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SkyWest Reports Fourth Quarter Net Loss of $46 Million, Full Year 2020 Net Loss of $9 Million

SkyWest reported a fourth quarter net loss of $46 million or ($0.93) per share on a 21 percent revenue decline to $570,000. For the full year 2020, the carrier reported a loss of $9.0 million or ($0.17) per share on year-over-year revenue decline of 28 percent to $2.1 billion.

SkyWest Embraer E175 Operated as United Express - Courtesy United Airlines

On Thursday (February 4, 2021), St George, Utah-based SkyWest reported their fourth quarter and full year 2020 financial results. The regional carrier reported a fourth quarter net loss of $46 million or ($0.93) per diluted share on a 21 percent revenue decline versus Q4 2019 to $570,000. For the full year 2020, SkyWest reported a loss of $9.0 million or ($0.17) per diluted share on a year-over-year revenue decline of 28 percent to $2.1 billion. In Thursday’s announcement, SkyWest’s Chief Executive Officer, Chip Childs, said,

“The past year has challenged our industry, our business, and our people beyond what anyone could have anticipated, and we responded quickly and aggressively to protect our people, our partners, and our business. I’m incredibly proud of the SkyWest team’s great work and the flexibility they continue to demonstrate. We believe we’re in a strong position to play a key role in the industry’s recovery and we remain committed to positioning SkyWest for future success.”

SkyWest’s fourth quarter revenue increased 29 percent versus the third quarter due to improved demand, while total Q4 block hours were up 20 percent versus Q3 2020. The company deferred recognition of $12 million in fixed monthly payments received during Q4, down from the deferral of $69 million deferred during Q2 and the deferral of $30 million for Q3. SkyWest will recognize the deferred fixed payments on a completed flight basis over the remaining term of their contracts.

For the fourth quarter, SkyWest’s expenses totaled $617 million, flat from $618 million in Q4 2019, as the reduction in direct operating costs were offset by an increase in maintenance expenses on their CRJ200 and CRJ700 fleets, as well as depreciation on the CRJ200 fleet. As of December 31, 2020, the company had $826 million in cash and marketable securities, up from $520 million at December 31, 2019. SkyWest has $665 million available under a $725 million five-year secured facility with the U.S. Treasury Department under the loan provision of the U.S. CARES Act. The carrier also has a $75 million line of credit facility with approximately $35 million in letters-of-credit issued under the facility and $40 million available under the line at December 31, 2020.

The company’s total debt at the end of 2020 totaled $3.2 billion, up from $3.0 billion at the close of 2019. SkyWest’s Q4 CAPEX included $230 million for the purchase of four new Embraer E175s and 22 used CRJ700s and $28 million for other maintenance assets. The carrier issued $205 million in debt to finance the aircraft acquisitions.

Under their flying contract with Delta Air Lines, SkyWest financed four new E175s which were delivered in Q4 and one new CRJ900 will be financed by Delta and operated by SkyWest is scheduled for delivery in 2021. The carrier’s capacity agreement with Delta for CRJ200s expired at the end of 2020 and was not extended. SkyWest has no outstanding finance obligations on the CRJ200s removed from the Delta contract and the aircraft have been fully depreciated.

SkyWest will receive 20 Embraer E175s under their flying contract with American Airlines with 18 deliveries expected during H2 2021 and the remaining two in 2022. The company expects to finance the aircraft through debt. As of December 31, 2020, SkyWest had 65 CRJ700s in service with American Airlines and the company expects to place an additional 25 CRJ700s into service with American this year.

St. George, Utah-based SkyWest, Inc. (NASDAQ: SKYW) is the holding company for SkyWest Airlines and SkyWest Leasing. The regional carrier usually operates up to 2,500 daily flights to more than 250 destinations throughout North America with a fleet of over 400 aircraft. Through partnerships with United Airlines, Delta Air Lines, American Airlines and Alaska Airlines, SkyWest carried 21 million passengers in 2020, down from 43 million passengers in 2019 due to the global COVID-19 pandemic.

Source SkyWest


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