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What changed in SKYWEST INC's 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of SKYWEST INC's 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+304 added−315 removedSource: 10-K (2026-02-17) vs 10-K (2025-02-13)

Top changes in SKYWEST INC's 2025 10-K

304 paragraphs added · 315 removed · 271 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

54 edited+8 added−10 removed71 unchanged
Biggest changeUnited 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.
Biggest changeThe following summaries of our code-share agreements with our major airline partners do not purport to be complete and are qualified in their entirety by reference to the applicable agreement. 7 Table of Contents ​ ​ ​ ​ ​ ​ ​ United Express Agreements ​ ​ ​ ​ ​ ​ Agreement ​ Aircraft type ​ Number of Aircraft ​ Term / Termination Dates United Express Agreements ​ • E175 ​ 121 ​ Individual aircraft have scheduled (capacity purchase agreements) ​ • CRJ700/CRJ550 ​ 37 ​ removal dates under the agreements ​ ​ • CRJ200 ​ 30 ​ between 2026 and 2033 ​ ​ ​ ​ ​ ​ ​ United Express Prorate Agreement ​ • CRJ200 ​ 28* ​ Terminable with 120-day notice Total under United Express Agreements ​ ​ ​ 216 ​ ​ ​ ​ ​ ​ ​ ​ ​ Delta Connection Agreements ​ ​ ​ ​ ​ ​ Agreement ​ Aircraft type ​ Number of Aircraft ​ Term / Termination Dates Delta Connection Agreement ​ • E175 ​ 87 ​ Individual aircraft have scheduled (capacity purchase agreement) ​ • CRJ900 ​ 32 ​ removal dates under the agreement ​ ​ • CRJ700 ​ 4 ​ between 2026 and 2034 ​ ​ ​ ​ ​ ​ ​ Delta Connection Prorate Agreement ​ • CRJ550 ​ 14* ​ Terminable with 30-day notice Total under Delta Connection Agreements ​ ​ ​ 137 ​ ​ ​ ​ ​ ​ ​ ​ ​ American Agreements ​ ​ ​ ​ ​ ​ Agreement ​ Aircraft type ​ Number of Aircraft ​ Term / Termination Dates American Agreement ​ • E175 ​ 20 ​ Individual aircraft have scheduled (capacity purchase agreement) ​ • CRJ700 ​ 68 ​ removal dates under the agreement ​ ​ ​ ​ ​ ​ between 2027 and 2032 ​ ​ ​ ​ ​ ​ ​ American Prorate Agreement ​ • CRJ900 ​ 4* ​ Terminable with 180-day notice Total under American Agreements ​ ​ ​ 92 ​ ​ ​ ​ ​ ​ ​ ​ ​ Alaska Agreement ​ ​ ​ ​ ​ ​ Agreement ​ Aircraft type ​ Number of Aircraft ​ Term / Termination Dates Alaska Agreement ​ • E175 ​ 42 ​ Individual aircraft have scheduled (capacity purchase agreement) ​ ​ ​ ​ ​ removal dates under the agreement ​ ​ ​ ​ ​ ​ between 2030 and 2034 * Our prorate agreements are based on specific routes, not a specific aircraft count.
We are largely dependent on direction from our major airline partners regarding long-term fuel saving initiatives such as engine innovations reducing fuel consumption, use of sustainable alternative fuels, carbon sequestration programs, air traffic flow routing efficiencies, and similar initiatives.
We are largely dependent on direction from our major airline partners regarding long-term fuel saving and carbon reducing initiatives such as engine innovations reducing fuel consumption, use of sustainable alternative fuels, carbon sequestration programs, air traffic flow routing efficiencies, and similar initiatives.
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.
On the other hand, the regional airline receives all of the passenger fare when a passenger purchases a ticket on a prorate 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.
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.
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, 2025, our fleet consisted of aircraft manufactured by Embraer S.A.
Under our prorate agreements with United and Delta, we are responsible for the costs to operate the flights, including fuel costs, and therefore we are exposed to fuel price fluctuations for flights operated under our prorate agreements.
Under our prorate agreements with United, Delta and American, we are responsible for the costs to operate the flights, including fuel costs, and therefore we are exposed to fuel price fluctuations for flights operated under our prorate agreements.
Our recruiting focus generally targets key aviation technical roles, especially pilots and mechanics. We seek qualified individuals through publishing positions on both internal and external career websites, supporting professional development leads, investment in targeted advertising, social media outreach, employee referrals and relationships with community-based organizations and educational institutions. School Partnerships and Development.
Our recruiting focus generally targets key aviation technical roles, especially pilots and mechanics. We seek qualified individuals through publishing positions on both internal and external career websites, supporting professional development leads, investment in targeted advertising, social media outreach, employee referrals and relationships with community-based organizations and educational institutions.
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.
Subject to an agreement of key commercial terms, this arrangement 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.
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.
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, 2025 is reflected in the summary below.
Insurance We maintain insurance policies we believe are of types customary in the industry and in amounts we believe are adequate to protect against material loss. These policies principally provide coverage for public liability, passenger liability, baggage and cargo liability, property damage, including coverage for loss or damage to our flight equipment, and workers’ compensation insurance.
Insurance We maintain insurance policies we believe are of types customary in the industry and in amounts we believe are adequate to protect against material loss. These policies principally provide coverage for public liability, passenger liability, baggage and cargo liability, property damage, including coverage for loss or damage to our flight equipment, and workers’ compensation insurance, and other coverages.
Our operations are somewhat favorably affected by pleasure travel on our prorate routes, historically contributing to increased travel in the summer months, and are unfavorably affected by decreased business travel during the months from November through January and by inclement weather which can result in cancelled flights, principally during the winter months.
Our operations are somewhat favorably affected by leisure travel on our prorate routes, historically contributing to increased travel in the summer months, and are unfavorably affected by decreased business travel during the months from November through January and by inclement weather which can result in cancelled flights, principally during the winter months.
(“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”).
(“Embraer”), including the E175 regional jet aircraft (“E175”), and aircraft manufactured by MHI RJ Aviation ULC, formerly known as Bombardier Aerospace (“Bombardier”), including 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”).
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.
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 changes in fuel prices.
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.
During the year ended December 31, 2025, 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.
If, however, any of our major airline partners experience a prolonged decline in the number of passengers or are negatively affected by low ticket prices or high fuel prices, they may seek rate reductions in future code-share agreements, or materially reduce scheduled flights in order to reduce their costs.
If, however, any of our major airline partners 5 Table of Contents experience a prolonged decline in the number of passengers or are negatively affected by low ticket prices or high fuel prices, they may seek rate reductions in future code-share agreements, or materially reduce scheduled flights in order to reduce their costs.
ITEM 1. BUSINESS General Through SkyWest Airlines, we offer scheduled passenger service to destinations in the United States, Canada and Mexico. Substantially all of our flights are operated as United Express, Delta Connection, American Eagle or Alaska Airlines flights under code-share agreements with United, Delta, American or Alaska, respectively.
ITEM 1. BUSINESS General Through SkyWest Airlines, our primary operating entity, we offer scheduled passenger service to destinations in the United States, Canada and Mexico. Substantially all of our flights are operated as United Express, Delta Connection, American Eagle or Alaska Airlines flights under code-share agreements with United, Delta, American or Alaska, respectively.
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.
Bankruptcy Code, if bankruptcy proceedings are commenced by or against either party and certain specified conditions are not satisfied. Delta Connection Agreement We and Delta are parties to a Delta Connection capacity purchase 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.
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.
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 hours of flight time.
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 remainder of our flying agreements revenue during the year ended December 31, 2025, related to prorate flights for United, Delta or American, where we controlled scheduling, pricing and seat inventories on certain prorate routes, and shared passenger fares with United, Delta or American according to prorate formulas and SWC on-demand charter flights.
Bombardier and Embraer are the primary manufacturers of regional jets operated in the United States and offer many of the amenities of larger commercial jet aircraft, including flight attendant service, a stand-up cabin, overhead and under seat storage, lavatories and in-flight snack and beverage service.
Bombardier and Embraer are the primary manufacturers of regional jets operated in the United States and offer many of the amenities of larger commercial jet aircraft, including flight attendant service, a stand-up cabin, overhead and 4 Table of Contents under seat storage, lavatories and in-flight snack and beverage service.
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, 2025, 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 89.6% of these employees were represented by in-house labor associations that have entered into collective bargaining agreements regarding employee compensation and work rules.
In addition, adverse weather conditions can impact our ability to complete scheduled flights and can have a negative impact on our operations and financial condition. Also, major airline scope limitations may restrict growth opportunities for the regional carriers.
In addition, adverse weather conditions can impact our ability to complete scheduled flights and can have a negative impact on our operations and financial condition. Also, major airline scope limitations may restrict certain fleet-type growth opportunities for the regional carriers.
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.
Government Regulation All interstate air carriers, including SkyWest, are subject to regulation by 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.
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, 2025, our fleet seat configuration by aircraft type is summarized as follows: ​ ​ 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, 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.
As of December 31, 2025, SkyWest Leasing leased 40 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.
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 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. They also have the right to reject union representation.
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.
During the year ended December 31, 2025, approximately 84% 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 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.
During 2025, we produced approximately 6.3 million metric tons of CO 2 e from fuel burned, using industry emissions factors, on flights we operated under our code-share agreements.
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.
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 with an independent service provider using a toll-free ethics and grievance hotline or by using an online reporting system accessible through SkyWest’s intranet.
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 have worked aggressively to reduce our reliance on paper manuals, further eliminating unnecessary waste while increasing efficiencies. We have entered into a strategic arrangement with Eve Holding, Inc. (“Eve”, formerly EVE UAM, LLC, an Embraer company) to develop a network of deployment for Eve UAM’s electric vertical takeoff and landing (“eVTOL”) aircraft.
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.
United Express Agreements We and United are parties to two United Express capacity purchase agreements: a United Express agreement to operate certain CRJ700 aircraft, and a United Express agreement to operate E175 aircraft, CRJ550 aircraft and CRJ200 aircraft (collectively, the “United Express Agreements”). The United Express Agreements have a latest scheduled termination date of 2033.
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.
Code-share agreements 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, 2025, we offered approximately 2,260 daily departures, of which approximately 940 were United Express flights, 680 were Delta Connection flights, 420 were American Eagle flights and 210 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 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.
We are coordinating with the aircraft manufacturer and our major airline partners regarding the timing of upcoming fleet deliveries. The anticipated deliveries and in-service timing referenced below are subject to change. ● Capacity purchase agreement with United for eight new E175 aircraft, which are scheduled for delivery in 2026.
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.
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. We also use third-party vendors for certain airframe and engine maintenance work.
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.
We completed the following number of flights and related block hours in 2025, 2024 and 2023: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the year ended December 31, ​ ​ ​ ​ ​ 2025 ​ ​ ​ 2024 ​ 2023 Departures ​ ​ 863,513 ​ 766,742 ​ 691,962 Block hours ​ ​ 1,481,723 ​ 1,292,040 ​ 1,140,443 Liquidity At December 31, 2025, we had $782.5 million in total available liquidity, consisting of $706.9 million in cash, cash equivalents and marketable securities, and $75.6 million available for borrowing under our line of credit.
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 Bombardier CRJ900, CRJ700 and CRJ550 aircraft and the Embraer E175 aircraft we operate under our code-share agreements are configured with a first-class seating section. The Bombardier CRJ200 aircraft we operate under our code-share agreements are configured in a 50-seat configuration with single-class seating.
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.
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.
Training is required for every SkyWest employee, regardless of position. SkyWest’s SMS is designed to identify, track, and help mitigate potential safety risks before an incident or accident occurs.
SkyWest’s SMS is designed to identify, track, and help mitigate potential safety risks before an incident or accident occurs.
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.
We anticipate financing the aircraft through debt. ● Capacity purchase agreement with Alaska for one new E175 aircraft, which is scheduled for delivery in 2026.
In exchange, the regional airline provides a designated number of low-capacity (usually between 50 and 76 seats) flights between larger airports served by the major airline and surrounding cities, usually in lower-volume markets.
In exchange, the regional airline provides a designated number of low-capacity (usually between 50 and 76 seats) flights between larger airports served by the major airline and surrounding cities, usually in lower-volume markets. The financial arrangements between the regional airlines and their code-share partners usually involve either capacity purchase agreements or prorate agreements as explained below: ● Capacity Purchase Agreements.
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.
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.
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.
Human Capital Resources Employee Profile As of December 31, 2025, we employed 15,775 total employees, consisting of 5,354 pilots, 4,831 flight attendants, 2,028 airport operations personnel, 1,728 maintenance technicians, 967 other maintenance personnel, 199 dispatchers and 668 operational support and administrative personnel. Our total employees at December 31, 2025, included 1,957 part-time employees.
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.
Sequential fluctuations in the number of completed departures and completed block hours from 2023 to 2025 were primarily driven by available captains. Capacity and flight schedule impact.
Code-Share Agreements Regional airlines generally enter into code-share agreements with major airlines, pursuant to which the regional airline is authorized to use the major airline’s two-letter flight designator codes to identify the regional airline’s flights and fares in the central reservation systems, to paint its aircraft with the colors and/or logos of the major airline and to market and advertise its status as a carrier for the major airline.
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. 6 Table of Contents Code-Share Agreements Regional airlines generally enter into code-share agreements with major airlines, pursuant to which the regional airline is authorized to use the major airline’s two-letter flight designator codes to identify the regional airline’s flights and fares in the central reservation systems, to paint its aircraft with the colors and/or logos of the major airline and to market and advertise its status as a carrier for the major airline.
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.
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.
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.
As of December 31, 2025, we had 637 total aircraft in our fleet, including 487 aircraft in scheduled service or under contract pursuant to our code-share agreements, summarized as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ E175 ​ ​ ​ CRJ900 ​ ​ ​ CRJ700/CRJ550 ​ ​ ​ CRJ200 ​ ​ ​ Total United 121 ​ — ​ 37 ​ 58 ​ 216 Delta ​ 87 ​ 32 ​ 18 ​ — ​ 137 American 20 ​ 4 ​ 68 ​ — ​ 92 Alaska 42 ​ — ​ — ​ — ​ 42 Aircraft in scheduled service or under contract ​ 270 ​ 36 ​ 123 ​ 58 ​ 487 SWC ​ — ​ — ​ — ​ 11 ​ 11 Leased to third parties — ​ 5 ​ 40 ​ — ​ 45 Other (1) — ​ 10 ​ 15 ​ 69 ​ 94 Total Fleet 270 ​ 51 ​ 178 ​ 138 ​ 637 (1) As of December 31, 2025, other aircraft included: supplemental spare aircraft supporting our code-share agreements that may be placed under future code-share or leasing agreements, aircraft scheduled to be placed under a code-share agreement with one of our major airline partners or aircraft that are scheduled to be disassembled for use as spare parts.
A substantial increase in the price of jet fuel for flights we operate under our prorate agreements, or the lack of adequate fuel supplies in the future, could have a material adverse effect on our business, financial condition, results of operations or liquidity.
A substantial, prolonged shortage of fuel supply in the future, could have a material adverse effect on our business, financial condition, results of operations or liquidity.
If either party wishes to modify the terms of any such agreement, it must notify the other party in the manner prescribed by the RLA and/or described in the agreement.
Under the RLA, a collective bargaining agreement between an airline and a labor representative does not expire, but instead becomes amendable as of a stated date. If either party wishes to modify the terms of any such agreement, it must notify the other party in the manner prescribed by the RLA and/or described in the agreement.
Our primary competitors include Air Wisconsin Airlines Corporation (“Air Wisconsin”); Endeavor Air, Inc. (“Endeavor”) (owned by Delta); Envoy Air Inc. (“Envoy”), PSA Airlines, Inc. (“PSA”) and Piedmont Airlines (“Piedmont”) (Envoy, PSA and Piedmont are owned by American); Horizon Air Industries, Inc. (“Horizon”) (owned by Alaska Air Group, Inc.); GoJet Airlines, LLC (“GoJet”); Mesa Air Group, Inc.
(“PSA”) and Piedmont Airlines (“Piedmont”) (Envoy, PSA and Piedmont are owned by American); Horizon Air Industries, Inc. (“Horizon”) (owned by Alaska Air Group, Inc.); GoJet Airlines, LLC (“GoJet”); and Republic Airways Holdings Inc. (“Republic”).
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.
Bankruptcy Code, if bankruptcy proceedings are commenced by or against either party and certain specified conditions are not satisfied. 9 Table of Contents Alaska Agreement We and Alaska are parties to a capacity purchase agreement (the “Alaska Agreement”) for the operation of E175 aircraft.
We expect our employees to think, plan, communicate and act appropriately to prevent injury, illness or harm to themselves, fellow employees, passengers and aircraft. SkyWest’s Safety Management System (SMS) integrates an intentional safety culture into every work group and every employee process from new hire through retirement, focusing on industry-best practices in safety competencies and behaviors.
SkyWest’s Safety Management System (SMS) integrates an intentional safety culture into every work group and every employee process from new hire through retirement, focusing on industry-best practices in safety competencies and behaviors. Safety training is required for every SkyWest employee annually, regardless of position.
We respect every individual's quality of life and are committed to promoting integrity and trust in all we do. We strive to be the partner of choice and employer of choice. Health & Safety Safety is the primary focus and foundation of our culture with our first guiding principle being Health and Safety First.
Culture At SkyWest our people are our most valued assets, and the success of our business is dependent on having a collaborative, engaged and effective workforce. We respect every individual's quality of life and are committed to promoting integrity and trust in all we do. We strive to be the partner of choice and employer of choice.
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.
The Company anticipates financing the aircraft through debt. 8 Table of Contents ● Capacity purchase agreements with United for 23 used CRJ550 aircraft that are anticipated to be placed into service by the end of 2026. Pursuant to these agreements, the Company is in the process of converting its owned CRJ700s to CRJ550s.
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.
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. Our primary competitors include CommuteAir, Inc.; Endeavor Air, Inc. (“Endeavor”) (owned by Delta); Envoy Air Inc. (“Envoy”), PSA Airlines, Inc.
Our relations with labor are governed by the Railway Labor Act (the “RLA”), the federal law governing labor relations between air carriers and their employees. Under the RLA, a collective bargaining agreement between an airline and a labor representative does not expire, but instead becomes amendable as of a stated date.
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. 10 Table of Contents Our relations with labor are governed by the Railway Labor Act (the “RLA”), the federal law governing labor relations between air carriers and their employees.
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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.
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As of December 31, 2025, SWC had 11 aircraft available for on-demand charter service. In September 2025, the U.S. Department of Transportation (the “DOT”) granted SWC authorization to operate as a commuter air carrier. We are evaluating opportunities to use SWC as a commuter air carrier. Competition and Economic Conditions The airline industry is highly competitive.
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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.
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Additionally, attrition of our pilots or other workgroups may reduce our flying schedules and have a negative impact on our operations and financial condition.
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The following summaries of our code-share agreements with our major airline partners do not purport to be complete and are qualified in their entirety by reference to the applicable agreement.
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As a result, we experienced a high level of captain and first officer attrition during 2022 and 2023, which constrained our capacity to operate our major airline partners’ requested flight schedules in full. During 2024, captain attrition began to ease and, by the end of 2025, we were operating full flight schedules requested by our major airline partners.
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Alaska Agreement We and Alaska are parties to a capacity purchase agreement (the “Alaska Agreement”) for the operation of E175 aircraft.
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We anticipate financing the aircraft through debt. ● Capacity purchase agreement with Delta for 16 new E175 aircraft. 10 new E175 aircraft are currently scheduled for delivery in 2027 and six new E175 aircraft are scheduled for delivery in 2028.
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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.
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In January 2026, we extended the scheduled contract expirations on 40 E175 aircraft with United and 13 E175 aircraft with Delta. The termination dates in the table above reflect the January 2026 extensions.
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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.
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A substantial increase in the price of jet fuel for flights we operate under our prorate agreements may have a material adverse effect on our financial results if we are unable to recover such cost increases through higher passenger fares.
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We have also worked with our other operational workgroups to secure significant increases in each of their pay scales and bonuses, including a 35% increase in starting pay for SkyWest flight attendants in 2023. Culture At SkyWest our people are our most valued assets, and the success of our business is dependent on having a collaborative, engaged and effective workforce.
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Health & Safety Safety is the primary focus and foundation of our culture with our first guiding principle being Health and Safety First. We expect our employees to think, plan, communicate and act appropriately to prevent injury, illness or harm to themselves, fellow employees, passengers and aircraft.
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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.
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Through various interview and related programs with our major airline partners, 11 Table of Contents including United’s Aviate program, our pilots have carrier pathway opportunities with our major airline partners. School Partnerships and Development. We maintain relationships with numerous flight schools and educational institutions across the country that are focused on developing the next generation of aviation professionals.
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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.
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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.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeDuring the year ended December 31, 2024, the revenue we recognized was $44.9 million more than the fixed monthly cash payments received. 19 Table of Contents Although we currently anticipate we will recognize previously deferred revenue throughout 2025, future contract amendments or reduced utilization levels of our aircraft could negatively impact the timing of our revenue recognition.
Biggest changeAlthough we currently anticipate we will recognize previously deferred revenue for the year ending December 31, 2026, future contract amendments or reduced utilization levels of our aircraft could negatively impact the timing of our revenue recognition. Our major airline partners may experience events that negatively impact their financial strength or operations, which may also negatively impact our operations.
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.
This strategic venture involves investment 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.
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.
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, protests 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.
Our business depends upon the efforts of our chief executive officer, Russell A. Childs, and our other key management and operating personnel. We may have difficulty replacing management or other key personnel who cease to be employed by us and, therefore, the loss of the services of any of these individuals could harm our business.
Our business depends upon the efforts of our president and chief executive officer, Russell A. Childs, and our other key management and operating personnel. We may have difficulty replacing management or other key personnel who cease to be employed by us and, therefore, the loss of the services of any of these individuals could harm our business.
Our inability to offset increased labor costs through rate increases under our capacity purchase agreements with all our major airline partners could negatively impact our operating costs. Currently, we believe our labor costs are competitive relative to other regional airlines.
Our inability to offset increased labor costs through rate increases under our capacity purchase agreements with all our major airline partners could negatively impact our operating profitability. Currently, we believe our labor costs are competitive relative to other regional airlines.
The market price of our common stock may fluctuate significantly for a variety of reasons, including: general market, political and other economic conditions; labor availability, including regional airline pilots; new regulatory pronouncements or changes in regulatory guidelines; announcements concerning the airline industry, our major airline partners or competitors; the market’s reaction to our quarterly or annual earnings or those of other companies in the airline industry; failure to meet financial analysts’ performance expectations or changes in recommendations by financial analysts for our common stock or the stock of other airlines; significant sales of our common stock, and other risks described in these “Risk Factors.” In recent periods, the stock market has experienced extreme declines and volatility, significantly impacting the market price of securities issued by many companies, including us and other companies in our industry.
The market price of our common stock may fluctuate significantly for a variety of reasons, including, but not limited to: general market, political and other economic conditions; labor availability, including regional airline pilots; new regulatory pronouncements or changes in regulatory guidelines; announcements concerning the airline industry, our major airline partners or competitors; the market’s reaction to our quarterly or annual earnings or those of other companies in the airline industry; failure to meet financial analysts’ performance expectations or changes in recommendations by financial analysts for our common stock or the stock of other airlines; significant sales of our common stock, and other risks described in these “Risk Factors.” In recent periods, the stock market has experienced extreme volatility, significantly impacting the market price of securities issued by many companies, including us and other companies in our industry.
If one of our major airline partners elects to terminate a flying agreement with notice of 120 days or less, our ability to use the aircraft under an alternative agreement with similar economics may be limited, which could negatively impact our financial results.
If one of our major airline partners elects to terminate a flying agreement with notice of 180 days or less, our ability to use the aircraft under an alternative agreement with similar economics may be limited, which could negatively impact our financial results.
We operate a significant number of flights to and from airports with potential winter related or other weather difficulties, including but not limited to, Chicago, Denver, Detroit, Minneapolis, Salt Lake City and San Francisco.
We operate a significant number of flights to and from airports with potential winter related or other weather difficulties, including but not limited to, Chicago, Dallas, Denver, Detroit, Houston, Minneapolis, Salt Lake City and San Francisco.
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.
Even if we meet all required debt and other financial obligations, the amount of our 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.
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.
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. 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.
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.
We not only compete with other regional 21 Table of Contents 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.
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.
If any of these events were to occur, our business, results of operations, and financial condition could be materially adversely affected. 18 Table of Contents 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.
Although we previously carried cybersecurity insurance coverage in the past, we currently do not have cybersecurity insurance coverage.
Cybersecurity”. Although we previously carried cybersecurity insurance coverage in the past, we currently do not have cybersecurity insurance coverage.
Operating an airline independent from major airline partners would be a significant departure from our business plan and would likely require significant time and resources and may not be a viable alternative. Additionally, each of our agreements with our major airline partners is subject to certain early termination provisions, including uncured material performance breaches.
Operating SkyWest Airlines as an airline independent from our major airline partners would be a significant departure from our business plan and would likely require significant time and resources and may not be a viable alternative. Additionally, each of our agreements with our major airline partners is subject to certain early termination provisions, including uncured material performance breaches.
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.
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 specific aircraft could potentially result in write-downs for aircraft held-for sale.
If we need additional capital and cannot obtain such capital on acceptable terms, or at all, we may be unable to realize our fleet replacement plans or take advantage of unanticipated opportunities. The residual value of our owned aircraft may be less than estimated in our depreciation policies.
If we need additional capital and cannot obtain such capital on acceptable terms, or at all, we may be unable to realize our fleet replacement plans or take advantage of unanticipated opportunities. 24 Table of Contents The residual value of our owned aircraft may be less than estimated in our depreciation policies.
Any or all of the foregoing could adversely affect our business, results of operations and financial condition. Interruptions or disruptions in service at one of our hub airports, due to weather, system malfunctions or for any other reason, could have a material adverse impact on our operations.
Any or all of the foregoing could adversely affect our business, results of operations and financial condition. 16 Table of Contents Interruptions or disruptions in service at one of our hub airports, due to weather, system malfunctions or for any other reason, could have a material adverse impact on our operations.
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.
If our liquidity is materially diminished, we might not be able to timely pay our debt or other obligations 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.
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.
Our operations and financial condition are affected by many changing economic and other conditions beyond our control, including, among others: ● actual or potential changes in international, national, regional and local economic, business and financial conditions, including recession, inflation, higher interest rates, higher taxes and/or tariffs, public health emergencies, including pandemics, wars (including the ongoing conflict between Russia and Ukraine, Israel and Hamas, and Israel and Iran), 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, caused by a government funding shutdown or otherwise; ● interference on aviation equipment from the deployment of 5G wireless telecommunications systems, or other factors disrupting communications; ● 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; ● disruptions in the credit markets, which may impact availability of price competitive financing; ● weather and natural disasters.
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.
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.
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.
There also can be no assurance that we will continue repurchasing shares of common stock under our current 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.
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.
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.
This strategic partnership involves significant risks, including: ● development and certification of the aircraft is uncertain or may take longer than expected; ● future customer demand for eVTOL aircraft is uncertain; ● other parties are developing electric-powered aircraft and the level of competition may increase; ● the extent government regulation of eVTOL aircraft and its related infrastructure is uncertain, and the cost of compliance with any such regulations may be significant; ● we may not realize a satisfactory return on our investment; and ● our partner might fail to fulfill its obligations.
This strategic arrangement involves significant uncertainty risks, including: ● development and certification of the aircraft is uncertain or may take longer than expected; ● future customer demand for eVTOL aircraft is uncertain; ● other parties are developing electric-powered aircraft and the level of competition may increase; 25 Table of Contents ● the extent government regulation of eVTOL aircraft and its related infrastructure is uncertain, and the cost of compliance with any such regulations may be significant; ● we may not realize a satisfactory return on our investment; and ● our partner might fail to fulfill its obligations.
In the event we are unable to hire qualified pilots, 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.
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.
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.
As of December 31, 2024, we have invested $25.0 million in Contour, a 14 CFR Part 135 air carrier .
As of December 31, 2025, we have invested $25.0 million in Contour, a 14 CFR Part 135 air carrier .
In the event any of our major airline partners defaults under a capacity purchase agreement or we are unable to extend the flying contract terms on aircraft with ongoing financial obligations, our financial position and financial results could be materially adversely affected.
In the event any of our major airline partners defaults under a capacity purchase agreement or we are unable to extend the flying contract terms on aircraft that we have ongoing financial obligations for, our financial position and financial results could be materially adversely affected.
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.
Further, in the event that one or more vendors experiences labor shortages, aircraft part shortages, seeks bankruptcy protection, ceases operation or fails to perform as promised, replacement services may not be readily available at competitive rates, or at all.
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.
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. 20 Table of Contents Revenue levels from our prorate agreements with our major airline partners may not continue to increase and are terminable upon notice of 180 days or less.
Moreover, any aircraft accident or incident, even if fully insured, could cause a public perception that our operations are less safe or reliable than other airlines and could affect our relationships with our major airline partners.
Moreover, any aircraft accident or incident, even if fully insured, could cause a public perception that our operations are 17 Table of Contents less safe or reliable than other airlines and could affect our relationships with our major airline partners.
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.
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 relationship with our major airline partners, operating results and financial condition. We operate on-demand charter flights through our wholly-owned subsidiary, SWC, and such operations involve significant risk.
Future collective bargaining agreements involving a national union and our employees may negatively impact our relationship with our employees and have an adverse impact on our operating and financial results. 22 Table of Contents We may experience an increase in fuel prices in our prorate and SWC operations.
Future collective bargaining agreements involving a national union and our employees may negatively impact our relationship with our employees and have an adverse impact on our operating and financial results. We may experience an increase in fuel prices in our prorate and SWC operations.
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.
During 2025, we produced approximately 6.3 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.
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.
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, 40 CRJ700/CRJ550 aircraft, and several CRJ aircraft engines to third parties as of December 31, 2025.
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”.
We expect such incidents to continue in varying degrees and 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.
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.
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.
Laws, regulations and other requirements relating to the privacy, security and handling of information about individuals, alongside the application and interpretation of such requirements, are constantly evolving and developing and subject to change.
Laws, regulations and other requirements relating to the privacy, security and handling of information about individuals, alongside the application and interpretation of such requirements, are constantly evolving and developing and subject to change, creating a complex compliance environment.
Risks That May Disrupt Our Operations We may experience disruption in service due to delays from key third-party aircraft maintenance service providers. We rely on third-party vendors for a variety of services, parts and functions critical to our business, particularly related to airframe and engine maintenance and repair.
We may experience disruption in service due to delays from key third-party service providers. We rely on third-party service providers to supply aircraft parts and for a variety of services and other functions critical to our business, particularly related to airframe and engine maintenance and repair.
Additionally, revenue levels from our SWC operation may not continue to increase. While our prorate agreements and SWC revenue increased $76.0 million, or 19.9%, for the year ended December 31, 2024, compared to the year ended December 31, 2023, there is no assurance our prorate revenue or SWC revenue will continue to increase in 2025 or thereafter.
Additionally, revenue levels from our SWC operation may not continue to increase. While our prorate agreements and SWC revenue increased $153.0 million, or 33.5%, for the year ended December 31, 2025, compared to the year ended December 31, 2024, there is no assurance our prorate revenue or SWC revenue will continue to increase in 2026 or thereafter.
Additionally, there is no assurance we will continue to be awarded subsidy contracts under the Essential Air Service (EAS) program 20 Table of Contents on applicable prorate routes from the DOT going forward. Additionally, there is no assurance the EAS program will continue to receive funding by the U.S. Government.
Additionally, there is no assurance we will continue to be awarded subsidy contracts under the EAS program on applicable prorate routes from the DOT going forward. Additionally, there is no assurance the EAS program will continue to receive funding by the U.S. Government.
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.
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. We have not paid a dividend since 2020.
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.
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.
Additionally, under our capacity purchase agreements with United, Delta, American and Alaska, a portion of our compensation is based upon pre-determined rates typically applied to production statistics (such as departures, block hours, flight hours and number of aircraft in service each month).
Under our capacity purchase agreements with our major airline partners, a portion of our compensation is based upon pre-determined rates typically applied to production statistics (such as departures, block hours, flight hours and number of aircraft in service each month).
As of December 31, 2024, we had approximately $5.6 billion of property and equipment and related assets, net of accumulated depreciation.
As of December 31, 2025, we had approximately $5.8 billion of property and equipment and related assets, net of accumulated depreciation.
A lessee default under one of our lease agreements could negatively affect our financial condition, cash flow and results of operations. We have entered into a strategic engine leasing joint venture that operates under joint control with a third party that involves significant risk.
A lessee default under one of our lease agreements could negatively affect our financial condition, cash flow and results of operations. We have entered into a strategic engine leasing joint venture that operates under joint control with a third party that may not meet our investment objectives.
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.
As of December 31, 2025, 353 out of our total 487 aircraft in scheduled service were operating under a capacity purchase agreement or a prorate agreement with either United or Delta.
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.
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, 2025, our common stock closing price varied between a high of $123.72 and a low of $79.41.
Changes to U.S. tariff and import/export regulations may have a negative effect on our suppliers and/or service providers and, in turn, could have a material adverse impact on our financial condition. The United States has recently enacted and proposed to enact significant new tariffs.
Changes to U.S. tariff and import/export regulations may have a negative effect on our suppliers and/or service providers and, in turn, could have a material adverse impact on our financial condition. The United States has recently enacted significant tariffs in excess of historical levels, and United States trade policies continue to evolve.
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 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.
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.
As of December 31, 2025, we have firm purchase commitments for 69 E175 aircraft and spare engines totaling $2.3 billion. Over the next several years, as we continue to add new aircraft to our fleet, we anticipate using significant amounts of capital to acquire these aircraft.
We entered into a partnership with a third party to develop demand for electric-powered aircraft that involves significant uncertainty and risk. We have entered into a strategic partnership with Eve Holding, Inc. (“Eve”, formerly EVE UAM, LLC, an Embraer company), to develop a network of deployment for Eve’s eVTOL aircraft.
We entered into an arrangement with a third party to develop demand for electric-powered aircraft that involves significant uncertainty and risk. We have entered into a strategic arrangement with Eve to develop a network of deployment for Eve’s eVTOL aircraft.
Future increases in SWC revenue is also based on several factors subject to change including, but not limited to, corporate or institutional demand for charter flights, competition for charter business and availability of other charter alternatives, such as ground transportation.
Future increases in SWC revenue is also based on several factors subject to change including, but not limited to, corporate or institutional demand for charter flights, competition for charter business and availability of other charter alternatives, such as ground transportation. SWC was granted commuter authority from the DOT in 2025, allowing SWC to expand its route strategy.
Our ability to issue shares of preferred and common stock without shareholder approval may have the effect of delaying or preventing a change in control and may adversely affect the voting and other rights of the holders of our common stock, even in circumstances where such a change in control would be viewed as desirable by most investors.
Our ability to issue shares of preferred and common stock without shareholder approval may have the effect of delaying or preventing a change in control and may adversely affect the voting and other rights of the holders of our common stock, even in circumstances where such a change in control would be viewed as desirable by most investors. 27 Table of Contents The provisions of the Utah Control Shares Acquisitions Act or other related regulations and laws may also discourage the acquisition of a significant interest in or control of our Company.
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.
Our business model relies significantly on our major airline partners, and we may be negatively affected by their financial and operating strength.
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.
We may experience difficulty in recruiting, training and retaining a sufficient number of qualified pilots. 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.
Additionally, as our captain attrition levels eased during 2024, our plans for 2025 include bringing certain CRJ aircraft out of storage and placing such aircraft into service. Delays in receiving spare parts and/or outsourced maintenance services could delay our efforts to place stored aircraft back into service.
Additionally, we plan to continue bringing certain CRJ aircraft out of storage and placing such aircraft into service. Delays in receiving spare parts and/or outsourced maintenance services could delay our efforts to place stored aircraft back into service.
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.
Under our 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. Depending on market conditions and other factors, such repurchases may commence or be suspended from time to time by management without prior notice.
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.
In the event we are unable to recruit and train a sufficient number of qualified pilots, 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.
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.
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. Additionally, timing and availability of new aircraft deliveries could be delayed beyond our control.
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.
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. A shortage of captains caused a sequential reduction in our annual block hours in 2022 and 2023.
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.
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.
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.
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.
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.
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.
In the event of default, if we are unable to sell the collateral, or the fair value is less than the required payment, it could negatively impact our financial condition and financial results. Additionally, there is no guarantee that the relationship with the entities will have a favorable effect on our ability to recruit pilots.
In the event of default, if we are unable to sell the collateral, or the fair value is less than the required payment, it could negatively impact our financial condition and financial results.
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.
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 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.
As of December 31, 2025, we operated 28 CRJ200s under a prorate agreement with United, 14 CRJ550s under a prorate agreement with Delta and 10 CRJ900s under a prorate agreement with American. As of December 31, 2025, we had 11 CRJ200s available for on-demand charter service through SWC.
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 have a significant amount of contractual long-term debt obligations. As of December 31, 2025, we had a total of approximately $2.4 billion in total long-term debt obligations. Our long-term debt obligations included $2.2 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.
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.
The primary operating costs intended to be compensated by the pre-determined rates include our labor and training costs, aircraft maintenance expenses and overhead costs. During the year ended December 31, 2025, approximately 93.0% of our code-share operating costs were reimbursable at pre-determined rates and 7.0% of our code-share operating costs were directly reimbursed costs, often referred to as pass-through costs.
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.
In 2022, we agreed to guarantee debt for a commuter air carrier that operates smaller aircraft than we operate. The debt is secured by the air carrier’s aircraft and engines and has a five-year term. At December 31, 2025, the outstanding debt for the guarantee was $12.6 million.
Additionally, representation by a national union may limit our ability to have open communications with our employees, negatively impact our company culture and deter our ability to amend our compensation packages for market conditions in a timely manner. Moreover, we cannot predict the outcome of any future negotiations relating to union representation or collective bargaining agreements.
Additionally, representation by a national union may limit our ability to have open communications with our employees, negatively impact our company culture and deter our ability to amend and increase our compensation packages for market conditions in a timely manner, which may result in higher employee dissatisfaction and attrition.
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.
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. 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 22 Table of Contents attention and disrupt operations.
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.
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.
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.
There is no assurance our major airline partners will take responsibility for 26 Table of Contents 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.
Risks Related to Operating and Leasing Regional Jet Aircraft and Engines We are reliant on two aircraft manufacturers and one engine manufacturer. We operate aircraft manufactured by Bombardier and Embraer. The issuance of FAA or manufacturer directives restricting or prohibiting the use of any Bombardier or Embraer aircraft types we operate could negatively impact our business and financial results.
The issuance of FAA or manufacturer directives restricting or prohibiting the use of any Bombardier or Embraer aircraft types we operate could negatively impact our business and financial results. We are also dependent upon General Electric as the sole manufacturer of engines used on the aircraft we operate.
At December 31, 2024, the fair value of the warrant was $8.2 million and future reductions in the trading market price of Eve’s common stock will likely negatively impact our net income. We have invested in Contour, which involves significant risk and may not produce a satisfactory return on our investment.
At December 31, 2025, the fair value of our holdings in Eve was $4.3 million and there is no assurance the value of Eve common stock will increase. We have invested in Contour, which involves significant risk and may not produce a satisfactory return on our investment.
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.
Should the attrition of our employees sharply increase, we may not be able to hire sufficient personnel to replace those leaving.
Reduced utilization of our aircraft under our capacity purchase agreements will likely have a material adverse impact on the results of our operations and financial condition. During the year ended December 31, 2022, we amended our capacity purchase agreements with certain major airline partners that reduced certain future contractual fixed monthly payments and increased future contractual variable payments.
Reduced utilization of our aircraft under our capacity purchase agreements will likely have a material adverse impact on the results of our operations and financial condition.
Recent shortages of captains caused a sequential reduction in our annual block hours in 2022 and 2023. Although captain attrition levels eased in 2024, future elevated pilot attrition levels could constrain our flight schedules. Operating at reduced flying schedules results in operating inefficiencies which negatively impacts our financial results.
Although captain attrition levels eased in 2024 and we were operating full flight schedules requested by our major airline partners by the end 2025, future elevated pilot attrition levels could constrain our flight schedules. Operating at reduced flying schedules results in operating inefficiencies which negatively impacts our financial results.
Our prorate flying agreements with our major airline partners permit each major airline partner to terminate the agreement in its discretion by giving us notice of 120 days or less.
There is no assurance that SWC will be awarded EAS markets or other commuter routes in the future, nor that demand for its services will materialize as anticipated. Our prorate flying agreements with our major airline partners permit each major airline partner to terminate the agreement in its discretion by giving us notice of 180 days or less.
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.
The effect of any, or some combination, of the foregoing risks could affect our arrangement with Eve and future benefits may not materialize. As of December 31, 2025, we held 1.1 million shares of common stock of Eve (NYSE: EVEX).

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeOur 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.
Biggest changeWhile 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.
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.
For the year ended December 31, 2025, 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.
Our cybersecurity risk management processes include a cybersecurity incident response plan, and we have invested in technical and organizational safeguards intended to manage and mitigate material risks from cybersecurity threats to our IT Systems, including network security controls, employee training, internal vetting of third-party vendors and service providers with whom we may share data, and regular system reviews and security exercises.
Our cybersecurity risk management processes include a cybersecurity incident response plan, and we have invested in technical and organizational safeguards intended to manage and mitigate material risks from cybersecurity 28 Table of Contents threats to our IT Systems, including network security controls, employee training, internal vetting of third-party vendors and service providers with whom we may share data, and regular system reviews and security exercises.
Audit Committee members also receive presentations on cybersecurity topics from our Vice President of Information Technology and Chief Financial Officer, supported by our internal security staff, or external experts as part of the Board’s continuing education on topics that impact public companies.
Audit Committee members also receive presentations on cybersecurity topics from our Vice President of Information Technology and Chief Financial Officer, supported by our internal security staff, or external experts as part of the Board’s continuing education on topics that impact public companies and update the full Board as necessary.
Our management team supervises efforts to prevent, detect, mitigate, and remediate cybersecurity risks and incidents through various means, which may include briefings from internal security personnel, threat intelligence and other information obtained from governmental, public or private sources, including external consultants engaged by us, and alerts and reports produced by security tools deployed in the IT environment.
Our management team takes steps to stay informed about and monitor efforts to prevent, detect, mitigate, and remediate cybersecurity risks and incidents through various means, which may include briefings from internal security personnel, threat intelligence and other information obtained from governmental, public or private sources, including external consultants engaged by us, and alerts and reports produced by security tools deployed in the IT environment. 29 Table of Contents
The Audit Committee oversees management’s design, implementation and enforcement of our cybersecurity risk management program. The Audit Committee receives quarterly reports from management on our cybersecurity risks. In addition, management updates the Audit Committee, as necessary, regarding any material cybersecurity incidents, as well as any incidents with lesser impact potential.
The Audit Committee oversees management’s design, implementation and enforcement of our cybersecurity risk management program. Our Board and our Audit Committee receive quarterly reports from management on our cybersecurity risks. In addition, management updates the Audit Committee, as necessary, regarding cybersecurity incidents it considers to be significant or potentially significant.
Removed
The Audit Committee reports to the full Board regarding its activities, including those related to cybersecurity. The full Board also receives briefings from management on our cyber risk management program.
Added
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.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changePROPERTIES 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.
Biggest changePROPERTIES Flight Equipment As of December 31, 2025, 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 219 ​ 51 70-76 2,100 530 7.4 CRJ900s 16 ​ 20 70-76 1,500 530 15.8 CRJ700s and CRJ550s 123 ​ 0 50-70 1,600 530 20.3 CRJ200s 58 ​ — 50 1,500 530 22.8 Several factors may impact our fleet size throughout 2026 and thereafter, including, but not limited to, contract expirations that are not renewed, labor shortages, reductions in our prorate fleet, lease expirations on aircraft with our major airline partners that are not extended and growth opportunities.
We also own maintenance facilities on land leases with airport authorities in Milwaukee, Wisconsin; Oklahoma City, Oklahoma; and Colorado Springs, Colorado.
We also own maintenance facilities on land leases with airport authorities in Milwaukee, Wisconsin; Oklahoma City, Oklahoma; Colorado Springs, Colorado; and Tucson, Arizona.
Most of these leases are for facilities at airports with various government agencies that control the use of the airport. We lease maintenance, training and office facilities in Salt Lake City, Utah, and we lease additional maintenance facilities in Boise, Idaho; Fresno, California; Tucson, Arizona; Chicago, Illinois; Detroit, Michigan; Nashville, Tennessee; South Bend, Indiana; and Fort Wayne, Indiana.
We lease maintenance, training and office facilities in Salt Lake City, Utah, and we lease additional maintenance facilities in Boise, Idaho; Fresno, California; Chicago, Illinois; Detroit, Michigan; Nashville, Tennessee; South Bend, Indiana; Lincoln, Nebraska; Omaha, Nebraska; Shreveport, Louisiana; and Palm Springs, California.
Added
Most of these leases are for facilities at airports with various government agencies that control the use of the airport.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeITEM 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.
Biggest changeITEM 3. LEGAL PROCEEDINGS We are subject to certain legal actions which we consider routine to our business activities. As of December 31, 2025, 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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Biggest changeThe 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.
Biggest changeThe following table summarizes the repurchases under our stock repurchase program during the three months ended December 31, 2025: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 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, 2025 - October 31, 2025 ​ 45,884 ​ $ 100.04 ​ 45,884 ​ $ 235,430 November 1, 2025 - November 30, 2025 ​ 104,465 ​ $ 97.32 ​ 104,465 ​ $ 225,264 December 1, 2025 - December 31, 2025 ​ 117,913 ​ $ 103.33 ​ 117,913 ​ $ 213,080 Total ​ 268,262 ​ $ 100.43 ​ 268,262 ​ $ 213,080 (1) In May 2023, our Board of Directors approved a stock purchase program and authorized us to repurchase up to $250.0 million of our common stock.
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.
The following graph compares the cumulative total shareholder return on our common stock over the five-year period ended December 31, 2025, 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, 2024 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. 30 Table of Contents Dividends We did not declare dividends for the years ended December 31, 2025 and 2024.
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.
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 10, 2026, there were approximately 3,245 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, 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 .
In May 2025, the Board approved a $250.0 million increase to the existing stock repurchase program. Purchases are made at management’s discretion based on market conditions and financial resources. As of December 31, 2025, we had repurchased 5,675,819 shares of our common stock for $286.9 million and had $213.1 million remaining availability under the stock repurchase program .
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 ]
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 ​ 2020 ​ 2021 ​ 2022 ​ 2023 ​ 2024 ​ 2025 SkyWest, Inc . ​ ​ ​ 100 ​ ​ ​ 97.49 ​ 40.96 ​ 129.50 ​ ​ ​ 248.40 ​ ​ ​ 249.09 ​ NASDAQ Composite 100 122.18 ​ 82.43 ​ 119.22 154.48 187.14 ​ NASDAQ Transportation Index ​ 100 ​ 126.45 ​ 107.00 ​ 128.47 ​ 130.86 ​ 139.12 ​ ​ ​ ITEM 6. [Reserved ]
Added
In May 2025, the Board approved a $250.0 million increase to the existing stock repurchase program.

Item 7. Management's Discussion & Analysis

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

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Biggest changeOperating 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.
Biggest changeThe increase in lease, airport services and other revenues of $57.9 million, or 50.3%, for the year ended December 31, 2025, compared to the year ended December 31, 2024, was primarily due to an incr ease in maintenance services provided to third parties, an increase in the number of leased assets, and increase in lease rates during 2025 compared to 2024. 36 Table of Contents 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, ​ ​ 2025 ​ 2024 ​ $ Change ​ % Change Salaries, wages and benefits ​ $ 1,559,356 ​ $ 1,463,932 ​ $ 95,424 ​ 6.5 % Aircraft maintenance, materials and repairs ​ 943,779 ​ 712,642 ​ 231,137 32.4 % Depreciation and amortization ​ 364,497 ​ 383,880 ​ (19,383) (5.0) % Airport-related expenses ​ 121,589 ​ 85,836 ​ 35,753 41.7 % Aircraft fuel ​ 120,368 ​ 87,409 ​ 32,959 37.7 % Other operating expenses ​ 330,767 ​ 299,564 ​ 31,203 10.4 % Total operating expenses ​ $ 3,440,356 ​ $ 3,033,263 ​ $ 407,093 13.4 % Salaries, wages and benefits.
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.
Other income, net primarily consists of the unrealized and realized gains and 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.
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.
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 agreements.
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.
Discussions of 2023 items and year-to-year comparisons between 2024 and 2023 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, 2024.
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.
The significant items affecting our revenue and operating expenses during the year ended December 31, 2025, 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.
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.
Given our available liquidity as of December 31, 2025, 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.
The number of flights we operate and the corresponding number of passengers we carry are the primary drivers of our revenue under our prorate flying agreements.
The number of flights we operate and the corresponding number of passengers we carry are the primary drivers of our revenue under our prorate agreements.
Our operating cash flows are typically impacted by various factors including our net income, adjusted for non-cash expenses and gains such as depreciation expense, asset impairment charges, stock-based compensation expense and gains or losses on the disposal of assets; and timing of cash payments and cash receipts attributed to our various current asset and liability accounts, such as accounts receivable, inventory, accounts payable, accrued liabilities, deferred revenue and unbilled revenue.
Our operating cash flows are typically impacted by various factors including our net income, adjusted for non-cash expenses and gains such as depreciation expense, stock based compensation expense and gains or losses on the disposal of assets; and timing of cash payments and cash receipts attributed to our various current asset and liability accounts, such as accounts receivable, inventory, accounts payable, income taxes, accrued liabilities, deferred revenue and unbilled revenue.
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.
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, 2025 and 2024. Also discussed is our financial condition as of December 31, 2025 and 2024.
The amount of deferred revenue and unbilled revenue from fixed monthly payments we recognize will increase or decrease in future reporting periods depending on the number of block hours we complete during such reporting period and our then-current forecast of block hours we anticipate completing over the remaining contract term based on information available to us as that time.
The amount of deferred revenue and unbilled revenue from fixed monthly payments we recognize will increase or decrease in future reporting periods depending on the number of block hours we 43 Table of Contents complete during such reporting period and our then-current forecast of block hours we anticipate completing over the remaining contract term based on information available to us as that time.
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.
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 2025 and 2024 items and year-to-year comparisons between 2025 and 2024.
The third parties’ loans are secured by aircraft and engines. Critical Accounting Policies and Estimates Our significant accounting policies are summarized in Note 1 to our Consolidated Financial Statements included in Item 8 of this Report.
The third party’s loans are secured by aircraft and engines. Critical Accounting Policies and Estimates Our significant accounting policies are summarized in Note 1 to our Consolidated Financial Statements included in Item 8 of this Report.
Lease, airport services and other revenues consist of revenue earned from leasing aircraft and spare engines to third parties separate from our capacity purchase agreements and providing airport counter, gate and ramp services.
Lease, airport services and other revenues consist of revenue earned from leasing aircraft and spare engines to third parties separate from our capacity purchase agreements, providing maintenance services to other airlines and providing airport counter, gate and ramp services.
A portion of the consideration received for the use of the aircraft is a fixed monthly payment per aircraft. We recognize the fixed monthly lease payments as lease revenue using the straight-line basis over 42 Table of Contents the capacity purchase agreement term and variable lease payments in the period when the block hours are completed.
A portion of the consideration received for the use of the aircraft is a fixed monthly payment per aircraft. We recognize the fixed monthly lease payments as lease revenue using the straight-line basis over the capacity purchase agreement term and variable lease payments in the period when the block hours are completed.
Our fleet of E175, CRJ900, CRJ700 and CRJ550 have a multiple-class seat configuration, whereas our CRJ200 have a single-class seat configuration. During 2022, we formed SWC, which offers on-demand charter services using CRJ200 aircraft in a 30-seat configuration.
Our fleet of E175, CRJ900, CRJ700 and 32 Table of Contents CRJ550 have a multiple-class seat configuration, whereas our CRJ200 have a single-class seat configuration. During 2022, we formed SWC, which offers on-demand charter services using CRJ200 aircraft in a 30-seat configuration.
Other operating expenses primarily consist of property taxes, hull and liability insurance, simulator costs, crew per diem, crew hotel costs and credit loss reserves.
Other operating expenses primarily consist of aircraft rentals, property taxes, hull and liability insurance, simulator costs, crew per diem, crew hotel costs and credit loss reserves.
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.
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.
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.
Long-term Debt Obligations As of December 31, 2025, we had $2.4 billion of long-term debt, which consisted of $2.2 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 4.3% at December 31, 2025.
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.
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 69 E175 aircraft with approximately 75-85% debt and the remaining balance with cash.
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.
Our total long-term debt, including current maturities decreased from $2.7 billion as of December 31, 2024, to $2.4 billion as of December 31, 2025, or by $0.3 billion, primarily due to scheduled debt payments for the 2025 year, partially offset by debt issued to finance seven new E175 aircraft.
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.
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 aircraft” due to the first-class seat offerings, to our capacity purchase agreements or prorate agreements, and potentially removing older aircraft from service that typically require higher maintenance costs.
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.
Our rates were finalized under our code-share agreements as of December 31, 2025. Long-Lived Assets As of December 31, 2025, we had approximately $5.8 billion of property and equipment and related assets net of accumulated depreciation.
The SkyWest Airlines and SWC segment includes revenue earned under the applicable capacity purchase agreements attributed to operating such aircraft and the respective operating costs, and revenue and operating expenses attributed to other flying or airport services agreements and charter flight services.
The SkyWest Airlines and SWC segment includes revenue earned under the applicable capacity purchase agreements attributed to operating such aircraft and the respective operating costs, and revenue and operating expenses attributed to prorate agreements, airport services agreements and charter flight services.
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.
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 three years to five years as of December 31, 2025. These eight leased aircraft are subleased to a third party.
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.
For the years ended December 31, 2025, and December 31, 2024, our effective income tax rates were 24.3% and 25.3%, respectively, which included the statutory federal income tax rate of 21.0% and other reconciling income tax items, including state income taxes and the impact of non-deductible expenses.
Excluding the purchase and sale of marketable securities, which results in the transfer of dollars between our investments in marketable securities and our cash accounts, our cash used in investing activities increased from $284.6 million for the year ended December 31, 2023, to $341.2 million for the year ended December 31, 2024.
Excluding the purchase and sale of marketable securities, which results in the transfer of dollars between our investments in marketable securities and our cash accounts, our cash used in investing activities increased from $341.2 million for the year ended December 31, 2024, to $642.0 million for the year ended December 31, 2025.
The increase in operating expenses was primarily due to an increase in 33 Table of Contents our direct operating expenses associated with the increase in the number of flights we operated for the year ended December 31, 2024, compared to the year ended December 31, 2023.
The increase in operating expenses was primarily due to an increase in our direct operating expenses associated with the increase in the number of flights we operated for the year ended December 31, 2025, compared to the year ended 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 $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.
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 $264.6 million as of December 31, 2025, compared to total deferred revenue, net of unbilled revenue of $322.4 million as of December 31, 2024.
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.
Primarily due to the factors described above, we generated net income of $428.3 million, or $10.35 per diluted share, for the year ended December 31, 2025, compared to net income of $323.0 million, or $7.77 per diluted share, for the year ended December 31, 2024.
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 recognized $13.9 million of previously deferred lease revenue and $5.6 million unbilled revenue during the year ended December 31, 2025, 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.
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.
Assuming a 6.2% discount rate, which is the average incremental borrowing rate 42 Table of Contents 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 $81.9 million at December 31, 2025.
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.
Cash Flows used in Financing Activities Our cash flows used in financing activities was $393.2 million for the year ended December 31, 2025, compared to cash used in financing activities of $384.8 million for the year ended December 31, 2024.
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.
Liquidity and Capital Resources As of December 31, 2025, we had $706.9 million in cash and cash equivalents and marketable securities. As of December 31, 2025, we had $75.6 million available for borrowings under our line of credit.
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.
As of December 31, 2025 and 2024, we had $47.2 million and $47.1 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, 2025 and 2024. 40 Table of Contents Sources and Uses of Cash Cash Position and Liquidity.
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.
We had net income of $428.3 million, or $10.35 per diluted share, for the year ended December 31, 2025, compared to net income of $323.0 million, or $7.77 per diluted share, for the year ended December 31, 2024.
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.
Guarantees We have guaranteed the obligations of SkyWest Airlines under the United Express Agreement and the Delta Connection Agreement for the E175 aircraft. In addition, we have guaranteed certain other obligations under our aircraft financing and leasing agreements. We have guaranteed $12.6 million in promissory notes of a third party in the event the third party defaults on their payments.
As a result of a higher number of passengers carried on our prorate routes and an increase in the number of prorate and charter flights operated year-over-year, our prorate and SWC revenue increased $76.0 million, or 19.9%, in 2024, as compared to 2023.
As a result of a higher number of passengers carried on our prorate routes and an increase in the number of prorate and charter flights operated year-over-year, our prorate and SWC revenue increased $153.0 million, or 33.5%, in 2025, as compared to 2024.
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.
SkyWest Airlines and SWC block hour production increased 14.7%, from 1,292,040 for the year ended December 31, 2024 to 1,481,723 for the year ended December 31, 2025, primarily due to an increase in the number of available captains, which allowed for a higher scheduled utilization of our aircraft.
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.
The number of aircraft we have in scheduled service or under contract pursuant to our code-share agreements decreased from 492 as of December 31, 2024, to 487 as of December 31, 2025, or by 1.0%; and the number of block hours increased from 1.3 million in 2024 to 1.5 million in 2025, or by 14.7%, primarily due to an increase in the scheduled daily utilization of our aircraft driven by an increase in the number of available captains.
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.
Based on the number of completed block hours during the year ended December 31, 2025, we recognized a total of $38.3 million of previously deferred revenue and unbilled revenue related to the non-lease fixed monthly payments we received associated with our flight operations revenues.
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 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 (which may also cause a reassessment of stand-alone selling prices of the lease and non-lease consideration), 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.
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.
We also have multiple agreements with United to place 23 used CRJ550 aircraft into service in 2026. 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.
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.
Overview We have the largest regional airline operation in the United States through our operating subsidiary SkyWest Airlines. As of December 31, 2025, we offered scheduled passenger and air freight service with approximately 2,260 total daily departures to destinations in the United States, Canada and Mexico.
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.
For the year ended December 31, 2025, approximately 44.4% of our aircraft in scheduled service or under contract were operated for United, approximately 28.1% were operated for Delta, approximately 18.9% were operated for American and approximately 8.6% were operated for Alaska.
For clarity, under our “Capacity purchase agreements flight operations revenue” and “Capacity purchase agreements aircraft lease revenue” combined, we recognized $44.9 million of previously deferred revenue, net of unbilled revenue, during the year ended December 31, 2024, compared to deferring revenue, net of unbilled revenue, of $242.5 million during the year ended December 31, 2023.
For clarity, under our “Capacity purchase agreements flight operations revenue” and “Capacity purchase agreements aircraft lease revenue” combined, we recognized a total of $57.8 million of previously deferred revenue and unbilled revenue during the year ended December 31, 2025, compared to recognizing a total of $44.9 million of previously deferred revenue and unbilled revenue during the year ended December 31, 2024.
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.
Cash Flows used in Investing Activities Our cash flows used in investing activities was $651.8 million for the year ended December 31, 2025, compared to cash flows used in investing activities of $228.6 million for the year ended December 31, 2024.
Future minimum lease payments due under all long-term operating leases were approximately $129.3 million at December 31, 2024.
Future minimum lease payments due under all long-term operating leases were approximately $119.0 million at December 31, 2025.
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.
The $35.8 million, or 41.7%, increase in airport-related expenses for the year ended December 31, 2025, compared to the year ended December 31, 2024, was primarily due to an increase in subcontracted airport services, station rents, 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.
Our average effective interest rate for 2024 and 2023 was 4.2% and 4.1%, respectively. Interest income. Interest income increased $4.0 million, from $43.9 million during the year ended December 31, 2023 to $47.9 million during the year ended December 31, 2024.
Our average effective interest rate for 2025 and 2024 was 4.3% and 4.2%, respectively. Interest income. Interest income decreased $4.6 million, from $47.9 million for the year ended December 31, 2024 to $43.3 million for the year ended December 31, 2025.
The increase in cash used in investing activities, excluding the transfer of dollars between our investments in marketable securities and our cash accounts, was primarily due to an increase of $59.4 million used in the acquisition of property and equipment for the year ended December 31, 2024, compared to the year ended December 31, 2023, primarily due to the acquisition of five new E175 aircraft in 2024.
Excluding the transfer of dollars between our investments in marketable securities and our cash accounts, the remaining increase in cash used in investing activities was primarily due to an increase of $267.3 million used in the acquisition of property and equipment and an increase of $57.8 million used for aircraft deposits for the year ended December 31, 2025, compared to the year ended December 31, 2024, primarily due to the acquisition of seven new E175 aircraft and spare engines in 2025.
At December 31, 2024, our total capital mix (measured as a ratio of total stockholder equity 39 Table of Contents and total long-term debt, including current maturities) was 47.4% equity and 52.6% total long-term debt, compared to 41.3% equity and 58.7% total long-term debt at December 31, 2023.
At December 31, 2025, our total capital mix (measured as a ratio of total stockholder equity and total long-term debt, including current maturities) was 53.4% equity and 46.6% total long-term debt, compared to 47.4% equity and 52.6% total long-term debt at December 31, 2024.
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.
The $33.0 million, or 37.7%, increase in fuel cost for the year ended December 31, 2025, compared to the year ended December 31, 2024, 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 $3.19 in 2024 to $3.00 in 2025.
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.
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 investments in other entities.
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.
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 in service or under contract as of December 31, 2024 and December 31, 2025: ​ ​ ​ ​ ​ ​ ​ ​ ​ Aircraft in Service or Under Contract ​ ​ ​ December 31, 2024 ​ ​ ​ Additions ​ ​ ​ Removals ​ December 31, 2025 E175s 262 ​ 8 ​ — ​ 270 CRJ900s 36 ​ 4 ​ (4) ​ 36 CRJ700/CRJ550s 119 ​ 18 ​ (14) ​ 123 CRJ200s 75 ​ — ​ (17) ​ 58 Total 492 30 (35) ​ 487 During 2025, we took delivery of seven new E175 aircraft and placed the aircraft into service under capacity purchase agreements, and we placed one partner-financed E175 aircraft into service under a capacity purchase agreement.
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.
Our total cash, cash equivalents and marketable securities decreased from $801.6 million as of December 31, 2024, to $706.9 million as of December 31, 2025, or by $94.7 million.
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.
Operating Expenses Our total operating expenses increased $407.1 million, or 13.4%, for the year ended December 31, 2025, compared to the year ended December 31, 2024.
We intend to fund the purchase of the four used CRJ550 aircraft through cash on hand. Aircraft Lease and Facility Obligations We also have long-term lease obligations, primarily relating to our facilities, aircraft and engines.
We intend to use cash to purchase the two used E170 aircraft. Aircraft Lease and Facility Obligations We also have long-term lease obligations, primarily relating to our facilities, aircraft and engines.
SkyWest Airlines and SWC’s interest expense decreased $4.1 million, or 24.3%, primarily due a decrease in outstanding debt from December 31, 2023 to December 31, 2024.
SkyWest Airlines and SWC’s interest expense decreased $1.2 million, or 9.4%, for the year ended December 31, 2025, compared to the year ended December 31, 2024, primarily due to a decrease in outstanding debt from December 31, 2024 to December 31, 2025.
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.
The increase in prorate agreements and SWC revenue of $153.0 million, or 33.5%, for the year ended December 31, 2025, compared to the year ended December 31, 2024, was primarily due to an increase in prorate departures, passengers and passenger revenue we received on routes we operated under our prorate agreements driven by an improvement in the number of available captains during the year ended December 31, 2025, compared to the year ended December 31, 2024.
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.
For the year ended December 31, 2025, our capacity purchase revenue represented approximately 84.3% of our total flying agreements revenue and our prorate and SWC revenue, combined, represented approximately 15.7% of our total flying agreements revenue.
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.
For the year ended December 31, 2024, we recognized a total of $43.4 million of previously deferred revenue and unbilled revenue related to non-lease fixed monthly payments received associated with our flight operations revenues.
SkyWest Airlines and SWC’s salaries, wages and benefits expense increased $141.3 million, or 10.7%, primarily 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.
SkyWest Airlines and SWC’s salaries, wages and benefits expense increased $95.4 million, or 6.5%, for the year ended December 31, 2025, compared to the year ended December 31, 2024, primarily due to an increase in direct labor costs that resulted from the higher number of flights we operated, partially offset by operating efficiencies from higher utilization of our aircraft during the year ended December 31, 2025, compared to the year ended December 31, 2024.
We control scheduling, pricing and seat inventories on certain prorate routes, and we share passenger fares with our major airline partners according to prorate formulas. We are also responsible for the operating costs of the prorate flights, including fuel and airport costs.
We control scheduling, pricing and seat inventories on certain prorate routes, and we share passenger fares with our major airline partners according to prorate formulas.
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.
Our Business Segments 2025 compared to 2024 : Our reportable segments consist of (1) the operations of SkyWest Airlines and SWC (collectively, “SkyWest Airlines and SWC”) and (2) SkyWest Leasing activities.
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 .
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) ​ ​ ​ 2025 ​ ​ ​ 2024 ​ ​ ​ % Change Fuel gallons purchased ​ ​ 40,160 ​ ​ 27,386 ​ 46.6 % Fuel expense ​ $ 120,368 ​ $ 87,409 37.7 % 37 Table of Contents Other operating expenses.
Departures increased from 691,962 for the year ended December 31, 2023 to 766,742 for the year ended December 31, 2024, or by 10.8%, and our total block hours increased 13.3% in 2024, as compared to 2023.
Departures increased from 766,742 for the year ended December 31, 2024 to 863,513 for the year ended December 31, 2025, or by 12.6%, and our total block hours increased 14.7% in 2025, as compared to 2024.
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.
We are evaluating alternative uses for the CRJ200 aircraft removed from service. 34 Table of Contents Results of Operations 2025 Compared to 2024 Operational Statistics The following table sets forth our major operational statistics and the associated percentage changes for the periods identified below.
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.
We placed 18 SkyWest owned CRJ550 aircraft into service under a capacity purchase agreement or prorate agreement, while removing 14 CRJ700 aircraft from flying agreements. We placed four SkyWest owned CRJ900 aircraft into service under a prorate agreement while removing four partner-financed CRJ900 aircraft from flying agreements. We also removed 17 CRJ200 aircraft from service during 2025.
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.
Purchase Commitments and Options As of December 31, 2025, we had a firm purchase commitment for 69 new E175 aircraft from Embraer with delivery dates anticipated into 2032. We also had firm purchase commitments to purchase two used E170 aircraft with anticipated delivery dates in 2026.
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 block hours, departures and passengers carried during the year ended December 31, 2025, compared to the year ended December 31, 2024, w as primarily due to an increase in the number of block hours incurred per aircraft as the number of available captains did not significantly limit our flight schedules during 2025, compared to 2024, which allowed for a higher scheduled utilization of our aircraft. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the year ended December 31, Block hours by aircraft type: ​ ​ ​ 2025 ​ ​ ​ 2024 ​ ​ ​ % Change E175s 863,876 ​ 792,318 ​ 9.0 % CRJ900s ​ 94,568 ​ 84,883 ​ 11.4 % CRJ700s/CRJ550s ​ 329,347 ​ 244,909 ​ 34.5 % CRJ200s 193,932 ​ 169,930 ​ 14.1 % Total block hours ​ 1,481,723 ​ 1,292,040 ​ 14.7 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Departures 863,513 ​ 766,742 ​ 12.6 % Passengers carried 46,021,999 ​ 42,335,302 ​ 8.7 % Passenger load factor 81.5 % 82.8 % (1.3) pts Average passenger trip length (miles) 457 ​ 464 ​ (1.5) % Operating Revenues The following table summarizes our operating revenue for the periods indicated (dollar amounts in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the year ended December 31, ​ ​ ​ ​ 2025 ​ ​ ​ 2024 ​ ​ ​ $ Change ​ ​ ​ % Change Flying agreements ​ $ 3,885,153 ​ $ 3,412,798 ​ $ 472,355 ​ 13.8 % Lease, airport services and other ​ 173,049 ​ 115,122 ​ 57,927 ​ 50.3 % Total operating revenues ​ $ 4,058,202 ​ $ 3,527,920 ​ $ 530,282 15.0 % 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.
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.
(2) Segment profit is equal to income before income taxes. SkyWest Airlines and SWC Segment Profit. SkyWest Airlines and SWC segment profit was $263.0 million for the year ended December 31, 2025, compared to $138.9 million for the year ended December 31, 2024.
Significant items contributing to the SkyWest Airlines and SWC segment profit for the year ended December 31, 2024 are set forth below. SkyWest Airlines and SWC operating revenues increased $513.2 million, or 21.5%, from 2024 to 2023.
Significant items contributing to the SkyWest Airlines and SWC segment profit for the year ended December 31, 2025 are set forth below.
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 $95.4 million, or 6.5%, increase in salaries, wages and benefits for the year ended December 31, 2025, compared to the year ended December 31, 2024, was primarily due to an increase in direct labor costs that resulted from the higher number of flights we operated, partially offset by operating efficiencies from higher utilization of our aircraft during the year ended December 31, 2025, compared to the year ended December 31, 2024.
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.
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. 41 Table of Contents The $8.5 million increase in cash used in financing activities for the year ended December 31, 2025, compared to the year ended December 31, 2024, w as primarily due to an increase of $41.6 million in cash used to purchase treasury stock and an increase of $20.3 million in cash used for employee income taxes paid on vested equity awards in lieu of shares, offset by an increase of $53.6 million in proceeds from the issuance of long-term debt for the purchase of seven new E175 aircraft, net of principal payments on long-term debt during the year ended December 31, 2025, compared to the year ended December 31, 2024.
Additionally, the increase in SkyWest Airlines and SWC operating revenues was attributed to an increase in block hour production during the year ended December 31, 2024, compared to the year ended December 31, 2023.
SkyWest Airlines and SWC operating revenues increased $509.7 million, or 17.5%, for the year ended December 31, 2025, compared to the year ended December 31, 2024, primarily due to an increase in block hour production during the year ended December 31, 2025, compared to the year ended December 31, 2024.
Under our capacity purchase agreements, our major airline partners compensate us for our costs of owning the aircraft on a monthly basis.
Under our capacity purchase agreements, our major airline partners compensate us for our costs of the aircraft on a monthly basis. The consideration for aircraft ownership costs we receive varies by agreement but is intended to compensate us for our ownership of the aircraft while the aircraft is under contract.
Airport-related expenses include airport-related customer service costs such as outsourced airport gate and ramp agent services, airport security fees, passenger interruption costs, deicing, landing fees and station rents. For clarity, our employee airport customer service labor costs are reflected in salaries, wages and benefits and customer service labor costs we outsource to third parties are included in airport-related expenses.
Airport-related expenses . Airport-related expenses include airport-related customer service costs such as outsourced airport gate and ramp agent services, airport security fees, passenger interruption costs, deicing, landing fees and station rents.
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.
As of December 31, 2025, we had 637 total aircraft in our fleet, including 487 aircraft in scheduled service or under contract pursuant to our code-share agreements, summarized as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ E175 ​ ​ ​ CRJ900 ​ ​ ​ CRJ700/CRJ550 ​ ​ ​ CRJ200 ​ ​ ​ Total United 121 ​ — ​ 37 ​ 58 ​ 216 Delta ​ 87 ​ 32 ​ 18 ​ — ​ 137 American 20 ​ 4 ​ 68 ​ — ​ 92 Alaska 42 ​ — ​ — ​ — ​ 42 Aircraft in scheduled service or under contract ​ 270 ​ 36 ​ 123 ​ 58 ​ 487 SWC ​ — ​ — ​ — ​ 11 ​ 11 Leased to third parties — ​ 5 ​ 40 ​ — ​ 45 Other (1) — ​ 10 ​ 15 ​ 69 ​ 94 Total Fleet 270 ​ 51 ​ 178 ​ 138 ​ 637 (1) As of December 31, 2025, other aircraft included: supplemental spare aircraft supporting our code-share agreements that may be placed under future code-share or leasing agreements, aircraft scheduled to be placed under a code-share agreement with one of our major airline partners or aircraft that are scheduled to be disassembled for use as spare parts.
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.
The increase in other income, net of expenses was primarily a result of an increase in the fair value of our investments in other companies for the year ended December 31, 2025, compared to the year ended December 31, 2024. Provision for income taxes.
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.
Corporate overhead expenses, primarily consisting of administrative labor costs, were allocated to the operating expenses of SkyWest Airlines and SWC and SkyWest Leasing.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeBased 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.
Biggest changeBased on this hypothetical assumption, we would have incurred an additional $30.1 million, $21.9 million and $21.5 million in fuel expense for the years ended December 31, 2025, 2024 and 2023, respectively. Interest Rates As of December 31, 2025, our long-term debt secured by aircraft and spare engines had fixed interest rates.
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.
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 45.3% of our total operating expense for year ended December 31, 2025.
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.
For illustrative purposes, a hypothetical increase of 25% to our salaries, wages and benefits during the year ended December 31, 2025, would have increased our operating expenses by approximately $389.8 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 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 each of the years ended December 31, 2025, 2024 and 2023, approximately 16%, 13% and 13% of our total flying agreements revenue was derived from prorate agreements and SWC. For the years ended December 31, 2025, 2024 and 2023, the average price per gallon of aircraft fuel was $3.00, $3.19 and $3.70, respectively.
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.
Pursuant to our capacity purchase agreements, United, Delta, American and Alaska have agreed to bear the economic risk of fuel price 44 Table of Contents fluctuations on our contracted flights. We bear the economic risk of fuel price fluctuations on our prorate and SWC operations.
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.
As such, a hypothetical 50 basis point change in market interest rates would not have a material effect on our financial results.
Changes in interest rates may impact our actual cost to acquire future aircraft.
We currently intend to finance the acquisition of aircraft through long-term debt. Changes in interest rates may impact our actual cost to acquire future aircraft.
Added
At December 31, 2025, of the $200.6 million in unsecured debt payable to Treasury, $95.4 million had a fixed interest rate of 1.0% and the remaining $105.2 million had a variable interest rate of the applicable Secured Overnight Financing Rate ("SOFR") plus 2.0%.
Added
The interest rate under the $95.4 million unsecured loans is scheduled to increase to the applicable SOFR rate plus 2.0% upon the fifth anniversary of each disbursement. We received disbursements under these unsecured loans from January 2021 through April 2021.
Added
We use the effective interest rate method to record interest expense assuming the unsecured loans are outstanding for the full 10-year term. Labor and Inflation Risk The global economy has experienced, and continues to experience high rates of inflation.

Other SKYW 10-K year-over-year comparisons