SkyWest: 3Q profit, revenue up on fleet transition

SkyWest Inc., parent of regional carriers SkyWest Airlines and ExpressJet Airlines, again cited the company’s ongoing fleet transition as the primary source of improved revenue and profits, posting $53.7 million in net profit for the 2017 third quarter, up 30% from $41.3 million in 3Q 2016.

Utah-based SkyWest’s third-quarter revenue was $831.9 million, up 4% year-over-year, attributable, the company said, to “the net impact of adding 37 new [Embraer] E175 aircraft since Q32016, partially offset by the removal of 75 unprofitable aircraft over the same period, including 50 ERJ-145s/135s, 22 [Bombardier] CRJ200s and three net CRJ700s/900s.” In the third quarter alone, SkyWest removed 25 aircraft, including six ERJs, 15 CRJs200s and four CRJ900s.

“Our results reflect strong production, solid operating performance and ongoing fleet transition improvements,” SkyWest CEO Chip Childs said.

Operating expenses totaled $719.6 million for the quarter, up just 0.8% year-over-year (YOY), which the company attributed to 26.8% higher fuel costs and an increase in engine maintenance costs.

During the quarter, SkyWest ordered 30 E175 special configuration (SC) aircraft to be placed under contract for regional flying with Atlanta-based Delta Air Lines. The E175 SCs will be built with a 70-seat layout that can be retrofitted to 76 seats in the future, per agreement with Delta. Additionally SkyWest ordered 15 standard E175s in a 76-seat configuration, to be placed under contract with Seattle-based Alaska Airlines.

The company took delivery of one E175 during the quarter, and expects to receive three more before the end of the year. In 2018, 42 E175/E175 SCs are expected to be delivered between mid-year and year-end.

In August, SkyWest subsidiary ExpressJet extended its ERJ-145 flying contract with Chicago-based United Airlines for five years as of Jan. 1, 2018. Additionally, ExpressJet and Delta mutually agreed to wind down their remaining dual-class flying agreement involving 57 CRJ700s/900s operated as Delta Connection flights. Twenty-seven leased aircraft will be returned to Delta over the next few quarters and 30 CRJ700s will be removed from service with Delta between mid-2018 and the end of the year. Eight of the CRJ700s are scheduled to be placed under an agreement with Dallas/Fort Worth-based American Airlines after their removal from service with Delta, SkyWest said.