SkyWest, Inc. announces 2Q15 results

SkyWest, Inc.’s financial and operating results for the quarter ended 30 June 2015 (2Q15) show an operating income of $70 million, which represents the airline’s best quarterly operating income since 2008.The quarter also amassed a net income of $31.5 million, an improvement of $46.2 million on 2Q14, which had a net loss of $14.7 million. In total, SkyWest registered a net income of $41 million for the first half of 2015 (1H15), which is a $79 million improvement compared with the same period last year, which suffered a net loss of $38 million.The company attributes this to improved operating performance, with revenue improving by $11 million from 2Q14 purely due to higher flight completion rates. SkyWest cites additional flying contracts with improved profitability and a reduction in the number of aircraft operating under unprofitable flying contracts as further reasons for progress.2Q15 operating expenses were also down by $85 million across the respective periods, likewise driven by operating efficiencies from improved completion rates, a net decrease in production and maintenance cost initiatives and a reduction in fuel costs.In the three months between 31 March 2015 and 30 June 2015, SkyWest’s total number of aircraft in service dropped from 693 to 676. Whilst the carrier added six new E175 aircraft with United, three new E175s with Alaska and 10 used ERJ 145s with American Airlines, it also removed 24 ERJ145/ERJ135 aircraft and 12 EMB 120s from service.During 2Q15, SkyWest made capital investments of $40 million as well as issuing $229 million in new long term debt to acquire nine E175s including spare parts and engines. SkyWest anticipates using approximately $30 million in cash as investments in E175 aircraft scheduled for delivery in 3Q and 4Q of 2015.Under an agreement announced in 2Q15, SkyWest, Inc. will place a further eight E175s into service for Alaska, meaning the latter will have a total of 15 E175s from SkyWest. SkyWest Airlines is scheduled to take delivery of the remaining 12 new E175s for Alaska Airlines between 4Q15 and 4Q16.Under a separately announced agreement, SkyWest Airlines is scheduled to take delivery of five new E175 aircraft for United during 3Q15.Chip Childs, SkyWest, Inc.’s president, stated, “Our second quarter results reflect meaningful progress in our action plans to secure profitable flying contracts, remove unprofitable aircraft and provide solid operating performance. These actions are the primary drivers for the strong earnings momentum we are generating. We remain committed to disciplined deployment of capital and resources as we continue the process of optimising our fleet size and mix.”

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