SkyWest Loses US$47m in Q4, Earns US$73m for the Year

DALLAS – SkyWest Airlines (OO) lost US$47m in what the company’s CEO called a “noisy” fourth quarter of 2022. The loss compares to US$4m in the same period of 2021.

Skywest is contracted with Alaska Airlines (AS), American Airlines (AA), Delta Air Lines (DL), and United Airlines (UA). The carrier generated US$681m in Q4 – a 12% decline as compared to US$777m in Q4 2021.

“This quarter’s US$96m year-over-year decrease in revenue consisted of a combination of a US$4m net reduction in contract and prorate revenue and a US$92m reduction as a result of revenue deferrals,” the airline said.

For the full year 2022, SkyWest posted a US$73m profit compared with US$112m in 2021. OO said that it generated US$3bn in revenue for the year, up from US$2.7bn in 2021.

“Despite the noise in the fourth quarter, I want to point out that over the past year, we have set ourselves up to be a fundamentally different and better company,” chief executive Chip Childs said during the airline’s fourth-quarter earnings call on February 2. “We’ve done this by focusing on the core areas of our business that will help us set up for growth in 2024 and beyond and ensure we have a solid, sustainable future.”

Upbeat about 2023

Childs noted that a focus in 2023 will be “ensuring that we have the resources, processes, and systems in place to run the most reliable operation and to mitigate negative impacts on our people and our customers.

“We also remain transparent with our partners about our constraints and are disciplined in ensuring we deliver on our commitments,” he added. “As we’ve seen throughout the industry, over-commitment without the ability to execute is a recipe for disaster.”

The airline transported about 2 million passengers over the peak holiday travel period between mid-December and early January. “I can proudly say our teams delivered some of the strongest operating performance in 2022 with over 99.9% adjusted completion for the fourth quarter,” Childs said. “This performance included the peak Christmas holiday travel period, during which we experienced severe winter weather.”

Deliveries

In terms of its fleet, OO took delivery of four EmbraerE175s for Delta Air Lines. As of early February, SkyWest has taken delivery of 13 of 16 E175s expected to be delivered through the middle of 2024. That will bring its fleet of E175s under contract with Delta to 87.

The carrier currently operates 517 aircraft – 236 E175s, 41 Bombardier CRJ900s, 104 CRJ700sand 136 CRJ200s.

Pilot Shortage

Childs notes that like all regional carriers in the US, OO is dealing with problems surrounding the pilot shortage. But he says the company “is making headway on our captain imbalance and we’re cautiously optimistic as we plan for the years ahead. We can say that attrition is not quite as bad as it was last year”.

The company's website advertises that new captains can earn US$216 per hour.

SkyWest anticipates launching a new charter subsidiary in spring 2023, pending an OK from federal regulators to operate scheduled public charters.

Featured image: N613CZ, Delta Connection (SkyWest Airlines) Embraer E175 @KSLC. Photo: Michael Rodeback/Airways