SkyWest (SKYW) 10-Q 4 Aug 17 2017 Q2 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	6 Months Ended
	Jun. 30, 2017	Jul. 31, 2017
Document and Entity Information
Entity Registrant Name	SKYWEST INC
Entity Central Index Key	793,733
Document Type	10-Q
Document Period End Date	Jun. 30, 2017
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Entity Current Reporting Status	Yes
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding		51,840,847
Document Fiscal Year Focus	2,017
Document Fiscal Period Focus	Q2

CONSOLIDATED BALANCE SHEETS

CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Jun. 30, 2017	Dec. 31, 2016
CURRENT ASSETS:
Cash and cash equivalents	$ 143,448	$ 146,766
Marketable securities	482,809	409,898
Restricted cash	8,262	8,243
Receivables, net	38,017	46,916
Inventories, net	118,476	118,509
Prepaid aircraft rents	137,692	162,360
Other current assets	18,305	25,100
Total current assets	947,009	917,792
PROPERTY AND EQUIPMENT:
Aircraft and rotable spares	5,202,929	4,839,501
Deposits on aircraft	21,976	38,800
Buildings and ground equipment	271,450	261,704
Total property and equipment, gross	5,496,355	5,140,005
Less-accumulated depreciation and amortization	(1,361,838)	(1,318,308)
Total property and equipment, net	4,134,517	3,821,697
OTHER ASSETS
Intangible assets, net	7,124	8,249
Long-term prepaid assets	227,427	218,505
Other assets	44,536	41,723
Total other assets	279,087	268,477
Total assets	5,360,613	5,007,966
CURRENT LIABILITIES:
Current portion of long-term debt, net of debt issue costs	306,849	305,460
Accounts payable	265,028	241,215
Accrued salaries, wages and benefits	146,083	139,885
Taxes other than income taxes	17,105	15,618
Other current liabilities	44,025	45,087
Total current liabilities	779,090	747,265
OTHER LONG TERM LIABILITIES	47,559	50,844
LONG TERM DEBT, net of current maturities	2,452,663	2,240,051
DEFERRED INCOME TAXES PAYABLE	609,957	565,404
DEFERRED AIRCRAFT CREDITS	48,802	53,459
COMMITMENTS AND CONTINGENCIES (Note 6)
STOCKHOLDERS' EQUITY:
Preferred stock, 5,000,000 shares authorized; none issued
Common stock, no par value, 120,000,000 shares authorized; 80,176,705 and 79,781,305 shares issued, respectively	664,917	657,353
Retained earnings	1,181,601	1,103,751
Treasury stock, at cost, 28,410,609 and 28,015,386 shares, respectively	(423,961)	(410,090)
Accumulated other comprehensive loss	(15)	(71)
Total stockholders' equity	1,422,542	1,350,943
Total liabilities and stockholders' equity	$ 5,360,613	$ 5,007,966

CONSOLIDATED BALANCE SHEETS (Pa

CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares	Jun. 30, 2017	Dec. 31, 2016
CONSOLIDATED BALANCE SHEETS
Preferred stock, shares authorized	5,000,000	5,000,000
Preferred stock, shares issued	0	0
Common stock, par value (in dollars per share)	$ 0	$ 0
Common stock, shares authorized	120,000,000	120,000,000
Common stock, shares issued	80,176,705	79,781,305
Treasury stock, at cost, shares	28,410,609	28,015,386

CONSOLIDATED STATEMENTS OF COMP

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016
OPERATING REVENUES:
Passenger	$ 791,341	$ 784,813	$ 1,536,752	$ 1,529,203
Ground handling and other	18,418	16,525	38,422	34,211
Total operating revenues	809,759	801,338	1,575,174	1,563,414
OPERATING EXPENSES:
Salaries, wages and benefits	295,929	304,228	595,969	609,785
Aircraft maintenance, materials and repairs	152,356	142,289	284,681	281,149
Depreciation and amortization	71,206	69,887	141,320	137,688
Aircraft rentals	55,413	72,567	113,123	139,691
Aircraft fuel	37,183	32,306	71,493	57,638
Ground handling services	15,902	16,743	35,436	37,727
Other operating expenses	75,174	79,181	150,262	153,790
Total operating expenses	703,163	717,201	1,392,284	1,417,468
OPERATING INCOME	106,596	84,137	182,890	145,946
OTHER INCOME (EXPENSE):
Interest income	1,330	485	1,990	915
Interest expense	(27,063)	(18,287)	(51,612)	(36,012)
Total other expense, net	(25,733)	(17,802)	(49,622)	(35,097)
INCOME BEFORE INCOME TAXES	80,863	66,335	133,268	110,849
PROVISION FOR INCOME TAXES	30,386	26,091	48,005	43,513
NET INCOME	$ 50,477	$ 40,244	$ 85,263	$ 67,336
BASIC EARNINGS PER SHARE (in dollars per share)	$ 0.98	$ 0.78	$ 1.65	$ 1.31
DILUTED EARNINGS PER SHARE (in dollars per share)	$ 0.95	$ 0.77	$ 1.61	$ 1.29
Weighted average common shares:
Basic (in shares)	51,751	51,418	51,785	51,318
Diluted (in shares)	52,977	52,194	53,090	52,104
COMPREHENSIVE INCOME:
Net income	$ 50,477	$ 40,244	$ 85,263	$ 67,336
Net unrealized appreciation on marketable securities, net of taxes	17	213	56	228
TOTAL COMPREHENSIVE INCOME	$ 50,494	$ 40,457	$ 85,319	$ 67,564

CONDENSED CONSOLIDATED STATEMEN

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016
CONSOLIDATED STATEMENTS OF CASH FLOWS
NET CASH PROVIDED BY OPERATING ACTIVITIES	$ 331,783	$ 228,034
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of marketable securities	(738,101)	(1,061,392)
Sales of marketable securities	665,246	1,071,668
Proceeds from the sale of aircraft, property and equipment	50,652
Acquisition of property and equipment:
Aircraft and rotable spare parts	(514,443)	(314,657)
Buildings and ground equipment	(2,420)	(7,303)
Aircraft deposits applied towards acquired aircraft, net	16,824
Increase in other assets	(6,098)	(1,499)
NET CASH USED IN INVESTING ACTIVITIES	(528,340)	(313,183)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of long-term debt	384,825	248,966
Principal payments on long-term debt	(169,550)	(136,328)
Net proceeds from issuance of common stock	1,783	4,048
Purchase of treasury stock	(13,871)
Increase in debt issuance cost	(3,221)	(2,495)
Payment of cash dividends	(6,727)	(4,095)
NET CASH PROVIDED BY FINANCING ACTIVITIES	193,239	110,096
Increase (decrease) in cash and cash equivalents	(3,318)	24,947
Cash and cash equivalents at beginning of period	146,766	203,035
CASH AND CASH EQUIVALENTS AT END OF PERIOD	143,448	227,982
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Acquisition of rotable spare parts	2,038
Cash paid during the period for:
Interest, net of capitalized amounts	50,943	35,887
Income taxes	$ 598	$ 741

Condensed Consolidated Financia

Condensed Consolidated Financial Statements	6 Months Ended
	Jun. 30, 2017
Condensed Consolidated Financial Statements
Condensed Consolidated Financial Statements	Note 1 — Condensed Consolidated Financial Statements Basis of Presentation The condensed consolidated financial statements of SkyWest, Inc. (“SkyWest” or the “Company”) and its operating subsidiaries, SkyWest Airlines, Inc. (“SkyWest Airlines”) and ExpressJet Airlines, Inc. (“ExpressJet”) included herein have been prepared, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) have been condensed or omitted pursuant to such rules and regulations, although the Company believes that the following disclosures are adequate to make the information presented not misleading. These condensed consolidated financial statements reflect all adjustments that, in the opinion of management, are necessary to present fairly the results of operations for the interim periods presented. All adjustments are of a normal recurring nature, unless otherwise disclosed. The Company suggests that these condensed consolidated financial statements be read in conjunction with the consolidated financial statements and the notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2016. The results of operations for the three and six months ended June 30, 2017 are not necessarily indicative of the results that may be expected for the year ending December 31, 2017. The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results will likely differ, and may differ materially, from those estimates and assumptions. The Company reclassified certain prior period amounts to conform to the current period presentation . Recent Accounting Pronouncements Standards Effective in Future Years In May 2014, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update No. 2014‑09, “Revenue from Contracts with Customers” (“ASU No. 2014‑09”). Under ASU No. 2014‑09, revenue is recognized at the time a good or service is transferred to a customer for the amount of consideration received for that specific good or service. In July 2015, the FASB deferred the effective date of ASU No. 2014‑09 for annual reporting periods beginning after December 15, 2017. In 2016, the FASB issued several amendments to the standard, including principal versus agent considerations when another party is involved in providing goods or services to a customer and the application of identifying performance obligations. The Company continues to assess the potential impacts of ASU No. 2014‑09 on its fixed-fee contracts, prorate flying agreements, ground handling agreements and other revenue transactions. The Company anticipates completing its review of the impact by the third quarter of 2017. Interpretations are on-going and could have a significant impact on the Company’s implementation. The Company believes the principal versus agent considerations may change how the Company presents revenue for certain directly-reimbursed expenses under its fixed-fee contracts, such as fuel expenses. The Company currently does not anticipate the adoption of ASU No. 2014‑09 will have a material impact on its net income. ASU No. 2014‑09 is required to be applied either full retrospective to each prior reporting period presented or modified retrospective with the cumulative effect of initially applying it at the date of initial application. The Company anticipates using the full retrospective method of adoption. In February 2016, the FASB issued Accounting Standards Update 2016‑02, “Leases (Topic 842)” (“ASU No. 2016-02”). ASU No. 2016‑02 amends the existing accounting standards for lease accounting, including requiring lessees to recognize most leases on their balance sheets and making targeted changes to lessor accounting. ASU No. 2016‑02 will be effective beginning in the first quarter of 2019. Early adoption of ASU No. 2016‑02 is permitted. ASU No. 2016‑02 requires a modified retrospective transition approach for all leases existing at, or entered into after, the date of initial application, with an option to use certain transition relief. The Company’s management is currently evaluating the impact the adoption of ASU 2016‑02 is anticipated to have on the Company’s consolidated financial statements. In 2016, the FASB issued Accounting Standards Update 2016‑15, “Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments” and Accounting Standard Update 2016‑18, “Statement of Cash Flows (Topic 230): Restricted Cash” related to the classification of certain cash receipts and cash payments and the presentation of restricted cash within an entity’s statement of cash flows, respectively. These standards are effective for interim and annual reporting periods beginning after December 15, 2017, but early adoption is permitted. The Company does not anticipate these standards to have a material impact on the Company’s Consolidated Statement of Cash Flows. Recently Adopted Standards Pursuant to the guidelines of the recently issued Accounting Standards Update 2015-17, “Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes” (“ASU 2015‑17”), all deferred tax assets and liabilities are to be classified as non-current. As permitted under ASU 2015‑17, the Company adopted this guidance for the quarter ended March 31, 2017. The guidance indicates that ASU 2015‑17 may be applied either prospectively or retrospectively. The Company elected to adopt ASU 2015‑17 retrospectively. Upon adoption, approximately $129.3 million of formerly recorded current deferred tax assets as of December 31, 2016 were reclassified to non-current and netted against non-current deferred income taxes payable as of December 31, 2016 in the accompanying financial statements. In March 2016, the FASB issued Accounting Standards Update No. 2016‑09, “Compensation—Stock Compensation (Topic 718)” (“ASU No. 2016‑09”). ASU No. 2016‑09 makes several amendments to Topic 718, which simplified the accounting for share-based payment transactions, including the income tax consequences, the calculation of diluted earnings per share, the treatment of forfeitures and the classification on the statement of cash flows. Amendments related to the timing of when excess tax benefits are recognized, minimum statutory withholding requirements and forfeitures should be applied using a modified retrospective transition method by means of a cumulative-effect adjustment to equity as of the beginning of the period in which the guidance is adopted. Amendments requiring the recognition of excess tax benefits and tax deficiencies in the income statement should be applied prospectively. Prior to the adoption of ASU No. 2016‑09, GAAP required tax effects of deductions for share-based payments in excess of compensation cost and tax deficiencies to be recorded in equity. Under ASU No. 2016‑09, the tax effects of awards are treated as discrete income tax expense items in the reporting period in which they occur. The Company adopted ASU No. 2016‑09 as of January 1, 2017. As a result of employee stock awards that vested and stock options that were exercised during the three months ended March 31, 2017, the Company recorded a discrete income tax benefit of $3.0 million for the same period. The adoption of ASU No. 2016-09 did not have a material effect on the Company’s financial results for the three months ended June 30, 2017. The adoption of ASU No. 2016‑09 did not have a material impact on the statement of cash flows presentation, which the Company adopted prospectively. Property and Equipment Property and equipment are stated at cost and depreciated over their useful lives to their estimated residual values using the straight‑line method. The Company changed the estimated useful lives and residual values for certain long-lived assets as of January 1, 2017 as follows: Assets Current Depreciable Life Prior Policy Depreciable Life Current Residual Value Prior Policy Residual Value New Aircraft 20 - 22 years 18 years 17.5 - 20 % % Used Aircraft, rotable spares, and spare engines up to 18 years up to 18 years 0 - 20 % 0 - 30 % Ground equipment up to 10 years No Change 0 % No Change Office equipment up to 7 years No Change % No Change Leasehold improvements Shorter of 15 years or lease term No Change % No Change Buildings 20 - 39.5 years No Change % No Change The Company estimates that the impact of the change in estimated useful lives and residual values for certain long-lived assets will increase depreciation expense by an additional $1.8 million on an annualized basis for 2017.

Passenger and Ground Handling a

Passenger and Ground Handling and Other Revenue	6 Months Ended
	Jun. 30, 2017
Passenger and Ground Handling and Other Revenue
Passenger and Ground Handling and Other Revenue	Note 2 — Passenger and Ground Handling and Other Revenue The Company recognizes passenger and ground handling revenues when the service is provided under its code-share agreements. Under the Company’s fixed-fee arrangements (referred to as “fixed-fee arrangements,” “fixed-fee contracts” or “capacity purchase agreements”) with Delta Air Lines, Inc. (“Delta”), United Airlines, Inc. (“United”), American Airlines, Inc. (“American”) and Alaska Airlines, Inc. (“Alaska”) (each, a “major airline partner”), the major airline partner generally pays the Company a fixed-fee for each departure, flight hour (measured from takeoff to landing, excluding taxi time) or block hour (measured from takeoff to landing, including taxi time) incurred, and an amount per aircraft in service each month with additional incentives based on flight completion and on-time performance. The major airline partner also directly reimburses the Company for certain direct expenses incurred under the fixed-fee arrangement, such as fuel expenses and landing fee expenses. Under the fixed-fee arrangements, revenue is earned when each flight is completed and is reflected in passenger revenues. For the six months ended June 30, 2017, fixed-fee arrangements represented approximately 88.6% of the Company’s total passenger revenue. Under the Company’s revenue-sharing arrangements (referred to as a “revenue-sharing” or “prorate” arrangement), the major airline partner and the Company negotiate a passenger fare proration formula, pursuant to which the Company receives a percentage of the ticket revenues for those passengers traveling for one portion of their trip on a Company airline and the other portion of their trip on the major airline partner. Revenue is recognized under the Company’s prorate flying agreements when each flight is completed based upon the portion of the prorate passenger fare the Company anticipates that it will receive for each completed flight. For the six months ended June 30, 2017, prorate flying arrangements represented approximately 11.4% of the Company’s total passenger revenue. Ground handling and other revenue primarily consists of customer service functions, such as gate and ramp agent services at applicable airports where the Company provides such services to other airlines. Ground handling and other revenue primarily consists of ground handling services the Company provides to third‑party airlines and government subsidies the Company receives for operating certain routes under its prorate agreements. Revenues associated with ground handling services the Company provides for its aircraft are recorded as passenger revenues. Other ancillary revenues commonly associated with airlines, such as baggage fee revenue, ticket change fee revenue and the marketing component of the sale of mileage credits, are retained by the Company’s major airline partners on flights that the Company operates under its code‑share agreements. In the event that the contractual rates under the Company’s flying agreements have not been finalized at quarterly or annual financial statement dates, the Company records revenues based on the lower of the prior period’s approved rates, as adjusted to reflect any contract negotiations, and the Company’s estimate of rates that will be implemented in accordance with revenue recognition guidelines. In the event the Company has a reimbursement dispute with a major airline partner, the Company evaluates the dispute under its established revenue recognition criteria and, provided the revenue recognition criteria have been met, the Company recognizes revenue based on management’s estimate of the resolution of the dispute. In several of the Company’s agreements, the Company is eligible to receive incentive compensation upon the achievement of certain performance criteria. The incentives are defined in the agreements and are measured and determined on a monthly, quarterly or semi‑annual basis. At the end of each period during the term of an agreement, the Company calculates the incentives achieved during that period and recognizes revenue attributable to that agreement accordingly. The following table summarizes the significant provisions of each code share agreement the Company has with each major airline partner: Delta Connection Agreements Agreement Aircraft type Number of Term / Termination SkyWest Airlines Delta Connection Agreement (fixed-fee arrangement) • • • • 57 27 36 18 • ExpressJet Delta Connection Agreement (fixed-fee arrangement) • • • 23 33 28 • SkyWest Airlines Delta Connection Prorate Agreement (revenue-sharing arrangement) • 25 • United Express Agreements Agreement Aircraft type Number of Term / Termination SkyWest Airlines United Express Agreements (fixed-fee arrangement) • • • 47 20 65 • ExpressJet United ERJ Agreement (fixed-fee arrangement) • • 5 119 • SkyWest Airlines United Express Prorate Agreement (revenue-sharing arrangement) • 22 • Alaska Capacity Purchase Agreement Agreement Aircraft type Number of Term / Termination SkyWest Airlines Alaska Agreement (fixed-fee arrangement) • 20 • American Agreements Agreement Aircraft type Number of Term / Termination SkyWest Airlines American Agreement (fixed-fee arrangement) • • 22 37 • SkyWest Airlines American Prorate Agreement (revenue-sharing arrangement) • 8 • ExpressJet American Agreement (fixed-fee arrangement) • • 2 12 • In addition to the contractual arrangements described above, SkyWest Airlines has entered into an agreement with Delta to place one additional Embraer E175 dual-class regional jet aircraft (“E175”) into service. The delivery date for the one additional E175 aircraft is expected to take place by the end of 2017. When an aircraft is scheduled to be removed from a fixed-fee arrangement, the Company may, as practical under the circumstances, negotiate an extension with the respective major airline partner, negotiate the placement of the aircraft with another major airline partner, return the aircraft to the lessor if the aircraft is leased and the lease is expiring, place owned aircraft for sale, or pursue other uses for the aircraft, including placing the aircraft in a prorate arrangement. The Company’s passenger and ground handling revenues could be impacted by a number of factors, including changes to the Company’s code-share agreements with its major airline partners, contract modifications resulting from contract renegotiations, the Company’s ability to earn incentive payments contemplated under the Company’s code-share agreements and settlement of reimbursement disputes with the Company’s major airline partners.

Share-Based Compensation and St

Share-Based Compensation and Stock Repurchases	6 Months Ended
	Jun. 30, 2017
Share-Based Compensation and Stock Repurchases
Share-Based Compensation and Stock Repurchases	Note 3 — Share-Based Compensation and Stock Repurchases During the six months ended June 30, 2017, the Company granted 22,617 fully-vested shares of common stock to the Company’s directors. Additionally, during the six months ended June 30, 2017, the Company granted 160,137 restricted stock units and 119,315 performance shares to certain employees of the Company and its subsidiaries under the SkyWest, Inc. 2010 Long-Term Incentive Plan. Both the restricted stock units and performance shares have a three-year vesting period, during which the recipient must remain employed with the Company or one of the Company’s subsidiaries. In addition to the three-year vesting period, certain performance metrics of the Company must be met before the recipient will receive any shares of stock attributable to the restricted stock units and performance shares. Upon vesting, each restricted stock unit and performance share will be replaced with one share of common stock. The fair value of the restricted stock units and performance shares on the date of grant was $35.81 per share. During the six months ended June 30, 2017, the Company did not grant any options to purchase shares of common stock. With the adoption of ASU No. 2016‑09, the Company accounts for forfeitures of restricted stock unit and performance share grants in 2017 when forfeitures occur. The estimated fair value of the stock options, restricted stock units and performance shares is amortized over the applicable vesting periods. During the six months ended June 30, 2017 and 2016, the Company recorded pre-tax share-based compensation expense of $5.8 million and $3.9 million, respectively. The Company repurchased 281,000 shares of its common stock for $10.0 million during the six months ended June 30, 2017. Additionally, during the six months ended June 30, 2017, the Company also repurchased 108,000 shares of its common stock through a net settlement of the income tax obligation on employee equity awards of $3.8 million. The Company did not repurchase any shares of its common stock during the six months ended June 30, 2016.

Net Income Per Common Share

Net Income Per Common Share	6 Months Ended
	Jun. 30, 2017
Net Income Per Common Share
Net Income Per Common Share	Note 4 — Net Income Per Common Share Basic net income per common share (“Basic EPS”) excludes dilution and is computed by dividing net income by the weighted average number of common shares outstanding during the period. Diluted net income per common share (“Diluted EPS”) reflects the potential dilution that could occur if stock options or other contracts to issue common stock were exercised or converted into common stock. The computation of Diluted EPS does not assume exercise or conversion of securities that would have an anti-dilutive effect on net income per common share. During the three and six months ended June 30, 2017, options to acquire zero shares, were excluded from the computation of Diluted EPS. During the three and six months ended June 30, 2016, options to acquire zero shares and 6,000 shares, respectively, were excluded from the computation of Diluted EPS. The calculation of the weighted average number of shares of common stock outstanding for Basic EPS and Diluted EPS for the periods indicated (in thousands, except per share data) is as follows: Three Months Ended Six Months Ended June 30, June 30, 2017 2016 2017 2016 Numerator: Net Income $ 50,477 $ 40,244 $ 85,263 $ 67,336 Denominator: Weighted average number of common shares outstanding 51,751 51,418 51,785 51,318 Effect of outstanding share-based awards 1,226 776 1,305 786 Weighted average number of shares for diluted net income per common share 52,977 52,194 53,090 52,104 Basic earnings per share $ 0.98 $ 0.78 $ $ 1.31 Diluted earnings per share $ 0.95 $ 0.77 $ 1.61 $ 1.29

Segment Reporting

Segment Reporting	6 Months Ended
	Jun. 30, 2017
Segment Reporting
Segment Reporting	Note 5 - Segment Reporting The Company’s three reporting segments consist of the operations of SkyWest Airlines, ExpressJet and SkyWest Leasing activities. Corporate overhead expenses incurred by the Company are allocated to the operating expenses of SkyWest Airlines and ExpressJet. The Company’s chief operating decision maker analyzes the profitability of operating the E175 aircraft (including operating costs and associated revenue) separately from the profitability of the Company’s ownership, financing costs and associated revenue of the Company’s E175 aircraft (including depreciation expense, interest expense and associated revenue). The SkyWest Leasing segment includes revenue attributed to the Company’s E175 aircraft ownership cost earned under the applicable fixed-fee contracts and the depreciation and interest expense of the Company’s E175 aircraft. The SkyWest Leasing segment’s total assets and capital expenditures include the acquired E175 aircraft. The SkyWest Leasing segment additionally includes the ownership and activity of four CRJ200 aircraft leased to a third party. The following represents the Company’s segment data for the three-month periods ended June 30, 2017 and 2016 (in thousands): Three months ended June 30, 2017 SkyWest SkyWest Airlines ExpressJet Leasing Consolidated Operating revenues $ 537,749 $ 212,025 $ 59,985 $ 809,759 Operating expense 460,641 215,070 27,452 703,163 Depreciation and amortization expense 32,530 11,710 26,966 71,206 Interest expense 5,735 1,088 20,240 27,063 Segment profit (loss) (1) 71,373 (4,133) 12,293 79,533 Identifiable intangible assets, other than goodwill — 7,124 — 7,124 Total assets (as of June 30, 2017) 529,175 2,580,107 5,360,613 Capital expenditures (including non-cash) 25,346 4,501 265,955 295,802 Three months ended June 30, 2016 SkyWest SkyWest Airlines ExpressJet Leasing Consolidated Operating revenues $ 504,107 $ 266,241 $ 30,990 $ 801,338 Operating expense 428,142 274,856 14,203 717,201 Depreciation and amortization expense 34,585 21,460 13,842 69,887 Interest expense 6,754 1,617 9,916 18,287 Segment profit (loss) (1) 69,211 (10,232) 6,871 65,850 Identifiable intangible assets, other than goodwill — 9,374 — 9,374 Total assets (as of June 30, 2016) 2,074,265 1,389,687 1,418,099 4,882,051 Capital expenditures (including non-cash) 7,927 2,002 212,745 222,674 (1) Segment profit (loss) is equal to operating income less interest expense The following represents the Company’s segment data for the six-month periods ended June 30, 2017 and 2016 (in thousands): Six months ended June 30, 2017 SkyWest SkyWest Airlines ExpressJet Leasing Consolidated Operating revenues $ 1,020,703 $ 440,683 $ 113,788 $ 1,575,174 Operating expense 896,010 444,563 51,711 1,392,284 Depreciation and amortization expense 64,347 26,235 50,738 141,320 Interest expense 11,535 2,202 37,875 51,612 Segment profit (loss) (1) 113,158 (6,082) 24,202 131,278 Identifiable intangible assets, other than goodwill — 7,124 — 7,124 Total assets (as of June 30, 2017) 2,251,331 529,175 2,580,107 5,360,613 Capital expenditures (including non-cash) 58,777 10,155 449,969 518,901 Six months ended June 30, 2016 SkyWest SkyWest Airlines ExpressJet Leasing Consolidated Operating revenues $ 970,403 $ 534,048 $ 58,963 $ 1,563,414 Operating expense 842,226 548,475 26,767 1,417,468 Depreciation and amortization expense 68,916 42,727 26,045 137,688 Interest expense 13,413 3,740 18,859 36,012 Segment profit (loss) (1) 114,764 (18,167) 13,337 109,934 Identifiable intangible assets, other than goodwill — 9,374 — 9,374 Total assets (as of June 30, 2016) 2,074,265 1,389,687 1,418,099 4,882,051 Capital expenditures (including non-cash) 21,885 7,050 293,025 321,960

Commitments and Contingencies

Commitments and Contingencies	6 Months Ended
	Jun. 30, 2017
Commitments and Contingencies
Commitments and Contingencies	Note 6 — Commitments and Contingencies As of June 30, 2017, the Company leased aircraft, airport facilities, office space, and other property and equipment under non-cancelable operating leases which are generally on a long-term, triple net lease basis pursuant to which the Company pays taxes, maintenance, insurance and certain other operating expenses applicable to the leased property. The Company expects that, in the normal course of business, such operating leases that expire will be renewed or replaced by other leases, or the property may be purchased rather than leased. The following table summarizes future minimum rental payments required under operating leases that had initial or remaining non-cancelable lease terms as of June 30, 2017 (in thousands): July through December 2017 $ 2018 2019 2020 2021 Thereafter $ 842,292 As of June 30, 2017, the Company had a firm purchase commitment for one E175 aircraft with a scheduled delivery date by the end of 2017.

Fair Value Measurements

Fair Value Measurements	6 Months Ended
	Jun. 30, 2017
Fair Value Measurements
Fair Value Measurements	Note 7 — Fair Value Measurements The Company holds certain assets that are required to be measured at fair value in accordance with GAAP. The Company determined the fair value of these assets based on the following three levels of inputs: Level 1 — Quoted prices in active markets for identical assets or liabilities. Level 2 — Observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Some of the Company’s marketable securities primarily utilize broker quotes in a non-active market for valuation of these securities. Level 3 — Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities, therefore requiring an entity to develop its own assumptions. As of June 30, 2017 and December 31, 2016, the Company held certain assets that are required to be measured at fair value on a recurring basis. Assets measured at fair value on a recurring basis are summarized below (in thousands): Fair Value Measurements as of June 30, 2017 Total Level 1 Level 2 Level 3 Marketable Securities Bonds and bond funds $ 417,274 $ — $ 417,274 $ — Commercial paper 65,535 — 65,535 — $ 482,809 $ — $ 482,809 $ — Cash, Cash Equivalents and Restricted Cash 151,710 151,710 — — Total Assets Measured at Fair Value $ 634,519 $ 151,710 $ 482,809 $ — Fair Value Measurements as of December 31, 2016 Total Level 1 Level 2 Level 3 Marketable Securities Bonds and bond funds $ $ — $ $ — Commercial paper — — $ $ — $ $ — Cash, Cash Equivalents and Restricted Cash — — Total Assets Measured at Fair Value $ $ $ $ — The Company’s “Marketable Securities” classified as Level 2 securities primarily utilize broker quotes in a non-active market for valuation of these securities. The Company did not make any significant transfers of securities between Level 1, Level 2 and Level 3 during the six months ended June 30, 2017. The Company’s policy regarding the recording of transfers between levels is to record any such transfers at the end of the reporting period. As of June 30, 2017 and December 31, 2016, the Company classified $482.8 million and $409.9 million of marketable securities, respectively, as short-term since it had the intent to maintain a liquid portfolio and the ability to redeem the securities within one year. As of June 30, 2017 and December 31, 2016, the cost of the Company’s total cash and cash equivalents and available for sale securities (excluding restricted cash) was $626.3 million and $556.8 million, respectively. As of June 30, 2017 and December 31, 2016, the fair value of the Company’s total cash and cash equivalents and available for sale securities (excluding restricted cash) was $626.3 million and $556.7 million, respectively. The fair value of the Company’s long-term debt classified as Level 2 debt was estimated using discounted cash flow analyses, based on the Company’s current estimated incremental borrowing rates for similar types of borrowing arrangements. The fair value of the Company’s long-term debt is estimated based on current rates offered to the Company for similar debt and was estimated to be $2.80 billion as of June 30, 2017 and $2.57 billion as of December 31, 2016, as compared to the carrying amount of $2.79 billion as of June 30, 2017 and $2.57 billion as of December 31, 2016.

Long-Term Debt

Long-Term Debt	6 Months Ended
	Jun. 30, 2017
Long-Term Debt
Long-Term Debt	Note 8 — Long-Term Debt Long-term debt consisted of the following as of June 30, 2017 and December 31, 2016 (in thousands): June 30, 2017 December 31, 2016 Current portion of long-term debt $ 310,469 $ 308,945 Current portion of unamortized debt issue cost, net (3,620) (3,485) Current portion of long-term debt, net of debt issue costs $ 306,849 $ 305,460 Long-term debt, net of current maturities $ 2,475,789 $ 2,261,959 Long-term portion of unamortized debt issue cost, net (23,126) (21,908) Long-term debt, net of current maturities and debt issue costs $ 2,452,663 $ 2,240,051 Total long-term debt (including current portion) $ 2,786,258 $ 2,570,904 Total unamortized debt issue cost, net (26,746) (25,393) Total long-term debt, net of debt issue costs $ 2,759,512 $ 2,545,511 During the six months ended June 30, 2017, the Company took delivery of 17 E175 aircraft, which the Company financed through $384.8 million of long-term debt. The debt associated with the E175 aircraft delivered during the six months ended June 30, 2017 has a twelve-year term, is due in quarterly installments with a fixed annual interest rate ranging from 4.3% to 4.7% and is secured by the E175 aircraft. As of June 30, 2017 and December 31, 2016, the Company had $84.6 million in letters of credit and surety bonds outstanding with various banks and surety institutions.

Income Taxes

Income Taxes	6 Months Ended
	Jun. 30, 2017
Income Taxes
Income Taxes	Note 9 — Income Taxes The Company’s effective tax rate for the three and six months ended June 30, 2017 was 37.6% and 36.0%, respectively. The Company’s effective tax rate for the three and six months ended June 30, 2017 varied from the federal statutory rate of 35% primarily due to provision for state income taxes and the impact of non-deductible crew per diem meal expenses, which were partially offset by a discrete tax benefit from excess tax deductions generated from employee equity transactions that occurred during such periods.

Legal Matters

Legal Matters	6 Months Ended
	Jun. 30, 2017
Legal Matters
Legal Matters	Note 10 — Legal Matters The Company is subject to certain legal actions which it considers routine to its business activities. As of June 30, 2017, the Company’s management believed, after consultation with legal counsel, that the ultimate outcome of such legal matters was not likely to have a material adverse effect on the Company’s financial position, liquidity or results of operations.

Condensed Consolidated Financ16

Condensed Consolidated Financial Statements (Policies)	6 Months Ended
	Jun. 30, 2017
Condensed Consolidated Financial Statements
Basis of Presentation	Basis of Presentation The condensed consolidated financial statements of SkyWest, Inc. (“SkyWest” or the “Company”) and its operating subsidiaries, SkyWest Airlines, Inc. (“SkyWest Airlines”) and ExpressJet Airlines, Inc. (“ExpressJet”) included herein have been prepared, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) have been condensed or omitted pursuant to such rules and regulations, although the Company believes that the following disclosures are adequate to make the information presented not misleading. These condensed consolidated financial statements reflect all adjustments that, in the opinion of management, are necessary to present fairly the results of operations for the interim periods presented. All adjustments are of a normal recurring nature, unless otherwise disclosed. The Company suggests that these condensed consolidated financial statements be read in conjunction with the consolidated financial statements and the notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2016. The results of operations for the three and six months ended June 30, 2017 are not necessarily indicative of the results that may be expected for the year ending December 31, 2017. The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results will likely differ, and may differ materially, from those estimates and assumptions. The Company reclassified certain prior period amounts to conform to the current period presentation .
Recent Accounting Pronouncements	Recent Accounting Pronouncements Standards Effective in Future Years In May 2014, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update No. 2014‑09, “Revenue from Contracts with Customers” (“ASU No. 2014‑09”). Under ASU No. 2014‑09, revenue is recognized at the time a good or service is transferred to a customer for the amount of consideration received for that specific good or service. In July 2015, the FASB deferred the effective date of ASU No. 2014‑09 for annual reporting periods beginning after December 15, 2017. In 2016, the FASB issued several amendments to the standard, including principal versus agent considerations when another party is involved in providing goods or services to a customer and the application of identifying performance obligations. The Company continues to assess the potential impacts of ASU No. 2014‑09 on its fixed-fee contracts, prorate flying agreements, ground handling agreements and other revenue transactions. The Company anticipates completing its review of the impact by the third quarter of 2017. Interpretations are on-going and could have a significant impact on the Company’s implementation. The Company believes the principal versus agent considerations may change how the Company presents revenue for certain directly-reimbursed expenses under its fixed-fee contracts, such as fuel expenses. The Company currently does not anticipate the adoption of ASU No. 2014‑09 will have a material impact on its net income. ASU No. 2014‑09 is required to be applied either full retrospective to each prior reporting period presented or modified retrospective with the cumulative effect of initially applying it at the date of initial application. The Company anticipates using the full retrospective method of adoption. In February 2016, the FASB issued Accounting Standards Update 2016‑02, “Leases (Topic 842)” (“ASU No. 2016-02”). ASU No. 2016‑02 amends the existing accounting standards for lease accounting, including requiring lessees to recognize most leases on their balance sheets and making targeted changes to lessor accounting. ASU No. 2016‑02 will be effective beginning in the first quarter of 2019. Early adoption of ASU No. 2016‑02 is permitted. ASU No. 2016‑02 requires a modified retrospective transition approach for all leases existing at, or entered into after, the date of initial application, with an option to use certain transition relief. The Company’s management is currently evaluating the impact the adoption of ASU 2016‑02 is anticipated to have on the Company’s consolidated financial statements. In 2016, the FASB issued Accounting Standards Update 2016‑15, “Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments” and Accounting Standard Update 2016‑18, “Statement of Cash Flows (Topic 230): Restricted Cash” related to the classification of certain cash receipts and cash payments and the presentation of restricted cash within an entity’s statement of cash flows, respectively. These standards are effective for interim and annual reporting periods beginning after December 15, 2017, but early adoption is permitted. The Company does not anticipate these standards to have a material impact on the Company’s Consolidated Statement of Cash Flows. Recently Adopted Standards Pursuant to the guidelines of the recently issued Accounting Standards Update 2015-17, “Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes” (“ASU 2015‑17”), all deferred tax assets and liabilities are to be classified as non-current. As permitted under ASU 2015‑17, the Company adopted this guidance for the quarter ended March 31, 2017. The guidance indicates that ASU 2015‑17 may be applied either prospectively or retrospectively. The Company elected to adopt ASU 2015‑17 retrospectively. Upon adoption, approximately $129.3 million of formerly recorded current deferred tax assets as of December 31, 2016 were reclassified to non-current and netted against non-current deferred income taxes payable as of December 31, 2016 in the accompanying financial statements. In March 2016, the FASB issued Accounting Standards Update No. 2016‑09, “Compensation—Stock Compensation (Topic 718)” (“ASU No. 2016‑09”). ASU No. 2016‑09 makes several amendments to Topic 718, which simplified the accounting for share-based payment transactions, including the income tax consequences, the calculation of diluted earnings per share, the treatment of forfeitures and the classification on the statement of cash flows. Amendments related to the timing of when excess tax benefits are recognized, minimum statutory withholding requirements and forfeitures should be applied using a modified retrospective transition method by means of a cumulative-effect adjustment to equity as of the beginning of the period in which the guidance is adopted. Amendments requiring the recognition of excess tax benefits and tax deficiencies in the income statement should be applied prospectively. Prior to the adoption of ASU No. 2016‑09, GAAP required tax effects of deductions for share-based payments in excess of compensation cost and tax deficiencies to be recorded in equity. Under ASU No. 2016‑09, the tax effects of awards are treated as discrete income tax expense items in the reporting period in which they occur. The Company adopted ASU No. 2016‑09 as of January 1, 2017. As a result of employee stock awards that vested and stock options that were exercised during the three months ended March 31, 2017, the Company recorded a discrete income tax benefit of $3.0 million for the same period. The adoption of ASU No. 2016-09 did not have a material effect on the Company’s financial results for the three months ended June 30, 2017. The adoption of ASU No. 2016‑09 did not have a material impact on the statement of cash flows presentation, which the Company adopted prospectively.
Property and Equipment	Property and Equipment Property and equipment are stated at cost and depreciated over their useful lives to their estimated residual values using the straight‑line method. The Company changed the estimated useful lives and residual values for certain long-lived assets as of January 1, 2017 as follows: Assets Current Depreciable Life Prior Policy Depreciable Life Current Residual Value Prior Policy Residual Value New Aircraft 20 - 22 years 18 years 17.5 - 20 % % Used Aircraft, rotable spares, and spare engines up to 18 years up to 18 years 0 - 20 % 0 - 30 % Ground equipment up to 10 years No Change 0 % No Change Office equipment up to 7 years No Change % No Change Leasehold improvements Shorter of 15 years or lease term No Change % No Change Buildings 20 - 39.5 years No Change % No Change The Company estimates that the impact of the change in estimated useful lives and residual values for certain long-lived assets will increase depreciation expense by an additional $1.8 million on an annualized basis for 2017.

Condensed Consolidated Financ17

Condensed Consolidated Financial Statements (Tables)	6 Months Ended
	Jun. 30, 2017
Condensed Consolidated Financial Statements
Schedule of property and equipment	Assets Current Depreciable Life Prior Policy Depreciable Life Current Residual Value Prior Policy Residual Value New Aircraft 20 - 22 years 18 years 17.5 - 20 % % Used Aircraft, rotable spares, and spare engines up to 18 years up to 18 years 0 - 20 % 0 - 30 % Ground equipment up to 10 years No Change 0 % No Change Office equipment up to 7 years No Change % No Change Leasehold improvements Shorter of 15 years or lease term No Change % No Change Buildings 20 - 39.5 years No Change % No Change

Passenger and Ground Handling18

Passenger and Ground Handling and Other Revenue (Tables)	6 Months Ended
	Jun. 30, 2017
Passenger and Ground Handling and Other Revenue
Schedule of details of agreements with other airlines	Delta Connection Agreements Agreement Aircraft type Number of Term / Termination SkyWest Airlines Delta Connection Agreement (fixed-fee arrangement) • • • • 57 27 36 18 • ExpressJet Delta Connection Agreement (fixed-fee arrangement) • • • 23 33 28 • SkyWest Airlines Delta Connection Prorate Agreement (revenue-sharing arrangement) • 25 • United Express Agreements Agreement Aircraft type Number of Term / Termination SkyWest Airlines United Express Agreements (fixed-fee arrangement) • • • 47 20 65 • ExpressJet United ERJ Agreement (fixed-fee arrangement) • • 5 119 • SkyWest Airlines United Express Prorate Agreement (revenue-sharing arrangement) • 22 • Alaska Capacity Purchase Agreement Agreement Aircraft type Number of Term / Termination SkyWest Airlines Alaska Agreement (fixed-fee arrangement) • 20 • American Agreements Agreement Aircraft type Number of Term / Termination SkyWest Airlines American Agreement (fixed-fee arrangement) • • 22 37 • SkyWest Airlines American Prorate Agreement (revenue-sharing arrangement) • 8 • ExpressJet American Agreement (fixed-fee arrangement) • • 2 12 •

Net Income Per Common Share (Ta

Net Income Per Common Share (Tables)	6 Months Ended
	Jun. 30, 2017
Net Income Per Common Share
Schedule of net income per common share	The calculation of the weighted average number of shares of common stock outstanding for Basic EPS and Diluted EPS for the periods indicated (in thousands, except per share data) is as follows: Three Months Ended Six Months Ended June 30, June 30, 2017 2016 2017 2016 Numerator: Net Income $ 50,477 $ 40,244 $ 85,263 $ 67,336 Denominator: Weighted average number of common shares outstanding 51,751 51,418 51,785 51,318 Effect of outstanding share-based awards 1,226 776 1,305 786 Weighted average number of shares for diluted net income per common share 52,977 52,194 53,090 52,104 Basic earnings per share $ 0.98 $ 0.78 $ $ 1.31 Diluted earnings per share $ 0.95 $ 0.77 $ 1.61 $ 1.29

Segment Reporting (Tables)

Segment Reporting (Tables)	6 Months Ended
	Jun. 30, 2017
Segment Reporting
Schedule of Company's segment data	The following represents the Company’s segment data for the three-month periods ended June 30, 2017 and 2016 (in thousands): Three months ended June 30, 2017 SkyWest SkyWest Airlines ExpressJet Leasing Consolidated Operating revenues $ 537,749 $ 212,025 $ 59,985 $ 809,759 Operating expense 460,641 215,070 27,452 703,163 Depreciation and amortization expense 32,530 11,710 26,966 71,206 Interest expense 5,735 1,088 20,240 27,063 Segment profit (loss) (1) 71,373 (4,133) 12,293 79,533 Identifiable intangible assets, other than goodwill — 7,124 — 7,124 Total assets (as of June 30, 2017) 529,175 2,580,107 5,360,613 Capital expenditures (including non-cash) 25,346 4,501 265,955 295,802 Three months ended June 30, 2016 SkyWest SkyWest Airlines ExpressJet Leasing Consolidated Operating revenues $ 504,107 $ 266,241 $ 30,990 $ 801,338 Operating expense 428,142 274,856 14,203 717,201 Depreciation and amortization expense 34,585 21,460 13,842 69,887 Interest expense 6,754 1,617 9,916 18,287 Segment profit (loss) (1) 69,211 (10,232) 6,871 65,850 Identifiable intangible assets, other than goodwill — 9,374 — 9,374 Total assets (as of June 30, 2016) 2,074,265 1,389,687 1,418,099 4,882,051 Capital expenditures (including non-cash) 7,927 2,002 212,745 222,674 (1) Segment profit (loss) is equal to operating income less interest expense The following represents the Company’s segment data for the six-month periods ended June 30, 2017 and 2016 (in thousands): Six months ended June 30, 2017 SkyWest SkyWest Airlines ExpressJet Leasing Consolidated Operating revenues $ 1,020,703 $ 440,683 $ 113,788 $ 1,575,174 Operating expense 896,010 444,563 51,711 1,392,284 Depreciation and amortization expense 64,347 26,235 50,738 141,320 Interest expense 11,535 2,202 37,875 51,612 Segment profit (loss) (1) 113,158 (6,082) 24,202 131,278 Identifiable intangible assets, other than goodwill — 7,124 — 7,124 Total assets (as of June 30, 2017) 2,251,331 529,175 2,580,107 5,360,613 Capital expenditures (including non-cash) 58,777 10,155 449,969 518,901 Six months ended June 30, 2016 SkyWest SkyWest Airlines ExpressJet Leasing Consolidated Operating revenues $ 970,403 $ 534,048 $ 58,963 $ 1,563,414 Operating expense 842,226 548,475 26,767 1,417,468 Depreciation and amortization expense 68,916 42,727 26,045 137,688 Interest expense 13,413 3,740 18,859 36,012 Segment profit (loss) (1) 114,764 (18,167) 13,337 109,934 Identifiable intangible assets, other than goodwill — 9,374 — 9,374 Total assets (as of June 30, 2016) 2,074,265 1,389,687 1,418,099 4,882,051 Capital expenditures (including non-cash) 21,885 7,050 293,025 321,960 Segment profit (loss) is equal to operating income less interest expense

Commitments and Contingencies (

Commitments and Contingencies (Tables)	6 Months Ended
	Jun. 30, 2017
Commitments and Contingencies
Schedule of Future Minimum Rental Payments for Operating Leases	The following table summarizes future minimum rental payments required under operating leases that had initial or remaining non-cancelable lease terms as of June 30, 2017 (in thousands): July through December 2017 $ 2018 2019 2020 2021 Thereafter $ 842,292

Fair Value Measurements (Tables

Fair Value Measurements (Tables)	6 Months Ended
	Jun. 30, 2017
Fair Value Measurements
Schedule of assets measured at fair value on a recurring basis	Assets measured at fair value on a recurring basis are summarized below (in thousands): Fair Value Measurements as of June 30, 2017 Total Level 1 Level 2 Level 3 Marketable Securities Bonds and bond funds $ 417,274 $ — $ 417,274 $ — Commercial paper 65,535 — 65,535 — $ 482,809 $ — $ 482,809 $ — Cash, Cash Equivalents and Restricted Cash 151,710 151,710 — — Total Assets Measured at Fair Value $ 634,519 $ 151,710 $ 482,809 $ — Fair Value Measurements as of December 31, 2016 Total Level 1 Level 2 Level 3 Marketable Securities Bonds and bond funds $ $ — $ $ — Commercial paper — — $ $ — $ $ — Cash, Cash Equivalents and Restricted Cash — — Total Assets Measured at Fair Value $ $ $ $ —

Long-Term Debt (Tables)

Long-Term Debt (Tables)	6 Months Ended
	Jun. 30, 2017
Long-Term Debt
Schedule of long-term debt	Long-term debt consisted of the following as of June 30, 2017 and December 31, 2016 (in thousands): June 30, 2017 December 31, 2016 Current portion of long-term debt $ 310,469 $ 308,945 Current portion of unamortized debt issue cost, net (3,620) (3,485) Current portion of long-term debt, net of debt issue costs $ 306,849 $ 305,460 Long-term debt, net of current maturities $ 2,475,789 $ 2,261,959 Long-term portion of unamortized debt issue cost, net (23,126) (21,908) Long-term debt, net of current maturities and debt issue costs $ 2,452,663 $ 2,240,051 Total long-term debt (including current portion) $ 2,786,258 $ 2,570,904 Total unamortized debt issue cost, net (26,746) (25,393) Total long-term debt, net of debt issue costs $ 2,759,512 $ 2,545,511

Condensed Consolidated Financ24

Condensed Consolidated Financial Statements - Recent Accounting Pronouncements (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended			6 Months Ended
	Jun. 30, 2017	Mar. 31, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016	Dec. 31, 2016
Recent Accounting Pronouncements
Long-term deferred income taxes payable	$ 609,957			$ 609,957		$ 565,404
Diluted earnings per-share (in dollars per share)	$ 0.95		$ 0.77	$ 1.61	$ 1.29
Adjustment | Accounting Standards Update 2015-17
Recent Accounting Pronouncements
Deferred tax assets, current						(129,300)
Long-term deferred income taxes payable						$ (129,300)
Scenario, adjustment | Accounting Standards Update 2016-09
Recent Accounting Pronouncements
Income tax benefit		$ 3,000

Condensed Consolidated Financ25

Condensed Consolidated Financial Statements - Property and Equipment (Details) - USD ($) $ in Millions	6 Months Ended	12 Months Ended
	Jun. 30, 2017	Dec. 31, 2017	Dec. 31, 2016
Forecast
Property and Equipment
Depreciation		$ 1.8
New aircraft
Property and Equipment
Depreciable Life			18 years
Residual Value (as a percent)			30.00%
New aircraft | Minimum
Property and Equipment
Depreciable Life	20 years
Residual Value (as a percent)	17.50%
New aircraft | Maximum
Property and Equipment
Depreciable Life	22 years
Residual Value (as a percent)	20.00%
Used Aircraft, rotable spares, and spare engines
Property and Equipment
Depreciable Life	18 years		18 years
Used Aircraft, rotable spares, and spare engines | Minimum
Property and Equipment
Residual Value (as a percent)	0.00%		0.00%
Used Aircraft, rotable spares, and spare engines | Maximum
Property and Equipment
Residual Value (as a percent)	20.00%		30.00%
Ground equipment
Property and Equipment
Depreciable Life	10 years
Residual Value (as a percent)	0.00%
Office equipment
Property and Equipment
Depreciable Life	7 years
Residual Value (as a percent)	0.00%
Leasehold improvements
Property and Equipment
Depreciable Life	15 years
Residual Value (as a percent)	0.00%
Buildings
Property and Equipment
Residual Value (as a percent)	0.00%
Buildings | Minimum
Property and Equipment
Depreciable Life	20 years
Buildings | Maximum
Property and Equipment
Depreciable Life	39 years 6 months

Passenger and Ground Handling26

Passenger and Ground Handling and Other Revenue (Details)	6 Months Ended
	Jun. 30, 2017aircraft
Agreements with other airlines
Percentage of ASMs flown under fixed-fee arrangements	88.60%
Percentage of ASMs flown under pro-rate arrangements	11.40%
Sky West Airlines Inc | Delta Connection Prorate Agreement
Agreements with other airlines
Term of agreement	30 days
Sky West Airlines Inc | United Express Prorate Agreement
Agreements with other airlines
Term of agreement	120 days
Sky West Airlines Inc | American Prorate Agreement
Agreements with other airlines
Term of agreement	120 days
CRJ 200 | Sky West Airlines Inc | Delta Connection Agreements
Agreements with other airlines
Number of aircraft under contract	57
CRJ 200 | Sky West Airlines Inc | Delta Connection Prorate Agreement
Agreements with other airlines
Number of aircraft under contract	25
CRJ 200 | Sky West Airlines Inc | United Express Agreements
Agreements with other airlines
Number of aircraft under contract	47
CRJ 200 | Sky West Airlines Inc | United Express Prorate Agreement
Agreements with other airlines
Number of aircraft under contract	22
CRJ 200 | Sky West Airlines Inc | American Capacity Purchase Agreement
Agreements with other airlines
Number of aircraft under contract	22
CRJ 200 | Sky West Airlines Inc | American Prorate Agreement
Agreements with other airlines
Number of aircraft under contract	8
CRJ 200 | ExpressJet | Delta Connection Agreements
Agreements with other airlines
Number of aircraft under contract	23
CRJ 200 | ExpressJet | American Capacity Purchase Agreement
Agreements with other airlines
Number of aircraft under contract	2
CRJ 700 | Sky West Airlines Inc | Delta Connection Agreements
Agreements with other airlines
Number of aircraft under contract	27
CRJ 700 | Sky West Airlines Inc | United Express Agreements
Agreements with other airlines
Number of aircraft under contract	20
CRJ 700 | Sky West Airlines Inc | Alaska Capacity Purchase Agreement
Agreements with other airlines
Number of aircraft under contract	20
CRJ 700 | Sky West Airlines Inc | American Capacity Purchase Agreement
Agreements with other airlines
Number of aircraft under contract	37
CRJ 700 | ExpressJet | Delta Connection Agreements
Agreements with other airlines
Number of aircraft under contract	33
CRJ 700 | ExpressJet | American Capacity Purchase Agreement
Agreements with other airlines
Number of aircraft under contract	12
CRJ 900 | Sky West Airlines Inc | Delta Connection Agreements
Agreements with other airlines
Number of aircraft under contract	36
CRJ 900 | ExpressJet | Delta Connection Agreements
Agreements with other airlines
Number of aircraft under contract	28
E 175 | Sky West Airlines Inc
Agreements with other airlines
Number of aircraft under contract	1
E 175 | Sky West Airlines Inc | Delta Connection Agreements
Agreements with other airlines
Number of aircraft under contract	18
E 175 | Sky West Airlines Inc | United Express Agreements
Agreements with other airlines
Number of aircraft under contract	65
ERJ 145 | ExpressJet | United Express Agreements
Agreements with other airlines
Number of aircraft under contract	119
ERJ 135 | ExpressJet | United Express Agreements
Agreements with other airlines
Number of aircraft under contract	5

Share-Based Compensation and 27

Share-Based Compensation and Stock Repurchases (Details) - USD ($) $ / shares in Units, $ in Millions	6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016
Share-Based Compensation
Upon vesting, each restricted stock unit and performance share replaced with common stock	1.00%
Common stock repurchased (in shares)	281,000	0
Common stock repurchased, value	$ 10
Shares repurchased, net settlement of income tax obligation on employee equity awards (in shares)	108,000
Payment of income tax obligation on employee equity awards	$ 3.8
Employee stock option
Share-Based Compensation
Options granted (in shares)	0
Restricted Stock Units (RSUs)
Share-Based Compensation
Granted (in dollars per share)	$ 35.81
Restricted Stock Units (RSUs) | Long Term Incentive Plan 2010
Share-Based Compensation
Granted (in shares)	160,137
Vesting period	3 years
Performance share units | Long Term Incentive Plan 2010
Share-Based Compensation
Granted (in shares)	119,315
Vesting period	3 years
Director | Restricted Stock Units (RSUs)
Share-Based Compensation
Granted (in shares)	22,617
Accounting Standards Update 2016-09
Share-Based Compensation
Stock based compensation expense	$ 5.8	$ 3.9

Net Income Per Common Share (De

Net Income Per Common Share (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016
Net Income Per Common Share
Number of outstanding options not included in computation of Diluted EPS (in shares)	0	0	0	6,000
Numerator
Net income	$ 50,477	$ 40,244	$ 85,263	$ 67,336
Denominator
Weighted average number of common shares outstanding	51,751,000	51,418,000	51,785,000	51,318,000
Effect of outstanding share-based awards	1,226,000	776,000	1,305,000	786,000
Weighted average number of shares for diluted net income per common share	52,977,000	52,194,000	53,090,000	52,104,000
Basic earnings per-share (in dollars per share)	$ 0.98	$ 0.78	$ 1.65	$ 1.31
Diluted earnings per-share (in dollars per share)	$ 0.95	$ 0.77	$ 1.61	$ 1.29

Segment Reporting (Details)

Segment Reporting (Details) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2017USD ($)	Jun. 30, 2016USD ($)	Jun. 30, 2017USD ($)segmentaircraft	Jun. 30, 2016USD ($)	Dec. 31, 2016USD ($)
Segment Reporting
Number of operating segments | segment			3
Operating revenues	$ 809,759	$ 801,338	$ 1,575,174	$ 1,563,414
Operating expense	703,163	717,201	1,392,284	1,417,468
Depreciation and amortization expense	71,206	69,887	141,320	137,688
Interest expense	27,063	18,287	51,612	36,012
Segment profit (loss)	80,863	66,335	133,268	110,849
Identifiable intangible assets, other than goodwill	7,124	9,374	7,124	9,374	$ 8,249
Total assets	5,360,613	4,882,051	5,360,613	4,882,051	$ 5,007,966
Capital expenditures (including non-cash)	295,802	222,674	518,901	321,960
Segments
Segment Reporting
Segment profit (loss)	79,533	65,850	131,278	109,934
SkyWest Airlines
Segment Reporting
Operating revenues	537,749	504,107	1,020,703	970,403
Operating expense	460,641	428,142	896,010	842,226
Depreciation and amortization expense	32,530	34,585	64,347	68,916
Interest expense	5,735	6,754	11,535	13,413
Total assets	2,251,331	2,074,265	2,251,331	2,074,265
Capital expenditures (including non-cash)	25,346	7,927	58,777	21,885
SkyWest Airlines | Segments
Segment Reporting
Segment profit (loss)	71,373	69,211	113,158	114,764
ExpressJet Airlines Inc
Segment Reporting
Operating revenues	212,025	266,241	440,683	534,048
Operating expense	215,070	274,856	444,563	548,475
Depreciation and amortization expense	11,710	21,460	26,235	42,727
Interest expense	1,088	1,617	2,202	3,740
Identifiable intangible assets, other than goodwill	7,124	9,374	7,124	9,374
Total assets	529,175	1,389,687	529,175	1,389,687
Capital expenditures (including non-cash)	4,501	2,002	10,155	7,050
ExpressJet Airlines Inc | Segments
Segment Reporting
Segment profit (loss)	(4,133)	(10,232)	(6,082)	(18,167)
SkyWest Leasing
Segment Reporting
Operating revenues	59,985	30,990	113,788	58,963
Operating expense	27,452	14,203	51,711	26,767
Depreciation and amortization expense	26,966	13,842	50,738	26,045
Interest expense	20,240	9,916	37,875	18,859
Total assets	2,580,107	1,418,099	2,580,107	1,418,099
Capital expenditures (including non-cash)	265,955	212,745	$ 449,969	293,025
SkyWest Leasing | CRJ 200
Segment Reporting
Number of aircraft under contract | aircraft			4
SkyWest Leasing | Segments
Segment Reporting
Segment profit (loss)	$ 12,293	$ 6,871	$ 24,202	$ 13,337

Commitments and Contingencies30

Commitments and Contingencies (Details) $ in Thousands	6 Months Ended
	Jun. 30, 2017USD ($)aircraft
Future minimum rental payments required under operating leases
July through December 2017	$ 76,117
2,018	157,512
2,019	123,878
2,020	135,746
2,021	112,536
Thereafter	236,503
Total future lease obligations	$ 842,292
E 175
Future minimum rental payments required under operating leases
Number of aircraft under firm purchase commitment | aircraft	1

Fair Value Measurements (Detail

Fair Value Measurements (Details) - USD ($) $ in Thousands	Jun. 30, 2017	Dec. 31, 2016
Fair Value Measurements
Marketable securities	$ 482,809	$ 409,898
Fair Value of Financial Instruments
Carrying amount of long-term debt	2,759,512	2,545,511
Recurring
Fair Value Measurements
Marketable securities	482,809	409,898
Cash, Cash Equivalents and Restricted Cash	151,710	155,009
Total Assets Measured at Fair Value	634,519	564,907
Cost of cash and cash equivalents and available for sale securities	626,300	556,800
Fair value of cash and cash equivalents and available for sale securities	626,300	556,700
Recurring | Bonds and bond funds
Fair Value Measurements
Marketable securities	417,274	409,885
Recurring | Commercial paper
Fair Value Measurements
Marketable securities	65,535	13
Recurring | Level 1
Fair Value Measurements
Cash, Cash Equivalents and Restricted Cash	151,710	155,009
Total Assets Measured at Fair Value	151,710	155,009
Recurring | Level 2
Fair Value Measurements
Marketable securities	482,809	409,898
Total Assets Measured at Fair Value	482,809	409,898
Fair Value of Financial Instruments
Fair value of long-term debt	2,800,000	2,570,000
Carrying amount of long-term debt	2,790,000	2,570,000
Recurring | Level 2 | Bonds and bond funds
Fair Value Measurements
Marketable securities	417,274	409,885
Recurring | Level 2 | Commercial paper
Fair Value Measurements
Marketable securities	$ 65,535	$ 13

Long-term Debt (Details)

Long-term Debt (Details) $ in Thousands	6 Months Ended
	Jun. 30, 2017USD ($)aircraft	Dec. 31, 2016USD ($)
Long-term Debt
Current portion long-term debt	$ 310,469	$ 308,945
Current portion of unamortized debt issue cost, net	(3,620)	(3,485)
Current portion of long-term debt, net of debt issue costs	306,849	305,460
Long-term debt, net of current maturities	2,475,789	2,261,959
Long-term portion of unamortized debt issue cost, net	(23,126)	(21,908)
Long-term debt, net of current maturities and debt issue costs	2,452,663	2,240,051
Total long-term debt (including current portion)	2,786,258	2,570,904
Total unamortized debt issue cost, net	(26,746)	(25,393)
Total long-term debt, net of debt issue costs	2,759,512	2,545,511
Letter of credit
Long-term Debt
Amount outstanding	$ 84,600	$ 84,600
E 175
Long-term Debt
Number of aircraft delivered | aircraft	17
Debt issued to purchase of aircraft	$ 384,800
Debt instrument, term	12 years
Minimum | E 175
Long-term Debt
Interest rate (as a percent)	4.30%
Maximum | E 175
Long-term Debt
Interest rate (as a percent)	4.70%

Income Taxes (Details)

Income Taxes (Details)	3 Months Ended	6 Months Ended
	Jun. 30, 2017	Jun. 30, 2017
Income Taxes
Effective tax rate (as a percent)	37.60%	36.00%
Statutory Federal income tax rate (as a percent)	35.00%	35.00%