SkyWest(SKYW) - 2024 Q4 - Annual Report

Financial Performance - Total operating revenues for the year ended December 31, 2024, were $3.5 billion, a 20.2% increase from$ 2.9 billion in 2023[211]. - Net income for 2024 was $323.0 million, or$ 7.77 per diluted share, compared to $34.3 million, or$ 0.77 per diluted share, in 2023[211]. - Operating revenues for SkyWest Airlines and SWC increased by $513.2 million, or 21.5%, from 2023 to 2024[245]. - SkyWest Airlines and SWC segment profit was$ 138.9 million for 2024, a significant recovery from a loss of $165.2 million in 2023[243]. - SkyWest Leasing segment operating revenues increased by$ 79.3 million, or 14.6%, to $622.6 million in 2024 from$ 543.3 million in 2023[250]. - SkyWest Leasing segment profit rose by $87.7 million, or 42.7%, to$ 293.3 million in 2024 compared to $205.5 million in 2023[252]. Operational Metrics - The number of aircraft in scheduled service or under contract increased from 485 in 2023 to 492 in 2024, a 1.4% increase[212]. - Block hours increased from 1.14 million in 2023 to 1.29 million in 2024, representing a 13.3% increase[212]. - Departures increased from 691,962 in 2023 to 766,742 in 2024, a 10.8% increase[216]. - The average passenger trip length increased by 2.4%, from 453 miles in 2023 to 464 miles in 2024[219]. Revenue and Expense Analysis - Capacity purchase revenue rose by$ 502.4 million, or 20.5%, due to increased completed block hours and recognition of previously deferred revenue[213]. - Prorate and SWC revenue increased by $76.0 million, or 19.9%, driven by a higher number of passengers carried[213]. - Total operating expenses increased by$ 201.9 million, or 7.1%, primarily due to increased direct operating expenses from more flights operated[215]. - Salaries, wages, and benefits increased by $141.3 million, or 10.7%, due to higher direct labor costs from increased flight operations[246]. - Aircraft maintenance expenses rose by$ 39.2 million, or 5.8%, primarily due to higher flight volume[229]. Cash Flow and Debt Management - Cash and cash equivalents increased by $79.1 million, or 53.3%, to$ 227.4 million as of December 31, 2024, from $148.3 million in 2023[258]. - Total long-term debt decreased by$ 0.3 billion, or 10%, to $2.7 billion as of December 31, 2024, from$ 3.0 billion in 2023[254]. - Net cash provided by operating activities was $692.5 million in 2024, down$ 43.9 million, or 6.0%, from $736.3 million in 2023[258]. - Cash used in investing activities surged by$ 205.4 million, or 884.3%, to $228.6 million in 2024 from$ 23.2 million in 2023[258]. - Cash used in financing activities decreased by $283.1 million, or 42.4%, to$ 384.8 million in 2024 compared to $667.8 million in 2023[265]. Future Commitments and Investments - The fleet is scheduled to add a total of 15 new E175 aircraft with United from 2025 to 2026, enhancing capacity and profitability[208]. - SkyWest has a firm purchase commitment for 16 new E175 aircraft with anticipated delivery dates extending into 2026[269]. - The company recognized$ 1.5 million of previously deferred lease revenue during the year ended December 31, 2024[281]. Tax and Impairment - The effective income tax rate increased to 25.3% in 2024 from 14.8% in 2023, influenced by various factors including non-deductible expenses[238]. - The company recorded a non-cash impairment loss of $2.3 million related to 14 CRJ700 aircraft in 2023[285]. - The company reclassified the 14 CRJ700 aircraft as held for use assets in March 2024, resulting in a$ 4.2 million gain for the year ended December 31, 2024[285]. Fuel and Cost Analysis - The average price per gallon of aircraft fuel for the year ended December 31, 2024, was $3.19, compared to$ 3.70 in 2023 and $4.14 in 2022[291]. - Salaries, wages, and benefits expense represented 48.3% of total operating expenses for the year ended December 31, 2024[294]. - A hypothetical 25% increase in salaries, wages, and benefits would have raised operating expenses by approximately$ 366.0 million for the year ended December 31, 2024[294]. - A hypothetical 50 basis point change in market interest rates would not have a material effect on the company's financial results[292].