SkyWest (SKYW) 1 Aug 202020 Q2 Earnings call transcript

Good day, and welcome to the SkyWest Inc.

Second Quarter 2020 Earnings Conference Call. [Operator Instructions] Please note this event is being recorded. I would now like to turn the conference over to Rob Simmons, Chief Financial Officer. Please go ahead.

us call joining for everyone, on today. the Thanks,

is SkyWest’s Chief the operator Officer. Simmons, this indicated, As Financial Rob

On the Commercial over the Chief to the Executive comments. Woodward, call Safe President some Accounting to start Officer; Childs, with Chief I Eric Wade Chip me today today Harbor, by for Steel, to I’d then time Chief Officer. Officer; asking Eric are and like Chip read and turn will

discuss the Chip, results. will Following will Then arrangements. through take and financial the fleet I us flying related Wade

Wade, our we will session Following have the sell-side Q&A customary with analysts. Eric?

results forward-looking a represent no likely regarding assume to number vary may Today’s for statements discussion those vary and are and expectations risks current obligation assumptions to contains estimated and events subject will and or from that projected Actual materially of our update We beliefs, anticipated, any uncertainties. reasons. future statement. forward-looking

Some and and of our the may XX-K in that I’ll now to Form and call such with included are turn over filings Chip. cause differences the Commission. And factors other the reports XXXX Exchange Securities

Good the everyone. in history, Thank that and its to Eric. and aviation airline aware all I currently us know call downturn afternoon, you, you’re well joining Thank you is the is immune industry largest on Rob demand the navigating for today. no its impact.

our people However, despite other, the our have and responded who proud SkyWest to obvious industry, quickly care our our challenges each passengers facing airline. of take of I’m

us this of pandemic. this We’re still our side other very to the to focused priorities through on key get

focus. of our our personal people well-being and top First, the remains health and passengers

for continued to in crisis. liquidity needs differentiator necessary remain meet And a ensure well working cash with focused we’re third, work to and positioned partners are Second, through we maintaining their and key recovery. will our the this flexibility our on

aggressive and the in with support received Act. work we in navigate recovery. management, a relief, we ensure of expect will under combined work This million to about for we our cost position will payroll minute. the funding a QX, to total marketplace our in cash $XXX $XXX Rob more the and as million receive CARES crisis During positioned this talk help our we’re liquidity

closely continue latest airline health partners the guidance officials health and to the of industry and well our ahead as as working stay We passengers. CDC our and of and major with the ensure people well-being

disinfectant We company-wide. measures policies customer in and onboard SkyWest and have all robust implemented facilities, points aircraft cleaning and implemented touch reduced face-covering

in and people. expect appreciate We our many remain these partnership the with will changes we place indefinitely, response and of rapid

qualification who to adapting and grace quarter. for We of demonstrated with pleased with this to proud our success environment. new distancing, requirements have continued training social stringent cleaning and professionalism remarkable the resume are face teams coverings I’m during in

social of very accomplished this a against been challenging backdrop. All has

many the at and violence appalled Humanity been have with in country We our at racism begins individually respect us cities, bases collectively. our of hubs and and of and risk. at each

As employees serving an employees we our our against diverse to and with remain committed customers. Black we each racism, and organization, stand of

to manage steps in continue with costs take our people environment. also closely this We to working

As of reduced on early are time flexible to have X,XXX A today, retirement. and voluntary elected schedules. portion teams working our just employees take over non-operational of off large or

management before quite our resize demand we’ll and year-end. including before and administrative will expect We airline, it be time and need likely streamline some our to fully it’s positions returns, reducing

take creative working we them furloughs. toward do with work our member not difficult very continue avoid labor solutions we decisions, groups lightly. crew are However, These and to

cost will important near taking our viability success. and long-term measures the However, ensure in term

In at ago. have we we X/X we In slightly have June, quarter. about the some July, X,XXX during departures to and daily we departures. utilization would saw approximately XXX, X,XXX flew to modest should with During XXX. – less about it daily the a that quarter, year what a that, increased increase was perspective overall efficient fleet fly provide expected hours to remained May, To on in of block number

With likely or the in the off will that flatten resurgence we fall. the departures drop expect in recent virus,

prepared previously As to climate respond as have continues discussed, to we we necessary the are if deteriorate.

In quarter Our continued remain our improvement received A will in recovery. key in of which same component to our quarter, In their lining June increase. removed year-end. XX% of XX and to end. aircraft several agility this them and was continue more mix. year, that the of contract from most expirations will resulted of an the Delta this the it XX-seat we expect natural service mix with We during XXXX, this accelerated it nice crisis fleet during quarter is began EXXXs time, a our of silver agreement has June At at remove at dual-class. from XX% fleet was

and shared risk tail have As we’ve previously, most space. to we the in no the little fleet regional flexible

reductions to rate we temporary waivers. contract September provided our temporary in quarter, through October. provision we expire As including partners last This the support shared flexibility will and and contract minimum and quarter,

fill partners each months best closely turbulent. But the our critical be confident continue next returns, of collaboratively will fleet We and role positioned to to Undoubtedly, to in we several we’re working are the meet ensure return will travel. continue our a with their as needs. to demand

our people crisis of and our are take we customers aggressively plan focused and navigating and preserve this as deliberately for care liquidity We on our to recovery.

work ensure stronger the to financial as with business. people to now our continue us through we data. take together a partners will We better, emerge our will Rob and

we Today, a per $XX net million second loss of reported quarter share. $X.XX or

rate GAAP and include deferral of of our with effect a was QX expense. for the results $XX revenue was in of no associated million QX deferred count These XX%. share million, tax effective Our XX.X

in to the are anticipated on over us of remaining contracts flight for the XXX fixed we various But some ongoing our and cash obligation be flying, block that future not fixed of the for does hours paid recognized represent as based revenue a component will revenue schedules already of of result number partners. it the large us have the partners accounting of the and contracts, in Our to standard. rate part this disruption unusually our life of pursuant in as rate the deferred COVID-related an

We the this have unaffected cash fixed obviously defer never deferral. our reversed The the various The timing and of accounting of by depends into rate periods. revenue revenue be end contracts on of revenue amount revenue contract timing deferred the historically. shape future are reversal and flow this thereof had to the the and flying. deferrals economics will and of by of All our into recovery

million, $XXX million to balance from last the move ended me of quarter quarter. We the sheet. Let $XXX; with cash up

second the other year $XXX billion, $XX including Delta new two is and for year, expectation EXXXs of million $XXX debt At as during point, the the our of quarter was quarter back in the $X of We including CapEx to million acquisition last by Our $XXX for year from EXXXs down of contract, new million end slightly million, $XX with from $X.XX the this to engines billion pull this million $X items. to million four the year. CapEx ended $XX for spare year-end. million our under our

Let’s talk liquidity. about

million position $XXX million, availability on Our was in of $XX June credit. cash our of to revolving line XX addition

$XX funding payroll grant the $XXX million million CARES a which we million loan. is of Act, under is $XXX support in QX, received and During a

$XX is which of loan. will in million $XX million QX, grant come is million $XXX a a Another and

years, $X As you for of funding the million the the is of secured collateral interest math, first with in alternatives, term grant. in of in the in and liquidity remaining of in including Act. with program see the form $XXX term XX-year million financing assets gives access end, $XXX rate a This aircraft. total over loan $XXX we million five the being which engines $XXX billion, under PSP to the quarter senior X% a unencumbered At CARES had a evaluate, primarily will us additional million we loan unpledged

item signed expense income of the rate LOI per cash of the $XXX $XX a level we balance The of a $XXX at of on that current additional second and $XX second this Based still which end we June $X of PSP received per on million as million to million year in and of is million in ignores our be a line and we the year. the no million loan draw deferred Last estimated reverse for will recognized analysis cash the year documentation through or grant day. loan cash June estimating and laid million income between debt as income XX non-binding half. per on and program the of estimated $XXX difference any U.S. are million have as QX in P&L. we Of of million in average $X.X the $XXX are quarter, cash receive a sheet be burn million CARES the year-end $XXX recognized incremental in on will of working the This as cash our half ending considering money grant The cash the through the Treasury about would participation. the the sitting out will revolver. to item, month and clearly $XX, remaining million, of QX end its cash our month the day. $XXX of PSP through and in million own contra burn million assume per burn form total program continues in our or are about Act $XX $XXX the the was recognized on in weeds currently timing money, We effect

incremental importance disruption current burn we in XXXX. business assumed over as This the model the by Our in and shines last been of years. spotlight a event five recovery modest flying cost to and the uncertainties demand modeling, how subject on improves have rationalization, many cash with our year-end derisking is

positioned the effects of weather in industry how we including expect, the loans secured about loan feel is $X continue million and accessed currently than one in we putting COVID and call no billion liquidity slower recovery good revolver, other additional to CARES can immune work. by unpledged storm. our we Act effects If we have turn collateral economic our we worse crisis, out the alternatives $XXX our the over are of on, While our the tools to economic be to to to is allocation secured

couple on a when core in financing partner-owned term Number between and uncertainty minimal risk and to the is space. remaining give operate. tail XX% financing of of delta have remind our This more of the of In dollar one, I’m This no during to we has number million. aircraft to time than things fleet term. around our liquidity $XXX XX% that two, addition our you goes of flexibility this nice it. to us Number are contract that going others you position, include

zero grant is of expiring and the XXXX like to out any Especially with year. now Delta this is this in time. risk we mentioned additional XXXs the on $XXX timing initiatives, have remaining the revenue in deferred great in of fleet or been we I earlier, times a guidance is formal EPS will fleet in that are and and a now tail without would of our pocket half, goes policy A of income not of the of as plans. depends as uncertainty on component has consistent next or and It revenue saying Our COVID informal into later at our commercial practice, and to PSP highlight give other and event this that thereof reversal give to that recovery this all But setback the most position amount Wade timing opportunities. of and flying. the I movements recorded QX. you million the with that details some expected our Wade? second future on be the to shape

fleet update Rob. I’ll businesses. To and update update as provide prorate you, well status by and as Thank on our a partner. production leasing an

EXXXs we deliver financed took quarter. quarter, Delta. are with new during currently We on the two scheduled fourth Delta our order under aircraft We these During long-term for the to new delivery debt. EXXXs have four which of agreement,

scheduled Delta used six EXXXs to into also from are service. operator We sourced play another

and property year. next early The three are begin All currently service remaining in of service. scheduled to these are on are aircraft three

We during delivery of QX this are take also Delta-financed scheduled of our year. to final CRJXXX

under You may our have expire recall that scheduled at Delta this the end we of XX agreement to year. CRJXXX

are These not which we by and depreciated sourced began SkyWest-owned do Express EXXXs, remaining service June United remaining returned of terminate financing end be United fully renewed. aircraft the During to of operator. year. delivery remaining financed aircraft our July. the aircraft were Delta-owned another took Delta. partnership, will these and in the are of quarter, CRJXXXs We XX XX Under XX majority an we and agreement to the have will to and used the aircraft from no the United by be our obligations anticipate came with These

modify last shared of of timing XXXX. worked we deliveries. aircraft fourth the middle the delivery our As of XXXX expect EXXX American to now of during quarter, with quarter XX through these the We new

Our be during to X are placed previously announced into scheduled half and CRJXXXs the QX now XXXX of XXXX. first service

our Let production. current me review

fleet block for be to The year. our same of Based to XX% third last major on XX% to the approximately XX% for an completed quarter, down will hours need our last have from by our compared second the partners During schedule year. hours block the the to the quarter by important current anticipate third down that we major our EXXX quarter, partners. compared quarter we continues were fill

CRJXXX reduction block hours XX% block down will the down QX hours QX anticipate of fleet, will in to the our we QX be CRJXXX majority the as approximately hours approximately block XX%. last have year, that be while on our been While compared EXXX by

As of contract middle By under under to we EXXXs have our had XXXX, contract the XXXX, our expect December XX, major with with of XXX partners. EXXXs we XXX partners.

finalized of included our and charges contracts, the we primary temporary and the of contract $XX largest deferring quarter, aircraft of of reductions due with QX million. all QX with waiving certain minimums, deferring through during The our certain creditors. These partners that during was ownership partners. contract related the costs concessions negotiated our the During rate ownership approximately passing benefit major start deferring aircraft payments to were from quarter concession our temporarily

quarter. the to we deferred still revenue second recognize payments aircraft the purposes, GAAP For with associated during related ownership the

will the over deferred amounts paid the expect be CPA back We that contract remaining ownership terms.

concessions either All or these September in October. of expire

business. talk Let about me our prorate

hours decreased reduced XX% the will approximately be during to foreseeable our XX% approximately quarter, expect for last of block or compared quarter currently During by million. removed hours our our block block the to by we revenue We reduced hours anticipate by and $XX approximately second future. prorate the the prorate We year. XX% XX% be

in XXXX. we during approximately revenue in our compared to system XXX We be prior United the expect million $XX of to Specific third XXXX CRJXXX fleet, of prorate the over our our the quarter will had flying to States. less CRJXXX COVID onset

XX our year-end. we at fleet by reductions CRJXXX our anticipated the prorate and With Delta fleet, estimate reducing approximately by aircraft

CRJXXXs discussed Delta. to we previously, As returned XX have

are expect returning CRJXXXs in the of out XXXX to We anticipate We or several XX part end sell CRJXXXs also and the lessors. by currently of process excess aircraft. third-party to having of XX these

second We contract lives of in to contributed of the our the of of half and to CRJXXX anticipate approximately estimated second second This expense million of for service, quarter. incremental each of the an compared number additional we align half increase the the aircraft we our million applicable XXXX. to of depreciation expense $XX incur shortened depreciation the Given purposes age approximately removals upcoming $XX will depreciation have during XXXX fleet with useful with of our anticipated removals from CRJXXX partner.

Let leasing me our shift to business. gears

lease have of under We a XX XX to CRJXXXs third-party.

do not remaining anticipate However, delivering the aircraft we to the lessee. six

are working these will We SkyWest. XXXX. during with half partner placed of XX operate the parties several these aircraft We major to under a with be second believe contract at aircraft

under during to and engines XX XXXX. last year, commitment had short-term During XX lease additional we engines QX lease agreements

summary, not demand As the of are been have today, the to XX we In XXXX. and majority of engines our on returned, for return business during commitment expect working the do the lessee these leasing the for engines. we with

provide new two is the crisis third-party this and our committed respond their history, final needs. under quarter. and second This we our major to CRJXXXs of We in two purchase each during commitment. on the to to from aircraft solutions closed agreed also with are to unprecedented a We quickly working creative partners

positioned will to We have environment. several and ensure risk challenging spent last we’re the flexibility, fleet which financing and reducing years navigate this enhancing

Okay. for the Q&A call. of Operator, portion we’re ready the

Please today Instructions] Syth Savi [Operator from of first you. The question go Raymond Thank comes ahead. James.

afternoon, good Hey, everyone.

I detail concessions provided. to the the granted that partner, you on the appreciate you Just

recent beyond kind revisit wouldn’t provided weakening, back Given comfort is of go these it that and you far. extend your for of how kind so and wonder the to I you’ve long them have what concessions level

we’re Chip. That creatively for us. to – has this last I not spent partners with over long too the our finding the years concessions, going into worked term. call. Yes. that Savi, add very solutions reiterate is the would value certainly well we’ve relation would But mean the to where in I get can we details on many I several

continue facing hope that We us. would strategy. we’re over to need I to relative Given for going would this in that need all that we’re the the things that dynamic pandemic good we’re with environment things be this game. over the some into we provide fall, That this we’re we long same fall going them to the to gets quickly. emphasize and to partners, utilize the the exact that of in, our to exercise given of of ready to for we’re whatever to do that for But months. need do winter to stand we philosophy continue some and

that it’s of now. thinking then placing, think And the on were at XX you I Helpful. just XX CRJXXXs

Is sublease you flying? those And were you’ve I had be think were placed CRJXXXs that with mentioned expecting you’ll you where place last quarter that some might that to another place you partner. the I’m you XX, Or is that agreement? guessing looking to mentioned have so returned. another doing

We have did XX Yes. quarter. XX Wade. so those the back of well, for I the as question. is of three Thanks Yes, the Savi, delivered. XX we took during – this the said,

have undelivered. we XX So

to to position delivering financial not the – in They’re current we do a take will We not lessee. not them. those anticipate

And And Airlines, fly potential they at so to we those demand have partner. those and our of partners major another we’re major working are, looking on operate SkyWest that. all with for for

squeeze if for the current Got might this one environment it. having wanted pilot I might just of in not this focus and the business. you of last outlook of when if kind outlook business. kind the and But And question. demand, the weren’t know of I to demand that kind core cargo side the you moving we on previously, I maybe the into have, slow consider given wonder, recovery levels you

a That’s of nature. partners, continue that. that candidly, the can some our not that very the to think business low-margin But – evaluate demands certainly We’ve to things of good we energetic question. I we to as explored do we’re meet that of jump a into high-risk, not

have airplanes, that at to not what’s key is time. the of lot we we’re one but market, in Although focuses this to going there our evaluate a of continue out clearly

Thank you.

Our question Goldman Catherine Sachs. comes next from go O’Brien Please ahead. of

everyone. the afternoon, good time. Hey, Thanks for

Hi, Catie.

Hey guys.

more on third-party one So, the this, aircraft. question I just have leased

So remaining worked to that for financial with was some got obviously, the paid to it – Or that that penalty out? aircraft for there and, you those remuneration SkyWest third-party of take, that is that, or coming that? back able is not any

get of Yes, But those. not Catie, some going receive this get lessee. is for were that we to level I’m that. with of Wade. compensation settlement We into did the the specifics specifics – the of into won’t We

that that’s won’t we you depreciation see impairment And of retiring Okay. more then yes, the will that that charges just expect end that. then the or then next XX after at That’s of – any the and one fair. – on quarters? Do definitely the year, And you’re retirement CRJs couple means accelerate on – or the maybe selling on the those? over

Yes.

on Wade. so So fleet – this is the Catie,

have now, my the as aircraft, fully those. depreciation XX year-end. at we on the said depreciated be Those the all majority those on of accelerated right script, are will I aircraft in by So Delta

taking And charge so anticipate now, the we right at as time. any this of CRJXXX on not do impairment fleet

the million And as a look reflects last ago. year, depreciation QX, some little in by $XX the to In be run going That to think over Catie, Yes, of second year’s million. earlier, it’s if you accelerated depreciation. a we in second at second year said hot continue of depreciation. above half half that little that compared we half, to will it’s the about a $XX up

could on I one just Okay. costs. sneak Great. in more If maybe

ex some So Do that, the you operating year-end. third just more the efficiencies were like we CARES pressure that similar down relationship I’m should like but cost-reduction depreciation see year-over-year between block quarter it sounds costs potentially that on XX%. into Or well? as and sure hours operating into you’re to some gap expect having as close the was putting alluding about future expect on It get we Obviously, upward block two a hours maybe costs opportunities, down of between and XX%. quarter looks your to year-over-year? the were fourth accelerated

Yes.

I a and Catie, that is And too bit a factors of one soon answer, lot than variables more – that there’s to anything question think this that we today. just it’s almost evaluate and great little answer It’s Chip. that. a going into

we’re Given the significantly. volume our have the our variation. our size four are even with that there’s months, recovery, aircraft, and assisting of last business, nature the as of do, can lot helping schedules, in a things that changed we And we the the this flying, partners of

I our want in that of And from like partners got do to ready my like to we do lot we off. voluntary what again, things we to perspective, do. have look, – us stand So taking employees a script, we’ve think time mentioned I

fluid be they anything, what model be our than still recovery we execute our in to our want ready goes But to partners. and people of be going back anything, more to with need those in costs. than to with a particularly to on our and things fluid the types we’re to partners We’re with overheads streamline, continue of very ways where couple to More to and it the relative communication work process. going cost,

paramount. to do this at it’s too being early of is little going ready So to to partners a what because still the our us point that’s help say exactly importance

the for Thanks time. Understood.

Becker ahead. Cowen. The Please Helane of question from next go comes

Thanks the for Thanks, time. gentlemen. operator. Hi,

second from a So, you position. I the about think Act, in why is, – good have one question CARES taking the pretty you’re when loan

unencumbered significant have You assets.

the You’re to with partners. working things able around? and be recovery the money? turn through in of kind to pay not stock yourself dividends take to your put Why all and of a continue Why position when buy the back issues win

the think for to view as as revolver. and Look, thanks year-end loan, pointed question. very I CARES we a undrawn at situation, at Helane, we out, $XXX so without or our us. liquidity of But $XXX good the some to alternative feel Yes, nice that be those, have we about continuing for do million Act core including an again, we expect million

So I case now. anticipate to in sure right than alternatives think, in is we longer make recovery and our this it’s that might this though, environment, anyone slower just have job. It’s that my job

have billion become for that over that balance very We’re nice scenarios, into sheet and this strong for are – unpledged be. a so by need of with if alternatives a alternatives. can And it crisis included enabled number to that we if liquidity $X planning of different those it’s needs sources the fact collateral went us

to in partners you question hour sheet? statement But able terms and notice hours last who balance wrong. this significant in the compared XX% you are you your then helpful. block said say completely prepared much are and how how going to your And about have being right I’m to actually forecast? giving third you much – how I’m changing are can noticed is so penalty of the say But very those you XX% – time you And advance when say That’s about block year. remarks without Can not – sure do talked to income in to own your I down your – this. partners now other quarter talked much

extraordinarily this us. Helane, in It of when Yes. I seen, know adapted was That all think just – a hard It terrific It’s the March it was I look, us. would of It’s on our we question. most was March, was unfolding. – hard this pretty what well. that is the something was industry us Back evolve on there’s into is Chip. is great you and some, hard be months these extraordinarily on one today. today the little had partners with very of of little have very to just recovery. prepared and we notices, adapt. in April. have when it through myself, people I But There our what to this it And of we to need March keep again, and help experiences, be like but And may – repeating types today. there’s ready facilitate like

country, these all this a that said, And much any more probably been adapt have But before. dynamic the things schedules, rates in with of you that whatever so And can in of block us with that wide August, happening we’re long-term having are than possible. competitive figure do. And virologist evolving range then to hour as becoming because of almost or it’s level notice quickly, are to the out we try and we’re the industry seen and as uncertainty that of learned And point, to advanced ever variability like what’s advantage for there’s want going can see have another perspective, things flights throughout all from us we infection We toward and we’ve to a and of travel see specifically as the accept. the day. flying we’re if can opportunity. a data X,XXX within an

to again, to happens and So when recovery respond it be as ready need our what the we, happens. need partners to

good doing our thing, partners. job good that a we relative even forward think to a of to and geography, we’re and is I evolution look, what going for need flight schedules So to attention pay

helpful. you Thank very very, your is insight. appreciate That for you. it. Thank I

Deutsche of comes Linenberg Bank. Mike from question go next The Please ahead.

would adjustments, make. call deferral. everyone. it, way I with not numbers revenue out the the receipt on guys you I there Are afternoon, missing? the three are of at it money of, D&A are decision, some we those look the are call of any – others items others, an Hey, Or CARES Act, in expense, special portrayed, or, to apples-to-apples I you as whether if main good made the In call the that just I’m was there Rob, order sort guess, guess, special upsizing – items, sort contract the probably will? the am it, that to that basis you adjustments I

number sort there Mike, Look, items. No. unusual of were of a

we received, so was sure visibility We’ve Obviously, that a pretty present PSP make ones is quarter. easy just were. the we a that And those the to it then provided of grant other decision GAAP deferred the of new what – but cash revenue We’ve – we’ve numbers but useful we’ve this into high some lots part got because component got where hot was a the XXXs. And particularly depreciation got the a some of the running a changes engine recognition be events. reasons, made and of unusually – expense running of for on variety maintenance deferred. that’s was assumptions we’ve the will some little of life the just got

take pro pick. like. given whatever forma lots So pie We’ve your bake ingredients, of you can you you’d

what That’s I figured.

$XX the Just much I second for you some D&A us told half. mean how clarity, the – increase, million

Yes.

earlier? – call since you’re the you getting been? have get of Or kind was those increase quarter, in what the it, the made extraordinary pickup would D&A of What June decision D&A out airplanes to in

Yes. Yes.

some million, So of of $XX and related contracts early. it wind-down of bulk the of to was was the that total the up a

Okay.

Okay.

I $XX revenue of less kind So was million it’s the about $XXX like, – on million million think CARES think it $XX the whatever, the how it. I big items, is picture plus

there’s the Okay, into of an are I’m then point believe no also And then we my about dilution, and secured they the question curious that’s dilution obligation. is, would program, company may yesterday, mainstream program, talk something able yesterday loan heard that learned unsecured knows? actually actually, that’s relatively the of relatively a you hit I’m well. the company, actually for a it’s maybe you that as cost, was shouldn’t there say second smaller looked loan that. one Do – no lending do it for be the essential Is program carriers to other you’re that a the is that you’ve of and or we warrant looked And Act. at curious And who company I They way you if if a of actually another they certain certain they’ve quality that and benefits higher part credit helpful. – a that work pledge we And because there’s is CARES from collateral? – smaller just qualify. that interest

not if – curious that I’m on So looked that. you and thoughts into

Yes.

of program, yes, flexibility relatively we soon. where I mentioned full quite got March down that treasury in documentation going program, bit the draw as of if Again, the like, the on we So would until have again, close that’s – to phase under on the that look want. we middle expect a of thing, the we’re which next loan we to we’ve and that, amount we’re

to – available and has continue the we we’ve got timing government that. – made to to a the the we’ll of like us. So our great feel we involvement amount program And evaluate continue in

they on did call, meaningfully, that to originally on we and went delivery learned they of pretty one Okay. last their their regional say United sheet And on take then their to partners. CapEx put now going are one. airplanes balance take were going of that down the to and they one just What quick

going balance tell, have the reduction call. the best don’t see the looking CapEx X.X there on of as I think United regional that that on across delivery aware yet, you’re we on I the road it’s I haven’t and flown that carriers release. be and to front take Anything finished delivered? that taking sealed one, can United just that in should on maybe Are you up be – sheet there on of? you the only don’t And can your not anything signed, documentation, down would other I maybe, of airplanes indicated know, to that out their behalf landscape, that As are even

the is that have those. To Mike, our Chip. if finance will that business the Yes. those aircraft in, to we coming absolutely new be were flying is ones this we extent we

that’s that So happening speaking, perspective candidly from nothing with. there’s our

a we unless perspective of here partners. from new to to with if them finance is only our nothing going soon, conversations our buy we’re fly airplanes, going lot if but short-term them. principle have changes the something we’re that We Clearly,

everyone. Okay, Chip. Thanks, very good. Thanks

of ahead. go Joseph from question Next DeNardi Stifel. Please comes

to fleet afternoon. – a I to not tried evening the standpoint, moving but enough guys. Hi, from pieces up. good follow keep the, I I’m Good smart wasn’t guess, I

your what you several it of then over on of you walk is of, kind through that fleet contractually, like maybe looks next changes And just don’t fleet emerge few actually realistically, all you can the like? that, of fleet contractually quarters realistic I to, where the then the next looks kind this. So at your and relative think what other quarters side some how plays scope out the know, Just over mainline partners? and

question. of Yes. Joe, That’s a Wade. now. a is great fleet this are movement There right lot

of our We’re with major all working partners.

end some the – quarter, of look XX-seaters in that be now the we’ll fleet biggest primarily as out. side you the flying somewhere that some on American airplanes the end release, then second XXXs the we And around be and side. flying. then XXXs XXX the the definitely movement additional adding We There’s the in of be XXX the going year. be end airplanes are and will Primary by the on Delta changes some of coming anticipate had the Delta will new our year. to we of If between

the So those boil the it of fleet we’ll day, of movement. at year. SkyWest down, around are end end the kind you at the all be But at of airplanes the when XXX big

Okay.

kind a – partners Is about though than from right? talking smaller. materially well, getting similar it size even of came significantly roughly think into with SkyWest, that emerges that you – them talking your you it, similar So – of fleet some this are about

going were those We And today. of major are couple We’ve that guys. XX We all CRJXXXs that a a XXXs at. those the from financed the year. property by were financed things a Those of can lot offsetting that are away. did those lot that So have not on took are United last taken during pandemic, you partners look our the right? of

XXXs talked of have script, it our spot fleet are bright lot we our a and going this. And accelerated more accelerated to it has replacement. of we in as it, as – we it’s so is emerge more And and we are – one this has

so by we XXXX, XXXs, going there’s we we’re had of to in As it’s script, And a our block year-end, And be middle growth nice XX%. my going At I around XXX the third to have the said XXX, the down think been our quarter, XXXs. in very XXXs. only in right? hours period-over-period

So in growing nice of dual-class a very job that. done our we’ve

we’re net-net, bit, with XXX going a emerge XX-seaters down is it to airplanes. Our But little shrink. around but will

outsource what some Okay. helpful. soundproof I I for talk wish maybe the this kind house, do in a of I of flying in Chip, what your how of to third-party, regional to for background But That’s other versus on my had looks you terms this? like market addressable the means in-house partners about your much look paid you think side noise. doors of apologize can the

Yes.

with is trying flexibility execute. – bring not of things it’s I significant a as say, we of of can a to there’s call, with be capital, a I just as mean what the flight the – briefly, other what of that the couple able ability marketplace Just lot we’re times like may variables will a that I of schedules and this. with carriers well if is necessary, to to said in do amount I a lot to, associated think couple

what the not like. to far relative So internal pathway to look that carriers, see down enough we’re might really

many we like only last scramble. want strong the is CARES accomplish lot can is more several an variables for there I our to we There’s short And exceptional got like thing emerge variables over bit be to what going a partners. in working very, can very everybody strategy when that Or see. that know more going domestic what to that been to to go and we kind we partners, feel with think happening hard But the years term today, Is of our still what control is little of with going away do we’ve money? more? The Is we in just you. feel can think there think, term. We be a a I honest by built important, were it the could resurgence in the to There’s that’s long this optimistic be we so virus returns. is that demand we do control. infection? fall. trying said, than we’re the to we having that with people We

given of right amount that So that’s about now all we the uncertainty. can say to

Thank helpful. That’s you.

go Sidoti Please question O’Hara with The Company. & next ahead. comes Steve from

Hi, time. for Thanks good afternoon. the

Hi, Steve.

Hi.

if thought cash? just I curious, I with you that received maybe received, just there it But was me guess cash Just deferred the flying happened explain receipt wasn’t and I deferred from revenue, you revenue what on to if that. said was or maybe had of the the on quickly I can – you cash the the wrong understand.

Yes.

a been production, revenue which million So no portion revenue of hours required XXX, during our we under fixed down paid. because our much. contracts deferred for were we we was of have so being disruption the of defer which we is obligation. This completely of $XX quarter. to But recognition in of block the It ongoing rate component the our for revenue have

Okay.

going slashing of lot talking you’re flying future, long But the obviously, a about then right would take lot to about within of that’s cetera. And you’re of is, level? my where the become that to if if to mean take be it about different. of your as whatever structure Okay. think maintain get level about costs time, obviously, And that mean a is? I talk you how if in – maybe get you now – the to the flying how assumption costs of well, on mean, there’s reasonable flexibility guess I right side. today, you your not that a level XX% to again But I kind questions long you et a reduced are to at can other effort place to kind that’s I profitable cost just it you would

of summer. some of costs. how we broader management really can of as we some with as and we to we why, if and this picture, to. would the overhead Steve, changes to If Outside the ahead were we can I from because relative do X, So is give them X some soon anyway do of little we’re October and working we the would exactly the on need early be, how as make those knew to we in impacting answers we was the get volume Chip. structure what knew overall But it partners going to level that’s those But it’s as better dealing separate too need going a this and flight perspective, our next to airline. could four what it go with we them early respond a adapt to October to is say before costs,

that summer the But have the looks decisions. But yet. time extent, of that’s certain the what a the by this know we the to to virus, if difficult we then quite easier. get of the to extremely some nine make over that continues data and points different deteriorate and Now to it’s to got don’t next months, finish kind have if six next we depending line are good to, going volumes next see to we and then something know we’re upon like, outlook we summer, on your spring

answer as answer to they’re as that airlines I know the the flying. be demonstrating question the need to soon are given So we is there volumes other can going think your we get very several quickly that as

what just things. a may go of those spring looks quickly, we that or but significant we through domiciles need – know frontline employees like the we and year to really So summer next types process hit and before

Okay. All right. very you Thank much.

of is O’Brien The Catherine follow-up go Sachs. Goldman today ahead. next from question Please a

you much the Thank for time. so

probably off share going about amortization very to able additional trying like need get or able get of get least. intentionally things a a sense of to just just, be guess either for of years be a reducing would flying to to that regularly thinking like answer clear-cut off? not be way. much you out debt were the that like, adding materially the question, like. reducing lot terminations? trying at like maybe side reduced cetera, feeling this. next other path extra think long-winded we really see balance be this, to CapEx look glide at through of off just and roll Or two the guess, how and – now, pay demand to buybacks, refinancing, little kind guys path the on I and, sense all for, debt, what I of payments? would that there’s I to growing early on to But prior but I to guess just don’t be look I to to bad pay a have for know, further contracts a how this, demand debt have minimum the like to et potentially, being I growing you the – having think it a path on draconian, a Like, growing your is sheet if contract But could don’t of EPS So and the you know earnings of recurring I seems those not would lost to to

Yes.

utilize that would tail kind pointed associated little largely we’re depreciation done by the economic very paid and very as and out, with very end well debt Wade The also the fleet off little but and question, is they is today, XXX fleet we partners think, very I our good really it we I that by it Catie, The have through debt the So particularly present to the anticipate fleet, fleet, little year. of more as go are fleet. a this ironically utilizing as risk that’s specific Bombardier our Bombardier ERJ that more most, by is which really, of fleet, as the and with of most larger we the time will recovery. the this it’s

I think in those look terms. So you at it have to

of is the on to our value one of debt, which providing Our valuable of the also that if all debt the fleet type has most in that the is it, not the majority partners. recovery

to, those from the reduce for reduce a the debt would we Bombardier that make had not you and it’s how it make we XXXs so lot, house, couldn’t if what be side penetrate So fleet you and the the that need payments. never those your will payments, of recovering could will we

the So our look, of what and the lot, but mostly and look at and I think stabilize payment that that, type, is that the your that providing helps this debt. what about about a fleet solidify the process story here a to recovery is partners value it’s of great is is in debt it’s general question kind the question, attached fleet we

thing. And one other Catie, just

other that that, is debt piece, this $X little close that is reminder of none the financing And debt CARES billion, this those terms than that’s the got deck in that’s have, of matched That’s sliver corporate – than debt, the our the much we debt. is a to our that of are new all those serviced in fully purpose structures other debt something those of airplanes. the none by sheet to Act that of end fully of $X general structure overall debt, all of like assets. of term. bulk amortizing billion we’ve piece, – where Just And balance very in the we that that of

for great. be time. probably That’s the much Thank very likely Seems you into Okay. running that. won’t

Catie. Thanks,

The next Syth from question James. Raymond is Please follow-up another Savi of go ahead.

the follow-up. for thanks Hey,

drivers were down of from talked the cash as be seems think million that was month reduction $XX you the head of last the about you Just maybe million burn. you end burn. the cash $XX about I Rob, to and a That I’m what about into wondering that you on how talking it quarter. think question a year.

obviously, as quarter-over-quarter. $XX up million. good you is generated up is we Yes. during cash can Sure. million $XXX Cash see, Well, the quarter. Debt

think little it a sources. the as can we over that So quarter during of from variety of generated different you $XXX million a

going to So right as of year-end, that’s the burn, count were $XX mix, in new so of $XXX $XXX we six months as too. at that the we’re be assume we’ll somewhere neighborhood XX. debt million – of as the year, June model million we down that last million – now are we’ve or where the we of but where then as of at we look we again, part got CARES from And Act

$XX So forecast, of that the new also if included look $XX in you from CARES burn cash at million cash a a reduction what from you year over million to million your last $X a that’s and Act estimated, of down because then well, or was of the million burn little that’s count the we $XXX as by burn a end about just down day, debt quarter. day, million that month to $XXX gets as $XXX,XXX

it is quite So as the is I Is had not catching as revenue down better you what guess feared? cost drove maybe I’m what it much not difference, execution?

Some well. voluntary And it’s timing got the – very as some these also been well initiatives also of of in for of of Chip mentioned, these programs. of receipt programs have we’ve some we’re where we’ve us time-off just worked that successful, very as

Excellent. Thank you.

closing remarks. for question-and-answer our conference like would to This over turn any to the concludes session. I Chip Childs back

all people. you to our the today. and for on thank Elisa, again us appreciate joining you, your interest I thank want Thank call in We SkyWest.

We the Thank with work the long-term airline simply other in support and and have our you and foundation you. a great best proud the quarter. SkyWest. of team they’re talk doing to to next in solid each success the our teams And I’m we industry. that, will of

attending The for presentation. conference has now concluded. Thank today’s you

disconnect. now may You