SkyWest (SKYW) 4 Feb 222021 Q4 Earnings call transcript

Good day and thank you for standing by. Welcome to the SkyWest Inc. Fourth Quarter 2021 Earnings Call. At this time, all participants are in a listen-only mode. After the speakers' presentation, there will be a question-and-answer session. advised conference be being Please Instructions] that is today's recorded. [Operator to I today, conference would Instructions] hand Mr. now for [Operator speaker like the your over to Rob Simmons, Financial SkyWest Chief Officer. ahead, go sir. Please

us the joining for everyone call Thanks, today. on

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

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

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

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

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

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

everyone. Thank the you, Rob and for Eric. Good today. joining us Thank on you afternoon, call

remain $X We product as million pretax fourth prepares our $X an million. enter income focused industry Recapping to our reported for quarter see of facing continue the fourth headwinds of net exceptional on we recovery. to post-pandemic income as the and operate we very next results, delivering we the phase product and quarter environment, the we're during strong demand a new beyond, while in of

concessions, irregular Winter the and rapid in to the as PSP in QX absent of COVID in combination led any week of which final during were January. environment their people to this the difficult the third month period variant and the year by The above began we over was and countless even period. December weather are previously results the I operation well quarter. surge a in flexibility we the and and went address and period began last of cases grants and travel the communicated, the expected our The travel challenge holiday who today. want Year beyond over concluded Omicron current and employees that As lengthy for disrupted the good are work surge where thank this into January. or want through accounts There I New to during peak

in demand to continue experience all very We our for strong flying fleet types.

place this We at year. expect one and EXXXs service us XXX service XX in putting more by to early EXXXs new in XXXX, next into year

that be execute priority has our strategy. been we years last refleeting long-term in as for Our a continues to the progress several on

and have solid, we exceptional summer. hiring headwinds maintain SkyWest demand enjoy industry a work new to new retain in across We While are and for facing the pipeline post-pandemic well groups environment. a pilot all as is field strategy to attract is the ability operation. and into operate robust prepares our classes professionals hire to fortunate

an recovery captains. regional We X,XXX for the and retirements demand created experienced This early higher have an new increase long been in much at the pilots, pilot and majors here of across steep the imbalance during preparing retirements, however, demand taken the mainline pilots for has demand SkyWest industry. a the particularly resulted COVID in has

strategies. attrition pilot planned our anticipated and and in course, models was Of for

not. captain attrition in increase was rapid the However,

our future this so. next to schedules notably partners foreseeable working pilot help to So new constraint To while we implement incentives. major pilots strong, reduce retention is correct have imbalance, production our for for the year with worked imbalance upgrade upgrade expect that timing an with and pipeline the group we're creates and or our for and

we're phase for teamwork. together dedication be want to summary, work employees for XX,XXX and is teams I XX to of thank results. in captains. pilot and together disciplined working current and service XXXX, In to We with in going into we are best pilot to that the allow it to our our backdrop, the the remain sustainable people can our our are nearly we pathways, into begun aggressively. allow. success. have acquired continue highest and looks reliability both people including XXXX in In to flying the programs play our interview the past continue that in for imbalance in our imbalance we all will producing With ensure we year our new group pilot these prorate resources monetize of COVID have Forbes' manage challenge incredibly we ongoing upgrade, to reason position The now next ability very with But long the as deliver an EXXX guaranteed the been as to challenging partners of partners up flex doesn't game. to our This down couple the strategies and honored Overall, the to Against and that so We our given the have prorate offer our XXXX. been utilizing option flex our with running likely constrain to early XXXX. worked reduce refleeting employers our operation. also for we second And short-term. back training this humbled industry-wide our their significantly embedded is timing already aggressively never ways years flexibility staffing reducing named had of and for with various work of for short, with flexibility pilot services and stronger, for large imbalance one to up flying. for forward demand prorate across us that the recovery in to product our been are this our model best we have demand and allow prorate has to while our going production

As a XX% in we block hour expect the production be from production. down XXXX XXXX XX% to result, to

income. similar XXXX, excluding year to government this be breakeven expect with We grant will another profit transition

Our strong differentiators key balance SkyWest. for and cash position remain sheet

pilot We on data. aggressive solid rebalancing financial to and well are us our will we're in ensuring Rob We well through staffing the are ensure XXXX are allocated and reliable deliberate and for steps remain a taking deliver our and focused we beyond. now take resources positioned to the product. now

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

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

of XX% hour up X% with XX% consistent First, our QX revenue from let's up is is talk block $XXX about year-over-year revenue. Total XXXX, QX. increase revenue of production million QX from QX and

quarter. released quarter, last certain XX% XXXX to $XX X% revenue discussed QX. and support. our revenue sequentially. last effect partners and from million from flat compared QX include government is QX XX% deferred and revenue XXXX. and These breaks revenue from with the of of that down XX% results Leasing million was year-over-year down COVID to up QX $XX quarter, in to Prorate million of deferred QX included was related this up up GAAP As other up $XX release our QX contract XX% revenue QX, and in concessions revenue $XXX during million a revenue year-over-year

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

of of and revenue or cadence quarter, reversed revenue various the the by of depends the As into timing discussed contract All the our will deferred reversals last the on deferrals amount of shape revenue recovery end periods. future into flying. be and

As did grant have income additional expected, we in not QX. any recognized

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

in and used no and was new fixed We million, new Total have only other million unsecured $X.X during was quarter CapEx coupon $XXX aircraft XX-year government XXXX $XXX million fourth year-end of four we aircraft, compares the in ended million low QX as CRJXXX for to total down a including balance the EXXX of aircraft, other of fixed PSP sheet Our XXXX. CapEx billion This in debt used debt our $X.X XX on with amortization, XX assets. The purchase of assets. from $XXX CapEx XX $XXX billion, CRJXXX's is loans. EXXX XXXX.

Let me about of couple liquidity. things say a

XXst, December the $XXX effect $XXX quarter of EXXXs. debt of million our for cash having new $XX million included of incremental an 'XX, million financing position before XX adding repaid the As this of debt of

also needed. We have if of be collateral that could approximately unpledged $X.X liquidity deployed billion additional for ever

$XXX As cash is million lower debt net balance of at was actually than XXXX. it the XXXX, end pre-COVID of XX/XX, our of

are this this not including any financing and color. practice, Additional let fleet little our a obligation. XX% specific to has of that position a great and we policy but guidance you comes aircraft, me consistent service at uncertainty in times Especially time, from with partner-owned fact EPS of like no now our flexibility in over give in the give

the First, at be of government roughly this grant benefit. in the million concessions over Similarly, for XXXX. we XXXX XXXX, grants, net $XXX partner expect of net XXXX were EBITDA in to excluding to expect breakeven XXXX for of that earnings, $XXX we recognized adjusted flat time, similar be revenue in to with million, neighborhood also

and staffing block growing of staffing fleet. and have extended attrition XXXX from down to for expect related some our XX% our transition production as on COVID, production fleet in be hour related we ERJ challenges or Second, CRJ the another mix to XX% focus to two. XXXX we The to imbalance COVID pulling down year our

accretive new pilot our maintenance work and preserve the through from expected year-over-year to won't replacing offset on cash pipeline the see other XX training the XXXX continue investments with time opportunities optionality being partially XX and industry strong profitability Fourth, focus into position the liquidity aircraft, to we of to imbalance, flat impact service EXXXs strongly believe XXXX. We in will until over XXXX bringing with XXXX sector. breakeven labor after of the caused will strong CRJ that the early a the growth CRJXXX having end of accretive primarily this in the fleet by spite actions imbalance, and regional lower with the and of higher the EXXX flying. XXXX full-year are expect to affecting Wade? position go XX are in by in on labor imbalance XXXX. in back production us Third, of focus we XXXX are is XX of delivery now a growth year. ERJ these expense taking new going we aircraft lower

aircraft first fleet as new will and CRJXXX EXXXs. These be with XXXX. We Thank the will these add you, partner, under We our agreement placed with have contract a we our businesses. long-term will by After with XX update American this replace of SkyWest-owned delivery XX on to currently prorate part Delta. XX year Delta EXXXs an Under under of we last leasing have and middle we CRJXXX update, contract, in To Rob. into during announced CRJXXXs contract older XX as service. aircraft in service take contracts operating of XX the well service quarter, into currently aircraft placed these XXXX. provide we production aircraft, I'll status update anticipate Delta. and an beginning under through

year. We this throughout also have XX new EXXX scheduled service for

We CRJXXXs fleet XXXX. have during EXXXs total will of Together, third and quarter end the American of and of the quarter the XXXX received XX in XXX two our this will of and those year. second by bring receive to fourth these

an add We Alaska with to XX our to agreement have EXXXs contract.

year very of those XXXX, Alaska. and half long-term XX EXXXs. After aircraft total and into becoming demand aircraft to place the backbone one of XXX be fleet under this XX we strong the on more our a first of during take our service flying. of with is contracts currently expect for our remain delivery The EXXX for the We EXXXs order, will of

partners have XXXX. major by will our XXXX, fourth X% that Let on we me decrease of quarter quarter current our production. current review for the schedules block compared of hours approximately the we first anticipate Based from the our to

our to block QX lower we be that look we will fourth XX% QX quarter the of anticipate than hours XXXX. As XXXX,

We business. as XXXX, model prorate we block to our XXXX about and that hours our will to most of our these bit prorate to decrease during little reallocate anticipate a talk me expect contract Let continue fleet.

our Shifting cash anticipate staffing good under with margin long-term of line under parties. engine flow prorate we business very to preserve have with third into currently leases We engines has This to long-term characteristics. and flexibility intentionally leasing for our strong placing returning this several and business balance. XXXs leases and XX is business, comfortable this year. flexibility built CRJXXXs flying once are will that Demand we return and gears our our we model leasing have

placing Next entity have currently placed. anticipate from may the out opportunities aircraft not come leasing these pursue in for where are year, contract, XX after Delta we Delta that we'll We and engines. removal the our the leasing CRJXXXs aircraft of contract or

We to major be years our with enhancing and committed partners and have solutions. and spent last continue to our flexibility several for of are risk ensure fleet will to us provide continuing reducing positioned. each we well we're financing a to the flexibility work This differentiator

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

you, [Operator Thank question is James. with Mr. first Simmons. Our Syth from Instructions] Savi Raymond

Your open. line is

from Hey, hour little stays through out I bit that everyone. mostly Or then little terms kind kind Wade, color that type? year. has Could the as maybe And safety maybe good segment of appreciate afternoon as the a is you -- coming of reduction block were you and aircraft coming prorate in changed more how of well bit about the could kind is little provide a thinking it a how last during CPA you provide of and versus was steady? call? this earnings cadence of where But the maybe and to curious

Savi, in hours our script, that talked XX% several said to my XXXX. The to I Yes, QX XXXX Yeah, and I X% model be compared about, from so to of QX contract we into majority QX about as expect down reallocating models. QX, block down prorate are Wade. our is be to of the compared as this we

seen in bit little CRJ reduction of of an well. We EXXX daily we've our in also but decrease fleet, our utilization have also in a seen as utilization primarily and kind overall

losing the And it. summer kind the assume fair losing then for is this about is if and play year, Or about maybe something of to over would this normal Got would year there not XQ? -- XQ, money for that you one in and kind that as breakeven just Rob, talk in the out? you, profit where of seasonality is income making

guidance the cadence breakeven seasons. the usual be mean yeah, I But meant will there Yeah, full-year. the the for is some of obviously throughout

of I resolved there just I'm if kind get of kind seeing And XXXX. that that last Chip, lot of mentioned it. you're longer-term you this, today recover. maybe does back that's kind business more change business bit where of that certain a as one might worked in is of Got we little your kind kind model the maybe hopefully, permanent question. of of ask come a into kind in of anything things prior cycle of aspects a kind when gets not curious,

think this your again, I that's question to Chip, -- foundationally of model that's this. is is Savi a business I great in to our there relative couple because that's changed questions, certainly a of back attrition. on way we're January would is honestly our we have made particularly that attrition pilot, the as through that backdrop say month of incredible recruiting the something higher to higher we adapting and

specifically one we've on of experienced just hiring, higher that think is attrition. adapted pressure seat our outpace and I so like continues in Probably attrition to things our Captains. probably have for has been relative moved the Captain the was to the our major partners, hiring recently XX-XX. also to record to past, We the to the it's overall primarily But first hiring XX-XX captain the that paradigm officer

going right are So get invest in of relooked are models, in long-term. think you those within are our at types the to us these going have can right the think and in need Captain things we that business to do level to at with upgrades model, the long-term understand way to we certainly be the for resources the where some place to that and of as things we we the look, sensitivity the good I allocate

caution conservatism breakeven and a right again, pivot the is bit well timing really, of the there's in and positioned we hour block that in sure reductions. So But the analysis in and everything to for be way making the really long-term. right the

Appreciate that, thanks.

Bank. Deutsche Linenberg Next Mike we with have

is open. line Your

everyone. Hey, good afternoon

the the those question quick fleet XXXX the the count at a guess, end is XXXX? I Wade. handy? of have fleet versus Do of Just, What numbers end here, you total count,

can in release XXXX, of So at look our end today. the you

today, long-term of on on XXX CRJXXX of talked our current will of contracts. flexibility the XXX that as The our to script, we a balance. -- my continue back CRJ side especially take is all have more in lot A flexible for if are fleet more And have As the a we'll CRJXXX end have EXXXs things we fleet, we of get under right? is to caught EXXXs, the I after we year, of up have aircraft. our working delivery going good couple hiring, around of so out we have of we be

be will those be some back in to able and opportunistic put of We there.

to lot flexibility what So a going we're have forward of do. going we on

say we it's at will early we under have to right will a probably do So long-term of too we end the little be now, contracts. but what XXXX, XXX EXXXs know

to Okay. you guess and And partners. a of Captain a I more major to lose specifically be then one who when happens a major, your

consequence, all As take we're seeing a rates being up. forced airlines to

by of when Are And the a and CPAs? your as you this some margins you in especially pay do not continue this CTA undermine partners, so, feedstock to officers take your some that have up to that's Captains that of protected is protection rates healthy sort can flow under wage going your of of being for that you driven first what get inflation? so you your

about that type those handle to to back make contracts we put professionals the our those this for a and dialogue to system, But the XXXX. they them certainly when We yet our ago, of capital XXXX the an our value fleet long-term about a and couple couple idea years as at ago. this have but heavier our six that To and of things is for new five in sure good very -- have as pilot the all up enter dynamics into in last there's do our coming unencumbered, of provide is the this is business XXXX. evaluated that fleet the that have this lot from XXX, we the going get longer-term. that, for a get contemplated anticipated with can't go typically with move we've good at that way economics you of years. and at year, that XX to raise Mike, strategy CRJ two contract, been them, and look years a as But our the in shorter-term question, forward fleet Certainly, a situation. knew And valuable. contract, we we've those sets conversation in we of years -- to do in the of what very always some have Chip, us. it that's exceptional starting outlay it. rate around and train we The of we look we dealing aviation like They length end retain and those a plan there's short-term when that color, So, strategies partners, do of give three are there's opportunities to ago, perspective, and that's We into fix question renewals your decades. we the for issue we shortage of we're with

sort a some I you last backbone the Okay. that you I the have think with you in for about And fly in market dispatch something the that XG Are three still aircraft from out alternative some methods you fleet to and as lot cities. are of West, a and facing, will and do get markets. of jets, these it now? operate are these soon of When you to your obviously, said the on to are of fact one. we planes, can to that very months on with say, will higher. and the do we sense that of Great. issues consequently get methods those alternative go Embraer and And operate going what the in the can good going of smaller which What obviously, a And you a when especially the your carriers six one resolved, example, ability this this seeing Embraer impact airports, smaller around And is is like take dealing into timing compliance? problem that and have the be squeeze other issues, who Key deal or some EXXX costs this, see front? with just of -- if to may actually

Just any Thank at sort this? end of of light the on tunnel you. the

from Yeah, our there we [Amax] specific, fleet. fleet out look look, got our think I for

issue amount regional like We major have on other maybe not seen a disruption of carriers this have.

Great.

bigger question, about is that fix the a is That's the in cellular carriers. happen this? do near-term aviation to there This the that. to optimistic we going your and I'm between something think industry not issue big

be I foremost, going think be our something going so We're we're approach the in safe and those first this And perspective FAA collaborating transparent very in our to to this. look manufacturers. with that and to is from our and

we're permanent rid solution. soon So big the and a anytime have enough going we're I to wouldn't assume issue, of be over a [Amax] It's issue. that all

Thanks, Thanks, Okay. everyone. Chip.

Evercore. Duane with Pfennigwerth Next, we have

line open. Your is

guidance didn't much some that that Or all be this flying is CPA that And it there can't relative you. in the you that about prorate execute? environment? little is ability but So higher us, block for is you and to constraints? us between you're squirrely, example, you frame XQ flying how Thank gap hour just a Appreciate really the if Can cutting? the help June deliver these gave the that your demand you quarter time. would have to obviously, think you if

Yeah, is Wade. Duane, this

a we our about. as we'd working partners It is down -- were staffing both would major The prorate We've And pulled talked fleet imbalance fix been issues. we've extremely able on schedules contract been as we higher strong. both. and well. our if we've XX% demand So our of probably utilization it's XX% reduced with on of all to our our to mix and

there. is continue to utilization. contract partners, extremely but are the between how balanced out to prorate a do We're we with decreasing have going So we going our approach this demand on and strong to work

as from perspective, super all speak losing to That's you as a anecdotes what network markets these this frequency, here? the follow-up to losing Mike's could a would And constraints be Is is profile one helpful. kind share Okay. you Can the any that are about markets about then of maybe that are service this questions. of of great. a result of

Duane, again. Yeah, Wade is so this

So once been looked market a day combination both. that frequency. to a we're may into of having at a it's that four There again market. flights have We've pre-pandemic three

or like that two Now one service certain that markets have we're go down just are right, forward won't going dark, to are going that. SkyWest. to from There something

to have be going aren't there'll frequency just combination to and you've of it's be a So service. as both seen certain that going markets probably

thinking operate for appreciate own service? And of Would it be them be behalf would type know question, types? think on my I flying majors? you you in required last Thanks very Would Eve that. a conceptually, some for this just take these of it's be partnership, then Okay. delivery then aircraft just when new early, on thoughts these? you'd of And maybe about And to to it. pilot utilizing Really but of on your guys. do how taking be the the that are any you position

this is again. Duane, Yeah, Wade

think good a partnership and well. great we thing far for entity, initiatives as as it's our with the Eve them as So sustainability the

half still don't plan. on As those be quite to operating decade delivery solution far this. of these, sure. are back for of We potential an as commercial these the the have still more for We're working yet. in developing going We're

is get and solutions this with here. a working we much Embraer still of start So in to potential want and progress, but some in very front work out it

so would a be again, that this on the totally it Or to there, replace different just you've historically but persistent is like CRJs? XX-seat range super potentially thought? I'm Okay. flying conceptually, sorry some done network of long

miles miles, a not it's a range. will this of or The thought. XX stage vehicle near average network seaters Yeah, XXX that XXX have this totally different length aircraft have to

in it something, it's regional and setting -- historical than urban-type So is the in markets. it's more

Thank you.

Next Helane with we Cowen. Becker have

Your line is open.

very and very thanks Oh, time. much you your thank for Hi, much. everybody

The year Just one get I out an of issues guys you issue that's maybe getting behind with aircraft a parts of questions. that to couple of ability to the maintenance maintenance, spare question talked and was last you? had is one now about the

Yeah, Helane, this is Wade.

So that we very is expense expense our in going getting forward. issue large and of maintenance And the -- in a our will a we're And approximately look had position. resolving of our right now And fleet it XXXX prepared. forward as check end made a itself decrease the we we and during at getting good a very into C XXXX, do maintenance maintenance in on. see or XX think C from we year, investment lines I perspective, generally checks heavy going

then the block do flying you helpful. pay don't Or Is that is a -- Okay. you want Thanks, other to know -- it And Wade. you with penalties? fewer to but it really respect hours. to is how cancellations or to able my have I them, are away? That's question classify negotiate the

this Helane, Wade so is again. Yeah,

on So we've working major issues been during issues with our these and the pandemic. partners other many

been as utilization issues these And to able pandemic, them work with solving issues. the on emerge while. collaborative we've been Now dealing we we've from a for with very

relationships all And we're now. hand-in-hand great our we've our And partners. so something that that's got very with right much of with major very, working partners that

that's through so working speak. that as And something we're we

Okay.

revenue last were by penalties Or or know to how whatever through comes year? can you there it, -- are call included then you credits. So revenue you in I the the the revenue -- deduction a to maybe walk me in as offset want for

able government that live being You your the you made by staffing people for to up giving commitments offset because not the by okay? penalties of issues the were hiring for to them away, caused financing the are them

forecast, complexity of industry a in definitely we in -- on Yeah, revenue is and with reduction hours the that. is our this they've with this issues. associated the and associated issue, that's block lot our a Helane, the have And

colleagues right. persistent Thank go. I be will Okay. All you. my than you less and let

Catherine with have we Next Goldman O'Brien Sachs.

open. is line Your

crew Hey, forgive for and think is your how asking could bit are first for outlook I is of to block everyone. and But My like this something you, year. a between specifically afternoon, understand Helene me. driving gets say, the fly Or you have don't that what's to Like regional of ground coming walk to is than I question you partner lower block them partners? also made staff staffing less good hours? of us along Duane number you through a so run lines decision that only you follow-up operation. But both technically that you're XXXX full is have to x and you they to workers, you're some they they need capable say of to a other is your fly because decision need to to going some

Chip. this Katy, Yeah, so is

block three ago in actual demand provide the our primarily that where months you to us Just the in process to today. one feel going what transparency higher the actually that. think than communication of previous a we to upon to reduction I relative one that It's were were at I be of we we likely have thing ago. we're based thought to demonstrated, probably and because foundationally much on talking entire about produce can a months best mean, it's that the partners critical, I that want going is three for demand our we're is able the that absolutely what to fly question, we industry, Back seamless that even hours that, tell very thought we process. is we that,

back than of fly flying who have asking now, mean to amount your to us they go I to a So right what? says even contracts point, tremendous for. are more we

we Our perspective is, with our needs. are staffing very about transparent them

sure want Given we two, aviation outstanding our typically that are staffing particularly partners most an That's our ones location models. to of all go can be make embraced. absolutely give we our can, for the in opportunity to have want times. what deliver through do as of we we you, saying that they're these for is that the professionals it know the what we they the for. model And And the we but to spirit that through our provide outstanding We know our one, we fact domicile in sensitive three long this it partners well. ways that that things, to we specific, fly work in exactly it and main are And and and people, an also they them model is and general happening even estimate digest out. hiring here's directly

to have our from that daily well they on of is the our to guys this all to into a there's plan been going really employees, a view. going the with value we dialogue. lot basis worked presented get product quite it. caution yet of they the there's candidly and also also And we've some So partners outstanding of that into been far, value and it, goes you a fact And which that there's produce with year so that to our assumptions thought lot all been

I'm demand yesterday, staffing. Great. double the and lately attrition, to more bit stats attrition give 'XX? airlines low you. get be commentary and between really or carrier, digit could it pilots based them they're it's for to where might be us versus other can would now their we call you're or some understand a Maybe where guessing takes it running low-cost from, acute Okay. figures you on at 'XX -- that the on X% usually X%, helpful Any great puts than on on That's from attrition in hiring

mean have that four to XX%, those But tell with to we others I probably we're to statistics down keep internal. what relatively attrition sensitivity XXXX have, not would compared own that's brand flying and Yeah, our well that XX% you is. what in the the the probably us going partners by of given I statistics pulling

I'll that. about leave with given I at So our that's best think as nature partners, as -- and the far we're our of relationship probably

it. modeling to just I bit, down relative did revenue little the you year. the expecting than Got I next XX% more can. revenue sense [indiscernible]. a of won't over year, is last a threshold XX% do like to quarters, the two to you With book what as compare that hours Okay. prior periods? Just of quick hours from expect if book get block trying Thanks. one to a for what Maybe for deferred course next in the you're 'XX deferred closer down block was the bit one

Katy, is this Hey, Rob.

be key that what of little So the how got of bit is that like, already. we've the sort Again, of timing revenue air. sitting depends will on in cadence recovery unwound our books. collected on $XXX the we've will revenue still New for the that's million the looks the topic of -- deferred deferred revenue but of Year, going that into to which on the is up It around that cash the

So reversed we're $XXX the again, represented modeling too contracts to those -- deferred by expire, sure. of know spend to for going the don't the that that revenue through time it all many individual eventually will perfection. I be time calories but on million But that revenue that by that flow will all

it's think that Rob? you Do to on one, back going like Okay. you come to really

Sure.

to been show quarter so like Because saw Thanks I that X, XX%, time. to and we able some block approach like 'XX start in of that's to that the we that held down you back as past maybe fourth you've is come online for should XX%, up. much hours, in you XX back down back where that's guided a looking that have block or the I guess that no? revenue hours just historically you see revenue in all deferred when of quarter, the think book levels even

No, that's Katy. fine. Sure,

early a year, you in in year. in the as And then quarters book $XX $XX little of in go recovery think still QX did I We million then some the QX. half and at wound analog, the look, and first back wound of XXXX revenue So were sort mode. which the million an of look of in if more

there. the got how block of hours the you've work So cadence

be few it expiration think you that their get the in by out 'XX as forward, contracts as go So of point. I 'XX end years if or again will likely unwind expected window. And than those things next stronger will wiped we that slowly again, approach over the

also is what to And it mid-XXXX a much. very heard because Wondering that to we you of maybe get XXX changes CRJXXXs by seven you getting seemed had there? the the if couple deferred? or were last were with And Thank there more like current issues, American before. with the

Savi, Yeah, is this Wade.

question, that. XXXs on them not do are that to come on in side, them with timing the American correct staffing push I work guys the the with second those yes, the them on out Right so... we clarity. anticipate of we And will half. to have the better just into on first and is were we added, working So ability with half we'll Alaska two more get the models work our as continue now, that and they the

And you. Thank Chip. great. this I if conceptual they're Okay, for kind industry question. don't know know is I of

your and in recruiting with resources so the and kind from whole airline partners I appetite in more your that unlikely have might benefit regional Just think industry. terms industry a of realize you do consolidation you're wasting pilots of airline further see and size, consolidation what's importantly, mechanics. your fly sense for is regional of the not to the And maybe further M&A SkyWest defendants from but perspective, industry given training

this view great point has we anti-M&A has know are proven this out it as so for not I worked don't us. how is Savi, exactly Chip. I know Yeah, that. would our that partners history our at

our all from want prefer we recover organic that process under think and the current still even do. to to an perspective, to -- we situation grow things I the and

we're and reputation the to to be continues the aviation strong. outstanding attract like not earlier, have headwind now talking said and that and We that's professionals ability we about right

out does strong the us. data point take that equation side for of M&A So really the being

Thanks. All thanks. right,

Next with we Evercore. Pfennigwerth have Duane

Your line is open.

the mean, just other was think et what clearly to of much chance requirements the US geographies rule. I there's wondered cetera. in the follow-up. movement Europe, the the on movement there industry? I for used constraints for look be you if you any kind seeing across in just we're lower any Do much, and X,XXX-hour Thanks in if here given

we you for a and question that It's to And Chip. great a been decade. out have decade to talk. of were tell is of this I will more know, smaller think fundamentally, service a lose some various altogether, you think as question, your on previous we can this get some had conversations -- the having I we as after communities, this finally I frequency. I Duane, communities, politicians continue issue those is will is working flying engaged with in cities we've drastically than reduce small

point you, know there do there tell answer, the hours. I a than is, guess but I is think will I be that will X,XXX my engagement So dialogue. we ever before don't in more in movement

are certainly they know that extraordinarily think ESG much done. data data get those ways and to points safer things, we having clear, like it compelling. types much very XXX efficient people I are more we things and for a is even fly That where are of why time the

in a dialogue. politicians this to much very are particularly that We mindset if have somebody wants continue

call for we show the that's now what about talked over phone on as we've data, life years. have the to have real today, been saying We we going XX

of we're very that would again, that now can this this, a environment and that plans love the long to to extraordinarily hopefully point been hopeful, take at. more it at points for because about talking I'm We've do the safer the place efficient prospects. has and a FAA the a to day believe traction to the get the continues something to data we in professionals more interesting with that make fundamentally there and So we for that, also are ability it's dialogue than aviation we political become ever. time be end people helpful place but process and some hope like We things

thoughts. the Appreciate

with Mike Linenberg have again Next we Bank. Deutsche

Your line is open.

know And smaller these in some maybe Again, becomes the like mobility you communities I there because thinking years, [Avi's] that that this? with five XX probably sort X,XXX. you X,XXX-hour that, it of chip, that obviously, worry that airplane hours would not Duane's Part pilots, grow a get many your Yeah, the you of on about question to to XXX maybe I you have bring these are And airplanes. on that either was you've also of pulled said of, rather of with don't aren't you carriers one, capable I some -- organically. investing address maybe that pilots, do don't out just from brings markets I out be pipeline with kind how know But platform a some of far but that lot we're it of are unfortunately don't that of the but know eight going sizable those about, years, away type, for, work I lot beauty years. on may with there rule, does another question

So and at I you've don't some know, if several there, I looked XXX there's carrier out there don't know that... are a because

Michael, this Chip. is

You your cut is know what off, will to I question but I think be -- and I going answer I will it.

those XXX relationships that. for outstanding Just from be But back And we the do with lot relative that be talking And have any engaged to operators, not XXX what of operator, to a engaged we consolidation much opportunities. to we in. may you're of about the view going in XXX question, some would flying different have looking be would we we previous in very operators. relative there some or interested a at perspective that, additional partnerships

Chip there this to at the time. are questions Childs remarks. And further for call back turn I'll no closing

appreciate to Thank some us has by for I'll just interest never and product Despite saying facing, again We call stronger. your the a the today. you, been headwinds we're on the for of our SkyWest. everyone joining Eli thanks really couple in of things. demand close

flexibility look quarter. do that we you the need strong our the balance. accomplish they Again, of we're this confident a pipeline and things through and the and recovery we talk thank have to current that that, ability our their hiring they to partners to navigate people work continued thank with that we'll I will and very call to and staffing next continue next With in for you phase the work to end work and people as great at the long-term. We the to our and want

concludes this today's for And all your participation. conference call. Thank you

may disconnect. You now