• Net Income (Q4 2024): $97 million or $2.34 per diluted share.
• Net Income (Full Year 2024): $323 million or $7.77 per diluted share.
• Total Revenue (Q4 2024): $944 million, up 3% from Q3 2024 and up 26% from Q4 2023.
• Contract Revenue (Q4 2024): $786 million, up 3% from Q3 2024 and up 27% from Q4 2023.
• Pro Rate and Charter Revenue (Q4 2024): $126 million, up 3% from Q3 2024 and up 14% from Q4 2023.
• Leasing and Other Revenue (Q4 2024): $32 million, up 8% from Q3 2024 and up 34% from Q4 2023.
• Cash (End of Q4 2024): $802 million.
• Debt (End of Q4 2024): $2.7 billion, down from $3 billion at year-end 2023.
• Free Cash Flow (2024): Over $500 million.
• CapEx (Q4 2024): $186 million, up from $97 million in Q3 2024.
• Deferred Revenue (End of Q4 2024): $322 million.
• Share Repurchase (2024): 11.2 million shares repurchased for $332 million.
• Block Hours (2024): Increased by approximately 13% compared to 2023.
• Expected Block Hours Increase (2025): Approximately 12% over 2024.
• Expected CapEx (2025): Approximately $600 million.

• Warning! GuruFocus has detected 7 Warning Signs with SKYW.

Release Date: January 30, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• SkyWest Inc (NASDAQ:SKYW) reported a net income of $97 million for Q4 2024, reflecting strong financial performance.
• The company successfully extended a multiyear contract with American Airlines for 74 CRJ 700 aircraft, ensuring long-term revenue stability.
• SkyWest Inc (NASDAQ:SKYW) achieved a 99.9% adjusted completion rate, demonstrating operational efficiency and reliability.
• The company is set to receive 16 new E175 aircraft by the end of 2026, enhancing its fleet and market position.
• SkyWest Inc (NASDAQ:SKYW) has a strong balance sheet with $802 million in cash and has significantly reduced its debt, providing financial flexibility for future growth.

Negative Points

• SkyWest Inc (NASDAQ:SKYW) faces challenges in its third-party MRO network, including labor and parts shortages, which could impact maintenance costs and aircraft availability.
• The company anticipates increased aircraft maintenance expenses in 2025, which could affect profitability.
• SkyWest Inc (NASDAQ:SKYW) is still working to restore pilot staffing levels to pre-COVID levels, which could limit operational capacity.
• The tragic collision involving a military aircraft and an American Eagle aircraft highlights potential safety concerns in the aviation industry.
• SkyWest Inc (NASDAQ:SKYW) has a significant amount of deferred revenue, which could impact future financial results if not managed effectively.

Q & A Highlights

Q: Can you provide an update on SkyWest's efforts to bring back service to small communities and the status of SkyWest Charter's commuter authority? A: Wade Steel, Chief Commercial Officer, mentioned that SkyWest has added a few markets in the fourth quarter and plans to add more in the third and fourth quarters, focusing on summer demand. Chip Childs, President and CEO, stated that SkyWest is reengaging with the FAA to obtain commuter authority for SkyWest Charter, viewing it as a strategic opportunity to better serve communities.

Q: How do the terms of the new contract extension with American Airlines compare to the previous contract? A: Wade Steel, Chief Commercial Officer, explained that the new contract allows SkyWest to operate up to 74 CRJ 700 aircraft for American Airlines through the end of the decade, with economics similar to the previous contract.

Q: What is the current status of pilot staffing at SkyWest, and how does it compare to pre-pandemic levels? A: Chip Childs, President and CEO, noted that SkyWest has about 700 more pilots than a year ago but is not yet at 2019 levels. The company has a disciplined growth plan and a strong pipeline, with attrition levels being extremely low.

Q: What factors could drive further upside to the 12% increase in block hours projected for 2025? A: Wade Steel, Chief Commercial Officer, identified fleet utilization and availability as key factors. Improvements in the MRO supply chain and overcoming labor and parts challenges could lead to increased aircraft availability and utilization, driving additional block hours.

Q: How should investors think about SkyWest's long-term fleet strategy and growth opportunities beyond 2026? A: Wade Steel, Chief Commercial Officer, highlighted that by the end of 2026, SkyWest will have 278 Embraer 175 aircraft under long-term contracts and a stable fleet of CRJ 550s. Chip Childs, President and CEO, emphasized the company's strategic flexibility and strong partnerships, positioning SkyWest well for continued growth and potential new aircraft orders.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.