Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2024 | Apr. 19, 2024 | |
Document and Entity Information | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Mar. 31, 2024 | |
Document Transition Report | false | |
Entity File Number | 0-14719 | |
Entity Registrant Name | SKYWEST INC | |
Entity Incorporation, State or Country Code | UT | |
Entity Tax Identification Number | 87-0292166 | |
Entity Address, Address Line One | 444 South River Road | |
Entity Address, City or Town | St. George | |
Entity Address, State or Province | UT | |
Entity Address, Postal Zip Code | 84790 | |
City Area Code | 435 | |
Local Phone Number | 634-3000 | |
Title of 12(b) Security | Common Stock, No Par Value | |
Trading Symbol | SKYW | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 40,259,473 | |
Entity Central Index Key | 0000793733 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2024 | |
Document Fiscal Period Focus | Q1 | |
Amendment Flag | false |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
CURRENT ASSETS: | ||
Cash and cash equivalents | $ 179,979 | $ 148,277 |
Marketable securities | 641,185 | 686,946 |
Receivables, net | 85,882 | 82,854 |
Inventories, net | 129,866 | 127,114 |
Other current assets | 32,449 | 86,705 |
Total current assets | 1,069,361 | 1,131,896 |
PROPERTY AND EQUIPMENT: | ||
Aircraft and rotable spares | 8,405,513 | 8,323,107 |
Deposits on aircraft | 77,282 | 77,282 |
Buildings and ground equipment | 292,633 | 282,398 |
Total property and equipment, gross | 8,775,428 | 8,682,787 |
Less-accumulated depreciation and amortization | (3,284,609) | (3,199,820) |
Total property and equipment, net | 5,490,819 | 5,482,967 |
OTHER ASSETS: | ||
Operating lease right-of-use assets | 85,905 | 86,727 |
Long-term receivables and other assets | 336,658 | 324,703 |
Total other assets | 422,563 | 411,430 |
Total assets | 6,982,743 | 7,026,293 |
CURRENT LIABILITIES: | ||
Current maturities of long-term debt | 506,602 | 443,869 |
Accounts payable | 480,654 | 470,251 |
Accrued salaries, wages and benefits | 181,154 | 194,881 |
Current maturities of operating lease liabilities | 19,668 | 19,335 |
Taxes other than income taxes | 20,924 | 26,077 |
Other current liabilities | 103,294 | 99,879 |
Total current liabilities | 1,312,296 | 1,254,292 |
LONG-TERM DEBT, net of current maturities | 2,389,227 | 2,562,183 |
DEFERRED INCOME TAXES PAYABLE | 703,602 | 687,600 |
NONCURRENT OPERATING LEASE LIABILITIES | 66,237 | 67,392 |
OTHER LONG-TERM LIABILITIES | 346,478 | 341,324 |
COMMITMENTS AND CONTINGENCIES (Note 7) | ||
STOCKHOLDERS' EQUITY: | ||
Preferred stock, 5,000,000 shares authorized; none issued | ||
Common stock, no par value, 120,000,000 shares authorized; 83,137,744 and 82,840,372 shares issued as of March 31, 2024, and December 31, 2023, respectively | 761,318 | 754,362 |
Retained earnings | 2,331,509 | 2,271,211 |
Treasury stock, at cost, 42,868,446 and 42,615,347 shares as of March 31, 2024, and December 31, 2023, respectively | (928,076) | (912,396) |
Accumulated other comprehensive income | 152 | 325 |
Total stockholders' equity | 2,164,903 | 2,113,502 |
Total liabilities and stockholders' equity | $ 6,982,743 | $ 7,026,293 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Mar. 31, 2024 | Dec. 31, 2023 |
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 | 83,137,744 | 82,840,372 |
Treasury stock, at cost, shares | 42,868,446 | 42,615,347 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
OPERATING REVENUES: | ||
Total operating revenues | $ 803,614 | $ 691,831 |
OPERATING EXPENSES: | ||
Salaries, wages and benefits | 350,999 | 335,201 |
Aircraft maintenance, materials and repairs | 145,415 | 142,226 |
Depreciation and amortization | 95,870 | 94,149 |
Aircraft fuel | 21,164 | 20,964 |
Airport-related expenses | 20,888 | 18,295 |
Aircraft rentals | 1,276 | 19,528 |
Other operating expenses | 68,496 | 66,172 |
Total operating expenses | 704,108 | 696,535 |
OPERATING INCOME (LOSS) | 99,506 | (4,704) |
OTHER INCOME (EXPENSE): | ||
Interest income | 11,626 | 10,033 |
Interest expense | (29,829) | (33,620) |
Other income (loss), net | (1,128) | 2,174 |
Total other expense, net | (19,331) | (21,413) |
INCOME (LOSS) BEFORE INCOME TAXES | 80,175 | (26,117) |
PROVISION (BENEFIT) FOR INCOME TAXES | 19,877 | (4,046) |
NET INCOME (LOSS) | $ 60,298 | $ (22,071) |
BASIC EARNINGS (LOSS) PER SHARE (in dollars per share) | $ 1.50 | $ (0.45) |
DILUTED EARNINGS (LOSS) PER SHARE (in dollars per share) | $ 1.45 | $ (0.45) |
Weighted average common shares: | ||
Basic (in shares) | 40,299 | 49,391 |
Diluted (in shares) | 41,492 | 49,391 |
COMPREHENSIVE INCOME (LOSS): | ||
Net income (loss) | $ 60,298 | $ (22,071) |
Net unrealized appreciation (depreciation) on marketable securities, net of taxes | (173) | 1,480 |
TOTAL COMPREHENSIVE INCOME (LOSS) | 60,125 | (20,591) |
Flying agreements | ||
OPERATING REVENUES: | ||
Total operating revenues | 778,289 | 663,838 |
Lease, airport services and other | ||
OPERATING REVENUES: | ||
Total operating revenues | $ 25,325 | $ 27,993 |
CONSOLIDATED STATEMENTS OF STOC
CONSOLIDATED STATEMENTS OF STOCKHOLDERS EQUITY - USD ($) shares in Thousands, $ in Thousands | Common Stock | Retained Earnings | Treasury Stock | Accumulated Other Comprehensive Loss | Total |
Balance at Dec. 31, 2022 | $ 734,426 | $ 2,236,869 | $ (619,862) | $ (3,802) | $ 2,347,631 |
Balance (in shares) at Dec. 31, 2022 | 82,593 | (31,994) | |||
Increase (Decrease) in Stockholders' Equity | |||||
Net Income (loss) | (22,071) | (22,071) | |||
Vested employee stock awards | $ 57 | 57 | |||
Vested employee stock awards (in shares) | 130 | ||||
Employee income tax paid on vested equity awards | $ (585) | (585) | |||
Employee income tax paid on vested equity awards (in shares) | (32) | ||||
Sale of common stock under employee stock purchase plan | $ 1,218 | 1,218 | |||
Sale of common stock under employee stock purchase plan (in shares) | 78 | ||||
Stock based compensation expense | $ 4,329 | 4,329 | |||
Treasury stock purchases | $ (100,001) | (100,001) | |||
Treasury stock purchases (in shares) | (5,067) | ||||
Net unrealized appreciation (depreciation) on marketable securities, net of tax | 1,480 | 1,480 | |||
Balance at Mar. 31, 2023 | $ 740,030 | 2,214,798 | $ (720,448) | (2,322) | 2,232,058 |
Balance (in shares) at Mar. 31, 2023 | 82,801 | (37,093) | |||
Balance at Dec. 31, 2023 | $ 754,362 | 2,271,211 | $ (912,396) | 325 | 2,113,502 |
Balance (in shares) at Dec. 31, 2023 | 82,840 | (42,615) | |||
Increase (Decrease) in Stockholders' Equity | |||||
Net Income (loss) | 60,298 | 60,298 | |||
Vested employee stock awards (in shares) | 269 | ||||
Employee income tax paid on vested equity awards | $ (6,930) | (6,930) | |||
Employee income tax paid on vested equity awards (in shares) | (117) | ||||
Sale of common stock under employee stock purchase plan | $ 1,446 | 1,446 | |||
Sale of common stock under employee stock purchase plan (in shares) | 29 | ||||
Stock based compensation expense | $ 5,510 | 5,510 | |||
Treasury stock purchases | $ (8,750) | (8,750) | |||
Treasury stock purchases (in shares) | (136) | ||||
Net unrealized appreciation (depreciation) on marketable securities, net of tax | (173) | (173) | |||
Balance at Mar. 31, 2024 | $ 761,318 | $ 2,331,509 | $ (928,076) | $ 152 | $ 2,164,903 |
Balance (in shares) at Mar. 31, 2024 | 83,138 | (42,868) |
CONSOLIDATED STATEMENTS OF ST_2
CONSOLIDATED STATEMENTS OF STOCKHOLDERS EQUITY (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
CONSOLIDATED STATEMENTS OF STOCKHOLDERS EQUITY | ||
Net unrealized appreciation (depreciation) on marketable securities, tax | $ 56 | $ 476 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | ||
NET CASH PROVIDED BY OPERATING ACTIVITIES | $ 157,648 | $ 150,203 |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Purchases of marketable securities | (337,694) | (289,116) |
Sales of marketable securities | 383,282 | 373,492 |
Acquisition of property and equipment: | ||
Aircraft and rotable spare parts | (33,525) | (92,953) |
Buildings and ground equipment | (4,250) | (10,319) |
Proceeds from the sale of property and equipment | 2,212 | 2,162 |
Decrease (increase) in other assets | (10,579) | 19,766 |
NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES | (554) | 3,032 |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Proceeds from issuance of long-term debt | 25,000 | |
Principal payments on long-term debt | (111,158) | (107,276) |
Payment of debt issuance cost | (108) | |
Net proceeds from issuance of common stock | 1,446 | 1,275 |
Employee income tax paid on vested equity awards | (6,930) | (585) |
Purchase of treasury stock | (8,750) | (100,001) |
NET CASH USED IN FINANCING ACTIVITIES | (125,392) | (181,695) |
Increase (decrease) in cash and cash equivalents | 31,702 | (28,460) |
Cash and cash equivalents at beginning of period | 148,277 | 102,984 |
CASH AND CASH EQUIVALENTS AT END OF PERIOD | 179,979 | 74,524 |
Non-cash investing and financing activities: | ||
Acquisition of property and equipment | 6,575 | 4,649 |
Derecognition of right of use assets | (35,062) | |
Derecognition of operating lease liabilities | 35,062 | |
Cash paid during the period for: | ||
Interest, net of capitalized amounts | 30,362 | 33,838 |
Income taxes | $ 42 | $ 533 |
Condensed Consolidated Financia
Condensed Consolidated Financial Statements | 3 Months Ended |
Mar. 31, 2024 | |
Condensed Consolidated Financial Statements | |
Condensed Consolidated Financial Statements | ( 1) Condensed Consolidated Financial Statements Basis of Presentation The condensed consolidated financial statements of SkyWest, Inc. (“SkyWest” or the “Company”), its operating subsidiary SkyWest Airlines, Inc. (“SkyWest Airlines”), its leasing subsidiary SkyWest Leasing, Inc. (“SkyWest Leasing”) and its charter service subsidiary SkyWest Charter, LLC (“SWC”) included herein have been prepared, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). 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. These condensed consolidated financial statements should 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, 2023. The results of operations for the three months ended March 31, 2024, are not necessarily indicative of the results that may be expected for the year ending December 31, 2024. 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 could differ materially from those estimates and assumptions. Recent Accounting Pronouncements In November 2023, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) No. 2023-07, “Segment Reporting (Accounting Standard Codification (“ASC”) Topic 280) – Improvements to Reportable Segment Disclosures,” which is intended to improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses. This ASU also expands disclosure requirements to enable users of financial statements to better understand the entity’s measurement and assessment of segment performance and resource allocation. The guidance is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted. The Company is currently evaluating the potential impact of adopting this new guidance on its consolidated financial statements and related disclosures. In December 2023, the FASB issued ASU No. 2023-09, “Income Taxes (ASC Topic 740) – Improvements to Income Tax Disclosures”, which enhances the transparency, effectiveness and comparability of income tax disclosures by requiring consistent categories and greater disaggregation of information related to income tax rate reconciliations and the jurisdictions in which income taxes are paid. The guidance is effective for annual periods beginning after December 15, 2024, with early adoption permitted. The Company is currently evaluating the potential impact of adopting this new guidance on its consolidated financial statements and related disclosures. |
Operating Revenues
Operating Revenues | 3 Months Ended |
Mar. 31, 2024 | |
Operating Revenues | |
Operating Revenues | (2) Operating Revenues The Company recognizes revenue under its flying agreements and under its lease, airport services and other service agreements when the service is provided under the applicable agreement. Under the Company’s fixed-fee arrangements (referred to as “capacity purchase” agreements) with United Airlines, Inc. (“United”), Delta Air Lines, Inc. (“Delta”), 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, on-time performance or other performance metrics. The major airline partner also directly pays for or reimburses the Company for certain direct expenses incurred under the capacity purchase agreement, such as fuel, airport landing fees and airport rents. Under the capacity purchase agreements, the Company’s performance obligation is met when each flight is completed, measured in completed block hours, and is reflected in flying agreements revenue. The transaction price for the capacity purchase agreements is determined from the fixed-fee consideration, incentive consideration and directly reimbursed expenses earned as flights are completed over the agreement term. For the three months ended March 31, 2024 and 2023, capacity purchase agreements represented approximately 87.0% and 88.4% of the Company’s flying agreements revenue, respectively. Under the Company’s “prorate” arrangements, 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. Under the Company’s prorate flying agreements, the performance obligation is met and revenue is recognized when each flight is completed based upon the portion of the prorate passenger fare the Company determines that it will receive for each completed flight. The transaction price for the prorate agreements is determined from the proration formula derived from each passenger ticket amount on each completed flight over the agreement term. Certain routes under the Company’s prorate arrangements are subsidized by the U.S. Department of Transportation under the Essential Air Service (“EAS”) program, a program created to ensure small communities in the United States maintain a minimum level of scheduled air service. The EAS contracts are generally two years in duration and the Company recognizes EAS revenue on a per-completed-flight basis pursuant to the terms of each contract. Under the Company’s charter operations, SWC, the Company negotiates a fare for the charter flight with the customer. The performance obligation is met and revenue is recognized upon completion of the flight. For the three months ended March 31, 2024 and 2023, prorate flying agreements and SWC revenue represented approximately 13.0% and 11.6% of the Company’s flying agreements revenue, respectively. The following table represents the Company’s flying agreements revenue by type for the three months ended March 31, 2024 and 2023 (in thousands): For the three months ended March 31, 2024 2023 Capacity purchase agreements flight operations revenue (non-lease component) $ 544,160 $ 468,916 Capacity purchase agreements fixed aircraft lease revenue 75,159 74,480 Capacity purchase agreements variable aircraft lease revenue 57,886 43,105 Prorate agreements and SWC revenue 101,084 77,337 Flying agreements revenue $ 778,289 $ 663,838 The Company allocates the total consideration received under its capacity purchase agreements between lease and non-lease components based on stand-alone selling prices. A portion of the Company’s compensation under its capacity purchase agreements relates to operating the aircraft, identified as the non-lease component of the capacity purchase agreement. The Company recognizes revenue attributed to the non-lease component received as fixed-fees for each departure, flight hour or block hour on an as-completed basis for each reporting period. The Company recognizes revenue attributed to the non-lease component received as fixed monthly payments per aircraft proportionate to the number of block hours completed during each reporting period, relative to the estimated number of block hours the Company anticipates completing over the remaining contract term. Accordingly, the Company’s revenue recognition will likely vary from the timing of cash receipts under the Company’s capacity purchase agreements. The Company refers to cash received under its capacity purchase agreements prior to recognizing revenue as “deferred revenue,” and the Company refers to revenue recognized prior to billing its major airline partners under its capacity purchase agreements as “unbilled revenue” for each reporting period. A portion of the Company’s compensation under its capacity purchase agreements is designed to reimburse the Company for certain aircraft ownership costs. The consideration for aircraft ownership costs varies by agreement but is intended to cover either the Company’s aircraft principal and interest debt service costs, its aircraft depreciation and interest expense or its aircraft lease expense costs while the aircraft is under contract. The consideration received for the use of the aircraft under the Company’s capacity purchase agreements is accounted for as lease revenue, inasmuch as the agreements identify the “right of use” of a specific type and number of aircraft over a stated period of time. The lease revenue associated with the Company’s capacity purchase agreements is accounted for as an operating lease and is reflected as flying agreements revenue on the Company’s consolidated statements of comprehensive income. The Company recognizes fixed monthly lease payments as lease revenue using the straight-line basis over the capacity purchase agreement term and variable lease payments in the period when the block hours are completed. The Company recognized $0.5 million of previously deferred lease revenue during the three months ended March 31, 2024, whereas the Company deferred recognizing lease revenue of $20.6 million during the three months ended March 31, 2023, under the straight-line basis. The Company has not separately stated aircraft rental income and aircraft rental expense in the consolidated statement of comprehensive income because the use of the aircraft is not a separate activity of the total service provided under the capacity purchase agreements. The Company’s total deferred revenue balance as of March 31, 2024 was $373.4 million, including $58.0 million in other current liabilities and $315.4 million in other long-term liabilities. The Company’s unbilled revenue balance was $7.0 million as of March 31, 2024, including $1.1 million in other current assets and $5.9 million in other long-term assets. The Company’s total deferred revenue balance was $374.6 million as of December 31, 2023, including $61.0 million in other current liabilities and $313.6 million in other long-term liabilities. The Company’s unbilled revenue balance was $7.3 million as of December 31, 2023, including $1.2 million in other current assets and $6.1 million in other long-term assets. The Company’s capacity purchase and prorate agreements include weekly provisional cash payments from the respective major airline partner based on a projected level of flying each month. The Company and each major airline partner subsequently reconcile these payments to the actual completed flight activity on a monthly or quarterly basis. 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, subject to the variable constraint guidance under ASC Topic 606. As of March 31, 2024, the Company had 475 aircraft in scheduled service or under contract pursuant to code-share agreements. The following table summarizes the significant provisions of each code-share agreement the Company has with each major airline partner through SkyWest Airlines: United Express Agreements Agreement Aircraft type Number of Aircraft Term / Termination Dates United Express Agreements (capacity purchase agreement) • E175 • CRJ 700 • CRJ 200 93 19 70 • Individual aircraft have scheduled removal dates from 2024 to 2029 United Express Prorate Agreement • CRJ 200 19* • Terminable with 120-days’ Total under United Express Agreements 201 Delta Connection Agreements Agreement Aircraft type Number of Aircraft Term / Termination Dates Delta Connection Agreement (capacity purchase agreement) • E175 • CRJ 900 • CRJ 700 85 35 5 • Individual aircraft have scheduled removal dates from 2025 to 2034 Delta Connection Prorate Agreement • CRJ 900 • CRJ 700 6* 4* • 30-days’ Total under Delta Connection Agreements 135 American Capacity Purchase Agreement Agreement Aircraft type Number of Aircraft Term / Termination Dates American Agreement (capacity purchase agreement) • E175 • CRJ 700 20 77 • Individual aircraft have scheduled removal dates from 2024 to 2032 Total under American Agreement 97 Alaska Capacity Purchase Agreement Agreement Aircraft type Number of Aircraft Term / Termination Dates Alaska Agreement (capacity purchase agreement) • E175 42 • Individual aircraft have scheduled removal dates from 2030 to 2034 * The Company’s prorate agreements are based on specific routes, not a specific aircraft count. The number of aircraft listed above for each prorate agreement approximates the number of aircraft the Company uses to serve the prorate routes. In addition to the contractual arrangements described above, as of March 31, 2024, SkyWest Airlines reached agreements to place the following E175 aircraft under a capacity purchase agreement with the respective major airline partners: 2024 2025 2026 Total Delta Air Lines 1 — — 1 United Airlines (1) 21 7 8 36 Alaska Airlines — 1 — 1 Total 22 8 8 38 (1) 17 of the E175 deliveries scheduled for 2024 are partner-financed so the aircraft will be provided by the major airline partner for SkyWest to operate. Final delivery and in-service dates for aircraft to be placed under contract may be adjusted based on various factors. When an aircraft is scheduled to be removed from a capacity purchase 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 major airline partner when the aircraft is provided by the major airline partner, place owned aircraft for sale or pursue other uses for the aircraft. Other uses for the aircraft may include placing the aircraft in a prorate agreement, leasing the aircraft to a third party or disassembling aircraft components such as the engines and parts to be used as spare inventory. Lease, airport services and other revenues primarily consist of revenue generated from aircraft and spare engines leased to third parties and from airport customer service agreements, such as gate and ramp agent services at various airports where the Company has been contracted by third parties to provide such services.. The following table represents the Company’s lease, airport services and other revenues for the three months ended March 31, 2024 and 2023 (in thousands): For the three months ended March 31, 2024 2023 Operating lease revenue $ 16,668 $ 16,560 Airport customer service and other revenue 8,657 11,433 Lease, airport services and other $ 25,325 $ 27,993 The following table summarizes future minimum rental income under operating leases primarily related to leased aircraft and engines that had remaining non-cancelable lease terms as of March 31, 2024 (in thousands): April 2024 through December 2024 $ 34,787 2025 41,476 2026 35,946 2027 35,915 2028 35,139 Thereafter 53,500 Total future minimum rental income under operating leases $ 236,763 Of the Company’s $5.5 billion of net property and equipment as of March 31, 2024, $210.4 million of regional jet aircraft and spare engines were leased to third parties under operating leases. The Company’s mitigation strategy for the residual asset risks of these assets includes leasing aircraft and engine types that can be operated by the Company in the event of a default. Additionally, the operating leases typically have specified lease return condition requirements paid by the lessee to the Company and the Company typically maintains inspection rights under the leases. The transaction price for airport customer service agreements is determined from an agreed-upon rate by location applied to the applicable number of flights handled by the Company over the agreement term. The Company’s operating revenues could be impacted by several factors, including changes to the Company’s code-share agreements with its major airline partners, changes in flight schedules, contract modifications resulting from contract renegotiations, the Company’s ability to earn incentive payments contemplated under the Company’s code-share agreements and resolution of unresolved items with the Company’s major airline partners. 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. Allowance for Credit Losses The Company monitors publicly available credit ratings for entities for which the Company has a significant receivable balance. As of March 31, 2024, the Company had gross receivables of $89.5 million in current assets and gross receivables of $203.9 million in other long-term assets. The Company has established credit loss reserves based on publicly available historic default rates issued by a third party for companies with similar credit ratings, factoring in the term of the respective accounts receivable, notes receivable or guarantees. During the three months ended March 31, 2024, there were no significant changes in the outstanding accounts receivable, notes receivable, guarantees or credit ratings of the entities. The following table summarizes the changes in allowance for credit losses: Allowance for Credit Losses Balance at December 31, 2023 $ 18,699 Adjustments to credit loss reserves 943 Write-offs charged against allowance — Balance at March 31, 2024 $ 19,642 |
Stock-Based Compensation
Stock-Based Compensation | 3 Months Ended |
Mar. 31, 2024 | |
Stock-Based Compensation | |
Stock-Based Compensation | (3) Stock-Based Compensation During the three months ended March 31, 2024, the Company granted 50,577 restricted stock units and 118,021 performance shares to certain employees of the Company under the SkyWest, Inc. 2019 Long-Term Incentive Plan. Both the restricted stock units and performance shares have a three-year vesting per share The Company accounts for forfeitures of restricted stock units and performance shares when forfeitures occur. The estimated fair value of the restricted stock units and performance shares is amortized over the applicable vesting periods. Stock-based compensation expense for the performance shares is based on the Company’s anticipated outcome of achieving the performance metrics. During the three months ended March 31, 2024 and 2023, the Company recorded pre-tax stock-based compensation expense of $5.5 million and $4.3 million, respectively. |
Stock Repurchase
Stock Repurchase | 3 Months Ended |
Mar. 31, 2024 | |
Stock Repurchase | |
Stock Repurchase | ( 4) Stock Repurchase The Company’s Board of Directors adopted a stock repurchase program in May 2023, which authorizes the Company to repurchase shares of the Company’s common stock in the public market or in private transactions, from time to time, at prevailing prices. Under the During the three months ended March 31, 2024, the Company repurchased 136,261 shares of common stock for $8.7 million at a weighted average price per share of $64.21. During the three months ended March 31, 2023, the Company repurchased 5.1 million shares of common stock for $100.0 million at a weighted average price per share of $19.74. |
Net Income Per Common Share
Net Income Per Common Share | 3 Months Ended |
Mar. 31, 2024 | |
Net Income Per Common Share | |
Net Income Per Common Share | (5) 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. Securities that could potentially dilute Basic EPS in the future, and which were excluded from the calculation of Diluted EPS because inclusion of such share would be anti-dilutive, are as follows (in thousands): Three Months Ended March 31, 2024 2023 Treasury Warrants (1) — 785 Employee Stock Awards — 700 Total antidilutive securities — 1,485 (1) U.S. Department of the Treasury (“U.S. Treasury”) warrants to purchase shares of SkyWest common stock issued pursuant to the three Payroll Support Program Agreements and a loan agreement with the U.S. Treasury. Additionally, during the three months ended March 31, 2024 and 2023, 452,000 and 538,000 performance shares (at target performance) were excluded from the computation of Diluted EPS because the Company had not achieved the minimum target thresholds for these shares for the three months ended March 31, 2024 and 2023, respectively. The calculation of the weighted average number of shares of common stock outstanding for Basic EPS and Diluted EPS are as follows for the periods indicated (in thousands, except per share data): Three Months Ended March 31, 2024 2023 Numerator: Net income (loss) $ 60,298 $ (22,071) Denominator: Basic earnings per share weighted average shares 40,299 49,391 Dilutive effect of employee stock awards and warrants 1,193 — Diluted earnings per share weighted average shares 41,492 49,391 Basic earnings per share $ 1.50 $ (0.45) Diluted earnings per share $ 1.45 $ (0.45) |
Segment Reporting
Segment Reporting | 3 Months Ended |
Mar. 31, 2024 | |
Segment Reporting | |
Segment Reporting | (6) Segment Reporting The Company’s two reportable segments consist of (1) the operations of SkyWest Airlines and SWC (collectively, “SkyWest Airlines and SWC”) and (2) SkyWest Leasing activities. The Company’s chief operating decision maker analyzes the profitability of operating new aircraft financed through the issuance of debt, including the Company’s E175 fleet, separately from the profitability of the Company’s capital deployed for ownership and financing of such aircraft. The SkyWest Airlines and SWC segment includes revenue earned under the applicable capacity purchase agreements attributed to operating such aircraft and the respective operating costs. The SkyWest Airlines and SWC segment also includes revenue and operating expenses attributed to other flying agreements and airport services agreements. The SkyWest Leasing segment includes applicable revenue earned under the applicable capacity purchase agreements attributed to the ownership of new aircraft acquired through the issuance of debt and the respective depreciation and interest expense of such aircraft. The SkyWest Leasing segment also includes the activity of leasing regional jet aircraft and spare engines to third parties and other activities. The SkyWest Leasing segment’s total assets and capital expenditures include new aircraft acquired through the issuance of debt and assets leased to third parties. Additionally, aircraft removed from SkyWest Airlines’ operations and held for sale are included in the SkyWest Leasing segment. The following represents the Company’s segment data for the three-month periods ended March 31, 2024 and 2023 (in thousands): Three months ended March 31, 2024 SkyWest Airlines SkyWest and SWC Leasing Consolidated Operating revenues (1) $ 646,809 $ 156,805 $ 803,614 Operating expense 641,363 62,745 704,108 Depreciation and amortization expense 36,108 59,762 95,870 Interest expense 3,476 26,353 29,829 Segment profit (2) 1,970 67,707 69,677 Total assets (as of March 31, 2024) 2,608,104 4,374,639 6,982,743 Capital expenditures (including non-cash) 44,350 — 44,350 Three months ended March 31, 2023 SkyWest Airlines SkyWest and SWC Leasing Consolidated Operating revenues (1) $ 568,173 $ 123,658 $ 691,831 Operating expense 633,392 63,143 696,535 Depreciation and amortization expense 38,258 55,891 94,149 Interest expense 4,062 29,558 33,620 Segment profit (loss) (2) (69,281) 30,957 (38,324) Total assets (as of March 31, 2023) 2,629,521 4,604,240 7,233,761 Capital expenditures (including non-cash) 21,111 86,810 107,921 (1) Prorate revenue and airport customer service revenue are reflected in the SkyWest Airlines and SWC segment. (2) Segment profit (loss) is equal to operating income less interest expense. |
Leases, Commitments, Guarantees
Leases, Commitments, Guarantees and Contingencies | 3 Months Ended |
Mar. 31, 2024 | |
Leases, Commitments, Guarantees and Contingencies | |
Leases, Commitments, Guarantees and Contingencies | (7) Leases, Commitments, Guarantees and Contingencies The Company leases property and equipment under operating leases. For leases with durations longer than 12 months, the Company recorded the related operating lease right-of-use asset and operating lease liability at the present value of lease payments over the term. The Company used its incremental borrowing rate to discount the lease payments based on information available at lease commencement. Aircraft As of March 31, 2024, excluding aircraft financed by the Company’s major airline partners that the Company operates for them under contract, the Company leased eight aircraft under long-term lease agreements with remaining terms ranging from five Airport facilities The Company has operating leases for facility space including airport terminals, office space, cargo warehouses and maintenance facilities. The Company generally leases this space from government agencies that control the use of the various airports. The remaining lease terms for facility space vary from one month to 32 years. The Company’s operating leases with lease rates that are variable based on airport operating costs, use of the facilities or other variable factors are excluded from the Company’s right-of-use assets and operating lease liabilities in accordance with accounting guidance. Leases As of March 31, 2024, the Company’s right-of-use assets were $85.9 million, the Company’s current maturities of operating lease liabilities were $19.7 million, and the Company’s noncurrent lease liabilities were $66.2 million. During the three months ended March 31, 2024, the Company paid $5.7 million under operating leases reflected as a reduction from operating cash flows. The table below presents lease related terms and discount rates as of March 31, 2024: Weighted-average remaining lease term for operating leases 11.4 years Weighted-average discount rate for operating leases 6.2% The Company’s lease costs for the three months ended March 31, 2024 and 2023 included the following components (in thousands): For the three months ended March 31, 2024 2023 Operating lease cost $ 7,259 $ 24,948 Variable and short-term lease cost 1,033 803 Sublease income (1,246) (1,350) Total lease cost $ 7,046 $ 24,401 As of March 31, 2024, 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. The following table summarizes future minimum rental payments required under operating leases that had initial or remaining non-cancelable lease terms as of March 31, 2024 (in thousands): April 2024 through December 2024 $ 15,726 2025 17,974 2026 14,910 2027 12,983 2028 9,976 Thereafter 56,592 Total future minimum operating lease payments $ 128,161 As of March 31, 2024, the Company had a firm purchase commitment for 21 E175 aircraft from Embraer with anticipated delivery dates through 2026. The following table summarizes the Company’s commitments and obligations as noted for each of the next five years and thereafter (in thousands): Total Apr - Dec 2024 2025 2026 2027 2028 Thereafter Operating lease payments for aircraft and facility obligations $ 128,161 $ 15,726 $ 17,974 $ 14,910 $ 12,983 $ 9,976 $ 56,592 Firm aircraft and spare engine commitments 610,945 143,810 230,725 236,410 — — — Interest commitments (1) 442,822 84,964 97,933 78,149 56,289 40,947 84,540 Principal maturities on long-term debt 2,918,971 339,156 532,255 510,598 464,289 292,862 779,811 Total commitments and obligations $ 4,100,899 $ 583,656 $ 878,887 $ 840,067 $ 533,561 $ 343,785 $ 920,943 (1) At March 31, 2024, the Company’s long-term debt had fixed interest rates. Guarantees In 2022, the Company agreed to guarantee $19.8 million of debt for a 14 CFR Part 135 air carrier. The debt is secured by the Part 135 air carrier’s aircraft and engines and has a five-year term. In exchange for providing the guarantee, the Company received 6.5% of the guaranteed amount as consideration, payable in the estimated value of common stock of the Part 135 air carrier, all of which was sold in 2023. The balance of the debt under the guarantee was $ 16.1 million as of March 31, 2024. In 2023, the Company agreed to guarantee up to $12.0 million of debt for an aviation school. The debt is secured by the school’s aircraft and engines and has a five-year term. In exchange for providing the guarantee, the Company receives 2.0% annually of the guaranteed amount as consideration in cash. The balance of the debt under the guarantee was $7.2 million as of March 31, 2024. The purpose of these guarantees is to help reduce the financing costs of aircraft for the third-parties in an effort to increase the potential number of commercial pilots in the Company’s hiring pipeline. The Company also recorded the estimated credit loss associated with the guarantees based on publicly available historical default rates issued by a third party for companies with similar credit ratings, factoring the collateral and guarantee term. |
Fair Value Measurements
Fair Value Measurements | 3 Months Ended |
Mar. 31, 2024 | |
Fair Value Measurements | |
Fair Value Measurements | (8) 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 March 31, 2024, and December 31, 2023, 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 March 31, 2024 Total Level 1 Level 2 Level 3 Marketable Securities Bonds and bond funds $ 628,994 $ — $ 628,994 $ — Commercial paper 12,191 — 12,191 — 641,185 — 641,185 — Investments in Other Companies 11,904 2,158 — 9,746 Cash and Cash Equivalents 179,979 179,979 — — Total Assets Measured at Fair Value $ 833,068 $ 182,137 $ 641,185 $ 9,746 Fair Value Measurements as of December 31, 2023 Total Level 1 Level 2 Level 3 Marketable Securities Bonds and bond funds $ 677,074 $ — $ 677,074 $ — Commercial paper 9,872 — 9,872 — 686,946 — 686,946 — Investments in Other Companies 15,402 2,925 — 12,477 Cash and Cash Equivalents 148,277 148,277 — — Total Assets Measured at Fair Value $ 850,625 $ 151,202 $ 686,946 $ 12,477 The Company’s “Marketable Securities” classified as Level 2 securities primarily utilize broker quotes in a non-active market for valuation of these securities. See Note 11 “Investments in Other Companies” regarding the Company’s investments in other companies, for the three months ended March 31, 2024. The Company did not make any significant transfers of securities between Level 1, Level 2 and Level 3 during the three months ended March 31, 2024. 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 March 31, 2024, and December 31, 2023, the Company classified $641.2 million and $686.9 million of marketable securities, respectively, as short-term because it had the intent to maintain a liquid portfolio and the ability to redeem the securities within one year. At the time of sale, any realized appreciation or depreciation, calculated by the specific identification method, is recognized in other income and expense. As of March 31, 2024, and December 31, 2023, the cost of the Company’s marketable securities was $641.0 million and $686.5 million, respectively. |
Assets Held for Sale
Assets Held for Sale | 3 Months Ended |
Mar. 31, 2024 | |
Assets Held for Sale | |
Assets Held for Sale | (9) Assets Held for Sale In 2022, the Company committed to a formal plan to sell 14 CRJ700 aircraft and determined the aircraft met the criteria to be classified as assets held for sale. At December 31, 2023, the Company presented the $54.3 million of assets held for sale at their fair market value less costs to sell and included the amount in “Other current assets” on the Company’s consolidated balance sheet. During the three months ended March 31, 2024, the Company changed its plan to sell the 14 CRJ700 aircraft and reclassified them as held for use assets in “Aircraft and rotable spares” on the Company’s consolidated balance sheet. The Company remeasured the fair value of the held for use assets at the time of the reclassification and, as a result, for the three months ended March 31, 2024, the Company recorded a $4.2 million gain (pre-tax) as an offset to other operating expenses primarily due to the elimination of the estimated costs to sell the assets. |
Long-term Debt
Long-term Debt | 3 Months Ended |
Mar. 31, 2024 | |
Long-term Debt | |
Long-term Debt | (10) Long-term Debt Long-term debt consisted of the following as of March 31, 2024, and December 31, 2023 (in thousands): March 31, 2024 December 31, 2023 Current portion of long-term debt $ 510,204 $ 447,534 Current portion of unamortized debt issue cost, net (3,602) (3,665) Current portion of long-term debt, net of debt issue costs $ 506,602 $ 443,869 Long-term debt, net of current maturities $ 2,408,767 $ 2,582,776 Long-term portion of unamortized debt issue cost, net (19,540) (20,593) Long-term debt, net of current maturities and debt issue costs $ 2,389,227 $ 2,562,183 Total long-term debt (including current portion) $ 2,918,971 $ 3,030,310 Total unamortized debt issue cost, net (23,142) (24,258) Total long-term debt, net of debt issue costs $ 2,895,829 $ 3,006,052 As of March 31, 2024, the Company had $2.9 billion of total long-term debt, which consisted of $2.7 billion of debt used to finance aircraft and spare engines and $200.6 million of unsecured debt payable to U.S. Treasury. The average effective interest rate on the Company’s debt was approximately 4.1% at March 31, 2024. As of March 31, 2024 and December 31, 2023, the Company had $45.0 million and $49.1 million, respectively, in letters of credit and surety bonds outstanding with various banks and surety institutions. As of March 31, 2024, SkyWest Airlines had a $100.0 million line of credit. The line of credit includes minimum liquidity and profitability covenants and is secured by certain assets. As of March 31, 2024, SkyWest Airlines had no amounts outstanding under the facility. However, at March 31, 2024, SkyWest Airlines had $24.9 million in letters of credit issued under the facility, which reduced the amount available under the facility to $75.1 million. The line of credit expires March 25, 2025 and has a variable interest rate of % plus the one month SOFR rate. The Company’s debt agreements are not traded on an active market and are recorded at carrying value on the Company’s consolidated balance sheet. The fair value of the Company’s long-term debt is estimated based on current rates offered to the Company for similar debt. Debt is primarily classified as Level 2 within the fair value hierarchy. The carrying value and fair value of the Company’s long-term debt as of March 31, 2024 and December 31, 2023, were as follows (in thousands): March 31, 2024 December 31, 2023 Carrying value $ 2,918,971 $ 3,030,310 Fair value $ 2,820,034 $ 2,918,012 |
Investments in Other Companies
Investments in Other Companies | 3 Months Ended |
Mar. 31, 2024 | |
Investments in Other Companies | |
Investments in Other Companies | ( 11) Investments in Other Companies Equity Method Investments During 2019, the Company created a joint venture with Regional One, Inc. and, as of March 31, 2024, has invested a total of $26.6 million for an ownership interest in Aero Engines, LLC. (“Aero Engines”). The primary purpose of Aero Engines is to lease engines to third parties. The Company accounts for its investment in Aero Engines under the equity method. The Company’s exposure in its investment in Aero Engines primarily consists of the Company’s portion of income or loss from Aero Engines’ engine lease agreements with third parties and the Company’s ownership percentage in Aero Engines’ engines book value. Aero Engines had no debt outstanding as of March 31, 2024. As of March 31, 2024, the Company’s investment balance in Aero Engines was $25.3 million and has been recorded in “Other Assets” on the Company’s consolidated balance sheet. The Company’s portion of income generated by Aero Engines for the three months ended March 31, 2024, was $0.2 million, which is recorded in “Other income (loss), net” on the Company’s consolidated statements of comprehensive income. In December 2023, the Company invested $9.9 million for a 9.9% ownership interest in Corporate Flight Management, Inc. d/b/a C 14 CFR Part 135 air carrier. In January 2024, the Company invested an additional $15.1 million in Contour. The Company has a 25% ownership interest in Contour at March 31, 2024 and holds one of five seats, or 20% , on Contour’s board of directors. The Contour arrangement also includes an asset provisioning agreement under which the Company will provide CRJ airframes, engines and rotable parts to Contour. The The Company assesses investments for impairment whenever events or changes in circumstances indicate that the carrying value of an investment may not be recoverable. Fair Value Method Investments In 2021, the Company entered into a strategic partnership with Eve UAM, LLC (“Eve UAM”), to develop a network of deployment for Eve UAM’s electric vertical takeoff and landing (“eVTOL”) aircraft. In 2022, the Company acquired 1,000,000 shares of common stock of Eve Holding, Inc. (“Eve”) and a warrant giving the Company the right to acquire 1,500,000 shares of common stock of Eve at an exercise price of $0.01 per share. The Company also received a put option from an Eve shareholder for the 1,000,000 shares of common stock of Eve payable in aircraft parts credits. The intent of the put option is to reduce the Company’s investment risk in Eve, and the put option expires in December 2031. The Company is restricted from selling the shares underlying the warrant until May 2025, and the warrant expires in May 2032. The Company acquired the shares of common stock, warrant and put option (collectively the “Eve Investments”) for $10.0 million. The Company evaluated the Eve Investments under ASC Topic 321, “Investments – Equity Securities” and ASC Topic 815, “Derivatives and Hedging,” and recorded the Eve Investments based on their pro rata share of the consideration paid using the fair value of the Eve Investments on the acquisition date, with subsequent changes in the fair value report The shares of common stock of Eve are classified as Level 1 within the fair value hierarchy as Eve stock is actively traded on the New York Stock Exchange, and the value is determined using quoted market prices for the equity security. The warrant and put option are classified as Level 3 within the fair value hierarchy (“Eve Level 3 Investments”), and the Company used the Black Scholes Option Pricing Model to determine the estimated fair market value of the , including an expected volatility of 52% , which is a derived from historical volatility of comparable companies. The table below shows the reconciliation of the Eve Level 3 Investments (in thousands): Eve Level 3 Investments: Balance at December 31, 2023 $ 12,477 Unrealized loss (2,731) Balance at March 31, 2024 $ 9,746 The Company recognized unrealized losses of $3.5 million in “ Other income (loss) , net |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2024 | |
Income Taxes | |
Income Taxes | (12) Income Taxes The Company’s effective tax rate for the three months ended March 31, 2024 was 24.8%. The Company’s effective tax rate for the three months ended March 31, 2024 varied from the federal statutory rate of 21.0% primarily due to the provision for state income taxes and the impact of non-deductible expenses, partially offset by a discrete tax benefit from excess tax deductions generated from employee equity transactions that occurred during the three months ended March 31, 2024. The Company’s effective tax rate for the three months ended March 31, 2023 was 15.5%. The Company’s effective tax rate for the three months ended March 31, 2023 varied from the federal statutory rate of 21.0% primarily due to the impact of non-deductible expenses and a discrete tax expense on employee equity transactions that occurred during the three months ended March 31, 2023, partially offset by the provision for state income taxes. |
Legal Matters
Legal Matters | 3 Months Ended |
Mar. 31, 2024 | |
Legal Matters | |
Legal Matters | (13) Legal Matters The Company is subject to certain legal actions which it considers routine to its business activities. As of March 31, 2024, 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 Financ_2
Condensed Consolidated Financial Statements (Policies) | 3 Months Ended |
Mar. 31, 2024 | |
Condensed Consolidated Financial Statements | |
Basis of Presentation | Basis of Presentation The condensed consolidated financial statements of SkyWest, Inc. (“SkyWest” or the “Company”), its operating subsidiary SkyWest Airlines, Inc. (“SkyWest Airlines”), its leasing subsidiary SkyWest Leasing, Inc. (“SkyWest Leasing”) and its charter service subsidiary SkyWest Charter, LLC (“SWC”) included herein have been prepared, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). 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. These condensed consolidated financial statements should 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, 2023. The results of operations for the three months ended March 31, 2024, are not necessarily indicative of the results that may be expected for the year ending December 31, 2024. 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 could differ materially from those estimates and assumptions. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In November 2023, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) No. 2023-07, “Segment Reporting (Accounting Standard Codification (“ASC”) Topic 280) – Improvements to Reportable Segment Disclosures,” which is intended to improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses. This ASU also expands disclosure requirements to enable users of financial statements to better understand the entity’s measurement and assessment of segment performance and resource allocation. The guidance is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted. The Company is currently evaluating the potential impact of adopting this new guidance on its consolidated financial statements and related disclosures. In December 2023, the FASB issued ASU No. 2023-09, “Income Taxes (ASC Topic 740) – Improvements to Income Tax Disclosures”, which enhances the transparency, effectiveness and comparability of income tax disclosures by requiring consistent categories and greater disaggregation of information related to income tax rate reconciliations and the jurisdictions in which income taxes are paid. The guidance is effective for annual periods beginning after December 15, 2024, with early adoption permitted. The Company is currently evaluating the potential impact of adopting this new guidance on its consolidated financial statements and related disclosures. |
Operating Revenues (Tables)
Operating Revenues (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Agreements with other airlines | |
Schedule of revenue by type | The following table represents the Company’s flying agreements revenue by type for the three months ended March 31, 2024 and 2023 (in thousands): For the three months ended March 31, 2024 2023 Capacity purchase agreements flight operations revenue (non-lease component) $ 544,160 $ 468,916 Capacity purchase agreements fixed aircraft lease revenue 75,159 74,480 Capacity purchase agreements variable aircraft lease revenue 57,886 43,105 Prorate agreements and SWC revenue 101,084 77,337 Flying agreements revenue $ 778,289 $ 663,838 |
Schedule of aircraft and agreements with major airline partners | United Express Agreements Agreement Aircraft type Number of Aircraft Term / Termination Dates United Express Agreements (capacity purchase agreement) • E175 • CRJ 700 • CRJ 200 93 19 70 • Individual aircraft have scheduled removal dates from 2024 to 2029 United Express Prorate Agreement • CRJ 200 19* • Terminable with 120-days’ Total under United Express Agreements 201 Delta Connection Agreements Agreement Aircraft type Number of Aircraft Term / Termination Dates Delta Connection Agreement (capacity purchase agreement) • E175 • CRJ 900 • CRJ 700 85 35 5 • Individual aircraft have scheduled removal dates from 2025 to 2034 Delta Connection Prorate Agreement • CRJ 900 • CRJ 700 6* 4* • 30-days’ Total under Delta Connection Agreements 135 American Capacity Purchase Agreement Agreement Aircraft type Number of Aircraft Term / Termination Dates American Agreement (capacity purchase agreement) • E175 • CRJ 700 20 77 • Individual aircraft have scheduled removal dates from 2024 to 2032 Total under American Agreement 97 Alaska Capacity Purchase Agreement Agreement Aircraft type Number of Aircraft Term / Termination Dates Alaska Agreement (capacity purchase agreement) • E175 42 • Individual aircraft have scheduled removal dates from 2030 to 2034 2024 2025 2026 Total Delta Air Lines 1 — — 1 United Airlines (1) 21 7 8 36 Alaska Airlines — 1 — 1 Total 22 8 8 38 (1) 17 of the E175 deliveries scheduled for 2024 are partner-financed so the aircraft will be provided by the major airline partner for SkyWest to operate. |
Schedule of future minimum rental payments for operating leases | April 2024 through December 2024 $ 34,787 2025 41,476 2026 35,946 2027 35,915 2028 35,139 Thereafter 53,500 Total future minimum rental income under operating leases $ 236,763 |
Schedule of allowance for credit losses | The following table summarizes the changes in allowance for credit losses: Allowance for Credit Losses Balance at December 31, 2023 $ 18,699 Adjustments to credit loss reserves 943 Write-offs charged against allowance — Balance at March 31, 2024 $ 19,642 |
Airport customer service and other | |
Agreements with other airlines | |
Schedule of revenue by type | represents the Company’s lease, airport services and other revenues for the three months ended March 31, 2024 and 2023 (in thousands): For the three months ended March 31, 2024 2023 Operating lease revenue $ 16,668 $ 16,560 Airport customer service and other revenue 8,657 11,433 Lease, airport services and other $ 25,325 $ 27,993 |
Net Income Per Common Share (Ta
Net Income Per Common Share (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Net Income Per Common Share | |
Schedule of antidilutive securities excluded from calculation of diluted EPS | 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. Securities that could potentially dilute Basic EPS in the future, and which were excluded from the calculation of Diluted EPS because inclusion of such share would be anti-dilutive, are as follows (in thousands): Three Months Ended March 31, 2024 2023 Treasury Warrants (1) — 785 Employee Stock Awards — 700 Total antidilutive securities — 1,485 (1) U.S. Department of the Treasury (“U.S. Treasury”) warrants to purchase shares of SkyWest common stock issued pursuant to the three Payroll Support Program Agreements and a loan agreement with the U.S. Treasury. |
Schedule of Basic EPS and Diluted EPS | The calculation of the weighted average number of shares of common stock outstanding for Basic EPS and Diluted EPS are as follows for the periods indicated (in thousands, except per share data): Three Months Ended March 31, 2024 2023 Numerator: Net income (loss) $ 60,298 $ (22,071) Denominator: Basic earnings per share weighted average shares 40,299 49,391 Dilutive effect of employee stock awards and warrants 1,193 — Diluted earnings per share weighted average shares 41,492 49,391 Basic earnings per share $ 1.50 $ (0.45) Diluted earnings per share $ 1.45 $ (0.45) |
Segment Reporting (Tables)
Segment Reporting (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Segment Reporting | |
Schedule of Company's segment data | The following represents the Company’s segment data for the three-month periods ended March 31, 2024 and 2023 (in thousands): Three months ended March 31, 2024 SkyWest Airlines SkyWest and SWC Leasing Consolidated Operating revenues (1) $ 646,809 $ 156,805 $ 803,614 Operating expense 641,363 62,745 704,108 Depreciation and amortization expense 36,108 59,762 95,870 Interest expense 3,476 26,353 29,829 Segment profit (2) 1,970 67,707 69,677 Total assets (as of March 31, 2024) 2,608,104 4,374,639 6,982,743 Capital expenditures (including non-cash) 44,350 — 44,350 Three months ended March 31, 2023 SkyWest Airlines SkyWest and SWC Leasing Consolidated Operating revenues (1) $ 568,173 $ 123,658 $ 691,831 Operating expense 633,392 63,143 696,535 Depreciation and amortization expense 38,258 55,891 94,149 Interest expense 4,062 29,558 33,620 Segment profit (loss) (2) (69,281) 30,957 (38,324) Total assets (as of March 31, 2023) 2,629,521 4,604,240 7,233,761 Capital expenditures (including non-cash) 21,111 86,810 107,921 (1) Prorate revenue and airport customer service revenue are reflected in the SkyWest Airlines and SWC segment. (2) Segment profit (loss) is equal to operating income less interest expense. |
Leases, Commitments, Guarante_2
Leases, Commitments, Guarantees and Contingencies (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Leases, Commitments, Guarantees and Contingencies | |
Summary of related terms and discount rates | Weighted-average remaining lease term for operating leases 11.4 years Weighted-average discount rate for operating leases 6.2% |
Summary of lease costs | For the three months ended March 31, 2024 2023 Operating lease cost $ 7,259 $ 24,948 Variable and short-term lease cost 1,033 803 Sublease income (1,246) (1,350) Total lease cost $ 7,046 $ 24,401 |
Schedule of future minimum rental income under operating leases | April 2024 through December 2024 $ 15,726 2025 17,974 2026 14,910 2027 12,983 2028 9,976 Thereafter 56,592 Total future minimum operating lease payments $ 128,161 |
Summary of commitments and obligations | The following table summarizes the Company’s commitments and obligations as noted for each of the next five years and thereafter (in thousands): Total Apr - Dec 2024 2025 2026 2027 2028 Thereafter Operating lease payments for aircraft and facility obligations $ 128,161 $ 15,726 $ 17,974 $ 14,910 $ 12,983 $ 9,976 $ 56,592 Firm aircraft and spare engine commitments 610,945 143,810 230,725 236,410 — — — Interest commitments (1) 442,822 84,964 97,933 78,149 56,289 40,947 84,540 Principal maturities on long-term debt 2,918,971 339,156 532,255 510,598 464,289 292,862 779,811 Total commitments and obligations $ 4,100,899 $ 583,656 $ 878,887 $ 840,067 $ 533,561 $ 343,785 $ 920,943 (1) At March 31, 2024, the Company’s long-term debt had fixed interest rates. |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
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 March 31, 2024 Total Level 1 Level 2 Level 3 Marketable Securities Bonds and bond funds $ 628,994 $ — $ 628,994 $ — Commercial paper 12,191 — 12,191 — 641,185 — 641,185 — Investments in Other Companies 11,904 2,158 — 9,746 Cash and Cash Equivalents 179,979 179,979 — — Total Assets Measured at Fair Value $ 833,068 $ 182,137 $ 641,185 $ 9,746 Fair Value Measurements as of December 31, 2023 Total Level 1 Level 2 Level 3 Marketable Securities Bonds and bond funds $ 677,074 $ — $ 677,074 $ — Commercial paper 9,872 — 9,872 — 686,946 — 686,946 — Investments in Other Companies 15,402 2,925 — 12,477 Cash and Cash Equivalents 148,277 148,277 — — Total Assets Measured at Fair Value $ 850,625 $ 151,202 $ 686,946 $ 12,477 |
Long-term Debt (Tables)
Long-term Debt (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Long-term Debt | |
Schedule of long-term debt | Long-term debt consisted of the following as of March 31, 2024, and December 31, 2023 (in thousands): March 31, 2024 December 31, 2023 Current portion of long-term debt $ 510,204 $ 447,534 Current portion of unamortized debt issue cost, net (3,602) (3,665) Current portion of long-term debt, net of debt issue costs $ 506,602 $ 443,869 Long-term debt, net of current maturities $ 2,408,767 $ 2,582,776 Long-term portion of unamortized debt issue cost, net (19,540) (20,593) Long-term debt, net of current maturities and debt issue costs $ 2,389,227 $ 2,562,183 Total long-term debt (including current portion) $ 2,918,971 $ 3,030,310 Total unamortized debt issue cost, net (23,142) (24,258) Total long-term debt, net of debt issue costs $ 2,895,829 $ 3,006,052 |
Carrying value and fair value of long-term debt | The carrying value and fair value of the Company’s long-term debt as of March 31, 2024 and December 31, 2023, were as follows (in thousands): March 31, 2024 December 31, 2023 Carrying value $ 2,918,971 $ 3,030,310 Fair value $ 2,820,034 $ 2,918,012 |
Investments in Other Companies
Investments in Other Companies (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Investments in Other Companies | |
Schedule of reconciliation of Eve Level 3 investments | The table below shows the reconciliation of the Eve Level 3 Investments (in thousands): Eve Level 3 Investments: Balance at December 31, 2023 $ 12,477 Unrealized loss (2,731) Balance at March 31, 2024 $ 9,746 |
Operating Revenues (Details)
Operating Revenues (Details) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2024 USD ($) aircraft | Mar. 31, 2023 USD ($) | Dec. 31, 2023 USD ($) | |
Agreements with other airlines | |||
Percentage of ASMs flown under fixed-fee arrangements | 87% | 88.40% | |
EAS contract term | 2 years | ||
Percentage of ASMs flown under pro-rate arrangements | 13% | 11.60% | |
Rental income under operating leases | |||
Operating lease revenue | $ 16,668 | $ 16,560 | |
Total operating revenues | 803,614 | 691,831 | |
Future minimum rental income | |||
April 2024 through December 2024 | 34,787 | ||
2025 | 41,476 | ||
2026 | 35,946 | ||
2027 | 35,915 | ||
2028 | 35,139 | ||
Thereafter | 53,500 | ||
Total future minimum rental income under operating leases | 236,763 | ||
Deferred revenue recognized | 700 | 39,300 | |
Decreased unbilled revenue | 300 | 3,300 | |
Deferred revenue | 373,400 | $ 374,600 | |
Deferred revenue in other current liabilities | 58,000 | 61,000 | |
Deferred revenue in other long-term liabilities | 315,400 | 313,600 | |
Unbilled revenue | 7,000 | 7,300 | |
Property and equipment and related assets | 5,490,819 | 5,482,967 | |
Gross receivables current | 89,500 | ||
Gross receivables Non-current | 203,900 | ||
Balance | 18,699 | ||
Adjustments to credit loss reserves | 943 | ||
Balance | 19,642 | ||
Other Current Assets | |||
Future minimum rental income | |||
Unbilled revenue | 1,100 | 1,200 | |
Other Noncurrent Assets | |||
Future minimum rental income | |||
Unbilled revenue | 5,900 | $ 6,100 | |
Other Noncurrent Liabilities | |||
Future minimum rental income | |||
Deferred lease revenue | $ 500 | 20,600 | |
Aircraft in schedule service or under contract | |||
Future minimum rental income | |||
Number of aircraft | aircraft | 475 | ||
Sky West Airlines Inc. | |||
Future minimum rental income | |||
2024 | aircraft | 17 | ||
United | |||
Future minimum rental income | |||
Number of aircraft | aircraft | 201 | ||
United | United Express Prorate Agreement | |||
Future minimum rental income | |||
Agreement term | 120 days | ||
Delta | |||
Future minimum rental income | |||
Number of aircraft | aircraft | 135 | ||
Delta | Delta Connection Prorate Agreement | |||
Future minimum rental income | |||
Agreement term | 30 days | ||
American | |||
Future minimum rental income | |||
Number of aircraft | aircraft | 97 | ||
Jet aircraft and spare engines leased to third parties | |||
Future minimum rental income | |||
Property and equipment and related assets | $ 210,400 | ||
CRJ 200 | United | United Express Agreements | |||
Future minimum rental income | |||
Number of aircraft | aircraft | 70 | ||
CRJ 200 | United | United Express Prorate Agreement | |||
Future minimum rental income | |||
Number of aircraft | aircraft | 19 | ||
CRJ 700 | United | United Express Agreements | |||
Future minimum rental income | |||
Number of aircraft | aircraft | 19 | ||
CRJ 700 | Delta | Delta Connection Prorate Agreement | |||
Future minimum rental income | |||
Number of aircraft | aircraft | 4 | ||
CRJ 700 | Delta | Delta Connection Agreements | |||
Future minimum rental income | |||
Number of aircraft | aircraft | 5 | ||
CRJ 700 | American | American Capacity Purchase Agreement | |||
Future minimum rental income | |||
Number of aircraft | aircraft | 77 | ||
CRJ 900 | Delta | Delta Connection Prorate Agreement | |||
Future minimum rental income | |||
Number of aircraft | aircraft | 6 | ||
CRJ 900 | Delta | Delta Connection Agreements | |||
Future minimum rental income | |||
Number of aircraft | aircraft | 35 | ||
E175 | |||
Future minimum rental income | |||
2024 | aircraft | 22 | ||
2025 | aircraft | 8 | ||
2026 | aircraft | 8 | ||
Total | aircraft | 38 | ||
Number of aircraft under purchase agreement | aircraft | 21 | ||
E175 | Sky West Airlines Inc. | Alaska Capacity Purchase Agreement | |||
Future minimum rental income | |||
Number of aircraft | aircraft | 42 | ||
E175 | United | United Express Agreements | |||
Future minimum rental income | |||
2024 | aircraft | 21 | ||
2025 | aircraft | 7 | ||
2026 | aircraft | 8 | ||
Total | aircraft | 36 | ||
Number of aircraft | aircraft | 93 | ||
E175 | Delta | Delta Capacity Purchase Agreement | |||
Future minimum rental income | |||
2024 | aircraft | 1 | ||
Total | aircraft | 1 | ||
E175 | Delta | Delta Connection Agreements | |||
Future minimum rental income | |||
Number of aircraft | aircraft | 85 | ||
E175 | American | American Capacity Purchase Agreement | |||
Future minimum rental income | |||
Number of aircraft | aircraft | 20 | ||
E175 | Alaska | Alaska Capacity Purchase Agreement | |||
Future minimum rental income | |||
2025 | aircraft | 1 | ||
Total | aircraft | 1 | ||
Flying agreements | |||
Rental income under operating leases | |||
Total operating revenues | $ 778,289 | 663,838 | |
Flight operations revenue | |||
Rental income under operating leases | |||
Total operating revenues | 544,160 | 468,916 | |
Capacity purchase agreements fixed aircraft lease revenue | |||
Rental income under operating leases | |||
Total operating revenues | 75,159 | 74,480 | |
Capacity purchase agreements variable aircraft lease revenue | |||
Rental income under operating leases | |||
Total operating revenues | 57,886 | 43,105 | |
Prorate agreements and SWC revenue | |||
Rental income under operating leases | |||
Total operating revenues | 101,084 | 77,337 | |
Airport customer service and other revenue | |||
Rental income under operating leases | |||
Total operating revenues | 8,657 | 11,433 | |
Lease, airport services and other. | |||
Rental income under operating leases | |||
Total operating revenues | $ 25,325 | $ 27,993 |
Stock-Based Compensation (Detai
Stock-Based Compensation (Details) $ / shares in Units, $ in Millions | 3 Months Ended | |
Mar. 31, 2024 USD ($) item $ / shares shares | Mar. 31, 2023 USD ($) | |
Share-Based Compensation | ||
Upon vesting, each restricted stock unit and performance share replaced with common stock | 1 | |
Stock based compensation expense | $ | $ 5.5 | $ 4.3 |
Restricted Stock Units (RSUs) | ||
Share-Based Compensation | ||
Granted (in dollars per share) | $ / shares | $ 59.57 | |
Restricted Stock Units (RSUs) | Long Term Incentive Plan 2019 | ||
Share-Based Compensation | ||
Granted (in shares) | 50,577 | |
Vesting period | 3 years | |
Performance Share Units (PSUs) | ||
Share-Based Compensation | ||
Granted (in dollars per share) | $ / shares | $ 59.57 | |
Performance Share Units (PSUs) | Long Term Incentive Plan 2019 | ||
Share-Based Compensation | ||
Granted (in shares) | 118,021 | |
Vesting period | 3 years | |
Number of performance period | item | 3 | |
Performance period | 1 year | |
Performance Share Units (PSUs) | Minimum | Long Term Incentive Plan 2019 | ||
Share-Based Compensation | ||
Award percentage | 0% | |
Performance Share Units (PSUs) | Maximum | Long Term Incentive Plan 2019 | ||
Share-Based Compensation | ||
Award percentage | 200% | |
Director | ||
Share-Based Compensation | ||
Granted (in shares) | 12,634 | |
Granted (in dollars per share) | $ / shares | $ 59.57 | |
Director | Restricted Stock Units (RSUs) | ||
Share-Based Compensation | ||
Granted (in shares) | 2,632 |
Stock Repurchase (Details)
Stock Repurchase (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | ||
Mar. 31, 2024 | Mar. 31, 2023 | May 31, 2023 | |
Stock Repurchase | |||
Common stock authorized for repurchase, maximum | $ 250 | ||
Common stock remaining number of shares authorized to repurchase | 82.2 | ||
Stock repurchased (shares) | 136,261 | 5.1 | |
Stock repurchased during period (value) | $ 8.7 | $ 100 | |
Weighted average price per share of common stock (in dollars per share) | $ 64.21 | $ 19.74 |
Net Income Per Common Share - A
Net Income Per Common Share - Antidilutive securities (Details) shares in Thousands | 3 Months Ended |
Mar. 31, 2023 shares | |
Net Income Per Common Share | |
Total antidilutive securities (in shares) | 1,485 |
Treasury Warrants | |
Net Income Per Common Share | |
Total antidilutive securities (in shares) | 785 |
Employee Stock Awards | |
Net Income Per Common Share | |
Total antidilutive securities (in shares) | 700 |
Net Income Per Common Share (De
Net Income Per Common Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Number of outstanding units not included in computation of Diluted EPS (in shares) | 1,485,000 | |
Numerator: | ||
Net income (loss) | $ 60,298 | $ (22,071) |
Denominator: | ||
Basic earnings per share weighted average shares | 40,299,000 | 49,391,000 |
Dilutive effect of employee stock awards and warrants | 1,193,000 | |
Diluted earnings per share weighted average shares | 41,492,000 | 49,391,000 |
Basic earnings per share (in dollars per share) | $ 1.50 | $ (0.45) |
Diluted earnings per share (in dollars per share) | $ 1.45 | $ (0.45) |
Performance Share Units (PSUs) | ||
Number of outstanding units not included in computation of Diluted EPS (in shares) | 452,000 | 538,000 |
Segment Reporting (Details)
Segment Reporting (Details) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2024 USD ($) segment | Mar. 31, 2023 USD ($) | Dec. 31, 2023 USD ($) | |
Segment Reporting | |||
Number of reporting segments | segment | 2 | ||
Operating revenues | $ 803,614 | $ 691,831 | |
Operating expense | 704,108 | 696,535 | |
Depreciation and amortization expense | 95,870 | 94,149 | |
Interest expense | 29,829 | 33,620 | |
Segment profit | 69,677 | (38,324) | |
Total assets | 6,982,743 | 7,233,761 | $ 7,026,293 |
Capital expenditures (including non-cash) | 44,350 | 107,921 | |
SkyWest Airlines and SWC | |||
Segment Reporting | |||
Operating revenues | 646,809 | 568,173 | |
Operating expense | 641,363 | 633,392 | |
Depreciation and amortization expense | 36,108 | 38,258 | |
Interest expense | 3,476 | 4,062 | |
Segment profit | 1,970 | (69,281) | |
Total assets | 2,608,104 | 2,629,521 | |
Capital expenditures (including non-cash) | 44,350 | 21,111 | |
SkyWest Leasing | |||
Segment Reporting | |||
Operating revenues | 156,805 | 123,658 | |
Operating expense | 62,745 | 63,143 | |
Depreciation and amortization expense | 59,762 | 55,891 | |
Interest expense | 26,353 | 29,558 | |
Segment profit | 67,707 | 30,957 | |
Total assets | $ 4,374,639 | 4,604,240 | |
Capital expenditures (including non-cash) | $ 86,810 |
Leases, Commitments, Guarante_3
Leases, Commitments, Guarantees and Contingencies (Details) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2024 USD ($) aircraft | Mar. 31, 2023 USD ($) | Dec. 31, 2023 USD ($) | |
Lessee, Lease, Description [Line Items] | |||
Operating lease right-of-use assets | $ 85,905 | $ 86,727 | |
Current maturities of lease liabilities | 19,668 | 19,335 | |
Noncurrent operating leases | 66,237 | $ 67,392 | |
Operating leases | $ 5,700 | ||
Weighted-average remaining lease term for operating leases | 11 years 4 months 24 days | ||
Weighted-average discount rate for operating leases | 6.20% | ||
Lease costs | |||
Operating lease cost | $ 7,259 | $ 24,948 | |
Variable and short-term lease cost | 1,033 | 803 | |
Sublease income | (1,246) | (1,350) | |
Total lease cost | $ 7,046 | $ 24,401 | |
Aircraft | |||
Lessee, Lease, Description [Line Items] | |||
Number of aircraft acquired | aircraft | 8 | ||
Aircraft | Minimum | |||
Lessee, Lease, Description [Line Items] | |||
Remaining lease term | 5 years | ||
Aircraft | Maximum | |||
Lessee, Lease, Description [Line Items] | |||
Remaining lease term | 6 years | ||
Airport Facilities | Minimum | |||
Lessee, Lease, Description [Line Items] | |||
Remaining lease term | 1 month | ||
Airport Facilities | Maximum | |||
Lessee, Lease, Description [Line Items] | |||
Remaining lease term | 32 years |
Leases, Commitments, Guarante_4
Leases, Commitments, Guarantees and Contingencies - Operating Leases (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2024 USD ($) aircraft | |
Future minimum rental payments required under operating leases | |
April 2024 through December 2024 | $ 15,726 |
2025 | 17,974 |
2026 | 14,910 |
2027 | 12,983 |
2028 | 9,976 |
Thereafter | 56,592 |
Total future minimum operating lease payments | $ 128,161 |
E175 | |
Future minimum rental payments required under operating leases | |
Number of aircraft under purchase agreement | aircraft | 21 |
Leases, Commitments, Guarante_5
Leases, Commitments, Guarantees and Contingencies - Commitments and Obligations (Details) - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Operating lease payments for aircraft and facility obligations | ||
Apr - Dec 2024 | $ 15,726 | |
2025 | 17,974 | |
2026 | 14,910 | |
2027 | 12,983 | |
2028 | 9,976 | |
Thereafter | 56,592 | |
Total future minimum operating lease payments | 128,161 | |
Firm aircraft and spare engine commitments | ||
Apr - Dec 2024 | 143,810 | |
2025 | 230,725 | |
2026 | 236,410 | |
Total | 610,945 | |
Interest commitments | ||
Apr - Dec 2024 | 84,964 | |
2025 | 97,933 | |
2026 | 78,149 | |
2027 | 56,289 | |
2028 | 40,947 | |
Thereafter | 84,540 | |
Total | 442,822 | |
Principal maturities on long-term debt | ||
Apr - Dec 2024 | 339,156 | |
2025 | 532,255 | |
2026 | 510,598 | |
2027 | 464,289 | |
2028 | 292,862 | |
Thereafter | 779,811 | |
Total | 2,918,971 | $ 3,030,310 |
Total commitments and obligations | ||
Apr - Dec 2024 | 583,656 | |
2025 | 878,887 | |
2026 | 840,067 | |
2027 | 533,561 | |
2028 | 343,785 | |
Thereafter | 920,943 | |
Total | $ 4,100,899 |
Leases, Commitments, Guarante_6
Leases, Commitments, Guarantees and Contingencies - Guarantees (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Mar. 31, 2024 | |
Leases, Commitments, Guarantees and Contingencies | |||
Guaranteed amount received as consideration, percentage | 6.50% | ||
Debt | |||
Leases, Commitments, Guarantees and Contingencies | |||
Guarantor Obligations, Current Carrying Value | $ 7.2 | ||
Debt | Aircraft and engines | |||
Leases, Commitments, Guarantees and Contingencies | |||
Guaranteed amount | $ 12 | $ 19.8 | |
Term of guarantee obligations | 5 years | 5 years | |
Guaranteed amount received as consideration, percentage | 2% | ||
Guarantor Obligations, Current Carrying Value | $ 16.1 |
Fair Value Measurements (Detail
Fair Value Measurements (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended |
Mar. 31, 2024 | Dec. 31, 2023 | |
Fair Value Measurements | ||
Marketable Securities | $ 641,185 | $ 686,946 |
Maximum period for redemption | 1 year | 1 year |
Marketable securities at cost | $ 641,000 | $ 686,500 |
Recurring | Estimate of Fair Value Measurement | ||
Fair Value Measurements | ||
Marketable Securities | 641,185 | 686,946 |
Investments in Other Companies | 11,904 | 15,402 |
Cash and Cash Equivalents | 179,979 | 148,277 |
Total Assets Measured at Fair Value | 833,068 | 850,625 |
Recurring | Estimate of Fair Value Measurement | Bonds and bond funds | ||
Fair Value Measurements | ||
Marketable Securities | 628,994 | 677,074 |
Recurring | Estimate of Fair Value Measurement | Commercial Paper | ||
Fair Value Measurements | ||
Marketable Securities | 12,191 | 9,872 |
Recurring | Level 1 | ||
Fair Value Measurements | ||
Investments in Other Companies | 2,158 | 2,925 |
Cash and Cash Equivalents | 179,979 | 148,277 |
Total Assets Measured at Fair Value | 182,137 | 151,202 |
Recurring | Level 2 | ||
Fair Value Measurements | ||
Marketable Securities | 641,185 | 686,946 |
Total Assets Measured at Fair Value | 641,185 | 686,946 |
Recurring | Level 2 | Bonds and bond funds | ||
Fair Value Measurements | ||
Marketable Securities | 628,994 | 677,074 |
Recurring | Level 2 | Commercial Paper | ||
Fair Value Measurements | ||
Marketable Securities | 12,191 | 9,872 |
Recurring | Level 3 | ||
Fair Value Measurements | ||
Investments in Other Companies | 9,746 | 12,477 |
Total Assets Measured at Fair Value | $ 9,746 | $ 12,477 |
Assets Held for Sale (Details)
Assets Held for Sale (Details) - CRJ 700 - Held for sale $ in Millions | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2024 USD ($) aircraft | Dec. 31, 2022 aircraft | Dec. 31, 2023 USD ($) | |
Assets Held for Sale | |||
Number of aircraft held-for-sale | aircraft | 14 | 14 | |
Gain due to elimination of the costs to sell in other operating expenses | $ 4.2 | ||
Assets held for sale | $ 54.3 |
Long-term Debt (Details)
Long-term Debt (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Dec. 31, 2023 | |
Debt Instrument [Line Items] | ||
Current portion of long-term debt | $ 510,204 | $ 447,534 |
Current portion of unamortized debt issue cost, net | (3,602) | (3,665) |
Current portion of long-term debt, net of debt issue costs | 506,602 | 443,869 |
Long-term debt, net of current maturities | 2,408,767 | 2,582,776 |
Long-term portion of unamortized debt issue cost, net | (19,540) | (20,593) |
Long-term debt, net of current maturities and debt issue costs | 2,389,227 | 2,562,183 |
Total long-term debt (including current portion) | 2,918,971 | 3,030,310 |
Total unamortized debt issue cost, net | (23,142) | (24,258) |
Total long-term debt, net of debt issue costs | 2,895,829 | 3,006,052 |
Maximum borrowing capacity | $ 100,000 | |
Effective interest rate (as a percent) | 4.10% | |
Basis spread on variable rate | 3.50% | |
Letters of credit and surety bonds | ||
Debt Instrument [Line Items] | ||
Letters of credit and surety bonds outstanding with various banks and surety institutions | $ 45,000 | $ 49,100 |
Letters of credit | ||
Debt Instrument [Line Items] | ||
Amount outstanding | $ 24,900 | |
Basis spread on variable rate | 3.50% | |
Unsecured debt payable to U.S. Treasury | ||
Debt Instrument [Line Items] | ||
Total long-term debt, net of debt issue costs | $ 200,600 | |
Line of credit | ||
Debt Instrument [Line Items] | ||
Amount outstanding | 0 | |
Maximum borrowing capacity | 75,100 | |
Primarily related to acquisition of aircraft and certain spare engines | ||
Debt Instrument [Line Items] | ||
Total long-term debt (including current portion) | 2,900,000 | |
Total long-term debt, net of debt issue costs | $ 2,700,000 |
Long-term Debt - Carrying Value
Long-term Debt - Carrying Value and Fair Value (Details) - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Debt Instrument [Line Items] | ||
Carrying value | $ 2,895,829 | $ 3,006,052 |
Recurring | Level 2 | ||
Debt Instrument [Line Items] | ||
Carrying value | 2,918,971 | 3,030,310 |
Fair value | $ 2,820,034 | $ 2,918,012 |
Investments in Other Companie_2
Investments in Other Companies (Details) $ / shares in Units, $ in Thousands | 1 Months Ended | 3 Months Ended | 12 Months Ended | |||
Jan. 31, 2024 USD ($) | Dec. 31, 2023 USD ($) | Mar. 31, 2024 USD ($) item | Mar. 31, 2023 USD ($) | Dec. 31, 2023 USD ($) shares | Dec. 31, 2022 USD ($) $ / shares shares | |
Long-term debt | $ 3,006,052 | $ 2,895,829 | $ 3,006,052 | |||
Aircraft maintenance, materials and repairs | $ 145,415 | $ 142,226 | ||||
Fair Value, Net Derivative Asset (Liability), Recurring Basis, Still Held, Unrealized Gain (Loss), Statement of Income or Comprehensive Income [Extensible Enumeration] | Other Nonoperating Income (Expense) | |||||
Aero Engines, LLC. ("Aero Engines") | ||||||
Payments to acquire interest in joint venture | $ 26,600 | |||||
Long-term debt | 0 | |||||
Aero Engines, LLC. ("Aero Engines") | Other Assets | ||||||
Investment balance in other companies | 25,300 | |||||
Aero Engines, LLC. ("Aero Engines") | Other income (loss), net | ||||||
Company's portion of income (loss) generated by other companies | $ 200 | |||||
Contour Airlines | ||||||
Investment ownership (as a percent) | 9.90% | 25% | 9.90% | |||
Aircraft maintenance, materials and repairs | $ 14,000 | |||||
Aircraft and collectible years | 4 years | |||||
Payments to acquire equity method investment | $ 15,100 | $ 9,900 | ||||
Number of Board of Directors Seat Held | item | 1 | |||||
Total Number of Board of Directors Seat | item | 5 | |||||
Percentage of Board of Directors Seat Held | 20% | |||||
Contour Airlines | Other Assets | ||||||
Investment balance in other companies | $ 25,000 | |||||
Contour Airlines | Other income (loss), net | ||||||
Company's portion of income (loss) generated by other companies | (100) | |||||
Eve Holdings, Inc. ("Eve") | ||||||
Warrants to purchase shares | shares | 1,500,000 | |||||
Warrants exercise price (in dollars per share) | $ / shares | $ 0.01 | |||||
Initial investment | $ 10,000 | |||||
Unrealized loss | 3,500 | |||||
Eve Holdings, Inc. ("Eve") | Level 3 | ||||||
Beginning balance | $ 12,477 | 12,477 | ||||
Unrealized loss | 2,731 | |||||
Ending balance | $ 12,477 | 9,746 | $ 12,477 | |||
Eve Holdings, Inc. ("Eve") | Level 3 | Black Scholes Option Pricing Model | Volatility | ||||||
Measurement input | 0.52 | |||||
Eve Holdings, Inc. ("Eve") | Put option | ||||||
Shares obtained | shares | 1,000,000 | |||||
Shares sold | shares | 600,411 | |||||
Shares reduced | shares | 600,411 | |||||
Eve Holdings, Inc. ("Eve") | Other Assets | ||||||
Investment balance in other companies | $ 11,900 | |||||
Eve Holdings, Inc. ("Eve") | Class A common stock | ||||||
Number of shares acquired | shares | 1,000,000 |
Income Taxes (Details)
Income Taxes (Details) | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Income Taxes | ||
Effective tax rate (as a percent) | 24.80% | 15.50% |
Statutory Federal income tax rate (as a percent) | 21% | 21% |
Insider Trading Arrangements
Insider Trading Arrangements | 3 Months Ended |
Mar. 31, 2024 | |
Trading Arrangements, by Individual | |
Rule 10b5-1 Arrangement Adopted | false |
Non-Rule 10b5-1 Arrangement Adopted | false |
Rule 10b5-1 Arrangement Terminated | false |
Non-Rule 10b5-1 Arrangement Terminated | false |