What changed in this filing

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Item 1A. Risk Factors

2025-02-13 compared with 2024-02-15 · 106 added, 104 removed, 296 unchanged (42% of the section changed)

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Additional risks and uncertainties not presently known to us or that we currently do not deem material may also impair our business operations.

If any of the risks we describe below occur, or if any unforeseen risk develops, our operating results may suffer, our financial condition may deteriorate, the trading price of our common stock may decline and investors could lose all or part of their investment in us.

If any of the risks we describe below occur, or if any

unforeseen risk develops, our operating results may suffer, our financial condition may deteriorate, the trading price of our common stock may decline and investors could lose all or part of their investment in us.

Risks That May Disrupt Our Operations

We may experience disruption in service due to delays from key third-party aircraft maintenance service providers.

We rely on third-party vendors for a variety of services, parts and functions critical to our business, particularly related to airframe and engine maintenance and repair.

Even though we strive to formalize agreements with key vendors that define expected service levels and availability of parts, our use of outside vendors, including, but not limited to aircraft maintenance, ground handling, fueling, telecommunication systems and information technology services, increases our exposure to several risks.

Current economic conditions have resulted in delays from third-party service providers for spare aircraft parts and third-party service providers have recently experienced challenges in retaining trained technicians.

Delays from third-party service providers could negatively impact our ability to timely maintain our fleet currently in service.

Additionally, as our captain attrition levels eased during 2024, our plans for 2025 include bringing certain CRJ aircraft out of storage and placing such aircraft into service.

Delays in receiving spare parts and/or outsourced maintenance services could delay our efforts to place stored aircraft back into service.

Further, in the event that one or more vendors experiences labor shortages, aircraft part shortages, goes into bankruptcy, ceases operation or fails to perform as promised, replacement services may not be readily available at competitive rates, or at all.

If one of our vendors fails to perform adequately, we may experience increased costs, delays, maintenance issues, safety issues or negative public perception of our airline.

Vendor bankruptcies, unionization, regulatory compliance issues or significant changes in the competitive marketplace among suppliers could adversely affect vendor services or force us to renegotiate existing agreements on less favorable terms.

These events could result in disruptions in our operations or increases in our cost structure.

We have experienced, and may continue to experience, difficulty in retaining and upgrading qualified pilots.

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Our pilots may seek employment at major airlines, low-cost carriers or cargo carriers, which generally offer higher salaries and more extensive benefit programs than regional airlines.

In response to the COVID-19 pandemic, several major airlines offered their employees early retirement programs in 2020 and may continue to hire significant levels of pilots in the near term.

As a result, we have experienced elevated levels of pilot attrition, particularly attrition of our captains, which may continue in the future.

As we have worked to upgrade our first officers to captains, our attrition levels exceeded our upgrade and replacement levels during 2023.

Our shortage of captains resulted in a reduction of our flight schedules with our major airline partners in 2023 compared to 2022.

There is no assurance that our block hour production in 2024 will exceed our block hour production in 2023.

In recent years, we have experienced elevated levels of pilot attrition, particularly attrition of our captains.

Recent shortages of captains caused a sequential reduction in our annual block hours in 2022 and 2023.

Although captain attrition levels eased in 2024, future elevated pilot attrition levels could constrain our flight schedules.

Operating at reduced flying schedules results in operating inefficiencies which negatively impacts our financial results.

Further, in September 2022, we increased pay rates for our pilots;

however, there is no assurance our current pay rates will have a significant impact on retaining and upgrading our pilots, which could negatively impact our operations.

If we request our major airline partners to reduce our flight schedules due to pilot or other labor shortages, our major airline partners may seek to enforce financial penalties or reduce the compensation otherwise payable to us under our capacity purchase agreements, which would likely have a negative impact on our revenues and adversely impact our financial condition.

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Our operational personnel may seek employment at major airlines, which generally offer higher salaries and more extensive benefit programs than regional airlines.

Should the turnover of our employees sharply increase, we may not be able to hire sufficient personnel to replace those leaving.

Should the attrition of our employees sharply increase, we may not be able to hire sufficient personnel to replace those leaving.

In the event we are unable to hire and retain other qualified personnel, we may be unable to operate requested flight schedules under our capacity purchase agreements, which could result in a reduction in revenue and operating inefficiencies, such as incremental new-hire training costs, and our business and financial condition could be adversely affected.

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● disruptions in the credit markets, which may impact availability of price competitive financing;

● actual or potential changes in international, national, regional and local economic, business and financial conditions, including recession, inflation, higher interest rates, public health emergencies (including the COVID-19 pandemic and related variants), wars (including the ongoing conflict between Russia and the Ukraine and Israel and Palestine), terrorist attacks or political instability;

● actual or potential changes in international, national, regional and local economic, business and financial conditions, including recession, inflation, higher interest rates, public health emergencies, including pandemics, wars (including the ongoing conflict between Russia and Ukraine and Israel and Hamas), terrorist attacks or political instability;

● impact on workforce availability and economic uncertainty;

● potential resurgence of COVID-19 or future public health threats similar to COVID-19 could negatively impact demand and the industry;

● future public health threats, outbreaks of diseases or other illnesses could negatively affect travel behavior and the industry;

● changes in consumer preferences, perceptions, spending patterns or demographic trends;

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● price of jet fuel and oil that may negatively impact the number of flights we are scheduled to operate by our major airline partners under our capacity purchase agreements and may negatively impact the profitability of our prorate agreements;

● outbreaks of diseases and other illnesses that affect travel behavior;

● weather and natural disasters.

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Any internal technological error, failure or large-scale external interruption in the information systems, networks, hardware, software and technological infrastructure we depend on, such as U.S.

air traffic control systems, power, telecommunications or the internet (collectively, “IT Systems”), may disrupt our internal network, impact our ability to conduct our business and result in increased costs.

Our IT Systems (including those provided by third parties) and information about our employees and other individuals and proprietary information belonging to our business such as trade secrets (“Confidential Information”) are vulnerable to a variety of sources of interruption due to events beyond our control, including natural disasters, terrorist attacks, telecommunications or IT System failures, computer viruses, hackers and other security issues.

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Remote and hybrid working arrangements at our company (and at many third-party service providers) also increase cybersecurity risks due to the challenges associated with managing remote computing assets and security vulnerabilities that are present in many non-corporate and home networks.

We and certain of our third-party service providers have in the past experienced cybersecurity incidents and we expect such incidents to continue in varying degrees.

As further described in “Item 1C.

Cybersecurity” we had a cybersecurity incident in 2021, but based on our assessment, we do not believe the incident has or will materially affect us, including our operations, business strategy, results of operations or financial condition.

While to date no incidents have had a material impact on our operations or financial results, we cannot guarantee that material incidents will not occur in the future.

enforcement actions, liability or regulatory penalties, disruption to our operations, damage to our reputation, loss of existing or future customers and/or significant incident response, system restoration or remediation and future compliance costs.

We and certain of our third-party service providers have in the past experienced cybersecurity incidents.

For example, as previously disclosed, our flight service was interrupted in 2021 due to a cyberattack that resulted in the installation of malware on our systems.

The incident was considered fully remediated and settled through our insurer in 2023, and we are not aware of any ongoing liability.

We cannot assure our cybersecurity risk management program will prevent such incidents from occurring in the future.

While no incidents have had a material impact on our operations or financial results to date, we cannot guarantee that material incidents will not occur in the future as further described in “Item 1C.

Cybersecurity”.

Although we previously carried cybersecurity insurance coverage in the past, we currently do not have cybersecurity insurance coverage.

Any cybersecurity incident or other adverse impact to the availability, integrity or confidentiality of our IT Systems or Confidential Information could compromise our ability to operate flights or technology systems, result in the loss of Confidential Information, legal claims or proceedings (such as class actions), regulatory investigations and enforcement actions, liability or regulatory penalties, disruption to our operations, damage to our reputation, loss of existing or future customers and/or significant incident response, system restoration or remediation and future compliance costs.

Any or all of the foregoing could adversely affect our business, results of operations and financial condition.

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We operate a significant number of flights to and from airports with potential winter related or other weather difficulties, including but not limited to, Chicago, Denver, Detroit, Minneapolis, Salt Lake City and San Francisco.

A significant interruption or disruption in service at one of our hubs, due to adverse weather, system malfunctions, airport construction, security closures or otherwise, could result in the cancellation or delay of a significant portion of our flights and, as a result, could have a severe adverse impact on our operations and financial performance.

A significant interruption or disruption in service at one of our hubs, due to adverse weather, system malfunctions, air traffic control disruptions, airport construction, security closures or otherwise, could result in the cancellation or delay of a significant portion of our flights and, as a result, could have a severe adverse impact on our operations and financial performance.

The occurrence of an aviation accident involving our aircraft would negatively impact our operations and financial condition.

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In addition, any accident or incident involving a type of aircraft in our fleet could result in air travelers being reluctant to fly on our aircraft, and adversely impact our business, results of operations and financial condition.

We may experience disruption in service with key third-party service providers.

We rely on third party vendors for a variety of services and functions critical to our business, including airframe and engine maintenance, ground handling, fueling, computer reservation system hosting, telecommunication systems and information technology infrastructure and services.

Even though we strive to formalize agreements with these vendors that define expected service levels, our use of outside vendors increases our exposure to several risks.

In the event that one or more vendors experiences labor shortages, aircraft part shortages, goes into bankruptcy, ceases operation or fails to perform as promised, replacement services may not be readily available at competitive rates, or at all.

If one of our vendors fails to perform adequately, we may experience increased costs, delays, maintenance issues, safety issues or negative public perception of our airline.

These events could result in disruptions in our operations or increases in our cost structure.

We are subject to significant governmental regulation and potential regulatory changes.

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Regulations promulgated by the DOT primarily relate to economic aspects of air service.

The FAA requires operating, air worthiness and other certificates;

FAA requires operating, air worthiness and other certificates;

approval of personnel who may engage in flight, maintenance or operation activities;

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We incur substantial costs in maintaining our current certifications and otherwise complying with the laws, rules and regulations to which we are subject.

A decision by the FAA to ground, or

require time-consuming inspections of or maintenance on, all or any of our aircraft for any reason may have a material adverse effect on our operations.

A decision by the FAA to ground, or require time-consuming inspections of or maintenance on, all or any of our aircraft for any reason may have a material adverse effect on our operations.

In addition to state and federal regulation, airports and municipalities enact rules and regulations that affect our operations.

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Our business may be subject to additional costs or loss of government subsidies as a result of potential regulatory changes, which could have an adverse effect on our operations and financial results.

Changes to U.S.

tariff and import/export regulations may have a negative effect on our suppliers and/or service providers and, in turn, could have a material adverse impact on our financial condition.

The United States has recently enacted and proposed to enact significant new tariffs.

Additionally, President Trump has directed various federal agencies to further evaluate key aspects of U.S.

trade policy and there has been ongoing discussion and commentary regarding potential significant changes to U.S.

trade policies, treaties and tariffs.

There continues to exist significant uncertainty about the future relationship between the United States and other countries with respect to such trade policies, treaties and tariffs.

These developments, or the perception that any of them could occur, may have a material adverse effect on global economic conditions and the stability of global financial markets, and may significantly impact the cost of aircraft parts and supplies sourced internationally or impact the cost of service providers located outside of the United States, which in turn would negatively impact us.

Compliance, or failure to comply, with new or existing laws, regulations and other requirements relating to the privacy, security and handling of information about individuals could adversely affect our business, results of operations, or financial condition.

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Terrorist activities or warnings have dramatically impacted the airline industry and will likely continue to do so.

The terrorist attacks of September 11, 2001 and their aftermath have negatively impacted the airline industry in general, including our operations.

Past terrorist attacks and their aftermath have negatively impacted the airline industry in general, including our operations.

If additional terrorist attacks are launched against the airline industry, there will be lasting consequences of such attacks, which may include loss of life, property damage, increased security and insurance costs, increased concerns about future terrorist attacks, increased government regulation and airport delays due to heightened security.

Additionally, terrorist attacks and the fear of such attacks could negatively impact the airline industry, and result in decreased passenger traffic and yields, increased flight delays or cancellations associated with new government mandates, as well as increased security, fuel and other costs.

mandates, as well as increased security, fuel and other costs.

We cannot provide any assurance that these events will not harm the airline industry generally or our operations or financial condition in particular.

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Scope limitations could limit our ability to increase the number of aircraft operating under our code-share agreements.

As of December 31, 2023, 333 out of our total 485 aircraft in scheduled service were operating under a capacity purchase arrangement or a prorate agreement with either United or Delta.

If our code-share relationship with United or

Delta were terminated, our operations would be significantly impacted and we would not likely have an immediate source of revenue or earnings to offset such loss.

As of December 31, 2024, 359 out of our total 492 aircraft in scheduled service were operating under a capacity purchase agreement or a prorate agreement with either United or Delta.

If our code-share relationship with United or Delta were terminated, our operations would be significantly impacted and we would not likely have an immediate source of revenue or earnings to offset such loss.

A termination of either of these relationships would likely have a material adverse effect on our financial condition, operating revenues and net income unless we are able to enter into satisfactory substitute arrangements for the utilization of the affected aircraft by other code-share partners, or, alternatively, obtain the airport facilities and gates and make the other arrangements necessary to fly as an independent airline.

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Additionally, amendments to our capacity purchase agreements that result in changes to our future scheduled fixed monthly payments will likely impact the timing of our revenue recognition.

During the year ended December 31, 2023, the revenue we recognized was $242.5 million less than the fixed monthly cash payments received, primarily due to the capacity purchase agreement amendments we executed during the 2022 year.

During the year ended December 31, 2024, the revenue we recognized was $44.9 million more than the fixed monthly cash payments received.

Although we currently anticipate we will recognize previously deferred revenue throughout 2025, future contract amendments or reduced utilization levels of our aircraft could negatively impact the timing of our revenue recognition.

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Our business model relies significantly on our major airline partners, and we may be negatively affected by their financial and operating strength.

Events impacting airline travel, including pandemics such as COVID-19, that negatively impact the financial strength of our major airline partners or have a long-term effect on the use of our major airline partners by airline travelers would likely have a material adverse effect on our business, financial condition and results of operations.

Events impacting airline travel, including pandemics or recessions, that negatively impact the financial strength of our major airline partners or have a long-term effect on the use of our major airline partners by airline travelers would likely have a material adverse effect on our business, financial condition and results of operations.

If our major airline partners experience adverse effects to their operational or financial condition, they may be unable to make payments due to us under their capacity purchase agreements or may need to reduce utilization of our aircraft.

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Our growth may be limited with our major airline partners' flight systems.

Additional growth opportunities within our major airline partners’ flight systems are limited by various factors, including a limited number of regional aircraft each major airline partner can operate in its regional network due to scope

limitations in its own labor agreements.

Except as contemplated by our existing code-share agreements, we cannot be sure that our major airline partners will contract with us to fly any additional aircraft.

We may not receive additional growth opportunities, or we may agree to modifications to our code-share agreements that reduce certain benefits to us in order to obtain additional aircraft, or for other reasons.

Given the competitive nature of the airline industry, we believe limited growth opportunities may result in competitors accepting reduced margins and less favorable contract terms in order to secure new or additional code-share operations.

We may not receive additional growth opportunities, or we may agree to modifications to our code-share agreements at less favorable terms in order to obtain additional aircraft, or for other reasons.

Certain of our competitor regional airlines may agree to flying contract terms at lower rates or unfavorable contract terms, which could affect the terms offered to us.

Even if we are offered growth opportunities by our major airline partners, those opportunities may involve economic terms or financing commitments that are unacceptable to us.

Additionally, our major airline partners may reduce the number of regional jets in their system by not renewing or extending existing flying arrangements with regional operators.

Additionally, our major airline partners may reduce the number of regional jets in their system by not renewing or extending existing flying agreements with regional operators.

Any one or more of these factors may reduce or eliminate our ability to expand our flight operations with our existing major airline partners.

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Such changes could result in a reduction in the number of regional aircraft our major airline partners operate in the future.

If our major airline partners’ future strategies include a material reduction in regional aircraft generally or for specific aircraft types, such as 50-seat regional aircraft, the resulting decrease in demand in the aircraft we operate could have a material negative impact on our business and financial condition.

If our major airline partners’ future strategies include a material reduction in regional aircraft generally or for specific aircraft types that we operate, the resulting decrease in demand in the aircraft we operate could have a material negative impact on our business and financial condition.

Additionally, future developments of electric-powered aircraft designed to operate on routes typically served by regional aircraft could impact our major airline partners’ strategy and result in a reduction of demand or increase our capital expenditures and could have a material negative impact on our business and financial condition.

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If our major airline partners were to make changes such as these in their strategy and operations, our operations and financial results could be adversely impacted.

Our prorate arrangements with our major airline partners may not return to pre-pandemic revenue levels and are terminable upon notice of 120 days or less.

Our prorate revenue in 2023 continued to be negatively impacted by captain attrition to other airlines, and there is no assurance our prorate revenue will return to pre-pandemic levels in 2024 or thereafter.

We may continue to reduce the volume of flying under our prorate arrangements in the future based on several factors including, but not limited to, passenger demand on prorate routes and labor availability.

Revenue levels from our prorate agreements with our major airline partners may not continue to increase and are terminable upon notice of 120 days or less.

Additionally, revenue levels from our SWC operation may not continue to increase.

While our prorate agreements and SWC revenue increased $76.0 million, or 19.9%, for the year ended December 31, 2024, compared to the year ended December 31, 2023, there is no assurance our prorate revenue or SWC revenue will continue to increase in 2025 or thereafter.

Future increases in prorate revenue is based on several factors subject to change including, but not limited to, passenger demand on prorate routes, approval of new routes with our major airline partners, maintenance required to return parked aircraft for service and labor availability.

Additionally, there is no assurance we will continue to be awarded subsidy contracts under the Essential Air Service (EAS) program

on applicable prorate routes from the DOT going forward.

Additionally, there is no assurance the EAS program will continue to receive funding by the U.S.

Future increases in SWC revenue is also based on several factors subject to change including, but not limited to, corporate or institutional demand for charter flights, competition for charter business and availability of other charter alternatives, such as ground transportation.

Additionally, SWC applied for commuter authority from the DOT in 2022, which if approved, may allow SWC to expand its route strategy.

There is no assurance that the DOT will approve SWC’s commuter authority application.

Our prorate flying agreements with our major airline partners permit each major airline partner to terminate the agreement in its discretion by giving us notice of 120 days or less.

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Some of those disagreements have resulted in litigation, and we may be subject to additional disputes and litigation in the future.

To the extent that we experience disagreements regarding the interpretation of our code-share or other agreements, we will likely expend valuable management time and financial resources in our efforts to resolve those disagreements.

Those disagreements may result in litigation, arbitration,

settlement negotiations or other proceedings.

Furthermore, there can be no assurance that any or all of those proceedings, if commenced, would be resolved in our favor.

Furthermore, there can be no assurance that any or all future disputes and related proceedings, if commenced, would be resolved in our favor.

An unfavorable result in any such proceeding could have adverse financial consequences or require us to modify our operations.

Such disagreements and their consequences could have an adverse effect on our operating results and financial condition.

We recently began operating on-demand charter flights through our wholly-owned subsidiary, SWC, and such operations involve significant risk.

In 2022 we formed a new subsidiary, SWC, which had its first revenue generating flight in May 2023.

We operate on-demand charter flights through our wholly-owned subsidiary, SWC, and such operations involve significant risk.

In 2022 we formed a new subsidiary, SWC, which had its first revenue generating charter flight in 2023.

SWC offers on-demand charter service using CRJ200 aircraft in a 30 or less seat configuration under its own FAA operating certificate.

As we grow operations, there may be significant risks, including that SWC may divert management’s attention or the Company’s resources from our core business and strategies and that the objectives of SWC may not materialize or may take longer to materialize than anticipated.

The airline industry is highly competitive, which could adversely affect our operating results and financial condition.

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Our major airline partners rely on us to fly passengers from various locations into their hubs under our code-share agreements at competitive terms.

We not only compete with other regional airlines, some of which are owned by or operated as code-share partners of major airlines, but we also indirectly face competition from low-cost carriers, such as Southwest, Allegiant, Spirit, JetBlue and others, who compete with our major airline partners on many routes we operate.

We not only compete with other regional airlines, some of which are owned by or operated as code-share partners of major airlines, but we also indirectly face competition from low-cost carriers, such as Southwest, Allegiant, Spirit, JetBlue, Breeze and others, who compete with our major airline partners on many routes we operate.

Certain of our competitors, including wholly-owned regional airline subsidiaries of our major airline partners, may have access to significantly greater financial and other resources than we do.

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Increases in our labor costs could result in a material reduction in our earnings.

For example, during the year ended December 31, 2023 and 2022, our salary, wage and benefit costs constituted approximately 46.7% and 42.9% of our total operating costs, respectively.

In September 2022, we entered into a collective bargaining agreement with our pilots, increasing the pay rates for pilots.

For example, during the years ended December 31, 2024 and 2023, our salary, wage and benefit costs constituted approximately 48.3% and 46.7% of our total operating costs, respectively.

Various factors may result in higher attrition rates that could cause us to significantly increase compensation to our labor groups, such as higher compensation offered by other airlines and companies in the airline industry and/or general labor costs increases in the United States.

Our inability to offset increased labor costs through rate increases under our capacity purchase agreements with all our major airline partners could negatively impact our operating costs.

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The primary operating costs intended to be compensated by the pre-determined rates include our labor and training costs, certain aircraft maintenance expenses and overhead costs.

During the year ended December 31, 2023, approximately 91.9% of our code-share operating costs were reimbursable at pre-determined rates and 8.1% of our code-share operating costs were directly reimbursed costs, often

referred to as pass-through costs.

During the year ended December 31, 2024, approximately 92.2% of our code-share operating costs were reimbursable at pre-determined rates and 7.8% of our code-share operating costs were directly reimbursed costs, often referred to as pass-through costs.

Additionally, our aircraft maintenance costs may increase annually as our fleet ages at a higher rate than our pre-determined rates in our capacity purchase agreements.

Also, on an individual aircraft basis, various in-depth maintenance procedures are typically scheduled to occur at multi-year intervals, which can result in maintenance expense fluctuations year-to-year.

If our operating costs for labor, aircraft maintenance and overhead costs exceed the compensation earned from our pre-determined rates under our capacity purchase arrangements, our financial position and operating results will be negatively affected.

If our operating costs for labor, aircraft maintenance and overhead costs exceed the compensation earned from our pre-determined rates under our capacity purchase agreements, our financial position and operating results will be negatively affected.

Increased labor costs, pilot and other labor availability, labor disputes and unionization of our workforces may adversely affect our ability to conduct our business and reduce our profitability.

Any new collective bargaining agreements entered into by other regional carriers with their work forces may also result in higher industry wages and increased pressure on us to increase the wages and benefits of our employees.

Future agreements with represented employees may be on terms that are not as attractive as our current agreements or comparable to agreements entered into by our competitors.

Any new labor agreement entered into by other regional carriers with their work forces may result in higher industry wages and increase pressure on us to increase the wages and benefits of our employees.

If our labor agreements become uncompetitive, we may experience higher employee attrition and low employee job satisfaction, which may negatively impact our operating and financial results.

Our employees are represented by in-house associations;

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Such efforts will likely continue in the future and may ultimately result in some or all of our employees being represented by one or more national unions.

If our employees were to unionize or be deemed to be represented by one or more national unions, negotiations with these unions could divert management’s attention and disrupt operations, which may result in low employee morale and inefficient work rules and may limit our ability to adjust to market compensation in a timely manner and negatively impact our financial results.

If our employees were to unionize or be deemed to be represented by one or more national unions, negotiations with these unions could divert management’s attention and disrupt operations.

Additionally, representation by a national union may limit our ability to have open communications with our employees, negatively impact our company culture and deter our ability to amend our compensation packages for market conditions in a timely manner.

Moreover, we cannot predict the outcome of any future negotiations relating to union representation or collective bargaining agreements.

A national union soliciting to represent our employees may represent employees at mainline carriers or other regional airlines and may have conflicting interests with those of our employees or SkyWest.

Agreements reached in union-involved collective bargaining may negatively impact our financial results.

We may experience an increase in fuel prices in our prorate operations.

Future collective bargaining agreements involving a national union and our employees may negatively impact our relationship with our employees and have an adverse impact on our operating and financial results.

We may experience an increase in fuel prices in our prorate and SWC operations.

Dependence on foreign imports of crude oil, limited refining capacity and the possibility of changes in government policy on jet fuel production, transportation and marketing make it difficult to predict the future availability of jet fuel.

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Major reductions in the availability of jet fuel or significant increases in its cost, or a continuation of high fuel prices for a significant period of time, would have a material adverse impact on us.

Pursuant to our capacity purchase arrangements, our major airline partners have agreed to bear the economic risk of fuel price fluctuations on our contracted flights.

However, we bear the economic risk of fuel price fluctuations on our prorate and charter operations.

As of December 31, 2023, we operated 19 CRJ200s under a prorate agreement with United and six CRJ900s and four CRJ700s under a prorate agreement with Delta.

Pursuant to our capacity purchase agreements, our major airline partners have agreed to bear the economic risk of fuel price fluctuations on our contracted flights.

However, we bear the economic risk of fuel price fluctuations on our prorate and SWC operations.

As of December 31, 2024, we operated 25 CRJ200s under a prorate agreement with United and one CRJ900 and 16 CRJ700s or CRJ550s under a prorate agreement with Delta.

As of December 31, 2024, we had 18 CRJ200s available for on-demand charter service through SWC.

Our operating and financial results with respect to these prorate arrangements and charter services can be negatively affected by the price of jet fuel in the event we are unable to increase our passenger fares.

Additionally, in the event of prolonged low fuel prices, our competitors may lower their passenger ticket prices on routes that compete with our prorate or charter markets, which could negatively impact our passenger load factors.

Our operating and financial results with respect to these prorate agreements and charter services can be negatively affected by the price of jet fuel in the event we are unable to increase our passenger fares.

Our business could be harmed if we lose the services of our key personnel.

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We do not maintain key-person insurance on any of our executive officers.

We may experience credit losses in excess of our estimated credit loss reserves.

Our financial results include estimated credit loss reserves associated with our accounts receivables, notes receivables and third-party debt guarantees.

Our actual credit losses may exceed our estimated allowances, for a number of factors including but not limited to, counterparties’ bankruptcy, undervalued collateral and/or inability to liquidate collateral, which could negatively impact our financial condition and financial results.

We have guaranteed the indebtedness of third parties that may default on their debt and require us to pay.

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We are also dependent upon General Electric as the sole manufacturer of engines used on the aircraft we operate.

Our operations could be materially and adversely affected by the failure or inability of Bombardier, Embraer or General Electric to provide sufficient parts or related maintenance and support services to us on a timely manner.

Our operations could be materially and adversely affected by the failure or inability of Bombardier, Embraer, General Electric or other certified replacement part companies to provide sufficient parts or related maintenance and support services to us on a timely manner.

Additionally, timing and availability of new aircraft deliveries could be delayed beyond our control.

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In the event any of our major airline partners defaults under a capacity purchase agreement or we are unable to extend the flying contract terms on aircraft with ongoing financial obligations, our financial position and financial results could be materially adversely affected.

In addition, we may seek material amounts of additional financial liquidity in the short-term, which may include drawing down on SkyWest Airlines’ line of credit, the issuance of secured debt securities and/or the entry into other debt facilities, among other items.

There can be no assurance as to the timing of any such drawdown or issuance, which may be in the near term, or that any such additional financing will be completed on favorable terms, or at all.

If our liquidity is materially diminished, we might not be able to timely pay our leases and debts or comply with certain covenants under SkyWest Airlines’ line of credit or with other material provisions of our contractual obligations.

Our anticipated aircraft purchases are expected to require an increase in our leverage and the related cash requirements.

We expect to issue debt to finance our anticipated aircraft purchases.

As of December 31, 2024, we have firm purchase commitments for 16 E175 aircraft and spare engines totaling $481.5 million.

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There can be no assurance that our operations will generate sufficient cash flow or liquidity to enable us to obtain the necessary aircraft acquisition financing to replace our current fleet, or to make required debt service payments related to our existing or anticipated future obligations.

Even if we meet all required debt, lease and purchase obligations,

the size of these long-term obligations could negatively affect our financial condition and results of operations in many ways, including:

Even if we meet all required debt, lease and purchase obligations, the size of these long-term obligations could negatively affect our financial condition and results of operations in many ways, including:

● increasing the cost, or limiting the availability of, additional financing for working capital, acquisitions or other purposes;

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Factors indicating potential impairment include, but are not limited to, amendments to our capacity purchase agreements that impact the anticipated cash flows for our aircraft, significant decreases in the market value of the long-lived assets, a significant change in the condition of the long-lived assets and operating cash flow losses associated with the use of the long-lived assets.

In the event the estimated residual value of any of our aircraft types is determined to be lower than the residual value assumptions used in our depreciation policies, the applicable aircraft type in our fleet may be impaired and may result in a material reduction in the book value of applicable aircraft types we operate or we may need to prospectively modify our depreciation policies.

In 2021, we recorded a non-cash impairment of $84.6 million attributable to certain CRJ900 aircraft operating with a major airline partner as a result of contract expirations and the uncertainty about our ability to redeploy the CRJ900 aircraft with another major airline partner.

Additionally, in 2022, we committed to a plan to sell 14 CRJ700 aircraft, resulting in a non-cash impairment of $51.4 million.

In 2023, the aircraft held for sale were written down an additional $2.3 million.

An impairment on any of our aircraft types we operate or an increased level of depreciation expense resulting from a change to our depreciation policy and assumptions could result in a material negative impact to our financial results.

Future decisions to sell aircraft could potentially result in write-downs for aircraft held-for sale.

In the event the estimated fair value of any of our aircraft types is determined to be lower than the net book value of the applicable aircraft type, such aircraft type in our fleet may be impaired and may result in a material impairment charge.

An impairment on any of our aircraft types we

operate or an increased level of depreciation expense resulting from a change to our depreciation policy and assumptions could result in a material negative impact to our financial results.

Future decisions to sell specific aircraft could potentially result in write-downs for aircraft held-for sale.

We lease aircraft and engines to third parties and the lessee may default under the lease terms, which could negatively affect our financial condition, cash flow and results of operations.

We leased five CRJ900 aircraft, 35 CRJ700 aircraft, and engines used on CRJ aircraft to third parties as of December 31, 2023.

We leased five CRJ900 aircraft, 35 CRJ700 aircraft, and several CRJ aircraft engines to third parties as of December 31, 2024.

In the event a lessee defaults under the terms of the lease agreement, we may incur additional costs, including legal and other expenses necessary to repossess the aircraft or engines, particularly if the lessee is contesting the proceedings or is in bankruptcy.

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The effect of any, or some combination, of the foregoing risks could affect our partnership with Eve and future benefits may not materialize.

As of December 31, 2023, we held 399,589 shares of common stock of Eve and a warrant giving us the right to acquire 1,500,000 shares of common stock of Eve at an exercise price of $0.01 per share.

The Company also holds a put option from an Eve shareholder for 399,589 shares of common stock of Eve payable in aircraft parts credits.

At December 31, 2023, the fair value of our investments in Eve was $15.4 million and future reductions in the trading market price of Eve’s common stock will likely negatively impact our net income.

We have invested in Corporate Flight Management, Inc.

d/b/a Contour Airlines (“Contour”), which involves significant risk and may not produce a satisfactory return on our investment.

We have invested $9.9 million as of December 31, 2023, in Contour, a 14 CFR Part 135 air carrier .

As of December 31, 2024, we held a warrant giving us the right to acquire 1,500,000 shares of common stock of Eve at an exercise price of $0.01 per share.

At December 31, 2024, the fair value of the warrant was $8.2 million and future reductions in the trading market price of Eve’s common stock will likely negatively impact our net income.

We have invested in Contour, which involves significant risk and may not produce a satisfactory return on our investment.

As of December 31, 2024, we have invested $25.0 million in Contour, a 14 CFR Part 135 air carrier .

This strategic investment involves significant risks, including:

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● the investment may divert management’s attention from our core business;

● Contour could have investment goals that are not consistent with our investment objectives, including the timing, terms and strategies for any investments.

● Contour could have operational or financial goals that are not consistent with our investment objectives, including the strategies and objectives for increasing value for Contour’s shareholders.

The effect of any, or some combination, of the foregoing risks could negatively affect our financial results.

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For example, the federal government, as well as several state and local governments, have implemented legislative and regulatory proposals and voluntary measures intended to reduce greenhouse gas emissions.

Compliance with laws, regulations and other programs

intended to reduce emissions or otherwise protect the environment may require us to reduce our emissions, secure carbon offset credits or otherwise pay for emissions or make capital investments to modify certain aspects of our operations to reduce emissions.

Compliance with laws, regulations and other programs intended to reduce emissions or otherwise protect the environment may require us to reduce our emissions, secure carbon offset credits or otherwise pay for emissions, or make capital investments to modify certain aspects of our operations to reduce emissions.

Future policy, legal and regulatory developments relating to the protection of the environment could increase our costs and have a material adverse effect on our operations.

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From April 2020 through September 30, 2022, we were restricted from paying dividends and repurchasing shares of our common stock under three Payroll Support Program Agreements and under a loan agreement with Treasury.

The Company did not declare a dividend during 2023 or 2022, following the restriction lapse under the Payroll Support Program Agreements.

During 2023, we resumed repurchasing shares of our common stock, and completed the repurchase of 10.6 million shares of common stock for $289.1 million during the year ended December 31, 2023.

During 2023, we resumed repurchasing shares of our common stock.

We have not paid a dividend since 2020.

There can be no assurance that we will resume our past practice of paying dividends on our common stock or that we will have the financial resources to pay such dividends.

The future payment of dividends will depend upon our financial condition, alternative uses of the Company’s cash and results of operations and other factors deemed relevant by our board of directors.

There also can be no assurance that we will continue our practice of repurchasing shares of common stock or that we will have the financial resources to repurchase shares of common stock in the future.

However , in May 2023, our board of directors approved a share repurchase program, pursuant to which we are authorized to repurchase up to $250 million of our common stock.

We are authorized to repurchase such shares of common stock at prevailing market prices in the open market, in privately negotiated transactions or by other means in accordance with federal securities laws.

In May 2023, our board of directors approved a share repurchase program, pursuant to which we are authorized to repurchase up to $250 million of our common stock.

Under our May 2023 repurchase program we are authorized to repurchase such shares of common stock at prevailing market prices in the open market, in privately negotiated transactions or by other means in accordance with federal securities laws.

Depending on market conditions and other factors, such repurchases may commence or be suspended from time to time by management without prior notice.

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The number of shares of common stock that we may repurchase, including pursuant to the share repurchase program, will depend upon our financial condition and results of operations and other factors deemed relevant by our board of directors.

There also can be no assurance that we will continue repurchasing shares of common stock under our May 2023 authorization, that our board of directors will approve additional share repurchase programs in the future or that we will have the financial resources to repurchase shares of common stock in the future.

Repurchases of our common stock pursuant to our share repurchase program and any future dividends could affect our stock price and increase its volatility.

Additionally, our share repurchase program and any future dividends

may reduce our cash reserves, which may impact our ability to finance future growth and to pursue possible future strategic opportunities and acquisitions.

Additionally, our share repurchase program and any future dividends may reduce our cash reserves, which may impact our ability to finance future growth and to pursue possible future strategic opportunities and acquisitions.

Our common stock price may fluctuate significantly.

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significant sales of our common stock, and other risks described in these “Risk Factors.” In recent periods, the stock market has experienced extreme declines and volatility, significantly impacting the market price of securities issued by many companies, including us and other companies in our industry.

We issued warrants to purchase shares of our common stock to Treasury for relief we received under three Payroll Support Program Agreements and a Loan Agreement with Treasury.

During 2020 and 2021, we issued warrants to Treasury as consideration for payments received under the three Payroll Support Program Agreements and a loan agreement with Treasury.

The warrants we issued to Treasury include:

warrants to purchase 582,136 shares of our common stock with an exercise price of $28.38 per share, warrants to purchase 124,773 shares of our common stock with an exercise price of $40.41 per share and warrants to purchase 78,317 shares of our common stock with an exercise price of $57.47 per share.

If Treasury exercises its option to purchase shares of our common stock under warrants previously issued to Treasury, such exercise will be dilutive to our shareholders.

As of December 31, 2023, Treasury has not exercised any of the warrants issued.

Provisions of our charter documents and code-share agreements may limit the ability or desire of others to gain control of our Company.

Provisions of our articles of incorporation, by-laws and code-share agreements may limit the ability or desire of others to gain control of our Company.

Our ability to issue shares of preferred and common stock without shareholder approval may have the effect of delaying or preventing a change in control and may adversely affect the voting and other rights of the holders of our common stock, even in circumstances where such a change in control would be viewed as desirable by most investors.

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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-K

Item 1A. Risk Factors