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The following discussion and analysis presents factors that had a material effect on the results of operations of SkyWest, Inc.
−Removed: (“SkyWest” “we” or “us”) during the three- and nine-month periods ended September 30, 2024 and 2023.
−Removed: Also discussed is our financial condition as of September 30, 2024, and December 31, 2023.
−Removed: You should read this discussion in conjunction with our condensed consolidated financial statements for the three and nine months ended September 30, 2024, including the notes thereto, appearing elsewhere in this Report.
+Added: (“SkyWest” “we” or “us”) during the three-month periods ended March 31, 2025 and 2024.
+Added: Also discussed is our financial condition as of March 31, 2025, and December 31, 2024.
+Added: You should read this discussion in conjunction with our condensed consolidated financial statements for the three months ended March 31, 2025, including the notes thereto, appearing elsewhere in this Report.
This discussion and analysis contains forward-looking statements.
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These forward-looking statements may be identified by words such as “may,” “will,” “expect,” “intend,” “forecast,” “anticipate,” “believe,” “estimate,” “plan,” “project,” “could,” “should,” “hope,” “likely,” and “continue” and similar terms used in connection with statements regarding our outlook, anticipated operations, the revenue environment, our contractual relationships, and our anticipated financial performance.
−Removed: These statements include, but are not limited to, statements about the continued demand for our product, the effect of economic conditions on SkyWest’s business, financial condition and results of operations, the scheduled aircraft deliveries and fleet size for SkyWest in upcoming periods and the related execution of SkyWest’s fleet transition strategy and expected timing thereof, expected production levels in future periods and associated staffing challenges, pilot attrition trends, SkyWest’s coordination with United Airlines, Inc.
+Added: These statements include, but are not limited to, statements about the continued demand for our product, the effect of economic conditions on SkyWest’s business, financial condition and results of operations, the scheduled aircraft deliveries, fleet expansion and anticipated fleet size for SkyWest in upcoming periods, expected production levels in future periods and associated staffing challenges, pilot attrition trends, SkyWest’s coordination with United Airlines, Inc.
(“United”), Delta Air Lines, Inc.
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(“American”) and Alaska Airlines, Inc.
−Removed: (“Alaska”) (each, a “major airline partner” and together, “major airline partners”) to optimize the delivery of aircraft under previously announced agreements, the expected terms, timing and benefits related to SkyWest’s leasing and joint venture transactions, SkyWest’s provision of assets to Corporate Flight Management, Inc.
−Removed: d/b/a Contour Airlines (“Contour”), as well as SkyWest’s future financial and operating results, plans, objectives, expectations, estimates, intentions and outlook, and other statements that are not historical facts.
+Added: (“Alaska”) (each, a “major airline partner” and together, “major airline partners”) to optimize the delivery of aircraft under previously announced agreements and quickly placing new aircraft deliveries into service, the expected terms, timing and benefits related to SkyWest’s leasing, strategic partnership and joint venture transactions, SkyWest’s provision of assets to Corporate Flight Management, Inc.
+Added: d/b/a Contour Airlines (“Contour”), scheduled flight service to smaller communities, increasing the utilization and efficiency of all fleet types as well as SkyWest’s future financial and operating results, plans, objectives, expectations, estimates, intentions and outlook, and other statements that are not historical facts.
All forward-looking statements included in this Report are made as of the date hereof and are based on information available to SkyWest as of such date.
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developments associated with fluctuations in the economy and the demand for air travel, including related to inflationary pressures, and related decreases in customer demand and spending;
−Removed: uncertainty regarding continued recovery from the COVID-19 pandemic and other potential future outbreaks of infectious diseases or other health concerns, and the consequences of such outbreaks to the travel industry, including travel demand and travel behavior, and our major airline partners in general and the financial condition and operating results of SkyWest in particular;
+Added: uncertainty regarding potential future outbreaks of infectious diseases or other health concerns, and the consequences of such outbreaks to the travel industry, including travel demand and travel behavior, and our major airline partners in general and the financial condition and operating results of SkyWest in particular;
the prospects of entering into agreements with existing or other carriers to fly new aircraft;
+Added: uncertainty regarding timing and performance of key third-party service providers;
ongoing negotiations between SkyWest and its major airline partners regarding their contractual obligations;
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estimated useful life of long-lived assets, residual aircraft values and related impairment charges;
−Removed: labor relations and costs and labor shortages;
+Added: labor relations and costs;
the impact of global instability;
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uncertainty regarding ongoing hostility between Russia and the Ukraine, as well as Israel and Hamas, and the related impacts on macroeconomic conditions and on the international operations of any of our major airline partners as a result of such conflict;
+Added: the availability of parts used in connection with maintenance and repairs of the aircraft;
+Added: the availability of suitable replacement aircraft for aging aircraft;
+Added: the impact of recently enacted and proposed U.S.
+Added: tariffs on global economic conditions and the financial markets, passenger demand, the cost of aircraft parts and supplies sourced internationally and the cost of service providers located outside of
+Added: the United States;
as well as the other factors identified under the heading “Risk Factors” in Part I, Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2024, under the heading “Risk Factors” in Part II, Item 1A of this Report, elsewhere in this Report, in our other filings with the Securities and Exchange Commission (the “SEC”) and other unanticipated factors.
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(“SkyWest Airlines”).
−Removed: As of September 30, 2024, we offered scheduled passenger and air freight service with approximately 2,240 total daily departures to destinations in the United States, Canada and Mexico.
−Removed: Our fleet of Embraer E175 regional jet aircraft (“E175”), Canadair CRJ900 regional jet aircraft (“CRJ900”) and Canadair CRJ700 regional jet aircraft (“CRJ700”) have a multiple-class seat configuration, whereas our Canadair CRJ200 regional jet aircraft (“CRJ200”) have a single-class seat configuration.
+Added: As of March 31, 2025, we offered scheduled passenger and air freight service with approximately 2,350 total daily departures to destinations in the United States, Canada and Mexico.
+Added: Our fleet of Embraer E175 regional jet aircraft (“E175”), Canadair CRJ900 regional jet aircraft (“CRJ900”) and Canadair CRJ700 regional jet aircraft (“CRJ700”), including a 50-seat configuration of the CRJ700 aircraft, commonly referred to as a “CRJ550,” have a multiple-class seat configuration, whereas our Canadair CRJ200 regional jet aircraft (“CRJ200”) have a single-class seat configuration.
During 2022, we formed SkyWest Charter, LLC (“SWC”), which offers on-demand charter services using CRJ200 aircraft in a 30-seat configuration.
−Removed: As of September 30, 2024, we had 615 total aircraft in our fleet, including 484 aircraft in scheduled service or under contract pursuant to our code-share agreements, summarized as follows:
+Added: As of March 31, 2025, we had 626 total aircraft in our fleet, including 488 aircraft in scheduled service or under contract pursuant to our code-share agreements, summarized as follows:
+Added: CRJ700/CRJ550
Aircraft in scheduled service or under contract
Leased to third parties
−Removed: (1) As of September 30, 2024, other aircraft included:
−Removed: supplemental spare aircraft supporting our code-share agreements that may be placed under future code-share or leasing arrangements, aircraft transitioning between code-share agreements with our major airline partners or aircraft that are scheduled to be disassembled for use as spare parts.
−Removed: (2) Includes CRJ550 aircraft, a 50-seat configuration of the CRJ700 aircraft.
+Added: (1) As of March 31, 2025, other aircraft included:
+Added: supplemental spare aircraft supporting our code-share agreements that may be placed under future code-share or leasing agreements, aircraft transitioning between code-share agreements with our major airline partners or aircraft that are scheduled to be disassembled for use as spare parts.
Our business model is based on providing scheduled regional airline service under code-share agreements (commercial agreements between airlines that, among other things, allow one airline to use another airline’s flight designator codes on its flights) with our major airline partners.
−Removed: Our success is principally centered on our ability to meet the needs of our major airline partners by providing a reliable and safe operation at attractive economics.
−Removed: From September 30, 2023, to September 30, 2024, we made changes to our fleet, including the addition of three new E175 aircraft and 20 partner-financed E175 aircraft.
−Removed: We anticipate our fleet will continue to evolve, as we are scheduled to add 19 new E175 aircraft with United (four in the fourth quarter of 2024, seven in 2025 and eight in 2026) and one new E175 aircraft with Alaska in 2025.
−Removed: We also entered into multiple agreements with United in September and October 2024 to place a total of 40 used CRJ550 aircraft into service between the fourth quarter of 2024 and the end of 2026.
−Removed: Timing of these anticipated deliveries may be subject to change as we are coordinating with our major airline partners in response to labor availability or other factors.
−Removed: Our primary objective in the fleet changes is to improve our profitability by adding new E175 aircraft and used CRJ aircraft to capacity purchase agreements, and potentially removing older aircraft from service that typically require higher maintenance costs.
−Removed: As of September 30, 2024, approximately 43.4% of our aircraft in scheduled service or under contract were operated for United, approximately 29.1% were operated for Delta, approximately 18.8% were operated for American and approximately 8.7% were operated for Alaska.
−Removed: Historically, multiple contractual relationships with major airlines have enabled us to reduce our reliance on any single major airline code and to enhance and stabilize operating results through a mix of fixed-fee arrangements (referred
−Removed: to as “capacity purchase” agreements) and “prorate” agreements.
−Removed: For the nine months ended September 30, 2024, our capacity purchase revenue represented approximately 86.8% of our total flying agreement revenue and our prorate and SWC revenue, combined, represented approximately 13.2% of our total flying agreements revenue.
+Added: In exchange for such services, our major airline partners pay us either fixed fees to operate the flight, referred to as “capacity purchase agreement,” or we receive a percentage of applicable passenger ticket revenues on the designated flights we operate, referred to as “prorate agreement.” Our success is principally centered on our ability to meet the needs of our major airline partners by providing a reliable and safe operation at attractive economics.
+Added: From March 31, 2024, to March 31, 2025, we made changes to our fleet, including the addition of five new E175 aircraft and 17 partner-financed E175 aircraft.
+Added: We anticipate our fleet will continue to evolve, as we are scheduled to add a total of 15 new E175 aircraft with United from 2025 to 2026 and one new E175 aircraft with Alaska in 2025.
+Added: We also have multiple agreements with United to place 38 used CRJ550 aircraft into service throughout 2025 and 2026.
+Added: Timing of placing these additional aircraft into service, including delivery timing on acquired aircraft, may be subject to change as we are coordinating with our major airline partners in response to labor availability or other factors.
+Added: Our primary objective in the fleet changes is to improve our profitability by adding new E175 aircraft and used CRJ700, CRJ550, CRJ900 and E175 aircraft, commonly referred to as “dual-class CRJ aircraft” to capacity purchase agreements or prorate agreements, and potentially removing older aircraft from service that typically require higher maintenance costs.
+Added: As of March 31, 2025, approximately 44.7% of our aircraft in scheduled service or under contract were operated for United, approximately 28.7% were operated for Delta, approximately 18.0% were operated for American and approximately 8.6% were operated for Alaska.
+Added: Historically, multiple contractual relationships with major airlines have enabled us to reduce our reliance on any single major airline code and to enhance and stabilize operating results through a mix of capacity purchase agreements and prorate agreements.
+Added: For the three months ended March 31, 2025, our capacity purchase revenue represented approximately 85.7% of our total flying agreements revenue and our prorate and SWC revenue, combined, represented approximately 14.3% of our total flying agreements revenue.
On capacity purchase routes, the major airline partner controls scheduling, ticketing, pricing and seat inventories and we are compensated by the major airline partner at contracted rates based on completed block hours (measured from takeoff to landing, including taxi time), flight departures, the number of aircraft under contract and other operating measures.
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We are also responsible for the operating costs of the prorate flights, including fuel and airport costs.
−Removed: Third Quarter Summary
−Removed: We had total operating revenues of $912.8 million for the three months ended September 30, 2024, a 19.1% increase compared to total operating revenues of $766.2 million for the three months ended September 30, 2023.
−Removed: We had net income of $89.7 million, or $2.16 per diluted share, for the three months ended September 30, 2024, compared to net income of $23.5 million, or $0.55 per diluted share, for the three months ended September 30, 2023.
−Removed: The significant items affecting our revenue and operating expenses during the three months ended September 30, 2024, are outlined below:
+Added: First Quarter Summary
+Added: We had total operating revenues of $948.5 million for the three months ended March 31, 2025, an 18.0% increase compared to total operating revenues of $803.6 million for the three months ended March 31, 2024.
+Added: We had net income of $100.6 million, or $2.42 per diluted share, for the three months ended March 31, 2025, compared to net income of $60.3 million, or $1.45 per diluted share, for the three months ended March 31, 2024.
+Added: The significant items affecting our revenue and operating expenses during the three months ended March 31, 2025, are outlined below:
The number of aircraft we have in scheduled service or under contract pursuant to our code-share agreements and the number of block hours we incur on our flights are primary drivers of our flying agreements revenue under our capacity purchase agreements.
−Removed: The number of flights we operate and the corresponding number of passengers we carry are the primary drivers of our revenue under our prorate flying agreements.
−Removed: The number of aircraft we have in scheduled service or under contract pursuant to our code-share agreements decreased from 493 as of September 30, 2023 to 484 as of September 30, 2024;
−Removed: and the number of block hours increased from 290,830 for the three months ended September 30, 2023 to 334,459 for the three months ended September 30, 2024, or by 15.0%, due to an increase in scheduled daily utilization of our aircraft driven by an increase in the number of available captains.
−Removed: Our capacity purchase revenue increased $128.5 million, or 20.3%, from the three months ended September 30, 2023 to the three months ended September 30, 2024, primarily as a result of an increase in completed block hours for the comparable periods and recognizing previously deferred revenue for the three months ended September 30, 2024, compared to deferring revenue for the three months ended September 30, 2023.
−Removed: As a result of a higher number of passengers carried on our prorate routes and an increase in the number of prorate and charter flights operated year-over-year, our prorate and SWC revenue increased $13.1 million, or 11.9%, for the three months ended September 30, 2024, as compared to the three months ended September 30, 2023.
+Added: The number of flights we operate and the corresponding number of passengers we carry are the primary drivers of our revenue under our prorate agreements.
+Added: The number of aircraft we have in scheduled service or under contract pursuant to our code-share agreements increased from 475 as of March 31, 2024 to 488 as of March 31, 2025, or by 2.7%;
+Added: and the number of block hours increased from 289,801 for the three months ended March 31, 2024 to 352,155 for the three months ended March 31, 2025, or by 21.5%, due to an increase in scheduled daily utilization of our aircraft driven by an increase in the number of available captains.
+Added: Our capacity purchase revenue increased $108.0 million, or 15.9%, for the three months ended March 31, 2025, as compared to the three months ended March 31, 2024, primarily as a result of an increase in completed block hours for the comparable periods.
+Added: As a result of a higher number of passengers carried on our prorate routes and an increase in the number of prorate and charter flights operated year-over-year, our prorate and SWC revenue increased $29.7 million, or 29.4%, for the three months ended March 31, 2025, as compared to the three months ended March 31, 2024.
Operating Expenses
−Removed: Our total operating expenses increased $64.5 million, or 9.0%, for the three months ended September 30, 2024, compared to the three months ended September 30, 2023.
−Removed: The increase in operating expenses was primarily due to an increase in our direct operating expenses associated with the increase in the number of flights we operated.
−Removed: Departures increased from 180,069 for the three months ended September 30, 2023 to 201,397 for the three months ended September 30, 2024, or by 11.8%.
+Added: Our total operating expenses increased $105.0 million, or 14.9%, for the three months ended March 31, 2025, compared to the three months ended March 31, 2024.
+Added: The increase in operating expenses was primarily due to an increase in our direct operating expenses associated with the increase in the number of flights we operated for the three months ended March 31, 2025, compared to the three months ended March 31, 2024.
+Added: Departures increased from 169,432 for the three months ended March 31, 2024 to 201,838 for the three months ended March 31, 2025, or by 19.1%, and our total block hours increased 21.5% for the three months ended March 31, 2025, as compared to the three months ended March 31, 2024.
Additional details regarding the increase in our operating expenses are described in the section of this Report entitled “Results of Operations.”
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Aircraft in Service or Under Contract
−Removed: September 30, 2024
+Added: March 31, 2025
December 31, 2024
−Removed: September 30, 2023
+Added: March 31, 2024
+Added: CRJ700s/CRJ550s
Critical Accounting Policies and Estimates
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The application of these accounting policies involves the exercise of judgment and the use of assumptions as to future uncertainties and, as a result, actual results will likely differ, and may differ materially, from such estimates.
−Removed: There have been no significant changes in our critical accounting estimates during the nine months ended September 30, 2024.
+Added: There have been no significant changes in our critical accounting estimates during the three months ended March 31, 2025.
Recent Accounting Pronounceme nts
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Results of Operations
−Removed: Three Months Ended September 30, 2024 and 2023
+Added: Three Months Ended March 31, 2025 and 2024
Operational Statistics
The following table sets forth our major operational statistics and the associated percentage changes for the periods identified below.
−Removed: The increase in block hours, departures and passengers carried during the three months ended September 30, 2024, compared to the three months ended September 30, 2023, was primarily due to an increase in the number of available captains during the three months ended September 30, 2024, compared to the three months ended September 30, 2023, which allowed for a higher scheduled utilization of our aircraft.
−Removed: For the three months ended September 30,
+Added: The increase in block hours, departures and passengers carried during the three months ended March 31, 2025, compared to the three months ended March 31, 2024, was primarily due to an increase in the number of available captains during the three months ended March 31, 2025, compared to the three months ended March 31, 2024, which allowed for a higher scheduled utilization of our aircraft.
+Added: For the three months ended March 31,
Block hours by aircraft type:
+Added: CRJ700s/CRJ550s
Total block hours
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The following table summarizes our operating revenue for the periods indicated (dollar amounts in thousands):
−Removed: For the three months ended September 30,
+Added: For the three months ended March 31,
Flying agreements
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We disaggregate our flying agreements revenue into the following categories (dollar amounts in thousands):
−Removed: For the three months ended September 30,
+Added: For the three months ended March 31,
Capacity purchase agreements flight operations revenue
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Flying agreements revenue
−Removed: The increase in “Capacity purchase agreements flight operations revenue” of $112.4 million, or 22.0%, was primarily due to a 15.0% increase in block hour production and a decrease in deferred revenue related to fixed monthly payments for flight operations received under our capacity purchase agreements for the three months ended September 30, 2024, compared to the three months ended September 30, 2023.
+Added: The increase in “Capacity purchase agreements flight operations revenue” of $95.0 million, or 17.5%, was primarily due to a 21.5% increase in block hour production and an increase in the recognition of revenue that was previously deferred related to fixed monthly payments for flight operations received under our capacity purchase agreements for the three months ended March 31, 2025, compared to the three months ended March 31, 2024.
Under our capacity purchase agreements, we are paid a fixed amount per month per aircraft over the contract term.
−Removed: We recognize the fixed amount per aircraft related to operating the aircraft as revenue proportionately to the number of block hours we complete for each reporting period.
+Added: We recognize the total projected fixed monthly payments per aircraft as revenue proportionately to the number of block hours we complete for each reporting period, relative to the estimated number of block hours we anticipate completing over the remaining contract term.
Under our capacity purchase agreements, the performance obligation of each completed flight is measured in block hours incurred for each completed flight.
−Removed: Beginning January 1, 2024, certain scheduled fixed monthly payments under our capacity purchase agreements transitioned to variable payments, which are calculated at a rate per block hour.
−Removed: Based on the number of completed block hours during the three months ended September 30, 2024, we recognized $18.2 million of previously deferred revenue, net of unbilled revenue, related to the non-lease fixed monthly payments we received associated with our flight operations revenues.
−Removed: For the three months ended September 30, 2023, we deferred recognizing $37.2 million of revenue, net of unbilled revenue, related to fixed monthly payments received associated with our flight operations revenues.
+Added: Based on the number of completed block hours during the three months ended March 31, 2025, we recognized $9.6 million of previously deferred revenue, net of unbilled revenue, related to the non-lease fixed monthly payments we received associated with our flight operations revenues.
+Added: For the three months ended March 31, 2024, we recognized $0.4 million of previously deferred revenue, net of unbilled revenue, related to non-lease fixed monthly payments received associated with our flight operations revenues.
The timing of our revenue recognition related to the fixed payments associated with our flight operations will be adjusted over the remaining contract term for each capacity purchase agreement based on the number of block hours we complete each reporting period relative to the number of block hours we anticipate completing over the remaining contract term of each capacity purchase agreement.
−Removed: The increase in “Capacity purchase agreements aircraft lease revenue” of $16.1 million, or 13.4%, was primarily due to an increase in variable lease revenue as a result of certain scheduled fixed monthly lease payments that transitioned beginning January 1, 2024 to variable payments under our capacity purchase agreements.
+Added: The increase in “Capacity purchase agreements aircraft lease revenue” of $13.0 million, or 9.8%, was primarily due to a contract extension that reallocated certain fixed monthly lease revenue from flight operations revenue under one of our capacity purchase agreements during the three months ended March 31, 2025.
Under our capacity purchase agreements, a portion of the consideration we are paid is designed as reimbursement for certain aircraft ownership costs and is considered lease revenue, including fixed monthly payments and variable payments.
We recognize the fixed monthly lease payments as lease revenue using the straight-line basis over the capacity purchase agreement term and variable lease payments are recognized in the period when the block hours are completed.
−Removed: W e recognized $0.5 million of previously deferred lease revenue during the three months ended September 30, 2024, using the straight-line basis for fixed monthly lease payments, whereas we deferred recognizing lease revenue on $19.3 million during the three months ended September 30, 2023.
+Added: Additionally, we recognized $3.3 million of previously deferred lease revenue, net of unbilled revenue, during the three months ended March 31, 2025, using the straight-line basis for fixed monthly lease payments, compared to recognizing $0.5 million of previously deferred revenue during the three months ended March 31, 2024.
The deferred revenue balance applicable to each contract will be recorded as revenue over the term of each respective contract.
−Removed: For clarity, in total we recognized $18.7 million of previously deferred revenue, net of unbilled
−Removed: revenue, during the three months ended September 30, 2024, compared to deferring revenue, net of unbilled revenue, of $56.5 million during the three months ended September 30, 2023.
−Removed: Our total deferred revenue balance, net of unbilled revenue, was $342.2 million as of September 30, 2024, compared to total deferred revenue, net of unbilled revenue, of $367.3 million as of December 31, 2023.
−Removed: The increase in prorate agreements and SWC revenue of $13.1 million, or 11.9%, was primarily due to an increase in prorate passengers and passenger revenue we received on routes we operated under our prorate agreements during the three months ended September 30, 2024, compared to the three months ended September 30, 2023.
−Removed: Additionally, a portion of the increase was attributed to an increase in SWC revenue during the three months ended September 30, 2024, compared to the three months ended September 30, 2023.
−Removed: The increase in lease, airport services and other revenues of $5.0 million, or 20.7%, was primarily due to an increase in leased assets and lease rates for leases to third parties during the three months ended September 30, 2024, compared to the three months ended September 30, 2023.
+Added: For clarity, under our “Capacity purchase agreements flight operations revenue” and “Capacity
+Added: purchase agreements aircraft lease revenue” combined, we recognized $12.9 million of previously deferred revenue, net of unbilled revenue, during the three months ended March 31, 2025, compared to recognizing $0.9 million of deferred revenue, net of unbilled revenue, during the three months ended March 31, 2024.
+Added: Our total deferred revenue balance associated with our “Capacity purchase agreements flight operations revenue” and our “Capacity purchase agreements aircraft lease revenue,” net of unbilled revenue, was $309.5 million as of March 31, 2025, compared to total deferred revenue, net of unbilled revenue, of $322.4 million as of December 31, 2024.
+Added: The increase in prorate agreements and SWC revenue of $29.7 million, or 29.4%, was primarily due to an increase in prorate passengers and passenger revenue we received on routes we operated under our prorate agreements during the three months ended March 31, 2025, compared to the three months ended March 31, 2024.
+Added: Additionally, a portion of the increase was attributed to an increase in SWC revenue during the three months ended March 31, 2025, compared to the three months ended March 31, 2024.
+Added: The increase in lease, airport services and other revenues of $7.1 million, or 28.2%, was primarily due to an increase in the number of leased assets and lease rates for leases to third parties during the three months ended March 31, 2025, compared to the three months ended March 31, 2024.
Operating Expenses
Individual expense components attributable to our operations are set forth in the following table (dollar amounts in thousands):
−Removed: For the three months ended September 30,
+Added: For the three months ended March 31,
Salaries, wages and benefits
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Depreciation and amortization
−Removed: Aircraft fuel
Airport-related expenses
−Removed: Aircraft rentals
+Added: Aircraft fuel
Other operating expenses
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Salaries, wages and benefits.
−Removed: The $44.4 million, or 13.3%, increase in salaries, wages and benefits was primarily due to an increase in direct labor costs that resulted from the higher number of flights we operated during the three months ended September 30, 2024, compared to the three months ended September 30, 2023.
+Added: The $26.3 million, or 7.5%, increase in salaries, wages and benefits was primarily due to an increase in direct labor costs that resulted from the higher number of flights we operated during the three months ended March 31, 2025, compared to the three months ended March 31, 2024.
Aircraft maintenance, materials and repairs.
−Removed: The $3.2 million, or 1.8%, increase in aircraft maintenance expense was primarily due to higher flight volume, which increased our maintenance activity and related expenses, offset by a decrease in our engine maintenance events and related expenses for the three months ended September 30, 2024, compared to the three months ended September 30, 2023 .
+Added: The $63.7 million, or 43.8%, increase in aircraft maintenance expense was primarily due to incremental maintenance costs incurred on our CRJ fleet and an increase in our flight volume, which increased our maintenance activity and related expenses, for the three months ended March 31, 2025, compared to the three months ended March 31, 2024 .
Depreciation and amortization.
−Removed: The $0.1 million, or 0.1%, increase in depreciation and amortization expense was primarily due to an increase in depreciation expense related to the acquisition of three new E175 aircraft and spare engines since September 30, 2023, offset by certain CRJ aircraft and engines that were depreciated to their estimated residual value since September 30, 2023.
+Added: The $6.4 million, or 6.7%, decrease in depreciation and amortization expense was primarily a result of extending the estimated useful lives on our CRJ700/CRJ550 fleet by an average of three years and revising the residual values of the assets accordingly during the fourth quarter of 2024, offset by an increase in depreciation expense related to the acquisition of five new E175 aircraft and spare engines since March 31, 2024.
Aircraft fuel.
−Removed: The $0.6 million, or 2.6%, decrease in fuel cost was primarily due to a decrease in our average fuel cost per gallon from $3.83 for the three months ended September 30, 2023, to $3.10 for the three months ended September 30, 2024, offset by an increase in the number of flights we operated under our prorate agreements and SWC and the corresponding increase in gallons of fuel we purchased.
+Added: The $3.3 million, or 15.7%, increase in fuel cost was primarily due to an increase in the number of flights we operated under our prorate agreements and under SWC and the corresponding increase in gallons of fuel we purchased, offset by a decrease in our average fuel cost per gallon from $3.51 for the three months ended March 31, 2024 to $3.03 for the three months ended March 31, 2025.
We purchase and incur expense for all fuel on flights operated under our prorate agreements and SWC.
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The following table summarizes the gallons of fuel we purchased under our prorate agreements and SWC, for the periods indicated:
−Removed: For the three months ended September 30,
+Added: For the three months ended March 31,
(in thousands)
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For clarity, our employee airport customer service labor costs are reflected in salaries, wages and benefits and customer service labor costs we outsource to third parties are included in airport-related expenses.
−Removed: The $4.2 million, or 23.1%, increase in airport-related expenses for the three months ended September 30, 2024, compared to the three months ended September 30, 2023, was primarily due to an increase in subcontracted airport services and landing fees as a result of an increase in the number of flights we operated under our prorate agreements.
−Removed: Aircraft rentals.
−Removed: The $0.8 million, or 36.2%, decrease in aircraft rentals was primarily related to a decrease in our leased aircraft since the three months ended September 30, 2023.
−Removed: During 2023, we acquired 26 CRJ700 aircraft, eight CRJ200 aircraft and one CRJ900 aircraft under early lease buyouts.
+Added: The $6.9 million, or 33.2%, increase in airport-related expenses for the three months ended March 31, 2025, compared to the three months ended March 31, 2024, was primarily due to an increase in subcontracted airport services, weather related aircraft deicing costs and landing fees as a result of an increase in the number of flights we operated under our prorate agreements.
Other operating expenses.
−Removed: Other operating expenses primarily consist of property taxes, hull and liability insurance, simulator costs, crew per diem and crew hotel costs.
−Removed: The $13.9 million, or 21.4%, increase was primarily a result of the higher number of flights we operated during the three months ended September 30, 2024, compared to the three months ended September 30, 2023, such as increased crew per diem and crew hotel costs.
−Removed: Summary of interest expense, interest income, other income (loss), net and provision for income taxes
+Added: Other operating expenses primarily consist of aircraft rentals, property taxes, hull and liability insurance, simulator costs, crew per diem, crew hotel costs and credit loss reserves.
+Added: The $11.1 million, or 16.0%, increase in other operating expenses was primarily related to an increase in other operating costs, such as crew per diem and crew hotel costs, as a result of the higher number of flights we operated during the three months ended March 31, 2025, compared to the three months ended March 31, 2024.
+Added: Summary of interest expense, interest income, other expense, net and provision for income taxes
Interest Expense.
−Removed: The $4.7 million, or 14.5%, decrease in interest expense was primarily related to a decrease in outstanding debt.
−Removed: At September 30, 2024 we had $2.7 billion of outstanding debt, compared to $3.1 billion at September 30, 2023.
+Added: Interest expense decreased $2.7 million, or 9.1%, for the three months ended March 31, 2025 as compared to the three months ended March 31, 2024.
+Added: The decrease in interest expense was primarily related to a decrease in outstanding debt.
+Added: At March 31, 2025 we had $2.6 billion of outstanding debt, compared to $2.9 billion at March 31, 2024.
+Added: Our average effective interest rate for the three months ended March 31, 2025 and 2024, was 4.3% and 4.1%, respectively.
Interest income.
−Removed: Interest income increased $1.3 million, from $11.2 million for the three months ended September 30, 2023, to $12.5 million for the three months ended September 30, 2024.
−Removed: The increase in interest income was primarily related to an increase in average interest rates attributed to our marketable securities for the three months ended September 30, 2024, compared to the three months ended September 30, 2023.
−Removed: Other income (loss), net.
−Removed: Other income (loss), net increased $3.7 million during the three months ended September 30, 2024, compared to the three months ended September 30, 2023.
−Removed: Other income (loss), net primarily consists of the unrealized and realized gains and losses on our investments in other companies, income or loss related to our equity method investments and gains or losses on the sale of assets.
−Removed: The increase in other income (loss), net was primarily a result of a decrease in the loss on the fair value of our investments in other companies for the three months ended September 30, 2024, compared to the three months ended September 30, 2023.
−Removed: Provision (benefit) for income taxes.
−Removed: For the three months ended September 30, 2024 and 2023, our effective income tax rates were 22.8% and 3.6%, respectively, which included the statutory federal income tax rate of 21% and other reconciling income tax items, including state income taxes and the impact of non-deductible expenses.
−Removed: The increase in the effective tax rate was primarily related to lower pre-tax income for the three months ended September 30, 2023, compared to the three months ended September 30, 2024, and a release of $7.6 million of a previously recorded uncertain tax position liability for the three months ended September 30, 2023.
−Removed: Primarily due to the factors described above, we generated net income of $89.7 million, or $2.16 per diluted share, for the three months ended September 30, 2024, compared to net income of $23.5 million, or $0.55 per diluted share, for the three months ended September 30, 2023.
−Removed: Nine Months Ended September 30, 2024 and 2023
−Removed: Operational Statistics
−Removed: The following table sets forth our major operational statistics and the associated percentage changes for the periods identified below.
−Removed: The increase in block hours, departures and passengers carried during the nine months ended September 30, 2024, compared to the nine months ended September 30, 2023, was primarily due to an increase in the number of available captains during the nine months ended September 30, 2024, compared to the nine months ended September 30, 2023.
−Removed: For the nine months ended September 30,
−Removed: Block hours by aircraft type:
−Removed: Total block hours
−Removed: Passengers carried
−Removed: Passenger load factor
−Removed: Average passenger trip length (miles)
+Added: Interest income decreased $1.5 million, from $11.6 million for the three months ended March 31, 2024, to $10.1 million for the three months ended March 31, 2025.
+Added: The decrease in interest income was primarily related to a decrease in our marketable securities balance from $641.2 million at March 31, 2024, to $571.9 million at March 31, 2025.
+Added: Other expense, net.
+Added: Other expense, net decreased $0.5 million during the three months ended March 31, 2025, compared to the three months ended March 31, 2024.
+Added: Other expense, net primarily consists of the unrealized and realized gains and losses on our investments in other companies, income or loss related to our equity method investments and gains or losses on the sale of assets.
+Added: The decrease in other expense, net was primarily a result of a decrease in the fair value of our investments in other companies for the three months ended March 31, 2025, compared to the three months ended March 31, 2024.
+Added: Provision for income taxes.
+Added: For the three months ended March 31, 2025 and 2024, our effective income tax rates were 16.7% and 24.8%, respectively, which included the statutory federal income tax rate of 21% and other reconciling income tax items, including state income taxes, the impact of non-deductible expenses and a discrete tax benefit on employee equity awards that vested during the period.
+Added: The decrease in the effective tax rate was primarily related to a higher discrete tax benefit from additional tax deductions generated from employee equity awards that vested for the three months ended March 31, 2025, compared to the three months ended March 31, 2024.
+Added: Primarily due to the factors described above, we generated net income of $100.6 million, or $2.42 per diluted share, for the three months ended March 31, 2025, compared to net income of $60.3 million, or $1.45 per diluted share, for the three months ended March 31, 2024.
+Added: Our Business Segments
+Added: Three Months Ended March 31, 2025 and 2024
+Added: For the three months ended March 31, 2025, our reportable segments, which were the basis of our internal financial reporting, consisted of (1) the operations of SkyWest Airlines and SWC (collectively, “SkyWest Airlines and SWC”) and (2) SkyWest Leasing activities.
+Added: Our segment disclosure relates to components of our business for which separate financial information is available to, and regularly evaluated by, our chief operating decision maker.
+Added: The following table sets forth our SkyWest Airlines and SWC segment data for the three months ended March 31, 2025 and 2024 (in thousands):
+Added: For the three months ended March 31,
+Added: (dollar amounts in thousands)
Operating revenues
−Removed: The following table summarizes our operating revenue for the periods indicated (dollar amounts in thousands):
−Removed: For the nine months ended September 30,
−Removed: Flying agreements
−Removed: Lease, airport services and other
−Removed: Total operating revenues
−Removed: Flying agreements revenue primarily consists of revenue earned on flights we operate under our capacity purchase agreements and prorate agreements with our major airline partners and on-demand charter flights.
−Removed: Lease, airport services and other revenues consist of revenue earned from leasing aircraft and spare engines to third parties separate from our capacity purchase agreements and providing airport counter, gate and ramp services.
−Removed: We disaggregate our flying agreements revenue into the following categories (dollar amounts in thousands):
−Removed: For the nine months ended September 30,
−Removed: Capacity purchase agreements flight operations revenue
−Removed: Capacity purchase agreements aircraft lease revenue
−Removed: Prorate agreements and SWC revenue
−Removed: Flying agreements revenue
−Removed: The increase in “Capacity purchase agreements flight operations revenue” of $283.6 million, or 19.2%, was primarily due to a 10.8% increase in block hour production and a decrease in deferred revenue related to fixed monthly payments for flight operations received under our capacity purchase agreements for the nine months ended September 30, 2024, compared to the nine months ended September 30, 2023.
−Removed: Under our capacity purchase agreements, we are paid a fixed amount per month per aircraft over the contract term.
−Removed: We recognize the fixed amount per aircraft related to operating the aircraft as revenue proportionately to the number of block hours we complete for each reporting period.
−Removed: Under our capacity purchase agreements, the performance obligation of each completed flight is measured in block hours incurred for each completed flight.
−Removed: Beginning January 1, 2024, certain scheduled fixed monthly payments
−Removed: under our capacity purchase agreements transitioned to variable payments, which are calculated at a rate per block hour.
−Removed: Based on the number of completed block hours during the nine months ended September 30, 2024, we recognized $23.6 million of previously deferred revenue, net of unbilled revenue, related to the non-lease fixed monthly payments we received associated with our flight operations revenues.
−Removed: For the nine months ended September 30, 2023, we deferred recognizing $120.6 million of revenue, net of unbilled revenue, related to fixed monthly payments received associated with our flight operations revenues.
−Removed: The timing of our revenue recognition related to the fixed payments associated with our flight operations will be adjusted over the remaining contract term for each capacity purchase agreement based on the number of block hours we complete each reporting period relative to the number of block hours we anticipate completing over the remaining contract term of each capacity purchase agreement.
−Removed: The increase in “Capacity purchase agreements aircraft lease revenue” of $48.5 million, or 13.6%, was primarily due to an increase in variable lease revenue as a result of certain scheduled fixed monthly lease payments that transitioned beginning January 1, 2024 to variable payments under our capacity purchase agreements.
−Removed: Under our capacity purchase agreements, a portion of the consideration we are paid is designed as reimbursement for certain aircraft ownership costs and is considered lease revenue, including fixed monthly payments and variable payments.
−Removed: We recognize the fixed monthly lease payments as lease revenue using the straight-line basis over the capacity purchase agreement term and variable lease payments are recognized in the period when the block hours are completed.
−Removed: W e recognized $1.5 million of previously deferred lease revenue during the three and nine months ended September 30, 2024, using the straight-line basis for fixed monthly lease payments, whereas we deferred recognizing lease revenue on $59.3 million during the nine months ended September 30, 2023.
−Removed: The deferred revenue balance applicable to each contract will be recorded as revenue over the term of each respective contract.
−Removed: For clarity, in total we recognized $25.1 million of previously deferred revenue, net of unbilled revenue, during the nine months ended September 30, 2024, compared to deferring revenue, net of unbilled revenue, of $179.9 million during the nine months ended September 30, 2023.
−Removed: Our total deferred revenue balance, net of unbilled revenue, was $342.2 million as of September 30, 2024, compared to total deferred revenue, net of unbilled revenue, of $367.3 million as of December 31, 2023.
−Removed: The increase in prorate agreements and SWC revenue of $61.7 million, or 22.9%, was primarily due to an increase in prorate passengers and passenger revenue we received on routes we operated under our prorate agreements during the nine months ended September 30, 2024, compared to the nine months ended September 30, 2023.
−Removed: Additionally, a portion of the increase was attributed to an increase in SWC revenue during the nine months ended September 30, 2024, compared to the nine months ended September 30, 2023, as SWC began operations in May 2023.
−Removed: The increase in lease, airport services and other revenues of $6.1 million, or 7.8%, was primarily due to an increase in leased assets and lease rates for leases to third parties during the nine months ended September 30, 2024, compared to the nine months ended September 30, 2023.
−Removed: Operating Expenses
−Removed: Individual expense components attributable to our operations are set forth in the following table (dollar amounts in thousands):
−Removed: For the nine months ended September 30,
Salaries, wages and benefits
1 unchanged sentence
Depreciation and amortization
−Removed: Aircraft fuel
+Added: Interest expense
+Added: Other segment items (1)
+Added: SkyWest Airlines and SWC Segment profit (2)
+Added: (1) Other segment items for SkyWest Airlines and SWC include aircraft fuel;
airport related expenses;
−Removed: Aircraft rentals
−Removed: Other operating expenses
−Removed: Total operating expenses
+Added: other operating expenses consisting primarily of property taxes, hull and liability insurance, simulator costs, crew per diem and crew hotel costs;
+Added: interest income and other expense, net.
+Added: (2) Segment profit is equal to income before income taxes.
+Added: As a result of adopting ASC 2023-07, we included interest income and other income in the recast segment profit for each segment for the three months ended March 31, 2024 and 2025.
+Added: SkyWest Airlines and SWC Segment Profit.
+Added: SkyWest Airlines and SWC segment profit was $54.3 million for the three months ended March 31, 2025, compared to $5.0 million for the three months ended March 31, 2024.
+Added: SkyWest Airlines and SWC block hour production increased 21.5%, from 289,801 for the three months ended March 31, 2024 to 352,155 for the three months ended March 31, 2025, primarily due to an increase in the number of available captains, which allowed for a higher scheduled utilization of our aircraft.
+Added: Significant items contributing to the SkyWest Airlines and SWC segment profit for the three months ended March 31, 2025 are set forth below.
+Added: SkyWest Airlines and SWC operating revenues increased $154.8 million, or 23.9%, from the three months ended March 31, 2024, to the three months ended March 31, 2025, primarily as a result of an increase in block hour production during the three months ended March 31, 2025, compared to the three months ended March 31, 2024.
+Added: SkyWest Airlines and SWC’s salaries, wages and benefits expense increased $26.3 million, or 7.5%, primarily due to an increase in direct labor costs that resulted from the higher number of flights we operated during the three months ended March 31, 2025, compared to the three months ended March 31, 2024.
+Added: SkyWest Airlines and SWC’s aircraft maintenance, materials and repairs expense increased $60.4 million, or 42.8%, primarily due to incremental maintenance costs incurred on our CRJ fleet and higher flight volume, which increased the maintenance activity and related expenses, for the three months ended March 31, 2025, compared to the three months ended March 31, 2024.
+Added: SkyWest Airlines and SWC’s depreciation and amortization expense increased $1.6 million, or 4.5%, primarily due to acquiring additional assets, including engines and CRJ550 aircraft since March 31, 2024.
+Added: SkyWest Airlines and SWC’s interest expense decreased $0.5 million, or 14.2%, primarily due to a decrease in outstanding debt from March 31, 2024 to March 31, 2025.
+Added: SkyWest Airlines and SWC’s other segment items increased $17.7 million, or 16.0%, primarily related to an increase in other operating costs, such as crew per diem and crew hotel costs, as a result of the higher number of flights we operated during the three months ended March 31, 2025, compared to the three months ended March 31, 2024.
+Added: The following table sets forth our SkyWest Leasing segment data for the three months ended March 31, 2025 and 2024 (in thousands):
+Added: For the three months ended March 31,
+Added: (dollar amounts in thousands)
+Added: Operating revenues
Salaries, wages and benefits
−Removed: The $92.8 million, or 9.4%, increase in salaries, wages and benefits was primarily due to an increase in direct labor costs that resulted from the higher number of flights we operated during the nine months ended September 30, 2024, compared to the nine months ended September 30, 2023.
Aircraft maintenance, materials and repairs
−Removed: The $27.2 million, or 5.6%, increase in aircraft maintenance expense was primarily due to higher flight volume, which increased maintenance activity and related expenses, for the nine months ended September 30, 2024, compared to the nine months ended September 30, 2023 .
Depreciation and amortization
−Removed: The $1.5 million, or 0.5%, increase in depreciation and amortization expense was primarily due to an increase in depreciation expense related to the acquisition of three new E175 aircraft and spare engines since September 30, 2023.
−Removed: Aircraft fuel.
−Removed: The $2.6 million, or 4.2%, increase in fuel cost was primarily due to an increase in the number of flights we operated under our prorate agreements and SWC and the corresponding increase in gallons of fuel we purchased, offset by a decrease in our average fuel cost per gallon from $3.71 for the nine months ended September 30, 2023, to $3.30 for the nine months ended September 30, 2024.
−Removed: We purchase and incur expense for all fuel on flights operated under our prorate agreements and SWC.
−Removed: All fuel costs incurred under our capacity purchase agreements are either purchased directly by our major airline partner, or if purchased by us, we record the direct reimbursement as a reduction to our fuel expense.
−Removed: The following table summarizes the gallons of fuel we purchased under our prorate agreements and SWC, for the periods indicated:
−Removed: For the nine months ended September 30,
−Removed: (in thousands)
−Removed: Fuel gallons purchased
−Removed: Airport-related expenses.
−Removed: Airport-related expenses include airport-related customer service costs such as outsourced airport gate and ramp agent services, airport security fees, passenger interruption costs, deicing, landing fees and station rents.
−Removed: For clarity, our employee airport customer service labor costs are reflected in salaries, wages and benefits and customer service labor costs we outsource to third parties are included in airport-related expenses.
−Removed: The $7.4 million, or 13.8%, increase in airport-related expenses for the nine months ended September 30, 2024, compared to the nine months ended September 30, 2023, was primarily due to an increase in subcontracted airport services and landing fees as a result of an increase in the number of flights we operated under our prorate agreements.
−Removed: Aircraft rentals.
−Removed: The $20.1 million, or 83.7%, decrease in aircraft rentals was primarily related to a decrease in our leased aircraft since the nine months ended September 30, 2023.
−Removed: During 2023, we acquired 26 CRJ700 aircraft, eight CRJ200 aircraft and one CRJ900 aircraft under early lease buyouts.
−Removed: Other operating expenses.
−Removed: Other operating expenses primarily consist of property taxes, hull and liability insurance, simulator costs, crew per diem and crew hotel costs.
−Removed: The $14.4 million, or 7.0%, increase was primarily related to an increase in other operating costs as a result of the higher number of flights we operated during the nine months ended September 30, 2024, compared to the nine months ended September 30, 2023, such as crew per diem and crew hotel costs, offset by the timing and the higher number of training events during the nine months ended September 30, 2023, compared to the nine months ended September 30, 2024.
−Removed: Summary of interest expense, interest income, other income (loss), net and provision for income taxes
Interest expense
−Removed: The $13.3 million, or 13.3%, decrease in interest expense was primarily related to a decrease in outstanding debt.
−Removed: At September 30, 2024 we had $2.7 billion of outstanding debt, compared to $3.1 billion at September 30, 2023.
−Removed: Interest income.
−Removed: Interest income increased $4.3 million, from $31.8 million for the nine months ended September 30, 2023, to $36.1 million for the nine months ended September 30, 2024.
−Removed: The increase in interest income was primarily related to an increase in average interest rates attributed to our marketable securities for the nine months ended September 30, 2024, compared to the nine months ended September 30, 2023.
−Removed: Other income (loss), net.
−Removed: Other income (loss), net decreased $9.1 million during the nine months ended September 30, 2024, compared to the nine months ended September 30, 2023.
−Removed: Other income (loss), net primarily consists of the unrealized and realized gains and losses on our investments in other companies, income or loss related to our equity method investments and gains or losses on the sale of assets.
−Removed: The decrease in other income (loss), net was primarily a result of a decrease in the fair value of our investments in other companies for the nine months ended September 30, 2024, compared to the nine months ended September 30, 2023.
−Removed: Provision (benefit) for income taxes.
−Removed: For the nine months ended September 30, 2024 and 2023, our effective income tax rates were 24.4% and (6.0)%, respectively, which included the statutory federal income tax rate of 21% and other reconciling income tax items, including state income taxes, the impact of non-deductible expenses and a discrete tax benefit or expense on employee equity transactions.
−Removed: The increase in the effective tax rate was primarily related to higher pre-tax earnings for the nine months ended September 30, 2024, compared to the nine months ended September 30, 2023, and a release of $7.6 million of a previously recorded uncertain tax position liability for the nine months ended September 30, 2023, partially offset by the impact of non-deductible expense on lower pre-tax earnings for the nine months ended September 30, 2023, compared to the nine months ended September 30, 2024.
−Removed: Primarily due to the factors described above, we generated net income of $225.6 million, or $5.44 per diluted share, for the nine months ended September 30, 2024, compared to net income of $16.8 million, or $0.37 per diluted share, for the nine months ended September 30, 2023.
−Removed: Our Business Segments
−Removed: Three Months Ended September 30, 2024 and 2023
−Removed: For the three months ended September 30, 2024, we had two reportable segments, which were the basis of our internal financial reporting:
−Removed: (1) the operations of SkyWest Airlines and SWC and (2) SkyWest Leasing activities.
−Removed: Our segment disclosure relates to components of our business for which separate financial information is available to, and regularly evaluated by, our chief operating decision maker.
−Removed: For the three months ended September 30,
−Removed: (dollar amounts in thousands)
−Removed: Operating Revenues:
−Removed: SkyWest Airlines and SWC
−Removed: SkyWest Leasing
−Removed: Total Operating Revenues
−Removed: Operating Expenses and Interest Expense:
−Removed: SkyWest Airlines and SWC
−Removed: SkyWest Leasing
−Removed: Total Operating Expenses and Interest Expense (1)
−Removed: Segment profit (loss):
−Removed: SkyWest Airlines and SWC
−Removed: SkyWest Leasing
−Removed: Total Segment Profit
−Removed: Interest Income
−Removed: Other Income (Loss), net
−Removed: Consolidated Income Before Taxes
−Removed: (1) We include interest expense in our segment profit (loss) given our interest expense is primarily attributed to debt associated with financing aircraft under our capacity purchase agreements and revenue earned under our capacity purchase agreements is intended to compensate us for our aircraft ownership costs, including interest expense.
−Removed: SkyWest Airlines and SWC Segment Profit (Loss).
−Removed: SkyWest Airlines and SWC segment profit was $42.9 million for the three months ended September 30, 2024, compared to a segment loss of $30.3 million for the three months ended September 30, 2023.
−Removed: SkyWest Airlines and SWC block hour production increased to 334,459, or 15.0%, for the three months ended September 30, 2024, from 290,830 for the three months ended September 30, 2023, primarily due to an increase in the number of available captains, which allowed for a higher scheduled utilization of our aircraft.
−Removed: Significant items contributing to the SkyWest Airlines and SWC segment profit for the three months ended September 30, 2024 are set forth below.
−Removed: SkyWest Airlines and SWC operating revenues increased $131.6 million, or 21.0%, from the three months ended September 30, 2023, to the three months ended September 30, 2024.
−Removed: SkyWest Airlines recognizes revenue attributed to flight operations received as fixed monthly payments per aircraft proportionate to the number of block hours completed during each reporting period, relative to the estimated number of block hours we anticipate completing over the remaining contract term.
−Removed: During the three months ended September 30, 2024, SkyWest Airlines recognized $18.2 million of previously deferred revenue, net of unbilled revenue, related to fixed monthly payments we received associated with our flight operations revenues, compared to deferring $37.2 million of revenue, net of unbilled revenue, related to fixed monthly payments received associated with our flight operations revenues during the three months ended September 30, 2023.
−Removed: Additionally, the increase in SkyWest Airlines and SWC operating revenues was attributed to an increase in block hour production during the three months ended September 30, 2024, compared to the three months ended September 30, 2023.
−Removed: SkyWest Airlines and SWC operating expenses and interest expense increased $58.5 million, or 8.9%, from the three months ended September 30, 2023, to the three months ended September 30, 2024, due to the following primary factors:
−Removed: ● SkyWest Airlines and SWC’s salaries, wages and benefits expense increased $44.4 million, or 13.4%, primarily due to an increase in direct labor costs that resulted from the higher number of flights we operated during the three months ended September 30, 2024, compared to the three months ended September 30, 2023.
−Removed: ● SkyWest Airlines and SWC’s aircraft maintenance, materials and repairs expense decreased $0.6 million, or 0.3%, primarily due to a decrease in our engine maintenance events and related expenses for the three months ended September 30, 2024, compared to the three months ended September 30, 2023, offset by higher flight volume, which increased the other maintenance activity and related expenses, for the three months ended September 30, 2024, compared to the three months ended September 30, 2023.
−Removed: ● SkyWest Airlines and SWC’s depreciation and amortization expense decreased by $0.2 million, or 0.6%, primarily due to certain CRJ aircraft and engines that were depreciated to their estimated residual value since September 30, 2023.
−Removed: ● SkyWest Airlines and SWC’s fuel expense decreased $0.6 million, or 2.6%, due to a decrease in our average fuel cost per gallon from $3.83 for the three months ended September 30, 2023, to $3.10 for the three months ended September 30, 2024 , offset by an increase in the number of flights we operated under our prorate agreements and SWC and the corresponding increase in gallons of fuel we purchased.
−Removed: ● SkyWest Airlines and SWC’s remaining airline expense increased $15.5 million, or 17.2%, primarily related to an increase in other operating costs as a result of the higher number of flights we operated during the three months ended September 30, 2024, compared to the three months ended September 30, 2023, such as crew per diem and crew hotel costs.
+Added: Other segment items (1)
SkyWest Leasing Segment profit (2)
−Removed: SkyWest Leasing profit increased $13.7 million, or 29.1%, during the three months ended September 30, 2024, compared to the three months ended September 30, 2023 .
−Removed: For the three months ended September 30, 2024, SkyWest Leasing recognized $0.5 million of previously deferred lease revenue, compared to deferring $19.3 million of lease revenue on the fixed monthly lease payments received for the three months ended September 30, 2023, under the straight-line basis.
−Removed: Additionally, SkyWest Leasing profit increased due to additional lease revenue from the E175 aircraft placed under contract since September 30, 2023, a decrease in interest expense as a result of a lower outstanding debt balance for the three months ended September 30, 2024, compared to the three months ended September 30, 2023, offset by an increase in maintenance costs for certain leased engines for the three months ended September 30, 2024, compared to the three months ended September 30, 2023.
−Removed: Nine Months Ended September 30, 2024 and 2023
−Removed: For the nine months ended September 30, 2024, we had two reportable segments, which were the basis of our internal financial reporting:
−Removed: (1) the operations of SkyWest Airlines and SWC and (2) SkyWest Leasing activities.
−Removed: Our segment disclosure relates to components of our business for which separate financial information is available to, and regularly evaluated by, our chief operating decision maker.
−Removed: For the nine months ended September 30,
−Removed: (dollar amounts in thousands)
−Removed: Operating Revenues:
−Removed: SkyWest Airlines and SWC
−Removed: SkyWest Leasing
−Removed: Total Operating Revenues
−Removed: Operating Expenses and Interest Expense:
−Removed: SkyWest Airlines and SWC
−Removed: SkyWest Leasing
−Removed: Total Operating Expenses and Interest Expense (1)
−Removed: Segment profit (loss):
−Removed: SkyWest Airlines and SWC
−Removed: SkyWest Leasing
−Removed: Total Segment Profit (Loss)
−Removed: Interest Income
−Removed: Other Income (Loss), net
−Removed: Consolidated Income Before Taxes
−Removed: (1) We include interest expense in our segment profit (loss) given our interest expense is primarily attributed to debt associated with financing aircraft under our capacity purchase agreements and revenue earned under our capacity purchase agreements is intended to compensate us for our aircraft ownership costs, including interest expense.
−Removed: SkyWest Airlines and SWC Segment Profit (Loss).
−Removed: SkyWest Airlines and SWC segment profit was $75.3 million for the nine months ended September 30, 2024, compared to a segment loss of $142.3 million for the nine months ended September 30, 2023.
−Removed: SkyWest Airlines and SWC block hour production increased to 941,722, or 10.8%, for the nine months ended September 30, 2024, from 849,689 for the nine months ended September 30, 2023, primarily due to an increase in the number of available captains, which allowed for a higher scheduled utilization of our aircraft.
−Removed: Significant items contributing to the SkyWest Airlines and SWC segment profit for the nine months ended September 30, 2024 are set forth below.
−Removed: SkyWest Airlines and SWC operating revenues increased $335.6 million, or 18.8%, from the nine months ended September 30, 2023, to the nine months ended September 30, 2024.
−Removed: SkyWest Airlines recognizes revenue attributed to flight operations received as fixed monthly payments per aircraft proportionate to the number of block hours completed during each reporting period, relative to the estimated number of block hours we anticipate completing over the remaining contract term.
−Removed: During the nine months ended September 30, 2024, SkyWest Airlines recognized $23.6 million of previously deferred revenue, net of unbilled revenue, related to fixed monthly payments we received associated with our flight operations revenues, compared to deferring $120.6 million of revenue, net of unbilled revenue, related to fixed monthly payments received associated with our flight operations revenues during the nine months ended September 30, 2023.
−Removed: Additionally, the increase in SkyWest Airlines and SWC operating revenues was attributed to an increase in block hour production during the nine months ended September 30, 2024, compared to the nine months ended September 30, 2023.
−Removed: SkyWest Airlines and SWC operating expenses and interest expense increased $118.0 million, or 6.1%, from the nine months ended September 30, 2023, to the nine months ended September 30, 2024, due to the following primary factors:
−Removed: ● SkyWest Airlines and SWC’s salaries, wages and benefits expense increased $92.8 million, or 9.4%, primarily due to an increase in direct labor costs that resulted from the higher number of flights we operated during the nine months ended September 30, 2024, compared to the nine months ended September 30, 2023.
−Removed: ● SkyWest Airlines and SWC’s aircraft maintenance, materials and repairs expense increased $20.1 million, or 4.3%, primarily due to higher flight volume, which increased the maintenance activity and related expenses, for the nine months ended September 30, 2024, compared to the nine months ended September 30, 2023.
−Removed: ● SkyWest Airlines and SWC’s depreciation and amortization expense decreased by $3.3 million, or 2.9%, primarily due to certain CRJ aircraft and engines that were depreciated to their estimated residual value since September 30, 2023.
−Removed: ● SkyWest Airlines and SWC’s fuel expense increased $2.6 million, or 4.2%, due to an increase in the number of flights we operated under our prorate agreements and SWC and the corresponding increase in gallons of fuel we purchased, offset by a decrease in our average fuel cost per gallon from $3.71 for the nine months ended September 30, 2023, to $3.30 for the nine months ended September 30, 2024 .
−Removed: ● SkyWest Airlines and SWC’s remaining airline expense increased $5.8 million, or 2.0%, primarily related to an increase in other operating costs as a result of the higher number of flights we operated during the nine months ended September 30, 2024, compared to the nine months ended September 30, 2023, such as crew per diem and crew hotel costs, offset by a decrease in aircraft rent expense due to the early lease buyouts of 35 CRJ aircraft in 2023.
+Added: (1) Other segment items for SkyWest Leasing include other operating expenses consisting primarily of property taxes and credit loss reserves;
+Added: aircraft rentals;
+Added: interest income and other expense, net.
+Added: (2) Segment profit is equal to income before income taxes.
+Added: As a result of adopting ASC 2023-07, we included interest income and other income in the recast segment profit for each segment for the three months ended March 31, 2024 and 2025.
SkyWest Leasing Segment Profit.
−Removed: SkyWest Leasing profit increased $69.8 million, or 58.8%, during the nine months ended September 30, 2024, compared to the nine months ended September 30, 2023 .
−Removed: For the nine months ended September 30, 2024, SkyWest Leasing recognized $1.5 million of previously deferred lease revenue, compared to deferring $59.3 million of lease revenue on the fixed monthly lease payments received for the nine months ended September 30, 2023, under the straight-line basis.
−Removed: Additionally, SkyWest Leasing profit increased due to additional lease revenue from the E175 aircraft placed under contract since September 30, 2023, a decrease in interest expense as a result of a lower outstanding debt balance for the nine months ended September 30, 2024, compared to the nine months ended September 30, 2023, and a gain related to reclassifying assets held for sale as held and used during the nine months ended September 30, 2024.
+Added: SkyWest Leasing profit decreased $8.7 million, or 11.6%, during the three months ended March 31, 2025, compared to the three months ended March 31, 2024 , primarily due to a contract extension that reallocated certain fixed monthly lease revenue to flight operations revenue under one of our capacity purchase agreements during the three months ended March 31, 2025 and a $4.2 million gain related to reclassifying assets held for sale as held and used during the three months ended March 31, 2024.
+Added: There was not a comparable gain during the three months ended March 31, 2025.
+Added: The decrease in depreciation and amortization expense was primarily a result of extending the estimated useful lives on our CRJ700/CRJ550 fleet during the fourth quarter of 2024.
Liquidity and Capital Resources
−Removed: As of September 30, 2024, we had $836.0 million in cash and cash equivalents and marketable securities.
−Removed: As of September 30, 2024, we had $75.1 million available for borrowings under our line of credit.
−Removed: Given our available liquidity as of September 30, 2024, we believe the working capital currently available to us will be sufficient to meet our present financial requirements, including planned capital expenditures, scheduled lease payments and debt service obligations for at least the next 12 months.
−Removed: Our total cash and marketable securities increased from $835.2 million as of December 31, 2023 to $836.0 million as of September 30, 2024, or by $0.8 million.
−Removed: At September 30, 2024, our total capital mix was 51.3% equity and 48.7% long-term debt, compared to 45.2% equity and 54.8% long-term debt at December 31, 2023.
−Removed: During the nine months ended September 30, 2024, we repurchased 0.5 million shares of our common stock for $38.4 million under share repurchase programs authorized by our Board of Directors.
−Removed: As of September 30, 2024, and December 31, 2023, we had $47.1 million and $49.1 million, respectively, in letters of credit and surety bonds outstanding with various banks and surety institutions.
−Removed: We had no restricted cash as of September 30, 2024, and December 31, 2023.
+Added: As of March 31, 2025, we had $750.9 million in cash and cash equivalents and marketable securities.
+Added: As of March 31, 2025, we had $75.0 million available for borrowings under our line of credit.
+Added: Given our available liquidity as of March 31, 2025, we believe the working capital currently available to us will be sufficient to meet our present financial requirements, including planned capital expenditures, scheduled lease payments and debt service obligations for at least the next 12 months.
+Added: Our total cash, cash equivalents and marketable securities decreased from $801.6 million as of December 31, 2024 to $750.9 million as of March 31, 2025, or by $50.7 million.
+Added: At March 31, 2025, our total capital mix (measured as a ratio of total stockholder equity and total long-term debt, including current maturities) was 49.2% equity and 50.8% total long-term debt, compared to 47.4% equity and 52.6% total long-term debt at December 31, 2024.
+Added: During the three months ended March 31, 2025, we repurchased 140,658 shares of our common stock for $13.7 million under a share repurchase program authorized by our Board of Directors.
+Added: As of both March 31, 2025, and December 31, 2024, we had $47.1 million in letters of credit and surety bonds outstanding with various banks and surety institutions.
+Added: We had no restricted cash as of March 31, 2025, and December 31, 2024.
Sources and Uses of Cash
Cash Position and Liquidity.
−Removed: The following table provides a summary of the net cash provided by (used in) our operating, investing and financing activities for the nine months ended September 30, 2024 and 2023, and our total cash and marketable securities positions as of September 30, 2024, and December 31, 2023 (in thousands):
−Removed: For the nine months ended September 30,
+Added: The following table provides a summary of the net cash provided by (used in) our operating, investing and financing activities for the three months ended March 31, 2025 and 2024, and our total cash and marketable securities positions as of March 31, 2025, and December 31, 2024 (in thousands):
+Added: For the three months ended March 31,
Net cash provided by operating activities
−Removed: Net cash provided by (used in) investing activities
+Added: Net cash used in investing activities
Net cash used in financing activities
−Removed: September 30,
Cash and cash equivalents
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Cash Flows provided by Operating Activities
−Removed: Our cash flows provided by operating activities was $506.6 million for the nine months ended September 30, 2024, compared to $511.9 million for the nine months ended September 30, 2023.
−Removed: Our operating cash flows are typically impacted by various factors including our net income, adjusted for non-cash expenses and gains such as depreciation expense, stock-based compensation expense and gains or losses on the disposal of assets;
+Added: Our cash flows provided by operating activities was $171.0 million for the three months ended March 31, 2025, compared to $157.6 million for the three months ended March 31, 2024.
+Added: Our operating cash flows are typically impacted by various factors including our net income, adjusted for non-cash expenses and gains such as depreciation expense, asset impairment charges, stock-based compensation expense and gains or losses on the disposal of assets;
and timing of cash payments and cash receipts attributed to our various current asset and liability accounts, such as accounts receivable, inventory, accounts payable, accrued liabilities, deferred revenue and unbilled revenue.
−Removed: The decrease in our cash flow from operations for the nine months ended September 30, 2024, compared to the nine months ended September 30, 2023, was primarily due to the timing of cash payments on our current liability accounts and a decrease in cash received in excess of revenue recognized for the nine months ended September 30, 2024, compared to the nine months ended September 30, 2023, offset by the increase in net income, adjusted for non-cash items, for the nine months ended September 30, 2024, compared to the nine months ended September 30, 2023.
−Removed: Cash Flows provided by (used in) Investing Activities
−Removed: Our cash flows used in investing activities was $119.0 million for the nine months ended September 30, 2024, compared to cash flows provided by investing activities of $61.0 million for the nine months ended September 30, 2023.
+Added: The increase in our cash flow from operations for the three months ended March 31, 2025, compared to the three months ended March 31, 2024, was primarily due to an increase in income before income taxes for the three months ended March 31, 2025 compared the three months ended March 31, 2024, partially offset by the timing of cash payments on certain current liability accounts for the comparable periods.
+Added: Cash Flows used in Investing Activities
+Added: Our cash flows used in investing activities was $66.1 million for the three months ended March 31, 2025, compared to cash flows used in investing activities of $0.6 million for the three months ended March 31, 2024.
Our investing cash flows are typically impacted by various factors including our capital expenditures, such as the acquisition of aircraft and spare engines;
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and timing of cash payments and cash receipts attributed to our various long-term asset and long-term liability accounts.
−Removed: Excluding the purchase and sale of marketable securities, which results in the transfer of dollars between our investments in marketable securities and our cash accounts, our cash used in investing activities decreased from $192.7 million for the nine months ended September 30, 2023, to $147.6 million for the nine months ended September 30, 2024.
−Removed: The decrease in cash used in investing activities, excluding the transfer of dollars between our investments in marketable securities and our cash accounts, was primarily due to a decrease of $55.5 million in aircraft deposits and $12.0 million in the acquisition of property and equipment for the nine months ended September 30, 2024, compared to the nine months ended September 30, 2023, due to the early lease buyouts we executed during the nine months ended September 30, 2023.
−Removed: This was offset by an increase in our cash used to acquire other long-term assets , including our investment in Contour, fo r the nine months ended September 30, 2024.
−Removed: Cash Flows provided by (used in) Financing Activities
−Removed: Our cash flows used in financing activities was $358.2 million for the nine months ended September 30, 2024, compared to cash used in financing activities of $550.6 million for the nine months ended September 30, 2023.
+Added: Excluding the purchase and sale of marketable securities, which results in the transfer of dollars between our investments in marketable securities and our cash accounts, our cash used in investing activities increased from $46.1 million for the three months ended March 31, 2024, to $68.4 million for the three months ended March 31, 2025.
+Added: The increase in cash used in investing activities, excluding the transfer of dollars between our investments in marketable securities and our cash accounts, was primarily due to an increase of $35.5 million used in the acquisition of property and equipment for the three months ended March 31, 2025, compared to the three months ended March 31, 2024 .
+Added: This was offset by a decrease in our cash used to acquire other long-term assets fo r the three months ended March 31, 2025.
+Added: Cash Flows used in Financing Activities
+Added: Our cash flows used in financing activities was $153.3 million for the three months ended March 31, 2025, compared to cash used in financing activities of $125.4 million for the three months ended March 31, 2024.
Our financing cash flows are typically impacted by various factors including proceeds from issuance of debt, principal payments on debt obligations, repurchases of our common stock and payment of cash dividends.
−Removed: The $192.3 million decrease in cash used for financing activities for the nine months ended September 30, 2024, compared to the nine months ended September 30, 2023, was primarily due to a decrease of $207.8 million in cash used to purchase treasury stock, offset by an increase of $7.0 million in principal payments on long-term debt and an increase of $6.3 million for employee income taxes paid on vested equity awards during the nine months ended September 30, 2024, compared to the nine months ended September 30, 2023.
+Added: The $27.9 million increase in cash used in financing activities for the three months ended March 31, 2025, compared to the three months ended March 31, 2024, was primarily due to an increase of $20.3 million in cash used for employee income taxes paid on vested equity awards in lieu of shares and an increase of $4.9 million in cash used to purchase treasury stock during the three months ended March 31, 2025, compared to the three months ended March 31, 2024.
Significant Commitments and Obligations
−Removed: See Note 7, “Leases, Commitments and Contingencies,” to the condensed consolidated financial statements for our commitments and obligations for each of the next five years and thereafter.
+Added: See Note 7, “Leases, Commitments, Guarantees and Contingencies,” to the condensed consolidated financial statements for our commitments and obligations for each of the next five years and thereafter.
Purchase Commitments and Options
−Removed: As of September 30, 2024, we had a firm purchase commitment for 20 new E175 aircraft from Embraer with delivery dates anticipated into 2026.
−Removed: We also have a firm purchase commitment to purchase 11 used CRJ550 aircraft with anticipated delivery dates into 2025.
−Removed: One of such CR550 aircraft was acquired during the three months ended September, 30, 2024.
+Added: As of March 31, 2025, we had a firm purchase commitment for 16 new E175 aircraft from Embraer with delivery dates anticipated into 2026.
+Added: We also had a firm purchase commitment to purchase 12 used CRJ900 airframes with anticipated delivery dates in 2025.
At the time of each aircraft acquisition, we evaluate the financing alternatives available to us, and select one or more of these methods to fund the acquisition.
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We intend to finance the firm purchase commitment for 16 E175 aircraft with approximately 75-85% debt and the remaining balance with cash.
−Removed: We intend to fund the purchase of the remaining 10 used CRJ550 aircraft through cash on hand.
+Added: We intend to use cash to purchase the 12 used CRJ900 airframes.
Aircraft Lease and Facility Obligations
We also have long-term lease obligations, primarily relating to our facilities, aircraft and engines.
−Removed: Excluding aircraft financed by our major airline partners that we operate for them under contract, we had eight aircraft under lease with remaining terms ranging from five years to six years as of September 30, 2024.
−Removed: Future minimum lease payments due under all long-term operating leases were approximately $127.6 million at September 30, 2024.
−Removed: Assuming a 6.3% discount rate, which is the average incremental borrowing rate we anticipate we would have incurred on debt obtained over a similar term to acquire these assets, the present value of these lease obligations would have been equal to approximately $85.3 million at September 30, 2024.
+Added: Excluding aircraft financed by our major airline partners that we operate for them under contract, we had eight aircraft under lease with remaining terms ranging from four years to five years as of March 31, 2025.
+Added: These eight leased aircraft are subleased to a third party.
+Added: Future minimum lease payments due under all long-term operating leases were approximately $123.9 million at March 31, 2025.
+Added: Assuming a 6.2% discount rate, which is the average incremental borrowing rate we anticipate we would have incurred on debt obtained over a similar term to acquire these assets, the present value of these lease obligations would have been equal to approximately $83.7 million at March 31, 2025.
Long-term Debt Obligations
−Removed: As of September 30, 2024, we had $2.7 billion of long-term debt, which consisted of $2.5 billion of debt used to finance aircraft and spare engines and $200.6 million of unsecured debt payable to U.S.
−Removed: Department of the Treasury.
−Removed: The average effective interest rate on our debt was approximately 4.1% at September 30, 2024.
−Removed: Under our capacity purchase agreements, our major airline partners compensate us for our costs of owning or leasing the aircraft on a monthly basis.
+Added: As of March 31, 2025, we had $2.6 billion of long-term debt, which consisted of $2.4 billion of debt used to finance aircraft and spare engines and $200.6 million of unsecured debt payable to the U.S.
+Added: Department of the Treasury (“Treasury”).
+Added: The average effective interest rate on our debt obligations was approximately 4.3% at March 31, 2025.
+Added: Under our capacity purchase agreements, our major airline partners compensate us for our costs of the aircraft on a monthly basis.
The aircraft compensation structure varies by agreement, but is intended to cover either our aircraft principal and interest debt service costs, our aircraft depreciation and interest expense or our aircraft lease expense costs while the aircraft is under contract.
We have guaranteed the obligations of SkyWest Airlines under the United Express Agreement and the Delta Connection Agreement for the E175 aircraft.
−Removed: In addition, we have guaranteed certain other obligations under SkyWest Airlines’ aircraft financing and leasing agreements.
+Added: In addition, we have guaranteed certain other obligations under our aircraft financing and leasing agreements.
We have guaranteed $24.0 million in promissory notes of third parties in event the third parties default on their payments.
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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.