Financial Data and Key Metrics Changes - SkyWest reported net income of $116 million, or $2.81 per diluted share for Q3 2025, reflecting a strong demand for its services [4] - Total Q3 revenue was $1.1 billion, up 15% from $913 million in Q3 2024, and up from $1 billion in Q2 2025 [9] - Q3 pre-tax income was $157 million, with an effective tax rate of 26% [9][10] - Cash at the end of Q3 was $753 million, up from $727 million in the previous quarter but down from $836 million in Q3 2024 [10] - Free cash flow generated in the first three quarters of 2025 was nearly $400 million, including $144 million in Q3 [11] Business Line Data and Key Metrics Changes - Contract revenue for Q3 was $844 million, slightly up from $842 million in Q2 2025 and significantly up from $761 million in Q3 2024 [9] - Pro-rate and charter revenue was $167 million in Q3, up from $145 million in Q2 and $123 million in Q3 2024 [9] - Leasing and other revenue was $39 million in Q3, down from $48 million in Q2 but up from $29 million in Q3 2024 [9] Market Data and Key Metrics Changes - SkyWest achieved over 185 days of 100% controllable completion year-to-date through Q3 2025, with over 2,500 daily scheduled departures [4] - Q3 block hours were up 2% compared to Q2 2025, with a projected 4% decrease in Q4 due to seasonality [19] Company Strategy and Development Direction - The company aims to restore or bring new service to underserved communities, redeploy its existing fleet, and prepare for future aircraft deliveries [8] - SkyWest plans to acquire and finance 30 additional E175s by the end of 2028 and repay approximately $500 million in debt in 2025 [12] - The company is focused on enhancing its fleet flexibility and maintaining strong partnerships to meet market demands [8][16] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about growth opportunities in 2026, including increased service to underserved communities and strong demand for pro-rate products [15] - The company is committed to navigating challenges posed by the federal government shutdown while honoring service commitments [5][27] - Management anticipates low single-digit percentage growth in block hours for 2026, translating into mid to high single-digit percentage growth in EPS [13][20] Other Important Information - The Department of Transportation finalized SkyWest Charter's commuter authorization, which is expected to provide future opportunities [5] - The company has secured firm delivery positions for 44 more E175s from 2028 to 2032, enhancing fleet flexibility [6] Q&A Session Summary Question: Can you walk us through the fleet and mixed benefit as you bring on more E175s? - Management noted that they expect to transition additional CRJ-550s into service and have strong pro-rate demand, which will offset some of the Delta-owned CRJ-900s being returned [23][24] Question: What is the status of Essential Air Service funding? - Management indicated that funding is secured through November 18, and they are committed to serving communities despite uncertainties regarding future reimbursements [26][27] Question: Can you clarify the multi-year agreement with United regarding CRJ-200s? - Management confirmed that the extended CRJ-200s are all contract airplanes, enhancing their partnership with United [28][29] Question: What is the impact of the 10% tariff from Brazil? - Management acknowledged the tariff's impact on small community service but emphasized their commitment to evolving and executing their strategy [34][35] Question: What are the net fleet additions expected for 2026? - Management projected flat to small increases in capacity purchase flying for 2026, with 20 CRJ-550s and 11 E175s being added, offset by the return of Delta-owned aircraft [38]

Financial Data and Key Metrics Changes - The company reported total revenue of $326.6 million for Q1 2025, marking a 4.9% increase compared to Q1 2024, and the highest quarterly revenue on record [15][16] - Operating margin for the quarter was 17.2%, with an adjusted operating margin of 18.3%, expected to be among the highest in the industry [15][16] - Diluted adjusted EPS for the quarter was $0.72, reflecting the resilience of the diversified business model [15][16] Business Line Data and Key Metrics Changes - Revenue for the passenger segment, including scheduled service and charter businesses, grew by 4.1% year over year [16] - Charter revenue increased by 15.6% to $55 million, driven by a 10.7% growth in charter block hours [17] - Cargo segment revenue grew by 17.6% to $28.2 million, despite a 1.1% decrease in cargo block hours [18] Market Data and Key Metrics Changes - Scheduled service TRASM declined by 4.7% as scheduled service ASMs increased by 6.7% [16] - The company expects scheduled service ASMs to decrease by approximately 7% in Q2 2025 [10][17] - Close-in fares accelerated into April, indicating positive demand for the summer season [10][11] Company Strategy and Development Direction - The company aims to leverage its diversified business model to deliver industry-leading profitability throughout all cycles [5][8] - Execution on cargo expansion is ongoing, with plans to have all eight additional aircraft in service by the end of summer 2025 [9] - The company plans to allocate pilot resources to support cargo growth, temporarily reducing scheduled service capacity [10][19] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in outperforming during industry stress due to the strength of the diversified model and reliable demand in the home market [8] - The company anticipates a doubling of cargo revenue by September 2025, driven by the addition of new aircraft and increased unit revenue [9][66] - Management noted that the leisure market needs to shrink in the U.S. to regain pricing power, potentially through reorganizations or M&A activity [29] Other Important Information - The company has a total liquidity of $227.1 million at the end of Q1 2025 and plans to continue deleveraging, with net debt levels expected to fall below zero by 2028 [20][21] - The company repurchased $10 million of shares during the quarter and received an additional $25 million share repurchase authorization from the board [21][22] - The company was awarded Air Transport World's airline leader of the year for 2025 [13] Q&A Session Summary Question: Can you talk about the ramp of aircraft utilization and profitability on the cargo side? - Management indicated that pilot credit hours will grow by 10% annually, but total system block hour growth will be below that as the focus shifts to cargo [25] Question: What do you think other carriers will need to do regarding peak versus off-peak flying? - Management believes the leisure space needs to shrink in the U.S. to regain pricing power, potentially through reorganizations or M&A [29] Question: Can you elaborate on demand trends through the quarter and into April? - Management reported strong performance in January, but load factor was missed in February and March due to high fares [36] Question: Can you discuss the reasoning behind tripling your revolver? - The increase was primarily due to the growth of the company since the IPO, not specifically for opportunistic purposes [41][44] Question: Can you talk about the new credit card deal with Synchrony? - Management expressed excitement about the new co-brand partnership, which is expected to improve revenue share starting in 2026 [52][54] Question: How should we think about the cargo revenue ramp this year and next? - Management expects a doubling of cargo revenue by September, with a gradual ramp-up as new aircraft are delivered [66] Question: Have you seen any share shift due to changes in product offerings from low-cost carriers? - Management believes their product is well-positioned and does not anticipate significant share shifts [93] Question: What are the guidelines for M&A in terms of leverage and liquidity? - Management emphasized the importance of maintaining operational flexibility and noted that liquidity is not as sensitive due to contracted revenue [99][100]

Financial Data and Key Metrics Changes - The company reported total revenue of $326.6 million for Q1 2025, marking a 4.9% increase compared to Q1 2024, and the highest quarterly revenue on record [15][16] - Operating margin for the quarter was 17.2%, with an adjusted operating margin of 18.3%, expected to be among the highest in the industry [15][16] - Diluted adjusted EPS for the quarter was $0.72, reflecting the resilience of the diversified business model [15][16] Business Line Data and Key Metrics Changes - Revenue for the passenger segment, including scheduled service and charter businesses, grew by 4.1% year over year [16] - Charter revenue increased by 15.6% to $55 million, driven by a 10.7% growth in charter block hours [17] - Cargo segment revenue grew by 17.6% to $28.2 million, despite a 1.1% decrease in cargo block hours [18] Market Data and Key Metrics Changes - Scheduled service TRASM declined by 4.7% as scheduled service ASMs increased by 6.7% [16] - The company expects scheduled service ASMs to decrease by approximately 7% in Q2 2025 [17] - Close-in fares accelerated into April, indicating positive demand for the summer season [10][11] Company Strategy and Development Direction - The company aims to leverage its diversified business model to deliver industry-leading profitability throughout all cycles [5][6] - Execution on cargo expansion is ongoing, with plans to have all eight additional aircraft in service by the end of summer 2025 [9] - The company is focusing on reallocating resources to maximize profitability and minimize earnings volatility [22] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in outperforming during times of stress due to the strength of the diversified model and reliable demand in the home market [8] - The company anticipates a temporary drawdown in scheduled service to absorb cargo growth, which is expected to provide a tailwind for scheduled service unit revenues [10] - Management noted that the leisure space in the U.S. may need to shrink for pricing power to return, potentially through reorganizations or M&A activity [29] Other Important Information - The company has a total liquidity of $227.1 million at the end of Q1 2025 and plans to continue deleveraging, with net debt levels expected to fall below zero by 2028 [20][21] - The company repurchased $10 million of shares during the quarter and received an additional $25 million share repurchase authorization from the board [21][22] - The company was awarded Air Transport World's airline leader of the year for 2025 [13] Q&A Session Summary Question: Can you talk about the ramp of aircraft utilization and profitability on the cargo side? - Management indicated that pilot credit hours will grow by 10% a year, but total system block hour growth will be below that as they expand into cargo [25] Question: What do you think other carriers will need to do regarding peak versus off-peak flying? - Management believes the leisure space needs to shrink in the U.S. for pricing power to return, potentially through reorganizations or M&A activity [29] Question: Can you elaborate on demand through the quarter and into April? - Management reported strong performance in January, but load factor missed expectations in February and March due to high fares [36] Question: Can you discuss the reasoning behind tripling your revolver? - The increase was primarily due to the growth of the company since the IPO, not specifically for opportunistic purposes [41][46] Question: Can you talk about the new credit card deal with Synchrony? - Management expressed excitement about the new co-brand partnership, which is expected to improve revenue share, but benefits will not hit the P&L until 2026 [52][54] Question: How should we think about the cargo revenue ramp this year and next? - Management expects cargo revenue to double by September, with a significant increase in revenue per block hour [66][68] Question: Have you seen any share shift due to changes in product offerings from low-cost carriers? - Management believes they have a strong product and brand presence, which positions them well against competitors [95] Question: What are the guidelines for M&A in terms of leverage and liquidity? - Management stated that they are comfortable with their current liquidity position and have significant headroom on the balance sheet for potential opportunities [100][102]

Financial Data and Key Metrics Changes - Total revenue for Q1 2025 reached $326.6 million, marking a 4.9% increase compared to Q1 2024, and is the highest quarterly revenue on record for the company [14][15] - Operating margin for the quarter was 17.2%, with adjusted operating margin at 18.3%, expected to be among the highest in the industry [15] - Diluted adjusted EPS for the quarter was $0.72, reflecting the resilience of the diversified business model [15] - Total operating expenses grew by 5.5% on a 5.8% increase in total block hours, with adjusted CASM increasing by 3.5% year-over-year [18][20] Business Line Data and Key Metrics Changes - Passenger segment revenue, including scheduled service and charter businesses, grew by 4.1% year-over-year [15] - Charter revenue increased by 15.6% to $55 million, driven by a 10.7% growth in charter block hours [15] - Cargo segment revenue grew by 17.6% to $28.2 million, despite a 1.1% decrease in cargo block hours, with revenue per block hour up by 18.9% [17][18] Market Data and Key Metrics Changes - Scheduled service TRASM declined by 4.7% as scheduled service ASMs increased by 6.7% [15] - The company expects scheduled service ASMs to decrease by approximately 7% in Q2 2025 as resources are allocated to cargo growth [15][19] Company Strategy and Development Direction - The company aims to leverage its diversified business model to maintain industry-leading profitability through various cycles [4][7] - Plans to expand the cargo fleet with eight additional aircraft, with three already inducted into service [7][8] - The company anticipates cargo revenue to double by September 2025, with two-thirds of flights under committed contracts [8][15] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in outperforming competitors due to the strength of the diversified model and reliable demand in the home market [7] - There is an expectation of margin expansion in the latter half of the year as cargo growth is absorbed and passenger fleet utilization is improved [102] - Management noted that the leisure market may need to consolidate to regain pricing power [27] Other Important Information - The company has a total liquidity of $227.1 million and plans to continue deleveraging, with net debt levels expected to fall below zero by 2028 [20] - The company repurchased $10 million of shares during the quarter and received an additional $25 million share repurchase authorization [20][21] Q&A Session Summary Question: Can you talk about the ramp of aircraft utilization and profitability on the cargo side? - Management indicated that pilot credit hours will grow by 10% annually, but total system block hour growth will be below that as cargo expands [23][24] Question: What do you think other carriers will need to do regarding off-peak flying? - Management suggested that the leisure space in the US needs to shrink to regain pricing power, potentially through reorganizations or M&A activity [27] Question: Can you elaborate on demand trends through the quarter? - Management reported strong performance in January, but load factors were missed in February and March due to high fares and slight demand weakening [30][32] Question: Can you discuss the reasoning behind tripling your revolver? - The increase was primarily due to the growth of the company since the IPO, with the previous revolver being insufficient for current revenue levels [39][41] Question: Can you talk about the new credit card deal with Synchrony? - Management expressed excitement about the new co-branding agreement, which is expected to improve revenue share, although significant benefits will not be realized until 2026 [49][51] Question: How should we think about the cargo revenue ramp this year and next? - Management expects cargo revenue to double by September, with a gradual ramp-up as additional aircraft are inducted [63][65] Question: Have you seen any share shift due to changes in low-cost carriers' offerings? - Management believes their product remains strong and well-positioned, with no immediate changes planned [91][92] Question: What are the guidelines for M&A in terms of leverage and liquidity? - Management emphasized the importance of maintaining operational flexibility and protecting the unique business model, with current liquidity levels being comfortable [96][98]

Financial Performance - Sun Country Airlines reported total revenue of $327 million for Q1 2025, marking a 4.9% increase compared to Q1 2024 [3][7] - The company achieved GAAP diluted EPS of $0.66 and adjusted diluted EPS of $0.72, reflecting a year-over-year increase of 3.1% and 9.1% respectively [3][39] - GAAP operating income was $56 million with a margin of 17.2%, while adjusted operating income reached $60 million with a margin of 18.3% [3][4] Business Segments - Growth in charter and cargo businesses helped offset lower scheduled service revenue, demonstrating the effectiveness of the company's diversified business model [2][4] - Charter service revenue increased by 15.6% year-over-year to $55 million, while cargo revenue rose by 17.6% to $28 million [7][8] Cost and Expenses - Total GAAP operating expenses increased by 5.5% year-over-year, primarily due to a 5.8% rise in total block hours [9] - Significant non-fuel expenses included a 12.9% increase in salaries, driven by an increase in pilot headcount and wage scale adjustments [9] Capacity and Operations - System block hours flown grew by 5.8% year-over-year, with a 6.7% increase in scheduled service ASMs and a 10.7% increase in charter block hours [6] - Scheduled service TRASM decreased by 4.7% year-over-year, while the total fare per scheduled passenger increased by 1.0% [7][27] Liquidity and Financial Position - Total liquidity as of March 31, 2025, was $227 million, with net debt at $447 million [12][28] - The company completed a secondary public offering and entered into a four-year $75 million revolving credit facility [11][12] Future Outlook - For Q2 2025, the company expects total revenue between $250 million and $260 million, with an operating income margin projected between 4% and 7% [15]