SkyWest, Inc. Q3 FY2025 earnings call

SkyWest reported net income of $116 million or $2.81 per diluted share for Q3 2025. Year-to-date, SkyWest achieved over 185 days of 100% controllable completion with ~2,500 daily scheduled departures. Navigated federal government shutdown challenges, working to honor Federal EAS program commitments. SWC received commuter authorization after a 3-year review process. Announced purchase and operation of 16 new E175s with Delta and firm delivery positions for 44 more E175s from 2028-2032. Extended CRJ200s with United and deployed CRJ550s for partners. Ended Q3 with cash $753 million, debt $2.4 billion, and generated ~$144 million in free cash flow in Q3. Anticipated 2025 CapEx ~$550 million and 2026 CapEx ~$575-$625 million.

Total Q3 revenue was $1.1 billion, up from $1 billion in Q2 2025 and 15% from $913 million in Q3 2024. Contract revenue was $844 million, up from $842 million in Q2 2025 and $761 million in Q3 2024. Prorate and charter revenue was $167 million in Q3, up from $145 million in Q2 and $123 million in Q3 2024. Leasing and other revenue was $39 million in Q3, down from $48 million in Q2 but up from $29 million in Q3 2024.

2025 block hours expected to be up ~15% over 2024. 2025 GAAP EPS projected in the mid-$10 per share area, with Q4 EPS ~$2.30. For 2026, block hours expected to have low-single-digit growth translating to mid-to-high single-digit EPS growth ~$11. Effective tax rate anticipated to be 26%-27% in Q4 2025 and ~24% in 2026. Focus areas include restoring/service to underserved communities, utilizing existing fleet, and receiving ~300 E175 deliveries by end of 2028.

Federal government shutdown poses uncertainty regarding EAS funding beyond November 18; Embraer delivery delays may impact aircraft schedules; potential supply chain challenges with purchase of 30 used CRJ900 airframes.

Q: Walk through fleet mix benefit with E175s and CRJs A: Wade Steel discussed 20 CRJ550s to be in service in 2026, 14 E175s to be delivered in 2025-2026, and some Delta-owned CRJ900s returning to Delta Q: Update on EAS funding A: Funding for the program is believed to continue through November 18, with intent to continue serving communities even if funding beyond that is uncertain Q: Prorate status vs pre-pandemic A: Prorate is at ~70% of pre-pandemic 2019 levels, with strong demand across the US and opportunities in small communities for expanding service Q: CRJ200 fleet size outlook A: Wade Steel stated SkyWest anticipates ~100 CRJ200s will fly well into the early 2030s with maintenance investments Q: Net fleet additions for 2026 A: Wade Steel mentioned 20 CRJ550s coming in 2026, 11 E175s, and 24 Delta-owned planes rolling off, resulting in net-net flattish to small increase in capacity purchase