SKYW - Earnings call transcript Q1 2020

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Operator

Good afternoon, and welcome to the SkyWest Incorporated First Quarter 2020 Earnings Call. All participants will be in listen-only mode. [Operator Instructions] After today’s presentation, there will be an opportunity to ask questions. [Operator Instructions] Please note, this event is being recorded.

I would now like to turn the conference over to Rob Simmons, Chief Financial Officer. ahead. go Please

Robert Simmons

joining for the today. call Thanks, us everyone, on

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

On the Commercial Chief SkyWest Executive Chief call President Officer; Airlines’ Officer; Childs, with Accounting Wade me Chief today Operating Steel, Mike Chief and Officer; Officer. Woodward, are Eric Thompson, Chip and

to comments. turn would over the I Eric to to Harbor. Safe Chip today start the like some time Then asking for by read I will

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

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

Eric Woodward

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

filings XXXX Exchange in Some and other of are differences the and included the such factors may XX-K Form cause with Securities our that reports Commission. and

And turn to over now, Chip. the I’ll call

Russell Childs

and Thank us afternoon, joining thank for today. you call the on Good you, Eric. everyone, and Rob

The and history. speed not to breadth first anything the been has lost this crisis of economic health those our anticipated, loved The hearts coronavirus have and go have and who in experienced been quarter could of to disease. we’ve XXXX SkyWest’s unlike out ones

three as take work we customers. on areas, to this critical and been our of care and focused airline, unprecedented within Our environment response our has our navigate people

and to through third, flexible once and we’re is for on top and second, the and health personal focused necessary ensuring passengers our and work cash is the well-positioned the well-being our crisis; contained. we’re recovery people First, of virus this maintaining priority; liquidity

implement to early onboard and disinfecting In to and we social cleaning possible. reduce enhance mobilized our distancing and partners onboard where aircraft, customer measures service quickly CDC-recommended points practices work with touch of very each March,

appreciate and the and rapid remain as these to swiftly with expect our people in work response changes we thoroughly. of place partnership will updates many in we indefinitely, We these implement

remarkable demonstrated I’m other have to of customers incredible each people and and part be event this throughout a teamwork team. for humbled support our Our and this

Our leadership to our thank support commitment. continued I dedication protect want company, them and people challenges, working our and constantly for to these address their is and

the professionals SkyWest and they’re this a Our doing this that the the support acknowledgment proud and doing CARES work vital Support part people the simply Congress as is are funding, the administration to air Payroll appreciate everyday. maintain help are these We critical best for certainly in industry, Act, our in of outstanding of service times. work I’m passing The people. Program our important to legislation challenging of

a million the includes several the In of million the minute. our recovery. $XXX the marketplace which we’re our our April, form talk receive relief, liquidity management, cash Rob as will with in we in of received months, ensure we work will more million combined to term help next in over work expected we navigate XX-year a positioned and cost to position unsecured are this $XXX This crisis for and about total $XXX aggressive loan. with

over difficult ways, some and In position. to aircraft fleet with the some would day. aircraft cruise fly and each XXX departures and we that change, fewer opportunities to reduction about provide XXX the year. To between X,XXX time expected more that dramatic XXX is significant on have in this perspective daily number to of departures a of can demand get manage Today, be

the as May and necessary prepared June this see respond deteriorate. Though not counts we are we continues hopeful are to to be the similar climate departure if case to will indefinitely, expect and throughout

needs. provide to with and collaborating each for with closely flexibility – of partners collaboratively their our working and and We’re options

working of we’re provisions, our aircraft passing and temporary share, the partners to credit reduction providers. rate ownership negotiated support, benefit contract waiving will and with minimum through creative certain Wade we provide including each primary our of payment temporarily solutions As which with have deferrals,

As environment. with flexible to many remain over we’re Across where off, ensuring manage several early we’ve costs possible. also and take focused voluntary in providing past people worked operation, opportunities work partners’ years, includes offerings we schedules our the best meet other retirement time the on reduced we’ve and our times discussed to to needs. for positioned our closely steps this This

of We as our complying requirements with suspended planned of schedules. we reduced deferred CARES and deployment on to training pro while until Act. work We’ve initiated fleet a our We’ve rate maintenance footprint all the hiring notice. previously the the was further some new flying, also align freeze under that positions with heavy partners with

of schedules to today, we’re cost an operating. is important nearly six currently reduced the employees As have also voluntary one take off us helps for X,XXX navigate better elected This months. significantly time to that measure

positioning we’re on recovery. and for safety health, focused Following liquidity,

Given year-end. travel, before our the current we near-term sometime and is we’ll to and real viability long-term to it success. fully It smaller will need quite we’ll sharp be resize a environment in expect likely streamline airline our ensure and be There’s returns. the reduction airline a possibility by demand in

several Undoubtedly, months will the next be turbulent.

are foundation fleet comes. in best our flexible the remain ensure every possible strong with our our for We and time and step positioned and disciplined recovery partners. when taking are we approach We remains to our

long-term our fleet role demand a core The to you most returns, continue challenges, have travel. in critical our and on has and of The at SkyWest seen confident are will us through many risk helped several up last focus operating fill values are we for to reducing the as eliminating overall return shore fleet spent to As solid sustainability. our we’ve foundation on risk. risk contract tail risk, focused years aware,

was this as our and well ago strength our dramatically of our weeks today. aggressively care preserve as and The and people and crisis continue than recovery. our environment We of objective discipline, different needs meet are plan principles on as we to to our deliberately agility, focused to just But partners’ navigating our remain customers, take liquidity unchanged. for fundamental

and quicker maintaining anyone that our to we’re adapting a needs on partners’ than have track capability. focused record We very of

with We to thank better, work success. business each emerge again and will together as our support of people, and and want they ensure our as long-term aiding are to we and people teams proud business. our stronger well partners, great to who doing our a in stability. the our as our continue partners and our I work I’m are our to airline long-term other administration the

of Rob the data. will us now through financial some take

Robert Simmons

share. first reported $XX of quarter million, per we income net Today, diluted or $X.XX

was million XX.X%. our and rate tax XX.X shares Our in was effective QX diluted QX share count for

Let with me $XXX million We million, cash with up ended quarter. the start sheet. today $XXX last balance the from quarter of

first $XX and in million, the during $XX Our other roadables for was including million CapEx spare aircraft. $XX million and quarter engines used

the last end this is EXXXs six back We $XXX the year-end. our At of million for the of to ended CapEx year down our of acquisition million this billion, from debt pull quarter to of as billion by to the from $XXX $X $XXX million year new year. the expectation point, $X.X year, including with

liquidity. about talk Let’s

of credit. $XXX Our March $XX position was line million XX of on addition million revolving availability to in our cash

CARES April, Act. received the payroll During we funding million $XXX under in support

three will Another payments come in summer. $XXX this additional million

the years with is you the in the PSP five a XX-year grant. As of the rate a loan, remainder for interest million form recall, $XXX term of X% first in will $XXX million funding with a in

evaluate, At we $XXX the which of quarter financing unpledged loan million alternatives, in primarily unencumbered assets over liquidity This the of program including end, Act. additional and billion, will we collateral had us senior aircraft. $X term in secured CARES engines gives under

We if until have XX, any. Treasury, our for through formally we XXXX, but level, program September decide this to the participation on applied loan U.S. have

and $XXX April funding March a of ending of the million million on month $XXX including in strong PSP the April, still cash undrawn revolver. with of we and Based received ended initial liquidity

with the and of at This cash is deferrals over lower payable eight expected any $XXX we we million modeling year-end, notes indicates number months tax XXXX along April. debt be PSP six this million debt next payroll delivered million XXXX to EXXXs end in assumes cash term end in outstanding ordinary $XX at current Our full finance than the that where approximately draws than the should other the XXXX. the $XXX to year, without in stood additional in

in cash the cash rest through from outstanding the burn May reduction the the in December, million over the deferrals, burn year. million total So payroll million cash estimated total to in of $XXX and million remainder in a year $XX the of $XXX net tax notes of $XXX is PSP

of day. December, May for year, month million or $X math $XX the remaining average, the burn eight is The per million burn per months on through

year-end, flying been This our model event cash is spotlight importance last years. and with in modeling, current on cost many Our improves uncertainties how rationalizations a derisking by modest and the demand in incremental subject have we five over assumed burn of XXXX. recovery shines disruption the business to the

no million on, the we industry in immune our accessed collateral including expect, by loan to in weather the worse storm. reasonably be the effects appear the to crisis, to turn recovery out economic the one of positioned than If effects COVID While is our to and be is we economic can other and billion we secured $XXX CARES currently have putting liquidity revolver, unpledged to allocation we secured loans our tools our Act $X call additional alternatives of work. slower

number you have can quickly this aircraft has remaining identify liquidity space. things core one, of it. during give are XX% no more financing uncertainty include our that operate. on to partner-owned to time we Number us This others our addition when flexibility you three In of that nice XX% position, to our in than fleet goes that

we This the secured engines billion liquidity of assets aircraft. the gives if in unencumbered needed. Number of in have incremental form form optionality two, us $X borrowing, for the in and

financing number risk dollar contract of $XXX the between delta million, And term. and term around tail minimal three,

XXXX on delta Our this zero tail later out year. and next risk pocket to expiring is XXXs now of is the

impact specifically the QX results. Let me on our COVID address

roughly primarily demand accelerated to evaporated, million March QX contract renewed million be not $XX of other and from from items. adoption lower have $XX and is $XX hoped credit million pre-tax we of $XX standard in loss in expected is pro on million QX. that the in Our would upcoming generate depreciation rate income expirations are the $X that lower than to is in is what as million from new revenue

PSP as and be QX. been income time. would is the our are ratably we received to that consistent like I expected summer the saying of event It great in a any give million $XXX with setback times has over the EPS plans. component of this be of guidance policy goes in to to and or not recorded informal practice, and the QX a this formal COVID uncertainty to course position our grant But in highlight that without Especially at

our on the road. color additional give outlook as obviously appropriate will We down

Wade will and Wade? on now other commercial give initiatives, fleet details opportunities. fleet movements some

Wade Steel

XX I’ll Thank and as you, a pro at as Rob. provide leasing status our to of To an update some update, businesses. rate a agreements well we recap scheduled fleet were well high-level, our as add fleet partners, on our our by XX and aircraft financed as XX used and XXXX. in XX aircraft five to aircraft financed by in SkyWest. aircraft This XXXX included new

current into Taking still aircraft. these travel account, environment of the we anticipate delivery taking

are closely our the and of we adjust partners timing However, working these manufacturers with deliveries. to

this anticipate To and working EXXXs six schedule on we We Delta the Embraer. through our still aircraft all and currently new delivery have partner, of taking Delta order six update by with agreement. under year

into to scheduled also take Delta sourced are another operator used service. We EXXXs from six

three aircraft, in We late We X which will the have anticipate begin six service year. all aircraft are this received of other service. currently

We and Bombardier for and delivery Delta this working scheduled timing. on quarter are we be delayed, expect with our final that CRJXXXs will

Delta Delta CRJXXXs And our You the under may scheduled working recall to on have XX their XX-seat end are needs. this that agreement with of long-term we expire year. at we

aircraft certain a average The starting CRJXXXs Both In our an extension are owned remaining will Delta. early XXXX. fully of of not we’d XX partnership, SkyWest are rights remaining financing the in depreciated renewed, XX the aircraft have we extension event signed for of be February, XX our and three obligations with these with by in United return year-end. years. no aircraft to back number termination term of aircraft the end parties for Under an

financed another placed be in previously under operator. will year. United aircraft months will XX are this third by of These service from quarter beginning sourced Express be Our announced and EXXX ratably XX United used aircraft the into

current the working aircraft are to with environment. and to We adapt deliveries American schedules service

We the the XX XX remaining have EXXXs year first the and of new anticipated taking this first-half next. XX delivery our of during of

as provide this planned year XX However, not to is for time anticipate announced next be year, we it the new now we XXXX. year. to into updates on placed in these move delivery We’ll early arrive we American to will schedule originally service that do finalized. CRJXXXs expect previously early our this line while or And

we’re QX have and through major contract the temporarily minimums, with Chip negotiated contract charges including aircraft deferring As deferring contracts, temporary waiving partners working of mentioned, reductions during with start all creditors. the our on we QX of of benefit primary and that passing certain our rate flexibility, ownership

We each with to the creative are partner proactively provide to challenges. solutions working current

CARES in service Let reduced me our the with rate rate our We to approximately now with a due pro XX% scheduled by second growth We to during provisions little April. reductions talk bit this the partners rate our markets while with contract to pro hours of business. working to pro this Act. block about pro anticipated providing be transition the quarter, year, anticipate compliance still major several were rate

of by our month lower rate will compared pro the expectation We of million. second approximately quarter XXXX. during to approximately rate our revenue be million revenue March, XXXX was less the pro now $XX During than our expect $XXX

business. Let gears our to me shift leasing

lessee aircraft XX options evaluating pause we lessee all are XX The a the under on delivery the and requested issues, we has delivered of other XX have third-party. CRJXXX that to under The financial our of We extraordinary lease. has leases aircraft.

purchase We aircraft. At have to have on seven used quarter-end, also the from agreed of a five third-party. closed we seven CRJXXXS

times. this We during on of unprecedented expect are to two These the close other QX year.

our of We to are respond each solutions needs. quickly with to partners creative provide working to major and to committed their

several and financing we’re the ensure enhancing reducing We which years flexibility, navigate to have risk last challenging spent and fleet will positioned environment. this

Robert Simmons

for section. ready the we’re Q&A Operator, Okay.

Operator

the We will comes with session. [Operator go question ahead. Instructions] Stifel. question-and-answer DeNardi The from begin Please now first Joseph

Joseph DeNardi

realistically lot shaking of what’s about, service, the a evening, and I of how Chip, just the your out? And are maybe everybody. But having as a you the the know there just negotiations. good of of about you see just – for obviously, talk on can less bit happened the moving fleet demand Hey, it other you’re size see of side or Robert, you fleet little – talk kind parts Thank and mainline sure I’m fleet you can to the partners your given this? you.

Russell Childs

Today, to smaller from what portion of would you how certainly we’re is flying that fleet. that a try say anticipating or to fleet our down overall of going a to to have of utilization fleet. don’t also that fair XXX be This departures, Joe. Part when I we’re But is move a much X,XXX flown. daily ton Thanks, Chip. relative you we evaluate departures fleet. is XXX

do. the The us are we we’ve additional conversations emerge looking watch to within And are for demand the look, overall, asking fluid. our data So continue weeks. as of that last out points, what industry experienced entire we data lockdowns to several the traditional partners those is

in smaller very we without the we’re likely more year, attention lot to we’ll conversations. potentially by smaller more be at have before any bit saying that to of it a say XX% goes fluid think beyond get the We’ll fair time. a that pay clarity this we that and also end can But I data

Joseph DeNardi

partners that And balance you balance high-level, talk too their sensitive, ensure your of but I’m sheet? you kind you Okay, a kind some your since sure that’s how just without risk do then, for on of being on helpful. Rob, of much flexible it’s can to at of taking

Robert Simmons

be collaborative crisis to liquidity now other to But the as same we’re if strong to ourselves. relatively be to fact unpledged be can adequate possible also we’re sure time, ability we’ve this deploy we our proud Wade to us flexible, But be chip helpful Yes. helpful got and collateral as We’ve able partners. made the Well, far trying to to by I make that a in $X me the start of addition that that we’re got obviously, that are our position be partners, into liquidity that let in went at need we think down to that billion with in right road. for can here. and liquidity maybe our options

Joseph DeNardi

Thank Okay. you.

Operator

James. comes ahead. The Savi from go Raymond question Please next Syth with

Savanthi Syth

are the appreciate you cash or those how kind us numbers ask like assuming building as change through really in the color well. I and I bridge? the you that Rob, walking cash you are current But can and just it burn liquidity that of – that on what profile cash no in provided? Is burn there’s flying, that

Robert Simmons

improvement the Yes. of expecting No, end we’re the said, like year. modest some I by

also eight detail $X not our and adequate liquidity that out months. on projection dial liquidity they the to where But worse of based we over more got average cover months, we’ve got next next appear But to a day, burn be see on we’re We’re other turn million now. lot about the for to available trying than to we in are. being we’ve that right options over grateful eight than a things us if

Savanthi Syth

kind I things. And service on the on is understand – kind of working entry of with certain of partners

understand the on both you there something have do burn that’s I’m with American part work or and Is kind you are CRJXXXs, them. payments Because just as the GoJet, cash out? until options figure lease And guessing you this handle of at With just I’m how of that that that? those. payments debt what trying you to potential

Wade Steel

Yes. Obviously Savi, is this – Wade.

Savanthi Syth

Hi, Wade.

Wade Steel

financing numbers lessee obligations As taking burn. the cash in of and million do That’s American, into Rob’s of have. $X that we both the we work we’re mind included with definitely

so. we’re and finding one are with – creative to those issues solutions the them So we’re working around of those, around have going each we that

Savanthi Syth

resizing All might one the of last ask right. fleet. if one just the I on And

of as costs in the what of figure fixed out out long how you year? kind think match to new some taking new the kind Just environment the how of we might And we about is? your of should go through terms take that flexibility when the environment

Russell Childs

I this of to Savi, there’s referring and Chip. a Well, fleet. a probably have unique then set I mean, couple circumstances you’re fixed is costs, think, of we by

As unencumbered Rob his fair in of said a have script, assets. amount we

I our XXXs. smaller the on on to significant debt disclosed our XXXs, a fleet but of XXXs, of as a of point on also portion some relative that leverage same our lot is XXXs large and think, the is we’ve

in partners each So we these could those help how process. with a we’re on way our a of fleets what all possibly working of – look at and unique in recovery

also we’ve we’ve the debt and As some to opportunities some for the pass those cash our temporary mentioned script, to out extremely in worked on holders partners. It’s worked with savings of well. cash gain –

But going we’re the fixed other to anything you’ve company not forward, to the costs that we have, heard within industry. that immune relative

doubt, overheads of take absolutely to taking industry. necessary next is decisions over no take different very are, a relative there fixed several months opportunity our to costs and place those is some streamline things, evolution the uniquely, We – that there’s the to because going of difficult that’s some throughout and the levels

very other been investment meet find not a types we level side past but this. We performance, leaner things. of investment in of a built the day, on our high that a same again, to the to on seen of have and the end And on return going to, very, different of evolve does which needs evolve way of at and well we’ve that people better to the as we’re the as operator our be going still the the partners. structurally, pay matters, It’s

Savanthi Syth

answers. I appreciate you. those all Thank

Operator

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

Duane Pfennigwerth

collaborative, But I’m XXX% about shock. below capacity I the rate minimums? of are far have thank confused. percent a how commentary I what business guaranteed think operating sort pro those the recency the cost. And your appreciate big as Hey, minimums? purchase little picture, just you agreements would the you. of being of of variable given being

and nature any of there we the here, is why your burn thought business So what model really given were ratable guarantees? cash

Wade Steel

Yes. Duane, is this Wade.

been collaborative all, very So first have we our with of partners.

have trying – of the majority with contract our contracts minimums. work our them. the CPAs have to Around We’re minimums, vast

remarks, prepared As I the during we said and my temporarily those waiving second third minimums quarters. are in

are And flying flying of reduction –we we right XX% so have about a now. of XX%, our about XX%

some why that’s the revenue. been there And has variability in so

Duane Pfennigwerth

it’s at pass-through, balance what And example, then of the what not finance aircraft the is not are for if a you us being sense that can more debt paid EXXX, utilized, for least you you but to for getting still getting kind how versus on is aircraft does reimbursed your new into ownership? on give So, factor to paid? sheet? a the being And willingness ownership take

Wade Steel

Yes.

that’s good question. a So

you prepared So some his in there, we’ve about, with getting of on remarks, as deferral the a ownership worked Rob gave example creditors in certain as that talked our we’ve talked charges. in

of have time, the we certain received so our And that to creditors. we’ve based during period partners the major deferred ownership this from deferral on charges

Duane Pfennigwerth

payroll support. Okay. And then just on lastly

So the receiving? requests for you folks partners those utilized. you’re credit getting Are any labor carrying being reimbursed credit not getting and you’re �� the are for from for costs that you’re your

Wade Steel

So, Duane, great question.

we we using partners So money the diligent close right? that clear are payroll working that payroll, our with extremely are is folks. being And and very very money we CARES around is obviously and for for – our

quarters, with that said, our giving them the they’re to help second and rate as We are partners, some with third facing. also I the reductions issues during working of

CARES diligent money. we’re around the So being very

Duane Pfennigwerth

drive? post model lastly, But there’s decline and you drive any about of period Okay. And willing for how lose share regional then the for traffic you you think a that – good X/XX don’t a if to right? in people fit periods that, I think analogy Like to does more short-haul of just were with and here. those do past time, to

thought in to growth actually current you I lot hand, the of mainline trip makes potential it a construct. the down the a maybe but regionals, side, which be other for sense cost achieve higher catalyst gauge On to to on scope would hard would that other have aircraft that’s

driver think perspective? you demand a big about longer-term this from just picture, So how

Russell Childs

Yes.

is Duane, this So, Chip.

different gaining to to regional There’s the the exactly being see back you at relative go in You having aircraft some back advantages crisis go many or do to are model, what elements smaller when this process. X/XX you particularly about financial gaining so recovery of – – the some looking handicap factors and we right.

math to still look one statistic that I travel air for Look, or always at is several safest you and decades. any has the go is travel back math, the by years past been

Now is of even on to that think travel, I particularly still adding do, that safest mode what risk to model, the we the COVID relative still air of transportation.

So the bigger question relatively clear. and are is going statistics process the look to overall be what recovery does The data like.

We’re is to and our also be going carriers we actually engaged fix deeply need to activities We – relative know just new – know system travel to going in what is that wearing air the a mask. with TSA is mask. We that this in many partners to other be normal. the the a everyone this to try to wearing

advantages that flying We some you the go good, to we’re to costs to one think get question back to other aircraft lot what a that that that there’s some compared We to and shorter the things having of up infrastructure flights elements with lot. strong is smaller on town to relative small There’s working of duration number brought demand. of we trip a there advantages are. think of bringing a

more had we wish I that looking all looking Duane, at. look, in variables about But this. at the a you’re answers we’re nutshell, right So

variables, will relative we lockdown get the some these we and process the of that to of very, all very to and happens we’re out come on as emerge demand. excited data opportunities partners of our more with points and conversations what engaged as having see We’re

tremendous at crisis, are the a turns, once to overnight, things aircraft clean. start So they They doing do as industry amazingly are midday, well what flying public never – we’ve to as I people again, and the – mean, everything so today. our handle the we’re clean what amount of were but back is and get done, point, product. we in trained doing in the we going this confidence before, how our are to we’re believe

we math in the about crisis. we earlier even with about to that risk how current the is have Given response safe this talked the with that it associated fly

Duane Pfennigwerth

practical think demand mean, exists. them scope rediscover guys. they would Thanks help for suited taking that would your I limitations actually there’s as thanks. Yes, helping them aircraft But for vis-à-vis obviously, I some where be shrink. the – questions, ideally

Russell Childs

you. Thank Yes.

Operator

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

Mike Linenberg

Hey, good afternoon.

think. Just here, a couple I

right, XX% you’re So, heard down CPA June would Wade, Is Presumably, right? block XX% in to be business. said that talking flying I you that you think quarter. hours about if the I the on

Wade Steel

That’s correct, Michael.

Mike Linenberg

for early? And at quarter, too September or in to XX% it’s you are this schedule, maybe is still even point, planning XX%, the down

Wade Steel

really really, early still It’s for that.

But be during with that that in working anticipate we We’re modeling we obviously our anticipate partners. well. that as do that it the still – done, we’ve the all will quarter suppressed

Mike Linenberg

Okay.

will that. it So be

giving some reductions there. that fully cover, although Now when are off they are rate think right, we covered Duane and it’s, it, a of here revenues, full about the so there you call But obviously, things X% think nonetheless, that I number. will

XX%, but the not is should – down, much. – think contracts down as be be should So line, down the received block if to down the on nearly that on it at we the if least revenue actual XX%

of you rate that shouldn’t the some that as sort you see and a discounting reductions If incorporate you’re of accurate? the flaw. providing big like Is of that

Wade Steel

Yes.

You understand our good. model pretty

Mike Linenberg

Okay.

then In March your the have quarter, it pro may and pro have Okay, who Wade, and rate quarter June I but it that over – good. should been, rate, And misheard, down may just on how rate in business million pro generated that’s XXXX. down? be much the $XXX of in you rate what less than and pro about revenue was indicated XX%,

Wade Steel

Yes.

$XX be. to quarter the month we million March So what it less was of for the about than expected and

Mike Linenberg

Okay.

revenue, on that the on but got percentage? I just number you So do have

Wade Steel

we… The percentage flying? So of

Mike Linenberg

maybe Your it much hours, how been? block has

Wade Steel

to weren’t …the prior very didn’t down… We ability the – – block yes, we we pull the – that block consistent the hours hours with were periods. were hadn’t have

Mike Linenberg

I see.

Okay.

Wade Steel

…the market pretty us on has quickly. jumped

block high. hours the So were pretty still

Mike Linenberg

Okay.

that makes six-month and, for costs, that up. you’re where flow and ramp of benefit, So ultimately, on to to I you’ve deferral the sense. Then benefit, passing your know to out three-month and partners. a sort don’t just of a it’s relief creditors reached cash asked if Presumably, your will the back but back ownership course, that

XX months we’re the so XX months back-half or be nine XX, looking And through charges. higher through of maybe at ownership going much to

your a are a up jump in normally Is lot the of amount you are XXX% when with You will that they agreement they that. go partners up – beyond and that they and above understanding? are they in will presumably, cover what that

Wade Steel

Yes.

– is it of but exactly it we the principal-type an the not time. can’t is, a into specifics yes, we’re deferral, for interest what deferral topic So on and get the

Mike Linenberg

Okay.

Wade Steel

of part And it that being some contract. will will remaining life over I – recaptured, – the of reamortized the by mean, and be it recaptured be will of that

Mike Linenberg

That’s but great. position then, up – the of at as numbers added didn’t my liquidity you, April just of number I you had and phone I hear April, think cut end was maybe what for cash, Rob, out, the that And I Okay. your your XX?

Robert Simmons

$XXX give again, didn’t the cash. end that And did first-half with point April, of month the then We Yes. of we funding. out the did our just we PSP quarter of Michael. an million to actual – number, we during received, But

of you the year, and measured that $X our the the are through from average. of numbers to solid eight-month – million a is May the burn ended how that X burn clearly April end we liquidity XXX get on of day math period over million in cash So, a end position burn of the $XXX cash

Mike Linenberg

was of And just the Okay. point, we – just starting know was burn $X don’t cash I’m more was because April. for I right? just…. what than million, month the the But it presumably, I curious

Robert Simmons

Yes.

Mike Linenberg

April that number. to get to XX trying …I’m

I Okay. last, solid all There was a level. was And was detail But lot said, for of my just that apologize the covered. and questions. it then like you a

that I markets, have margin. certain maybe you’re EAS X% maybe a you XX%, that profit to volume a get to some you whatever X% meet historically, know or Your it’s requirements to guaranteed have operating or have volume,

and you a than pro believe EAS had more that’s out your business. rate any I big carrier flying of there, part

not so but that, good rate were a not. why it, pro So million is a the I piece because up you’re hit maybe And know why the pro you of pool, EAS $XXX getting maybe I talk I rate? curious, and it’s what suspect that getting was year? that – I’m badly? is showing you in about Can And EAS portion the

Wade Steel

Yes.

So – the Michael, this again. DOT Wade, is

that a gave So saw in markets came carriers could relief and that their they the frequencies still out some and recently I the the could cancel if subsidy. they on you some of of some the know get don’t to cancel DOT, so they –

subsidy But is of And markets. we operating numbers have been you May We canceling that we’re of were EAS not a seven week. doing I still two a days X, The the day, flights revenues that have did one. numbers. some that include there operating service instead our so passenger gave starting

Mike Linenberg

see. I

Okay.

So bit, because be the subsidy. passenger profitable a down may be of of markets a could Is still that revenues some but these point? fair

Wade Steel

frequency. letting they’ll reduce us very look is now these doubt be I has right We’ll in in been obviously small it. so the the helpful profitable. at markets demand The and DOT

Mike Linenberg

Okay.

Wade Steel

we looking doubt at highly we’re I that. so will be obviously, profitable. And But

Mike Linenberg

helpful, That’s Okay. guys.

all time, for gentlemen. Thanks thanks. Okay, the

Russell Childs

Thanks, Michael.

Operator

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

Conor Cunningham

maybe asked at just if that for are some of of my guys, you payments just But Can a mean, confirm business. not? leasing questions. lease case Hey, I bunch Mike that’s the those the on deferring assume this time. guys point. or I thanks you the

Wade Steel

XX we’re I into paused service put remarks, we’ve of had said that that deliveries. actually with supposed as to So, lessees. We’ve one airplanes prepared our in my

in right lessee point. financial we’re some at or whether currently don’t on right want are giving now. this specifics about how We’re I talk not of [Technical deferrals to we They difficulties working the with handle challenges. now Difficulty] their And

We are very closely. with working them

Conor Cunningham

you enough. And the aircraft place have just XX year. we out coming Fair said of this – so then Okay. on

think coming only I in or coming the the thing that’s else come could XXXX? that this potentially year. – there that’s Just off off-lease, up CPA anything Is

and much you refocusing on curious the And guys could Because I maybe in don’t there think shrinking overall just I thoughts you has mean, hugely past, to been us either, update profitability. XXXX. on but then beneficial like that. your there’s your –

those off? aircraft thoughts So are how your curious just on on coming

Wade Steel

Yes.

with all got I working XXXX done Obviously, to exploring coming about XX not we’re out contract That of that anything those our but is including in of Delta. with all we out obviously, and prepared partner in renew, kinds my talked XXXX. have with remarks, contract the that’s airplanes, So, yet. alternatives of coming airplanes current are potentially

Conor Cunningham

Okay.

Wade Steel

for have we also year I my six we this and order, remarks, then Delta have so right? we about And we And and on – used talked airplanes then the six still have Delta. airplanes in airplanes XX obviously have coming coming that are

our United dates. with We on the used delivery XXXs XX and just have in-service of fleet working taken in them we’re also

XX in-service on them fleet, we the so... we’re also XXXs new American the those, working On and on have dates still with

Conor Cunningham

were speed Maybe would question. on Okay. are continue Duane’s this when up. that or that I that the probably to trends going settles, just already occurring all follow-up to think

So down. – significantly regional to I I would just that think aircraft rather slow speeds would larger us the like us move than

but would on seems mean, I like be be airlines to I this contracts favor. what’s this the would when scope It – that be the these So it all all your actually your mean, are smaller, view settles? time reworked going in seems like

– mean, if it’s I you touchy curious time. just there? a any So Thanks thoughts but subject, know for the have I

Russell Childs

going obviously thanks. be new you’re your – managed would is I to do there our and Chip. no relative partners fundamentally is that what respect I at thinking that hope I that. always – we’ve there. continue business our would planning scope we’re hunch Yes, We to to scope, true. This We mean,

the next lot going of that years. won’t front it’s predicting the and than to the of what’s of option that’s we better, this in be we us. Otherwise, part have things on handle an as the And like six don’t side other But us a much other side there’s between none do we this, at right so for. can which when But answer, questions we’re here this within what have strategy. our of there’s of happens hopeful to time, four not it of we us or key past what if even if on five good, the in look months execute and

what execute I ourselves on we look, in, bury may got market the us and literally everything we that just determine than because have much we that mean, in the so be like that. in with other we’re so that see more on execute front to about disciplined we going to looks our to it short-term, partners and to are But hopeful of and happening what side to with we’ve going execute need trying that’s that. what the here probably speculate on

So it’s question. a great

two We’re or three on five happen extremely to going the we are to months. four, next focused in but what’s optimistic,

Conor Cunningham

again. Thanks, enough. Fair

Operator

O’Brien next with ahead. The Catherine go from Sachs. comes Goldman Please question

Joyce Koltisko

is This Thank questions. my Hi. actually for for Joyce taking Katie. on you

temporary that You had you’re the noticed alluded your more to than you contract Have just option you’d any one you’ve from reductions. how lean minimum provisions I’m that just to various on relief that partners, partners helping ways rate waiving wondering granted. others? characterize the

Wade Steel

just one needs. Yes. every Joyce, are their contracts this is of different. we – with Wade. work of them It’s specific Each one on the

every have commercial’s partners. can agreements with these that and We large every of one contract different we levers pull. very unique They – there’s is

and of we just planes obviously, another. It And can lot are – or so they’re them. one – it on help and it’s how financed how a the not leaning on owned depends

Joyce Koltisko

Okay.

use them all those then? you’re all of options broadly, seeing So

Russell Childs

is this And Chip, Yes. Joyce.

have in cash, I have is partner is, several the provide this with thing what structure be type do them look, flexibility, what assistance. to other of wanted we they’d flexibility we can fleets the be one within to is and to risk years able unique mean, we’ve what the and to we every ourselves over we common fly factor any is think, contract everybody that, is for the each able past And into obviously. I value. our And build to to wanted and be able

they are been we our with. that is framework to and them. of like has help the feel in do stable continue that said, we I making them that and good people. however, cash suffer sure all the we’re have of at with And, take to do really collaborative what obviously that and like can And care one we constant We’ll provide be value thing

Joyce Koltisko

That Got sense. it. makes

last then, Just one too. one

any that expect recourse And should these given pursuing is and there around the built mentioned these just could translate you’ll any contracts? Thank cuts, these temporary to that QX, for but be your permanent? we you. relief be that more was fleet and is You are QX staffing just if actually permanent of

Russell Childs

the this I like. before things probably add like to we that. evaluating on looks a all Yes. call, And are would I’ve of said couple what

strong is you this things – look built numbers, on industry the you of good, if look at at lean reviewing, and would the and at what backwards relationships. look demand We’re some the we’ve on go I you numbers, recovery that airline that’s entire the

have as – to I’m wide strong fruition, partners, going is in being do run I as Like what public that to the point speculate approach where open liquid things providing leap get temporary internal going at not flying being eyes able to best to the of and what’s wants. of long with to And achieve evolve the to as going can our people each we goal of the well. kind some to fall. of a our a until one well airline the here the said, happen lot we comes of in to the we’re of

more reiterate, a partners I’ll end with going that. said, we our temporary So know long like don’t I have any to us need front in that than the in comment collaborate lot that essence, leap. get the of I we of to on before we’re execute to But we and

Joyce Koltisko

for you Thank it. Got the answers.

Operator

from comes go & question next The Sidoti with ahead. Company. O’Hara Steve Please

Stephen O’Hara

good Hi, question. and thanks for the afternoon, taking

Russell Childs

Good afternoon, Steve.

Stephen O’Hara

Hi.

I do you sense Just of peers, partners type might some a doing like versus be curious, regional I the as as the seem does other your of probably lot your of it you of flying to have be. same guys just mean, ability flexibility – you’re I’m mean, – and mean, the the partners the that I and helpful get in terms that can

is of you think the reduced that do you of you it Board? I case? And what know, kind guys you the your even wondering, been willingness generally flexible? of mean, maybe Or has And less I’m flying across do just are or – be the doing of to maybe more it from because

Russell Childs

great question. So, Steve,

shorter-haul Where first, who question those certainly relative of in the that of lines, flying the to San state not fly one there probably number Northwest. of across the York, flying your things regional of lines, we and – the some have the New L.A., across industry is state one number some back-half within to the across have level the happened think is answer Pacific determinant Francisco, geography. I country

evolve don’t specific each over I it seen preference. geographic determinant think, of and I weeks flying happening one, We’ve that’s not, terrific area number know on just a overall carrier even or if amount what’s or within eight of is the the there’s nine that

a the first with to our what’s happening provide. The our to approach partners of trying strong focus that. very do a way. Relative competitors, and really don’t part what We what just than by we we can take on important to peers, ton question we’re a the your with are with lot more relationship

measuring yardstick out So with relative that’s our there fluid and priority on to continue one hands necessarily kind others we down that up is very just to the this. to we how catalyst externally is. with It’s of what put a partners we’re try – number be to very, don’t relationship the see

Stephen O’Hara

Okay.

guys – mean, arena your I a consider want would demand things kind down that again? you what I of would that have would away the if collaborative this a you’re back in in to road and or of, is M&A. into looked of that the that stayed that an to willing is like that, again from go I terms – to be guess, to I mean, clearer – that. on maybe, and you kind got effort mean, outlook assume to that of I delve go want I if you mean, don’t that’s length Now, just you like like you’re kind things helpful. then, kind again, you I And something – picture of –

Russell Childs

history, significant collaboratively for we the would our other that to of down could them. definitely we historical of But work do But again. would in not again. We would relative ways acquiring do provide we aircraft, perspective road we never our from have to go that what type with other model very value

Stephen O’Hara

Thank much. right. All very you Okay.

Operator

remarks. This concludes our over like back for now Chip to conference the to question-and-answer any turn closing session. I would Childs

Russell Childs

joining the today. call Thanks, us for everyone, again on

of in As on appreciative are of our seen remarks, SkyWest history, are people we predicted never are here engagement come. at in I earlier we that times that these level the our have that we times and issue. never But their this said would

a to from have great be and to this such so And that very look of have a – humbled professionals high level, great around such a back forward partners table part be with, that a all We in we’re with with company, working we we our and and a outstanding us relationship we will look can of be how become to forward. on better will time this that it think a airline out our defined way hopefully remember this. history going books

interest, you that, you and talk with again, to quarter. thank your So next we will for

Operator

The for Thank presentation. today’s conference you attending concluded. now has

disconnect. now may You

SkyWest (SKYW) 10 May 202020 Q1 Earnings call transcript