SkyWest SKYW shares have performed exceedingly well on the bourse over the past year. Shares of this St. George, UT-based carrier have skyrocketed 130.4% year over year, outperforming its industry’s 44.5% growth.

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Given the strong price performance, let's take a closer look to uncover the factors driving growth at this regional carrier, currently sporting a Zacks Rank #1 (Strong Buy), and explore whether there is potential for further gains. You can see the complete list of today’s Zacks #1 Rank stocks here.

The increase in air travel demand is positively impacting SkyWest's top-line growth. While demand is particularly robust in the flying agreement segment, lease, airport services and other areas have also shown a strong recovery. Due to the surge in air travel, SkyWest saw notable 18.7% year-over-year revenue growth during the first nine months of 2024. This rise in revenues was primarily driven by a 19.1% increase in flying agreements, which now account for 96.8% of the company's total revenues.

SkyWest Airlines has a fleet of approximately 500 aircraft connecting passengers to more than 240 destinations throughout North America. SkyWest Airlines operates through partnerships with United Airlines UAL, Delta Air Lines, American Airlines and Alaska Airlines, carrying more than 38 million passengers in 2023.

Moreover, SkyWest's fleet modernization efforts are commendable. SKYW has fleet-related agreements with other heavyweight airlines like United Airlines and Alaska Airlines. Alaska Airlines is a wholly owned subsidiary of Alaska Air Group ALK. By 2026-end, SKYW is scheduled to operate 278 E175 aircraft. In February 2024, SkyWest announced that it had acquired a 25% ownership stake in Contour Airlines, a regional carrier.

Concurrent with its third-quarter 2024 results, SkyWest also announced that it had inked a deal with UAL to place 40 CRJ550s under a multi-year contract. Per the deal, SKYW will purchase 11 used CRJ550s and convert 29 of its CRJ700s to CRJ550s.

With air travel demand expected to remain healthy, SKYW stock should continue to perform well on the bourse going forward as well.

Estimate Revisions to Head North

Driven by upbeat air travel demand, earnings per share estimates for SkyWest are expected to move 4.07%, 4.07% and 7.05% upward for the fourth quarter of 2024, full-year 2024 and full-year 2025, respectively.

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Another Stock to Consider

Another top-ranked stock from the Zacks Transportation sector is ZIM Integrated Shipping Services ZIM. ZIM Integrated Shipping Services currently sports a Zacks Rank #1 (Strong Buy) and has an impressive earnings surprise history. The company's earnings outpaced the Zacks Consensus Estimate in three of the trailing four quarters (missed the mark in the remaining quarter), delivering an average surprise of 12.62%.

ZIM shares have surged 168.2% so far this year. The Red Sea crisis-induced high freight rates, a focus on niche markets and a shareholder-friendly approach bode well for ZIM.

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United Airlines Holdings Inc (UAL) : Free Stock Analysis Report

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