare engines were leased to third parties under operating leases.

The Company’s mitigation strategy for the residual asset risks of these assets includes leasing aircraft and engine types that can be operated by the Company in the event of a default.

Of the Company’s $ 5.9 billion of property and equipment, net of accumulated depreciation, as of June 30, 2026, $ 233.4 million of regional jet aircraft and spare engines were leased to third parties under operating leases.

Company’s mitigation strategy for the residual asset risks of these assets includes leasing aircraft and engine types that can be operated by the Company in the event of a default.

Additionally, the operating leases typically have specified lease return condition requirements paid by the lessee to the Company and the Company typically maintains inspection rights under the leases.

5 unchanged sentences

The Company monitors publicly available credit ratings for entities for which the Company has a significant receivable balance or guarantee.

As of March 31, 2026, the Company had gross receivables of $ 176.6 million in current assets and gross receivables of $ 256.7 million in other long-term assets.

As of June 30, 2026, the Company had gross receivables of $ 192.5 million in current assets and gross receivables of $ 252.7 million in other long-term assets.

As of December 31, 2025, the Company had gross receivables of $ 163.3 million in current assets and gross receivables of $ 266.3 million in other long-term assets.

The Company has established credit loss reserves based on publicly available historic default rates issued by a third party for companies with similar credit ratings, factoring in the amount and term of the Company’s respective accounts receivable, notes receivable or guarantees.

During the three months ended March 31, 2026, there were no significant changes in the outstanding accounts receivable, notes receivable, guarantees or credit ratings of the entities.

During the six months ended June 30, 2026, there were no significant changes in the outstanding accounts receivable, notes receivable, guarantees or credit ratings of the entities.

The following table summarizes the changes in allowance for credit losses (in thousands):

3 unchanged sentences

Write-offs charged against allowance

Balance at March 31, 2026

Balance at June 30, 2026

(3) Capital Transactions

Stock-Based Compensation

During the three months ended March 31, 2026, the Company granted 76,648 performance shares and 32,850 restricted stock units to certain employees of the Company under the SkyWest, Inc.

During the six months ended June 30, 2026, the Company granted 76,648 performance shares and 32,850 restricted stock units to certain employees of the Company under the SkyWest, Inc.

Amended and Restated 2019 Long-Term Incentive Plan.

4 unchanged sentences

The weighted average fair value of these performance shares and restricted stock units on their date of grant was $ 101.47 per share.

A dditionally, during the six months ended June 30, 2026, the Company granted 6,095 fully vested shares of common stock and 1,219 fully vested deferred stock units to the Company’s directors at a weighted average grant date fair value of $ 83.22 .

The Company accounts for forfeitures of restricted stock units and performance shares when forfeitures occur.

1 unchanged sentence

Stock-based compensation expense for the performance shares is based on the Company’s anticipated outcome of achieving the performance metrics.

During the three months ended March 31, 2026 and 2025, the Company recorded pre-tax stock-based compensation expense of $ 4.4 million and $ 4.7 million, respectively.

During the six months ended June 30, 2026 and 2025, the Company recorded pre-tax stock-based compensation expense of $ 8.3 million and $ 9.9 million, respectively.

( 4) Stock Repurchase

The Company’s Board of Directors (the “Board”) adopted a stock repurchase program in May 2023, which authorizes the Company to repurchase shares of the Company’s common stock in the public market or in private transactions, from time to time, at prevailing prices.

Under the repurchase program, the Board initially authorized up to $ 250.0 million for the repurchase of the Company’s common stock.

In May 2025, the Board approved a $ 250.0 million increase to the existing repurchase program.

At March 31, 2026, $ 137.8 million remained available under the repurchase program.

During the three months ended March 31, 2026, the Company repurchased 782,900 shares of common stock for $ 75.3 million at a weighted average price per share of $ 96.18 .

The Company also recorded $ 0.1 million of excise tax

related to the stock repurchases as treasury stock in the Company’s stockholders’ equity for the three months ended March 31, 2026.

During the three months ended March 31, 2025, the Company repurchased 140,658 shares of common stock for $ 13.7 million at a weighted average price per share of $ 97.27 .

The Company did no t record excise tax related to the stock repurchases for the three months ended March 31, 2025 .

Under the stock repurchase program, the Board initially authorized up to $ 250.0 million for the repurchase of the Company’s common stock.

In May 2025, the Board approved a $ 250.0 million increase to the existing stock repurchase program.

At June 30, 2026, $ 63.2 million remained available under the stock repurchase program.

In July 2026, subsequent to the end of the quarter, the Board approved an additional $ 250 million increase to the existing stock repurchase program.

During the six months ended June 30, 2026, the Company repurchased 1,615,756 shares of common stock for $ 149.9 million at a weighted average price per share of $ 92.76 .

The Company also recorded $ 0.8 million of excise tax related to the stock repurchases as treasury stock in the Company’s stockholders’ equity for the six months ended June 30, 2026.

During the six months ended June 30, 2025, the Company repurchased 335,843 shares of common stock for $ 31.0 million at a weighted average price per share of $ 92.24 .

The Company did no t incur excise tax related to the stock repurchases for the six months ended June 30, 2025 .

(5) Net Income Per Common Share

2 unchanged sentences

The computation of Diluted EPS does not assume exercise or conversion of securities that would have an anti-dilutive effect on net income per common share.

During the three months ended March 31, 2026 and 2025, 155,000 and 268,000 performance shares (at target performance) were excluded from the computation of Diluted EPS because the Company had not achieved the minimum target thresholds for these shares as of March 31, 2026 and 2025, respectively.

During the six months ended June 30, 2026 and 2025, 155,000 and 216,000 performance shares (at target performance) were excluded from the computation of Diluted EPS because the Company had not achieved the minimum target thresholds for these shares as of June 30, 2026 and 2025, respectively.

The calculation of the weighted average number of common shares outstanding for Basic EPS and Diluted EPS are as follows for the periods indicated (in thousands, except per share data):

Three Months Ended

Six Months Ended

Basic earnings per share weighted average shares

12 unchanged sentences

The chief operating decision maker assesses performance for each segment and decides how to allocate resources based on income before income taxes.

The chief operating decision maker uses the segment profit or loss

measure when assessing performance of the segment and monitors budget versus actual results to allocate resources for each segment predominantly in the annual budget and forecasting process.

The following represents the Company’s segment data for the three-month periods ended March 31, 2026 and 2025 (in thousands).

Three months ended March 31, 2026

The chief operating decision maker uses the segment profit or loss measure when assessing performance of the segment and monitors budget versus actual results to allocate resources for each segment predominantly in the annual budget and forecasting process.

The following represents the Company’s segment data for the three-month periods ended June 30, 2026 and 2025 (in thousands).

Three months ended June 30, 2026

SkyWest Airlines

6 unchanged sentences

Segment profit (2)

Total assets (as of March 31, 2026)

Total assets (as of June 30, 2026)

Capital expenditures (including non-cash)

Deposits on aircraft

Three months ended March 31, 2025

Deposits paid on aircraft

Three months ended June 30, 2025

SkyWest Airlines

6 unchanged sentences

Segment profit (2)

Total assets (as of March 31, 2025)

Total assets (as of June 30, 2025)

Capital expenditures (including non-cash)

Deposits on aircraft

Deposits paid on aircraft

(1) Other segment items include aircraft fuel;

1 unchanged sentence

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

interest income and other expense , net.

interest income and other income ( expense) , net.

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

The following represents the Company’s segment data for the six-month periods ended June 30, 2026 and 2025 (in thousands).

Six months ended June 30, 2026

SkyWest Airlines

Operating revenues

Salaries, wages and benefits

Aircraft maintenance, materials and repairs

Depreciation and amortization

Interest expense

Other segment expense (income) items (1)

Segment profit (2)

Total assets (as of June 30, 2026)

Capital expenditures (including non-cash)

Deposits paid on aircraft

Six months ended June 30, 2025

SkyWest Airlines

Operating revenues

Salaries, wages and benefits

Aircraft maintenance, materials and repairs

Depreciation and amortization

Interest expense

Other segment expense (income) items (1)

Segment profit (2)

Total assets (as of June 30, 2025)

Capital expenditures (including non-cash)

Deposits paid on aircraft

(1) Other segment items include aircraft fuel;

airport related expenses;

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

interest income and other income ( expense) , net.

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

(7) Leases, Commitments, Guarantees and Contingencies

2 unchanged sentences

The Company used its incremental borrowing rate to discount the lease payments based on information available at lease commencement.

As of March 31, 2026, excluding aircraft financed by the Company’s major airline partners that the Company operates for them under contract, the Company leased eight aircraft under long-term lease agreements with remaining terms ranging from three to four years .

As of June 30, 2026, excluding aircraft financed by the Company’s major airline partners that the Company operates for them under contract, the Company leased eight aircraft under long-term lease agreements with remaining terms ranging from three to four years .

The Company is subleasing these eight aircraft to a third party.

4 unchanged sentences

The Company’s operating leases with lease rates that are variable based on airport operating costs, use of the facilities or other variable factors are excluded from the Company’s right-of-use assets and operating lease liabilities in accordance with accounting guidance.

As of March 31, 2026, the Company’s right-of-use assets were $ 82.9 million, the Company’s current maturities of operating lease liabilities were $ 20.8 million, and the Company’s noncurrent lease liabilities were $ 62.1 million.

During the three months ended March 31, 2026, the Company paid $ 11.9 million under operating leases reflected as a reduction from operating cash flows.

The table below presents lease related terms and discount rates as of March 31, 2026:

As of June 30, 2026, the Company’s right-of-use assets were $ 87.0 million, the Company’s current maturities of operating lease liabilities were $ 21.9 million, and the Company’s noncurrent lease liabilities were $ 65.8 million.

During the six months ended June 30, 2026, the Company paid $ 21.6 million under operating leases reflected as a reduction from operating cash flows.

The table below presents lease related terms and discount rates as of June 30, 2026:

Weighted-average remaining lease term for operating leases

Weighted-average discount rate for operating leases

The Company’s lease costs for the three months ended March 31, 2026 and 2025 included the following components (in thousands):

For the three months ended March 31,

The Company’s lease costs for the three and six months ended June 30, 2026 and 2025 included the following components (in thousands):

For the three months ended June 30,

For the six months ended June 30,

Operating lease cost

2 unchanged sentences

Total lease cost

As of March 31, 2026, the Company leased aircraft, airport facilities, office space and other property and equipment under non-cancelable operating leases, which are generally under long-term agreements pursuant to which the Company pays taxes, maintenance, insurance and certain other operating expenses applicable to the leased property.

As of June 30, 2026, the Company leased aircraft, airport facilities, office space and other property and equipment under non-cancelable operating leases, which are generally under long-term agreements pursuant to which the Company pays taxes, maintenance, insurance and certain other operating expenses applicable to the leased property.

The Company expects that, in the normal course of business, such operating leases that expire will be renewed or replaced by other leases.

As of March 31, 2026, the Company had a firm purchase commitment for 68 E175 aircraft from Embraer with anticipated delivery dates through 2032.

Under this commitment, the Company expects to purchase and place into service eight E175 aircraft with United and 16 E175 aircraft with Delta.

As of June 30, 2026, the Company had a firm purchase commitment for 67 E175 aircraft from Embraer with anticipated delivery dates through 2031.

Under this commitment, the Company expects to purchase and place into service seven E175 aircraft with United, 11 E175 aircraft with American and 16 E175 aircraft with Delta.

Additionally, the Company secured delivery positions for 33 additional E175 aircraft between 2028 and 2031.

The following table summarizes the Company’s commitments and obligations for future minimum rental payments required under operating leases that had initial or remaining non-cancelable lease terms as of March 31, 2026, firm aircraft and spare engine commitments, interest commitments and principal maturities on long-term debt as noted for each of the next five years and thereafter (in thousands):

Apr - Dec 2026

The following table summarizes the Company’s commitments and obligations for future minimum rental payments required under operating leases that had initial or remaining non-cancelable lease terms as of June 30, 2026, firm aircraft and spare engine commitments, interest commitments and principal maturities on long-term debt as noted for each of the next five years and thereafter (in thousands):

Jul - Dec 2026

Operating lease payments for aircraft and facility obligations

5 unchanged sentences

The Company accounted for the transaction as a failed sale-leaseback in accordance with ASC 842 as the criteria for a sale were not met.

At March 31, 2026, the Company estimated the remaining financing obligation under the agreement will be between $ 20.0 million and $ 25.0 million and anticipated closing on the remaining financings during 2026.

At June 30, 2026, the Company estimated the remaining financing obligation under the agreement will be between $ 15.0 million and $ 18.0 million and anticipated closing on the remaining financings between 2026 and 2027.

In 2022, the Company agreed to guarantee $ 19.8 million of debt for a 14 CFR Part 135 air carrier.

2 unchanged sentences

The purpose of this guarantee is to help reduce the financing costs of aircraft for the third party in an effort to increase the potential number of commercial pilots in the Company’s hiring pipeline.

The balance of the debt under the guarantee was $ 12.2 million as of March 31, 2026.

The balance of the debt under the guarantee was $ 11.8 million as of June 30, 2026.

The Company recorded the estimated credit loss associated with the guarantees based on publicly available historical default rates issued by a third party for companies with similar credit ratings, factoring the collateral and guarantee term.

8 unchanged sentences

Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities, therefore requiring an entity to develop its own assumptions.

As of March 31, 2026, and December 31, 2025, the Company held certain assets that are required to be measured at fair value on a recurring basis.

As of June 30, 2026, and December 31, 2025, the Company held certain assets that are required to be measured at fair value on a recurring basis.

Assets measured at fair value on a recurring basis are summarized below (in thousands):

Fair Value Measurements as of March 31, 2026

Fair Value Measurements as of June 30, 2026

Marketable Securities

12 unchanged sentences

The Company’s “Marketable Securities” classified as Level 2 securities primarily utilize broker quotes in a non-active market for valuation of these securities.

The Company did not make any significant transfers of securities between Level 1, Level 2 and Level 3 during the three months ended March 31, 2026.

The Company did not make any significant transfers of securities between Level 1, Level 2 and Level 3 during the six months ended June 30, 2026.

The Company’s policy regarding the recording of transfers between levels is to record any such transfers at the end of the reporting period.

As of March 31, 2026, and December 31, 2025, the Company classified $ 561.4 million and $ 584.2 million of marketable securities, respectively, as short-term because it had the intent to maintain a liquid portfolio and the ability to redeem the securities within one year .

At the time of sale, any realized appreciation or depreciation, calculated by the specific identification method, is recognized in other expense, net.

As of March 31, 2026, and December 31, 2025, the cost of the Company’s marketable securities was $ 561.9 million and $ 583.9 million, respectively.

As of June 30, 2026, and December 31, 2025, the Company classified $ 519.6 million and $ 584.2 million of marketable securities, respectively, as short-term because it had the intent to maintain a liquid portfolio and the ability to redeem the securities within one year .

At the time of sale, any realized appreciation or depreciation, calculated by the

specific identification method, is recognized in other income ( expense) , net.

As of June 30, 2026, and December 31, 2025, the cost of the Company’s marketable securities was $ 520.1 million and $ 583.9 million, respectively.

(9) Long-term Debt

Long-term debt consisted of the following as of March 31, 2026, and December 31, 2025 (in thousands):

March 31, 2026

Long-term debt consisted of the following as of June 30, 2026, and December 31, 2025 (in thousands):

June 30, 2026

December 31, 2025

8 unchanged sentences

Total long-term debt, net of debt issue costs

As of March 31, 2026, the Company had $ 2.4 billion of total 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 June 30, 2026, the Company had $ 2.3 billion of total long-term debt, which consisted of $ 2.1 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”).

As of March 31, 2026, $ 55.5 million of the unsecured debt payable to Treasury had a fixed annual interest rate of 1.0 % , which increased to the applicable Secured Overnight Financing Rate ("SOFR") plus 2.0 % in April 2026.

The remaining $ 145.1 million had a variable interest rate of SOFR plus 2.0 % .

The average effective interest rate on the Company’s debt was approximately 4.4 % at March 31, 2026.

During the three months ended March 31, 2026, the Company took delivery of one new E175 aircraft that the Company financed through $ 23.6 million of long-term debt.

As of June 30, 2026, the unsecured debt payable to Treasury had a variable interest rate of Secured Overnight Financing Rate (“ SOFR ”) plus 2.0 % .

The average effective interest rate on the Company’s debt was approximately 4.4 % at June 30, 2026.

During the six months ended June 30, 2026, the Company took delivery of two new E175 aircraft that the Company financed through $ 47.7 million of long-term debt.

The debt associated with the E175 aircraft has a 12 -year term, is due in quarterly installments, and is secured by the E175 aircraft.

During the three months ended March 31, 2026, the Company executed promissory notes for $ 94.0 million.

During the six months ended June 30, 2026, the Company executed promissory notes for $ 94.0 million.

The promissory notes have four-year terms, are due in monthly installments, and are secured by spare engines.

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

As of March 31, 2026, SkyWest Airlines had a $ 100.0 million line of credit.

As of June 30, 2026 and December 31, 2025, the Company had $ 44.0 million and $ 47.2 million, respectively, in letters of credit and surety bonds outstanding with various banks and surety institutions.

As of June 30, 2026, SkyWest Airlines had a $ 100.0 million line of credit.

The line of credit includes minimum liquidity and profitability covenants and is secured by certain assets.

As of March 31, 2026, SkyWest Airlines had no amounts outstanding under the line of credit facility.

However, at March 31, 2026, SkyWest Airlines had $ 24.6 million in letters of credit issued under the facility, which reduced the amount available under the facility to $ 75.4 million.

The line of credit expires March 25, 2028 and has a variable interest rate of 3.5 % plus the one month SOFR rate.

As of June 30, 2026, SkyWest Airlines had no amounts outstanding under the line of credit facility.

However, at June 30, 2026, SkyWest Airlines had $ 21.0 million in letters of credit issued under the facility, which reduced the amount available under the facility to $ 79.0 million.

The line of credit expires March 25, 2028 and has a variable interest rate of 3.5 % plus the one month SOFR .

The Company’s debt agreements are not traded on an active market and are recorded at carrying value on the Company’s consolidated balance sheet.

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The fair value of debt is estimated using inputs classified as Level 2 within the fair value hierarchy.

The carrying value and fair value of the Company’s long-term debt as of March 31, 2026 and December 31, 2025, were as follows (in thousands):

March 31, 2026

The carrying value and fair value of the Company’s long-term debt as of June 30, 2026 and December 31, 2025, were as follows (in thousands):

June 30, 2026

December 31, 2025

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During 2019, the Company created a joint venture with Regional One, Inc.

(“Regional One”) and, as of March 31, 2026, has invested a total of $ 26.6 million for a 75 % ownership interest in Aero Engines, LLC.

(“Regional One”) and, as of June 30, 2026, has invested a total of $ 26.6 million for a 75 % ownership interest in Aero Engines, LLC.

(“Aero Engines”).

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The Company’s exposure in its investment in Aero Engines primarily consists of the Company’s portion of income or loss from Aero Engines’ engine lease agreements with third parties and the Company’s ownership percentage in Aero Engines’ engines book value.

Aero Engines had no debt outstanding as of March 31, 2026.

During 2025, the Company received a $ 12.0 million distribution from Aero Engines, which reduced the Company’s investment balance in Aero Engines.

As of March 31, 2026 and December 31, 2025, the Company’s investment balance in Aero Engines was $ 13.4 million and $ 12.8 million, respectively, and was recorded in “Other Assets” on the Company’s consolidated balance sheet.

The Company’s portion of income generated by Aero Engines for the three months ended March 31, 2026 and 2025, was $ 0.5 million and $ 0.6 million, respectively, which was recorded in “Other expense, net” on the Company’s consolidated statements of comprehensive income.

Aero Engines had no debt outstanding as of June 30, 2026.

During 2025, the Company received a $ 12.0 million distribution from Aero Engines, and during the six months ended June 30, 2026, the Company received a $ 5.5 million distribution from Aero Engines, which reduced the Company’s investment balance in Aero Engines.

As of June 30, 2026 and December 31, 2025, the Company’s investment balance in Aero Engines was $ 8.7 million and $ 12.8 million, respectively, and was recorded in “Other Assets” on the Company’s consolidated balance sheet.

The Company’s portion of Aero Engines’ results for the three months ended June 30, 2026 and 2025, was income of $ 0.8 million and a loss $ 0.4 million, respectively, which was recorded in “Other income ( expense) , net” on the Company’s consolidated statements of comprehensive income.

The Company’s portion of income generated by Aero Engines for the six months ended June 30, 2026 and 2025, was $ 1.3 million and $ 0.1 million, respectively, which was recorded in “Other income ( expense) , net” on the Company’s consolidated statements of comprehensive income.

In December 2023, the Company invested $ 9.9 million for a 9.9 % ownership interest in Corporate Flight Management, Inc.

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In January 2024, the Company invested an additional $ 15.1 million in Contour.

The Company had a 25 % ownership interest in Contour at March 31,

2026 and held one of five seats, or 20 % , on Contour’s board of directors.

The Company had a 25 % ownership interest in Contour at June 30, 2026 and held one of five seats, or 20 % , on Contour’s board of directors.

The Contour arrangement also includes an asset provisioning agreement under which the Company will provide CRJ airframes, engines and rotable parts to Contour.

The Company accounts for its investment in Contour under the equity method where the investment is reported at cost and adjusted each period for the Company’s share of Contour’s income or loss, recorded on a one quarter lag.

For the three months ended March 31, 2026 and 2025, the Company recorded income of $ 0.7 million and $ 0.9 million, respectively, related to its Contour investment, its portion of income generated by Contour, which was recorded in “Other expense, net” on the Company’s consolidated statements of comprehensive income.

As of March 31, 2026 and December 31, 2025, the Company’s investment balance in Contour was $ 23.5 million and $ 22.8 million, respectively, and was recorded in “Other Assets” on the Company’s consolidated balance sheet.

At March 31, 2026, the Company had $ 7.9 million in notes receivable from Contour related to the sale of aircraft under the asset provisioning agreement.

For the three months ended June 30, 2026 and 2025, the Company recorded a loss of $ 1.8 million and $ 0.2 million, respectively, related to its Contour investment, reflecting its portion of results generated by Contour, which was recorded in “Other income ( expense) , net” on the Company’s consolidated statements of comprehensive income.

For the six months ended June 30, 2026 and 2025, the Company recorded a loss of $ 1.0 million and income of $ 0.7 million, respectively, related to its Contour investment, reflecting its portion of results generated by Contour, which was recorded in “Other income ( expense) , net” on the Company’s consolidated statements of comprehensive income.

As of June 30, 2026 and December 31, 2025, the Company’s investment balance in Contour was $ 21.7 million and $ 22.8 million, respectively, and was recorded in “Other Assets” on the Company’s consolidated balance sheet.

At June 30, 2026, the Company had $ 7.0 million in notes receivable from Contour related to the sale of aircraft under the asset provisioning agreement.

The notes are secured by aircraft and collectible within three years .

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(“Eve”), to develop a network of deployment for Eve’s electric vertical takeoff and landing aircraft.

As of March 31, 2026 and December 31, 2025, the Company held 1.1 million common shares of Eve.

During the three months ended March 31, 2026, the Company recorded an unrealized loss of $ 1.6 million in “Other expense, net” on the Company’s consolidated statements of comprehensive income related to its investment in Eve.

During the three months ended March 31, 2025, the Company recorded an unrealized loss of $ 3.2 million in “Other expense, net” on the Company’s consolidated statements of comprehensive income related to its investment in Eve.

As of March 31, 2026 and December 31, 2025, the fair value of the Company’s investment in Eve was $ 2.6 million and $ 4.3 million, respectively, and was recorded in “Other Assets” on the Company’s consolidated balance sheet.

As of June 30, 2026 and December 31, 2025, the Company held 1.1 million common shares of Eve.

During the three months ended June 30, 2026 and 2025, the Company recorded an unrealized gain of $ 0.1 million and $ 5.3 million, respectively in “Other income ( expense) , net” on the Company’s consolidated statements of comprehensive income related to its investment in Eve.

During the six months ended June 30, 2026 and 2025, the Company recorded an unrealized loss of $ 1.6 million and an unrealized gain of $ 2.1 million, respectively, in “Other income ( expense) , net” on the Company’s consolidated statements of comprehensive income related to its investment in Eve.

As of June 30, 2026 and December 31, 2025, the fair value of the Company’s investment in Eve was $ 2.7 million and $ 4.3 million, respectively, and was recorded in “Other Assets” on the Company’s consolidated balance sheet.

(11) Income Taxes

The Company’s effective tax rate for the three months ended March 31, 2026 was 5.6 %.

The Company’s effective tax rate for the three months ended March 31, 2026 varied from the federal statutory rate of 21.0 % primarily due to the impact of a discrete tax benefit from additional tax deductions generated from employee equity awards that vested at a stock price above the grant date price during the three months ended March 31, 2026, offset by the provision for state income taxes and the impact of non-deductible expenses.

The Company’s effective tax rate for the three months ended March 31, 2025 was 16.7 %.

The Company’s effective tax rate for the three months ended March 31, 2025 varied from the federal statutory rate of 21.0 % primarily due to the impact of a discrete tax benefit from additional tax deductions generated from employee equity awards that vested during the three months ended March 31, 2025, offset by the provision for state income taxes and the impact of non-deductible expenses.

The Company’s effective tax rate for the six months ended June 30, 2026 and 2025 was 17.9 % and 22.2 %, respectively.

The Company’s effective tax rate for the six months ended June 30, 2026 and 2025 varied from the federal statutory rate of 21.0 % primarily due to the impact of a discrete tax benefit from additional tax deductions generated from employee equity awards that vested at a stock price above the grant date price during the six months ended June 30, 2026 and 2025, offset by the provision for state income taxes and the impact of non-deductible expenses.

(12) Legal Matters

The Company is subject to certain legal actions which it considers routine to its business activities.

As of March 31, 2026, the Company’s management believed, after consultation with legal counsel, that the ultimate outcome of such legal matters was not likely to have a material adverse effect on the Company’s financial position, liquidity or results of operations.

As of June 30, 2026, the Company’s management believed, after consultation with legal counsel, that the ultimate outcome of such legal matters was not likely to have a material adverse effect on the Company’s financial position, liquidity or results of operations.

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 1. Financial Statements