SKYW - Earnings call transcript Q3 2018

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Operator

Good afternoon. And welcome to the SkyWest Incorporated Third Quarter 2018 Earnings Conference Call. All participants will be in a listen-only mode. [Operator Instructions] Please also note, today's event is being recorded. I would like to turn the conference call over to Rob Simmons, SkyWest's Chief Financial Officer. sir. ahead, go Please

Rob Simmons

joining the for today. us everyone call on Thanks

Simmons, this Financial As indicated, Rob SkyWest's the operator is Chief Officer.

Eric Steel, On the and Commercial Mike Wade President excuse Airlines' we Chief Vais, Chip are Accounting Operating Officer, Thompson, Chief Officer SkyWest call with Chief ExpressJet me Executive today Woodward, Officer, Chief will and Childs, Terry Officer, Safe will by Airlines' would like I the Chief operation asking to to some his Eric today. Chip Operating I Officer. comments. running He Harbor. read over time the start turn is today Then out for to

take through discuss arrangements. will I Chip, Wade related Then financial will Following fleet flying and us the results. the

Wade, analysts. Following with the session Q&A our Eric? will sell-side we have customary

Eric Woodward

assumptions and Today's subject forward-looking those and vary discussion or may contains We statements uncertainties. statement. represent likely and forward-looking to materially reasons. of and future vary to Actual regarding are that update risks our no expectations assume projected number from obligation events will for any a estimated results beliefs, anticipated, current

such call reports With factors our and XX-K Some of the Form XXXX Chip. to turn may other in included differences filings will the I and that Exchange are that, Securities with Commission. over and the cause

Chip Childs

and production for during and quarter, Eric. and third strong everyone season SkyWest and Good Summer precision. Thank our same XX.X% SkyWest adjusted continued you performed achieved our ExpressJet delivered to Airlines Rob quarter and and third operating completion on travel execute Overall, and the joining with thank is SkyWest that flights more peak our XXX,XXX XX.X% the a well third for the With quarter. afternoon, our trend teams each adjusted quarter release. reliability. in completion during quarter the achieved press you ExpressJet than year. the great us typically had today. call reflects this as outlined

to as for and second placing Airlines industry VOT first report work also service SkyWest recent respectively their North in our month the for the delivering of work across for our fewest great and the passengers partners most complaints airlines I with teams ExpressJet the Our thank want led America. exceptional and seamless with and the August.

our for an our SkyWest agreed existing to noted CRJ-XXX XX Airlines in United with aircraft. extension release, press As

We both dual continue demand to aircraft strong seat our for and see fleet. class XX across

eight also We EXXX of aircraft our on expected plans four previously agreement. the delivery more our CRJ-XXX and continue fleet fourth quarter with executing current in under aircraft announced new

on commitments, flexibility strong delivering are discipline. We our maintaining on fleet focused executing with and

new tranche we expected are had years three transition We've agreement movement that largest complete, a of indicated we to over the to modest to and smaller, fleet expect losses where positioned are significant end. we Fleet XXXX its leaner ExpressJet's pilot and to ExpressJet come entity quarter. continue finally With last for the in as a past put profitability an

economics strong existing one by while continuing firmly well quarter, with our XXXX third Airlines solidify distinct the fleet. smaller, competitors fulfilling the existing a successful today, employer And helping visibility, as we of employer through opportunities. Two, improve XXXX of amendment provides This scope secured and also creating establishing earnings demand believe and an opportunities us the believe is agreement. within three advantage improved legacy and and and opportunity XXXX are for is the there positions SkyWest our to left in as pilots runs future competitive innovative through We its ourselves long-term choice growth still very to of that tracking position During compensation pilot. the weaker choice. we for agreement to agreement

changes. fleet announcements expanses expect don't we While without large scope

growth for incremental those can who builds smaller aggregate of deliver. is available still Solid from an

advantage. competitive to attract ability be a to our continue believe We best will that the professionals

sustainable Our balance and if will sheet scope vision has when strength be liquidity arrives. people philosophy or changed, and new for growth ready and long-term with we not

focused are strategic of and that believe investment objectives including employer, developing We thank professionals want priorities, successfully stakeholders. by balancing we sustainable, to allows that operational delivering discussed, third Rob? us continue during and these excellence. for producing choice. quarter. I've XX,XXX add be the risk our on I work on to sheet business each fleet long-term As the again balance aviation outstanding we objectives strength tremendous value plans, their And executing to mitigating will of our these discipline to partner

Rob Simmons

QX, XXXX, $XX QX the Today was the we from XXXX. aircraft for adding profitable reported or removal $XX in net quarter $XXX of up or of quarter of impact unprofitable in same third net per $X.XX of XXXX. period. up XXXX. share of during per QX, XXXX the from from XX of $X.XX $XX offset XX% QX, Pretax aircraft from third revenue new million Revenue less up XX included million of income $XXX million over income million million in or partially income $XX increase since QX, million This XXXX, share by the net the was EXXX

during paid million business cost per from a up year in prorate total was fuel under item $X.XX line higher higher third Our fuel model. our aircraft reflecting gallon our per gallon pretax for the average rate QX, ago, $X the XXXX. P&L in $X.XX quarter, The than

subject reminder fuel XX% not our model to is that of a Just approximately risk.

effective law. with by compared rate Our being in to driven difference year tax obviously Q the tax at time new year-over-year XX% XX.X% the this last was

We XXXX whole. tax continue to XX% rate be approximately to for and a the quarter our XX% for fourth to expect as XX%

acquisition things Let financing of and the We million, in XXth, the XX fourth million quarter. equity deposits quarter and XXXX me quarter new during differentiation in ended up run as capital from $XXX our million to million of last to range. and $XXX million $X million QX, debt $X.X new into billion, We was planes Total last model. aircraft about up per with toward in in cash and billion for in from $XX new should XXXX important $XX point our a SkyWest continue spending September $XX Non $XXX CapEx. of $XX quarter million used debt cash issued long-term balance sheet EXXXs. quarter. XXXX couple the in say other

With fourth to approximately in million $XXX be of year by quarter. We the eight of delivered to a raise for remaining $XX new the debt own term plan the and these EXXX million invest the end expected our capital planes. in

debt amortizing $X.X of now from in embedded normal because end We million will year. the $XXX of the XXXX principle expect close we debt the payments by million up our in are approximately where to billion, by $XXX be end term our fully of

the end debt, and of expected to to balance an in continue of peak down per in XXXX delever paying our Assuming million $XXX XXXX year. million debt will in we XXXX, by $XXX neighborhood sheet we

The last it. During be authorized couple QX, a the utilize from remaining program few we we in expected have by are still $XX We this million busy repurchased fleet over under execute have authorization extensions to as next very repurchase months. Board stock last million $XX to new expect reported the program perspective quarters year. in our three-year the that and under $XXX fully we contracts million and

bolstering though SkyWest not expect announced and be last year. and profitability in offset we The inked does pilot The expect also in fleet and offset amount full is deal, is XXXX. that earnings of the the our SkyWest production SkyWest generate at today we the the SkyWest of to more Chip revenue in high upside quarter opportunities. XXXX, future at single-digit expect ExpressJet opportunities. new other Airlines rate smaller could With increase from pilots to pay in half the Airlines be our world. market from mentioned, of and affect the airline monetize of incremental full necessarily hope contract resets pilot cost expectation This effect this cost regional we be but of Airlines. in the revenue the attractive Including growth not would new to the one new in the In via expectation we flying contract flying that effect as with will capture most growth standing agreement anywhere pilot XXXX of baseline pilot more XXXX. offset by newly come the the agreements, agreements in recruiting of new cost the both employers at retention expected over movements and further ExpressJet and deal leaner includes able offset potential articulated As modest the does at and pilot numerous pilot resets ExpressJet contract pilots next we

to anytime year-over-year XXXX to growth in spending it about scope come. a We be this than anyone of quarters in is it new also with something the unexpected goes will our new world is soon, on XXXX XXXX. In from no in zero aircraft earnings in as that expected a less talk rate be expected not been surprising is to that to million should closer to What our XXXX. in not has in more $XXX

aircraft deployment and out well scope had will adjusted the to generation how long-term if opportunities strong liquid new free our and as cash leasing, look and be confidence years. generate then our with our will and opportunities This a as buy Our capital visibility capital dramatically. we ability to be growth flying, inflexible new set about for investment risk better Never have couple contract in expensive could over our and opportunities ready increase of include a opportunities organic we flying; to we to and continue flow Until is to investment. sheet. balance disciplined we structures. in deploy of When to next cash continue come, will sensible couple to prorate leasing strong way

excess you to commercial will Wade? addition other and now fleet and via color dividends. organic look growth shareholders movements capital some opportunities, also Wade at and to will In give to returning repurchase opportunities share on we the continue initiatives.

Wade Steel

the XXth, agreements the you, fleet then September June our changes discuss XXth implementation these and of third Thank review first quarter I'll to I'll and from XXXX. flying during changes Rob.

total includes our XX during XX by XXX EXXX for our contract We Delta fleet United; our taking EXXX with XXX eight fleet delivery to EXXXs XXX total EXXX Delta. QX at added of XX end specifically XX year-end. bringing under from new with and EXXX This anticipate quarter. Alaska fleet the total during the to of to bringing total to with aircraft, aircraft XXX quarter, we the moved fleet Our aircraft

first very flying We of during strong. quarter agreement CRJ-XXX aircraft those XXXX eight XX also took Demand delivery during delivery to during quarter; taking during and seven anticipate We for of Delta. our XX seat more fourth previously of CRJ-XXXs remains our for as announced third the the XXXX. new operate of part four

their major meet working seat are needs. partners We XX with of to each our

three years that United As SkyWest we to CRJ-XXX with the the American an XX fleet demand, announced agreements for first Airlines. result four additional Separately, agreement with previously reached during on of a transition the placing of quarter. we an executing Service XX extend quarter, CRJ-XXXs began during into third have

to CRJ-XXX remaining more eight fourth be transitioned expect eight Service into the We XXXX. in early and during American quarter the

also The XXXX. and contract some changes, XXXX. of into October on expected XX service United and Service early the QX now the noise to placed aircraft With We X this we fourth be ExpressJet continued of quarter anticipate XX transition and are transitioned in CRJ-XXX to first movement Xth. remaining between fleet

transitioning incremental operating the changes. well bridging as result and operation some with United delivery aircraft, CRJ-XXX First location associated XX changes ExpressJet crew in maintenance, as to will costs

the American aircraft contract as transitioning to the delivery We changes. aircraft also some anticipate accommodate would downtime primarily to continue CRJ-XXX

of Additionally, quarter. wind Connection owned down ExpressJet to anticipate Delta of remainder during ExpressJet's XX flying service complete the Delta fourth from CRJ-XXX the we removing the

of For expense. majority with expect the retain term, aircraft the agreements some these we various short flying transition American under to

aircraft these own with debt we However, remaining. little very

tail aircraft aircraft Delta that XX risk. XXXX. various not the contract. the are these we by American aircraft include majority XX We leasing under with prorate CRJ-XXX currently the American Separately, or transitioned including leased options and or for be utilizing six third their from extended to selling aircraft The beyond flown is are early original CRJ-XXX parties and short-term operating contract These ExpressJet evaluating for parts. these no of from agreements, with selling, XX will contract expect

expect to aircraft We the XXXX. to these by lessor early return

rating both partner their offset at payout is The pilot Chip Airlines. at As XXXX. expected other ratified increase The is XXXX current in SkyWest and significant pilot at renewals and ExpressJet offsets in mentioned, and were contractually SkyWest to contract Rob new agreements increase agreement. contract have under and pilot in Airlines payout provision via ExpressJet

continues improve strategy I've As these to part fleet reduce overall us fleet expect more positions we XXXX impact in our broader be and early overall with efficient fourth leaves and The with fleet and outlined, all a movements and the transitions tail risk our and to the model. reduce XXXX beyond. quarter. busy ExpressJet movement of our us for risk operation in XXXX of of is net smaller and half agreements second well the to This

Rob Simmons

operator. Okay, ready We're for the Q&A.

Operator

Savi Instructions] question with sir. ahead, from comes Syth first [Operator Raymond Our Please James. go

Savi Syth

good afternoon. from risks know Could helpful XX XXXX? you Hey, as XXXX risk low of like what understand of you're and kind especially next kind the looking understand CRJ-XXXs year. that with bigger the sales you It's to What and the at help us CRJ-XXX tail aircraft? you have around

Wade Steel

Yes.

Savi, this So, Wade. is

start for so the majority we some your the majority paid off tail of that So of of in XXXX. was think XXXX going of be end by XXXX. they're flying we or to the I Yes, beyond that part is have good on risk of have aircraft, question and all debt XXXX of middle what The those kind a of CRJ-XXX exposure. XXXX debt the to and

really left some there's very and some some and So with aircraft. We'll very opportunities engines actually get those and for some we've some of airplanes. of little We're that through parts. XXXX And working on good in cash XXXX. of got on early those other most interesting those lease --to LOIs exposure

in those we're placing very confident So airplanes.

Savi Syth

there Are contract XXXX any aircraft of that that Is XXXX? mindful or should we be additional of? off [Technical Great. Difficulty] like kinds come

Wade Steel

Yes.

or aircraft. CRJ-XXX, there's So, those little no we all with of associated risk our very

the no major to with CRJ-XXX, those our with either. in we periods there's and tail in have some those of part of renew extend little time a XXX risk of All bit becomes risk There and first CRJ-XXXs, of tail partners aircraft. to plenty our work XXXX but

Savi Syth

a some not on of If Helpful we help kind assuming --it color year. on we getting those Again quo and XXXX for pilot especially the increases next significant contracts at might to you and what can of was incorporated, fully then if that status any looked kind get growth the changes. I are earning take of expect? given

Rob Simmons

here. So, Rob Savi, it's

So, look, in XXXX comments We some I sitting we're October XXXX that say our on here. made would today. of comments,

by taking including the that as we're we've over quarters smaller, mine I now, growth within and right weaker can up you we of the within with creative years fleet this all very continue nicely to but think economics for obviously of new number more then take say we to the from like we've sort up to to opportunities of and usual opportunities set we're competitors our come scope ourselves liquidity and I I for partners XXXX of opportunities give ahead, we've expect that the feel when think you. that opportunities they will investment what and do be opportunities enabled XXXX. Chip like opportunities scope that the those trying continuing if in would improve new feel the and as between existing balance next and in are I opportunities the a the mentioned, as come. We've other got that areas different we've for done to We And got sheet of existing color got these pilot actions think got right legacy is our those couple earnings now. opportunities renewals all and feel

Operator

from Our comes Deutsche from Bank. ahead. next Linenberg question Mike Please go

Michael Linenberg

guys. afternoon, good Hey,

not coming early is there's of Those So almost guess guess from coming like then and XX amount. December distinct and were eight extended that moving just going that into merely in it there's just, that in here. went the right? Just I in the that in American eight the what will XXXX are to be CRJ-XXX couple sure, what is XXXX. want are a here same are out out airplanes coming just XXXX, there obviously I a quarter, four in lot swap airplanes the a things there's sounds make of and that I so parts it

Wade Steel

This Yes, here. Wade is Mike.

the in come Yes they're You it's of is, same but close We've are up, fairly four the the to right match there, they're the not come eight. in. ones and the out and on in phasing exactly when got planes timing other there's but aircraft. those close fairly

Michael Linenberg

I then EXXX XXXX. know mentioned the I that's I about anything taking And Okay, is early order question start helpful. my going United second in you don't think recently. made is United sometime airplanes if that know to those

where to be the on around out the in we're one? to not-too-distant for Number airplanes Express sense of a those to airplanes in the fact to that right presumably with United future and wherewithal go find guess partner. inducted will have noise of probably given bid if time transition induct which airplanes So be presumably number a fleet able be that timing going into same Do to flying. I going have the those you that dealing that fact two you those your lot you're would to any into

Chip Childs

Hi, it's Yes. Chip. Mike,

on One comment and timing. have So would anything anything I to we those. quick honestly engaged a are it, on deeply trying have it. we you've to for find can't that today to United we we share a relative that good in situation. probably that certainly tell to that just anything our And enterprise. pretty don't that complicated or couple into the have that. I spent you don't yes, you're candid We all with amount we to it's be of of progress dispute but share a workable comments can time make assessed a right be certainly is, way with

if for would United, with work there's to work continue to with that. going we're us something think I So that

Michael Linenberg

great. Okay,

growth XXXX, with going gave respect XXXX does a like a as that transition quarter, to last did have the reported we Rob, of fourth $X. question. lot into get hear meaningful be but deceleration EPS to --you in consensus said to be earnings $X.XX; versus we slower it seems a in us We where then look street above sort I the just quarter. XXXX, at like we looks the guidance you fourth noise When is look of it a Just growth. right my you there's

base single-digit the of can And noise so for the get of XXXX impact fourth off that sense XXXX. that to high the this in of magnitude we so quarter from the of right trying a potential EPS growth get

give know with delivery kind expenses cost. a bridging changes, of transition the don't et million if can a range relocation of maintenance, crew aircraft, when the you this I A us exercise million of Is about $XX So type the you talk associated this cetera? exercise? $X

Rob Simmons

So, Mike, Rob. is this

that So what that new in transition we're into nothing I made was and announcing QX. we announced that would There's quarter. that Wade related last the all say that deals friction QX the to about is quarter. reference to this That

So a service. transition. aircraft like the that temporarily --it's in was said his script, out having some on laid quarter is as what of sort transition it's this just And out call ago of of just reiterating that again, about Wade

of has got it associated Some some other it. expenses with operating

Some but that are again, new. that. painting delivery of noise of But partners, is but other charges, covered delivery lot for friction of by there's sort none and our of the charges a and

Wade the So I to reiterate is as that we friction noise would the don't new. consensus or street comment made reference you that know, just not anything on officially and but

Michael Linenberg

out we --there you we press -- thought last Okay, are well that transitions lot of is aware because and on there's-- I releases. going couple That's this all a of painted what the I in thought. were the are what fact that's

guys. dealing So Thanks, I it. be know good we with. of quarter kind appreciate will we're what

Operator

go Our Sidoti Please next ahead. from comes O'Hara with and Company. question Steve

Steve O'Hara

obviously that for gave talk outlook my continuing guidance a about that or be you you noted. you I thank of mean Can included friction of generally Yes, issue. about question. just the this that kind comments the and you'd kind in XXXX, that's I we'd taking mean the in

So is that correct?

Rob Simmons

guidance. in It is, The friction yes. our is included

Steve O'Hara

few better tail just could I sitting the and expect it are forward? how does a I or mean then a guys --your today need partners and the is than look going ago press Okay improve versus reasonable risk mean in a today word the think comments you years used are I position you around you ago? be there risk, evolved will I expectation maybe you mean release. was to years in tail that maybe I as a where you that guess the And here few be

Chip Childs

Yes.

So, Steve, it's Chip.

fleet two patience; to next where it's and were outstanding in flexible about work; of with fleet to a the where exposure and an time compared I capital is a We flexibility, talk dynamic lot because four key it's a we element very this it's needs entirely about three also when picture. think better hard year our exposure. honestly continues that's strategy be be it's your ago, among different taking partners, of going with to years today. about of to And we're costs position but lot get or able are a meet of that question in lot with be in we And what agile of to partner. also to the we very, it talk the ability four about being where

what has past. it picture broad a in better than big lot the a been it's in So

that on that taken the to the that in candid, not have outlined continue be it can last risks. we Rob or goes aircraft pretty continue financed to what flow done get better, with with the to intentionally time will some to so four come As offset cash leases and years utilize these all strong lot is leverage three been strategically a years to in and we've and of is

in are fleet to going years we where compared be optimistic the we're very and flexibility to where come. and with today risk were pleased where we And to so we're very with we're

Steve O'Hara

I was new know, contract I union your pilot has you just two thank last change with contract you. any or not mean you any was so contract, a needed pilots cetera. there, the within, the of -- a on do you and follow-up source been one it's where just maybe Is group month churn or to at And the hiring work then kind don't new in in a SkyWest. contract there change have quick ability there them. know there Okay, but thought any a I in et maybe

Chip Childs

good No, that's question, Steve. a

does strong of other us that onset behind lagging out and to We situation first were were pilot compensation of an the foremost but with fundamentally that the think data the some long-term was that have believe that are pay to I the in honestly several I and have our to say be opportunity. top to that we that deal among next alarmed with candidly with able think I not concerned amendment years a carrier strategy the have But having stability. need given be SkyWest and within consistent or agreement, very one to first an no not balance. captains, stability to a and with about do fundamentally for would you approach and is was quantitative top strong our go could was going over tier it the going flexibility the the admittedly grow officers back pilots do the out and agreement. pilot thought existing there

public model and based because of pilots. upon do either. And that just overall safety this. perspective entirety to getting looked aviation extraordinarily just high from It's partners and our is flying So so. to term, is economic not pilots good with this you pilots take opportunity care need best that we at exceptional certainly had performance have long and the metrics what over model We the its the we getting deliver what do saw the our about need and professionals good opportunities and and to about a to

with all look and -- in. term the So it to came moving together parties long We to continuing well all of forward forward model together professionals. with develop all our for very involved our

Operator

comes question go with Duane next ISI. Evercore your Pfennigwerth with ahead question. The Please from

Duane Pfennigwerth

to Is around? moving a time. the convenient visibility moves thanks fuel there of prorate the was thanks the and profitability versus more as year call a for into give on can What this any question quarter Hey, in for ago? you us this margin that quarter the

Wade Steel

this Wade. Yes, is

fleet see what fuel, prorate is in did profitability. we our consistent been but very in it but very year-over-year. increase the been both margins we consistent that, So for experiencing, profitability an have don't has size is We stayed consistent give year-over-year and exact very but with

Duane Pfennigwerth

it is a number. But positive

Wade Steel

very little so bit up, a it's It's consistent, yes. yes,

Duane Pfennigwerth

Okay. just Can what XXXX? left the year, you me number aircraft CapEx into of remind CapEx the gross any trickles is does this and that that's

Rob Simmons

Hi, Rob Duane, it's here.

got by of the more take delivery the EXXX of will we've So year. that eight end

of roughly into million that will that's neighborhood on So or in going against somewhere translate million $XX put us that that to of new serve of a those. equity debt $XXX or the in so will and deposits will deploy

EXXX end again $XX historical. the the non that's neighborhood somewhere in just of of mentioned, XXX sort to of to a CapEx, and the a us to this quarter Wade year. we'll as to run delivery end that total stream by aircraft the property CapEx, aircraft on our as respect of of will of terms With in million continue brings So have $XX million

Duane Pfennigwerth

XXXX how at so And thinking point. this that's you're about

Rob Simmons

significant this That's our next very right. XXXX happens over I expect in to what zero clear came close mean we to spent this million thesis in on we cash to that years. be close acquiring it's several year of airplanes. I through but as numbers generating XXXX I like of be In to mentioned new our cash barely $XXX going own the depending one hope is today our would call that on that

Duane Pfennigwerth

that or do about level? you What some higher want feels this a target right level? build is Is it to your level cash to

Rob Simmons

that's making the Duane, sheet, balance about for our way. being debt we've to us respect With opportunities availability And is and comes our mean the disciplined how that sure I our capital we most deploy thing important the to liquidity. whatever got

just that don't effectively disciplined be And going we we're comfortable but ways the have via return that look whatever us, we a hold we're So right repurchase specific the for more future. capital, very number place about now opportunities, may liquidity to future extent in we'll share We're have and in future to having adequate growth in for to excess that mind. that we at that that consider dividends the do. and the shareholders ourselves we organic than to

Duane Pfennigwerth

What one assumes digit then year? for And earnings guidance next just Rob. one. your Thanks single is high buybacks last

Rob Simmons

So have next year. but would our we into we do to we is I continue that --this obviously to that would a conversation regularly, say and will board expect would with buy

Operator

from Cunningham Our Cowen. next with question Conor comes go Please ahead.

Conor Cunningham

Hey, guys.

offset your contract Just to flying on how done prorate bit drill it I a next Can you or of bit you XX% the the actually year. in to on little just, short-term but like leasing will contracts. of be side confidence the little mentioned much via down engines a on know pilot

First whole of to out you out the figure I'm about. if and going talking were And reason leasing engine the trying revenue stuff there's only that like type any why to stickiness asking just that parting I'm forward.

Wade Steel

So, Wade. is Connor, this

contract renewals So as renewals XXX and done of those And those SkyWest part far we've we even those airplanes XXX are constantly there's, some baked contract contract as airplanes; a doing place. lot the Airlines. And are have we as odd costs that pilot into lots airplanes, that we're with of that have those operated offsets almost that of taking renewals.

is in we some reset there rates few the There some of every provisions is years. that we believe So it. our contracts to certain stickiness on also

will will baked have be rate cost, And as into those pilot well. so. obviously it to some stickiness the it resets And of cost those

Chip Childs

is Connor And this Chip.

at have our as the it's we our fleet. of here the process to approach transparency good managing part for onset important think business clarify review our model I with is us the of partners, strategic to to strong

just pilot not costs. even So it's

I transparent and our several we've matter what over on types be is that those things one our years very issue things that the moves being with maintenance or ability the improved think of and of or to past forward. partners work compensation that things creatively the pilot no

what our and and do their place practice So talking how and we constructs a partners we make of we needs really best with think in have the we about here. we're sure work

Conor Cunningham

a great. little Okay, the then just sheet And bit. on balance

bit a growth target for to if your would was adequate XXXX-XXXX you like about that like you do a flow. get quite guys, want be incremental of or still like liquidity to going you given in of have a to out we're go that it's that whatever cash debt there? So Is leverage you think paying there kind want to down be

Rob Simmons

Yes, Connor, is Rob. this

is We've me end access actually again the in the absolute has We've a all of seen for QX, year capital airplanes of not somewhere mentioned, neighborhood with So peak normal debt a at been our our was that XXXX. not our in number, year. last piece should comes this from into us from X.XX the a it based structures into the thing $X.X again years. in for to part leverage as I been terms amortizing leverage but range problem brought the what put equity us of as translates between market. end looks think in down important building the you've few X.XX on That's billion the we've the leverage exclusively of of and it's to pay of come that the I the about and up just gone service as year that at over we've new standpoint. these over that going fully the leverage growing of that the And now debt the past using market down that right comes, our amortization view in ago

will opportunities, as of need. per that orders liquidity any we've any sheet there way. might balance our million come So $XXX that we've debt result market we XXXX, that year And $XXX come and fully we to to again provide feel to got could any million off of be our right new that said, access just But for structure. now the market new new a as without in opportunities the got organic like amortizing capital de-levering coming if natural a access

Conor Cunningham

it last fleet on? safe guys. to that in and transition Great of your utilization And Thanks you'll is assume your so at EXXX given underlying one, the see XXXX and just on what's again to assumption aircraft increased XXXX? the end

Chip Childs

fleet, Yes, somewhere anticipate the airplanes so of around XXX fleet we end XXXX. the the be to at

point aircraft, XX to planes airplanes Connor, than some of seat just bit our on your here, that there little utilization X% take that X% out the as those utilization probably to in. this a of less expect the somewhere with And coming airplanes We the around in XXX. new on are are we growth

little an to do of see to expect -- we bit block our a So forward. uptick in the we utilization as go

Conor Cunningham

that obviously like little continue fleet and to well, I be so utilization expect will I -like we And clear mean as just to improve assume. bit to XXXX the to shrink a to should into moves continue like

XXXX I any but color of you if for know anything I well. had as numbers XXX quoted just Just additional you know didn't kind there.

Chip Childs

Yes.

the have aircraft So where new XX seat but we'll on also a in. be in there'll side, then of the XXXX shrinkage coming little go bit we'll

we It two should point very consistent. a so may year-over-year. or be be And higher

Operator

to concludes the any question-and-answer Thank you. would like back Childs over for remarks. And this turn Chip our I session. to closing conference

Chip Childs

right, the all you on you call joining All and today. thank thank for us

excited and executing be sure best we're good we that ensure We'll with season. a hope about year. holiday chat positioned has We to remain for you continue flexible remain, that We plan everybody Thanks. our long-term make next business opportunities.

Operator

The now presentation. conference Thank for attending you concluded. today's is

You may now disconnect.

SkyWest (SKYW) 30 Oct 182018 Q3 Earnings call transcript