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SKYWEST INC

SKYWEST INCSKYWEarnings & Financial Report

Nasdaq · transport

SkyWest, Inc. is the holding company for SkyWest Airlines, a North American regional airline, as well as an aircraft leasing company. It is headquartered in St. George, Utah, United States.

What changed in SKYWEST INC's 10-K — 2023 vs 2024

Top changes in SKYWEST INC's 2024 10-K

319 paragraphs added · 311 removed · 259 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

63 edited+6 added−5 removed66 unchanged
Bankruptcy Code, if either party makes a general assignment for the benefit of creditors or becomes insolvent; or ● subject to limitations imposed by the U.S. Bankruptcy Code, if bankruptcy proceedings are commenced against either party and certain specified conditions are not satisfied.
Bankruptcy Code, if either party makes a general assignment for the benefit of creditors or becomes insolvent; or ● subject to limitations imposed by the U.S. Bankruptcy Code, if bankruptcy proceedings are commenced by or against either party and certain specified conditions are not satisfied.
Participants benefit from the SkyWest Pilot Pathway Program through certain starting seniority at SkyWest, final interview privileges and access to pilot mentors. The Pilot Pathway Program allows students to remain at their campus to complete their flight training until they meet SkyWest's Airline Transport Pilot standards and achieve their required minimum 11 Table of Contents hours of flight time.
Participants benefit from the SkyWest Pilot Pathway 11 Table of Contents Program through certain starting seniority at SkyWest, final interview privileges and access to pilot mentors. The Pilot Pathway Program allows students to remain at their campus to complete their flight training until they meet SkyWest's Airline Transport Pilot standards and achieve their required minimum hours of flight time.
After receipt of such notice, the parties must meet for direct negotiations, and if no agreement is reached, either party may request the National Mediation Board to initiate a process including mediation, arbitration, and a potential “cooling off” period that must be followed before either party may engage in “self-help.” “Self-help” includes, among other things, a strike by the representative or the imposition of proposed changes to the collective bargaining agreement by the airline.
After receipt of such notice, the parties must meet for direct negotiations, and if no agreement is reached, either party may request the National Mediation Board (“NMB”) to initiate a process including mediation, arbitration, and a potential “cooling off” period that must be followed before either party may engage in “self-help.” “Self-help” includes, among other things, a strike by the representative or the imposition of proposed changes to the collective bargaining agreement by the airline.
We conduct our code-share operations with our major airline partners pursuant to various code-share agreements described under the heading “Code-Share Agreements” below. Fleet SkyWest has been flying since 1972. During our long operating history, we have developed an industry-leading reputation for providing quality regional airline service. As of December 31, 2023, our fleet consisted of aircraft manufactured by Embraer S.A.
We conduct our code-share operations with our major airline partners pursuant to various code-share agreements described under the heading “Code-Share Agreements” below. Fleet SkyWest has been flying since 1972. During our long operating history, we have developed an industry-leading reputation for providing quality regional airline service. As of December 31, 2024, our fleet consisted of aircraft manufactured by Embraer S.A.
The financial arrangements between the 6 Table of Contents regional airlines and their code-share partners usually involve either capacity purchase arrangements or prorate arrangements as explained below: ● Capacity Purchase Arrangements.
The financial arrangements between the 6 Table of Contents regional airlines and their code-share partners usually involve either capacity purchase agreements or prorate agreements as explained below: ● Capacity Purchase Agreements.
Under a capacity purchase arrangement, the major airline generally pays the regional airline a fixed-fee for each departure, flight hour (measured from takeoff to landing, excluding taxi time) and block hour (measured from takeoff to landing, including taxi time) and an amount per aircraft in service each month with additional incentives based on completion of flights, on-time performance and other operating metrics.
Under a capacity purchase agreement, the major airline generally pays the regional airline a fixed-fee for each departure, flight hour (measured from takeoff to landing, excluding taxi time) and block hour (measured from takeoff to landing, including taxi time) and an amount per aircraft in service each month with additional incentives based on completion of flights, on-time performance and other operating metrics.
However, regional airlines in capacity purchase arrangements generally do not benefit from positive trends in ticket prices, ancillary revenue, such as baggage and food and beverage fees, the number of passengers enplaned or decreasing fuel prices, because the major airlines retain passenger fare volatility risk and fuel costs associated with the regional airline flight. ● Prorate Arrangements.
However, regional airlines with capacity purchase agreements generally do not benefit from positive trends in ticket prices, ancillary revenue, such as baggage and food and beverage fees, the number of passengers enplaned or decreasing fuel prices, because the major airlines retain passenger fare volatility risk and fuel costs associated with the regional airline flight. ● Prorate Agreements.
The Bombardier CRJ900 and CRJ700 aircraft and the Embraer E175 aircraft we operate are configured with a first-class seating section. The Bombardier CRJ200 aircraft we operate are configured with single-class seating.
The Bombardier CRJ900, CRJ700 and CRJ550 aircraft and the Embraer E175 aircraft we operate are configured with a first-class seating section. The Bombardier CRJ200 aircraft we operate are configured with single-class seating.
The regional airline typically acquires or finances the aircraft used under the capacity purchase arrangement, which is accounted for as a lease of the aircraft to our major airline partner. In addition, under a capacity purchase arrangement, the major airline bears the risk of fuel price fluctuations and certain other costs.
The regional airline typically acquires or finances the aircraft used under the capacity purchase agreement, which is accounted for as a lease of the aircraft to our major airline partner. In addition, under a capacity purchase agreement, the major airline bears the risk of fuel price fluctuations and certain other costs.
Regional airlines benefit from capacity purchase arrangements because they are protected from some of the elements that typically cause volatility in airline financial performance, including variations in ticket prices, number of passengers onboard each flight and increasing fuel prices.
Regional airlines benefit from capacity purchase agreements because they are protected from some of the elements that typically cause volatility in airline financial performance, including variations in ticket prices, number of passengers onboard each flight and increasing fuel prices.
Under a prorate arrangement, the major airline and regional airline negotiate a passenger fare proration formula for specifically identified routes, pursuant to which the regional airline receives a percentage of the ticket revenues for those passengers traveling for one portion of their trip on the regional airline and the other portion of their trip on the major airline.
Under a prorate agreement, the major airline and regional airline negotiate a passenger fare proration formula for specifically identified routes, pursuant to which the regional airline receives a percentage of the ticket revenues for those passengers traveling for one portion of their trip on the regional airline and the other portion of their trip on the major airline.
During the year ended December 31, 2023, our major airline partners purchased the majority of the fuel for our aircraft flying under their respective capacity purchase agreements directly from their fuel vendors or, when applicable, reimbursed us for the fuel costs we incurred under the capacity purchase agreements.
During the year ended December 31, 2024, our major airline partners purchased the majority of the fuel for our aircraft flying under their respective capacity purchase agreements directly from their fuel vendors or, when applicable, reimbursed us for the fuel costs we incurred under the capacity purchase agreements.
In a prorate arrangement, the regional airline may realize increased profits as ticket prices and passengers carried increase or fuel prices decrease and, correspondingly, the regional airline may realize decreased profits as ticket prices and passengers carried decrease or fuel prices increase. We have code-share agreements with United, Delta, American and Alaska.
In a prorate agreement, the regional airline may realize increased profits as ticket prices and passengers carried increase or fuel prices decrease and, correspondingly, the regional airline may realize decreased profits as ticket prices and passengers carried decrease or fuel prices increase. We have code-share agreements with United, Delta, American and Alaska.
During the year ended December 31, 2023, approximately 87% of our flying agreements revenue related to capacity purchase agreement flights, where United, Delta, American and Alaska controlled scheduling, ticketing, pricing, and seat inventories.
During the year ended December 31, 2024, approximately 87% of our flying agreements revenue related to capacity purchase agreement flights, where United, Delta, American and Alaska controlled scheduling, ticketing, pricing, and seat inventories.
In exchange for such services, the major airline pays the regional airline either fixed fees to operate the flight, termed “capacity purchase agreement,” “flying contract,” “fixed-fee arrangement,” or a “fixed-fee contract,” or the regional airline receives a percentage of applicable passenger ticket revenues on designated flights operated by the regional airline, termed “prorate agreement” as described in more detail below.
In exchange for such services, the major airline pays the regional airline either fixed fees to operate the flight, termed “capacity purchase agreement,” or “flying contract,” or the regional airline receives a percentage of applicable passenger ticket revenues on designated flights operated by the regional airline, termed “prorate agreement” as described in more detail below.
The Delta Connection Agreement is subject to early termination in various circumstances, including: ● if we or Delta commit a material breach of the Delta Connection Agreement, subject to 30-day notice and cure rights; ● if we fail to conduct all flight operations and maintain all aircraft under the Delta Connection Agreement in compliance in all material respects with applicable government regulations; ● if we fail to satisfy certain performance and safety requirements; or ● if either party files for bankruptcy, reorganization or similar action (subject to limitations imposed by the U.S.
The Delta Connection Agreement is subject to early termination in various circumstances including: ● if we or Delta commit a material breach of the Delta Connection Agreement, subject to applicable notice and cure periods; ● if we fail to conduct all flight operations and maintain all aircraft under the Delta Connection Agreement in compliance in all material respects with applicable government regulations; ● if we fail to satisfy certain performance or safety requirements; or ● if either party files for bankruptcy, reorganization or similar action (subject to limitations imposed by the U.S.
We maintain relationships with numerous flight schools and educational institutions across the country that are focused on developing the next generation of aviation professionals. We typically recruit pilots and maintenance technicians that have completed required coursework from an accredited flight or maintenance school, respectively, and have obtained other applicable certifications.
We maintain relationships with numerous flight schools and educational institutions across the country that are focused on developing the next generation of aviation professionals. We have also developed relationships with numerous aviation mechanic schools. We typically recruit pilots and maintenance technicians that have completed required coursework from an accredited flight or maintenance school, respectively, and have obtained other applicable certifications.
(“Southwest”), JetBlue Airways Corporation (“JetBlue”), Spirit Airlines, Inc. (“Spirit”), Allegiant Travel Company (“Allegiant”) and Frontier Group Holdings, Inc. (“Frontier”), generally have lower cost structures than major airlines, which permits them to offer flights to and from many of the same markets as the major airlines, but at lower prices.
(“Southwest”), JetBlue Airways Corporation (“JetBlue”), Spirit Airlines, Inc. (“Spirit”), Allegiant Travel Company (“Allegiant”), Frontier Group Holdings, Inc. (“Frontier”) and Breeze Aviation Group, Inc. (“Breeze”) generally have lower cost structures than major airlines, which permits them to offer flights to and from many of the same markets as the major airlines, but at lower prices.
As of December 31, 2023, our fleet seat configuration by aircraft type is summarized as follows: ​ ​ 4 Table of Contents Manufacturer ​ Aircraft Type ​ Seat Configuration Embraer E175s ​ 70-76 Bombardier CRJ900s ​ 70-76 Bombardier CRJ700s ​ 65-70 Bombardier CRJ200s ​ 30-50 SkyWest Leasing SkyWest Leasing is a reportable segment that includes revenue associated with our financing of new aircraft with debt under our capacity purchase agreements, currently consisting of our E175 aircraft, and the depreciation and interest expense of our E175 aircraft.
As of December 31, 2024, our fleet seat configuration by aircraft type is summarized as follows: ​ ​ 4 Table of Contents Manufacturer ​ Aircraft Type ​ Seat Configuration Embraer E175s ​ 70-76 Bombardier CRJ900s ​ 70-76 Bombardier CRJ550/CRJ700s ​ 50-70 Bombardier CRJ200s ​ 30-50 SkyWest Leasing SkyWest Leasing is a reportable segment that includes revenue associated with our financing of new aircraft with debt under our capacity purchase agreements, currently consisting of our E175 aircraft, and the depreciation and interest expense of our E175 aircraft.
As of December 31, 2023, all our employees are employed by SkyWest Airlines or to a limited extent, by SWC. Certain SkyWest Airlines employees also provide administrative support to the SkyWest Leasing segment. Approximately 89.0% of these employees were represented by in-house labor associations that have entered into collective bargaining agreements regarding employee compensation and work rules.
As of December 31, 2024, all our employees are employed by SkyWest Airlines or to a limited extent, by SWC. Certain SkyWest Airlines employees also provide administrative support to the SkyWest Leasing segment. Approximately 89.2% of these employees were represented by in-house labor associations that have entered into collective bargaining agreements regarding employee compensation and work rules.
As of December 31, 2023, SWC had 16 aircraft available for on-demand charter service. Competition and Economic Conditions The airline industry is highly competitive. We compete principally with other regional airlines. Our operations extend throughout most major geographic markets in the United States. Our competition includes, therefore, nearly every other domestic regional airline.
As of December 31, 2024, SWC had 18 aircraft available for on-demand charter service. Competition and Economic Conditions The airline industry is highly competitive. We compete principally with other regional airlines. Our operations extend throughout most major geographic markets in the United States. Our competition includes, therefore, nearly every other domestic regional airline.
Additionally, during the years ended December 31, 2023 and December 31, 2022, we amended our capacity purchase agreements with our major airline partners which resulted in higher compensation as a result of our increased 10 Table of Contents labor costs.
Additionally, during the years ended December 31, 2023 and December 31, 2022, we amended our capacity purchase agreements with our major airline partners which resulted in higher compensation as a result of our increased labor costs.
Additionally, a significant portion of our capacity purchase arrangements is based on completing flights and we typically have more scheduled flights during the summer months. We generally experience a significantly higher number of weather cancellations during the winter months, which negatively impacts our revenue during such months. Additional Information We were incorporated in Utah in 1972.
Additionally, a significant portion of our capacity purchase agreements are based on completing flights and we typically have more scheduled flights during the summer months. We generally experience a significantly higher number of weather cancellations during the winter months, which negatively impacts our revenue during such months. Additional Information We were incorporated in Utah in 1972.
United Express Agreements We and United are parties to two United Express agreements: a United Express agreement to operate certain CRJ200 aircraft and CRJ700 aircraft, and a United Express agreement to operate E175 aircraft (collectively, the “United Express Agreements”). 8 Table of Contents The United Express Agreements have a latest scheduled termination date in 2029.
United Express Agreements We and United are parties to two United Express agreements: a United Express agreement to operate certain CRJ200 aircraft and CRJ700 aircraft, and a United Express agreement to operate E175 aircraft and CRJ550 aircraft (collectively, the “United Express Agreements”). 8 Table of Contents The United Express Agreements have a latest scheduled termination date in 2033.
Additionally, attrition of our pilots or other workgroups may reduce our flying schedules and have a negative impact on our operations and financial condition. 5 Table of Contents Regional Airline Pilot Constraints As passenger demand in the airline industry recovered from the COVID-19 pandemic in 2020, the number of regional airline captains and first officers hired by major airlines and low-cost carriers significantly increased.
Additionally, attrition of our pilots or other workgroups may reduce our flying schedules and have a negative impact on our operations and financial condition. 5 Table of Contents Impact of Regional Airline Captain Availability on Production As passenger demand in the airline industry recovered from the COVID-19 pandemic in 2020, the number of regional airline captains and first officers hired by major airlines and low-cost carriers significantly increased.
The remainder of our flying agreements revenue during the year ended December 31, 2023, related to prorate flights for United or Delta, where we controlled scheduling, pricing and seat inventories on certain prorate routes, and shared passenger fares with United or Delta according to prorate formulas and SWC flights.
The remainder of our flying agreements revenue during the year ended December 31, 2024, related to prorate flights for United or Delta, where we controlled scheduling, pricing and seat inventories on certain prorate routes, and shared passenger fares with United or Delta according to prorate formulas and SWC on-demand charter flights.
The aircraft compensation structure varies by agreement but is intended to cover either our aircraft principal and interest debt service costs or our aircraft depreciation and interest expense while the aircraft is under contract. The number of aircraft under our capacity purchase arrangements and our prorate arrangements as of December 31, 2023 is reflected in the summary below.
The aircraft compensation structure varies by agreement but is intended to cover either our aircraft principal and interest debt service costs or our aircraft depreciation and interest expense while the aircraft is under contract. The number of aircraft under our capacity purchase agreements and our prorate agreements as of December 31, 2024 is reflected in the summary below.
Bankruptcy Code, if bankruptcy proceedings are commenced against either party and certain specified conditions are not satisfied. Delta Connection Agreements We and Delta are parties to a Delta Connection Agreement (the "Delta Connection Agreement"), pursuant to which we provide contract flight services for Delta. The Delta Connection Agreement has a latest scheduled termination date of 2034.
Bankruptcy Code, if bankruptcy proceedings are commenced by or against either party and certain specified conditions are not satisfied. Delta Connection Agreements We and Delta are parties to a Delta Connection Agreement (the “Delta Connection Agreement”), pursuant to which we provide contract flight services for Delta. The Delta Connection Agreement has a latest scheduled termination date of 2034.
Additionally, we collaborate with aircraft and engine manufacturers and our major airline partners regarding innovations and emerging technologies that could improve fuel efficiencies and minimize environmental impact. We are also collaborating with our major airline partners and fuel providers regarding long-term opportunities to use sustainable aviation fuel in the future.
Additionally, we collaborate with aircraft and engine manufacturers and our major airline partners regarding innovations and emerging technologies that could improve fuel efficiencies and minimize environmental impact. We are also collaborating with our major airline partners and fuel providers regarding long-term 13 Table of Contents opportunities to use sustainable aviation fuel in the future.
The routes placed under our prorate arrangements typically include flight service between one of our partners’ hub cities and a city not served under our capacity purchase arrangements. Under our capacity purchase arrangements, our major airline partners compensate us for our costs of owning or leasing the aircraft on a monthly basis.
The routes placed under our prorate agreements typically include flight service between one of our partners’ hub cities and a city not served under our capacity purchase agreements. Under our capacity purchase agreements, our major airline partners compensate us for our costs of owning the aircraft on a monthly basis.
On the other hand, the regional airline receives all of the passenger fare when a passenger purchases a ticket on a route solely operated by the regional airline. Substantially all costs associated with the regional airline flight are borne by the regional airline.
On the other hand, the regional airline receives all of the passenger fare when a passenger purchases a ticket on a route solely operated by the regional airline. Substantially all costs associated with the regional airline flight are borne by the regional airline, including the fuel cost.
Bankruptcy Code) or makes an assignment for the benefit of creditors. American Agreement We and American are parties to an agreement (the “American Agreement”) for the operation of E175 and CRJ700 aircraft.
Bankruptcy Code) or makes an assignment for the benefit of creditors. American Agreement We and American are parties to a Capacity Purchase Agreement (the “American Agreement”) for the operation of E175 and CRJ700 aircraft.
The effect of economic downturns may be somewhat mitigated by our predominantly contract-based flying arrangements.
The effect of economic downturns may be somewhat mitigated by our predominantly contract-based flying agreements.
The number of aircraft listed above for each prorate agreement approximates the number of aircraft the Company uses to serve the prorate routes. In addition to the aircraft operating under the respective arrangements outlined above, we have agreed with our major airline partners to place additional aircraft under capacity purchase arrangements as summarized below.
The number of aircraft listed above for each prorate agreement approximates the number of aircraft we use to serve the prorate routes. In addition to the aircraft operating under the respective agreements outlined above, we have agreed with our major airline partners to place additional aircraft under capacity purchase agreements as summarized below.
During 2023, we produced approximately 5.0 million metric tons of CO 2 e from fuel burned, using industry emissions factors, on flights we operated under our code-share agreements.
During 2024, we produced approximately 5.6 million metric tons of CO 2 e from fuel burned, using industry emissions factors, on flights we operated under our code-share agreements.
The delivery date for the new E175 aircraft is currently scheduled for 2024. We anticipate financing the aircraft through debt. ● Capacity purchase agreement with Alaska for one new E175 aircraft. The delivery date for the new E175 aircraft is currently scheduled for 2025. We anticipate financing the aircraft through debt.
We anticipate financing the aircraft through debt. ● Capacity purchase agreement with Alaska for one new E175 aircraft. The delivery date for the new E175 aircraft is currently scheduled for 2025. We anticipate financing the aircraft through debt. ● Capacity purchase agreement with United for 30 used CRJ550 aircraft.
As of December 31, 2023, SkyWest Leasing leased 35 CRJ700 aircraft, five CRJ900 aircraft and regional jet aircraft engines to third parties. SkyWest Charter (SWC) In 2022, we formed a new subsidiary, SWC, which had its first revenue generating flight in May 2023. SWC offers on-demand charter service using CRJ200 aircraft in a 30-seat configuration.
As of December 31, 2024, SkyWest Leasing leased 35 CRJ700 aircraft, five CRJ900 aircraft and regional jet aircraft engines to third parties. SkyWest Charter (SWC) In 2022, we formed a new subsidiary, SWC, which began operations in 2023. SWC offers on-demand charter service using CRJ200 aircraft in a 30-seat configuration.
The American Agreement has a latest scheduled termination date of 2032 and is subject to early termination in various circumstances including: ● if we or American fail to fulfill any obligation under the American Agreement for a period of 30 days after written notice to cure; ● if our operations fall below certain performance levels; ● subject to limitations imposed by the U.S.
The American Agreement has a latest scheduled termination date of 2032 and is subject to early termination in various circumstances including: ● if we or American fail to fulfill certain obligations under the American Agreement, subject in certain cases to a 30-day notice and cure period; ● if our operations fall below certain performance levels or safety standards; ● subject to limitations imposed by the U.S.
Code-share agreement are commercial agreements between airlines that, among other things, allow one airline to use another airline’s flight designator codes on its flights. As of December 31, 2023, we offered approximately 1,850 daily departures, of which approximately 740 were United Express flights, 580 were Delta Connection flights, 340 were American Eagle flights and 190 were Alaska Airlines flights.
Code-share agreement are commercial agreements between airlines that, among other things, allow one airline to use another airline’s flight designator codes on its flights. As of December 31, 2024, we offered approximately 2,190 daily departures, of which approximately 890 were United Express flights, 700 were Delta Connection flights, 380 were American Eagle flights and 220 were Alaska Airlines flights.
We are coordinating with our major airline partners to optimize the timing of upcoming fleet deliveries and the delivery timing referenced below is subject to change. ● Capacity purchase agreement with United for 19 new E175 aircraft.
We are coordinating with our major airline partners to optimize the timing of upcoming fleet deliveries and the delivery timing referenced below is subject to change. ● Capacity purchase agreement with United for 15 new E175 aircraft. Seven new E175 aircraft are currently scheduled for delivery in 2025 and eight new E175 aircraft are scheduled for delivery in 2026.
The Alaska Agreement has a latest scheduled termination date of 2034 and is subject to early termination in various circumstances including: ● if we or Alaska fail to fulfill an obligation under the Alaska Capacity Purchase Agreement for a period of 30 days after written notice to cure; ● if our operational performance falls below certain performance levels; ● subject to limitations imposed by the U.S.
The Alaska Agreement has a latest scheduled termination date of 2034 and is subject to early termination in various circumstances including: ● if we or Alaska fail to fulfill an obligation under the Alaska Agreement, subject to applicable notice and cure periods; ● if our operational performance falls below certain performance levels or if we fail to satisfy certain safety requirements; ● subject to limitations imposed by the U.S.
(“Embraer”) and MHI RJ Aviation ULC, formerly known as Bombardier Aerospace (“Bombardier”), including the E175 regional jet aircraft (“E175”), the Canadair CRJ900 regional jet aircraft (“CRJ900”), the Canadair CRJ700 regional jet aircraft (“CRJ700”) and the Canadair CRJ200 regional jet aircraft (“CRJ200”).
(“Embraer”) and MHI RJ Aviation ULC, formerly known as Bombardier Aerospace (“Bombardier”), including the E175 regional jet aircraft (“E175”), the Canadair CRJ900 regional jet aircraft (“CRJ900”), the Canadair CRJ700 regional jet aircraft (“CRJ700”), including a 50-seat configuration of the CRJ700 aircraft, commonly referred to as a “CRJ550” and the Canadair CRJ200 regional jet aircraft (“CRJ200”).
Bankruptcy Code, if bankruptcy proceedings are commenced against either party and certain specified conditions are not satisfied. 9 Table of Contents Training and Aircraft Maintenance We provide substantially all training to our crew members and maintenance personnel at our training facilities. Our employees perform routine airframe and engine maintenance along with periodic inspections of equipment at our maintenance facilities.
Bankruptcy Code, if bankruptcy proceedings are commenced by or against either party and certain specified conditions are not satisfied. 9 Table of Contents Training and Aircraft Maintenance We provide substantially all training to our crew members and maintenance personnel at our training facilities.
We also reinforce our guiding principles, including but not limited to, health and safety, personal and corporate integrity, excellent service and quality, and respect and teamwork through our training and development programs, as well as through our employee appreciation and recognition programs. During 2022 and 2023, we experienced significant turnover of our pilots, specifically our captains and experienced first officers.
We also reinforce our guiding principles, including but not limited to, health and safety, personal and corporate integrity, excellent service and quality, and respect and teamwork through our training and development programs, as well as through our employee appreciation and recognition programs.
Regulations promulgated by the DOT primarily relate to economic aspects of air service. The FAA requires operating, airworthiness and other certificates; approval of personnel who may engage in flight, maintenance or operating activities; record-keeping procedures in accordance with FAA requirements; and FAA approval of flight training and retraining programs.
The FAA requires operating, airworthiness and other certificates; approval of personnel who may engage in flight, maintenance or operating activities; record-keeping procedures in accordance with FAA requirements; and FAA approval of flight training and retraining programs.
Each participant may also participate in SkyWest recruiting events and outreach programs on their way to fulfilling commercial pilot jobs. ● The SkyWest AMT Pathway Program provides a career path for maintenance technicians seeking employment with SkyWest. Participants benefit from the SkyWest AMT Pathway Program through accelerated starting seniority at SkyWest, guaranteed final interview and access to mechanic advisors.
Each participant may also participate in SkyWest recruiting events and outreach programs on their way to fulfilling commercial pilot jobs. ● The SkyWest AMT Pathway Program provides a career path for maintenance technicians seeking employment with SkyWest.
United Express Agreements Agreement Aircraft type Number of Aircraft Term / Termination Dates United Express Agreements (capacity purchase agreement) ​ · E175 · CRJ 700 · CRJ 200 ​ 90 19 70 ​ · Individual aircraft have scheduled removal dates under the agreement between 2024 and 2029 · The average remaining term of the aircraft under contract is 2.7 years United Express Prorate Agreement (prorate agreement) ​ · CRJ 200 ​ 19* ​ · Terminable with 120-day notice Total under United Express Agreements ​ ​ ​ 198 ​ ​ 7 Table of Contents Delta Connection Agreements 3 Agreement Aircraft type Number of Aircraft Term / Termination Dates Delta Connection Agreement (capacity purchase agreement) ​ · E175 · CRJ 900 · CRJ 700 ​ 85 35 5 ​ · Individual aircraft have scheduled removal dates from 2024 to 2034 · The average remaining term of the aircraft under contract is 4.8 years Delta Connection Prorate Agreement (prorate agreement) ​ · CRJ 900 · CRJ 700 ​ 6* 4* ​ · Terminable with 30-day notice Total under Delta Connection Agreements ​ ​ ​ 135 ​ ​ ​ American Capacity Purchase Agreement Agreement Aircraft type Number of Aircraft Term / Termination Dates American Agreement (capacity purchase agreement) ​ · E175 · CRJ 700 ​ 20 90 ​ · Individual aircraft have scheduled removal dates from 2024 to 2032 · The average remaining term of the aircraft under contract is 3.1 years Total under American Agreement ​ ​ ​ 110 ​ ​ ​ Alaska Capacity Purchase Agreement Agreement Aircraft type Number of Aircraft Term / Termination Dates Alaska Agreement (capacity purchase agreement) ​ · E175 ​ 42 ​ · Individual aircraft have scheduled removal dates from 2030 to 2034 · The average remaining term of the aircraft under contract is 7.5 years * Our prorate agreements are based on specific routes, not a specific aircraft count.
United Express Agreements Agreement Aircraft type Number of Aircraft Term / Termination Dates United Express Agreements (capacity purchase agreement) ​ · E175 · CRJ700/CRJ550 · CRJ200 ​ 114 27 50 ​ · Individual aircraft have scheduled removal dates under the agreement between 2025 and 2033 · The average remaining term of the aircraft under contract is 2.5 years United Express Prorate Agreement (prorate agreement) ​ · CRJ 200 ​ 25* ​ · Terminable with 120-day notice Total under United Express Agreements ​ ​ ​ 216 ​ ​ 7 Table of Contents Delta Connection Agreements ​ Agreement Aircraft type Number of Aircraft Term / Termination Dates Delta Connection Agreement (capacity purchase agreement) ​ · E175 · CRJ900 · CRJ700 ​ 86 35 5 ​ · Individual aircraft have scheduled removal dates from 2025 to 2034 · The average remaining term of the aircraft under contract is 4.2 years Delta Connection Prorate Agreement (prorate agreement) ​ · CRJ900 · CRJ700/CRJ550 ​ 1* 16* ​ · Terminable with 30-day notice Total under Delta Connection Agreements ​ ​ ​ 143 ​ ​ ​ American Capacity Purchase Agreement Agreement Aircraft type Number of Aircraft Term / Termination Dates American Agreement (capacity purchase agreement) ​ · E175 · CRJ700 ​ 20 71 ​ · Individual aircraft have scheduled removal dates from 2025 to 2032 · The average remaining term of the aircraft under contract is 4.6 years Total under American Agreement ​ ​ ​ 91 ​ ​ ​ Alaska Capacity Purchase Agreement Agreement Aircraft type Number of Aircraft Term / Termination Dates Alaska Agreement (capacity purchase agreement) ​ · E175 ​ 42 ​ · Individual aircraft have scheduled removal dates from 2030 to 2034 · The average remaining term of the aircraft under contract is 6.5 years * Our prorate agreements are based on specific routes, not a specific aircraft count.
As part of SkyWest’s commitment to diversity, we have: ● Developed required training for all employees, which reviews our Company policies, provides opportunities to apply policy to real-world examples and reaffirms our commitment to diversity and inclusion. ● Created ongoing opportunities to highlight employees from different cultures throughout the year on internal and external websites.
As part of SkyWest’s commitment to hire the best qualified individuals, we have: ● Developed required training for all employees, which reviews our Company policies, provides opportunities to apply policy to real-world examples and reaffirms our approach of hiring the best qualified individuals regardless of race, religion, gender, national origin, sexual orientation or similar classifications . ● Created ongoing opportunities to highlight employees from different cultures throughout the year on internal and external websites.
We completed the following number of flights and related block hours in 2023, 2022 and 2021: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the year ended December 31, ​ ​ 2023 2022 ​ 2021 Departures ​ ​ 691,962 ​ 739,388 ​ 749,943 Block hours ​ ​ 1,140,443 ​ 1,254,392 ​ 1,319,628 Liquidity At December 31, 2023, we had $906.0 million in total available liquidity, consisting of $835.2 million in cash, cash equivalents and marketable securities, and $70.8 million available for borrowing under our line of credit.
We completed the following number of flights and related block hours in 2024, 2023 and 2022: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the year ended December 31, ​ ​ 2024 2023 ​ 2022 Departures ​ ​ 766,742 ​ 691,962 ​ 739,388 Block hours ​ ​ 1,292,040 ​ 1,140,443 ​ 1,254,392 Liquidity At December 31, 2024, we had $876.7 million in total available liquidity, consisting of $801.6 million in cash, cash equivalents and marketable securities, and $75.1 million available for borrowing under our line of credit.
The United Express Agreements are subject to early termination in various circumstances including: ● if we or United fail to fulfill an obligation under the United Express Agreements for a period of 60 days after written notice to cure; ● if our operations fall below certain performance levels for a period of three consecutive months; ● subject to limitations imposed by the U.S.
The United Express Agreements are subject to early termination in various circumstances including: ● if we or United fail to fulfill an obligation under the United Express Agreements, subject to applicable notice and cure periods; ● if our operations fall below certain performance levels or if we fail to meet certain safety standards; ● subject to limitations imposed by the U.S.
Under the RLA, employees have the right to decide whether they wish to be represented by a union. They also have the right to reject union representation. In September 2022, we entered into a collective bargaining agreement with our pilots, increasing the pay rates for pilots.
They also have the right to reject union representation. 10 Table of Contents In September 2022, we entered into a collective bargaining agreement with our pilots, increasing the pay rates for pilots.
Ongoing Training and Retention. SkyWest invests in retaining its professionals by providing a range of talent development opportunities, including mandatory compliance training, new hire training and general professional development, as well as engaging in the training of leaders through leadership development courses.
SkyWest invests in retaining its professionals by providing a range of talent development opportunities, including mandatory compliance training, new hire training and general professional development, as well as engaging in the training of leaders through leadership development courses. Our training programs include full-motion flight simulators for pilots, on-the-job training for technicians, and cabin trainers for flight attendants.
As of December 31, 2023, approximately 44% and 31% of our workforce were women and people of color, respectively. We believe every employee brings unique education, skills and life experiences to SkyWest that supplement our ability to achieve our commitment to excellence and to our customers and passengers.
We believe every employee brings unique education, skills and life experiences to SkyWest that supplement our ability to achieve our commitment to excellence and to our customers and passengers.
Human Capital Resources Employee Profile As of December 31, 2023, we employed 13,121 total employees, consisting of 4,410 pilots, 4,135 flight attendants, 1,633 airport operations personnel, 1,328 maintenance technicians, 821 other maintenance personnel, 170 dispatchers and 624 operational support and administrative personnel. Our total employees at December 31, 2023, included 1,651 part-time employees.
Human Capital Resources Employee Profile As of December 31, 2024, we employed 14,610 total employees, consisting of 5,048 pilots, 4,612 flight attendants, 1,716 airport operations personnel, 1,463 maintenance technicians, 887 other maintenance personnel, 198 dispatchers and 686 operational support and administrative personnel. Our total employees at December 31, 2024, included 1,734 part-time employees.
As of December 31, 2023, we had 603 total aircraft in our fleet, including 485 aircraft in scheduled service or under contract under our code-share agreements, summarized as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ E175 CRJ900 CRJ700 CRJ200 Total United 90 ​ — ​ 19 ​ 89 ​ 198 Delta ​ 85 ​ 41 ​ 9 ​ — ​ 135 American 20 ​ — ​ 90 ​ — ​ 110 Alaska 42 ​ — ​ — ​ — ​ 42 Aircraft in scheduled service or under contract ​ 237 ​ 41 ​ 118 ​ 89 ​ 485 SWC ​ — ​ — ​ — ​ 16 ​ 16 Leased to third parties — ​ 5 ​ 35 ​ — ​ 40 Other (1) — ​ 3 ​ 14 ​ 45 ​ 62 Total Fleet 237 ​ 49 ​ 167 ​ 150 ​ 603 (1) As of December 31, 2023, other aircraft included: supplemental spare aircraft supporting our code-share agreements that may be placed under future code-share or leasing arrangements, aircraft transitioning between code-share agreements with our major airline partners, aircraft held-for-sale or aircraft that are scheduled to be disassembled for use as spare parts.
As of December 31, 2024, we had 624 total aircraft in our fleet, including 492 aircraft in scheduled service or under contract pursuant to our code-share agreements, summarized as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ E175 CRJ900 CRJ700/CRJ550 CRJ200 Total United 114 ​ — ​ 27 ​ 75 ​ 216 Delta ​ 86 ​ 36 ​ 21 ​ — ​ 143 American 20 ​ — ​ 71 ​ — ​ 91 Alaska 42 ​ — ​ — ​ — ​ 42 Aircraft in scheduled service or under contract ​ 262 ​ 36 ​ 119 ​ 75 ​ 492 SWC ​ — ​ — ​ — ​ 18 ​ 18 Leased to third parties — ​ 5 ​ 35 ​ — ​ 40 Other (1) — ​ 8 ​ 20 ​ 46 ​ 74 Total Fleet 262 ​ 49 ​ 174 ​ 139 ​ 624 (1) As of December 31, 2024, other aircraft included: supplemental spare aircraft supporting our code-share agreements that may be placed under future code-share or leasing arrangements, aircraft transitioning between code-share agreements with our major airline partners or aircraft that are scheduled to be disassembled for use as spare parts.
We have entered into a strategic partnership with Eve UAM, LLC (“Eve UAM”), an Embraer company, to develop a network of deployment for Eve UAM’s electric vertical takeoff and landing (“eVTOL”) aircraft. This partnership includes the option for SkyWest to purchase up to 100 eVTOL aircraft.
We have worked aggressively to reduce our reliance on paper manuals, further eliminating unnecessary waste while increasing efficiencies. We have entered into a strategic partnership with Eve UAM, LLC (“Eve UAM”), an Embraer company, to develop a network of deployment for Eve UAM’s electric vertical takeoff and landing (“eVTOL”) aircraft.
We are evaluating opportunities to increase the number of electric powered ground equipment, including tugs and pushbacks used at airports where we provide ramp services.
We are evaluating opportunities to increase the number of electric powered ground equipment, including tugs and pushbacks used at airports where we provide ramp services. We participate with our major airline partners in recycling programs, and we have implemented recycling initiatives in our facilities to reduce the amount of paper, plastic and other recyclables going to landfills.
The U.S. Congress and the President have the authority to prevent “self-help” by enacting legislation that, among other things, imposes a settlement on the parties. We respect all employees’ legal rights, including the rights to free association and collective bargaining. This includes the right to decide whether to be represented by a union.
We respect all employees’ legal rights, including the rights to free association and collective bargaining. This includes the right to decide whether to be represented by a union. Under the RLA, employees have the right to decide whether they wish to be represented by a union.
We also use third-party vendors for certain airframe and engine maintenance work.
Our employees perform routine airframe and engine maintenance along with periodic inspections of equipment at our maintenance facilities. We also use third-party vendors for certain airframe and engine maintenance work.
As we work to train and promote our first officers to captains, we anticipate incurring continued elevated training costs in 2024. Diversity & Inclusion Our approach is to hire the best qualified individuals, regardless of race, religion, gender, national origin, disability, sexual orientation or similar classifications.
Diversity & Inclusion Our approach is to hire the best qualified individuals, regardless of race, religion, gender, national origin, disability, sexual orientation or similar classifications. As of December 31, 2024, approximately 42% and 32% of our workforce were women and people of color, respectively.
Eve UAM anticipates its four-passenger eVTOL aircraft will be certified and available for service after 2026. Safety and Security We are committed to the safety and security of our passengers and employees. We have taken many steps, both voluntarily and as mandated by governmental authorities, to increase the safety and security of our operations.
Subject to an agreement of key commercial terms, this partnership includes the option for SkyWest to purchase up to 100 eVTOL aircraft. Safety and Security We are committed to the safety and security of our passengers and employees. We have taken many steps, both voluntarily and as mandated by governmental authorities, to increase the safety and security of our operations.
Reports can be filed using a toll-free ethics and grievance hotline or by using on online reporting system on SkyWest’s intranet. 12 Table of Contents Government Regulation All interstate air carriers, including SkyWest, are subject to regulation by the U.S. Department of Transportation (the “DOT”), the U.S. Federal Aviation Administration (the “FAA”) and other governmental agencies.
Government Regulation All interstate air carriers, including SkyWest, are subject to regulation by the U.S. Department of Transportation (the “DOT”), the U.S. Federal Aviation Administration (the “FAA”) and other governmental agencies. Regulations promulgated by the DOT primarily relate to economic aspects of air service.
If unionization efforts are successful, we may be subjected to increased risks of work interruption or stoppage and/or incur additional expenses associated with a change in labor representation of our employees. SkyWest Airlines has never experienced a work stoppage due to a strike or other labor dispute, and we consider our relationships with our employees to be good.
Additionally, an outside union may limit our ability to increase employee wages to market rates in a timely manner which could result in low employee job satisfaction and increased employee attrition. SkyWest Airlines has never experienced a work stoppage due to a strike or other labor dispute, and we consider our relationships with our employees to be good.
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As a result, we experienced a high level of captain and first officer attrition beginning in 2021 that has continued through 2023.
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As a result, we experienced a high level of captain and first officer attrition during 2022 and 2023. During 2024, captain attrition began to ease. Sequential fluctuations in the number of completed departures and completed block hours from 2022 to 2024 were primarily driven by available captains. Capacity and flight schedule impact.
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Higher attrition rates have negatively impacted our ability to operate flight schedules requested by our major airline partners, which was the leading factor in our year-over-year decline in both flights completed and block hours incurred from 2021 to 2023. Capacity and flight schedule impact.
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Pursuant to these agreements, the Company is in the process of acquiring four used CRJ550s and will convert 26 of its CRJ700s to CRJ550s. The aircraft are anticipated to be placed into service between 2025 and the end of 2026.
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Four new E175 aircraft are currently scheduled for delivery in 2024, seven new E175 aircraft are scheduled for delivery in 2025 and eight new E175 aircraft are scheduled for delivery in 2026. We anticipate financing the aircraft through debt. ● Capacity purchase agreement with Delta for one new E175 aircraft.
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If unionization efforts are successful, we may be subjected to increased risks of work interruption or stoppage; and/or we may be limited in our ability to communicate with our employees, which would negatively impact our culture and working relationship with our employees.
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Our training programs include full-motion flight simulators for pilots, on-the-job training for technicians, and cabin trainers for flight attendants.
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If the NMB believes that self-help has the risk “substantially to interrupt interstate commerce to a degree such as to deprive any section of the country of essential transportation service,” it may recommend that the President establish a Presidential Emergency Board (“PEB”). The PEB would hear testimony and make a recommendation regarding how to resolve the outstanding issues.
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We participate with our major airline partners in recycling programs, and we have implemented recycling initiatives in our 13 Table of Contents facilities to reduce the amount of paper, plastic and other recyclables going to landfills. We have worked aggressively to reduce our reliance on paper manuals, further eliminating unnecessary waste while increasing efficiencies.
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Participants benefit from the SkyWest AMT Pathway Program through accelerated starting seniority at SkyWest, guaranteed final interview upon meeting requirements and access to mechanic advisors. Ongoing Training and Retention.
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Our Code of Conduct also forbids retaliation against any employee who, in good faith, reports a suspected 12 Table of Contents violation of law or policy. Reports can be filed using a toll-free ethics and grievance hotline or by using an online reporting system on SkyWest’s intranet.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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We not only compete with other regional airlines, some of which are owned by or operated as code-share partners of major airlines, but we also indirectly face competition from low-cost carriers, such as Southwest, Allegiant, Spirit, JetBlue and others, who compete with our major airline partners on many routes we operate.
We not only compete with other regional airlines, some of which are owned by or operated as code-share partners of major airlines, but we also indirectly face competition from low-cost carriers, such as Southwest, Allegiant, Spirit, JetBlue, Breeze and others, who compete with our major airline partners on many routes we operate.
In the event that one or more vendors experiences labor shortages, aircraft part shortages, goes into bankruptcy, ceases operation or fails to perform as promised, replacement services may not be readily available at competitive rates, or at all.
Further, in the event that one or more vendors experiences labor shortages, aircraft part shortages, goes into bankruptcy, ceases operation or fails to perform as promised, replacement services may not be readily available at competitive rates, or at all.
Any internal technological error, failure or large-scale external interruption in the information systems, networks, hardware, software and technological infrastructure we depend on, such as U.S. air traffic control systems, power, telecommunications or the internet (collectively, “IT Systems”), may disrupt our internal network, impact our ability to conduct our business and result in increased costs.
Any internal technological error, failure or large-scale external interruption in the information systems, networks, hardware, software and technological infrastructure we depend on, such as U.S. air traffic control systems, power, telecommunications or the internet (collectively, “IT Systems”), may disrupt our internal network, impact our ability to conduct our business and result in lower revenue and/or increased costs.
Even if we meet all required debt, lease and purchase obligations, 23 Table of Contents the size of these long-term obligations could negatively affect our financial condition and results of operations in many ways, including: ● increasing the cost, or limiting the availability of, additional financing for working capital, acquisitions or other purposes; ● limiting the ways in which we can use our cash flow, much of which may have to be used to satisfy debt and lease obligations; and ● adversely affecting our ability to respond to changing business or economic conditions or continue our growth strategy.
Even if we meet all required debt, lease and purchase obligations, the size of these long-term obligations could negatively affect our financial condition and results of operations in many ways, including: ● increasing the cost, or limiting the availability of, additional financing for working capital, acquisitions or other purposes; ● limiting the ways in which we can use our cash flow, much of which may have to be used to satisfy debt and lease obligations; and ● adversely affecting our ability to respond to changing business or economic conditions or continue our growth strategy.
Our operational personnel may seek employment at major airlines, which generally offer higher salaries and more extensive benefit programs than regional airlines. Should the turnover of our employees sharply increase, we may not be able to hire sufficient personnel to replace those leaving.
Our operational personnel may seek employment at major airlines, which generally offer higher salaries and more extensive benefit programs than regional airlines. Should the attrition of our employees sharply increase, we may not be able to hire sufficient personnel to replace those leaving.
This strategic venture involves significant risks, including: ● we may not realize a satisfactory return on our investment; ● the joint venture may divert management’s attention from our core business; ● our joint venture partner could have investment goals that are not consistent with our investment objectives, including the timing, terms and strategies for any investments; and 24 Table of Contents ● our joint venture partner might fail to fund their share of required capital contributions or fail to fulfill their other obligations.
This strategic venture involves significant risks, including: ● we may not realize a satisfactory return on our investment; ● the joint venture may divert management’s attention from our core business; ● our joint venture partner could have investment goals that are not consistent with our investment objectives, including the timing, terms and strategies for any investments; and ● our joint venture partner might fail to fund their share of required capital contributions or fail to fulfill their other obligations.
Any cybersecurity incident or other adverse impact to the availability, integrity or confidentiality of our IT Systems or Confidential Information could compromise our ability to operate flights or technology systems, result in the loss of Confidential Information, legal claims or proceedings (such as class actions), regulatory investigations and 16 Table of Contents enforcement actions, liability or regulatory penalties, disruption to our operations, damage to our reputation, loss of existing or future customers and/or significant incident response, system restoration or remediation and future compliance costs.
Any cybersecurity incident or other adverse impact to the availability, integrity or confidentiality of our IT Systems or Confidential Information could compromise our ability to operate flights or technology systems, result in the loss of Confidential Information, legal claims or proceedings (such as class actions), regulatory investigations and enforcement actions, liability or regulatory penalties, disruption to our operations, damage to our reputation, loss of existing or future customers and/or significant incident response, system restoration or remediation and future compliance costs.
Additionally, our major airline partners may reduce the number of regional jets in their system by not renewing or extending existing flying arrangements with regional operators. Any one or more of these factors may reduce or eliminate our ability to expand our flight operations with our existing major airline partners.
Additionally, our major airline partners may reduce the number of regional jets in their system by not renewing or extending existing flying agreements with regional operators. Any one or more of these factors may reduce or eliminate our ability to expand our flight operations with our existing major airline partners.
In addition, we may seek material amounts of additional financial liquidity in the short-term, which may include drawing down on SkyWest Airlines’ line of credit, the issuance of secured debt securities and/or the entry into other debt facilities, among other items.
In addition, we may seek material amounts of additional financial liquidity in the short-term, which may include drawing down on SkyWest Airlines’ line of credit, the issuance of secured debt securities and/or the entry into other debt facilities, among other financial instruments.
Our long-term debt obligations included $2.8 billion of debt used to finance aircraft and spare engines and $200.6 million related to borrowings under the Payroll Support Program Agreements with U.S. Department of the Treasury (“Treasury”).
Our long-term debt obligations included $2.5 billion of debt used to finance aircraft and spare engines and $200.6 million related to borrowings under the Payroll Support Program Agreements with U.S. Department of the Treasury (“Treasury”).
We incur substantial costs in maintaining our current certifications and otherwise complying with the laws, rules and regulations to which we are subject. A decision by the FAA to ground, or 17 Table of Contents require time-consuming inspections of or maintenance on, all or any of our aircraft for any reason may have a material adverse effect on our operations.
We incur substantial costs in maintaining our current certifications and otherwise complying with the laws, rules and regulations to which we are subject. A decision by the FAA to ground, or require time-consuming inspections of or maintenance on, all or any of our aircraft for any reason may have a material adverse effect on our operations.
Our operating and financial results with respect to these prorate arrangements and charter services can be negatively affected by the price of jet fuel in the event we are unable to increase our passenger fares.
Our operating and financial results with respect to these prorate agreements and charter services can be negatively affected by the price of jet fuel in the event we are unable to increase our passenger fares.
If our operating costs for labor, aircraft maintenance and overhead costs exceed the compensation earned from our pre-determined rates under our capacity purchase arrangements, our financial position and operating results will be negatively affected.
If our operating costs for labor, aircraft maintenance and overhead costs exceed the compensation earned from our pre-determined rates under our capacity purchase agreements, our financial position and operating results will be negatively affected.
Our growth may be limited with our major airline partners' flight systems. Additional growth opportunities within our major airline partners’ flight systems are limited by various factors, including a limited number of regional aircraft each major airline partner can operate in its regional network due to scope 19 Table of Contents limitations in its own labor agreements.
Our growth may be limited with our major airline partners' flight systems. Additional growth opportunities within our major airline partners’ flight systems are limited by various factors, including a limited number of regional aircraft each major airline partner can operate in its regional network due to scope limitations in its own labor agreements.
Additionally, terrorist attacks and the fear of such attacks could negatively impact the airline industry, and result in decreased passenger traffic and yields, increased flight delays or cancellations associated with new government mandates, as well as increased security, fuel and other costs.
Additionally, terrorist attacks and the fear of such attacks could negatively impact the airline industry, and result in decreased passenger traffic and yields, increased flight delays or cancellations associated with new government 18 Table of Contents mandates, as well as increased security, fuel and other costs.
Repurchases of our common stock pursuant to our share repurchase program and any future dividends could affect our stock price and increase its volatility. Additionally, our share repurchase program and any future dividends 26 Table of Contents may reduce our cash reserves, which may impact our ability to finance future growth and to pursue possible future strategic opportunities and acquisitions.
Repurchases of our common stock pursuant to our share repurchase program and any future dividends could affect our stock price and increase its volatility. Additionally, our share repurchase program and any future dividends may reduce our cash reserves, which may impact our ability to finance future growth and to pursue possible future strategic opportunities and acquisitions.
Compliance with laws, regulations and other programs 25 Table of Contents intended to reduce emissions or otherwise protect the environment may require us to reduce our emissions, secure carbon offset credits or otherwise pay for emissions or make capital investments to modify certain aspects of our operations to reduce emissions.
Compliance with laws, regulations and other programs intended to reduce emissions or otherwise protect the environment may require us to reduce our emissions, secure carbon offset credits or otherwise pay for emissions, or make capital investments to modify certain aspects of our operations to reduce emissions.
The inability to remain competitive on the various factors valued by our major airline partners could adversely affect our operating results and financial condition. Risks Related to Our Operating Costs and Personnel Increases in labor costs, including pilot costs, flight attendant costs, maintenance costs and overhead costs may result in lower operating margins under our capacity purchase agreements.
The inability to remain competitive on the various factors valued by our major airline partners could adversely affect our operating results and financial condition. 21 Table of Contents Risks Related to Our Operating Costs and Personnel Increases in labor costs, including pilot costs, flight attendant costs, maintenance costs and overhead costs may result in lower operating margins under our capacity purchase agreements.
If any of these events were to occur, our business, results of operations, and financial condition could be materially adversely affected. Terrorist activities or warnings have dramatically impacted the airline industry and will likely continue to do so. The terrorist attacks of September 11, 2001 and their aftermath have negatively impacted the airline industry in general, including our operations.
If any of these events were to occur, our business, results of operations, and financial condition could be materially adversely affected. Terrorist activities or warnings have dramatically impacted the airline industry and will likely continue to do so. Past terrorist attacks and their aftermath have negatively impacted the airline industry in general, including our operations.
The airline industry is highly competitive. We compete with other regional airlines on various factors including, but not limited to, labor resources, including pilots and mechanics; low operating costs; financial resources, including the ability to finance aircraft at competitive terms; geographical infrastructure; and overall customer service levels relating to on-time arrival and flight completion percentages.
We compete with other regional airlines on various factors including, but not limited to, labor resources, including pilots and mechanics; low operating costs; financial resources, including the ability to finance aircraft at competitive terms; geographical infrastructure; and overall customer service levels relating to on-time arrival and flight completion percentages.
If our code-share relationship with United or 18 Table of Contents Delta were terminated, our operations would be significantly impacted and we would not likely have an immediate source of revenue or earnings to offset such loss.
If our code-share relationship with United or Delta were terminated, our operations would be significantly impacted and we would not likely have an immediate source of revenue or earnings to offset such loss.
Our operations and financial condition are affected by many changing economic and other conditions beyond our control, including, among others: ● disruptions in the credit markets, which may impact availability of price competitive financing; ● actual or potential changes in international, national, regional and local economic, business and financial conditions, including recession, inflation, higher interest rates, public health emergencies (including the COVID-19 pandemic and related variants), wars (including the ongoing conflict between Russia and the Ukraine and Israel and Palestine), terrorist attacks or political instability; ● impact on workforce availability and economic uncertainty; ● potential resurgence of COVID-19 or future public health threats similar to COVID-19 could negatively impact demand and the industry; ● changes in consumer preferences, perceptions, spending patterns or demographic trends; ● changes in the competitive environment due to industry consolidation, new airlines entering the market, our major airline partners operating smaller sized aircraft that may reduce the demand for regional aircraft and other factors; 15 Table of Contents ● actual or potential disruptions to U.S. air traffic control systems; ● interference on aviation equipment from the deployment of 5G wireless telecommunications systems; ● price of jet fuel and oil that may negatively impact the number of flights we are scheduled to operate by our major airline partners under our capacity purchase agreements and may negatively impact the profitability of our prorate agreements; ● outbreaks of diseases and other illnesses that affect travel behavior; and ● weather and natural disasters.
Our operations and financial condition are affected by many changing economic and other conditions beyond our control, including, among others: ● disruptions in the credit markets, which may impact availability of price competitive financing; ● actual or potential changes in international, national, regional and local economic, business and financial conditions, including recession, inflation, higher interest rates, public health emergencies, including pandemics, wars (including the ongoing conflict between Russia and Ukraine and Israel and Hamas), terrorist attacks or political instability; ● impact on workforce availability and economic uncertainty; ● future public health threats, outbreaks of diseases or other illnesses could negatively affect travel behavior and the industry; ● changes in consumer preferences, perceptions, spending patterns or demographic trends; ● changes in the competitive environment due to industry consolidation, new airlines entering the market, our major airline partners operating smaller sized aircraft that may reduce the demand for regional aircraft and other factors; ● actual or potential disruptions to U.S. air traffic control systems; ● interference on aviation equipment from the deployment of 5G wireless telecommunications systems; ● price of jet fuel and oil that may negatively impact the number of flights we are scheduled to operate by our major airline partners under our capacity purchase agreements and may negatively impact the profitability of our prorate agreements; ● weather and natural disasters.
An impairment on any of our aircraft types we operate or an increased level of depreciation expense resulting from a change to our depreciation policy and assumptions could result in a material negative impact to our financial results. Future decisions to sell aircraft could potentially result in write-downs for aircraft held-for sale.
An impairment on any of our aircraft types we 24 Table of Contents operate or an increased level of depreciation expense resulting from a change to our depreciation policy and assumptions could result in a material negative impact to our financial results. Future decisions to sell specific aircraft could potentially result in write-downs for aircraft held-for sale.
A significant interruption or disruption in service at one of our hubs, due to adverse weather, system malfunctions, airport construction, security closures or otherwise, could result in the cancellation or delay of a significant portion of our flights and, as a result, could have a severe adverse impact on our operations and financial performance.
A significant interruption or disruption in service at one of our hubs, due to adverse weather, system malfunctions, air traffic control disruptions, airport construction, security closures or otherwise, could result in the cancellation or delay of a significant portion of our flights and, as a result, could have a severe adverse impact on our operations and financial performance.
The FAA requires operating, air worthiness and other certificates; approval of personnel who may engage in flight, maintenance or operation activities; recordkeeping procedures in accordance with FAA requirements; and FAA approval of flight training and retraining programs.
The 17 Table of Contents FAA requires operating, air worthiness and other certificates; approval of personnel who may engage in flight, maintenance or operation activities; recordkeeping procedures in accordance with FAA requirements; and FAA approval of flight training and retraining programs.
Additionally, in the event of prolonged low fuel prices, our competitors may lower their passenger ticket prices on routes that compete with our prorate or charter markets, which could negatively impact our passenger load factors. Our business could be harmed if we lose the services of our key personnel.
Additionally, in the event of prolonged low fuel prices, our competitors may lower their passenger ticket prices on routes that compete with our prorate or charter markets, which could negatively impact our prorate and charter revenue. Our business could be harmed if we lose the services of our key personnel.
We are also dependent upon General Electric as the sole manufacturer of engines used on the aircraft we operate. Our operations could be materially and adversely affected by the failure or inability of Bombardier, Embraer or General Electric to provide sufficient parts or related maintenance and support services to us on a timely manner.
We are also dependent upon General Electric as the sole manufacturer of engines used on the aircraft we operate. Our operations could be materially and adversely affected by the failure or inability of Bombardier, Embraer, General Electric or other certified replacement part companies to provide sufficient parts or related maintenance and support services to us on a timely manner.
During 2023, we produced approximately 5.0 million metric tons of CO 2 e primarily from jet fuel emissions, using industry emissions factors for jet fuel gallons consumed on flights we operated under our code-share agreements.
During 2024, we produced approximately 5.6 million metric tons of CO 2 e primarily from jet fuel emissions, using industry emissions factors for jet fuel gallons consumed on flights we operated under our code-share agreements.
Events impacting airline travel, including pandemics such as COVID-19, that negatively impact the financial strength of our major airline partners or have a long-term effect on the use of our major airline partners by airline travelers would likely have a material adverse effect on our business, financial condition and results of operations.
Events impacting airline travel, including pandemics or recessions, that negatively impact the financial strength of our major airline partners or have a long-term effect on the use of our major airline partners by airline travelers would likely have a material adverse effect on our business, financial condition and results of operations.
We lease aircraft and engines to third parties and the lessee may default under the lease terms, which could negatively affect our financial condition, cash flow and results of operations. We leased five CRJ900 aircraft, 35 CRJ700 aircraft, and engines used on CRJ aircraft to third parties as of December 31, 2023.
We lease aircraft and engines to third parties and the lessee may default under the lease terms, which could negatively affect our financial condition, cash flow and results of operations. We leased five CRJ900 aircraft, 35 CRJ700 aircraft, and several CRJ aircraft engines to third parties as of December 31, 2024.
If our major airline partners’ future strategies include a material reduction in regional aircraft generally or for specific aircraft types, such as 50-seat regional aircraft, the resulting decrease in demand in the aircraft we operate could have a material negative impact on our business and financial condition.
If our major airline partners’ future strategies include a material reduction in regional aircraft generally or for specific aircraft types that we operate, the resulting decrease in demand in the aircraft we operate could have a material negative impact on our business and financial condition.
Pursuant to our capacity purchase arrangements, our major airline partners have agreed to bear the economic risk of fuel price fluctuations on our contracted flights. However, we bear the economic risk of fuel price fluctuations on our prorate and charter operations.
Pursuant to our capacity purchase agreements, our major airline partners have agreed to bear the economic risk of fuel price fluctuations on our contracted flights. However, we bear the economic risk of fuel price fluctuations on our prorate and SWC operations.
This strategic investment involves significant risks, including: ● we may not realize a satisfactory return on our investment; ● the investment may divert management’s attention from our core business; and ● Contour could have investment goals that are not consistent with our investment objectives, including the timing, terms and strategies for any investments. ​ The effect of any, or some combination, of the foregoing risks could negatively affect our financial results.
This strategic investment involves significant risks, including: ● we may not realize a satisfactory return on our investment; ● the investment may divert management’s attention from our core business; and ● Contour could have operational or financial goals that are not consistent with our investment objectives, including the strategies and objectives for increasing value for Contour’s shareholders. ​ The effect of any, or some combination, of the foregoing risks could negatively affect our financial results.
Except as contemplated by our existing code-share agreements, we cannot be sure that our major airline partners will contract with us to fly any additional aircraft. We may not receive additional growth opportunities, or we may agree to modifications to our code-share agreements that reduce certain benefits to us in order to obtain additional aircraft, or for other reasons.
Except as contemplated by our existing code-share agreements, we cannot be sure that our major airline partners will contract with us to fly any additional aircraft. We may not receive additional growth opportunities, or we may agree to modifications to our code-share agreements at less favorable terms in order to obtain additional aircraft, or for other reasons.
As of December 31, 2023, we had approximately $5.5 billion of property and equipment and related assets, net of accumulated depreciation.
As of December 31, 2024, we had approximately $5.6 billion of property and equipment and related assets, net of accumulated depreciation.
Remote and hybrid working arrangements at our company (and at many third-party service providers) also increase cybersecurity risks due to the challenges associated with managing remote computing assets and security vulnerabilities that are present in many non-corporate and home networks.
Remote and hybrid working arrangements at our company (and at many third-party service providers) also increase cybersecurity risks due to the challenges associated with managing remote computing assets and security vulnerabilities that are present in many non-corporate and home networks. We and certain of our third-party service providers have in the past experienced cybersecurity incidents.
If our major airline partners were to make changes such as these in their strategy and operations, our operations and financial results could be adversely impacted. Our prorate arrangements with our major airline partners may not return to pre-pandemic revenue levels and are terminable upon notice of 120 days or less.
If our major airline partners were to make changes such as these in their strategy and operations, our operations and financial results could be adversely impacted. Revenue levels from our prorate agreements with our major airline partners may not continue to increase and are terminable upon notice of 120 days or less.
As of December 31, 2023, we have firm purchase commitments for 21 E175 aircraft and spare engines totaling $610.9 million. Over the next several years, if we continue to add new aircraft to our fleet, we anticipate using significant amounts of capital to acquire these aircraft.
As of December 31, 2024, we have firm purchase commitments for 16 E175 aircraft and spare engines totaling $481.5 million. Over the next several years, if we continue to add new aircraft to our fleet, we anticipate using significant amounts of capital to acquire these aircraft.
There can be no assurance that we will resume our past practice of paying dividends on our common stock or that we will have the financial resources to pay such dividends.
We have not paid a dividend since 2020. There can be no assurance that we will resume our past practice of paying dividends on our common stock or that we will have the financial resources to pay such dividends.
Our operations rely on recruiting and training qualified pilots. FAA regulations regarding personnel certification and qualifications have limited, and along with potential future changes in FAA regulations, could continue to limit, the number of qualified new entrants that we could hire.
FAA regulations regarding personnel certification and qualifications have limited, and along with potential future changes in FAA regulations, could continue to limit, the number of qualified new entrants that we could hire.
The debt is secured by the Part 135 air carrier’s aircraft and engines and has a five-year term. At December 31, 2023, the outstanding debt for the guarantee was $17.6 million. In 2023, we agreed to guarantee debt for an aviation school. The debt is secured by the school’s aircraft and engines and has a five-year term.
In 2022, we agreed to guarantee debt for a 14 CFR Part 135 air carrier. The debt is secured by the Part 135 air carrier’s aircraft and engines and has a five-year term. At December 31, 2024, the outstanding debt for the guarantee was $14.1 million. In 2023, we agreed to guarantee debt for an aviation school.
Additionally, timing and availability of new aircraft deliveries could be delayed beyond our control. We have a significant amount of contractual long-term debt obligations. As of December 31, 2023, we had a total of approximately $3.0 billion in total long-term debt obligations.
Additionally, timing and availability of new aircraft deliveries could be delayed beyond our control. 23 Table of Contents We have a significant amount of contractual long-term debt obligations. As of December 31, 2024, we had a total of approximately $2.7 billion in total long-term debt obligations.
Our common stock price may fluctuate significantly. Volatility in our common stock price may prevent holders from selling shares at or above the prices paid for them. During the year ended December 31, 2023, our common stock closing price varied between a high of $52.87 and a low of $16.43.
Our common stock price may fluctuate significantly. Volatility in our common stock price may prevent holders from selling shares at or above the prices paid for them. During the year ended December 31, 2024, our common stock closing price varied between a high of $115.11 and a low of $48.82.
As of December 31, 2023, 333 out of our total 485 aircraft in scheduled service were operating under a capacity purchase arrangement or a prorate agreement with either United or Delta.
As of December 31, 2024, 359 out of our total 492 aircraft in scheduled service were operating under a capacity purchase agreement or a prorate agreement with either United or Delta.
We may experience an increase in fuel prices in our prorate operations. Dependence on foreign imports of crude oil, limited refining capacity and the possibility of changes in government policy on jet fuel production, transportation and marketing make it difficult to predict the future availability of jet fuel.
Dependence on foreign imports of crude oil, limited refining capacity and the possibility of changes in government policy on jet fuel production, transportation and marketing make it difficult to predict the future availability of jet fuel.
The actual timing, number and value of shares repurchased will be determined by our management in its discretion. The number of shares of common stock that we may repurchase, including pursuant to the share repurchase program, will depend upon our financial condition and results of operations and other factors deemed relevant by our board of directors.
The number of shares of common stock that we may repurchase, including pursuant to the share repurchase program, will depend upon our financial condition and results of operations and other factors deemed relevant by our board of directors.
In the event we are unable to hire and retain other qualified personnel, we may be unable to operate requested flight schedules under our capacity purchase agreements, which could result in a reduction in revenue and operating inefficiencies, such as incremental new-hire training costs, and our business and financial condition could be adversely affected.
In the event we are unable to hire and retain other qualified personnel, we may be unable to operate requested flight schedules under our capacity purchase agreements, which could result in a reduction in revenue and operating inefficiencies, such as incremental new-hire training costs, and our business and financial condition could be adversely affected. 15 Table of Contents Various negative economic or industry conditions may result in reductions to our flight schedules, which could materially and adversely affect our operations and financial condition.
If any of the risks we describe below occur, or if any unforeseen risk develops, our operating results may suffer, our financial condition may deteriorate, the trading price of our common stock may decline and investors could lose all or part of their investment in us. 14 Table of Contents Risks That May Disrupt Our Operations We have experienced, and may continue to experience, difficulty in retaining and upgrading qualified pilots.
If any of the risks we describe below occur, or if any 14 Table of Contents unforeseen risk develops, our operating results may suffer, our financial condition may deteriorate, the trading price of our common stock may decline and investors could lose all or part of their investment in us.
Provisions of our charter documents and code-share agreements may limit the ability or desire of others to gain control of our Company.
Provisions of our articles of incorporation, by-laws and code-share agreements may limit the ability or desire of others to gain control of our Company.
Our operations also rely on retaining qualified pilots, including captains and first officers. Our pilots may seek employment at major airlines, low-cost carriers or cargo carriers, which generally offer higher salaries and more extensive benefit programs than regional airlines.
Our operations also rely on retaining qualified pilots, including captains and first officers. Our pilots may seek employment at major airlines, low-cost carriers or cargo carriers, which generally offer higher salaries and more extensive benefit programs than regional airlines. In recent years, we have experienced elevated levels of pilot attrition, particularly attrition of our captains.
During the year ended December 31, 2023, approximately 91.9% of our code-share operating costs were reimbursable at pre-determined rates and 8.1% of our code-share operating costs were directly reimbursed costs, often 21 Table of Contents referred to as pass-through costs.
During the year ended December 31, 2024, approximately 92.2% of our code-share operating costs were reimbursable at pre-determined rates and 7.8% of our code-share operating costs were directly reimbursed costs, often referred to as pass-through costs.
Our business model relies significantly on our major airline partners, and we may be negatively affected by their financial and operating strength.
Our major airline partners may experience events that negatively impact their financial strength or operations, which may also negatively impact our operations. Our business model relies significantly on our major airline partners, and we may be negatively affected by their financial and operating strength.
If our liquidity is materially diminished, we might not be able to timely pay our leases and debts or comply with certain covenants under SkyWest Airlines’ line of credit or with other material provisions of our contractual obligations. Our anticipated aircraft purchases are expected to require an increase in our leverage and the related cash requirements.
If our liquidity is materially diminished, we might not be able to timely pay our leases and debts or comply with certain covenants under SkyWest Airlines’ line of credit or with other material provisions of our contractual obligations. We expect to issue debt to finance our anticipated aircraft purchases.
There also can be no assurance that we will continue our practice of repurchasing shares of common stock or that we will have the financial resources to repurchase shares of common stock in the future.
There also can be no assurance that we will continue repurchasing shares of common stock under our May 2023 authorization, that our board of directors will approve additional share repurchase programs in the future or that we will have the financial resources to repurchase shares of common stock in the future.
As of December 31, 2023, we operated 19 CRJ200s under a prorate agreement with United and six CRJ900s and four CRJ700s under a prorate agreement with Delta. As of December 31, 2023, we had 16 CRJ200s available for on-demand charter service through SWC.
As of December 31, 2024, we operated 25 CRJ200s under a prorate agreement with United and one CRJ900 and 16 CRJ700s or CRJ550s under a prorate agreement with Delta. As of December 31, 2024, we had 18 CRJ200s available for on-demand charter service through SWC.
Such efforts will likely continue in the future and may ultimately result in some or all of our employees being represented by one or more national unions.
Our employees are represented by in-house associations; however, organizing efforts to join national unions among those employees occur from time to time. Such efforts will likely continue in the future and may ultimately result in some or all of our employees being represented by one or more national unions.
SWC offers on-demand charter service using CRJ200 aircraft in a 30 or less seat configuration under its own FAA operating certificate.
In 2022 we formed a new subsidiary, SWC, which had its first revenue generating charter flight in 2023. SWC offers on-demand charter service using CRJ200 aircraft in a 30 or less seat configuration under its own FAA operating certificate.
There can also be no assurance that our cybersecurity risk management program and processes, including our policies, controls or procedures, will be fully implemented, complied with or effective in protecting our IT Systems and Confidential Information.
Further, we may not be able to prevent all data breaches, misuses of data (including Confidential Information) or other cybersecurity incidents. 16 Table of Contents There can also be no assurance that our cybersecurity risk management program and processes, including our policies, controls or procedures, will be fully implemented, complied with or effective in protecting our IT Systems and Confidential Information.
In addition, any accident or incident involving a type of aircraft in our fleet could result in air travelers being reluctant to fly on our aircraft, and adversely impact our business, results of operations and financial condition. We may experience disruption in service with key third-party service providers.
In addition, any accident or incident involving a type of aircraft in our fleet could result in air travelers being reluctant to fly on our aircraft, and adversely impact our business, results of operations and financial condition. We are subject to significant governmental regulation and potential regulatory changes.
From April 2020 through September 30, 2022, we were restricted from paying dividends and repurchasing shares of our common stock under three Payroll Support Program Agreements and under a loan agreement with Treasury. The Company did not declare a dividend during 2023 or 2022, following the restriction lapse under the Payroll Support Program Agreements.
Historically, we have paid dividends and repurchased shares of our common stock in varying amounts. From April 2020 through September 30, 2022, we were restricted from paying dividends and repurchasing shares of our common stock under three Payroll Support Program Agreements and under a loan agreement with Treasury. During 2023, we resumed repurchasing shares of our common stock.
While to date no incidents have had a material impact on our operations or financial results, we cannot guarantee that material incidents will not occur in the future.
We cannot assure our cybersecurity risk management program will prevent such incidents from occurring in the future. While no incidents have had a material impact on our operations or financial results to date, we cannot guarantee that material incidents will not occur in the future as further described in “Item 1C. Cybersecurity”.
As a result we may be unable to anticipate or to detect, investigate, remediate or recover from attacks or incidents for long periods of time. Further, we may not be able to prevent all data breaches, misuses of data (including Confidential Information) or other cybersecurity incidents.
As a result we may be unable to anticipate or to detect, investigate, remediate or recover from attacks or incidents for long periods of time.
We are authorized to repurchase such shares of common stock at prevailing market prices in the open market, in privately negotiated transactions or by other means in accordance with federal securities laws. Depending on market conditions and other factors, such repurchases may commence or be suspended from time to time by management without prior notice.
Under our May 2023 repurchase program we are authorized to repurchase such shares of common stock at prevailing market prices in the open market, in privately negotiated transactions or by other means in accordance with federal securities laws.
These events could result in disruptions in our operations or increases in our cost structure. We are subject to significant governmental regulation and potential regulatory changes. All interstate air carriers, including SkyWest, are subject to regulation by the DOT, the FAA and other governmental agencies. Regulations promulgated by the DOT primarily relate to economic aspects of air service.
All interstate air carriers, including SkyWest, are subject to regulation by the DOT, the FAA and other governmental agencies. Regulations promulgated by the DOT primarily relate to economic aspects of air service.
In the event the estimated residual value of any of our aircraft types is determined to be lower than the residual value assumptions used in our depreciation policies, the applicable aircraft type in our fleet may be impaired and may result in a material reduction in the book value of applicable aircraft types we operate or we may need to prospectively modify our depreciation policies.
In the event the estimated fair value of any of our aircraft types is determined to be lower than the net book value of the applicable aircraft type, such aircraft type in our fleet may be impaired and may result in a material impairment charge.
There is no assurance our major airline partners will take responsibility for carbon emissions incurred under our contract flights and no assurance future long-term fuel saving initiatives will materialize. In the event we pursue initiatives to reduce our carbon emissions, the cost could materially and adversely affect our business plans and results of operations.
There is no assurance our major airline partners will take responsibility for carbon emissions incurred under our contract flights and no assurance future long-term fuel saving initiatives will materialize.
At December 31, 2023, the outstanding debt for the guarantee was $4.8 million. The purpose of these arrangements is to increase the potential number of commercial pilots in the Company’s hiring pipeline.
The debt is secured by the school’s aircraft and engines and has a five-year term. At December 31, 2024, the outstanding debt for the guarantee was $10.6 million. The purpose of these arrangements is to increase the potential number of commercial pilots in the Company’s hiring pipeline.
As we grow operations, there may be significant risks, including that SWC may divert management’s attention or the Company’s resources from our core business and strategies and that the objectives of SWC may not materialize or may take longer to materialize than anticipated. The airline industry is highly competitive, which could adversely affect our operating results and financial condition.
As we grow operations, there may be significant risks, including that SWC may divert management’s attention or the Company’s resources from our core business and strategies and that the objectives of SWC may not materialize or may take longer to materialize than anticipated, including but not limited to SWC’s pending application with the DOT to operate under commuter authority.
Any new collective bargaining agreements entered into by other regional carriers with their work forces may also result in higher industry wages and increased pressure on us to increase the wages and benefits of our employees.
Any new labor agreement entered into by other regional carriers with their work forces may result in higher industry wages and increase pressure on us to increase the wages and benefits of our employees. If our labor agreements become uncompetitive, we may experience higher employee attrition and low employee job satisfaction, which may negatively impact our operating and financial results.
The future payment of dividends will depend upon our financial condition, alternative uses of the Company’s cash and results of operations and other factors deemed relevant by our board of directors.
The future payment of dividends will depend upon our financial condition, alternative uses of the Company’s cash and results of operations and other factors deemed relevant by our board of directors. In May 2023, our board of directors approved a share repurchase program, pursuant to which we are authorized to repurchase up to $250 million of our common stock.
As of December 31, 2023, we held 399,589 shares of common stock of Eve and a warrant giving us the right to acquire 1,500,000 shares of common stock of Eve at an exercise price of $0.01 per share.
The effect of any, or some combination, of the foregoing risks could affect our partnership with Eve and future benefits may not materialize. 25 Table of Contents As of December 31, 2024, we held a warrant giving us the right to acquire 1,500,000 shares of common stock of Eve at an exercise price of $0.01 per share.
General Risk Factors We may be a party to litigation in the normal course of business or otherwise, which could affect our financial condition and results of operations.
Additionally, our code-share agreements contain termination and extension trigger provisions related to change in control type transactions that may have the effect of deterring a change in control of our Company. 27 Table of Contents General Risk Factors We may be a party to litigation in the normal course of business or otherwise, which could affect our financial condition and results of operations.
Such disagreements and their consequences could have an adverse effect on our operating results and financial condition. We recently began operating on-demand charter flights through our wholly-owned subsidiary, SWC, and such operations involve significant risk. In 2022 we formed a new subsidiary, SWC, which had its first revenue generating flight in May 2023.
An unfavorable result in any such proceeding could have adverse financial consequences or require us to modify our operations. Such disagreements and their consequences could have an adverse effect on our operating results and financial condition. We operate on-demand charter flights through our wholly-owned subsidiary, SWC, and such operations involve significant risk.
Even though we strive to formalize agreements with these vendors that define expected service levels, our use of outside vendors increases our exposure to several risks.
Even though we strive to formalize agreements with key vendors that define expected service levels and availability of parts, our use of outside vendors, including, but not limited to aircraft maintenance, ground handling, fueling, telecommunication systems and information technology services, increases our exposure to several risks.
Moreover, we cannot predict the outcome of any future negotiations relating to union representation or collective bargaining agreements. A national union soliciting to represent our employees may represent employees at mainline carriers or other regional airlines and may have conflicting interests with those of our employees or SkyWest. Agreements reached in union-involved collective bargaining may negatively impact our financial results.
A national union soliciting to represent our employees may represent employees at mainline carriers or other regional airlines and may have conflicting interests with those of our employees or SkyWest.
If our employees were to unionize or be deemed to be represented by one or more national unions, negotiations with these unions could divert management’s attention and disrupt operations, which may result in low employee morale and inefficient work rules and may limit our ability to adjust to market compensation in a timely manner and negatively impact our financial results.
If our employees were to unionize or be deemed to be represented by one or more national unions, negotiations with these unions could divert management’s attention and disrupt operations.
We are subject to tax laws and regulations of the U.S. federal, state and local governments as well as various non-U.S. jurisdictions. Potential changes in existing tax laws, including future regulatory guidance, may impact our effective tax rate and tax payments.
The adoption of new tax legislation or changes to existing tax laws and regulations could adversely affect our financial condition or results of operations. We are subject to tax laws and regulations of the U.S. federal, state and local governments as well as various non-U.S. jurisdictions.
The provisions of the Utah Control Shares Acquisitions Act may also discourage the acquisition of a significant interest in or control of our Company. Additionally, our code-share agreements contain termination and extension trigger provisions related to change in control type transactions that may have the effect of deterring a change in control of our Company.
The provisions of the Utah Control Shares Acquisitions Act may also discourage the acquisition of a significant interest in or control of our Company.
If a legal proceeding is resolved against us, it could result in significant compensatory damages or injunctive relief that could materially adversely affect our financial condition, results of operations and cash flows. 27 Table of Contents The adoption of new tax legislation or changes to existing tax laws and regulations could adversely affect our financial condition or results of operations.
Although we will vigorously defend ourselves in such legal proceedings, their ultimate resolution and potential financial and other impacts on us are uncertain. If a legal proceeding is resolved against us, it could result in significant compensatory damages or injunctive relief that could materially adversely affect our financial condition, results of operations and cash flows.
For example, during the year ended December 31, 2023 and 2022, our salary, wage and benefit costs constituted approximately 46.7% and 42.9% of our total operating costs, respectively. In September 2022, we entered into a collective bargaining agreement with our pilots, increasing the pay rates for pilots.
For example, during the years ended December 31, 2024 and 2023, our salary, wage and benefit costs constituted approximately 48.3% and 46.7% of our total operating costs, respectively.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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For the year ended December 31, 2023, we have not identified risks from known 28 Table of Contents cybersecurity threats, including as a result of any prior cybersecurity incidents, that have or are reasonably likely to materially affect us, including our operations, business strategy, results of operations, or financial condition.
For the year ended December 31, 2024, we have not identified risks from known cybersecurity threats, including as a result of any prior cybersecurity incidents, that have or are reasonably likely to materially affect us, including our operations, business strategy, results of operations, or financial condition.
While we work closely with accredited third-party cybersecurity firms, where appropriate, to audit our security architecture, our Information Security Team, consisting of experienced cybersecurity professionals, is responsible for the day-to-day management of our cybersecurity risks, including directing our cybersecurity risk assessment processes, our security processes, and our response to cybersecurity incidents.
Our cybersecurity risk management program is a component of our overall enterprise risk management program, and shares common methodologies, reporting channels and governance processes that apply across the enterprise risk management program to other legal, compliance, strategic, operational, and financial risk areas. 28 Table of Contents While we work closely with accredited third-party cybersecurity firms, where appropriate, to audit our security architecture, our Information Security Team, consisting of experienced cybersecurity professionals, is responsible for the day-to-day management of our cybersecurity risks, including directing our cybersecurity risk assessment processes, our security processes, and our response to cybersecurity incidents.
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Our cybersecurity risk management program is a component of our overall enterprise risk management program, and shares common methodologies, reporting channels and governance processes that apply across the enterprise risk management program to other legal, compliance, strategic, operational, and financial risk areas.
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During 2021, we identified malware on our system resulting from a cyberattack. We successfully quarantined the malware without disruption to our operations. However, this quarantine required a rebuild of a triple-redundant server. While moving one of our critical systems to a newly rebuilt server, we experienced a server outage that resulted in approximately 1,700 flight cancellations.
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We estimate the impact of the outage negatively impacted our 2021 financial results by approximately $16 million (pre-tax). Approximately half of the loss we incurred in 2021 from this incident was recovered through our cyber insurance policy during the year ended December 31, 2023.
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Based on our assessment, we do not believe the incident has or will materially affect us, including our operations, business strategy, results of operations, or financial condition.

Item 2. Properties

Properties — owned and leased real estate

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PROPERTIES Flight Equipment As of December 31, 2023, our fleet used by our SkyWest Airlines segment under our code-share agreements consisted of the following types of owned and leased aircraft: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Number of Number of ​ Scheduled Average ​ ​ ​ Owned ​ Leased ​ Passenger ​ Flight ​ Cruising ​ Average Aircraft Type ​ Aircraft ​ Aircraft ​ Capacity ​ Range (miles) ​ Speed (mph) ​ Age (years) E175s 207 ​ 30 70-76 2,100 530 5.8 CRJ900s 17 ​ 24 70-76 1,500 530 13.0 CRJ700s 116 ​ 2 65-70 1,600 530 18.3 CRJ200s 89 ​ — 50 1,500 530 20.9 Several factors may impact our fleet size throughout 2024 and thereafter, including, but not limited to, contract expirations that are not renewed, labor shortages, reductions in our prorate fleet, lease expirations that are not extended and growth opportunities.
PROPERTIES Flight Equipment As of December 31, 2024, our fleet used by our SkyWest Airlines segment under our code-share agreements consisted of the following types of owned and leased aircraft: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Number of Number of ​ Scheduled Average ​ ​ ​ Owned ​ Leased ​ Passenger ​ Flight ​ Cruising ​ Average Aircraft Type ​ Aircraft ​ Aircraft ​ Capacity ​ Range (up to miles) ​ Speed (mph) ​ Age (years) E175s 212 ​ 50 70-76 2,100 530 6.5 CRJ900s 12 ​ 24 70-76 1,500 530 14.0 CRJ700s and CRJ550s 117 ​ 2 50-70 1,600 530 19.1 CRJ200s 75 ​ — 50 1,500 530 21.8 Several factors may impact our fleet size throughout 2025 and thereafter, including, but not limited to, contract expirations that are not renewed, labor shortages, reductions in our prorate fleet, lease expirations that are not extended 29 Table of Contents and growth opportunities.
The number of 29 Table of Contents leased aircraft in the table above includes aircraft we lease from our major airline partners for a de minimis monthly cost under a capacity purchase agreement. Ground Facilities We lease many of the buildings and associated land that we occupy.
The number of leased aircraft in the table above are aircraft we lease from our major airline partners for a de minimis monthly cost under capacity purchase agreements (also referred to as partner-financed aircraft). Ground Facilities We lease many of the buildings and associated land that we occupy.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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ITEM 3. LEGAL PROCEEDINGS We are subject to certain legal actions which we consider routine to our business activities. As of December 31, 2023, our management believed, after consultation with legal counsel, that the ultimate outcome of such legal matters was not likely to have a material adverse effect on our financial position, liquidity or results of operations.
ITEM 3. LEGAL PROCEEDINGS We are subject to certain legal actions which we consider routine to our business activities. As of December 31, 2024, our management believed, after consultation with legal counsel, that the ultimate outcome of such legal matters was not likely to have a material adverse effect on our financial position, liquidity or results of operations.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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The following graph compares the cumulative total shareholder return on our common stock over the five-year period ended December 31, 2023, with the cumulative total return during such period of the Nasdaq Stock Market (U.S. Companies) and the Nasdaq Stock Market Transportation Index. The following graph assumes an initial investment of $100.00 with dividends reinvested.
The following graph compares the cumulative total shareholder return on our common stock over the five-year period ended December 31, 2024, with the cumulative total return during such period of the Nasdaq Stock Market (U.S. Companies) and the Nasdaq Stock Market Transportation Index. The following graph assumes an initial investment of $100.00 with dividends reinvested.
Securities held of record do not include shares held in securities position listings. The transfer agent for our common stock is Zions First National Bank, Salt Lake City, Utah. Dividends We did not declare dividends for the years ended December 31, 2022 and 2023.
Securities held of record do not include shares held in securities position listings. The transfer agent for our common stock is Zions First National Bank, Salt Lake City, Utah. Dividends We did not declare dividends for the years ended December 31, 2024 and 2023.
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Market Information Our common stock is traded on The Nasdaq Global Select Market under the symbol “SKYW.” As of February 9, 2024, there were approximately 3,786 stockholders of record of our common stock.
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Market Information Our common stock is traded on The Nasdaq Global Select Market under the symbol “SKYW.” As of February 7, 2025, there were approximately 3,458 stockholders of record of our common stock.
Purchases are made at management’s discretion based on market conditions and financial resources. As of December 31, 2023, we had repurchased 4,249,161 shares of our common stock for $159.1 million and had $90.9 million remaining availability under the May 2023 stock repurchase program .
Purchases are made at management’s discretion based on market conditions and financial resources. As of December 31, 2024, we had repurchased 4,827,300 shares of our common stock for $202.4 million and had $47.6 million remaining availability under the May 2023 authorization .
The following table summarizes the repurchases under our stock repurchase program during the three months ended December 31, 2023: 30 Table of Contents ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total Number of Shares Purchased ​ Average Price Paid Per Share Total Number of Shares Purchased as Part of a Publicly Announced Program (1) ​ Maximum Dollar Value of Shares that May Yet Be Purchased Under the Program (in Thousands) October 1, 2023 - October 31, 2023 ​ 372,691 ​ $ 40.25 ​ 372,691 ​ $ 120,922 November 1, 2023 - November 30, 2023 ​ 332,433 ​ $ 45.12 ​ 332,433 ​ $ 105,922 December 1, 2023 - December 31, 2023 ​ 290,507 ​ $ 51.63 ​ 290,507 ​ $ 90,922 Total ​ 995,631 ​ $ 45.20 ​ 995,631 ​ $ 90,922 (1) In May 2023, our Board of Directors approved a stock purchase program, which superseded our prior repurchase program and authorized us to repurchase up to $250.0 million of our common stock.
The following table summarizes the repurchases under our stock repurchase program during the three months ended December 31, 2024: 30 Table of Contents ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total Number of Shares Purchased ​ Average Price Paid Per Share Total Number of Shares Purchased as Part of a Publicly Announced Program (1) ​ Maximum Dollar Value of Shares that May Yet Be Purchased Under the Program (in Thousands) October 1, 2024 - October 31, 2024 ​ 12,500 ​ $ 91.23 ​ 12,500 ​ $ 51,405 November 1, 2024 - November 30, 2024 ​ 25,142 ​ $ 110.53 ​ 25,142 ​ $ 48,626 December 1, 2024 - December 31, 2024 ​ 9,685 ​ $ 106.03 ​ 9,685 ​ $ 47,599 Total ​ 47,327 ​ $ 104.51 ​ 47,327 ​ $ 47,599 (1) In May 2023, our Board of Directors approved a stock purchase program, which superseded our prior repurchase program and authorized us to repurchase up to $250.0 million of our common stock.
The stock performance shown on the graph below represents historical stock performance and is not necessarily indicative of future stock price performance. ​ 31 Table of Contents ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ INDEXED RETURNS ​ ​ Base ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Period ​ Years Ending Company Name / Index ​ 2018 ​ 2019 ​ 2020 ​ 2021 ​ 2022 ​ 2023 SkyWest, Inc . 100 146.41 ​ 91.64 ​ 89.34 37.53 118.66 ​ NASDAQ Composite 100 136.69 ​ 198.10 ​ 242.03 163.28 236.17 ​ NASDAQ Transportation Index ​ 100 ​ 125.94 ​ 164.80 ​ 208.39 ​ 176.34 ​ 211.72 ​ ​ ​ ITEM 6. [Reserved ]
The stock performance shown on the graph below represents historical stock performance and is not necessarily indicative of future stock price performance. ​ 31 Table of Contents ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ INDEXED RETURNS ​ ​ Base ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Period ​ Years Ending Company Name / Index ​ 2019 ​ 2020 ​ 2021 ​ 2022 ​ 2023 ​ 2024 SkyWest, Inc . 100 62.59 ​ 61.02 ​ 25.63 81.05 155.47 ​ NASDAQ Composite 100 144.92 ​ 177.06 ​ 119.45 172.77 223.87 ​ NASDAQ Transportation Index ​ 100 ​ 130.86 ​ 165.47 ​ 140.02 ​ 168.12 ​ 171.24 ​ ​ ​ ITEM 6. [Reserved ]
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Pursuant to the terms of our three Payroll Support Program Agreements with Treasury, we were restricted from paying dividends through September 30, 2022. Although we are no longer restricted from paying dividends under our agreements with Treasury, we cannot assure we will pay dividends in the future.
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During the year ended December 31, 2023, we also repurchased 6,340,256 shares of our common stock for $130.0 million under our February 2019 repurchase program that was superseded by the May 2023 program.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Under our airport customer service agreements, our performance obligation is measured on per departure basis for each flight we provide customer service. A portion of our compensation under our capacity purchase agreements is designed to reimburse us for the use of the aircraft we provide under such agreements.
Under our airport customer service agreements, our performance obligation is measured on a per departure basis for each flight we provide customer service. A portion of our compensation under our capacity purchase agreements is designed to reimburse us for the use of the aircraft we provide under such agreements.
Discussions of 2021 items and year-to-year comparisons between 2022 and 2021 that are not included in this Annual Report on Form 10-K can be found in the section entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 of the Company’s Annual Report on Form 10-K for the year ended December 31, 2022.
Discussions of 2022 items and year-to-year comparisons between 2023 and 2022 that are not included in this Annual Report on Form 10-K can be found in the section entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 of the Company’s Annual Report on Form 10-K for the year ended December 31, 2023.
The significant items affecting our revenue and operating expenses during the year ended December 31, 2023, are outlined below: Revenue The number of aircraft we have in scheduled service or under contract pursuant to our code-share agreements and the number of block hours we incur on our flights are primary drivers of our flying agreements revenue under our capacity purchase agreements.
The significant items affecting our revenue and operating expenses during the year ended December 31, 2024, are outlined below: Revenue The number of aircraft we have in scheduled service or under contract pursuant to our code-share agreements and the number of block hours we incur on our flights are primary drivers of our flying agreements revenue under our capacity purchase agreements.
At the time of each aircraft acquisition, we evaluate the financing alternatives available to us, and select one or more of these methods to fund the acquisition. In recent years, we have issued long-term debt to finance our new aircraft. At present, we intend to fund our aircraft purchase commitments through cash on hand and debt financing.
At the time of each aircraft acquisition, we evaluate the financing alternatives available to us, and select one or more of these methods to fund the acquisition. In recent years, we have issued long-term debt to finance our new aircraft. At present, we intend to fund our aircraft purchase commitments through a combination of cash on hand and debt financing.
Given our available liquidity as of December 31, 2023, we believe the working capital currently available to us will be sufficient to meet our present financial requirements, including planned capital expenditures, scheduled lease payments and debt service obligations for at least the next 12 months.
Given our available liquidity as of December 31, 2024, we believe the working capital currently available to us will be sufficient to meet our present financial requirements, including planned capital expenditures, scheduled lease payments and debt service obligations for at least the next 12 months.
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The following discussion and analysis presents factors that had a material effect on our results of operations during the years ended December 31, 2023 and 2022. Also discussed is our financial condition as of December 31, 2023 and 2022.
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The following discussion and analysis presents factors that had a material effect on our results of operations during the years ended December 31, 2024 and 2023. Also discussed is our financial condition as of December 31, 2024 and 2023.
Historically, multiple contractual relationships with major airlines have enabled us to reduce our reliance on any single major airline code and to enhance and stabilize operating results through a mix of our capacity purchase arrangements and our prorate flying arrangements.
Historically, multiple contractual relationships with major airlines have enabled us to reduce our reliance on any single major airline code and to enhance and stabilize operating results through a mix of our capacity purchase agreements and our prorate flying agreements.
Risk Factors” for discussion of some of the uncertainties, risks and assumptions associated with these statements. This section of this Annual Report on Form 10-K generally discusses 2023 and 2022 items and year-to-year comparisons between 2023 and 2022.
Risk Factors” for discussion of some of the uncertainties, risks and assumptions associated with these statements. This section of this Annual Report on Form 10-K generally discusses 2024 and 2023 items and year-to-year comparisons between 2024 and 2023.
Our revenues could be impacted by several factors, such as our flight schedules, passenger fares we receive under our prorate agreements, terminations, extensions or other amendments to our code-share agreements, our estimates 42 Table of Contents used to determine the amount of revenue we defer under our capacity purchase agreements, and our ability to earn incentive payments contemplated under applicable agreements.
Our revenues could be impacted by several factors, such as our flight schedules, passenger fares we receive under our prorate agreements, terminations, extensions or other amendments to our code-share agreements, our estimates used to determine the amount of revenue we defer under our capacity purchase agreements, and our ability to earn incentive payments contemplated under applicable agreements.
Our Business Segments 2023 compared to 2022 : Our reporting segments consist of (1) the operations of SkyWest Airlines and SWC, which had its first revenue generating flight in May 2023, (collectively, “SkyWest Airlines and SWC”) and (2) SkyWest Leasing activities.
Our Business Segments 2024 compared to 2023 : Our reporting segments consist of (1) the operations of SkyWest Airlines and SWC, which had its first revenue generating flight in 2023, (collectively, “SkyWest Airlines and SWC”) and (2) SkyWest Leasing activities.
Guarantees We have guaranteed the obligations of SkyWest Airlines under the Delta Connection Agreement and the United Express Agreement for the E175 aircraft. In addition, we have guaranteed certain other obligations under our aircraft financing and leasing agreements. We have guaranteed $22.4 million in promissory notes of third parties in event the third parties default on their payments.
Guarantees We have guaranteed the obligations of SkyWest Airlines under the Delta Connection Agreement and the United Express Agreement for the E175 aircraft. In addition, we have guaranteed certain other obligations under our aircraft financing and leasing agreements. We have guaranteed $24.7 million in promissory notes of third parties in event the third parties default on their payments.
Our rates were finalized under our code-share agreements as of December 31, 2023. Long-Lived Assets As of December 31, 2023, we had approximately $5.5 billion of property and equipment and related assets net of accumulated depreciation.
Our rates were finalized under our code-share agreements as of December 31, 2024. Long-Lived Assets As of December 31, 2024, we had approximately $5.6 billion of property and equipment and related assets net of accumulated depreciation.
As we operate our aircraft under code-share agreements with our major airline partners, changes in anticipated demand by our major airline partners for regional aircraft may impact our estimated useful lives and residual values for our aircraft, spare engines and other long-lived assets.
As we operate our aircraft under code-share agreements with our major 43 Table of Contents airline partners, changes in anticipated demand by our major airline partners for regional aircraft may impact our estimated useful lives and residual values for our aircraft, spare engines and other long-lived assets.
Based on current market conditions and discussions with prospective leasing organizations and financial institutions, we currently believe that we will be able to obtain financing for our committed acquisitions, as well as additional aircraft. We intend to finance the firm purchase commitment for 21 E175 aircraft with approximately 75-85% debt and the remaining balance with cash.
Based on current market conditions and discussions with prospective leasing organizations and financial institutions, we currently believe that we will be able to obtain financing for our committed acquisitions, as well as additional aircraft. We intend to finance the firm purchase commitment for 16 E175 aircraft with approximately 75-85% 41 Table of Contents debt and the remaining balance with cash.
Recent Accounting Pronouncements See Note 1 to the Consolidated Financial Statements included in Item 8 of this Report for a description of recent accounting pronouncements. 43 Table of Contents
Recent Accounting Pronouncements See Note 1 to the Consolidated Financial Statements included in Item 8 of this Report for a description of recent accounting pronouncements.
Our investing cash flows are typically impacted by various factors including our capital expenditures, such as the acquisition of aircraft and spare engines; deposit payments and refunds of previously made deposits on new aircraft; purchase and sales of marketable securities; proceeds from the sale of assets; and timing of cash payments and cash receipts attributed to our various long-term asset and long-term liability accounts.
Our investing cash flows are typically impacted by various factors including our capital expenditures, such as the acquisition of aircraft and spare engines; deposit payments; purchase and sales of marketable securities; proceeds from the sale of assets; and timing of cash payments and cash receipts attributed to our various long-term asset and long-term liability accounts.
Assuming a 6.1% discount rate, which is the average incremental borrowing rate we anticipate we would have incurred on debt obtained over a similar term to acquire these assets, the present value of these lease obligations would have been equal to approximately $86.7 million at December 31, 2023.
Assuming a 6.2% discount rate, which is the average incremental borrowing rate we anticipate we would have incurred on debt obtained over a similar term to acquire these assets, the present value of these lease obligations would have been equal to approximately $87.7 million at December 31, 2024.
Our total deferred revenue balance, associated with our “Capacity purchase agreements flight operations revenue” and our “Capacity purchase agreements aircraft lease revenue,” net of unbilled revenue, was $367.3 million as of December 31, 2023.
Our total deferred revenue balance, associated with our “Capacity purchase agreements flight operations revenue” and our “Capacity purchase agreements aircraft lease revenue,” net of unbilled revenue, was $322.4 million as of December 31, 2024, compared to total deferred revenue, net of unbilled revenue of $367.3 million as of December 31, 2023.
Overview We have the largest regional airline operation in the United States. As of December 31, 2023, we offered scheduled passenger and air freight service with approximately 1,850 total daily departures to destinations in the United States, Canada and Mexico.
Overview We have the largest regional airline operation in the United States. As of December 31, 2024, we offered scheduled passenger and air freight service with approximately 2,190 total daily departures to destinations in the United States, Canada and Mexico.
The SkyWest Leasing segment also includes the activity of acquiring and leasing used regional jet aircraft and regional aircraft engines to other entities. The SkyWest Leasing segment’s total assets and capital expenditures include new E175 aircraft acquired through the issuance of debt and our aircraft and engines leased to other entities.
The SkyWest Leasing segment also includes the activity of acquiring and leasing used regional jet aircraft and spare engines to third parties and other activities. The SkyWest Leasing segment’s total assets and capital expenditures include new aircraft acquired through the issuance of debt and our aircraft and engines leased to third parties.
For the years ended December 31, 2023, and December 31, 2022, our income tax provision rates were 14.8% and 21.2%, respectively, which included the statutory federal income tax rate of 21% and other reconciling income tax items, including state income taxes and the impact of non-deductible expenses.
For the years ended December 31, 2024, and December 31, 2023, our effective income tax rates were 25.3% and 14.8%, respectively, which included the statutory federal income tax rate of 21% and other reconciling income tax items, including state income taxes and the impact of non-deductible expenses.
Future minimum lease payments due under all long-term operating leases were approximately $129.1 million at December 31, 2023.
Future minimum lease payments due under all long-term operating leases were approximately $129.3 million at December 31, 2024.
For the year ended December 31, 2023, our capacity purchase revenue represented approximately 86.5% of our total flying agreements revenue and our prorate and SWC revenue, combined, represented approximately 13.5% of our total flying agreements revenue.
For the year ended December 31, 2024, our capacity purchase revenue represented approximately 86.6% of our total flying agreements revenue and our prorate and SWC revenue, combined, represented approximately 13.4% of our total flying agreements revenue.
Primarily due to the factors described above, we generated net income of $34.3 million, or $0.77 per diluted share, for the year ended December 31, 2023, compared to net income of $73.0 million, or $1.44 per diluted share, for the year ended December 31, 2022.
Primarily due to the factors described above, we generated net income of $323.0 million, or $7.77 per diluted share, for the year ended December 31, 2024, compared to net income of $34.3 million, or $0.77 per diluted share, for the year ended December 31, 2023.
As of December 31, 2023 and 2022, we had $49.1 million and $59.2 million, respectively, in letters of credit and surety bonds outstanding with various banks and surety institutions. We had no restricted cash as of December 31, 2023 and 2022. 39 Table of Contents Sources and Uses of Cash Cash Position and Liquidity.
As of December 31, 2024 and 2023, we had $47.1 million and $49.1 million, respectively, in letters of credit and surety bonds outstanding with various banks and surety institutions. We had no restricted cash as of December 31, 2024 and 2023. Sources and Uses of Cash Cash Position and Liquidity.
Under our capacity purchase agreements, we are paid a fixed amount per month per aircraft over the contract term. We recognize the fixed amount per aircraft as revenue proportionately to the number of block hours we complete for each reporting period.
Under our capacity purchase agreements, we are paid a fixed amount per month per aircraft over the contract term. We recognize the total projected fixed monthly payments per aircraft as revenue proportionately to the number of block hours we complete for each reporting period, relative to the estimated number of block hours we anticipate completing over the remaining contract term.
During the year ended December 31, 2023, SkyWest Airlines deferred recognizing $164.0 million of revenue, net of unbilled revenue, related to fixed monthly payments we received associated with our flight operations revenues, compared to recognizing $7.2 million of previously deferred revenue, net of unbilled revenue, related to fixed monthly payments received associated with our flight operations revenues during the year ended December 31, 2022.
During the year ended December 31, 2024, SkyWest Airlines recognized $43.4 million of previously deferred revenue, net of unbilled revenue, related to fixed monthly payments we received associated with our flight operations revenues, compared to deferring $164.0 million of revenue, net of unbilled revenue, related to fixed monthly payments received associated with our flight operations revenues during the year ended December 31, 2023.
Results of Operations 2023 Compared to 2022 Operational Statistics The following table sets forth our major operational statistics and the associated percentages of change for the periods identified below.
Results of Operations 2024 Compared to 2023 Operational Statistics The following table sets forth our major operational statistics and the associated percentage changes for the periods identified below.
Our total long-term debt, including current maturities decreased from $3.4 billion as of December 31, 2022, to $3.0 billion as of December 31, 2023, or by $0.4 billion, primarily due to scheduled debt payments for the 2023 year, partially offset by debt issued to finance two new E175 aircraft and spare engines.
Our total long-term debt, including current maturities decreased from $3.0 billion as of December 31, 2023, to $2.7 billion as of December 31, 2024, or by $0.3 billion, primarily due to scheduled debt payments for the 2024 year, partially offset by debt issued to finance five new E175 aircraft.
We presented the $54.3 million of assets held for sale at the lower of their current carrying value or their fair market value less costs to sell and included the amount in “Other current assets” on the Company’s consolidated balance sheet. The fair values are based upon observable and unobservable inputs, including market trends and conditions.
We presented the $54.3 million of assets held for sale at the lower of their current carrying value or their fair market value less costs to sell and included the amount in “Other current assets” on the Company’s consolidated balance sheet.
Cash Flows used in Investing Activities Our cash flows used in investing activities was $23.2 million for the year ended December 31, 2023, compared to $904.9 million for the year ended December 31, 2022.
Cash Flows used in Investing Activities Our cash flows used in investing activities was $228.6 million for the year ended December 31, 2024, compared to $23.2 million for the year ended December 31, 2023.
We had net income of $34.3 million, or $0.77 per diluted share, for the year ended December 31, 2023, compared to net income of $73.0 million, or $1.44 per diluted share, for the year ended December 31, 2022.
We had net income of $323.0 million, or $7.77 per diluted share, for the year ended December 31, 2024, compared to net income of $34.3 million, or $0.77 per diluted share, for the year ended December 31, 2023.
Financial Highlights We had total operating revenues of $2.9 billion for the year ended December 31, 2023, a 2.3% decrease compared to total operating revenues of $3.0 billion for the year ended December 31, 2022.
Financial Highlights We had total operating revenues of $3.5 billion for the year ended December 31, 2024, a 20.2% increase compared to total operating revenues of $2.9 billion for the year ended December 31, 2023.
Our primary objective in the fleet changes is to improve our profitability by adding new E175 aircraft and used CRJ aircraft to capacity purchase agreements, and potentially removing older aircraft from service that typically require higher maintenance costs.
Our primary objective in the fleet changes is to improve our profitability by adding new E175 aircraft and used CRJ700, CRJ550, CRJ900 and E175 aircraft, commonly referred to as “ dual-class CRJ aircraft,” to capacity purchase agreements or prorate agreements, and potentially removing older aircraft from service that typically require higher maintenance costs.
Cash Flows provided by (used in) Financing Activities Our cash flows used in financing activities was $667.8 million for the year ended December 31, 2023, compared to cash provided by financing activities of $269.1 million for the year ended December 31, 2022.
Cash Flows used in Financing Activities Our cash flows used in financing activities was $384.8 million for the year ended December 31, 2024, compared to cash used in financing activities of $667.8 million for the year ended December 31, 2023.
The increase in other income (loss), net was primarily an increase in gains from the sale of assets, partially offset by a decrease in unrealized gains on our investments in other companies for the year ended December 31, 2023, compared to the year ended December 31, 2022. Provision for income taxes.
The decrease in other income, net was primarily due to a decrease in gains from the sale of assets and a decrease in unrealized gains on our investments in other companies for the year ended December 31, 2024, compared to the year ended December 31, 2023. Provision for income taxes.
We recognize revenue attributed to the non-lease component received as fixed monthly payments per aircraft proportionate to the number of block hours completed during each reporting period, relative to the estimated number of block hours we anticipate completing over the remaining contract term. In 2023, we deferred $151.4 million of fixed monthly payments and unbilled revenue decreased by $12.6 million.
We recognize revenue attributed to the non-lease component received as fixed monthly payments per aircraft proportionate to the number of block hours completed during each reporting period, relative to the estimated number of block hours we anticipate completing over the remaining contract term.
Based on the number of completed block hours during the year ended December 31, 2023, we deferred recognizing $164.0 million of revenue, net of unbilled revenue, related to fixed monthly payments we received associated with our flight operations revenues.
Based on the number of completed block hours during the year ended December 31, 2024, we recognized $43.4 million of previously deferred revenue, net of unbilled revenue, related to the non-lease fixed monthly payments we received associated with our flight operations revenues.
Under our capacity purchase agreements, a portion of the consideration we are paid is designed as reimbursement for certain aircraft ownership costs and is considered lease revenue. Recent amendments to our capacity purchase agreements with certain major airline partners reduced certain future contractual fixed monthly payments and increased future contractual variable payments.
Under our capacity purchase agreements, a portion of the consideration we are paid is designed as reimbursement for certain aircraft ownership costs and is considered lease revenue, including fixed monthly payments and variable payments.
SkyWest Airlines and SWC operating revenues decreased $100.1 million, or 4.0%, from 2022 to 2023. SkyWest Airlines recognizes revenue attributed to flight operations received as fixed monthly payments per aircraft proportionate to the number of block hours completed during each reporting period, relative to the estimated number of block hours we anticipate completing over the remaining contract term.
SkyWest Airlines recognizes revenue attributed to flight operations received as fixed monthly payments per aircraft proportionate to the number of block hours completed during each reporting period, relative to the estimated number of block hours we anticipate completing over the remaining contract term.
For the year ended December 31, 2022, we recognized $7.2 million of previously deferred revenue, net of unbilled revenue, related to fixed monthly payments received associated with our flight operations revenues.
For the year ended December 31, 2023, we deferred recognizing $164.0 million of revenue, net of unbilled revenue, related to the non-lease fixed monthly payments received associated with our flight operations revenues.
Our total of cash, cash equivalents and marketable securities decreased from $1.0 billion as of December 31, 2022, to $835.2 million as of December 31, 2023, or by $212.0 million.
Our total of cash, cash equivalents and marketable securities decreased from $835.2 million as of December 31, 2023, to $801.6 million as of December 31, 2024, or by $33.6 million.
Timing of these anticipated deliveries may be subject to change as we are coordinating with our major airline partners in response to labor availability or other factors.
Timing of placing these additional aircraft into service, including delivery timing on acquired aircraft, may be subject to change as we are coordinating with our major airline partners in response to labor availability or other factors.
Operating Expenses Our total operating expenses increased $7.6 million, or 0.3%, for the year ended December 31, 2023, compared to the year ended December 31, 2022.
Operating Expenses Our total operating expenses increased $201.9 million, or 7.1%, for the year ended December 31, 2024, compared to the year ended December 31, 2023.
Liquidity and Capital Resources As of December 31, 2023, we had $835.2 billion in cash, cash equivalents and marketable securities and $70.8 million available for borrowings under our line of credit.
Liquidity and Capital Resources As of December 31, 2024, we had $801.6 million in cash, cash equivalents and marketable securities and $75.1 million available for borrowings under our line of credit.
For the year ended December 31, 2023, approximately 40.8% of our aircraft in scheduled service or under contract were operated for United, approximately 27.8% were operated for Delta, approximately 22.7% were operated for American and approximately 8.7% were operated for Alaska.
For the year ended December 31, 2024, approximately 43.9% of our aircraft in scheduled service or under contract were operated for United, approximately 29.1% were operated for Delta, approximately 18.5% were operated for American and approximately 8.5% were operated for Alaska.
The following table summarizes the gallons of fuel we purchased under our prorate agreements and SWC, for the periods indicated: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the year ended December 31, (in thousands) 2023 2022 % Change Fuel gallons purchased ​ ​ 23,198 ​ ​ 26,218 ​ (11.5) % Fuel expense ​ $ 85,913 ​ $ 108,456 (20.8) % Airport-related expenses .
The following table summarizes the gallons of fuel we purchased under our prorate agreements and SWC, for the periods indicated: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the year ended December 31, (in thousands) 2024 2023 % Change Fuel gallons purchased ​ ​ 27,386 ​ ​ 23,198 ​ 18.1 % Fuel expense ​ $ 87,409 ​ $ 85,913 1.7 % Airport-related expenses .
As a result of these amendments, we deferred recognizing lease revenue on $78.5 million of the allocated fixed monthly lease payments received during the year ended December 31, 2023, under the straight-line method. Additionally, a portion of our compensation under our capacity purchase agreements relates to operating the aircraft, identified as the non-lease component of the capacity purchase agreement.
We recognized $1.5 million of previously deferred lease revenue during the year ended December 31, 2024, under the straight-line basis. Additionally, a portion of our compensation under our capacity purchase agreements relates to operating the aircraft, identified as the non-lease component of the capacity purchase agreement.
We deferred recognizing lease revenue on $22.1 million of the allocated fixed monthly lease payments received during the year ended December 31, 2022, under the straight-line method. The deferred revenue balance applicable to each contract will be recorded as revenue over the term of each respective contract.
We recognized $1.5 million of previously deferred lease revenue during the year ended December 31, 2024, using the straight-line basis for fixed monthly lease payments, whereas we deferred recognizing $78.5 million during the year ended December 31, 2023. The deferred revenue balance applicable to each contract will be recorded as revenue over the term of each respective contract.
Interest income. Interest income increased $26.3 million, from $17.6 million during the year ended December 31, 2022, to $43.9 million during the year ended December 31, 2023. Our interest income increased primarily from an increase in average interest rates attributed to our marketable securities for the year ended December 31, 2023, compared to the year ended December 31, 2022.
Our interest income increased primarily from an increase in average interest rates attributed to our marketable securities for the year ended December 31, 2024, compared to the year ended December 31, 2023. Other income, net. Other income, net decreased $19.4 million in 2024, compared to 2023.
Additional details regarding the increase in our operating expenses are described in the section of this Report entitled “Results of Operations.” Fleet Activity The following table summarizes our fleet activity for 2023: ​ ​ ​ ​ ​ ​ ​ ​ ​ Aircraft in Service or Under Contract December 31, 2022 Additions Removals ​ December 31, 2023 E175s 236 ​ 2 ​ (1) ​ 237 CRJ900s 41 ​ 6 ​ (6) ​ 41 CRJ700s 104 ​ 14 ​ — ​ 118 CRJ200s 136 ​ — ​ (47) ​ 89 Total 517 22 (54) ​ 485 During 2023, we took delivery of two new E175 aircraft and placed the aircraft into service under a capacity purchase agreement, and we returned one leased E175 to the major airline partner that financed the aircraft.
Additional details regarding the increase in our operating expenses are described in the section of this Report entitled “Results of Operations.” Fleet Activity The following table summarizes our fleet scheduled for service or under contract as of 2024: ​ ​ ​ ​ ​ ​ ​ ​ ​ Aircraft in Service or Under Contract December 31, 2023 Additions Removals ​ December 31, 2024 E175s 237 ​ 25 ​ — ​ 262 CRJ900s 41 ​ — ​ (5) ​ 36 CRJ700/CRJ550s 118 ​ 23 ​ (22) ​ 119 CRJ200s 89 ​ — ​ (14) ​ 75 Total 485 48 (41) ​ 492 During 2024, we took delivery of five new E175 aircraft and placed the aircraft into service under capacity purchase agreements and we placed 20 partner-financed E175 aircraft into service under a capacity purchase agreement.
The $22.5 million, or 20.8%, decrease in fuel cost was primarily due to a decrease in the number of flights we operated under our prorate arrangements and the corresponding decrease in gallons of fuel we purchased, combined with a decrease in our average fuel cost per gallon from $4.14 in 2022 to $3.70 in 2023.
The $1.5 million, or 1.7%, increase in fuel cost was primarily due to an increase in the number of flights we operated under our prorate agreements and under SWC and the corresponding increase in gallons of fuel we purchased, offset by a decrease in our average fuel cost per gallon from $3.70 in 2023 to $3.19 in 2024.
More specifically, the SkyWest Leasing segment includes an allocation of revenue from our capacity purchase agreements attributed to our financing of new aircraft through debt and cash covered under such agreements, and the respective depreciation and interest expense of such financed aircraft.
The SkyWest Leasing segment includes applicable revenue earned under the applicable capacity purchase agreements attributed to the ownership of new aircraft acquired through the issuance of debt and the respective depreciation and interest expense of such aircraft.
Our capacity purchase revenue decreased $97.5 million, or 3.8%, from 2022 to 2023, primarily as a result of a reduction in completed block hours for the year ended December 31, 2023, compared to the year ended December 31, 2022, and amendments to certain capacity purchase agreements since 2022 that resulted in deferring the recognition of revenue on fixed monthly payments we received during the year ended December 31, 2023.
Our capacity purchase revenue increased $502.4 million, or 20.5%, from 2023 to 2024, primarily as a result of an increase in completed block hours for the comparable period and recognizing previously deferred revenue for the year ended December 31, 2024, compared to deferring the recognition of revenue on fixed monthly payments we received during the year ended December 31, 2023.
Long-term Debt Obligations As of December 31, 2023, we had $3.0 billion of long-term debt, which consisted of $2.8 billion of debt used to finance aircraft and spare engines and $200.6 million of unsecured debt payable to Treasury.
Long-term Debt Obligations As of December 31, 2024, we had $2.7 billion of long-term debt, which consisted of $2.5 billion of debt used to finance aircraft and spare engines and $200.6 million of unsecured debt payable to Treasury. The average effective interest rate on our debt obligations was approximately 4.2% at December 31, 2024.
Other income (loss), net. Other income (loss), net increased $2.3 million in 2023, compared to 2022. Other income (loss), net primarily consists of the realized and unrealized gains or losses on our investments in other companies, income related to our investment in a joint venture with a third party and gains or losses on the sale of assets.
Other income, net primarily consists of the realized and unrealized gains or losses on our investments in other companies, income or loss related to our equity method investments and gains or losses on the sale of assets.
As of December 31, 2023, we had 603 total aircraft in our fleet, including 485 aircraft in scheduled service or under contract under our code-share agreements, summarized as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ E175 CRJ900 CRJ700 CRJ200 Total United 90 ​ — ​ 19 ​ 89 ​ 198 Delta ​ 85 ​ 41 ​ 9 ​ — ​ 135 American 20 ​ — ​ 90 ​ — ​ 110 Alaska 42 ​ — ​ — ​ — ​ 42 Aircraft in scheduled service or under contract ​ 237 ​ 41 ​ 118 ​ 89 ​ 485 SWC ​ — ​ — ​ — ​ 16 ​ 16 Leased to third parties — ​ 5 ​ 35 ​ — ​ 40 Other (1) — ​ 3 ​ 14 ​ 45 ​ 62 Total Fleet 237 ​ 49 ​ 167 ​ 150 ​ 603 (1) As of December 31, 2023, other aircraft included: supplemental spare aircraft supporting our code-share agreements that may be placed under future code-share or leasing arrangements, aircraft transitioning between code-share agreements with our major airline partners, aircraft held-for-sale or aircraft that are scheduled to be disassembled for use as spare parts.
As of December 31, 2024, we had 624 total aircraft in our fleet, including 492 aircraft in scheduled service or under contract pursuant to our code-share agreements, summarized as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ E175 CRJ900 CRJ700/CRJ550 CRJ200 Total United 114 ​ — ​ 27 ​ 75 ​ 216 Delta ​ 86 ​ 36 ​ 21 ​ — ​ 143 American 20 ​ — ​ 71 ​ — ​ 91 Alaska 42 ​ — ​ — ​ — ​ 42 Aircraft in scheduled service or under contract ​ 262 ​ 36 ​ 119 ​ 75 ​ 492 SWC ​ — ​ — ​ — ​ 18 ​ 18 Leased to third parties — ​ 5 ​ 35 ​ — ​ 40 Other (1) — ​ 8 ​ 20 ​ 46 ​ 74 Total Fleet 262 ​ 49 ​ 174 ​ 139 ​ 624 (1) As of December 31, 2024, other aircraft included: supplemental spare aircraft supporting our code-share agreements that may be placed under future code-share or leasing arrangements, aircraft transitioning between code-share agreements with our major airline partners or aircraft that are scheduled to be disassembled for use as spare parts.
The decrease in block hours and departures during the year ended December 31, 2023, compared to the year ended December 31, 2022, was primarily due to labor constraints, including a smaller number of available captains in 2023, compared to 2022. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the year ended December 31, Block hours by aircraft type: 2023 2022 % Change E175s 677,886 ​ 635,039 ​ 6.7 % CRJ900s ​ 76,588 ​ 101,662 ​ (24.7) % CRJ700s ​ 218,059 ​ 261,036 ​ (16.5) % CRJ200s 167,910 ​ 256,655 ​ (34.6) % Total block hours ​ 1,140,443 ​ 1,254,392 ​ (9.1) % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Departures 691,962 ​ 739,388 ​ (6.4) % Passengers carried 38,597,309 ​ 40,064,689 ​ (3.7) % Passenger load factor 83.6 % 83.4 % 0.2 pts Average passenger trip length (miles) 453 ​ 493 ​ (8.1) % Operating Revenues The following table summarizes our operating revenue for the periods indicated (dollar amounts in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the year ended December 31, ​ 2023 2022 $ Change % Change Flying agreements ​ $ 2,834,397 ​ $ 2,899,837 ​ $ (65,440) ​ (2.3) % Lease, airport services and other ​ 101,035 ​ 105,088 ​ (4,053) ​ (3.9) % Total operating revenues ​ $ 2,935,432 ​ $ 3,004,925 ​ $ (69,493) (2.3) % 34 Table of Contents Flying agreements revenue primarily consists of revenue earned on flights we operate under our capacity purchase agreements and prorate agreements with our major airline partners and SWC flights.
The increase in block hours, departures and passengers carried during the year ended December 31, 2024, compared to the year ended December 31, 2023, w as primarily due to an increase in the number of available captains during 2024, compared to 2023, which allowed for a higher scheduled utilization of our aircraft. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the year ended December 31, Block hours by aircraft type: 2024 2023 % Change E175s 792,318 ​ 677,886 ​ 16.9 % CRJ900s ​ 84,883 ​ 76,588 ​ 10.8 % CRJ700s ​ 244,909 ​ 218,059 ​ 12.3 % CRJ200s 169,930 ​ 167,910 ​ 1.2 % Total block hours ​ 1,292,040 ​ 1,140,443 ​ 13.3 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Departures 766,742 ​ 691,962 ​ 10.8 % Passengers carried 42,335,302 ​ 38,597,309 ​ 9.7 % Passenger load factor 82.8 % 83.6 % (0.8) pts Average passenger trip length (miles) 464 ​ 453 ​ 2.4 % Operating Revenues The following table summarizes our operating revenue for the periods indicated (dollar amounts in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the year ended December 31, ​ 2024 2023 $ Change % Change Flying agreements ​ $ 3,412,798 ​ $ 2,834,397 ​ $ 578,401 ​ 20.4 % Lease, airport services and other ​ 115,122 ​ 101,035 ​ 14,087 ​ 13.9 % Total operating revenues ​ $ 3,527,920 ​ $ 2,935,432 ​ $ 592,488 20.2 % 34 Table of Contents Flying agreements revenue primarily consists of revenue earned on flights we operate under our capacity purchase agreements and prorate agreements with our major airline partners and on-demand charter flights.
The increase in our cash flow from operations for the year ended December 31, 2023, compared to the year ended December 31, 2022, was primarily due to an increased amount of cash received in excess of revenue recognized for the year ended December 31, 2023, compared to the year ended December 31, 2022, and an increase in our accounts payable due to timing of vendor payments, compared to the year ended December 31, 2022.
The decrease in our cash flow from operations for the year ended December 31, 2024, compared to the year ended December 31, 2023, was primarily due to the timing of cash payments on our current liability accounts, timing of cash receipts on our accounts receivables and a decrease in cash received in excess of revenue recognized for the year ended December 31, 2024, compared to the year ended December 31, 2023, offset by an increase in net income, adjusted for non-cash items and deferred income taxes, for the year ended December 31, 2024, compared to the year ended December 31, 2023.
We disaggregate our flying agreements revenue into the following categories (dollar amounts in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the year ended December 31, ​ ​ 2023 ​ 2022 ​ $ Change ​ % Change Capacity purchase agreements flight operations revenue $ 1,976,743 $ 2,028,308 $ (51,565) (2.5) % Capacity purchase agreements aircraft lease revenue ​ 476,265 ​ 522,193 ​ (45,928) (8.8) % Prorate agreements and SWC revenue ​ 381,389 ​ ​ 349,336 ​ ​ 32,053 9.2 % Flying agreements revenue ​ $ 2,834,397 ​ $ 2,899,837 ​ $ (65,440) (2.3) % The decrease in “Capacity purchase agreements flight operations revenue” of $51.6 million, or 2.5%, was primarily due to an increase in deferred revenue related to fixed monthly payments for flight operations received under our capacity purchase agreements for the year ended December 31, 2023, compared to the year ended December 31, 2022.
We disaggregate our flying agreements revenue into the following categories (dollar amounts in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the year ended December 31, ​ ​ 2024 ​ 2023 ​ $ Change ​ % Change Capacity purchase agreements flight operations revenue $ 2,415,598 $ 1,976,743 $ 438,855 22.2 % Capacity purchase agreements aircraft lease revenue ​ 539,810 ​ 476,265 ​ 63,545 13.3 % Prorate agreements and SWC revenue ​ 457,390 ​ ​ 381,389 ​ ​ 76,001 19.9 % Flying agreements revenue ​ $ 3,412,798 ​ $ 2,834,397 ​ $ 578,401 20.4 % The increase in “Capacity purchase agreements flight operations revenue” of $438.9 million, or 22.2%, was primarily due to a 13.3% increase in block hour production and a decrease in deferred revenue related to fixed monthly payments for flight operations received under our capacity purchase agreements for the year ended December 31, 2024, compared to the year ended December 31, 2023.
As a result of these amendments, which decreased the future scheduled fixed monthly lease payments, the SkyWest Leasing segment deferred recognizing lease revenue on $78.5 million of the allocated fixed monthly lease payments received during the year ended December 31, 2023, compared to deferring $22.1 million of lease revenue during the year ended December 31, 2022, under the straight-line method.
For the year ended December 31, 2024, SkyWest Leasing recognized $1.5 million of previously deferred lease revenue, compared to deferring $78.5 million of lease revenue on the fixed monthly lease payments received for the year ended December 31, 2023, under the straight-line basis.
The increase in prorate agreements and SWC revenue of $32.1 million, or 9.2%, was primarily due to an increase in EAS subsidies we received on certain prorate routes and an increase in passenger fares offset by the decrease in the number of flights we operated under our prorate agreements, resulting in fewer prorate passengers during 2023, compared to 2022.
The increase in prorate agreements and SWC revenue of $76.0 million, or 19.9%, was primarily due to an increase in prorate passengers and passenger revenue we received on routes we operated under our prorate agreements during the year ended December 31, 2024, compared to the year ended December 31, 2023.
Corporate overhead expenses, primarily consisting of administrative labor costs, were allocated to the operating expenses of SkyWest Airlines and SWC and SkyWest Leasing. Overhead expenses allocated to SkyWest Leasing reflect our estimated labor expense incurred to support SkyWest Leasing activities.
Overhead expenses allocated to SkyWest Leasing reflect our estimated labor expense incurred to support SkyWest Leasing activities.
Aircraft Lease and Facility Obligations We also have long-term lease obligations, primarily relating to our aircraft fleet and airport facilities. Excluding aircraft financed by our major airline partners that we operate for them under contract, we had eight aircraft under lease with remaining terms ranging from five to seven years as of December 31, 2023.
Excluding aircraft financed by our major airline partners that we operate for them under contract, we had eight aircraft under lease with remaining terms ranging from four to six years as of December 31, 2024. These eight leased aircraft are subleased to a third party.
We transitioned six CRJ900 aircraft from a capacity purchase agreement with a major airline partner to a prorate agreement. We redeployed 14 SkyWest owned CRJ700 aircraft into service under a capacity purchase agreement and a prorate agreement. We also removed 47 CRJ200 aircraft from service during 2023. We are evaluating alternative uses for the CRJ200 aircraft removed from service.
We placed 23 SkyWest owned CRJ550 aircraft into service under a capacity purchase agreement or prorate agreement, while removing 22 CRJ700 aircraft from flying agreements. We also removed 14 CRJ200 aircraft from service during 2024. We are evaluating alternative uses for the CRJ200 aircraft removed from service.
The number of aircraft we have in scheduled service or under contract under code-share agreements decreased from 517 as of December 31, 2022, to 485 as of December 31, 2023, or by 6.2%; the number of block hours decreased from 1.25 million in 2022 to 1.14 million in 2023, or by 9.1%.
The number of aircraft we have in scheduled service or under contract pursuant to our code-share agreements increased from 485 as of December 31, 2023, to 492 as of December 31, 2024, or by 1.4%; and the number of block hours increased from 1.14 million in 2023 to 1.29 million in 2024, or by 13.3%, due to an increase in scheduled daily utilization of our aircraft driven by an increase in the number of available captains.
For the year ended December 31, 2023, the decrease in our effective tax rate primarily related to a benefit of $7.6 million for the release of a previously recorded uncertain tax position liability and a $1.1 million benefit for the release of valuation allowance against certain deferred tax assets associated with state net operating losses with a limited carry forward period.
For the year ended December 31, 2023, the lower effective tax rate was primarily related to a benefit of $7.6 million for the release of a previously recorded uncertain tax position liability.
Operating Expenses Individual expense components attributable to our operations are set forth in the following table (dollar amounts in thousands). ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the year ended December 31, ​ ​ 2023 ​ 2022 ​ $ Change ​ % Change Salaries, wages and benefits ​ $ 1,322,615 ​ $ 1,211,551 ​ $ 111,064 ​ 9.2 % Aircraft maintenance, materials and repairs ​ 673,453 ​ 644,157 ​ 29,296 4.5 % Depreciation and amortization ​ 383,115 ​ 394,552 ​ (11,437) (2.9) % Aircraft fuel ​ 85,913 ​ 108,456 ​ (22,543) (20.8) % Airport-related expenses ​ 72,640 ​ 71,549 ​ 1,091 1.5 % Aircraft rentals ​ 25,507 ​ 75,353 ​ (49,846) (66.1) % Other operating expenses ​ 268,120 ​ 318,145 ​ (50,025) (15.7) % Total operating expenses ​ $ 2,831,363 ​ $ 2,823,763 ​ $ 7,600 0.3 % ​ Salaries, wages and benefits.
Operating Expenses Individual expense components attributable to our operations are set forth in the following table (dollar amounts in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the year ended December 31, ​ ​ 2024 ​ 2023 ​ $ Change ​ % Change Salaries, wages and benefits ​ $ 1,463,932 ​ $ 1,322,615 ​ $ 141,317 ​ 10.7 % Aircraft maintenance, materials and repairs ​ 712,642 ​ 673,453 ​ 39,189 5.8 % Depreciation and amortization ​ 383,880 ​ 383,115 ​ 765 0.2 % Aircraft fuel ​ 87,409 ​ 85,913 ​ 1,496 1.7 % Airport-related expenses ​ 85,836 ​ 72,640 ​ 13,196 18.2 % Aircraft rentals ​ 5,257 ​ 25,507 ​ (20,250) (79.4) % Other operating expenses ​ 294,307 ​ 268,120 ​ 26,187 9.8 % Total operating expenses ​ $ 3,033,263 ​ $ 2,831,363 ​ $ 201,900 7.1 % ​ Salaries, wages and benefits.
SkyWest Airlines and SWC Segment Loss. SkyWest Airlines and SWC segment loss was $191.8 million for the year ended December 31, 2023, compared to a segment loss of $45.6 million for the year ended December 31, 2022. Significant items contributing to the SkyWest Airlines and SWC segment loss are set forth below.
SkyWest Airlines and SWC segment profit was $138.9 million for the year ended December 31, 2024, compared to a segment loss of $165.2 million for the year ended December 31, 2023.
The average effective interest rate on our debt obligations was approximately 4.1% at December 31, 2023. 41 Table of Contents Under our capacity purchase agreements, our major airline partners compensate us for our costs of owning or leasing the aircraft on a monthly basis.
Under our capacity purchase agreements, our major airline partners compensate us for our costs of owning the aircraft on a monthly basis.
Our success is principally centered on our ability to meet the needs of our major airline partners through providing a reliable and safe operation at attractive economics.
Our success is principally centered on our ability to meet the needs of our major airline partners by providing a reliable and safe operation at attractive economics. During the year 32 Table of Contents ended December 31, 2024, we made changes to our fleet, including the addition of five new E175 aircraft and 20 partner-financed E175 aircraft.
Additionally, aircraft removed from SkyWest Airlines operations and held for sale are included in the SkyWest Leasing segment. 37 Table of Contents The SkyWest Airlines and SWC segment includes all other revenue and operating expenses attributed to operating aircraft under our capacity purchase agreements and all revenue and operating expenses attributed to our prorate agreements, airport service agreements and charter flight services.
Additionally, aircraft removed from SkyWest Airlines operations and held for sale are included in the SkyWest Leasing segment. 37 Table of Contents Corporate overhead expenses, primarily consisting of administrative labor costs, were allocated to the operating expenses of SkyWest Airlines and SWC and SkyWest Leasing.
Purchase Commitments and Options We are coordinating with our major airline partners and aircraft manufacturers on the timing of upcoming fleet deliveries under previously announced deals. The anticipated future aircraft delivery dates are subject to change. As of December 31, 2023, we had a firm purchase commitment for 21 new E175 aircraft from Embraer with delivery dates anticipated into 2026.
The anticipated future aircraft delivery dates are subject to change. As of December 31, 2024, we had a firm purchase commitment for 16 new E175 aircraft from Embraer with delivery dates anticipated into 2026. We also have a firm purchase commitment to purchase four used CRJ550 aircraft with anticipated delivery dates in 2025.
The following table provides a summary of the net cash provided by (used in) our operating, investing and financing activities for the years ended December 31, 2023 and 2022, and our total cash and marketable securities positions as of December 31, 2023 and December 31, 2022 (in thousands). ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the year ended December 31, ​ 2023 2022 $ Change % Change Net cash provided by operating activities ​ $ 736,334 ​ $ 480,376 ​ $ 255,958 ​ 53.3 % Net cash used in investing activities ​ (23,228) ​ (904,894) ​ 881,666 (97.4) % Net cash provided by (used in) financing activities ​ (667,813) ​ 269,081 ​ (936,894) (348.2) % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, December 31, ​ ​ ​ ​ ​ 2023 ​ 2022 ​ $ Change ​ % Change Cash and cash equivalents ​ $ 148,277 ​ $ 102,984 ​ $ 45,293 44.0 % Marketable securities ​ 686,946 ​ 944,231 ​ (257,285) (27.2) % Total ​ $ 835,223 ​ $ 1,047,215 ​ $ (211,992) (20.2) % ​ Cash Flows provided by Operating Activities Our cash flows provided by operating activities was $736.3 million for the year ended December 31, 2023, compared to $480.4 million for the year ended December 31, 2022.
The following table provides a summary of the net cash provided by (used in) our operating, investing and financing activities for the years ended December 31, 2024 and 2023, and our total cash and marketable securities positions as of December 31, 2024 and December 31, 2023 (in thousands). ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the year ended December 31, ​ 2024 2023 $ Change % Change Net cash provided by operating activities ​ $ 692,462 ​ $ 736,334 ​ $ (43,872) ​ (6.0) % Net cash used in investing activities ​ (228,627) ​ (23,228) ​ (205,399) 884.3 % Net cash used in financing activities ​ (384,750) ​ (667,813) ​ 283,063 (42.4) % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, December 31, ​ ​ ​ ​ ​ 2024 ​ 2023 ​ $ Change ​ % Change Cash and cash equivalents ​ $ 227,362 ​ $ 148,277 ​ $ 79,085 53.3 % Marketable securities ​ 574,266 ​ 686,946 ​ (112,680) (16.4) % Total ​ $ 801,628 ​ $ 835,223 ​ $ (33,595) (4.0) % ​ Cash Flows provided by Operating Activities Our cash flows provided by operating activities was $692.5 million for the year ended December 31, 2024, compared to $736.3 million for the year ended December 31, 2023.
Additionally, the decrease in SkyWest Airlines and SWC operating revenues was also attributed to a decrease in block hour production from 1,254,392 for the year ended December 31, 2022, to 1,140,443 for the year ended December 31, 2022, primarily due to labor constraints, including the number of available captains.
SkyWest Airlines and SWC block hour production increased 13.3%, from 1,140,443 for the year ended December 31, 2023 to 1,292,040 for the year ended December 31, 2024, primarily due to an increase in the number of available captains, which allowed for a higher scheduled utilization of our aircraft.
This reduction in depreciation on our CRJ fleet was partially offset by an increase in depreciation expense due to the acquisition of two new E175 aircraft and spare engines in 2023. Aircraft fuel.
The $0.8 million, or 0.2%, increase in depreciation and amortization expense was primarily due to an increase in depreciation expense related to the acquisition of five new E175 aircraft and spare engines since December 31, 2023, significantly offset by lower depreciation on our older CRJ fleet that reached our previously estimated useful life estimates during the 2024 year. Aircraft fuel.
The $1.1 million, or 1.5%, increase in airport-related expenses for the year ended December 31, 2023, compared to the year ended December 31, 2022, was primarily due to an increase in subcontracted airport services. Aircraft rentals.
The $13.2 million, or 18.2%, increase in airport-related expenses for the year ended December 31, 2024, compared to the year ended December 31, 2023, was primarily due to an increase in subcontracted airport services, weather related aircraft deicing costs and landing fees as a result of an increase in the number of flights we operated under our prorate agreements. 36 Table of Contents Aircraft rentals.
Our financing cash flows are typically impacted by various factors including proceeds from issuance of debt, principal payments on debt obligations, repurchases of our common stock and payment of cash dividends. 40 Table of Contents The $936.9 million increase in cash used in financing activities for the year ended December 31, 2023, compared to the year ended December 31, 2022, was primarily due to a decrease of $614.8 million in proceeds from the issuance of long-term debt, an increase of $32.6 million in principal payments on long-term debt and $291.9 million of cash used to purchase treasury stock, including a $2.8 million excise tax on the repurchased stock, during the year ended December 31, 2023.
The $283.1 million decrease in cash used in financing activities for the year ended December 31, 2024, compared to the year ended December 31, 2023, w as primarily due to a decrease of $248.6 million in cash used to purchase treasury stock and an increase of $46.5 million in proceeds from the issuance of long-term debt, offset by an increase of $5.3 million in principal payments on long-term debt and an increase of $6.3 million for employee income taxes paid on vested equity awards during the year ended December 31, 2024, compared to the year ended December 31, 2023.
The $111.1 million, or 9.2%, increase in salaries, wages and benefits was due to an increase in employee compensation, including higher pilot pay scales, for the year ended December 31, 2023, compared to the year ended December 31, 2022. Aircraft maintenance, materials and repairs.
The $141.3 million, or 10.7%, increase in salaries, wages and benefits was due to an increase in direct labor costs that resulted from the higher number of flights we operated during the year ended December 31, 2024, compared to the year ended December 31, 2023. Aircraft maintenance, materials and repairs.
The $3.8 million, or 3.0%, increase in interest expense was primarily related to higher fixed interest rates on debt issued since December 31, 2022, partially offset by a decrease in outstanding debt from $3.4 billion at December 31, 2022 to $3.0 billion at December 31, 2023. Our average effective interest rate for 2023 and 2022 was 4.1% and 4.0%, respectively.
Summary of interest expense, interest income, other income (expense) and provision for income taxes: Interest Expense. The $16.6 million, or 12.7%, decrease in interest expense was primarily related to a decrease in outstanding debt from $3.0 billion at December 31, 2023 to $2.7 billion at December 31, 2024.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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A hypothetical 50 basis point change in market interest rates would not have a material effect on our financial results. Labor and Inflation Risk The global economy has experienced, and continues to experience high rates of inflation.
As such, a hypothetical 50 basis point change in market interest rates would not have a material effect on our financial results. Labor and Inflation Risk The global economy has experienced, and continues to experience high rates of inflation.
Pursuant to our contract flying arrangements, United, Delta, American and Alaska have agreed to bear the economic risk of fuel price fluctuations on our contracted flights. We bear the economic risk of fuel price fluctuations on our prorate and SWC operations.
Pursuant to our contract flying agreements, United, Delta, American and Alaska have agreed to bear the economic risk of fuel price fluctuations on our contracted flights. We bear the economic risk of fuel price fluctuations on our prorate and SWC operations.
As a result, our costs have become, and we expect they will continue to be, subject to significant inflationary pressures, and we may not be able to fully offset such higher costs through price increases under our capacity purchase agreements. Salaries, wages and benefits expense represented 46.7% of our total operating expense for year ended December 31, 2023.
As a result, our costs have become, and we expect they will continue to be, subject to inflationary pressures, and we may not be able to fully offset such higher costs through price increases under our capacity purchase agreements. Salaries, wages and benefits expense represented 48.3% of our total operating expense for year ended December 31, 2024.
For each of the years ended December 31, 2023, 2022 and 2021, approximately 13%, 12% and 16% of our total flying agreements revenue was derived from prorate agreements and SWC. For the years ended December 31, 2023, 2022 and 2021, the average price per gallon of aircraft fuel was $3.70, $4.14 and $2.49, respectively.
For each of the years ended December 31, 2024, 2023 and 2022, approximately 13%, 13% and 12% of our total flying agreements revenue was derived from prorate agreements and SWC. For the years ended December 31, 2024, 2023 and 2022, the average price per gallon of aircraft fuel was $3.19, $3.70 and $4.14, respectively.
For illustrative purposes, a hypothetical increase of 25% to our salaries, wages and benefits during the year ended December 31, 2023, would have increased our operating expenses by approximately $330.7 million. Our inability or failure to offset a material increase in costs due to inflation and/or labor costs could harm our business, financial condition and operating results.
For illustrative purposes, a hypothetical increase of 25% to our salaries, wages and benefits during the year ended December 31, 2024, would have increased our operating expenses by approximately $366.0 million. 44 Table of Contents Our inability or failure to offset a material increase in costs due to inflation and/or labor costs could harm our business, financial condition and operating results.
Based on this hypothetical assumption, we would have incurred an additional $21.5 million, $27.1 million and $26.8 million in fuel expense for the years ended December 31, 2023, 2022 and 2021, respectively. Interest Rates As of December 31, 2023, our long-term debt had fixed interest rates.
Based on this hypothetical assumption, we would have incurred an additional $21.9 million, $21.5 million and $27.1 million in fuel expense for the years ended December 31, 2024, 2023 and 2022, respectively. Interest Rates As of December 31, 2024, our long-term debt had fixed interest rates. We currently intend to finance the acquisition of aircraft through long-term debt.
We currently intend to finance the acquisition of aircraft through manufacturer financing or long-term borrowings. Changes in interest rates may impact our actual cost to acquire future aircraft.
Changes in interest rates may impact our actual cost to acquire future aircraft.

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