Earnings call transcript Q4 2022

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Operator

Good afternoon. My name is Devin, and I will be your conference operator today. At this time, I would like to welcome everyone to the SkyWest, Inc. Fourth Quarter and Annual 2022 Earnings Conference Call. All lines have been placed on mute to prevent any background noise. there a remarks, session. and speakers' the will question be answer After Instructions] [Operator

patience. Thank conference. the you Mr. Simmons, for your Rob you may begin

Robert Simmons

Thanks is on the everyone Financial us today. for as And Officer. the operator Simmons, Rob call this SkyWest's Chief indicated, joining

call Accounting Chip President On Officer. Executive with and and Officer; today Chief Steel, Wade Commercial me Eric Chief are the Childs, Officer; Woodward, Chief

Chip today Safe the to start by some to Harbor, time I like to the asking I'd read turn then will over for comments. Eric

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

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

Eric Woodward

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

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

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

Chip Childs

and the aircraft of flying CRJXXX contracts, our those Today, XXXX. $X.XX noncash $XX related to you, reported of on Good Reflecting and were quarter everyone today. and Rob lease a for results expense. XX $XX us per or majority on in call here $XX successfully fourth Thank $XX pretax joining million share in million loss revenue afternoon million of of amending deferred the impairment accelerated thanks million Eric. SkyWest the an

until the will be we deferred fleet normalizes. utilization moving regularly revenue expect forward, We discussing

want past fundamentally we in ourselves to have year over out a company. the that point noise to the be fourth better set up quarter, and different I Despite the

the fundamentals IT shoring care leading up enhancing which we solid growth our we to and efficiently of up people fleet strong continue to last our create key our two, continuing future. We Four, balance SkyWest processes These needs; future. arrangements maintaining effectively to beyond on take our in core have business XXXX help a and will set include: and new of in sustainable we this healthy operating a value utilize and ensure deliver systems; differentiator; is have ensure most and focusing our our a sheet, and shareholders. three, flexibility and and for for us ensure the adapt to today that a areas and industry our that on by and done and partner's partnerships industry importantly

execute We ensure of value stakeholders. are of all we're deliver able confident ongoing our SkyWest will these for fundamentals to

third last people nearly quarter, for invested the throughout a every heavily including pilot increased quarter. finalizing agreement we we As in work XXXX, pay in when group discussed our

pilot a we to our this While have help pleased to majority agreement costs. contracts worked are increase, significant with our the offset partners amend cost higher represents crew these to of

with deep to strong our efforts evolve, strengthen our and in new environment. working remain committed in we partnerships their their We the continue partners engagement and provide to support continued We needs. our solutions to appreciate and to adapt

quarter of on XXXX. We more focus class. aircraft took dual four to class flying our three deliver the now in the middle Our with by XX% flying of dual fourth EXXX are continues and expecting

growth transition Additionally, cycle, free CapEx capacity as leaves drives existing fleet. end cash flow we the fleet and within for this near us the of this

and fundamentally pandemic ongoing The our changed our environment. industry

reliable operation in accommodations that XXXX we our processes systems supply operation the mitigate the have to customers. impacts reinforcing and vulnerabilities to airport on ensuring place and couple of large refining We and have every part and resources, and Post realities spent most identifying of and negative our for from aspect our years and We pandemic operation systems. crews, our impact people staff to past spent have on a had our and lodging the fuel run an of

our We ensuring also remain on in transparent with our partners commitments. about are and our deliver we constraints disciplined

throughout we've the ability recipe for seen without is the over execute industry, disaster. to a commitment As

As focus, XXXX a proudly holiday over which severe experienced teams weather. result operating quarter. strongest completion we This of adjusted continued performance during included fourth XX.X%% I of the some can performance period Christmas our peak say our the in delivered with travel winter for the

every million delivered as geography. challenge in exceptionally January a able this this full But fact, were between teams to December and over for adjusted as X. our I of experienced key year completion teams destinations people resources extensive of our a location we the and SkyWest of result manage through their want result -- severe passengers well SkyWest In weather also to disruptions proactively and with across days X to to for commend safely XXXX. XXX XXX% get in XX planning

we best continue as the normal the provide our done again and in develop Thanks have industry. all teams the product Our people. to new to tremendous job regional of a amazing

cautiously We're plan and captain optimistic our we're making for headway the we good years as imbalance in ahead.

as hire maximizing desired our destinations. We resources continue of is crews. our classes priority and to to the SkyWest rebalance work training most clearly with fill as we are pilot one our on career recognized new upgrades

our over to utilization full of to rebalance and next continue cruise will restore accretive take couple it production time some highly the of and our believe fleet. years We

becomes within rebalance, ability fleet even portion existing production accretive mix. to we our our As restore of a

bar to existing once progress Part not made conduct charter communities. raising XXX quarter. and deliver and several represents and with existing within flights strong Part second with programs in XXX This entity ready, charter we SkyWest service another great assets -- of opportunity We've the looks to in implementation the in to utilize proven entity expect Part small operations. critical space the our operationally required safety SkyWest the underserved forward

our remains than products for demand Overall stronger ever.

the long strong game reliably for demand ensuring and are to to products. the our on As best we for opportunities laser fundamentals, on remain business focused positioned our execute we we exceptionally and executing respond

us now will Rob data. take financial the through

Robert Simmons

we was GAAP $XX loss net loss share. Today, QX fourth a reported pretax or $XX million million. $X.XX per quarter of loss

count share weighted Our million XX%. $XX.X tax effective and our rate was for was average QX

revenue, QX XXXX up other from down Prorate revenue XX% breaks First of in from sequentially with revenue was QX QX, year-over-year. revenue XX% QX from $XX QX XX% down and XX% million is X% down million sequentially down XXXX. down and QX and from contract XXXX. total $XXX XXXX. QX XX% revenue down QX XX% up Leasing revenue QX and from from X% is down and

million compared an released of million million include in results of of deferred to $XX and $XX was released QX QX XXXX. the $XX increase GAAP effect in that These this revenue quarter

As periods. deferred of of have the be will end in future $XXX we cumulative of recognized that QX, million revenue

to balance quarter. with the Let little the quarter me up of sheet. ended a cash over $X We move from last slightly billion,

and the was for XX financed XXXX, million $XXX $X.X up Total of million billion EXXX in XXXX. four aircraft for XX the compared with new as delivered fixed in purchase aircraft of debt XXXs driven QX We with by other and fourth quarter XXXX. CapEx Our million XXXX year-end was $XXX to increase EXXX ended new $XXX during CapEx new CapEx billion assets. this including $X.X from the of

loans. PSP that have debt amortization reminder total XX low our a unsecured coupon only sheet no the balance million we year on of is government Just in a $XXX

say liquidity. Let of about a me couple things

of cash included of XX, debt. XXXX quarter As our of the December repaying of billion position aircraft $XXX this $X effect million

of Additionally, we $XX new four during million added the delivered EXXXs debt financing quarter. the

liquidity for over unpledged that additional have if ever deployed could be collateral billion $X of also needed. We

in service Additional flexibility comes owned the from of no our has financing obligation. that including partner fact aircraft fleet XX%

revenue our Last of that this not actual profitable. to last expected but QX quarter, of but two, on in were amendment $XX million on three, with I accelerated still our majority a Number to impairment stated that QX arrangement loss XX related expiration. lease items being giving practice, successful into we of be policy QX QX guidance let EPS earnings CRJ the color. Consistent time, million give $XX down contracts. slightly not during lease specific the million charge pretax And expense me deferred stored to comment. for aircraft of million sale we placed quarter. XX held little number you and $XX a CRJXXXs included a following quarter's Number the be results are factored prior from the into in a any of levels, at $XX flying one,

recognized. revised $XX this Consistent of remain cash causing the deferred partially the revenue effect contracts, in expectation model fixed XXXX XXXX, obligations is from with XXXX last total met before a future The results quarter flying This and monthly will received GAAP refundable. month of before per revenue currently in fully component is the deferred the in expect million to quarter's difference new our we the be in is future where variability deferred performance reimbursement XXXX. revenue variable fixed from comments, roughly cash in with modestly fully collected not down newly to comes the for is deferred be reimbursements for profitable shift quarter revenue cash timing in but

GAAP this in XXXX. effect the a million profit of Excluding estimated revenue in XXXX, $XXX we expect deferred modest in

revenue to $XXX end per million XXXX. balance in will reverse approximately of expected quarter the We this deferred this by by with expect $XX balance million reverse to XXXX million of $XX

in points place quantification would there like GAAP can today a accommodate Wade the growth more of more large XXXX, fleet around in to spite call without In loss this capital seven The give will expected investment. minute. future out. in are

expect to be We year-over-year million XXXX. $XXX over down in CapEx

including repayment in end of billion $XXX We at to near expect the debt still XXXX expected $X be cash of XXXX million.

debt principal to with end million. levels to annual reductions be XXXX We at $XXX XXXX be expect expected the over below of ongoing

be of the five the million of could of reduction best the years. XXXX. the lower in flow last cash than drive the could in cash XXXX end at at free net XXXX last at Our end leverage Debt could CapEx end This the the years. of be five lowest $XXX

the believe couple and of years time the returns. for of the pilot to position to our demand and We we drive preserve well utilization monetizing industry over work our opportunities through to us Wade? that the affecting to total the the now strong cash taking will prepare shareholder way fleet are actions strong over optionality imbalance of incremental next position

Wade Steel

and as leasing our Thank prorate provide and I'll businesses. update you, update an well on fleet charter, Rob. as production a status

our an we've of nearing we announced completion new XX As agreement discussed, strong We for delivery with schedule. Delta are EXXXs. previously

we will to aircraft, term of have contracts aircraft. of we of of XX at with these XX receive XX the for of and three us aircraft four Delta, end aircraft quarter, XXXX those After delivery Delta. the bringing long delivery we XXXX. under Delta We taking last anticipate During took EXXXs the middle the

We anticipate agreement -- our We delivery contract, with aircraft We with have the which an of in of under have long XX XX. Alaska taking delivery add to Alaska term middle EXXXs XX Alaska received last contracts of have we the XXXX. Alaska. currently to

the four be of will delivery our aircraft. EXXX fleet currently on order, Following remaining XXX

As a significant the to discussed our quarter, pay pilots third which package quarter, we is new a last an agreement came with we on during cost.

we quarter, addressing partners fourth most the in of their mainline appreciate new cost We support our an During these agreement came this on additional costs. to with reimbursement.

we the million invoices variable and after and during years. rate and account, anticipate be partner. economics, related over the risk no reimbursement cash obligations collected. several The rate variable on We quarter As $XX We the cash fixed is performance will a fully fixed the towards XXXX. to optimizing flight emphasis is does contracts. will primarily The of our have This put for monthly end Rob chose the turning mitigation risk better a differing completed more we of to There flow cash some turn revenue be mitigation. mentioned, the with will flow of not additional reconciled per

approximately to in The quarter the we first major compared we to the were as review third to on Based fourth quarter will the the X% have be by anticipate me down hours Let X% quarter. our block approximately partners, hours our from fourth current that quarter. down our schedules compared production. as XX% block

XXXX, of XXXX. to compared XXXX year will XX% full anticipate as block that the our be down to we look we As hours

This As more beyond, each hours block block CRJ to aircraft. we over and makes number model. look additional very to fleet approximately hour to accretive we can is our additional XX% XXXX the ERJ for add and fleet XX% any same without our

partners, they conversations our in engaged to efforts our restore our with supporting are production. Given very

is and both operational of the thereafter, public of status well-capitalized operate matters carrier June, a business. fitness give managerial new the and by is some authority scheduled permitted other SkyWest Charter about FAA. entity me a meant our we Let brief to The commuter We the the purchased authority charter DOT financial, application update in charters as the terms Part we aircraft to DOT SkyWest believe XXX carrier. to Charter, has leaders applied among commuter things. for the operational primarily of In best demonstrate in and of the industry. a Shortly

the Charter and SkyWest first for on requested under once are provided ready. status revenue be or plans in to commuter with DOT have we authority our are with we moving We to the waiting charters forward of operational We approve and the XXXX. will -- existing flights DOT April the demand commuter are March its application, operate our of anticipate operationally them Regardless that our authority. they for all information issue of

just rest like As far our the prorate demand as strong the been extremely industry. of the business, has

and yields great support. very strong have We community seen

on continue leasing will business. service. gears to continue to best our work the communities We way the our with Shifting to

fully We third line leasing term business cash year leases and to very XX the CRJXXXs demand is The under and regional a has returning. for third not several long for business placed and our for engine strong leases flying This under flow We during the levels Demand be under good parties. party leasing business engines of total more last XXXX. XXXs have our placing a engine rebound. engines until few start industry margin of more realized leases anticipate characteristics. with will

lease to expense CRJ we -- million. lease made to During accelerated in decision aircraft resulting $XX the an also part quarter, of resulted expiration, the prior XX

are having of excess success some selling also CRJ our We in assets.

million during transactions the signed letters approximately these quarter. of sell XXXX, and and we $X intent of million will of first sold currently assets over We During we have to second $XX anticipate close assets.

we're have and risk ensure years several positioned. to We financing fleet and spent the enhancing flexibility reducing last well

to major products. to to work partners our with are exceptional continuing creative our provide We continued committed each solutions the of our for demand

Robert Simmons

ready we're for Q&A. operator, now Okay,

Operator

question Raymond first comes Instructions] [Operator Syth Our James. with from Savi

Savanthi Syth

good to of that provide I more curious know said probably little everyone. optimistic. of I'm just color. the back bit a couple exit a saw full cadence if help you like of and It front you cautiously more color of years kind get to it's you can kind think seems there with? Hey, afternoon, you operations the curious you of take but I what before, a little kind if to going wonder pilot kind on just said XXXX that bit provide might can on -- level you you

Chip Childs

on -- This how can time is we a And spent we what's That's Yes. the our we Thanks, any Chip. we've Savi. give out great XXXX, specific question. you but particularly kind give through like didn't of when in numbers, horizon. we feel past, evaluating most we the about done of

our would about gaining happening going in we're wholesale cautiously tone the I there -- of We yet a models environment the there's not pilots. existing are, growing some say, optimism, things or out being can ready we I to it. that do data in in optimistic how forward. do think that our But within change What's

we that our to that, is we lost are to lot and think compared increase that of year, time takes it XX% just of a is lot a mathematically big where the back specifically we I get to utilization can to math pilots, the XXXX thing big a XX% where cabins today.

about today. would So we much say, say I as that's as can

We're we're modification pay to to -- really helped our models. not but a make think closer get with we a the more I big got data until in certainly bit, some ready new that's quite package we've when summertime.

Savanthi Syth

to then of and you what of XXX. over will like couple Chip. especially you'd where when that is a have the you'd years? to next off I kind better to like general around fleet sales, asset size books the That's might Thanks, get kind what you curious just what that? on the fleet the fleet, now? you're And want EXXX on the timing curious are it be on of is right And and do idea. was just how CRJ assets helpful thoughts moves the and But to the type of just of color any the Obviously, taking

Wade Steel

Wade. Yes. Savi, is this

did So excess There's well now. assets. They good are some like CRJ time said for on good right They have have been and selling them. in assets. maintained those engine assets have CRJXXX we we some we have and there, excess are assets as that now do that demand people right primarily market the we --

well, There as And we able of intent we for and our assets letters primarily also assets. is are so some some what what there. are demand some the CRJXXXs under have but monetize to sold of CRJXXX out of is

Savanthi Syth

Got right. Thanks. queue. the I'll it. All get on back

Operator

Mike comes Deutsche Our next question Linenberg from with Bank.

Michael Linenberg

Hey, afternoon. Yes. Good

Just a here. couple

CRJs, XX the the lease airplanes parked, the that model? Just were what's

Wade Steel

Wade. Yes. assets Mike, of a this combination There's is in there.

big primarily are one CRJXXX have lease We And these structure that's CRJXXX remaining. and assets.

Michael Linenberg

the What's given figured XXXs the hold to them. just available Is just on? would I on be some fact you that better to What fact getting the are going the impression another under there these be always And that and want for valuable assets it EX to have Is XX would you CRJXXXs that it you'd Okay. the go first pushed then sale. was EXXX? that and by XX, they're out I that -- CRJXXXs? the have

Wade Steel

right of before some The CRJXXXs what some are good Yes. -- we we sure. at values. to and those pockets purchased we what able We are are CRJXXXs. flip some COVID, now prices for -- of There getting right extremely good are majority for we selling some are CRJXXXs

good assets at some those are start trade those. And we CRJXXXs, we that we'll so have marketplace we of in some and excess are the look be trading we going where there will if can to

Chip Childs

Chip well. as Mike, this is

lost a block but what's the did too of we buffer in have CRJXXXs it, these. both still large get and tremendously base a before CRJXXXs not think can a get we for hitting we I only fly it and base still large to large sale not aircraft of of

I assets our sale can that we because see as manage over don't three think leftover have for So that assets, are for many to we that still two utilize think I to scenario us these we so perspective, a in we from next good the the put years. it’s

can and I think stuff pretty do to other people this response of just smart good. kind it's has with asset what been management see the

as it's flying likely if times back we're think many get well, cash we going So good particularly to soon. don't flow to them

Michael Linenberg

And just Okay. back That's before get then helpful. the one in more I queue.

Just $XX about years releases per deferred, call two so the it so XXXX, and or deferred, XXXX. to $XXX XXXX, million million right? million, quarter, million, talk it's million that's $XX to XXXX it your then $XX let's $XX

Just [indiscernible] slower I to it guess maybe trying rate? think.

Robert Simmons

Mike, me Yes. Mike. help let you that, with

that's million So yes, deferred about -- revenue million per of for XXXX expecting $XXX $XX quarter. the we're deferred a

Over to the years $XXX million be expect through XXXX reversed. XXXX, we

Michael Linenberg

in What previous $XXX you that So does the that to component that I'm had no offset Okay. also -- think, just that does said so trying about out? we the up figure fourth Right? $XX deferred brought bleed longer builds. Rob, that $XXX million, quarter, to the which amount other there? million I Does -- that million.

Robert Simmons

Yes.

of million. in to reverse is And the approximately $XXX So we're it of [Multiple deferred and the balance end million saying XXXX, that then there's the starting another going bleed Speakers] XXXX, incremental off. $XXX starts be to ending year. as

Michael Linenberg

instead XX know, you over, million $XX sense. of to XX that million makes $XX months, months It’s

Okay.

great. Now have out. I That's you. that I have that figured -- Thank

Operator

question with Evercore next Pfennigwerth ISI. comes from Dwayne Our

Dwayne Pfennigwerth

just versus variable why expand fixed of in What guess I sense. future drives treatment, or makes Rather the in lower a this future? higher can a you a thanks. reimbursement reimbursement Hey, contracts revenue component accounting on the versus rec bit the your little than

Wade Steel

Yes, this is Wade.

question. great a So

of not So that a but point back optimize contracts, And we several to tried on is the these all do next we as agreements change, and variable, much turn back into mitigation, will to partners. cash with the what of what these flow our was really there rates risk And the of that in we of be years, to right? so get in We tried time the utilization at fixed some there's right? some of some will anticipation some more end normal. focused

reimburses is way based some just in future. the back the incurring go really of going in. hours revenue the on the shape block hours how to bringing recovery the fly cash on and really that anticipation good revenue working up are economics that's the in we're the block that flow now. the So is brought for will the be is we that utilization the But the is costs is And this, how the it gets -- there

Dwayne Pfennigwerth

Okay.

the back exceed down So of effectively expectation the contract, removing end some you're going to but that well minimums minimums point towards at the the those road.

Wade Steel

got you it. Yes. Yes,

Dwayne Pfennigwerth

-- on next then that Is And down Is what conservatism? Okay. your kind could a take that little can you that that speak events case of that staffing XX% a the just there give the of Or on than support? bit, course is is base down level could you of year, staff this the could unfold limit? that hours kind that XXXX? block higher upper to over year or your are

Chip Childs

Yes.

XX% attrition have lower look, and January lower last is. were the attrition this are ready year see but hold said, of in we see see by factor model of that's going through January plays what levels, to different not how to which they're we're other. It XXXX. hold, we we're last what XX% sitting I amount, do going perfectly, wholesale way can like see and of would with kind what number and then again, is the we want to the If it's this of are So a development fair summer is mood in cabins than of some there in year's levels, year. way gain to not what's summer. XX%. than February those of But to a combined I to go there's -- some that -- ratios a were which by there. continue and We in great But be I how the If earlier, think the springtime than going February, these think year's it I when we closer the we're summer, feels could but out go if we're get attrition of of that know got these pilots, say hit is horizon the year happening closer the the less kind until then to last to out than to be lot we a going these going year, predictive, end upside don't the XX% that know just to last to I here we're but probably to that not one or but a of very -- going perfectly how be And that's we to don't optimistic today. where good like would said predictor that

Dwayne Pfennigwerth

All very fair. Thanks for thoughts. the

Operator

Cowen. Becker Helane Our next from question comes with

Helane Becker

Thanks very Thanks everybody. Hi, much, operator. time. for the

So can last just be One, what questions. actually does and like it currently? more on What attrition? you attrition year was specific two look

Chip Childs

I January And Yes, some want this have when our folks so a things Dwayne year. sure turn of earlier, they indicated February make left we us demand were have pay that that pilots have But are leave less And Helane, keep are had tremendous we've have and that, of partners to SkyWest. can't, with we a like and for this I'm and the will some we we of hear we stay. and confidence, that anecdotally to about see kind back, Chip. package there's I year, decided to to and contract. last have kind to a December, of those pilots to come and lot far, than relative to lot down we lot of have our is things I say come commitments that them we that sorry,

quite on as only we see a was last side some the have attrition really it in or say and to not again, we're is summer So spring can happens that what optimism. is assessment. look, we meaty the make year can before But bad growing before of this that as model wholesale more we thing

Helane Becker

really And for That's question. just my Thanks. Great. fair. follow-up then

you raising did these So okay mean, pay pilots, contracts reimburse with portion I of from as willing partners much and when to you to they were you some off get you obviously, they did your that or input as negotiated sign with it. had your

when you a go? So move pushback, thinking they having those would that are operators, lot and on there they conversation, maybe to reliance did how aircraft was their other where reduce your of

Chip Childs

to is Chip period this Now, through us going again, dark you're our take a of lives, honestly.

Helane Becker

God, my I'm sorry. Oh

Chip Childs

I SkyWest in done regional better for think of industry at do last what SkyWest, care to than the able to the think years. to anybody and we is else XX back has take that, to be our take what go our people evolve, that and care of I partners is

candidly, we of the down rethink process. completely will we coordinate certainly some first road of I us our this we've our where through not time, a is some the some it that very our it. say of as I with we were started admittingly, quite had carriers had you things just So of pilots, -- conversation some one This ones mean partners, wholly all and do go to groups. stressful with caused was that partners owned work to one things the it's I that and of have think with

we off the and I'll best the market a the with what's I go we of our work makes in of to that a and best team from the that's Did with operational and you with the comes at solid tell to down how say, throughout stable involved And it Candidly, to way parties efficient we're pay credibility got we investments complete from down history SkyWest and regional of an partners? some really that back here what had all to would the happened long-term what of about for and very bridge -- we people with ability and easier lot in gaps and partners can connect partners, think it's our I what -- when comes relative it it it to had our comes So situation our happy commit our commitment I was because with us fluid happened we've outcome. we're Yeah, before. -- the work and our professionals, effect it's it to you that groups for pay difficult what's hats have for long-term quality happy XX,XXX has. team those extent we did XXXX and script to the have down our to a the an all said and my before have all to understatement. we work labor that our combine I negotiations desired operation approaches, to credibility say a the the

Helane Becker

That's thank very you very much. helpful,

Operator

Our question from with next comes Goldman Sachs. O'Brien, Catherine

Catherine O'Brien

of to the help some takes afternoon. quarter. on first about for of commentary given you good good puts about Hey should on deferred has revenue and the think ex Can the roughly we new a the breakeven salaries quarter being the for year, pilot rate gentlemen, see you Rob. this costs. Great for just one's fourth guys full Underlying agreement. and again run benefits Maybe, us think quarter my this

of that maintenance a to on just think know I large of Thanks. lumpy how about years, a the bit last couple do forward then couple line you And trending items. touch has been

Robert Simmons

covered at quarter. of little QX, we obviously up QX a line bit items, and in you in of of these the where were each labor was reimbursements mean look struck I the some part the and deal pilots Yeah, if

with the noisy impairment net the So quarter, all, the a revenue. a bit of we little sort operating was I obviously, and deferred results lease net But in of all -- mean pleased the the of acceleration company, with. QX were

Catherine O'Brien

really we help got just through Okay, amendment then much the through? higher And pilot costs able Understood. news level being how and the think about you on to of contract done it. can pilot us a rates, passed getting of wage like great high portion these pass

those on first how out mark portion we're the And on EXXX we I passed the being far are approaching contracts. know then today, like the delivery. XX-year or not negotiations XX that's from through

it of Thanks is maybe some up. coming So again.

Wade Steel

wade. is this Yeah,

great a So question.

as four of We're still each as of most partners, us our with additional have of on as the pilot So said, we the with the partners working partners, our reimbursed major reimbursement reimbursement. worked one major far there. we them

right we we're are well at. now XX% above So XX%, covered where

feel partners going we other forward forward about we're cost the So additional to pretty the good the at. -- partner working going We're other reimbursements. on with get where

Catherine O'Brien

us on comprises how to there's Can many need planes you been one business before. I of this just that on great. business, the you in or charter an that about remind That's sneak ultimately haven't thinking are update. you more maybe shared

is going pricing can Just then tap on I how there additional the main pilot couple wondering the like And months out, business. think pool your to into think like some you hiring it? versus of front, traditional about pilot in

So color great. will Thank the any you be for additional again time.

Chip Childs

with well hope you back, back. this your great Cathy, It's is. everything to Chip is have family. welcome

at couple the I scope Just charter I look of we suggest a think would that if side, in going fleet. you you could back to look at that numbers make this, that the

I into think now. we we about could that put for have available maximum XXX CRJXXXs Charter

I was you if pay think prorate model work has we what you in CRJXXXs think think And look historical model it at that demand our since for operation. that prorate had within XXXX, significantly like there, XX our XXXX that become stronger. then I a about from XX-seat if I would back within

think benchmark the that couple on-demand you non-scheduled of business be is to charter strong Charter, March, can't So model chart on-demand demand anticipate we we for right now a in where as service tell discussed I about will I we think charter certainly, extremely going flights starting well. flying we're that exactly hopefully, about, be, you as gives to

So And we've there's the a an mostly it's lot get list. operation options seniority situation pilot about, good of of we've what is extremely back to for then like here. because what this -- new a talked you

an a specific people availability new significantly compelling this circumstance with list and seniority and be differently a with I to because seems within and participant seniority that. different and but want these to reasons list what get just early things separate to that with days some different do a SkyWest pilots like do don't some we know there operate on certificate certainly some in is separate a going pilots, we're it

a list I up this and doing here. lot of think opened what pilots because we last year country we're seniority lost throughout why that's the the that's

is nutshell, And first new good. the a direct so, also operation charter extremely for in pilot come entrants, but demand for to the just to good, entry is extremely officer captain not

make good it. in right start do visibility after we're be we flights work to going We're you to operating May revenue and and another going So do forward again, continue have as and update sure call we to more when some look, we some we to on hopefully timeframe usually give patient. it going probably we're the to

So and little what an a of gives capacity -- bit high you may idea be. little some the level hopefully opportunities bit that of of a of

Catherine O'Brien

so Thanks the time for great. That's everyone. much

Operator

Savi Syth from James. comes question Raymond next with Our

Savanthi Syth

Hey, thanks follow-up. for the

question, up one breakeven on the first on significant until just not portion idea a have just up? it on is that you better including you earnings of just outlook Just of how that -- follow -- the Cathy's really charter ramps to or the how the are

Wade Steel

This Savi. Wade. is Yes,

not we are we XXXX, for So do that entity. as growing profitability significant anticipate

to a events ready, to doing going SkyWest overall be driver pilots not are get We that the so our airplanes training for major and maintenance in for breakeven Inc. is

Savanthi Syth

kind to of you're slightly to EXXXs we back fact are to the maybe utilize like in level going more maybe your talk it that I kind XXXX once the Got could XXXX able Really the and of in based a your -- wondering kind better little about of if you of longer-term kind than you've I on just question, a had gotten, ask compare revised you then can bit profitability it. you just just that that your And a was contracts if the might have of XXXX, to to and fleet, what's you be fully versus negative not-so-great? things of be if going what's than like just get or earnings? positive

Chip Childs

Savi, Chip, want, there get comparability profitability that we XXX is Yeah, this once comparable I utilization very be on the think fleet is I could quick, we unit just perspective. that levels some the a real a basis think -- from on

gap a going to continue from to in again, to the we that we way the point to to is get can investment -- we that hours think, have have capital we got we very have continue to that fleet where CRJ think be fleet overcome, cost I XX% just we we very to a non start I fly. manage good I and purely just accretive perspective, think which block a is the -- on

So I don't to doubt that XXXX. going that from different that be is

the on The that prorate as other fleet, to pulled element out happened as the we a of Obviously amount well. CRJ relative contributing particularly prorate relative to what what's in XXXX. significant was side to else

service margin very call are margins be what making prorate our that's will some on very clear These small false. in I was air in States not good an money we're contract the towns pulling that United that think than profitability. that the were, entities despite flying essential was higher with absolutely out, and

relative I and we we service can class on would CRJ that non-ERJ compare extent and/or Charter in essential the where what other have the to were So dual air models. say, relative we do to fleet to depends to it XXXX,

of demand also else, a talking wanting that guys cities. you and about tremendous since has is about Savi, has a serve service It's side certainly throughout much Now, exploded. We us big the local that to XXXX, get this, calls. flying, of pandemic ways somebody cities find amount just states are that small we it, the talk and hear will flip city everywhere from and also of not nonessential we their lot to calling us so calls don't get travel fact -- the the

pandemic a our deurbanization gone put -- pre-XXXX demand the back favor, even in has level. in the throughout certainly So

a perspective, I got utilization in about back some lot we -- like or back great left taking in we we've get assets. a got get got strategic about time. our up can more continue around do great way later, we of fleet of We're that patient accretive get can on got of just additional care balance to a with aircraft runway before we've then of shifting people what to a up our from lot be that and to and going we be So utilization say, partners we deliberate utilization to sheet, which our but and -- stuff our

So hopefully that's a helpful perspective.

Savanthi Syth

Chip That is. Thanks.

Operator

Linenberg Michael question comes Bank. Our from Deutsche with final

Michael Linenberg

partners. anything there I timing that's just majority -- to you with, kind back here? for or been you go there read time guess do your able hey, the into or I haven't you covered, Yeah, XX% I these to deals two, here. that the just it deals through or two I Chip, fact to to is each want actually of that just the to should if that just is Thanks one follow-up. is know giving said read we said closed some don't of XX% takes me it of that you

Chip Childs

with some than of all do anything to works us, I and think ways there's four think of of Michael, some continue than business job our to collaborating and timing, is with that honestly, finding I I great just that we the part mostly think dialog others are more and others, have to it. us about our both of are into think all I partners. or fun us read and don't patients all be aggressive more That's

work there of they're optimistic is good probably I or is after. updating fact lines, we're will think the can the be quarter next that we product the quarter thinking the if offer same and we in incredibly But all predictable I very of that and easy very and that And as long-term their about clearly. our all recognize sustainability, we try we're they toward make lives stable optimistic we think to can that we do to and partnerships. I that all think reliable,

Michael Linenberg

to us Thanks of without a And grow giving great. my capacity for shells. kind just adding then that's second. of your sense Okay,

only think the for the ERJ I how all have about next just take about to X few order about beyond of block XXXX, for should you anything any is the and not a increase hour planning you're it's is next years, years. like additional adding to that the next it's the coming airplanes what several few the it mentioned think XX% that think Is by over a on we planning XX% CRJs, delivery you units, -- to right years, that X way stabilization that few fleet the really have add without on could you you shells

Chip Childs

lot having I going is Chip to Michael, perspective manufacturers with agree I and to it's with the with there's we we of our that of lot about it. too certainly off so and serious there's from would get about conversations opportunity close creative long-term conversations utilization get of a and that conversations just gap about this before we would again. utilization a but are lot that that back. until conversation that ESG fleets reiterate, a partners, Yeah, much only take that fleet. There's

a The of other you've other running things couple got against mean, is, thing I this.

interest You've got rates, expensive. airplanes are higher

because making unnecessary sure perspective, our we more And of talking it accretion last to so down like, make while looking to if be additional takes not grow adding not attention then without need and road to it's first get which that continuing should It's pay the by we're little we focused about on aircraft. fleet. today from a the that the to talked let's investment timeframe the we're over the We bit. we've fleet

that, the conversation. I to the it's get to keep So speed ice, utilization important it's the rather think upcoming we're haven't about quarters but continuing put and up. conversation We on just, fluid we'll you up more we the in

Michael Linenberg

everyone. Okay, great. Chip. Thanks Thanks,

Operator

to no questions are now There Mr. further at Chip back turn time. thanks Childs I'll over call this CEO the

Chip Childs

and appreciate continue think to we the script that a have in the is reiterate what SkyWest a exciting in I fantastic position been to said what today. call, and what things We Devin. XXXX for eventful is with the a on Thanks, about, year. It's very will throughout I and your we us quarter. we're SkyWest. to day call work and going out capitalize help every making to the look we provide amazing care to and more all that they of reliability you. take SkyWest stakeholders forward to the going do that be thanks Thank next and this towards work the single at sure to we're all to continue disciplined talking Again, one people at --

SkyWest (SKYW) 2 Feb 232022 Q4 Earnings call transcript