SkyWest (SKYW) 2 May 212021 Q1 Earnings call transcript

Hello. And welcome to the SkyWest, Inc.

First Quarter 2021 Earnings Call. All participants will be in listen-only mode. [Operator Instructions] After today’s presentation, there will be an opportunity to ask questions. today’s being note Please Instructions] event recorded. is [Operator over to Rob now like Chief conference turn to I’d Simmons, the Financial Officer. Mr. ahead. Simmons, go please

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

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

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

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

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

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

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

and Eric. this joining much on time, today. and the learned to make and everyone, Rob and thank you, impact made COVID-XX progress headway of in are there’s beginning an for massive still the of We’ve were you One good across year our demand to industry. strategy over for around order our seeing to world we afternoon, crisis Thank only we thank us year any and and we ago Good to our product this quarter call strong on past of at better, continue feel the deliver while ground team the toward their to situation. dedication company. professionals flexibility improvement. stronger want this We first in good emerge to in I cover, recovery some from continued exceptional teamwork, outstanding

working our our are we across of CRJXXX the for all new previously lead operation to to our we’re took have of this maintenance need what to us We ready partners still investments Under areas to and storage into ensure nine responsive transition and placed CRJXXXs agreements, those we out American operations. one into recovery. We from announced delivery we’re quick and aircraft year and American bring Delta the them more of XX used with get network aircraft as for profitable them system. making

associated all and our just programs summer what investments for As ahead. minute. about in will build I for of seeing as well maintenance of long-term Wade maintenance a be more products. expect we our are our demand a These critical reliability our mentioned, preparing significant part talk as a to we are into fleet, will busy strategy costs

quarter, mechanics, the began applications and hiring pilot we During once again. flight also attendants accepting just recently

to team. advance our to organizations through across industry important continue professionals ensure partnerships We to continue join best diversity we the attracting the our commitment to with

Best a Forbes the row regional list receiving Choice previously airline only we’re the to first the to as Employees’ named addition Glass year in again on In for once Employers a the announced, Award quarter, America’s Door list. also second during XXXX

of a We’re continue helps proud incredibly leader an industry that our network us am for always set Thank apart of advance. you. SkyWest to as professionals exceptional as I to working team employer. in and their the outstanding

travel. sense U.S. across anxious increase, As normalcy resume to including are of vaccinations people clear, the it’s a

to travel. deliver to believe fleet as than product ability with work ever return and travels partners product. our on aircraft We’re important and for to more a for reason some there leisure of board demand, especially our all is optimism is terms we We solid seeing in more support the SkyWest

quarter Our XX.XX% XX% adjusted our year-over-year weather on performance for a for time. operational flights improved departing nearly the of completion and with

our and events hard through worked their weather across these operations teams for Texas severe and Colorado, challenges. and to through teamwork Our diligence impacting thank I them want

During slight improvement through a PSPX partner the prorate payroll challenges. are mainly QX million, temporary and the income can concessions million, we reported These to fourth and of we the the net driven program. related current of quarter, Revenue $XX support ways first support over our concessions. partners from in down by was due production seasonality $XXX extension the temporary quarter,

do a draw Act to secured minute. of we more about terms and quarter liquidity, under in at Rob loan had while further this expect of we end have million decide funds $XXX to facility. will additional In end cash May we not participation, the CARES until the discuss

the past seen our has utilization competitors. to months, strong compared Over SkyWest several

The XXXX. in increase first the for weakest our is the an quarter we of industry, QX see fourth seasonally quarter but from did

quarter fourth business and the to pending our While strategy. critical will second anticipate production to a of ongoing our the is fourth have production similar and third than still quarter Ensuring we remains recovery be quarters the lower component XXXX our continued to key levels recovery. agility XXXX levels, partner we’re will solid XXXX a

still we the recovery so XXXX optimistic we far. are of While below about levels, shape remain the

continue to will returns, return confident demand the As feel we’re in travel. our a to country’s role fleet critical

and data. company. we our and people customers stronger and are through of our we us deliberate better recovery financial the focused as for remaining Rob emerge in liquidity will now aggressive preserve taking a take to our plan We on as care ensure

Today, $XX net we reported income income $XX million of $X.XX share. diluted per quarter or was earnings pretax first million. QX

rate XX.X was tax count million XX.X%. effective for share Our QX QX in shares was and our diluted

from revenue quarter. Total and last million QX QX XXXX X% down of from First, about is is revenue. talk down $XXX let’s XX%

in QX from from XXXX revenue XX% the was down and Although, revenue breaks our production revenue QX block temporary up partner revenue seasonality. in mentioned, XX% quarter last QX Chip and down still PSPX concessions we prorate was and X% but is driven seasonality. sequentially or contract these XXXX hour Prorate was from sequential QX of revenue reduction QX comparatives, primarily not by QX, due related with This in both In down down as XXXX. to down temporary from year-over-year QX. X% XXXX, have XX% concessions partner

said, and is XX% this million revenue previously revenue is sequentially. a of up These revenue GAAP $XXX XXXX. the nicely XX% $XX year-over-year other recovery. prorate include to to effect and levered we’ve deferral during million demand Leasing of As of quarter, compared results the

of cumulative As QX, be revenue recognized we future that have of of periods. $XXX the million in deferred will end

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

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

quarter first $XX the four used during aircraft other CapEx and Our was for spare engines assets. million fixed

expectation billion of $XXX approximately $XXX XXXX. million, of $X.X year for purchase in later from billion, Our to the $X.X with as is in We debt XX CapEx ended to announced American. this million EXXXs million CapEx XXXX QX This under new including contract year-end previously compares XXXX. $XXX of down with our

$XX million in our of cash and XXXX, of million March million to liquidity, Act XX, line $XXX Let’s talk CARES credit. loan our as was position available approximately undrawn revolving our addition in availability about on $XXX of

any We how of secured release may to make on billion have draws draws additional this May pledged under high that additional coverage Based we until likely collateral much we would on the additional XXXX also and facility. warrant Act in that if choose additional facility, outstanding facility, later will cost is go. to any. and of under $XX decide of availability CARE government it that draw not million will the loan let This the repay amounts any that facility $X.X currently on

$XX.XX. of XXXX Based March burn common approximately in better grants is million XX Department top-up we are warrants be shares grant $XXX,XXX SkyWest $XX million million subsequent of Last was the Also, This $XX.XX. interest, as PSPX P&L. of change PSPX, grants laid bit quarter of a half a running million $XX quarter, additional shares $XXX a breaks QX funding grant, approximately of debt for from of million its item contra XXXX. During income stock QX. our per end, received into line in the entered estimated only an million PSPX. at rate with strike payroll a QX, of in with airlines. ending in million in of Subsequent agreement issue in $X cash SkyWest as warrants program represents million of form price stock recognized our a QX for top-up at U.S. to million, end, about largely income clearly Under day quarter a amortization or of recognized SkyWest a income as $XXX month. cash amount that SkyWest an in SkyWest purchase Treasury recorded out expense the we low own strike the XX,XXX $XX we and to PSPX as to expected on to first the million loan, $XXX Treasury $X is under in $XXX per price year at purchase and million the to common would of no to will This the than forecast. XX,XXX down this $XX in U.S. $XXX

additional before we and secured to we undrawn possible be the Act the be we $X.X the collateral is We let economic repayment our half out loan availability if and up Act voluntary be decide that under billion of $XXX next slightly that recovery, of cash the turn freeze worse on, currently CARE expect to the balances, recovery that If Depending our could secured either of effects cash we have our the outstanding our cash positive XXXX. CARES than tools revolver or including $XX loan. the first of expire facility expect, we positive slower can half million facility of month. call liquidity of the on in the to pace second under in XXXX million

are In focus addition liquidity position, we XXXX continue to core on XXXX to balance expecting and where to years, we strong sheet. be our our

to As repay $XXX it than XXXX, the we aircraft existing XX, balance as net over to is in $XXX financing. In debt of related principal million XXXX. expect year lower cash our debt actually the of million end balances March was of of XXXX,

long-term additional in reduce XXXX continue as the will maintaining delivery Of course, to to to years, liquidity. expect aircraft with over couple expect while absolute take our usual of be debt balance, we of we strong But financed debt financing. debt, next

fully used During partner-owned repaid. our no another of debt Including obligation. fleet in service QX, XX% now XX the over aircraft on has was aircraft, financing

financing between on delta minimal We also have around $XXX tail fleet. million, dollar and to contract of term term continue risk the our

any next to are and times this in out of time. PSPX, give to expect tail we specific EPS our now guidance to risk pocket Especially at practice, temporary late Our and QX related not But give uncertainty color. to a close you a consistent Ignoring we concessions, me little net the position XXXX. earnings like be of is great policy effect in breakeven. partner of of with this let

earnings positive With cash in the both second half flow. of XXXX, likely and

will more to minute. Continued busy expense our will likely current QX in three, XXXX level $XX QX. I’d a million. a summer. include XXXX. a up was to at $XXX as lower number we normal one, million talk call now was expense new cumulative Maintenance maintenance factors two, our a for and Number deferred from $XX to was later rate out. XXXX about finding run And still headwinds for in fleet continue business unprofitable QX it’s prorate model like prepare before in continue million in Number several our the revenue Wade this

to reversing product. until some defer it the trending in now tailwinds, begin QX pending be is concessions. income PSPX production and before three, good recovery. for new in demand number brings revenue our start the summer We expect number us in $XXX grant when in to temporary one, QX recognized Number program partner later to later deferred two, XXXX any the XXXX, timing of with additional higher And And into could may revenue reverse. new million

normal now taking few are take are nicely the the the Wade? over new up are in us for expect setting next We excited future. actions to that the we quarters and

anticipate the To to in throughout update production Thank well an and our with past total fleet of XX the our during under I’ll and required nine into the our existing update CRJXXXS as XX you, additional update, by been a fleet These CRJXXXS fleet prorate return CRJXXX and contract to from into American, aircraft We as businesses. partner, provide have of few service year-end. bringing have we American service. long-term put storage XX. on placing remainder Rob. our with leasing total status service to by years American XX the CRJXXXS lot for year, bringing maintenance a to quarter,

for have scheduled of our in also scheduled from deliveries to this fleet the XX EXXX first American will service year XXXX, new bring We XXXX. XXX American This XXXX. QX in quarter to of with total

Let me about briefly agreement. talk Delta our

first the took financed one During our under quarter, of Delta Delta. we agreement. CRJXXX and aircraft is delivery The new owned by

XXXX, XXX with -- Delta our have Delta. As under we of under aircraft XX, contract March

results. second partners rate During the included reductions. our of quarter, round in concessions first contract reflected quarter we temporary on These major are a of that worked concessions with all our

during to for and -- expect we of the partners third We bring a second concessions. round major work with quarters our third to expect

Let current me our review production.

block quarter, quarter, XX% compared we approximately our the anticipate the first our quarter by on XXXX. and fourth and as need last EXXX improvement QX our will an to have down the we And we to approximately curve. to we approximately During by -- be XXXX, from for pending fill that of continues XXXX the the hours block XX% partners. up as approximately were important by quarter same the for same the partners of major be quarter be completed third year. the the The continued XXXX, that current we first look the will down quarter in fourth hours block second compared fleet X% our of hours Based major to our recovery compared quarter will schedules at anticipate

year. the down block CRJXXX hours reductions QX been last X% majority on the to were have QX compared by the in our EXXX of hours While fleet, block

down XX%. our While hours were block QX by CRJXXX

business. our me talk Let prorate bit about a little

by During compared and prorate as compared we see hours or block as XXXX. XX% by approximately quarter, XX% revenue $XX to up our the anticipate to our by to XX% decreased first approximately to QX demand recover. reduced by increase we QX for million X% prorate QX prorate block We hours beginning and revenue to XXXX be the

recovery. Our margin is the coming down With prorate model nicely revenue prorate we have attractive to characteristics. revenue prorate back will levered incremental the to the expect XX%, business

XX a CRJXXX. that leasing quarter, used agreement business. purchase we Let gears me our shift to Last announced we signed acquire to additional

five of the of aircraft close we XX today, others expect throughout As closed to on the and have on XXXX.

either We lease are working with several parties for or SkyWest operate to these aircraft.

aircraft, XXX we purchase the XX control aircraft. Following these will own CRJXXX of or

in are to set aircraft believe continue SkyWest strong that exceptional as to We asset our these demand is fortunate the from CRJXXX partners. to will an major with be we a position purchase unique apart

the out of increase from long-term currently maintenance have of lines $XX current Let at from up anticipated me XX agreement history, To which context, to and of suppliers unprecedented through more roughly levels of this expect been the and return providers continue anticipated. in anticipate second this will to to and normal that maintenance level provide half have we of these XXXX. year at talk briefly due XX% heavy maintenance is We American our about XX our recovery we XXXX. million these maintenance QX The expense, or some aircraft than our the of third-party during the levels our primarily bringing is slower flying storage. ramp-up

the to enhancing spent well ensure fleet reducing have and last and positioned. We we’re years, flexibility several risk financing

full work to major work demand as are recovery. to creative with partners We we each of committed continuing our provide solutions our toward

for Okay. Q&A. sell our ready side Operator, we’re

Deutsche Linenberg Bank. the first Yes. comes Thank from And you. Mike with question [Operator Instructions]

everyone. Good Hey. afternoon, Hey.

if here, I rate reductions. couple the temporary a compare Just

second quarter, nothing And correctly, obviously year, first the right? Rob, quarter phase was the March there was you this So if in of I last fourth heard the quarter.

XXXX first these the XXXX. the rate the Is we second I second of will of concessions? in I third have think, and temporary the that phase, covered quarter on phase quarter reductions, So quarter and quarter think that third third timing and a be the

correct. That’s Yes.

tie deferred we I you when of out builds your in to a you that or Qs that good reductions at magnitude Have guide look do what for magnitude, up called am give get a of items I of how a here just give or sense they the us as to feel here. to on Is want these the -- to couple sense am those revenue. I us are? can a a trying double reductions don’t count

Yeah. Michael, this Wade. is

the… on So

Hi, Wade.

On the hi. temporary rate --

several been for So with the working rate temporary we’ve quarters. partners reductions, on our

second the quarter third this said, you reductions there during and of last quarter. temporary As quarter were rate year,

magnitude good these, them. going to make of with a sure into We significant. We’re to worked not want they We’ve but are the get partner. we’re

We’re and recovery their as businesses them their well. helping with proactively

So, Wade, for, we back, right, in meaningful well about revenue temporary, because come reversal think out to modeling when will as is go though, XXXX,XXXX, a as are deferred a there they up, I that... as these as be bump

the Yeah. for positive neighborhood in effect the Mike, QX that come we will as we income be the in to come partner that the is over… in about over year, grant that, QX then effect that QX and net look, of expect and in ignoring earnings related QX where QX, and and rest breakeven concessions of the talked PSP of also to the -- will the

Okay.

QX. and QX …

in Chip clear, Okay. just that A before PSPX was guidance, to Childs” those - noise So be numbers. any

the question That’s Okay. airplanes. I’ll hit probably you American as Wade, it helpful. Then, on to relates XX this

come -- in the Two coming XX quarter are I going they’re quarter. are come fourth to in to guess, third So and going XXXX.

pretty year. it service like But XXXX. the quarter the You’re go into CapEx looks they’re It’s to going until not incur sizable. going to of this March

quarter of a in, when come them like seems I I three curious planes some they the between deliver when there’s am the not? just mismatch that. American timing go two to compensation service. going sort and on So actually it or into productive like are about am to just -- quarter, you get

Yeah.

XX coming said, And OEM to you as either the with worked new cover So you’re QX the and and we’ve of partner QX majority in, we in the in of year. right, have this or XXX are coming those the…

Okay.

… for with costs associated those carrying little bit. a

and That’s great. and think, pilots. with then this pilot thought my we point, Okay. of I we last one Hard went were from it, like Avello, everybody’s obviously, as sudden surf be just a believe, as just is ExpressJet, a shortage as deficit going carriers and at even Breeze new And to a yourselves, sudden, then, reincarnated looks all of again, well to that dealing to a it one, now Okay, including operator. entrants, hiring all a we like on prorate they’re

sort to situation where either is PSP combined thought pretty the get I pilots where the I that of and a were curious into into of with have new pretty your a of we it’s pretty coming a entrants that got to workforce. we the flight going lot And of we great have go a industry. you’ve tight, to actually are fact going market, So slew from am tie the out pipeline going schools? because we across quickly, mean, retirements

a next we’re months problems am XX to it’s pilot to Thanks. So over I months? six the if start curious running question going there, but broad just into

So, Mike, it’s Chip.

Chip. Hi,

really over I a up we were think we like teed great want a to it’s almost really, year go ago. question. to well And where back and that That’s us it

had previous that on calls conversation the built earnings are we a pilot we for remember pre-COVID shortage. You

XXX… have We

Okay.

and work had we a tremendous strong machine we that with fly very schools XXX come demand to going SkyWest. have and at W

of and… class, to the doors we guys a up. back Now say were at as open to We bringing ago start the this, again, I couple hiring the astonished response getting pipeline will weeks back

Okay.

with because it we happen we’ve a through to this of We’ve think it show we’ve to would had credible things last tried how I happened and what’s the awards managed of year SkyWest. as to us through demand the … be lot strong to knew pandemic. come manage and goes

possibly, the been demand don’t foreseeable next a the anytime I pleasantly So future. is is to in with We’ve say, that here. surprised. honestly, problem going we’ve overwhelmed so tight, new SkyWest the I people entrants, to but think Long-term, still very would it think been a feel strong come have same supply there’s don’t and and lot way. they’re there’s going of lot but far of to get think a I I SkyWest

the excited to a been SkyWest. will type about been to opportunity. the do we’re schools and the never professionalism want I enhance there’s -- It’s some we’re to to say the things and So we that excited company better be. never to want -- time diversity of to with that that, come we

everyone. Great. Chip. Great. Thank Thanks,

Thank you.

Thanks, Mike.

ISI. And the Duane comes question Evercore you. with from next Pfennigwerth Thank

utilization? Hey. I changes your fleet into high keeping at flat. block booked XXXX, back XQ if follow-up, of or be normalized that year-over-year topline we On my the does wonder if outline Thanks. could higher into lower imply -- your just plus topline to hours sort we you for and kind what assume should XXXX? more that growth, level of utilization looking what And

Hi, a the is bit little talk production. Wade. Duane. about This I’ll

are to quarter, once CRJXXX, as the -- and going about the and to So and very of mix, to the very should revenue in XXXX. X% so And will -- out, right? exclude are where I concessions, where XX% mix, of service, consistent production you if they we’re get the to airplanes you side we with revenue in -- be this were quite XXXX, should definitely we were only be The change. difference, this them XX-seat bring significantly. to year those that mix change QX compare the down mix consistent going is should net put of we sizable production script, at the our in side pretty compared ago, said my mix on As to a continue if to continue even down EXXX a you of see XXXX QX

rate of that, baseline just just growth more guess, if with growth level forward? that booked run right, the XXXX, that sort is I sort production, if of And combined into extend production we of we normalized Thanks. you keep what that to have,

Yeah.

quite XXXX, we we’re but don’t growth. So, about at to think will continued I see prepared point, talk this

American service QX EXXX, have about, I As basically the we QX. XX of those coming in and talked into

additional we XXXX. to we where be and give to growth continue will point, not it will we’re but top that, have so on on of so And guidance will at see this there growth prepared in

maybe fair. answered to your That’s similarly the the but And just thinking on PSP funding in Okay. amount it follow-up you response we him, consent and then very you’re of question should to to concessions Mike’s be grant about that receiving? --

Yeah.

be So the it It’s amount, yes. same close. directionally directionally will very

it Some of can…

Okay.

a it, little stick … bit but with us, directionally, but of not all yeah.

much. so Thanks Thanks.

Thank you.

Next James. question comes from Savi Syth with Raymond

Hey. everyone. Good afternoon,

I fleet the EXXX think the your could kind other like for But this plan if standpoint? types thinking fleet a talk of is would bit I count about year fleet from look clear. about pretty how what exiting wonder you little you’re

Yeah. is Savi, Wade. this

we lot right movement in of now. our CRJXXXs, have CRJXXXs a the So

guys. end As had CRJXXXs with By under we have those of quarter, will of XX of the the of today, year, the contract the as XX we American. end with

of into are airplanes XX with put there’s that XXXX. back to going half we American So the service through

primary growth are Delta fleet on stable it’s a this the on few is with CRJXXXs they at. very where then quarters the on The shrunk CRJXXXs fleet We that the the ago a are CRJXXX, So and at fleet very consistent the other point. ones.

the primary -- be that’s side to growth the CRJ on going So CRJXXX. in the is

go kind stick that I of like, you assume does plus other, or XX? the if should just American around other at -- total XX look CRJXXXs total, to? with and had it. XX XX What XX I Got the just in But

Yeah.

So -- yeah.

that’s question. So a great

United So anticipate contract -- anticipate rest them also are and with under we and under Delta and there. with guys and those have them leaving with we they XX of the those with are then we contract they staying Delta

Wade. just anticipated, from that block on be XQ it anywhere the is stronger hours, may for little there seemed thanks in what Did line on that than then bit better with And fair? be came a come that came it else in may were quarter, that you thinking? or sense. Make And is

Yeah. No.

And investing busy was I we’re the net-net, in a mean, for right and demand Savi, with talked of As maintenance summer. for guess, ready we’re sequentially. and production form in of product pleased our now we seeing I that about, obviously that the we’re level getting product up

sense. Make Okay.

this the so fair side? So on came is and more than side the the to prorate CPA -- surprise out is say it

Yeah. to Again, of prorate was quarter. I see during say, strong -- the volumes coming CPA the that in side. the first -- prorate profitable will would we the prorate But yes, Again, in and continue again, benefit was summer not beyond. on continued the business side demand general going that’s on as -- back we to side. that, that

Thank you. sense. Make

you. Thank

Sachs. Catherine from comes question O'Brien Next with Goldman

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

got I’ve So a well. to as similar one Mike’s question first

full levels. margin should I we think tailwinds. as minimum can to back a fully up a think think of you’re when profile? to of with about contractual Just we your couple partners How at your you’re forward contract minimum, pre-COVID and like -- again running, schedule it sounds back more like

on, probably, deferred new So pre-COVID, then that impact of about higher deliveries? positive back flying, revenue And probably talked the some earlier. you percentage the you as EXXX the these take of of coming

margins being there probably higher tailwinds, some are those we not about Thanks. think we am if I put post or COVID giving should So do? just together, things enough

question, Rob. It’s Hey. Thanks Catie. for the

So, look, indicated I that, question. I there of sort as some in think margin takes mean, the we that gives are and

to run summer. indicated going prepare to airplanes a the what’s in pretty looking think busy as to what’s for shaping near-term, be bring that into up we as continue service we are I back again, things like -- maintenance hot, as new we

but we and not we’re is as to hoping that, profitable, back. the and in some that’s obviously, recovery going I a our Obviously that, come that there puts levered margins another to think as prorate there’s will those area nicely is takes prorates they’re. business drag -- and we’re overall currently on said

so one, margin that how be reverse, could or You obviously, will another of incremental again depending when mentioned deferred we have revenue. that’s amounts in XXX% -- deferred quarter modest come starts that the revenue. on Again, deferred to But, next some reversal revenue, that things that in quickly back.

of side. term, some again, the the will sort a I these long-winded other hope expense question, that So on of got as -- be of your things -- answer again, reversal headwinds those of near-term we items the it’s but demand and Longer as we’ve think to positive. combination

with Okay. airlines aircraft, Great. talking starting take potential in and future partners general, action leasing with just back the perhaps were had your the mostly the I through growth that. will asking lessors additional we the burn cash lock then to semi are in make versus about big years? to incremental business, of back get just Thanks to plan more but to XXXX. you they regional imagine for couple -- for concerned of flying recovery have your starting we next Not one throughout global to and about conversations over XXXX. yesterday hopefully, starting And

love hear planning just it’s to back Thanks. conversations are the or on would the long-term table growth if if still So flat? really

a Chip. good is Thanks This Catie. because as it our think Hey, perspective question. great asking for has That’s I that strategy.

the demand of more part for evolve, as economy how are lift is travel and But cities we’re because that we candidness, helping everybody we’ve we post-COVID of to also recover. out big And through thought conversations our been the a and today thing First all they the executing those certainly, to locations that, to demand. year have big rest that partners even through think still was in regional is focused this on relative having continues could a recover. pandemic, smaller midsized the going

aircraft we’re having about lot the a of with orders. so And long-term this partners conversations

our the manufacturers having of evolutionary needs of of all those lot that trying partners we that achieve meet about ways with to a conversations footprint we’re the environmental also things. We’re with and can

partners dialogue are answer of pandemic, But sure from to with making both to to we’re and we but manufacturers. those continue having well. in recover and it’s the lot secondary So a question, quick your alive conversations

Got would scope there And compliant. Thanks. sure there still just thoughts one it. EQ for future love of -- aircraft, out Not what not options are? so the new sure terms your is thoughts are in next-generation just to since the hear brought other up. for what guess am like I what be growth I sneak it any on will I’ll But SkyWest? pretty maybe in aircraft you more

Catie. and strategically I of that of XX of that a entities. to opportunities. and tell of well. to in I and to Thanks, recognized of aviation One -- out clearly almost aircraft the the is you long-term will very, years a performer, is lot with several as an thing Yeah. entirely spot make sure future we’re dispatcher I conversation do have goes the a mean, about of execute can is a for continue say an excellent strong we our conversation lot That evaluating that we’re approach world SkyWest we very part the different this competition last as

go needs into need We with I’ll question to are not We get is those of oblivious of not again, recovery. we But things. more other nature we as need conversation and about the pandemic out detailed people, need of the ourselves care to we to all But this to forefront that. until our want back to be are of get get to comfortable premise our going the going take what at strategy customers. or and to the your announcements partners also public anything that to of care again, of our original be we’re stand we -- to our take flying of and

hopefully, kind perspective where of you of give the helps So, we that are.

Thanks time. right. All the Yeah. for

Helane Cowen. Thank you. with question next the Becker And comes from

very Hi, time. Thanks the much, for gentlemen. Operator. Thanks

just pre-pandemic weak quarter one prorate questions, business two the So profitable seasonally first ever a quarter? the is normally or is in was that

is Helane, Wade. Yeah. this

-- is industry. of QX a make the QX was We’re on but the historically, bit definitely money very in not pre-pandemic of consistent little did prorate side. lot we with But, the even a weaker. rest always

facility And the airlines with we’re working then spending, fees the landing some to is, using help to year, of other and care other I airports last mitigate think, my Okay. airport charges guys. right, you question their

year-over-year related or is is So decline line the the that back more run net should stock? about -- that coming expense is flying is that -- to being think rate some we the item in as

again. Wade is this Helane, Yeah.

side, the of partners and our statements. those, the fee reflected not landing majority the financial are directly take of on So, care in

our on volume just The is related the associated other with line expenses and primarily item volume. decreases

Thanks. you. Okay. Very Thank helpful.

you. Thank

Our Joseph with Stifel. last from question comes DeNardi

Hi. Good afternoon. Thanks.

the providers? of understand, with with providers. labor on those I third-party performance market of tight you’re facing for are the I the of displeased want you maintenance byproduct just question Just one quick just a me, that your or challenges Is Wade, think, kind to

a obviously. That’s a question. great There’s going on lot

we As lines flying we definitely on, the we have back contracts. got come of increased and a lot the as of going during we So American right? it XX over some as there’s we pandemic, have check these anticipate said, XX -- C really of ramp-up, just the is we but never stock

great to They’re ours. their a bringing up Our do They’re things. of them third-party are getting They’re providers workforces. trained. lot partners back there them back of getting just speed. They

level I maintenance navigate should any the uniquely with our so. of strength forward. be anticipate very that to -- SkyWest going execute of we a be So in are we fleet of can our they’ll capabilities us, front able able very high positioned challenges internal the for and size at us to is through own that that

Thank Helpful. you.

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

next we’ll of you, Thank on team great people. support support and I proud thank our you they’re for today. more to involved airline a and the quarter. interest the to I really to SkyWest. want success team. great such proud again call We Thanks the joining work your each our to in appreciate us again, especially, couldn’t other fortunate doing Keith. be and talk to be in our and am long-term I with everyone of Thanks again and SkyWest.

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

now may You lines. your disconnect