SkyWest (SKYW) Q2 2025 Earnings Call July 24, 2025 04:30 PM ET Company ParticipantsRobert Simmons - CFOEric Woodward - Chief Accounting OfficerRussell Childs - President, CEO & DirectorWade Steel - Chief Commercial OfficerHillary Cacanando - Director - Equity ResearchSavanthi Syth - Managing DirectorThomas Fitzgerald - VP - Equity ResearchDuane Pfennigwerth - Senior Managing Director - EquitiesCatherine O'Brien - Vice PresidentOperatorHello, and thank you for standing by. My name is Tiffany, and I will be y ...

中国民航网 通讯员李海英 报道：2025年暑运旺季将至，为满足旅客出行需求，自7月18日起，锡林浩特 机场直飞济南航线机型升级为空客320执行，全方位提升旅客的出行体验。 自2025年夏航季以来，锡林浩特至济南航线一直保持着较高的热度。据统计，该航线进出港平均客座率 稳定在77%以上，特别是近期，锡林浩特至济南出港客座率更是高达92%，部分时段甚至接近满载状 态。随着暑运高峰的日益临近，草原避暑游热度持续攀升，探亲访友与商务出行的需求也不断叠加，预 计客流量将迎来新一轮的增长。 锡林浩特至济南航线的机型升级，不仅是运力与服务的提升，更是锡林浩特机场航线网络优化进程中的 关键一步。随着暑运市场的不断升温及与运力升级的双重机遇，锡林浩特机场将充分发挥自身优势，为 三地旅客打造更加高效、便捷的出行环境，有力推动草原经济与文旅产业的协同发展，为区域经济的繁 荣注入新的活力。（编辑：李佳洹 校对：陈虹莹 审核：程凌） 面对市场需求的急剧增长，锡林浩特机场充分发挥主观能动性，紧密结合季节性特点，主动与华夏航空 沟通协调运力，精心优化航线网络结构。自7月18日起，原"包头—锡林浩特—济南"航线将调整为"呼和 浩特—锡林浩特 ...

Core Viewpoint - The civil aviation market is approaching a peak in passenger flow as summer approaches, raising questions about the performance of regional airlines and smaller airports during the upcoming travel season [1] Group 1: Challenges Facing Regional Airlines - Resource limitations are a major constraint on the development of regional airlines, with many small cities experiencing slow growth in passenger markets and operational issues for regional airlines and airports [1][10] - Passengers often prefer high-speed rail over regional flights due to factors such as safety, comfort, and convenience, which impacts the demand for regional air travel [1][10] Group 2: Current State of Regional Aviation - The Civil Aviation Administration of China has been optimizing policies to promote regional aviation, resulting in an increase in the number of regional routes and improved connectivity for cities with regional airports [11] - As of the end of 2024, the number of domestic transport airports in China reached 263, with a total passenger throughput of approximately 1.46 billion, marking a year-on-year increase of 15.86% [12] Group 3: Future Prospects for Regional Airlines - The potential for growth in regional aviation is significant, with expectations that the number of airports in China will exceed 270 by 2025, primarily consisting of regional airports [13] - The development of regional airlines requires efficient collaboration between airlines and airports, as well as support from government policies to enhance connectivity and service offerings [15] Group 4: Financial Performance of Regional Airlines - Huaxia Airlines reported total assets of approximately 20.7 billion CNY and revenue of about 6.7 billion CNY in 2024, reflecting a year-on-year growth of 29.98% [16] - The airline's net profit attributable to shareholders reached approximately 268 million CNY, a significant increase of 127.77% compared to the previous year [16] Group 5: Government Support for Regional Aviation - In January 2024, the Ministry of Finance and the Civil Aviation Administration revised the subsidy management measures for regional airlines, focusing on enhancing support for routes operated by regional aircraft [19]

Core Insights - SkyWest, Inc. reported better-than-expected first-quarter 2025 results with earnings per share (EPS) of $2.42, surpassing the Zacks Consensus Estimate of $2.04 and improving 66% year-over-year. Revenues reached $948.5 million, exceeding the estimate of $931.4 million and increasing 18% year-over-year [1]. Revenue Performance - Revenues from flying agreements, which contributed 96.5% to total revenues, grew 17.6% from the prior year's figure of $915.99 million. The airline carried 13.6% more passengers year-over-year, and departures increased by 19.1% year-over-year. However, the passenger load factor decreased by 2.2 points to 78.6% [2]. Management Commentary - Chip Childs, CEO of SkyWest, emphasized the solid demand for their services despite uncertain macroeconomic factors. The company is focused on enhancing value for partners, improving service to smaller communities, and investing in fleet upgrades for long-term growth. A multi-year contract extension with Delta Air Lines for five CRJ700 and 11 CRJ900 aircraft was also announced [3]. Operating Expenses - Operating expenses totaled $809 million, reflecting a 15% increase from the previous year, primarily due to higher maintenance costs for the CRJ fleet and increased flight production, partially offset by operational efficiencies from better fleet utilization [4]. Financial Position - As of the end of the first quarter, SkyWest had cash and marketable securities amounting to $750.88 million, down from $801.62 million in the prior quarter. Long-term debt decreased to $2.07 billion from $2.14 billion [5]. Share Repurchase and Capital Expenditures - During the first quarter of 2025, SkyWest repurchased 141,000 shares for $13.7 million under its share repurchase program, with $34 million remaining available. Capital expenditures for the quarter were $73 million, which included the purchase of four CRJ550 aircraft and other fixed assets [6].

Financial Data and Key Metrics Changes - SkyWest reported a net income of $101 million or $2.42 per diluted share for Q1 2025, reflecting a slight increase in production compared to Q4 2024 [5][11] - Total Q1 revenue was $948 million, up from $944 million in Q4 2024 and up 18% from $804 million in Q1 2024 [12] - Q1 pretax income was $121 million, with an effective tax rate of 17% [11] Business Line Data and Key Metrics Changes - Contract revenue for Q1 was $785 million, flat from Q4 2024 but up 16% from Q1 2024 [12] - Pro rate and charter revenue was $131 million, up 3% from Q4 2024 and up 29% from Q1 2024 [12] - Leasing and other revenue was $32 million, up 3% from Q4 2024 and up 28% from Q1 2024 [12] Market Data and Key Metrics Changes - The company completed over 30,000 more flights in Q1 2025 compared to the same quarter last year, achieving a 99.9% adjusted completion rate [6] - The dual-class aircraft generated 87% of block hour production during Q1 [8] Company Strategy and Development Direction - SkyWest aims to restore or bring new service to underserved communities, redeploy and fully utilize its existing fleet, and prepare for the delivery of 16 new E175s over the next two years [7][9] - The company is focused on smart investments in its people and fleet while maintaining a disciplined approach to growth opportunities [9][10] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's positioning despite macroeconomic uncertainties, highlighting strong demand for their services [10] - The company anticipates a 12% to 13% increase in block hour production in 2025 compared to 2024, driven by improved fleet utilization and ongoing strong demand [18] Other Important Information - The company ended Q1 with cash of $751 million, down from $821 million in Q1 2024, and reduced debt to $2.6 billion [13][15] - SkyWest expects capital expenditures for 2025 to be approximately $575 million to $600 million, including the purchase of eight new E175s [17] Q&A Session Summary Question: When will discussions about extending contracts for E175s begin? - Management is optimistic about continuing to fly the E175s for their major partners due to their good maintenance and performance [30][31] Question: What are the guardrails for pacing future share purchases? - The company evaluates capital deployment quarterly and has repurchased about 22% of its shares since early 2023 [32][34] Question: What is the status of the CRJ200 fleet? - Approximately 80 CRJ200s are currently flying, with some being used in SkyWest Charter and others sold or leased [35][37] Question: How are customers scheduling flights given stronger peaks and weaker off-peak periods? - Management noted that while there is strong demand, they are still in a catch-up mode with partners due to ongoing pilot shortages [41][42] Question: What is the outlook for SkyWest Charter? - The company anticipates that the majority of aircraft will return to SkyWest Charter as demand fluctuates seasonally [45][46] Question: What is the status of the DOT approval process for SkyWest Charter? - Management is awaiting final approval from the DOT, which has been delayed due to chaotic conditions in Washington, D.C. [54][57] Question: How does the company view consolidation in the regional industry? - Management prefers organic growth and strategic asset acquisitions rather than mergers, emphasizing their focus on enhancing partnerships [80][82]