Posted on: 04 February 2016 by Mark Howells
Adjusted net income for the full year 2015 was $103 million, up from adjusted net income of $7 million in 2014. GAAP net income for the full year 2015 was $118 million, compared with a net loss of $24 million for 2014.
Adjusted 4Q15 net income was $25 million, up from 2014’s adjusted net income of $15.7 million. GAAP net income for the 4Q15 was $40 million, compared with a loss of $28 million for the same quarter of 2014.
The GAAP results for 4Q15 include two special items totalling $25 million in pre-tax income: a net gain of $33 million from the early extinguishment of debt and $8 million revenue reduction from the resolution of a flying contract matter. Both of these special items are excluded from the calculation of SkyWest's adjusted net income for the quarter.
Chip Childs, chief executive officer of SkyWest, Inc. commented, “Our fourth quarter results reflect continued progress in the optimisation of our fleet and flying contract mix. By the end of 2017, we anticipate over 50% of our fleet will be dual-class aircraft, compared to 38% today. We are scheduled to more than double the number of E175 aircraft operating in our fleet by mid-2017. We believe our operating performance continues to create additional opportunities to improve our business model.”
The operating margin in 4Q15 increased to 7.9% compared with 6.2% in 4Q14 on an adjusted basis. The improvement in operating income and operating margin was primarily due to additional flying contracts with improved profitability, improved operating performance and a reduction in the number of aircraft operating under unprofitable or less profitable flying contracts.
SkyWest generated $141 million in cash from operations in 4Q15, compared with $99 million in 4Q14. For the 2015 year, cash from operations was $455 million, compared with $285 million in 2014.
Excluding special items, operating expenses were down by $63 million, or 8.3%, compared with 4Q14. The company noted that the reduction primarily related to a reduction in direct operating costs from fewer aircraft in service and reduced fuel costs, and was partially offset by additional crew training costs in anticipation of upcoming E175 aircraft deliveries.
SkyWest Inc's total aircraft in service at 31 December 2015 was 660, a net decrease of 57 from 31 December 2014. In 4Q15, the total number of aircraft in service increased by four.
SkyWest Inc had $498 million in cash and marketable securities at 31 December 2015, a decrease of $70 million from 30 September 2015. The company made capital investments of $8 million during 4Q15 to acquire two Embraer 175s and used $94 million in cash to extinguish $128 million in debt.
SkyWest issued $46 million in new long-term debt during 4Q15 to finance the two new E175s delivered during the quarter. SkyWest anticipates using approximately $44 million in cash towards the purchase of additional E175s and related spare parts and spare engines scheduled for delivery in the first half of 2016.