Posted on: 12 February 2015 by Ross McSweeny
SkyWest, Inc. has reported its financial and operating results for the quarter ended 31 December 2014 and also for the whole of the last calendar year.
For 2014, SkyWest's pre-tax income, excluding special items, was $58.4 million, compared with 2013’s result of $98.5 million. SkyWest's net loss, including special items, was $24.2 million for the 2014 year, compared with net income of $59.0 million in 2013.
In the fourth quarter of 2014 (4Q14) SkyWest's pre-tax income excluding special items was $33.5 million, an increase of $18.4 million over 4Q13. SkyWest's 4Q14 net loss, including special items, was $27.9 million, compared with net income of $8.6 million in 4Q13.
The December 2014 quarter includes special item expenses of $70.0 million pre-tax ($43.6 million after-tax) due to the accelerated retirement of the company’s Embraer 120 Brasilias and a codeshare agreement modification that shortened the contract term for ExpressJet's operation of the ERJ 145.
SkyWest's pre-tax income for 4Q14, excluding special items, increased 122% from 4Q13, despite a 6.6% reduction in departures and a 4.4% reduction in completed block hours. Excluding the special items, the increase in pre-tax income from 4Q13 was primarily due to higher unit revenue from new and renewed flying arrangements at improved rates.
Jerry Atkin, SkyWest Inc's chairman and CEO remarked, "SkyWest made significant progress in executing our long-term strategy in the fourth quarter, including reducing the total number of unprofitable aircraft and flying over time. We expect these changes to continue through [to] 2017, as we continue to work with our major airline partners to meet their needs with larger RJ opportunities during that same period. We expect that reducing our total fleet count while improving the overall fleet composition will put us on a path of continued financial and operational improvement."
SkyWest had $559 million in cash and marketable securities at 31 December 2014. Cash and marketable securities decreased $111 million during 2014 primarily due to SkyWest's investment of $82 million towards the E175 ownership and $42 million to acquire E175 spare parts, engines and tooling.
The company’s long-term debt increased $275 million from 31 December 2013 to 31 December 2014. This increase was primarily due to the issuance of $454 million of long-term debt for the 20 E175s delivered in 2014, partially offset by principal payments made on total outstanding debt.