SKYW - Earnings call 4 2023

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Operator

Hello, and thank you for standing by. My name is Regina, and I will be your conference operator today. At this time, I would like to welcome everyone to the SkyWest, Inc. Fourth Quarter and Full Year 2023 Earnings Results Conference Call. [Operator Instructions]. there a remarks, session. speakers' the will question-and-answer be After the like to [Operator now turn conference Officer. Instructions]. I would Financial to over Chief Rob Simmons, ahead. go Please

Robert Simmons

on Thank call Regina, and everyone, joining you, thanks, today. us for the

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

turn today me to Then Commercial Chief start Chief comments. Chip Childs, and today time like read to Eric harbor. Woodward, the by with Executive call President will Chip Wade Eric Officer; the to the safe for I are On Officer. I'd asking Steel, Officer; and over Chief Accounting some

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

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

Eric Woodward

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

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

Russell A. Childs

to and our deployment. business first on our and us fourth Rob quarter full and on you, and Today, year, Eric, objectives foremost, our optimize partner to on to, we our risk our Thank maximize care executed and take deliver we people as commitments will joining everyone. our capital recap Thank of XXXX. Throughout the good today. you for afternoon, I call again year the

or our our access with who we're I X proud Today, major worked planning, an for teamwork. And XX $XX XXXX and lead historic global than delivered income approach will best high. passengers via people to vesting do annual together extraordinary deliver proud per a days. the people million SkyWest only with continue significant to benefits and takes thank reliably XXX% people our been that teams $X.XX our and completion and else per of Our to the to opportunity is product, strong challenge our of completion This full it industry net demand in net to share forward days of for help XX,XXX partners product alone. in $XX We our share unique regional respond and income our business product million years XXXX team unique preparation rapidly remains industry. last by the fourth the a extremely nearly quarter our million beyond. I'm our the $X.XX to anyone share. Overall, or for very as space. provide XXX the collaborative success it's this both and connecting well believe last part in Safely model people product, record enables better SkyWest fundamental not partnerships reported XXXX achievement and of to collaborating diluted us over want XXX year and are as product to XX of and of SkyWest our adjusted year diluted exceptional over XXXX, in of our

pleased we're since improved a for While estimates are with and our XXXX was little production expectations profit bumpy, quarter. and performance our the last

quarter in attrition experienced seeming expect and XXXX. to we've lowest the has fourth the in capital hiring to progress quarter, showed last begun continued stabilize, X also industry-wide years. With attrition shared we As improve,

development captain time know, and and all years be still it we our takes crew balance extensive will to restore As fully production.

by small at options to United more a as looking those opportunities a through the care who past announced in our ensuring program want ongoing program our over enhanced through XXX to program couple that SkyWest. years contribute build in we SkyWest asset improved pilots XX% provisioning well of ways positions for pilot benefits at new supply. to program monetize Airlines, mainline. We the to flying people those recognizing a those space for SkyWest transition looking who transition stake conditional captain United career accepted. This of successful establish to In assets those and take hours United agreement $XX XXX to continually pipeline to want recently Part us with the interest as completed gears, are of are proposition offer as pilot with who have for compensation as we Contour million. This CRJ at are earlier, both mentioned an clear in minority I recognize innovative before strategically to investment As path further best in packages appreciate QX, This they SkyWest pilot a and well provides pilots operator for pilots. value career early that our the United the SkyWest requirements. Shifting than a another the ever exclusively through we that for from of existing a acquisition for stake

We will our since accretively continued began year. last charter or evaluate has on-demand deploy to operations successfully to SkyWest continue it Charter SWC, flying and opportunities capital. complete to smartly

small SkyWest authority the for the And strong with remaining DOT, about with that our of commuter small will and our and a future. That for service. believe of business SWC major of it for partner overall and at possible our We status remain pleased contract focus product its primary air we're portion regardless continue is optimistic community best flying the are relationships. demand application our on very pending is said, to answer

and aggressive industry ensure demand we our for and our our shareholders. and of remains is profitably. Overall, strong, remain to each to partners the people, forefront position of products we effectively remain exceptionally and our our regional disciplined deployed the capital for always, As advance disciplined at

on reliably fundamentals, game. business As long our deliver on remain executing we the we laser-focused for

now about regional and believe better take through optimistic is entity us that data. Looking the we financial will forward, no there we're are still ahead. Rob opportunities headwinds positioned the

Robert Simmons

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

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

let's was Total revenue. and $XXX XX% QX QX contract revenue up revenue QX QX, $XXX this QX from deferred airport $XX reflecting with of million effect down customer QX million rate XX% was and include and and in is flat QX from from $XX results revenue QX XXXX. Pro flat by We of sequentially breaks down First, deferred from These reduction compared XXXX contracts. $XX down X% to QX of up that year-over-year, $X and from revenue QX X% about XXXX. million was and the in million Leasing a up GAAP million in XXXX. revenue down sequentially million charter QX other X% quarter XXXX. revenue in deferred from and talk service

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

As deferred QX to recognize in $XX and quarter, indicated $XX approximately $X XXXX. million $XX last we million roughly revenue million in expect of to previously million to

the Additionally, included purposes, about half a of nonoperating a with matter. modeling prior fourth in year gain for our associated quarter cash income of below-the-line nonrecurring resolution other the

$XX The up We of in Let $XXX with in two, repaying to the per $XX at quarter. cash SkyWest debt. $XX the of the price ended buying million Number QX shares for million sheet. me last included the an quarter in million increase accretive during X million, quarter move of million from million $XXX share. balance actions stock million of number back one, $XXX $XX.XX average cash

share. And of or shares XX% the company that debt During million million the of three, the number $XXX new XX.X full were outstanding $XX.XX average X shares year per XXXX, EXXX approximately financed. we at acquiring an have of repurchased for aircraft price

of the operations $X.X billion free cash-related billion, down with continue generate numbers as $XX production was quarter story we an the We Our CapEx ended quarter of year-end during from cash to from constraints. flow QX positive tell fourth despite important million. that about $X debt XXXX. These

Our cash in a flow from benefits years. prior CapEx strong investment lower than free in also

continue in of at during value. Tools specific a repay expected helped years. last balance color, over stock practice, our more tools driven shareholder be Consistent now that let color powerful quarter's guidance and $XXX by we create repurchased XX% giving to to Our from we policy liquidity attrition expect solid to and XXXX. not in QX's me our but any you and outstanding pilot production. This even debt million improvement From X are have be with ago little the higher us at EPS over is our sheet a versus level time, this on profitable XXXX. XXXX quarter being give expectations lowest

As Wade will X% expectation a in quarter to hours the we be XXXX, XXXX from up our block now up production of ago. a year-over-year to minute, X% flat over anticipate discuss

strong ongoing partners. We XXXX by in between rate hours block from in will pilot growth utilization production for to XXXX tax for expectation attrition, anticipate improving increasing and driven XX%. is XX% our our our income range Our demand

noise starts production expect XXXX pre-COVID, revenue where As to year, from and in our we repurchase the GAAP deferred we GAAP reverse our the outlook. to $X from handle were this EPS including have benefit our activity share a again, reflecting XXXX stronger XXXX

from strong we following: million XXXX. on improving including outstanding as provide sheet, our December for a XXXX, shares invested balance XX.X solid Our return catalyst capital, XX.X for operations of reliable shares as cash repurchasing result the of and a flow million demand had product our during XX,

opportunistic share in repurchase under authorization. we shares repurchasing going XX, December forward. remaining be We of anticipate As had current to $XX continuing million our

Although also than slower capital on cadence $XXX likely by a in XXXX. Over in our we repaying executed balanced over deployment at debt. significantly XXXX, million

a to can hour accommodate of future XX% our will debt place block of in continues Our more of CRJ underutilization cash in levels around growth future pre-pandemic be fleet color XX% the hours. this give Wade than today growth net and ERJ lower in XXXX. The minute. block

EXXX anticipate of expenditures XXXX million lease year XX $XXX of XXXX. acquisition to buyout including purchase million, be will approximately We $XXX $XXX capital in on CapEx an X including earlier were Our X new in early aircraft. CRJs in and new the the XXXX, EXXXs the million our

us Chip investment position our strong work years to earlier well our total believe an the will the and affecting underserved Our to give fleet way cash through prepare and our drive the channel now position over us shareholder opportunities taking actions we deploy monetizing to the industry are of strong over optionality the excess incremental pilot and shortage and Contour, by returns. that next utilization monetize important the preserve couple CRJ time Wade? engines aircraft of for in to in to mentioned demand of communities. We will XXX

Wade Steel

currently Last Rob. on of and Thank this X order. EXXXs for fourth anticipate a year, in delivered be XX you, We flying the contract. the we quarter two in X to will quarter, addition replace United to XXXX. EXXXs XXXX are in our agreement These in of EXXX the CRJXXX under XX X announced new XX remaining

X During the received contract. Delta fourth we quarter, under EXXX our

more Embraer solidify our XX-seat scope these XXX, are be of XXXX. the some aircraft to We as last of and are XXXX delivery aircraft. The end debt the by CRJXXX the EXXX XXX our of be continuing expect in we of will chances come operator SkyWest one contract repaid over XX the optimistic fleet largest to with will and XXXX, in operate be to At out the time on still to in awarded, world. There total they about remaining the United.

world. next-gen be to as these aircraft. product CRJXXX place are XXc move These extremely they agreements aircraft the flying some will single-class and they newest dual-class are working partners replace valuable in our XXX to to with of believe We the under

additional Let block will X% me any be is captain our more our approximately Based to number XX% trend block increase fleet an hours that aircraft. as QX, quarter staffing, consistent also fleet on XXXX as that review we makes hours block compared of production. quarter. With would we fourth current we the XX% and for compared XXXX. I same the seen before to quarter have we our and regard XXXX. partners anticipate that schedules improving to in flat quarter hours model. The the anticipate from our to major attrition hour for will hours to third can This adding the add block CRJ block our first fourth completed have with each were remind X% accretive you our over ERJ by our to

very Our supporting in efforts to remain production. our partners engaged restore

offer will During program with agreement current pilot agreement early and receive quarter, an SkyWest as job on This also interview for came a new United pilots the clarity to with pilots. XXX time. This our for once to a new join. hours at pathway of provides career as flown program allow a we to United pilot SkyWest. of time to will The then enhanced all flying with pilot transition SkyWest they United amount have SkyWest certain captain of as for the a

for acquired part stake airframes XX% will This monetize of today which ownership our XXX under announced Contour. This in includes our a is strategy arrangement provide provisioning CRJXXX Contour an Airlines, SkyWest million. engines also carrier also accretively agreement ownership stake asset we We assets. CRJ to and part $XX to

We CRJXXX monetize debt. of our have on million continue a our through Airlines utilize our have our approximately SkyWest assets for Both engines very little and book And variety value different no we cycles assets. will CRJXXX remaining new charter business, to also X and SWC, platforms. CRJ to

very demand these leasing assets. and good selling seeing continue for We

For million example, during $XX XXXX. we of over sold assets CRJ

of and the charter April, a status on-demand flights update we since been last that in brief hiring time. have training give SWC. revenue me about and Let operating of began employees SWC investing

the been bookings and we anticipated. than charter progress, higher originally SWC's sport winter with pleased significantly this are have for We

our While have positive of anticipate QX our we a contribute will SWC earnings, contribution SWC earnings did XXXX. to to QX during not

As rate extremely the far demand as remains just rest our the like strong, industry. business, of pro the

great are We very and community strong seeing support. yields

to to continued demand flexibility reduce our with continuing creative communities continue to way We service. good work our and enhance committed financing will our on efforts major the exceptional our work best to partners products. feel risk with we about fleet provide ongoing the our for to of continue each serve We solutions to and and remain the

Robert Simmons

the Okay. Operator, for ready our with we're sell Q&A side.

Operator

from first Raymond Syth of the Our Savi with come [Operator Instructions] James. question will line

Savanthi Syth

maybe could, that I mentioned your And, the each a you seasonality smaller $XXX item? was balance but elaborate because it's could sense other prorate the out of a I if I little of you rate to Southwest line how it in per know place the on you that in out bit and part I takes kind that you million. Does if of aircraft more some business, then was Charter your wondering and there wondering that of Charter know XX. grew Southwest a

get thinking how into you XXXX. you're wondering Just about as Charter Southwest

Russell A. Childs

today charter Savi, Thanks. in is tremendous Look, has which a great our thing sports a the this SWC future. surprising very The teams, doing entity is is that market. is Chip. from is opportunity perspective largely #X on-demand a for that SkyWest Charter doing

the of on-demand basis do are well, there. demand And charter time of lot business strong to before just go I doing would serve. demand. our communities the the sports to think we we receive about still still we can smaller all do authority objective some what We standpoint, back is into that And like we talked just to of along. that what that's teams. We're watching It's for primary that can limited model. the tremendous from to business. There's to today. commute see there's but last need quarter. are today that happens flying we things of exceptionally a we But that limited spring today, besides as again, other are happening That's

Savanthi Syth

Maybe opportunity of full to pilot hours kind roles way kind a assets Contour there. It there. kind I it's into sounds your just CRJ of kind of to strategic your is kind is this? put how and But it's of a well? of kind to build the like captain curious does operate there fit of was kind just as of as relationship build

Russell A. Childs

Yes.

little about we more a opening expand talked maybe me in Let than our comments. what

probably there's why interested we would say the Contour I transaction. think in I were So, four reasons about

investment continue this and First good in we the industry. anchored and to community say a foremost, a in small that's it's financial lot demand

in I of that's enhanced. very mean and pro and XX ago, these the what pandemic, United of that's years the becoming a with we communities, we started small more community. during tremendous the As small amount more foundation demand only are there's States de-urbanize and

we good like. unused So, it's you're aircraft that investment a way in a and right. really to assets space deploy the It's very strong a really, and CRJXXX like. Two, engines

particularly strong think a we going been and space, small that at that in the extremely that is just really at deliver we communities only same as XX-seat that, today. for it's doing to And we've aircraft, product the the way get demand stronger of that to level economics I think fantastic enhance the SWC. is

is for the do can of supply, some the pilot are expansion us in full. good comments, We touched is here. really schools the opening flight extremely is them. Again, path other on today that and So, thing strong this very, didn't you the things. We supply it mention very but

fantastic. And we able particularly as we not like So last, we certainly as the and road hire full the to various of We that, constraints, some that down in be flexibilities down as some as provide captain that's the to hire. Contour much that opportunity may relationship XXX space. could with Contour, much in this the serve feel with some that I given extent that's XXX our representative there But it us can things we should do think expansion out commitment to does communities with small can or for road. expand be our

it's a And of both with conversations a strategic, this going is had very something We've So, think while. them these great for for that us. to works I well be partnership.

Savanthi Syth

authority do have clarification, authority? or a Just commuter charter they

Russell A. Childs

ones commute And come to been air essential captains out have have back of the Yes, They've and East replaced as Coast. with and along certain they ironically, that cities. service had us have constrained been we've the gone do authority.

continuing well are we going the So, they we to pursue of investment. for with some in very authority that be Contour things to commune as aggressive can even as can do today, but SWC

Operator

from with line comes Evercore ISI. Duane Pfennigwerth question next of Your the

Duane Pfennigwerth

mix in higher And take given your hour you guess how of much if could XX% growth my up block the follow-up, like XX% remind what is? be headroom? pilot I to X much ERJ, sort just attrition how relatedly, can to of on continues headroom could trend favorably, system that that this higher on XXXX? percent us Just you And X

Wade Steel

Wade. Duane, this is

mix, ERJ disclosed that side set XX%, XX%. now fleet than our it's the the on a capacity And those we CRJ. the overall overall But XX-Q. Just the about we XX% the said is in are the numbers on ERJ fleet right bigger system, unused

blend still additional XX% there. adding aircraft we increase that the without is could in So, mixed over any

some to the So, some fleet had that's in of your headroom contract. On pilots current we're volumes, X,XXX X,XXX me SkyWest to on Airlines, than past. there's and have color that mostly with maybe we under there SkyWest, we've our let at gone color in plenty When that second to pre-pandemic question still pilots, we about on add obviously. more property we've

As of today, still number. pilots that short we're of about X,XXX

is levels, say, So, need to are of we the about pilots It's I supplied, pre-pandemic more captains. The we not about on a we that's well other XXX problem. captains, officers, pilots. long probably first the and that. term get like use X,XXX another back top X,XXX that demand the of to XXX could them see that XXX schools

small conversations we think levels, get XXXX. X,XXX the So, that, our we we service pilots, with when several demand, previous demand we talk to another about another taken which of back there's need partners, and the of talk since aircraft on community have X,XXX pilots when about we top to for

is throughout captain ourselves as hole. say I today, expand want. And make or X we're further. XXXX, we're to supply not can that out partners with evaluate is this years. X producing about of that we going programs we're When to we production but to long-term, optimistic integrated our to the captains a as many say a even additional It's that we're Captain of to couple not This to sure try as vertically of going take take model, year going So, years. dig this

around question So, helps framework I your of know Duane. kind if put or some not don't that

Duane Pfennigwerth

You know, it does.

Operator

Linenberg Deutsche from comes question Bank. next of the Your Mike line with

Michael Linenberg

Maybe say, type be should seaters, I seaters, to, that. X XX-seat Wade, for I XX about, major on of want carriers XX a little go or business clarification spots color XX X Is back it that you do can actually bringing seaters? guess that you may XXX looking provide other if I available I Is opportunities, the at guess, of Does that your just some to I talked amongst carriers bit guess, And XXX include that I partners. with? around just regional? a statement. that you want

Wade Steel

question, great a That's Mike. Yes.

was I So, a first that was lot XX-seat saying, all, just to in aircraft. it was it but what of my XX of clarify said to script, numbers I

between XXX So XX XXX all that category, there's major our in airplanes scope and between that airplanes to are So seats awarded it's be available right? partners. of XX

to our add obviously clear, that so, have. got we little And existing just a we've fleet

have that XX carriers that some still fall buckets there's obviously contract good opportunities And are those new very aircraft get are potentially seat some that of there. of potential not there's into three other not that And category. XX-seat flying, that XXX There's aircraft. assets airplanes or have We under out there obviously out to right? so, are

Michael Linenberg

go to And then, back Contour. I to want

I on off, XX% be First method, that guess, under equity Rob, going stake? the is accounted to that for

Robert Simmons

now, For yes.

Michael Linenberg

contributor maybe a or in break be just detractor your that a even? Will to P&L XXXX or

Robert Simmons

it that contributor would -- that is of said I'm but of we what operations. XXXX, in the sorry, fourth quarter was SWC our now it speaking not we Yes, expect a

Michael Linenberg

talking of I'm Yes, Contour.

Robert Simmons

contributor ownership color see SWC down and road. more the Contour. a yes, will Sorry, we'll We've and in that got give a be XX% wait

Michael Linenberg

Contour, is big have does many pilots today? Contour how then And how

Wade Steel

Mike, around range. and in pilots somewhere is Wade. XXX Yes, XX this They somewhere that aircraft about have

Michael Linenberg

with today, they they have affiliation Part And then like does have XXX do carriers Silver intra-line anyone? Keifer, don't with carriers and any agreements Contour like or other various

Robert Simmons

question. great Mike, Yes,

the currently, interline they Airlines. So, as have of with the American transaction agreement of closing an

Michael Linenberg

if an And I topic in one. then interesting one, is just squeeze can it one on because this last

Any lot wasn't Surf or de that Southern Airways with kind maybe on color get of kind if does there. What easier you sure investment. this now maybe Air. this with into novo recall, have clean one, you residual a that, is even get but and that's I'm a Express an As the Airways investment I not you of you type have to structure the in I Surf that? that Express, could a Air the rolled know a and Southern been did stake start

Robert Simmons

Yes.

the So, Chip the Mike, of of that, tackle part I'll and take it. first part will last then

transaction Southern far as So, with as our that. in we of their our divested Surf, part as ownership of stake investment in

we're have ownership. we So, no longer

Russell A. Childs

Contour, almost and that, big aircraft, type smaller exactly to between SWC, Michael, of a would on SWC. same Southwest was type of some the aircraft, at it's obviously. there's Southwest be differences type we like To And, of second And can turboprop, same that accomplish single-engine like is half I Contour mean, the of and flying. just with stuff.

So, the fleet it and carriers could both the to asset very connection of lot And and that work of is there's the do. #X a from difference seemed strategically what alignment perspective, well. very,

Operator

next line TD Your Becker with of question from comes Cowen. Helane the

Helane Becker

allocation? you versus weighing capital are think debt should How about that, buybacks priorities? for repayment like How we

Robert Simmons

have Yes. we'll take at and I time potentially that at we're sort being of see don't powder we're mutually think But obviously be probably out optimal airplanes we'll Thanks, a a quarter for slow do we job way. I grow focused about may continue there. We cadence like as now. at share say And that a to have on talking as things way. there well, them deploying of the Obviously, dry both. are an look I But to program scope open plenty capital of But levels repurchase to the and love And that would here, definitely we'll good Chip in opportunities think that. that that flying an want to that in exclusive. leave out would we've continue very we to Helane. done been continue the I Wade pretty XXX but

Helane Becker

line how thinking just roughly with about And question. thinking to then pre-COVID have, X,XXX to how like are Or you that I should pilots would the thinking we to about margins? And getting think margins? the how know about back margins? my follow-up are you're How you size back time about you then

Robert Simmons

Yes. Thanks, Helane.

we So back, shares not And direction. the margins EPS standpoint. in obviously, look, bought making and think deployed capital because back yet. of we we're how are an I we're But there that XXXX good that we've progress from to

will So margins in to though XXXX are potentially be. even EPS levels, not back XXXX,

Helane Becker

And the but if of I'm some if then of don't if been book I And has just them some any this, flying don't if business would seen think one know as since know kind Air, flying more. them or month. just do I the that even do Alaska would in and wondering could middle I you I for for and see see question away usual. of you it's the you you

Russell A. Childs

Yes. Helane, this is for usual. as all Chip. it's business honestly, us, In

In type of of have on that given we've some the that more fact, certainly, been to fly been in and going the industry, asked things stuff.

had relative a So it's impact not our major what to flying is.

I fact, stronger, In little today. we sometimes think when where a demand even strong. And it gets demand are think I don't is you notice

with situation the of kind that's that. So,

Operator

next Your comes from Catherine of Sachs. question the line Goldman O'Brien with

Catherine O'Brien

Maybe one more on Contour and the CRJ in general.

are you how I know many contract? on of just of currently not With going moving there's remind CRJ your can pieces. Contour, to these some us aircraft

value for sense just about of the to what's a wanted Contour get are Avenue? what's off? not I So to on those of come to contract options And rehome now, new this what be

Wade Steel

Great Yes, is Catie, Wade. this question.

CRJXXX. between probably side, we around talked assets, about those not book are are pro there's And XX So, about about right But as to current under XXX own contracts. through leasing. Charter, XX very contract, we value rate as we no of said and monetizing and little on CRJXXX that selling, debt. the we There's now, those there's SkyWest

kind that's so, scope of of And it. the

and very and vast those. XXX for are demand our those majority have of contract all under high XXX, Our the

Operator

with from of line follow-up a Syth James. is question Savi next the Our Raymond

Savanthi Syth

many build as of year kind maybe Charter was SkyWest any wanted just suppose, are to And in curious, your create there. your up you well? much is to Duane's your operation? how kind given just I response I captains follow I of main super captains, on net question. able of you incremental color That kind then helpful was how helping to in

Russell A. Childs

as will we So, this projections, and of have our they I watch lot complicated to And get basically, happening. answer what's is better probably we bit a question, a a time all say little today, of in the that. our conservatism

add We back away that we back seen at back couple And building context the this goes we captains a I it think as to that build of problem don't years. building want and operation, we're way that over we're change. moment next the just have some in this

decade think model and to So, to that's we both. build a relative the over officers first next so, that captains need or we resilient fundamentally

we doing So, right that still number, the do back your today, build as can get way, to to we're produce. levels. XXXX going just back years production up but back many rate you it say, to how we today have the it's and to you we're I'd positive take back, at that going several think the captain

the program probably with pilot going working partners investment career at important are faster produce the is investment, SkyWest that else. to than we're we pilots we That's can to most position that want a four anywhere attract position that and would ways have what partners producing to tag to which a in positions are Now, captains diligently in our career part we strategically, career with not today. look creative at either that's on be but we Contour very the United. Fundamentally here or

about partners' have far past be to that to our what than and to our been surgical contribute in So, the identifying we're we those the going future culture more continue culture. in

last are to lot captain is of be on So, to detail officer attrition. first they Savi, depends honestly, captains, become even on that could and the it like the little attrition It super X.X in the not be said, It before We're can first level over last great could going which be don't I years. And been all doing of I grip think, have a levels what optimistic positive time a attrition. we've get those We ready right producing months, place. be. conservative. we're it get of models we outside we bit can into super the which really a now the summarized. The just are of couple

but line, which we to want focused move creates people production but want but just where this really We our translates importantly, as our look, aggressively going ways today. utilization to stock shareholders, for We to a want which most to take it obviously for stay well. and It's a have long forward, lifestyle well. as bottom on positive captains not high are we're the employees time, going can this in

So, we're cultural well as that a on. focused it's deeply event

Operator

Our Goldman is from O'Brien Catherine next question with Sachs. a follow-up

Catherine O'Brien

I on. you for just outright? them talking are you, like to my Contour, selling interest sparked be follow-up had When back -- basically on aircraft So or the Wade. going about leasing a were you

Wade Steel

question. That's great a

them the So, have the we and are them, model now, we that right are airframes we engines. selling leasing currently the to

how And structured them. so, currently with that that's we've

Catherine O'Brien

you from I deferring to us then you've just trigger that recognize next is what revenue year. for revenues And us can starting you balance? deferred incremental the flip for the know to is remind given guidance

that could potentially XXXX. Not getting past, hours back noted about anything earlier I changes And think context that think block that tied how if in changed around year of this higher, to to where closer the we contract for block if the paying XXXX the like threshold. hour moves impact you've sure recognition? the just about target in

Robert Simmons

Rob it's here. Catie, Yes,

hard deferred depend sort future flip other the production a of our revenue it's and imagine now direction. sort back on scenario So, does forecast or to projection of the hours. right But block that future we for model

indicated XXXX, start I that many small that sort we in we'll starting to continue we've amounts would of to and as quarterly, expect that think for recognize years.

Catherine O'Brien

maybe is the of recognition there upside just was attrition pilot hour wondering to if more that block I further better. was was

Robert Simmons

on We'll posted keep you that.

Catherine O'Brien

squeeze also, And one then last in if Rob. for maybe one just I you can

question, Is going to share flow the else? You function And mentioned, of stepping of repurchases of projections or something your the those a earlier kind rephrasing than repurchases tune a pace years you on of couple up if flow Helane would flowing? expected, maybe of over change expect cash you better CapEx the pace that next free just came your in of 's forward.

Robert Simmons

Sure, debt and of ways at spectrum flow, capital, think NPVs best whether deploy accretively generate the and we you mean, Catie. starts, that it deploying go the repayment, that it we be as capital. Obviously, forward cash But in cash deploy of repurchase good I to terms it's been the free we'll a capital number in then generating there's share look pick look be and we how Thanks. other indicated, I XXXX. initiatives, can flying, flow, from we it and of new Yes, free continue we that, go mean, one a about as operational ways whether best whether to opportunities very at with have has there.

Catherine O'Brien

was one, I said last it. And should I my that know allow but maybe you

to on didn't and Charter, XQ it's between what Southwest XQ? be Delta going in the Just earnings us XQ. contribute I think can in it should you said just about help you think

So, a you And drag in how was XQ will to how if that. contribute have XQ? much of much

Wade Steel

not Yes, catie, for kind get to but you. profitability, Wade. is that give some directionally revenue now, specific this I be numbers that can into helpful may you of we're going The

$X $XX fourth million. in the $XX it like first the in revenue quarter, $X around quarter, million, anticipate in the being million quarter. it was over we million in then or first $XX And million So, to

a that. and still a the right the charter is of about And all learning entity now. lot growing still that pretty learning so, swing. We're there We're efficiencies We're about big still business.

So, We're we're growing. day. better learning. We're it every getting at

think I so, things, more all get then well. revenue more efficient. to and we're cost as we're opportunities And And more those of with finding going

Operator

turn Chip for Childs I'll over to remarks. now closing the call

Russell A. Childs

process what mean, Regina. we've pleased and in headwinds We look forward way. But think less last Great. professionals there going headwinds, lot lot probably I done I be everything a in and really a We're to will there's our was any you, that to along challenges with Thank for SkyWest the thanks year, that happen of amazing you what's We at flexibility the of that XXXX. of given you've XXXX. done and this to doubt really we quarter. our line Thank appreciate and the controlling to will, to positive and and to move forward way. very as options that making very, well look a we in company, and next analysts scrimmage, following talking are that in interest you. have with to us so to the we're of work sure if our forward are we our people the partners that don't we surprises you

Operator

joining, now conclude does you thank for may conference. all and today's disconnect. That We you

SkyWest (SKYW) 1 Feb 242023 Q4 Earnings call transcript