SkyWest (SKYW) 29 Oct 202020 Q3 Earnings call transcript

Good day, and welcome to the SkyWest Inc.

Third Quarter 2020 Earnings Call. All participants will be in listen-only mode. [Operator Instructions] Please note this event is being recorded. I would now like to turn the conference over to Rob Simmons, Chief Financial Officer. ahead. Go

joining call for on us everyone, 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, have together Thank by industry and unpredictable and Eric. into to pandemic, how dramatically this months begin want the call am for today. on teams our afternoon, has you, I to again and thank I saying incredibly challenging proud way joining Rob our us with you the confront pulled environment. Eight changed.

the of partners' working health our quickly Our our safety schedule deliver responding stay remain and on and changes. and and to teams are network we our in flexible nonstop focused to people both passengers, on

cleaning, face requirements testing, continued pre-attendance coverings. for resumed with social successfully COVID have as well We training as stringent and distancing, qualification

I able successfully recovery. guidance, teams said in stay work. crisis to we pandemic, things were the key want to Early outstanding keep latest successfully emerge and ago. play on thank to imagined have continue working the achieving ahead a the again them and priorities their in a of year ensure We for our to we couldn't this are from CDC we role

the passengers. and priority of first health our was wellbeing Our personal people and

maintaining focused the remaining was on we're strong three the remain as strong our We on priority with Second able and priority to liquidity, and we these industry third work and partners. ensuring changing priorities landscape. evolve is cash with agile and

recently and He Some most of our that Greg the this when leadership. almost person Executive regional in has excellence, senior operations Wooley a Vice the background position SkyWest leading right evolution week uniquely of President this this operation. was with confident was challenging and he landscape. named shared embraced over and XX-year ground stepping handling is his for wholeheartedly in Operations, announced we every earlier overseeing culture of his career, aspect our role commitment tremendous particularly to I'm airline into changes

remain agile transitioned some will operating leaders deliver and have changes vice our ensure other These in and streamlined the to We of operation also our better product, overall we management a to help into administrative partners. will our current also senior reflect needed and and stronger-then-ever president focus our provide responding roles staff.

game, to will an team competition agreement and are believe I SkyWest the under already as the and XX with be in have XX the focused enter These Today, throughout to agreement American announced American. between addition we the in we year. for for CRJXXXs next on our prepare we're months long service recovery. with team used We business. to CRJXXXs coming are leadership best this the difference the lucky in

and maintaining on are a and are partners schedule, strong fleet network of working We delivery each our with needs. their

the ability will remain for partners recovery, strong differentiator a is playing to deliver a role fleet key our Our in for us. our and dual-class

our long-term this build one of our in invest and reliability flying as just our fleet into fleet announced. maintenance strategy We just creating like to to continue we and part opportunities, programs

$XX the income this quarter recognized third CARES net This as Rob talk Without million. the nearly new the support under completion includes grant reported about our minute. that quarter. $XXX a income million support we funding. liquidity during marks Act extension During of CARES a more we of the program in funding will payroll payroll in

take critical employee positive and work our have to the working help our flexible with to viability closely impacts with much that our are This to ensure costs very our us labor productively fortunate all as we to provide to support positive partners. people with will in long-term our possible, our this manage and ready relationships relationship We to as we are workgroups. remain people They steps and negative environment, success. with while ensuring minimize groups to of

Our third the what XX% about of an peak departures. X,XXX improvement quarter was a quarter, usually second what ago, year is over about with production was quarter daily but our flew we

a expecting are production quarter. we in today, fourth the uptick in of slight As

prepared are we respond to climate However the if deteriorates.

agility will our key and remain working sessions clearly our our complete. on while partners, recovery ongoing Our are strategy, component with contracting a mostly focused of we're

We the the we've best partners business are to ensure of importance environment working their model to years. de-risking closely and positioned the over a past we're meet on been collaboratively COVID five with how each of spotlight shines needs. our This our

of months the we're storm. crisis, shape feel several recovery we of in this how about industry next the effects economic the good the to will one pleased COVID far. the turbulent, be so is to positioned our no we are with weather but immune Undoubtedly, While

travel. the critical As we demand fuel fleet will return role are returns, our in that confident a to to continue

deliberately as now emerge We Rob customers plan to recovery and our preserve take for are our we people, as crisis ensure the our liquidity, financial aggressively care focused stronger better, through we and take of business. navigating us information. to a on this will

income reported we million of net per $X.XX Today, or $XX share. quarter third

this include These $XX from effect in a million share QX our revenue $XX effective XX.X the results quarter, deferral Our was of QX. in down tax GAAP for deferred count QX of diluted was and million, million of rate XX%.

As cadence deferred of and of on discussed timing into deferrals revenue the flying. recovery will of All reversal last future revenue thereof the and the and shape amount quarter, the depends our be may currently XXXX revenue reversed expect We the defer to revenue XXXX to or begin it some various when of to continue end the contract reverse. by late into into periods.

XX% from quarter. First, from year-over-year, about revenue quarter. XX% but XX% with let's QX. talk revenue. is XXXX, contract from is breaks XX% revenue still and revenue from XXXX, down last QX down last but up XX% Pro-rate down Total up down it's was up XX% from QX This

pro-rate see in as can these nicely have we is previously revenue numbers. recovery As said, to levered a you

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

Act government through the year-end. quarter and with debt $XXX including debt, of unsecured engines CapEx of billion, The CARES year-end CARES in last Act million approximately $XX from to of the of driven million and up At low-cost ended September Our this our $XXX year as funding during expectation acquisition XX comprised $X.X is the is new a debt We year, $X.X XX-year from QX. primarily secured $XXX $XX of EXXXs, the million parts. of XX-seat million was in back by five-year third of configuration aircraft in this point, coming from including four PSP end up to debt. from increase our the million the CapEx slightly pull the quarter billion CRJXXXs year for and

Act expect CARES to year in year facility. draws debt next our the make other on new gross aircraft aircraft of next a million financing We pay-down or financing $XXX of before acquired

talk Let's about liquidity.

million As of September was our in Act in million of and of CARES on cash $XXX our credit. million $XXX to XXth, loan, undrawn availability position revolving $XX line our addition

In from Support QX, in and During million low closing CARES aircraft the secured $XX million is by which $XXX we of amount we by number a with today. secured undrawn quarter. is includes required $XXX closed interest under increased At a end of US loan. engines million the we the availability This of secured leaving facility, $XXX spare the the million, the to Coincident debt as of of and our that debt October, of $XX million. funding near the of of on in CARES loan parts. $XX treasury Act, received end million. million initial the $XXX minimum Payroll is the amount QX, million $XXX This Act drew a million Treasury Program top-up $XXX grant,

March to will We have we additional under until facility, XXXX if decide much loan draws how in secured the any. make

can average against have $XXX the our fourth facility P&L. effects currently liquidity draws economic CARES our laid This on in QX, quarter. we our recovery During the in $X line item be in PSP the a contra-expense either Based day. availability $XXX expect, loan call tools facility. end secured estimating of as our does of incremental end per QX recognized cash a the million, the Last be would cash its If in or of $XXX,XXX burn day. estimated approximately cash year-end to $XXX,XXX million we assume at we year out recognized grants per form not cash on through about any Act estimated income the loan forecast remains was in the on, under that we turn to of secured out we the we million Act including million CARES rate are to own be as quarter, and additional undrawn revolver $XXX slower and clearly burn million, September now that than worse revolver. year-end of the $XXX of year ending through cash

couple time addition give space. of our core flexibility than during In to have more going are uncertainty you that I'm position, our liquidity in others to of nice a and this remind us to things

you our financing and This financing dollar we to delta and number $XXX First, term. risk we it. approximately third have include million, second, minimal goes that on no the partner between of has tail operate, XX% owned contract remaining fleet of when a around term aircraft

this, say time. expiring the guidance now GAAP will give pocket any to over of tail practice, three we're curve. zero two losses next of Delta to at recovery to with driven policy our I the is risk quarters XXXs and not the consistent to on and least and factors EPS expect by like great at XXXX specific out in report other Especially next we including following year-end. uncertainty that in the by this position times and a Our

increase quarters $XX is one, up in will down of some or weak QX in QX is until $XX based few a plateau with it's million starts and with XX% million Number increases expense next of in PSP has half offset ended. with three, and million concessions $XXX as and now will expected reversing depending the net in tailwinds million late environment. impacting expected loss calculus moving or can we offsets not the earnings revenue may two, Number income are revenue down levels. higher QX QX, the likely many or this down year, have to in absent and we're of timing is continue then grants recovery. to to should Number two, into be credit production headwinds. QX, increase $XXX number PSP production reserve was a discrete $XX in slightly impact government. XXXX partner and maintenance million will of in COVID still expense anticipated mostly in expected QX Number that away in are to depreciation three, of production income in that anticipated QX for essentially $X new QX Obviously, with trending down boil five, QX, QX, four, reverse million one and start QX it from last deferred on QX Number going headwinds as likely the revenue hopeful Let some XX% to the reduce production by from five parts lower weakest year. and the pro-rate recognize begin from higher. to still XX% revenue deferred the tailwinds. recorded of out in QX the to we $XX in the next PSP there two the QX, go received four, consistent operate is higher Number contra XXXX. been and me coinciding million XXXX the from QX, the going seasonally the Number trending driven our enumerated. Number revenue continue recur. trend almost quarters To just is QX and Number and on

should day Assuming schedules in look we to we're by burn XXXX, to QX, positive no next or us XXXX. expecting QX year. currently normal our results $XXX,XXX The new meaningful per Wade? QX quarters We're are and we're fairly anticipate the improvement neutral expect of may nicely the modest up in excited similar cash QX future. mid-next take few actions the taking turn for setting now to that XXXX over the

XX fleet today to we Thank pro-rate place you, status update well and Rob. be couple I'll businesses. long-term To and as contract update current multiyear used been These leasing by have flying provide partner, storage CRJXXXs a for of years. under that an fleet on American. as the of announced will production with in update a an our from last sourced agreement aircraft our aircraft

under As of XX today, contract with CRJXXXs American. we have

the anticipated undelivered we are go XX the to of nine be will more XX ratably XX XXXX. a under have As under to the Of four we announced during still service scheduled have through placed agreement. and with are XXXX, By that into CRJXXXs reminder, previously CRJXXXs QX service CRJXXXs CRJXXXs American. into contract end XXXX, other

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

the Delta our finance of Delta half talk our order delivery EXXX during agreement. during agreement, which are to have fourth plan take about our Let for four briefly currently new me CRJXXX first scheduled year. we Delta final under quarter, the of next We on delivery

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

to remaining Delta. obligations SkyWest aircraft by remaining year. and the be end XX the financing XX are no will returned have with depreciated We owned of the fully aircraft Delta-owned The

our our of was ownership certain current October. related quarter or partner expired partners either approximately aircraft contract September All concessions million. from to during of costs concession payment largest in the The due deferring $XX

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

over paid We expect remaining be back term. the contract deferred the ownership amount to CPA

Let our me current review production.

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

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

QX CRJXXX down our be XX%. block hours by approximately While will

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

Let a about talk our business. bit pro-rate me

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

approximately be will million XXXX, fourth revenue quarter year. last pro-rate $XX the compared to our expect We less during

XX% Specific CRJXXX levered with is have recovery, business revenue revenue while to flying Our United in system fleet, pro-rate over will our in States. them the down XXX to COVID pro-rate coming of to back our of pro-rate incremental onset the prior model we the margin to attractive business the characteristics. had nicely

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

the to several earlier, process Delta. CRJXXXs said XX of of We're or XX part excess currently I year, to a also third having we to this XX less and aircraft As returning anticipate out sell aircraft. we these returned or the end have party of expect CRJXXXs by in

to flying evaluate begins demand flying recover. We if opportunities the additional also will

year. business. gears seat used regional this expected announced aircraft in our we me another XX an acquire multi-year leasing under Let agreement be and aircraft Today, CRJXXX completed in to leases a are of and shift QX in purchases the XX operator. to to configuration to The lease term

partners. the a believe demand this a unique in fortunate lease exceptional continue is CRJXXX an to aircraft. have set party. will apart of CRJXXXs to these to our SkyWest completion third strong are to that with major under XX we will purchase We After transaction, be from asset the very position We

return We business. for leasing our are starting to see engine demand

revenue-producing During XX in the we [eight-seat] signed by short-term aircraft engines fleet, end quarter, under lease engines lease Between with signed the we our next XX agreements of XX party, eight-seat engine be productive, agreements. under the of [ph] vast up the the third XX American, aircraft the with eight-seat leases, year. the and our will majority

QX, expense American $XX Maintenance storage. XX will and higher to current likely up our QX talk me is out is bringing and or million the XX%, Let of of the next aircraft in The recovery year. the next over from year. and flying agreement about increase due for anticipated forecasted maintenance and be long-term expense our briefly primarily

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

provide committed with to our work major of each this partners our creative to through in our are time difficult industry. solutions continuing We

Okay, now. Q&A operator, for we're ready

We question Savi [Operator Raymond Instructions] session. is ahead. from Go Our will question-and-answer the first now Syth begin James. from

Okay, is everybody, Wade, this question I and think. a Good thanks. for afternoon,

you've you expect storage, without out then had many [buying you help you so in I 'XX? dance Your could have about as aircrafts] and if detailing are talked been was be CRJXXXs that by how because you wondering with me partners, of partner kind [ph] by well. some each partners how sitting to many today, have and what many and year-end some

Wade. Yes, Savi, this is

fleet, about talk American. first So I'll our CRJXXX

XX have we American, So today.

to also nine the then have announced delivered, more will are delivered. that we XX be and We be going just

be with the contract under by end of American, XX have in we'll those so all service those, will of XXXX. All of

also then that under no contract under and in CRJXXXs. five with those and additional Delta will are so -- under have long-term any after are United, go We American long-term agreements, with we these XX have agreements, have with we XX and excess CRJXXXs

under contracts. our be of will CPA CRJXXXs All

that's get helpful, want comfortable placed XX? that then to, only you're just you is make that partner to because that this and -- sure subleasing you to and the Okay, just than different United then before, isn't aircraft had the I the partner like XX that

different the So those, regional it's Express buy United same did but -- airplanes. partner. it to they're is We

So can time? it take they this you're comfortable that

in configuration, and operating the These aircraft converted, and been and are already there, already flying already system have they're today. XXX in their

that on the Okay, hop back sense. queue. I'll Thanks. makes

from is Go ahead. question from DeNardi Joseph next Stifel. Our

afternoon. Good in for us for just of can would of that that what sort many can CPA or coming Rob produce? XX% you the you frame Thanks. just we reduction if Wade, hours XXXs frame maybe talked assume us, about, as as you and block environment out, revenue

So, is Wade. this

and -- a so with and airplanes XX the owned the so for XX XX QX those the were revenue minimal. has over of contract, and leasing Delta are So airplanes nominal that it couple not those, amount, lot past them out. of on a coming utilization Those quarters, the of very QX. have we just Delta those are associated had

a not financing the not CRJXXXs, year. completed no these depreciated aircraft no an Well, on There's about, book as will obligations impact there's -- by end to and of all talked of these So the is a any major as There's impact. well. be these there it's we've with revenue, contract exposure.

hour to, forward? the adapt you've structure a of environment walk then, lower going the Okay, taken that some structural you I initiatives just cost Rob, can guess, through block and to

first of for all, thanks, Well, Joe, your questions. Yes.

liquidity are I of going we that meet as at much position needs obviously ourselves possible with can our think the and so we to this look that as environment, flexibility forward. we partners as trying

of think efficient. that get everyone opportunities looking deeper again, intention the we script, lot so, to the said mentioned and think you is some us go those environment in efficient, we've more that in for more this have I and in script we time, to we started been we heard have than but to taking I enumerate this actions don't taking at be any As actions, a

like be so demand a I in you where that are your of the block or additional XX% for of commentary the there reduction And overall just reduction think aircraft American service? net the you'll aircraft out kind once Delta around going Is come in you the in, understand see just hours. XX%

this is Joe, Chip.

with a know the difficult Just have at when it's ready there's I and months of at us, what that vaccine do? talk it's looking days, we're outlier the and come is pieces of virus aircraft March reduction, in a when is that to things did get today. of look moving this big XXXs the winter. we months. we because thing one we important to next it's what in infection extremely we XX% December, to know yet. the and lot coming the number lot real and quick, January, speculate but about the relative the a that for cautious and November, XXXX, today throughout feel stand think things rates XXXX, of the a of February, summer is in that are there's on We what rest clearly end we four The that talking still these We are the We're to because happen taking for don't may

for the aircraft but perspective stand an we in impressive again, what most some that that for we delicate to importantly, what fly. sure may from we structure between absolute months smaller balance in sure and lean that we be with March, today, where cost be we resume there's ready a have know making demand, could So to have happen particularly what sized ready summer the make

of 'XX. that of you 'XX think is some March still uncertainty color, we're amount that but end hopefully gives there understand, through trying to of tremendous starting I the a in again, So,

you. Thank Got it.

from Our ahead. Go Goldman from O'Brien next Sachs. question Catherine is

gentlemen. afternoon, time. for Thank you the good Hi,

level you'll of should it to year what being on remind or even to then will revenue? the for can you Is XXXX, that early back get levels means couple just block based revenue hour deferring end into pre-COVID that to you can before recovering then, then hours is have topic, of one some this follow-up levels there's there, to and I a some So of if know just the to thank on Wade assume alluded this here, last block periods, another those defer maybe your for or couple we sure might us back time. next bar expectation before is, in some required misunderstanding. production, a it remarks. I wasn't stop of into I you his so concessions? I and pre-COVID take been you is XXX% of tied start have the to that booking

This and Hi, -- revenue Rob. is talk about Katy, thanks. I look, conceptually. let deferred me

one be that's the First -- of all, next quarter the to and XXX% has deferred was will this that several remember possibly quarter, deferred over thing of is revenue last quarters. differed been that deferred

of individual those will reversed of expire. by that be contracts time that revenue into the All each

There's circumstances we the recapture that. those. We've no under will ongoing performance under cash. So not obligation received

-- So revenue we that will all of will deferred that reverse.

no -- of guess that semblance potentially each this is start Now, that and is to guess on QX. to at on recognized by revenue starts at what then "Normal," point. environment, the deferred to means out to this look pretty look, like, of some depend revenue be individual that will saw, recovery to again the getting now turns again, the in significantly from that best fully [technical It modest came revenue our down when over is going of right be something some in circumstances time reverse timing reverse then, least that hard deferred more QX will think you but ends. not several difficulty] as but contract back periods depending quarters, -- We to there this deferred for to whatever

it. got Okay,

next bit to recover pre-COVID is right? so that that don't through So is hour completely you an just little block production, there -- of a assumption year

right. that's Yes,

it, -- today. your announced Okay, got on understood, the given you major thanks, deals just perfectly then and clear, that

share Given the you Can fields need United actions these for list net what next through Are of you for Thanks. a and you partners part, help the partners the American or taking couple most deals? their to your just stemming a increase major announced from? locking like fleet. that regional are, winning us new are years in think seeing shrink are over by

Again, A candid, for This I is partners, -- mean Chip. that Yes, it's answer. our be had their given reduced schedules look and think they to of questions them couple certainly some better there's so some suited everybody's to at, probably the we some of -- thanks. regional relative impact -- are to and on your probably respectively. I do our fleets, things to regional that better limitations

to as it to flexibility. mostly we've closely of sure share said make and them, niche tied continue to similar, maintain the our the with a delivering and not job business, in have good work like their the economics That time. got like like gives focus. get several is that product stand, we're game, frequently, service and choice are and communicate can today, good you're the and and market We've their only also not times, is said our sure presence We've be been crisis, helps up having good their really times recoveries. agile type long more we press been but not what we're we as make when Our smaller aircraft with is into that things entire really, partner that's stuff, seen that long somewhat that's industry for on because a a this but of only and forward times financial where job in them to to feel too for we've good market, X/XX, certainly with we're though, in today of facing difficult, good when

that right of into I will Got maybe level in was Act you depending you're will that the with about you sources impressed on on choice much. one looking to Is middle under loan time. just aircraft and other sneak coming drawn your by thinking and CARES understood. was just just guys then where Thank a it, the potentially are could demand goes, you appreciate Rob, loan? be new If if the to what the liquidity? minimize going now. additional through I for need happy are to terms, amount secured see How everything very on trying draw capital that quick or first there your you

Yes, thanks, Katy.

and So, liquidity number that option through available treasury the we has look, we're amount I and under that that make us. the think that, required very government minimal Again, million is to inexpensive us. to have outstanding a for gone that work to $XXX we facility, drew grateful now right the one, again,

wait of what, make to to and I going just and like, if to looks that facility, see wait we make or we and March that think then of we're Obviously on XXXX call. pretty what it. there's whether now, likely we're might a PSP grateful So it's not of and as any, recovery late what to things, final number this I impacted an the want another by round it liquidity see, situation we'll got inexpensive that till but and the is, and until decision is option mean think a we've have draw of then for on see

Great, thank you.

from Duane Pfennigwerth Evercore Our Go next ISI. from question is ahead.

Hey, thanks.

their who why just would that in because one be about? quarter obvious concerns fourth they're be American there, no you're you? line so, longer shelves of flying? with down on the Like the questioning most replacing Compass be to that's the Is and they all here, call Cathy's Is think XX% Just owns a adding having it it wholly capacity, you is that would explanation? else a so in follow-up equal, it can I plan to for of speak

Yes, Duane, Wade. this is

months. they the I large scope uniquely working First just a the as them. is unique what aircraft We that, like and small very or know, small follow-up uniquely very we've on for not it's they of seem economically that's were on say ask to to all, this agreement scope some to in who but good with you they comment fill a their and CRJXXX up, past a a RJ with of able on have scope. fill XX to much it you very, something doing. have scope, have came them American, that it been This has airplane seats. The fits it. an couple position RJ, very them to that replacing, very RJ we would I'm for is scope, is

I industry these point, a regional you kind permanently have players Okay, pandemic the since certainly can to started? of number the that's speak don't the have put the spot, left by I of fallen fair, the wayside. to to at Can on this RJs that of you industry that mean and number the speak smaller guess you

to, it's we that be professionals capital capital, last we've and on have be Not we're Duane. with our candid, five working very against our lot we don't and at there's This mostly will We're have enable to in of the think working delighted key is we're perspective perspective from can I not provide think script, information aggressive not very, the partners, his agile that to said is, strategy, to that to is a out partners, my our for and years the position strategies outstanding with what key to Chip, about reduce to I company What in to our and for be privy we're that competitors, have long things a focused and Wade care. a that, don't try necessarily that industry. and target really the time. risk, the just worked us and our and there all candidly and really, we within of on the certain we that's position, as for

of, operating, maybe kind then the little quarter noisy to quarter in and is deferred just contracts, how fourth but guarantees point is third minimums guys future, questions. existing obviously, the the of lastly your in are terms or the you below taking is in much and PSP, of in kind kind of this a some what you that, speak you third essentially that appreciate and investment that revenue whole and quarter, maybe appreciate Okay, the for the the with can to at guaranteed make

Wade. Yes, this is

fourth than and bit kind contract a contract in is remaining as we the rate to it's different little of match completed are variety contract some every our deferred bit quarter, as slightly is each really deferring and block the flying minimums, tell so, I of them minimum, the of aircraft will little fixed contracts our little the There are some a deferred partners some our the be contract the of bit a will at the contract differently. you, each contract are that over of revenue It's little unique. the below of hour, where far bit the minimum. revenue, and of the as far it, portion as block a there separately, term. hours So, are

it's So different. little bit a

Okay, the appreciate thoughts.

Go from is question Linenberg Mike from next Bank. Our ahead. Deutsche

that the rough quarter Yes, acquired and XX that on third hey, fourth the you just or were airplanes afternoon. Hey, hit? CapEx acquisition a good is Rob, quarter XXXs, us can give the acquisition,

Yes, sure.

the fourth be million the of the was what we neighborhood to in $XXX math quarter, in of my in CapEx script. just that's somewhere So expect

new dollars EXXXs little parts. of that's the coming the unusual then, the and quarter, So got of then $XXX CapEx million we've that, spare XX in other $XXX fourth airplanes over some four million roadable and represent a just roughly

year just, you you Wade, of to heard have it XXXX, that's what then you're you not I are and to have then middle was said and XXX you I Okay, right. helpful, obviously now, that's XXX the middle EXXX know, said have XXX going of know, I EXXXs? What going had

number XXX So end at the the XXXX. of was

okay. Oh,

XXX the is of middle then XXXX. And the

helpful. all the partners, actually actually Is partners, revenue? hours? and Rob, That's that with block revenue is with deferring major Okay. with math you're that very the the that your four deferred

of XXX of component consistent and the CPAs, needs sort as of again, it under that, of four for, that. partners, it it's Wade applies all block applies to those with fixed component to accounted be our Yes, hour rate the said, variable production the to

XX% and and one you opportunities one pro-rate for that you think smaller, previously, would Okay, parade as for demand versus on what a I world then available, here, the almost more your you that permanently, air there maybe resized, seem makes of have sense, when travel be away did larger. about that indicate last just and know, gauge yet, you would going and of it flying, your today been not that guest margins have is

and the -- would put or you to you have full So old, maybe would plate, what? out just they guys it big don't be are just that that a them volumes back wrong more planes from opportunities want where would is today, aren't I'm think because away just pasture but so make the to there for there. sense or I the because markets Is my thinking on

XX we're said Wade. excess and a to as little we probably this Yes, right going Michael, CRJXXXs, with have close be we So the is script, patient to airplanes of in those so bit now.

Okay.

the Okay. we we coming utilize we some to do and we is as what engines, we things recovery We of closely, they and the very what with do. partners things utilize we will can on to want our major obviously demand the will back, can and monitor the themselves want parts, work do versus demand see and

we know, do financing a just the are fully depreciated. will are airplanes as that, reminder, You completely they and and those are obligations done,

and monitor XX% and is be this now, what closely. we'll bit, we are continue a patient is number financial it. right model very of just will there very, little risk, lot we I a so to that with gave So can we monitor so The not that seeing and

as take operators I best thanks I just Yes, the in Anyway, as answering the for and advantage questions. in one last be point, add last the of a CRJXXX can my world, believe you I as of to throw may so Wade, tell that it. would of do viable

recognize but We in times more Michael, to idle relative very emphasize We that it of to we point these that's long, are anticipate thing to going I going last want us. point, to this one airplanes continue Chip, live strategic strong and for to visibility the very demand. don't on be that. for your is sit a is

Yes.

about not there deploying really worried economics. think them. that We good too is We're

So clarity about first perfectly. needs get these and world this right that comes thinking your just need to We now, -- pandemic to we question, this will used. whole the you're on think

good. very Great,

Okay. Thanks, everyone.

from is next ahead. Go Our question Cowen. Helane from Becker

this very much operator. the everybody, time, Thanks and very you for also thank the much for thanks Hi, afternoon. and information all

-- but transition can a in of the couple questions, this little is first, a were about a of the fleet? changes to the talk relative question, costs just any talk modeling quarter, So know there you can D&A you I and kind in boring

and a the hot the From it's little quarters expected to is depreciation Yes, of being these jumping depreciation service Helane, about a couple have for last talk standpoint, first, of and come there. end to so, on XXXs your let a depreciation today. of call and by Rob, asking year, up we me running your as as -- thanks the this schedule wanted question out the the match of of partially you noted, result been some

a sort and So, depreciation will year-over-year, it's you got is the can XXXs of up, bit sequentially, we've likely to continue now see these but that down QX, from behind of us. for trend it down some

pandemic to in you being larger things the be expect of XX-seaters like to accelerate as a you you bigger of are more the you know, Okay, your Mike that period you and think as -- asking, that deals shouldn't could seems It were out maybe up attractive, just coming would think your in why that's No? profitable that's the a then, helpful, and then, still there was -- than this position that thing growing part also, revenue years, you're next slow-growth you question, be pick see growth out declining, your before? what about I turned and with don't few EXXXs around. there a over is might of part market other the in the very portfolio, be we that, fact and growth and when and

much. those questions. so Thanks you? is two good really are and how are Chip, This Helane,

help first talks growth of as them. is. -- the for that's our declined fleet I'd with to fundamentally at is about back be market see decline still of our outstanding -- we go opportunities today, growth anticipated beginning outstanding perspective, in have technically, the the it me partners, we being from you, a do what opportunities we We than from still is and Let we to what stronger remind still see we that have of continue that to down them, some relationships question to the -- kind again, significantly year, some but going

unique you. want candidly, for into we again, it of as quite us cause to scripts hope is that because times get right the here in your long assist the the that We incredibly there, to it's There's you that positive, stay question, don't As in that that fundamentals that possibility we and post-pandemic the play but in climate to last a hard about with, there's said tell our too to continue game, things continue we're and lot make work living to in things political five could that see do us and a strategically our we companies, the there anything pandemic if to today, operating in a through to transactional lastly but today leasing to a continue true, And them it's of we to that, see but mean, very think question interested. a to happen. long we on it's can an see that to that to a organically that far overly job is to so we today looked our what I things profitability, the do and would partners that years, and do deal extent out some have be lot to outstanding has but there we're role, but back still that, it road, out the and couple of we've and in near runway control process this still to has that that's can that future in some there, for nothing between game but candidly, down or our there, we've that to from an lane we past, for thank the been and recovery situation. is in and and way our want early predict view going comparison go doubt to to perspective, a -- certainly able comes I no that to be that then, have entity

you. Thank

from Syth Raymond is Our next from James. Savi question

and given think is on more your a the XX% different markets of kind this of picked that wondering really you along flying airline kind types and passengers do your doesn't what hasn't bit business know but I not climate where just are kind you where little this just business I'm are primarily high up, line focused A of partners Mike's in at I maybe of or your of does business kind and business thinking of today, outlook? what current in of cost, -- unit like kind your -- demand just even kind regional pro-rate see you partners based markets, planned, curious, just recovery of SkyWest putting curious that of maybe and outlook on come type back, question, looking of that and is

our I that within geographical fleet. shifts a that's some do question, again. we Chip terrific Savi, say have is this Yes, would

our probably when due to degrees XXX a year from were a and places a candidly probably So, some mostly bit now through the completely they different flights, of trying which see than are preferential make given going that data it's little are being today, look would that the that's in efficiencies they different partners travel gaining advise ago. better. way pandemic that year we I the the also we quite scheduled some to happening, some about our we are to of schedule consolidation

to larger Midwest about look and cities that attention and to we I optimistic the as those movement are the out speculation, how are types from referred in things that provide certainly pretty these close is extent you've compelling things certainly could some aspect the all schedule-based about you we it, can see I down but there's a fly, lot some value partners, us, today seeing travel very that's are close travel of all tremendous question giving our some and is very We model. for of to execute, volumes your industry to to how of it, now. commuter of consolidation know are like that not to business paying it, market-based the the of shift, of now a and off that calls kind a shift, right flying -- well earlier, what the be of seen crossed things, we're cities, of more going we're as everywhere generally fleet things of the that more are much regional there's to those the that right up and bode think the other comfortable a coast all probably about we we smaller solid down what the aspect the what's certainly So, road, outside we of probably into amount can are of of to we answer into

helpful, that's No, the appreciate follow-up.

DeNardi from Joseph Stifel. Our next question from is

you next Thanks. a volatility more follow-up. are obviously in There's able a several have scheduled of Yes, visibility terms how if over mainline partners much months. lot I your to quick all your wondering fly. have of I'm into schedule the

So, as when is for flux contractual flying. the you or of scheduled is you. that nature all mainline that much because of Thank capacity look we at the that -- as in just firmer still

Yes, is Joseph, Wade. this

months our schedule. six, advance. in very closely we work on nine Pre-pandemic, obviously schedule probably with our to we getting were our partners visibility So,

demand in. Now, that we're with capacity much partners trying they as to need our give the they're as flexibility to match staying

closer lot right in now. a it's So,

lot get more November, on very well. obviously a our We good starting clarity have visibility as we're to to December and

our at where not more There's at. clarity a about this that's So, schedules we're lot point. from

you. thank Okay,

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

the Again, Kate, SkyWest. of your our everyone on I'm joining and again, to Once I today. call appreciate thanks for teams we people. support the proud Thank you. you, SkyWest, interest thank in next forward long-term our so great our they're us each Thank really work airline success the to we of and all you for to doing look talking and quarter. other for to want

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

may You now disconnect.