SkyWest(US:SKYW)2025-04-25 20:01Financial Performance - Total operating revenues for the three months ended March 31, 2025, were $948.5 million, an 18.0% increase from $803.6 million for the same period in 2024[105] - Net income for the three months ended March 31, 2025, was $100.6 million, or $2.42 per diluted share, compared to $60.3 million, or $1.45 per diluted share, for the same period in 2024[105] - Operating revenues rose by 18.0% to $948,455,000 in Q1 2025 from $803,614,000 in Q1 2024[114] - Segment profit for SkyWest Airlines and SWC rose to $54.3 million in Q1 2025, a significant increase of $49.3 million or 986.3% compared to $5.0 million in Q1 2024[136] Operational Metrics - The number of aircraft in scheduled service or under contract increased from 475 as of March 31, 2024, to 488 as of March 31, 2025, representing a 2.7% increase[106] - Block hours increased from 289,801 for the three months ended March 31, 2024, to 352,155 for the same period in 2025, a rise of 21.5%[106] - Departures increased from 169,432 for the three months ended March 31, 2024, to 201,838 for the same period in 2025, a growth of 19.1%[108] - The number of passengers carried increased by 13.6% to 10,390,364 in Q1 2025 from 9,149,453 in Q1 2024[113] - Block hour production for SkyWest Airlines and SWC increased by 21.5%, from 289,801 hours in Q1 2024 to 352,155 hours in Q1 2025[137] Revenue Sources - Capacity purchase revenue increased by $108.0 million, or 15.9%, for the three months ended March 31, 2025, primarily due to an increase in completed block hours[107] - Prorate and SWC revenue increased by $29.7 million, or 29.4%, for the three months ended March 31, 2025, compared to the same period in 2024[107] - Capacity purchase agreements flight operations revenue increased by 17.5% to $639,153,000, driven by a 21.5% rise in block hour production[115] - Lease, airport services, and other revenues grew by 28.2% to $32,461,000, attributed to an increase in leased assets and lease rates[121] - SkyWest Airlines and SWC operating revenues increased by $154.8 million, or 23.9%, from $646.8 million in Q1 2024 to $801.7 million in Q1 2025[138] Expenses - Total operating expenses rose by $105.0 million, or 14.9%, for the three months ended March 31, 2025, due to increased direct operating expenses from a higher number of flights[108] - Total operating expenses increased by 14.9% to $809,078,000, with aircraft maintenance expenses rising by 43.8% to $209,100,000[122] - Salaries, wages, and benefits expenses increased by $26.3 million, or 7.5%, due to higher direct labor costs from increased flight operations[139] - Aircraft maintenance, materials, and repairs expenses surged by $60.4 million, or 42.8%, primarily due to increased maintenance activity on the CRJ fleet[140] Cash Flow and Debt - Cash and cash equivalents decreased from $801.6 million as of December 31, 2024, to $750.9 million as of March 31, 2025, a decline of $50.7 million[148] - Net cash provided by operating activities was $171.0 million for Q1 2025, an increase of $13.4 million or 8.5% compared to $157.6 million in Q1 2024[150] - Cash used in investing activities increased significantly to $66.1 million in Q1 2025 from $0.6 million in Q1 2024, reflecting higher capital expenditures[153] - As of March 31, 2025, the company had $2.6 billion in long-term debt, with an average effective interest rate of approximately 4.3%[162] Tax and Interest Rates - The average effective interest rate for Q1 2025 was 4.3%, compared to 4.1% in Q1 2024, while outstanding debt decreased from $2.9 billion to $2.6 billion[129] - The effective income tax rate decreased to 16.7% in Q1 2025 from 24.8% in Q1 2024, primarily due to a higher discrete tax benefit from employee equity awards[132] Future Commitments and Risks - The company plans to add a total of 15 new E175 aircraft with United from 2025 to 2026 and one new E175 aircraft with Alaska in 2025[101] - The company has a firm purchase commitment for 16 new E175 aircraft and 12 used CRJ900 airframes, with anticipated delivery dates extending into 2026 and 2025 respectively[159] - The company has guaranteed $24.0 million in promissory notes of third parties, secured by aircraft and engines[164] - The unsecured debt payable to the U.S. Treasury of $200.6 million had a fixed interest rate of 1.0% as of March 31, 2025, with an increase scheduled to the applicable SOFR rate plus 2.0% after five years[168] - The company expects continued impacts from inflation on costs, which may not be fully offset by price increases under capacity purchase agreements[169] - Seasonal fluctuations affect operations, with increased travel during summer months and decreased travel from November to February[166] - The company bears the economic risk of fuel price fluctuations on prorate and SWC operations, with a hypothetical 25% increase in fuel prices resulting in an additional $6.1 million in fuel expenses for the three months ended March 31, 2025[167] - The company has guaranteed obligations under the United Express Agreement and Delta Connection Agreement for the E175 aircraft[164]