ST. GEORGE, Utah, July 31, 2019 /PRNewswire/ --

Second Quarter Highlights:

• Net income of $88 million, or $1.71 per diluted share, up from $76 million, or $1.43 per diluted share in Q2 2018
• Pre-tax income of $115 million, up from $98 million in Q2 2018
• Placing ten used CRJ700s into a flying contract with American Airlines beginning early 2020

SkyWest, Inc. (NASDAQ: SKYW) ("SkyWest") today reported financial and operating results for Q2 2019, including net income of $88 million, or $1.71 per diluted share, compared to net income of $76 million, or $1.43 per diluted share, for Q2 2018. Pre-tax income in Q2 2019 was $115 million, a 17% increase from Q2 2018 primarily due to SkyWest's ongoing fleet transition. SkyWest has added 25 new E175 aircraft and 11 new CRJ900 aircraft since Q2 2018 and has reduced aircraft ownership costs through early lease buyouts on 52 aircraft executed in early 2019.

Commenting on the results, Chip Childs, Chief Executive Officer and President of SkyWest, said, "This quarter we were pleased to demonstrate our ability to deploy capital and unlock growth opportunities within our partners' existing scope constraints. I want to thank our outstanding SkyWest professionals for the service they provide to our customers."

Financial HighlightsRevenue was $744 million in Q2 2019, down from $806 million in Q2 2018 due to the sale of ExpressJet Airlines ("ExpressJet") in January 2019. Excluding ExpressJet revenue in Q2 2018, Q2 2019 revenue increased $82 million, primarily from adding 36 new aircraft since Q2 2018.

Operating expenses were $600 million in Q2 2019, down from $679 million in Q2 2018 also due to the sale of ExpressJet. Excluding ExpressJet operating expenses in Q2 2018, Q2 2019 operating expenses increased $70 million, primarily from growth in operations as a result of additional aircraft placed into service since Q2 2018 and from higher labor costs.

Operational Update Flying contract updatesSkyWest announced an agreement with American Airlines ("American") to place ten used CRJ700s under a multi-year contract beginning early 2020. SkyWest anticipates acquiring seven CRJ700 aircraft from a third party and internally sourcing three CRJ700 aircraft through upcoming scheduled contract expirations.

Delivery update on new aircraft for DeltaE175 aircraft to be financed by SkyWest and operated by SkyWest:

• Four aircraft delivered in Q2 2019
• Four aircraft scheduled for delivery in mid-2020

SkyWest expects to remove four CRJ900 aircraft under its Delta agreement in 2020 and to return those aircraft to the lessor. SkyWest has previously removed five CRJ900s from service under its agreement with Delta and is leasing these five aircraft to a third party under a six-year term.

CRJ900 aircraft to be financed by Delta and operated by SkyWest for Delta:

• Three aircraft delivered in Q2 2019
• One aircraft scheduled for delivery in Q3 2019
• Eight aircraft scheduled for delivery in 2020

SkyWest expects to remove a used CRJ700 from its contract with Delta as each of these CRJ900 financed by Delta is placed into service. As previously announced, SkyWest anticipates transitioning the CRJ700s removed under this arrangement with Delta to an agreement with American.

Lease agreement with a third party for 29 CRJ700 aircraftSkyWest placed one of 29 CRJ700 aircraft under a previously announced lease agreement to a third party for a ten-year term during Q2 2019. SkyWest anticipates the remaining aircraft will be placed under lease in increments through mid-2020.

Capital and Liquidity

SkyWest had $550 million in cash and marketable securities at June 30, 2019, up from $544 million at March 31, 2019. During the second quarter of 2019, SkyWest:

• Used $35 million to repurchase stock under SkyWest's $250 million share repurchase program
• Used $14 million toward the purchase of four E175 aircraft (total capital expenditure of $88 million on the acquired aircraft including debt issued)
• Used $23 million for other capital investments, primarily related to spare engines, aircraft parts and maintenance assets, net of proceeds from sale of fixed assets

Total debt at June 30, 2019 and March 31, 2019 was $3.1 billion. Q2 2019 ending debt balance included debt issued for four E175 aircraft acquired during the quarter, offset by principal payments.

About SkyWest

SkyWest, Inc. is the holding company for SkyWest Airlines and SkyWest Leasing, an aircraft leasing company. SkyWest Airlines has a fleet of nearly 500 aircraft connecting millions of passengers each month to over 250 destinations and provides commercial air service in cities throughout North America with nearly 2,500 daily flights. SkyWest Airlines operates through partnerships with United Airlines, Delta Air Lines, American Airlines and Alaska Airlines to carry more than 38 million passengers annually. Based in St. George, Utah, SkyWest continues to set the standard for excellence across the regional industry with exceptional value for customers, shareholders and its more than 13,000 employees.

SkyWest will host its conference call to discuss second quarter 2019 results today, July 31, 2019, at 2:30 p.m. Mountain Time. The conference call number is 1-877-418-5293 for domestic callers, 1-866-605-3852 for Canada callers and 1-412-717-9593 for other international callers. Please call up to ten minutes in advance to ensure you are connected prior to the start of the call. The conference call will also be available live on the Internet at https://www.webcaster4.com/Webcast/Page/1088/30921. This press release and additional information regarding SkyWest, including access information for the digital rebroadcast of the second quarter 2019 earnings call, participation at investor conferences, investor presentations and monthly traffic statistic releases, can be accessed at inc.skywest.com.

Forward Looking-Statements

In addition to historical information, this release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Words such as "forecasts," "expects," "intends," "believes," "anticipates," "estimates," "should," "likely" and similar expressions identify forward-looking statements. Such statements include, but are not limited to, statements about the continued demand for our product, the potential benefits resulting from the sale of ExpressJet, including reduced risk, increased flexibility, efficiency and improved positioning for market opportunities, the scheduled aircraft deliveries for SkyWest Airlines in upcoming years and the related removal from service and/or placement into service of certain aircraft, the expected terms, timing and benefits related to SkyWest's leasing and joint venture transactions, as well as SkyWest's future financial and operating results, plans, objectives, expectations, estimates, intentions and outlook, and other statements that are not historical facts. All forward-looking statements included in this release are made as of the date hereof and are based on information available to SkyWest as of such date. SkyWest assumes no obligation to update any forward-looking statements for any reason. Readers should note that many factors could affect the future operating and financial results of SkyWest and could cause actual results to vary materially from those expressed in forward-looking statements set forth in this release. These factors include, but are not limited to, the prospects of entering into agreements with existing or other carriers to fly new aircraft, ongoing negotiations between SkyWest and its major partners regarding their contractual obligations, uncertainties regarding operation of new aircraft, the ability to attract and retain qualified pilots, the impact of regulatory issues such as pilot rest rules and qualification requirements, and the ability to obtain aircraft financing.

Actual operational and financial results of SkyWest will likely also vary, and may vary materially, from those anticipated, estimated, projected or expected for a number of other reasons, including, in addition to those identified above: the challenges of competing successfully in a highly competitive and rapidly changing industry; developments associated with fluctuations in the economy and the demand for air travel; the financial stability of SkyWest's major partners and any potential impact of their financial condition on the operations of SkyWest; fluctuations in flight schedules, which are determined by the major partners for whom SkyWest conducts flight operations; variations in market and economic conditions; significant aircraft lease and debt commitments; residual aircraft values and related impairment charges; labor relations and costs; the impact of global instability; rapidly fluctuating fuel costs, and potential fuel shortages; the impact of weather-related or other natural disasters on air travel and airline costs; aircraft deliveries; the ability to attract and retain qualified pilots and other unanticipated factors. Risk factors, cautionary statements and other conditions which could cause SkyWest's actual results to differ materially from management's current expectations are contained in SkyWest's filings with the Securities and Exchange Commission, including its most recent Annual Report on Form 10-K and Quarterly Reports on Form 10-Q.

On January 22, 2019, SkyWest completed the sale of ExpressJet to a third party. The unaudited operating highlights above include SkyWest Airlines only and exclude ExpressJet in both periods for comparability purposes.

Adjusted flight completion percent excludes weather cancellations. Raw flight completion includes weather cancellations.

SkyWest, Inc. and SubsidiariesAdditional Operational Information (unaudited)

SkyWest's total fleet in service increased by six aircraft during Q2 2019, as follows:

SkyWest's total fleet in service decreased by 101 aircraft over the last 12 months, as follows:

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SOURCE SkyWest, Inc.