Q2 2026 SkyWest Inc Earnings Call

July 23, 2026

Speaker #2: Thank you for standing by, and welcome to the SkyWest Inc. second quarter 2026 results call. All lines have been placed on mute to prevent any background noise.

Operator 2: Thank you for standing by, and welcome to the SkyWest Inc. Q2 2026 Results Call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question-and-answer session. If you would like to ask a question during that time, simply press star, then the number one on your telephone keypad. I would now like to turn the call over to Rob Simmons, Chief Financial Officer. Sir, please go ahead.

Operator: Thank you for standing by, and welcome to the SkyWest Inc. Q2 2026 Results Call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question-and-answer session. If you would like to ask a question during that time, simply press star, then the number one on your telephone keypad. I would now like to turn the call over to Rob Simmons, Chief Financial Officer. Sir, please go ahead.

Speaker #2: After the speakers' remarks, there will be a question-and-answer session. If you would like to ask a question during that time, simply press * then the number 1 on your telephone keypad.

Speaker #2: I would now like to turn the call over to Rob Simmons, Chief Financial Officer. Sir, please go ahead.

Speaker #3: Thanks, everyone, for joining us on the call today. As the operator indicated, this is Rob Simmons, SkyWest Chief Financial Officer. On the call with me today are Chip Childs, President and Chief Executive Officer; Wade Steel, SkyWest Airlines President and Chief Operating Officer; and Eric Woodward, Chief Accounting Officer.

Rob Simmons: Thanks, everyone, for joining us on the call today. As the operator indicated, this is Rob Simmons, SkyWest Chief Financial Officer. On the call with me today are Chip Childs, President and Chief Executive Officer, Wade Steel, SkyWest Airlines President and Chief Operating Officer, and Eric Woodward, Chief Accounting Officer. I would like to start today by asking Eric to read the Safe Harbor. Then I will turn the time over to Chip for some comments. Following Chip, I will take us through the financial results. Then Wade will discuss the fleet and related flying arrangements. Following Wade, we will have the customary Q&A session with our sell-side analysts. Eric?

Rob Simmons: Thanks, everyone, for joining us on the call today. As the operator indicated, this is Rob Simmons, SkyWest's Chief Financial Officer. On the call with me today are Chip Childs, President and Chief Executive Officer; Wade Steel, SkyWest Airlines President and Chief Operating Officer; and Eric Woodward, Chief Accounting Officer. I would like to start today by asking Eric to read the Safe Harbor. Then I will turn the time over to Chip for some comments. Following Chip, I will take us through the financial results. Then Wade will discuss the fleet and related flying arrangements. Following Wade, we will have the customary Q&A session with our sell-side analysts. Eric?

Speaker #3: I'd like to start today by asking Eric to read the Safe Harbor. Then I will turn the time over to Chip for some comments.

Speaker #3: Following Chip, I will take us through the financial results, then Wade will discuss the fleet and related flying arrangements. Following Wade, we will have the customary Q&A session with our sell-side analysts.

Speaker #3: Eric?

Speaker #4: Today's discussion contains forward-looking statements that represent our current beliefs, expectations, and assumptions regarding future events, and are subject to risks and uncertainties. We assume no obligation to update any forward-looking statement, whether as a result of new information, future events, or otherwise.

Eric Woodward: Today's discussion contains forward-looking statements that represent our current beliefs, expectations, and assumptions regarding future events and are subject to risks and uncertainties. We assume no obligation to update any forward-looking statement, whether as a result of new information, future events, or otherwise. Actual results will likely vary and may vary materially from those anticipated, estimated, or projected for a number of reasons. Some of the factors that may cause such differences are included in our most recent Form 10-K and other reports and filings with the Securities and Exchange Commission. Now I will turn the call over to Chip.

Speaker #4: Actual results will likely vary and may vary materially from those anticipated, estimated, or projected for a number of reasons. Some of the factors that may cause such differences are included in our most recent Form 10-K and other reports and filings with the Securities and Exchange Commission.

Speaker #4: And now, I'll turn the call over to Chip.

Speaker #3: Thank you, Rob, and Eric. Good afternoon, everyone, and thank you for joining us on the call today. Today, SkyWest reported net income of $101 million, or $2.54 per diluted share, for the second quarter of 2026.

Rob Simmons: Thank you, Rob and Eric. Good afternoon, everyone, and thank you for joining us on the call today. Today, SkyWest reported net income of $101 million or $2.54 per diluted share for Q2 2026. Q2's results include increased block hours and were affected by higher fuel costs impact our prorate business. We are pleased to continue to see very strong demand both in our contract and prorate flying despite the higher fuel cost. Similar to our major partners, that strong demand enabled us to offset about 60% of the fuel impact in the fair portion of our prorate business. Overall, our disciplined strategic choices and continued execution have strengthened our model, and we remain well-positioned to adapt quickly to respond to market demands better than anybody else. During the quarter, our people delivered 99.9% adjusted completion on nearly 228,000 flights.

Chip Childs: Thank you, Rob and Eric. Good afternoon, everyone, and thank you for joining us on the call today. Today, SkyWest reported net income of $101 million or $2.54 per diluted share for Q2 2026. Q2's results include increased block hours and were affected by higher fuel costs impact our prorate business. We are pleased to continue to see very strong demand both in our contract and prorate flying despite the higher fuel cost. Similar to our major partners, that strong demand enabled us to offset about 60% of the fuel impact in the fair portion of our prorate business. Overall, our disciplined strategic choices and continued execution have strengthened our model, and we remain well-positioned to adapt quickly to respond to market demands better than anybody else. During the quarter, our people delivered 99.9% adjusted completion on nearly 228,000 flights.

Speaker #3: The second quarter's results include increased block hours and were affected by higher fuel costs impacting our prorate business. We are pleased to continue to see very strong demand, both in our contract and prorate flying, despite the higher fuel costs.

Speaker #3: Similar to our major partners, that strong demand enabled us to offset about 60% of the fuel impact in the fare portion of our prorate business.

Speaker #3: Overall, our disciplined strategic choices and continued execution have strengthened our model, and we remain well-positioned to adapt quickly and respond to market demands better than anybody else.

Speaker #3: During the quarter, our people delivered 99.9% adjusted completion on nearly 228,000 flights. We're incredibly proud to be named one of America's Greatest Workplaces in 2026 by Newsweek, as well as one of Fortune World's Most Admired Companies in 2026.

Rob Simmons: We are incredibly proud to be named one of America's greatest workplaces in 2026 by Newsweek, as well as one of Fortune's world's most admired companies in 2026. These accomplishments are made possible by SkyWest's more than 16,000 professionals and their commitment to excellence. I want to thank them for their ongoing teamwork to deliver in our challenging industry. Today, we are pleased to announce an agreement with American for SkyWest to purchase and operate 11 new E175s with deliveries beginning this year. With 11 E175s expected during H2 this year and 23 more in the next couple of years, we expect a total of 34 additional E175s by the end of 2028. Additionally, we continue converting CRJ700s to the customer favorite CRJ550, and we're very excited about the CRJ450 service beginning for United this fall.

Chip Childs: We are incredibly proud to be named one of America's greatest workplaces in 2026 by Newsweek, as well as one of Fortune's world's most admired companies in 2026. These accomplishments are made possible by SkyWest's more than 16,000 professionals and their commitment to excellence. I want to thank them for their ongoing teamwork to deliver in our challenging industry. Today, we are pleased to announce an agreement with American for SkyWest to purchase and operate 11 new E175s with deliveries beginning this year. With 11 E175s expected during H2 this year and 23 more in the next couple of years, we expect a total of 34 additional E175s by the end of 2028. Additionally, we continue converting CRJ700s to the customer favorite CRJ550, and we're very excited about the CRJ450 service beginning for United this fall.

Speaker #3: These accomplishments are made possible by SkyWest's more than 16,000 professionals and their commitment to excellence. I want to thank them for their ongoing teamwork to deliver in our challenging industry.

Speaker #3: Today, we're pleased to announce an agreement with American for SkyWest to purchase and operate 11 new E175s, with deliveries beginning this year. With 11 E175s expected during the second half of this year, and 23 more in the next couple of years, we expect a total of 34 additional E175s by the end of 2028.

Speaker #3: Additionally, we continue converting CRJ700s to the customer-favorite CRJ550, and we're very excited about the CRJ450 service beginning for United this fall. With these transitions, we look forward to ultimately operating an all dual-class fleet.

Rob Simmons: With these transitions, we look forward to ultimately operating an all dual-class fleet. As I mentioned, prorate demand remains strong, and we believe these fleet initiatives will benefit prorate growth.

Chip Childs: With these transitions, we look forward to ultimately operating an all dual-class fleet. As I mentioned, prorate demand remains strong, and we believe these fleet initiatives will benefit prorate growth.

Speaker #3: As I mentioned, prorate demand remains strong, and we believe these fleet initiatives will benefit prorate growth. Our opportunities remain strong. We expect our growth will continue to come from three key areas.

Chip Childs: Our opportunities remain strong. We expect our growth will continue to come from three key areas. One, solid demand from our major partners and our solid E175 order book. Two, underserved communities with our prorate business. Three, execution of our fleet initiatives and conversions. The free cash flow that we continue to generate is still directed toward fleet growth opportunities, debt reduction, and share repurchase. We announced today that SkyWest Board of Directors has also approved a $250 million increase to our existing stock repurchase program. Our steadfast commitment to maintaining a strong balance sheet and liquidity benefits our employees, our partners, and our shareholders. Additionally, we've continued to reduce our debt, and we now have $1 billion less debt than we did at the end of 2022. We also expect to have over 100 unencumbered E175s by the end of 2029.

Speaker #3: One, solid demand from our major partners and our strong E175 order book. Two, underserved communities with our prorate business. And three, execution of our fleet initiatives and conversions.

Speaker #3: The free cash flow that we continue to generate is still directed toward fleet growth opportunities, debt reduction, and share repurchase. We announced today that SkyWest's Board of Directors has also approved a $250 million increase to our existing stock repurchase program.

Speaker #3: Our steadfast commitment to maintaining a strong balance sheet and liquidity benefits our employees, our partners, and our shareholders. Additionally, we've continued to reduce our debt, and we now have $1 billion less debt than we did at the end of 2022.

Speaker #3: We also expect to have over 100 unencumbered E175s by the end of 2029. Overall, our debt ratios and leverage metrics are among the best in the industry.

Chip Childs: Overall, our debt ratios and leverage metrics are among the best in the industry. SkyWest continues to lead our industry in product and in the value of our diverse assets. We remain disciplined and steady as we execute on our growth opportunities by delivering on significant prorate demand, investing in our fleet, and preparing to receive our deliveries in the coming years for a total of 300 E175s by the end of 2027. Our discipline, strategic choices, and continued execution have strengthened our model, and we remain well-positioned to adapt quickly and to respond to market demands better than anyone else in the industry. Rob will now take us through the financial data.

Speaker #3: SkyWest continues to lead our industry in product and in the value of our diverse assets. We remain disciplined and steady as we execute on our growth opportunities by delivering on significant prorate demand, investing in our fleet, and preparing to receive our deliveries in the coming years for a total of 300 E175s by the end of 2027.

Speaker #3: Our discipline, strategic choices, and continued execution have strengthened our model, and we remain well-positioned to adapt quickly and to respond to market demands better than anyone else in the industry.

Speaker #3: Rob will now take us through the financial data. Today, we reported a second quarter GAAP net income of $101 million, or $2.54 earnings per share.

Rob Simmons: Today, we reported a Q2 GAAP net income of $101 million, or $2.54 earnings per share. Q2 pretax income was $139 million, 29% higher than Q1 pretax income, on solid demand for our various contract and prorate products and sequential seasonality. Our weighted average share count for Q2 was 39.6 million, and our effective tax rate was 27.5%. Total Q2 revenue of $1.1 billion is up 9% from $1 billion in Q1 2026 on strong block-hour demand from our partners during a volatile quarter and is up 7% from $1 billion in Q2 2025. Q2 revenue includes contract revenue of $864 million, prorate and charter revenue of $201 million, and leasing and other revenue was $38 million.

Speaker #3: Q2 pretax income was $139 million, which is 29% higher than Q1 pretax income, on solid demand for our various contract and prorate products and sequential seasonality.

Speaker #3: Our weighted average share count for Q2 was 39.6 million, and our effective tax rate was 27.5%. Total Q2 revenue of $1.1 billion is up 9% from $1.0 billion in Q1 2026, on strong block hour demand from our partners during a volatile quarter, and is up 7% from $1.0 billion in Q2 2025.

Speaker #3: Q2 revenue includes contract revenue of $864 million; prorate and charter revenue of $201 million; and leasing and other revenue was $38 million. These Q2 GAAP results include the effect of recognizing $27 million of previously deferred revenue this quarter, up slightly from the $24 million recognized in Q1 2026 and $23 million recognized in Q2 2025.

Rob Simmons: These Q2 GAAP results include the effect of recognizing $27 million of previously deferred revenue this quarter, up slightly from the $24 million recognized in Q1 2026 and $23 million recognized in Q2 2025. As of the end of Q2, we have $214 million of cumulative deferred revenue that will be recognized in future periods. Our prorate fuel expense was $61 million in Q2, compared to $28 million in Q2 2025. The year-over-year increase of $33 million was due to both a higher price per gallon, a -$21 million impact, and incremental prorate production, a $12 million impact. The passenger fare portion of our prorate revenue received similar pricing increases as our major partners, partially offsetting the impact of our higher price per gallon in the area of 60% for Q2.

Speaker #3: As of the end of Q2, we have $214 million of cumulative deferred revenue that will be recognized in future periods. Our prorated fuel expense was $61 million in Q2, compared to $28 million in Q2 2025.

Speaker #3: The year-over-year increase of $33 million was due to both a higher price per gallon, a $21 million negative impact, and incremental prorated production, a $12 million impact.

Speaker #3: The passenger fare portion of our prorate revenue received similar pricing increases as our major partners, partially offsetting the impact of our higher price per gallon in the area of 60% for Q2.

Speaker #3: Our price per gallon on our prorate flying was $4.45 in Q2, up from $2.88 in Q2 2025 and up from $3.40 in Q1. Now, let's discuss the balance sheet.

Rob Simmons: Our price per gallon on our prorate flying was $4.45 in Q2, up from $2.88 in Q2 2025, and up from $3.40 in Q1. Let's discuss the balance sheet. We ended the quarter with cash of $601 million, slightly down from $627 million last quarter. The ending cash balance for the quarter included the effects from, One, repaying $122 million in debt. Two, issuing $24 million of new debt financing ongoing fleet deliveries. Three, investing $139 million in CapEx, including the purchase of one E175. Four, buying back 833,000 shares of SkyWest stock in Q2 for $75 million. As of 30 June, we had $63 million remaining under our current share repurchase authorization, and as announced today, the board has authorized an additional $250 million of share repurchase on top of the $63 million. Cash flow continues to be the key driver of our value creation strategy.

Speaker #3: We ended the quarter with cash of $601 million slightly down from $627 million last quarter. The ending cash balance for the quarter included the effects from one repaying $122 million in debt; two, issuing 24 million dollars of new debt financing new debt financing ongoing fleet deliveries; three, investing $139 million in CapEx including the purchase of one E175; and four, buying back $833,000 shares of SKYWEST stock in Q2 for 75 million dollars.

Speaker #3: As of June 30th, we had $63 million remaining under our current share repurchase authorization, and as announced today, the board has authorized an additional $250 million of share repurchase on top of the $63 million.

Speaker #3: Cash flow continues to be the key driver of our value creation strategy. We generated over $460 million of EBITDA during the first half of 2026, despite the headwind from pro rata fuel costs.

Rob Simmons: We generated over $460 million of EBITDA during H1 2026, despite the headwind from prorate fuel costs. Since the end of 2025, we reduced our total debt balance by approximately $100 million, invested over $240 million in CapEx for fleet and related assets, and repurchased $150 million of our shares. We expect to continue to deploy in a balanced way our ongoing generation of free cash flow by investing in our fleet, including financing the addition of 34 new E175s by the end of 2028, reducing our debt, and executing opportunistically our share repurchase program. By the end of 2029, we expect that we will have over 100 unencumbered E175s in our fleet portfolio.

Speaker #3: Since the end of 2025, we reduced our total debt balance by approximately $100 million, invested over $240 million in CapEx for fleet and related assets, and repurchased $150 million of our shares.

Speaker #3: We expect to continue to deploy, in a balanced way, our ongoing generation of free cash flow by investing in our fleet, including financing the addition of 34 new E175s by the end of 2028, reducing our debt, and executing opportunistically our share repurchase program.

Speaker #3: By the end of 2029, we expect that we will have over 100 unencumbered E175s in our fleet portfolio. As a result of our capital deployment strategy, both our debt net of cash and leverage ratios continue at favorable levels, reflecting our ongoing initiative to delever and de-risk our balance sheet, positioning the balance sheet with the capacity for future accretive investment opportunities.

Rob Simmons: As a result of our capital deployment strategy, both our debt net of cash and leverage ratios continue at favorable levels, reflecting our ongoing initiative to de-lever and de-risk our balance sheet, positioning the balance sheet with the capacity for future accretive investment opportunities. We expect to take 11 new E175s during H2 2026, 7 new E175s for United, and 4 of the 11 E175s for American announced today. We anticipate our total CapEx in 2026 will be approximately $700 million. Consistent with our practice, let me update you on some color on 2026. For the full year 2026, we expect to see block hour production up approximately 5% from 2025. We anticipate our GAAP EPS for 2026 will be in the $11 area, subject to ongoing prorate fuel volatility.

Speaker #3: We expect to take delivery of 11 new E175s during the back half of 2026—7 new E175s for United, and 4 of the 11 E175s for American—announced today.

Speaker #3: We anticipate our total CapEx in 2026 will be approximately $700 million. Consistent with our practice, let me give you some color on 2026.

Speaker #3: For the full year 2026, we expect to see block hour production up approximately 5% from 2025. We anticipate our GAAP EPS for 2026 will be in the $11 area, subject to ongoing pro-rate fuel volatility.

Speaker #3: This assumes an average jet fuel price of $3.65 per gallon for the second half of 2026, on 28 million gallons of jet fuel needed in the second half for our prorate business.

Rob Simmons: This assumes average jet fuel of $3.65 per gallon for H2 2026 on 28 million gallons of jet fuel needed in H2 for our prorate business. In terms of how to think of quarterly EPS modeling for H2 2026, on a GAAP basis, we anticipate directionally that Q3 we expect to be seasonally the strongest quarter of the year, and Q4 should be down modestly from Q3. For other modeling purposes, we anticipate our maintenance activity in 2026 will continue approximately at 2025 levels as we invest in bringing more aircraft back into service. We also anticipate our effective tax rate for Q3 and Q4 will be similar to Q2 at approximately 27% to 28%, translating to approximately 23% to 24% for the full year 2026.

Speaker #3: In terms of how to think of quarterly EPS modeling for the back half of 2026, on a gap basis, we anticipate directionally that Q3 we expect to be down seasonally or we expect to be seasonally the strongest quarter of the year and Q4 should be down modestly from Q3.

Speaker #3: For other modeling purposes, we anticipate our maintenance activity in 2026 will continue approximately at 2025 levels, as we invest in bringing more aircraft back into service.

Speaker #3: We also anticipate our effective tax rate for Q3 and Q4 will be similar to Q2, at approximately 27% to 28%, translating to approximately 23% to 24% for the full year 2026.

Speaker #3: We are optimistic about our ongoing growth possibilities in 2026 and 2027, including: first, strong ongoing demand for block hours from our partners; second, good demand in our prorate business as we continue to move back into underserved communities; and third, placing a total of 36 new E175s into service from 2026 to 2028, including 8 for United, 16 for Delta, 11 for American as announced today, and 1 for Alaska.

Rob Simmons: We are optimistic about our ongoing growth possibilities in 2026 and 2027, including, first, strong ongoing demand for block hours from our partners. Second, good demand in our prorate business as we continue to move back into underserved communities. Third, placing a total of 36 new E175s into service from 2026 to 2028, including eight for United, 16 for Delta, 11 for American, as announced today, and one for Alaska. We are also very pleased with the ongoing success of our CRJ-550 and CRJ-450 initiatives, and I will turn the call over to Wade, who will talk more about that next. We believe that we are positioned to convert strong cash flow generation over the next several years into long-term value creation benefiting our employees, our partners, and our capital providers as we execute against a variety of accretive opportunities. Wade?

Speaker #3: We are also very pleased with the ongoing success of our CRJ550 and CRJ450 initiatives, and I will turn the call over to Wade, who will talk more about that next.

Speaker #3: We believe that we are positioned to convert strong cash flow generation over the next several years into long-term value creation, benefiting our employees, our partners, and our capital providers as we execute against a variety of accretive opportunities.

Speaker #3: Wade?

Speaker #1: Thank you, Rob. Today, we announced an agreement with American for 11 new E175s. The E175s are expected to replace 11 CRJ700s SkyWest is currently flying under contract with American.

Wade Steel: Thank you, Rob. Today, we announced an agreement with American for 11 new E175s. The E175s are expected to replace 11 CRJ-700s SkyWest is currently flying under contract with American. We anticipate placing these CRJ-700s with one of our major partners, either through our prorate agreements, capacity purchase agreements, or a traditional lease. SkyWest is scheduled to purchase the 11 E175s from Embraer with delivery dates in 2026 and 2027. During the quarter, we took delivery of one new E175 for United. We currently have 67 future E175s on firm order with Embraer, including 16 for Delta, 11 for American, and seven for United. We expect delivery of 11 more new E175s during H2 of this year. As an update on the firm order of 67 aircraft, 34 are allocated to our major partners. 33 are not yet assigned.

Speaker #1: We anticipate placing these CRJ700s with one of our major partners either through our prorate agreements, capacity purchase agreements, or a traditional lease. SkyWest is scheduled to purchase the 11 E175s from Embraer, with delivery dates in 2026 and 2027.

Speaker #1: During the quarter, we took delivery of one new E175 for United. We currently have 67 future E175s on firm order with Embraer, including 16 for Delta, 11 for American, and 7 for United.

Speaker #1: We expect delivery of 11 more new E175s during the second half of this year. As an update on the firm order of 67 aircraft, 34 are allocated to our major partners.

Speaker #1: Thirty-three are not yet assigned. This order locks in delivery slots starting in 2027 through 2032. However, the order is structured with good flexibility to defer or terminate the aircraft in the event we don't arrange for a partner to take them.

Wade Steel: The order locks in delivery slots starting in 2027 through 2032. The order is structured with good flexibility to defer or terminate the aircraft in the event we don't arrange for a partner to take them. Our long-term fleet plan has positioned us well, and re-fleeting continues to be an important part of that strategy. With today's announced agreement with American, our E175 fleet total is scheduled to be 300 by the end of 2027, continuing to enhance SkyWest's position as the largest E175 operator in the world. We are also looking forward to deploying the CRJ-450 later this year for United. We anticipate converting four to six aircraft per month starting this fall. We expect to have 40 CRJ-450s under contract with United. We plan to retrofit our prorate CRJ-200s. We are optimistic the opportunity for the CRJ-450 will reach a total of 100 aircraft.

Speaker #1: Our long-term fleet plan has positioned us well, and refleeting continues to be an important part of that strategy. With today's announced agreement with American, our E175 fleet total is scheduled to be 300 by the end of 2027, continuing to enhance SkyWest's position as the largest E175 operator in the world.

Speaker #1: We are also looking forward to deploying the CRJ450 later this year for United. We anticipate converting four to six aircraft per month starting this fall.

Speaker #1: We expect to have 40 CRJ450s under contract with United, and we plan to retrofit our prorate CRJ200s. We are optimistic that the opportunity for the CRJ450 will reach a total of 100 aircraft.

Speaker #1: Last quarter, we announced five E170s and reached an agreement with United to operate these as we expedite the conversion of CRJ700s to CRJ550s. All five E170s are currently operating for United.

Wade Steel: Last quarter, we announced 5 E170s and reached an agreement with United to operate these as we expedite the conversion of CRJ-700s to CRJ-550s. All 5 E170s are currently operating for United. As previously announced, we have a multi-year agreement to fly 50 CRJ-550s with United. As of June 30, 36 CRJ-550s were in service, and we're expecting the remaining 14 to enter service this year. Last year, we reinitiated a prorate agreement with American, and we are currently operating 8 aircraft under this agreement, with up to 9 expected by year-end. We look forward to expanding our relationship with American. Let me review our production. Our block hours increased 9% from Q1 to Q2 2026. We also expect a slight increase in our Q3 block hours as compared to Q2. For the full year 2026, we anticipate that our block hours will be up approximately 5% compared to 2025.

Speaker #1: As previously announced, we have a multi-year agreement to fly 50 CRJ550s with United. As of June 30, 36 CRJ550s were in service, and we're expecting the remaining 14 to enter service this year.

Speaker #1: Last year, we reinitiated a prorate agreement with American. We are currently operating eight aircraft under this agreement, with up to nine expected by year-end.

Speaker #1: We look forward to expanding our relationship with American. Let me review our production. Our block hours increased 9% from Q1 to Q2 2026. We also expect a slight increase in our Q3 block hours as compared to Q2.

Speaker #1: For the full year 2026, we anticipate that our block hours will be up approximately 5% compared to 2025. This year, we expect to take delivery of 13 new E175s, place 23 CRJ550s into service, and capitalize on strong prorate demand.

Wade Steel: This year, we expect to take delivery of 13 new E175s, place 23 CRJ-550s into service, and capitalize on strong prorate demand. These gains are partially offset by the gradual return of approximately 19 lower-margin Delta-owned CRJ-900s to Delta over the next couple of years. Our revenue seasonality has normalized. With improved utilization during the strong summer months, we still have approximately 3 dual class CRJ aircraft currently undergoing heavy maintenance after transitioning from long-term storage. These aircraft are set to return to service in 2026 under existing flying agreements. Additionally, we have over 30 parked CRJ-200s that will likely transition to the CRJ-450 and further enhance our fleet flexibility. We continue to face challenges in our third-party MRO network, including labor and parts shortages. We expect maintenance expense in 2026 to remain consistent with 2025, even with the increase in block hours.

Speaker #1: These gains are partially offset by the gradual return of approximately 19 lower-margin Delta-owned CRJ900s to Delta over the next couple of years. Our revenue seasonality has normalized.

Speaker #1: With improved utilization during the strong summer months, we still have approximately three dual-class CRJ aircraft currently undergoing heavy maintenance after transitioning from long-term storage.

Speaker #1: These aircraft are set to return to service in 2026 under existing flying agreements. Additionally, we have over 30 parked CRJ200s that will likely transition to the CRJ450 and further enhance our fleet flexibility.

Speaker #1: We've continued—we continue to face challenges in our third-party MRO network, including labor and parts shortages. We expect maintenance expense in 2026 to remain consistent with 2025, even with the increase in block hours.

Speaker #1: Demand for our prorate business remains extremely strong, supported by great community engagement. During the quarter, we added 10 aircraft to our prorate agreements. To support the growing demand, we're continuing to see opportunities to restore SkyWest service to several communities, and we will continue working with airports to expand our reach.

Wade Steel: Demand for our prorate business remains extremely strong, supported by great community engagement. During the quarter, we added 10 aircraft to our prorate agreements to support the growing demand. We're continuing to see opportunities to restore SkyWest service to several communities, and we will continue working with airports to expand our reach. As discussed last quarter, growth in our prorate business contributes to a more seasonal model. The non-subsidized portion of our prorate revenue covered approximately 60% of fuel cost increases during Q2. Demand is strong and similar to our major partners, we anticipate continued fare strength in our prorate markets. We remain confident in our ongoing efforts to reduce risk and enhance fleet flexibility. We are committed to collaborating with our major partners to deliver innovative solutions that meet the continued demand for our products.

Speaker #1: As discussed last quarter, growth in our prorate business contributes to a more seasonal model. The non-subsidized portion of our prorate revenue covered approximately 60% of fuel cost increases during the second quarter.

Speaker #1: Demand is strong, and similar to our major partners, we anticipate continued fare strength in our prorate markets. We remain confident in our ongoing efforts to reduce risk and enhance fleet flexibility. We are committed to collaborating with our major partners to deliver innovative solutions that meet the continued demand for our products.

Speaker #2: Okay, Operator, we're ready for our Q&A now.

Chip Childs: Okay, operator, we're ready for our Q&A now.

Speaker #3: At this time, if you would like to ask a question, please press star, then the number 1 on your telephone keypad. To withdraw your question, simply press star 1 again.

Operator 2: At this time, if you would like to ask a question, press star, then the number one on your telephone keypad. To withdraw your question, simply press star one again. We will pause for just a moment to compile the Q&A roster. Your first question comes from the line of Savi Syth with Raymond James. Please go ahead.

Operator: At this time, if you would like to ask a question, press star, then the number one on your telephone keypad. To withdraw your question, simply press star one again. We will pause for just a moment to compile the Q&A roster. Your first question comes from the line of Savi Syth with Raymond James. Please go ahead.

Speaker #3: We will pause for just a moment to compile the Q&A roster. Your first question comes from the line of Salvi Phip with Raymond James.

Speaker #3: Please go ahead.

Speaker #4: Hey, good morning everyone. I guess maybe first, you know, this is not the first time this year we've seen a sharp rise in fuel prices in a very short period.

Savi Syth: Hey, good morning, everyone. I guess maybe first, this is not the first time this year we've seen suddenly a sharp rise in fuel price in a very short period. I was curious, last time it was kind of heading into the summer, more so this time it's heading into the winter. Are you having any kind of different conversations with partners? As you think about your prorate segment, are you making any kind of different decisions this time versus earlier this year?

Speaker #4: I was curious—you know, last time it was kind of heading into the summer; this time, it's heading into the winter. Are you having any kind of different conversations with partners, or as you think about your prorate segment, are you making any kind of different decisions this time versus earlier this year?

Speaker #1: Yes, Salvi, this is Chip. You know, it was interesting you bring up, given what's happened last quarter and this quarter, because there was a lot of uncertainty.

Chip Childs: Yeah, Savi, this is Chip. It was interesting you bring up, given what's happened last quarter and this quarter, because there was a lot of uncertainty. I think honestly, we're in a little more stable position right now relative to the conversation, and I think we've reflected that in our script. There's good, strong demand for block hours. There's good, strong demand relative to what's happening. We're not ignoring the volatility of oil under the circumstances, but I think that hopefully you can get a tone from what our message is today that we're pressing forward quite strong with our partners and good conversations about strategies to continue to enhance value to them.

Speaker #1: I think, honestly, we're in a little, you know, more stable position right now relative to the conversation. And I think we've reflected that in our script.

Speaker #1: There's good, strong demand for block hours—good, strong demand, you know, relative to what's happening. We're not ignoring the volatility of oil under the circumstances, but I think that, hopefully, you can get a tone from what our message is today that we're pressing forward quite strongly with our partners, and we're having good conversations about strategies to continue to enhance value to them.

Speaker #4: Yeah, it came through, but just wanted to clarify. It seems like maybe it's less of a shock this time, and we're more prepared and know how to react to it.

Savi Syth: Yeah. It came through, but just wanted to clarify. It seems like maybe less of a shock this time and more prepared and knowing how to react to it. Maybe just on the prorate side, I noticed kind of charter fleet stepped down, but your CRJs on the CPA/prorate side stepped up. Is there just more opportunity on the prorate side versus charter? Just how are you looking at those two segments?

Speaker #4: Maybe just on the prorate side, I noticed kind of charter step fleet step down but your CRJs on the CPA/prorate side stepped up. Is that kind of is there just more opportunity on the prorate side versus charter or just how are you looking at kind of those two segments?

Speaker #1: Yeah, that's a great question, Salvi. This is Wade. Yeah, so the demand, as you know, for charter is pretty light in the summertime, and so we do take the opportunity to move those airplanes around where we find the most demand.

Wade Steel: That's a great question, Sally. This is Wade. The demand, as you know, for charter is pretty light in the summertime, we do take the opportunity to move those airplanes around where we find the most demand. We're seeing very strong demand in the prorate side, we decided to move several of those over to the SkyWest Airlines prorate/CPA flying, we were able to utilize those and get very good flying with that. As far as SkyWest Charter, we're still looking at a lot of new technologies and things like that for SkyWest Charter. We're excited about the opportunities there to expand our reach into new and different markets with that entity as well.

Speaker #1: But we're seeing very strong demand in the prorate side, so we decided to move several of those over to the SkyWest Airlines prorate/CPA flying.

Speaker #1: And we're able to utilize those and get very good flying with that. As far as SkyWest Charter, you know, we're still looking at a lot of new technologies and things like that for SkyWest Charter.

Speaker #1: We're excited about the opportunities there to expand our reach into new and different markets, you know, with that entity as well. So,

Savi Syth: Helpful color. Thank you.

Speaker #4: Helpful color, thank you.

Speaker #3: Your next question comes from the line of Mike Lindenberg with Deutsche Bank. Please go ahead.

Operator 2: Your next question comes from the line of Michael Linenberg with Deutsche Bank. Please go ahead.

Operator: Your next question comes from the line of Michael Linenberg with Deutsche Bank. Please go ahead.

Speaker #5: Oh yeah, hey, good afternoon. Wade, congrats on your promotion. I have a couple here. Just right off the bat—the replacement of the eleven CRJ700s at American with the E175s—how should we think about the improvement in profitability?

Michael Linenberg: Good afternoon. Wade, congrats on your promotion. I have a couple here. Just right off the bat, the replacement of the 11 CRJ700s at American with the E175s, how should we think about the improvement in profitability? I would think that the bigger airplanes will be more profitable for you. Is that a safe assumption or reasonable assumption?

Speaker #5: I would think that the bigger airplanes would be more profitable for you. Is that a reasonable assumption?

Wade Steel: Hey, Michael Linenberg, this is Wade Steel. First of all, thank you. As far as the American Airlines side, the profitability of the E175s will be very consistent with our other fleets that we have. The 700s, we are going to find opportunities, as we said. We are in discussions with multiple partners about either prorate, contract, leasing these airplanes. The demand is still very strong. Yes, we definitely like the transaction. We are very happy that we were able to get that done with American Airlines.

Speaker #1: Hey Mike, this is Wade. So, first of all, thank you. As far as the American side, the profitability of the E175s will be very consistent with our other fleets that we have.

Speaker #1: The 700s, you know, we are going to find opportunities. As we said, you know, we're in discussions with multiple partners about either pro-rate contracts or leasing these airplanes.

Speaker #1: The demand is still very strong. So yes, we definitely like the transaction. We're very happy that we were able to get that done with American.

Speaker #5: And you mentioned prorate contract leasing. What about conversions to 550s? Is that also—?

Michael Linenberg: You mentioned prorate contract leasing. What about conversions to 550s? Is that also?

Speaker #1: Yes, yeah. So when—yes, when we convert them, they could potentially go into 550s for multiple of our partners, and we're looking at those opportunities right now.

Wade Steel: Yes. When we convert them, they could potentially go into 550s for multiple of our partners, and we are looking at those opportunities right now.

Speaker #5: Okay. And then how, you know, the how should we think, I guess this is more to Rob, taking on the additional 11 E175s. You told us about the CAT revised CAPEX number for 2026.

Michael Linenberg: Okay. How should we think, I guess this is more to Rob Simmons, taking on the additional 11 E175s? You told us about the revised CapEx number for 2026. Now we are at $700 million. How should we think about your debt profile? Does that tick back up a little bit as you take delivery of those airplanes?

Speaker #5: Now we're at $700 million. How should we think about your debt profile? Does that tick back up a little bit as you take delivery of those airplanes?

Speaker #1: Yeah, I mean, we'll be financing 11 of the new 175s this year and, you know, adding new debt for that. But we do expect that debt will continue to trend down over the next several years.

Rob Simmons: Yeah. We'll be financing 11 of the new E175s this year, and adding new debt for that. We do expect that debt will continue to trend down over the next several years. If you look at the $700 in CapEx, Mike, about half of that is the new E175s, the 13 new E175s-

Speaker #1: But, you know, if you think if you look at the 700 in CAPEX, Mike, you know, about half of that is the new E175s, the 13 new E175s.

Michael Linenberg: Okay

Speaker #1: You know, two that we've already done this year and 11 more that we'll do, you know, in the second half. So, you know, the bulk of that is our nicely accretive 175, you know, order book coming through for us.

Rob Simmons: 2 that we've already done this year-

Michael Linenberg: Yep

Rob Simmons: 11 more that we'll do in the H2. The bulk of that is our nicely accreted E175 order book coming through for us.

Speaker #5: Okay, great. And just one last one here. Just, you know, watching—and this is back to Wade—you had five CRJ900s on lease to a third party.

Michael Linenberg: Okay, great. Just one last one here. This is back to Wade. You had 5 CRJ-900s on lease to a third party, now they show back up in your fleet. I couldn't follow those. Where do they go from, and where are they now, the 5 from the CRJ-900s?

Speaker #5: But now they show back up—they show back up in your fleet. Those I couldn't follow, though. Where do they go from, and where are they now?

Speaker #5: The five from these CRJ900s.

Speaker #1: Yeah, that's a great question. One of them is currently in heavy maintenance, transitioning to one of our partners either through pro-rate or CPA. The other ones, we're still working with our major partners on placing those with them.

Wade Steel: Yeah, that's a great question. One of them is currently in heavy maintenance, transitioning to one of our partners, either through a prorate or CPA. The other ones we're still working with our major partners on placing those with them. We're very optimistic that we'll be able to place those airplanes with one of our major partners in one of our three business segments, either contract, prorate, or leasing.

Speaker #1: You know, we're very optimistic that we'll be able to place those airplanes with one of our major partners in one of our three business segments—either contract, prorate, or leasing.

Speaker #5: Wow. All right, that's great. Thanks, everyone.

Michael Linenberg: Wow. All right. That's great. Thanks, everyone.

Speaker #3: Your next question comes from the line of Dwayne Finikworth with Evercore ISI. Please go ahead.

Operator 2: Your next question comes from the line of Duane Pfennigwerth with Evercore ISI. Please go ahead.

Operator: Your next question comes from the line of Duane Pfennigwerth with Evercore ISI. Please go ahead.

Speaker #6: Hey guys, good afternoon. Just to follow up on some of Mike's questions on the E175s. It's a little surprising you could find slots within the year, within 2026.

Duane Pfennigwerth: Hey, guys. Good afternoon. Just to follow up on some of Mike's questions on the E175s, it's a little surprising you could find slots within the year, within 2026. Is this all of your availability for this year? Would you be willing to tell us how many slots do you have in 2027? I know you mentioned, I think 33 through 2032, but wondering how many could potentially drop into 2027.

Speaker #6: Is this all of your availability for this year? And would you be willing to tell us how many slots you have in 2027?

Speaker #6: I know you mentioned, I think, 33 through 2032, but I'm wondering how many could potentially drop into 2027.

Speaker #1: Yeah, Dwayne, this is Wade. Yeah, so we were able to work with Embraer on that order, and they were very creative in finding us some slots at the end of this year.

Wade Steel: Duane, this is Wade. We were able to work with Embraer on that order, and they were very creative in finding us some slots at the end of this year. They will be at the very end of the year. We are very excited. We have got great partners in Embraer, GE, and American to get that deal done, so we are very happy about that. 2026 probably is pretty close to tapped out with those guys. 2027, we do have 17 now scheduled to come, and we anticipate all of those. We are working potentially to loosen up another couple of slots here and there. Right now it is the 17 that we have firm coming in 2027.

Speaker #1: That will be at the very end of the year. But yeah, we were very excited to—you know, we've got great partners in Embraer and GE and American to get that deal done.

Speaker #1: So we're very happy about that. You know, 2026 probably is pretty close to tapped out with those guys. In 2027, we do have 17 now scheduled to come.

Speaker #1: And we anticipate all of those. We are working, potentially, to loosen up another couple of slots here and there. But right now, it is the 17 that we have firm coming in 2027.

Speaker #6: Okay, great. Thanks. And then maybe you can just give us some insight into your thought process about the pacing of the buyback going forward?

Duane Pfennigwerth: Okay, great. Thanks. Maybe you can just give us some insight into your thought process about the pacing of the buyback going forward. Is it a function of where the stock is trading, where it is priced, or is it more about the pacing of CapEx?

Speaker #6: Is it a function of where the stock is trading, where it's priced? Or is it more about the pacing of CapEx?

Speaker #1: Hey Dwayne, it's Rob here. So, it's sort of all of the above, I would say. You know, when it comes to how we deploy capital, we try to maintain, you know, a balanced approach.

Rob Simmons: Hey, Duane, it is Rob here. It is sort of all of the above, I would say. When it comes to how we deploy capital, we try to maintain a balanced approach but remain opportunistic, whether that means we have a new opportunity like the new E175 for American that we announced today. We loved that accretive chance to deploy capital. As we have talked about, we continue to generate strong free cash flow. We are in the fortunate situation where we can take advantage opportunistically of a share price that we felt was mispriced, and we are pleased that we bought $75 million in each of the first two quarters of the year this year, in addition to being able to continue to pay down debt and continue to invest in our fleet. We are in the fortunate situation, Duane, that we can sort of do an all of the above.

Speaker #1: But remain opportunistic whether that means you know we have a new opportunity like the new E175s for American that we announced today. We love that accretive chance to deploy capital.

Speaker #1: But, you know, as we've talked about, we continue to generate strong free cash flow. So we're in the fortunate situation where we can, you know, take advantage opportunistically of a share price that we felt was mispriced.

Speaker #1: And we're pleased that we bought, you know, $75 million in each of the first two, you know, quarters of the year this year.

Speaker #1: In addition to being able to pay down—you know, continue to pay down debt—and continue to invest in our fleet. So, you know, we're in the fortunate situation, Dwayne, that we can sort of do all of the above.

Speaker #6: Okay. Thank you.

Duane Pfennigwerth: Okay. Thank you.

Speaker #3: Your next question comes from the line of Tom Fitzgerald with TD Cowen. Please go ahead.

Operator 2: Your next question comes from the line of Tom Fitzgerald with TD Cowen. Please go ahead.

Operator: Your next question comes from the line of Tom Fitzgerald with TD Cowen. Please go ahead.

Speaker #7: Hi everyone. Thanks so much for the time. Congrats to Wade and congrats on the American deal. Just thinking about or how should we think about the cadence of those deliveries both in the back half of the year and then just throughout 2027?

Tom Fitzgerald: Hi, everyone. Thanks so much for the time. Congrats to Wade, congrats on the American deal. How should we think about the cadence of those deliveries, both in the back half of the year and then just throughout 2027? I don't know if it's more front half or back half weighted next year, or if it's just more of an even cadence throughout the year.

Speaker #7: I don't know if it's more front-half or back-half weighted next year, or just kind of more of an even cadence throughout the year?

Speaker #1: Yeah, Tom, thank you first of all. On the delivery schedules for this year, the four American ones are the very back end of Q4.

Rob Simmons: Yeah, Tom, thank you, first of all. On the delivery schedules for this year, the 4 American ones are at the very back end of Q4. Next year, the 7 American ones are heavily weighted towards the first six months of the year. We have 7 American ones coming in H1 of 2027, we have 10 Delta ones that are kind of starting in the middle of the year and go through the end of the year.

Speaker #1: And then next year, the seven American ones are heavily weighted towards the first six months of the year. We have seven American ones coming in the first half of 2027.

Speaker #1: And then we have 10 Delta ones that are kind of starting in the middle of the year and go through the end of the year.

Speaker #7: Okay, great. That's really helpful color. And then, just given the American announcement and just given some of the other moving pieces with the fleet and things coming out of conversion, how should investors think about a rough zip code for block hour growth in 2027?

Tom Fitzgerald: Okay, great. That's really helpful color. Just given the American announcement and just given some of the other moving pieces with the fleet and things coming out of conversion, how should investors think about a rough ZIP code for block hour growth in 2027? I know it's still early, but is mid-single digits, is another year like this, in the ballpark of where people should be thinking? Thanks again for the time.

Speaker #7: I know it's still early, but is mid-single digits for another year like this kind of in the ballpark of where people should be thinking?

Speaker #7: Thanks again for the time.

Speaker #1: Yeah, so Tom, that’s a great question. We’re still looking at 2027 right now. As you can tell, we’re still working on our fleet.

Rob Simmons: Yeah. Tom, that's a great question. We're still looking at 2027 right now. As you can tell, we're still working on our fleet. We're finalizing our 2027 plans. I would just say let's stay tuned for that. We'll give a lot more color on that next quarter as we firm up our plans for 2027.

Speaker #1: We're finalizing our 2027 plans. So I would just say let's stay tuned for that. We'll give a lot more color on that next quarter as we firm up our plans for 2027.

Speaker #3: Your next question comes from the line of John Goddin with Citigroup. Please go ahead.

Operator 2: Your next question comes from the line of John Godden with Citigroup. Please go ahead.

Operator: Your next question comes from the line of John Godden with Citigroup. Please go ahead.

Speaker #5: Hey guys, this is Max on for John. Thanks for taking my question. Can you guys just give a little further insight into demand trends you've been seeing in the prorate business and on forward bookings there later into the summer and fall?

[Analyst] (Citigroup): Hey, guys. This is Max on for John. Thanks for taking my question. Can you guys just give a little further insight into demand trends you've been seeing in the prorate business and on forward bookings there later into the summer and fall, and how consumers have been reacting to fare increases that have been issued? Thanks.

Max Lesnik: Hey, guys. This is Max on for John. Thanks for taking my question. Can you guys just give a little further insight into demand trends you've been seeing in the prorate business and on forward bookings there later into the summer and fall, and how consumers have been reacting to fare increases that have been issued? Thanks.

Speaker #5: And how have consumers been reacting to fare increases that have been issued? Thanks.

Speaker #1: Thanks, Max. This is Chip. I think, philosophically and practically speaking, we're still seeing very good demand, even relative to what is a somewhat seasonal drop-off in the fall period.

Chip Childs: Thanks, Max. This is Chip. Just I think philosophically and practically speaking, I think we're still seeing very good demand relative to even what is a seasonal, somewhat drop-off in the fall area. Again, I think I'd go back to some of the things that we tried to discuss in our script that I think we're consistent with what our partners are saying relative to fares and how much recovery we can get of the fuel price volatility that we have. Overall, I think that we would still come back to a very strong demand model for both prorate and contract with our partners. It's also helpful that we're in the middle of transitioning to an all-dual class fleet, and some of that's going to hit prorate as well. Being an all-dual class fleet changes what we've been trying to do even the last decade.

Speaker #1: And again, I think I'd go back to some of the things that we've tried to discuss in our script, that you know, I think we're consistent with what our partners are saying relative to fares and how much recovery we can get over the fuel price volatility that we have.

Speaker #1: But overall, I think that we would still come back to a very strong demand model for both prorate and contract with our partners. You know, it's also helpful that we're in the middle of transitioning to an all dual-class fleet, and some of that's going to hit prorate as well.

Speaker #1: Being an all dual-class fleet changes, you know, what we've been trying to do even the last decade. But I think from our perspective, things look good in the fall, but more importantly, I think long term we're very comfortable and pleased with what we see as an outlook that we can talk about more next quarter.

Chip Childs: I think from our perspective things look good in the fall, more importantly, I think long-term, we're very comfortable and pleased with what we see as an outlook that we can talk about more next quarter.

Speaker #5: Great. And then I know you guys have discussed this on prorate being roughly 10% of your block hour production. Do you expect this business to grow over the long term as a percentage of your total production?

[Analyst] (Citigroup): Great. I know you guys have discussed this on prorate being roughly 10% of your block hour production. Do you expect this business to grow over the long-term as a percentage of your total production? Obviously, the trends here have been pretty robust, just curious on kind of your outlook here over the long-term. Thanks.

Max Lesnik: Great. I know you guys have discussed this on prorate being roughly 10% of your block hour production. Do you expect this business to grow over the long-term as a percentage of your total production? Obviously, the trends here have been pretty robust, just curious on kind of your outlook here over the long-term. Thanks.

Speaker #5: Obviously, you know, the trends here have been pretty robust. So, just curious on your outlook here over the long term.

Speaker #5: Thanks.

Speaker #1: Yeah, I think it depends on a lot of factors I would say the trend today is obviously clear in the data shows that it's, you know, growing faster than the contract side of our business.

Chip Childs: Yeah, I think it depends on a lot of factors. I would say the trend today is obviously clear, the data shows that it's growing faster than the contract side of our business. I think from our perspective, our overall strategy is to drive all of our product lines in equal fashion, both contract, leasing, charter, and prorate. From that perspective, I think what we're seeing in all of those aspects of our business model is very strong on everything. Certainly the trend today is a little bit more on prorate. That may continue in the future, but it's not like it's something that we only want to continue to grow. There's a lot of good business lines that we're still actively working with some great partners to continue to provide some good value to them and our shareholders.

Speaker #1: But I think from our perspective, our overall strategy is to, you know, to drive all of the of our product lines in equal fashion, both contract, leasing, charter, and prorate.

Speaker #1: So from that perspective, I think what we're seeing in all of those aspects of our business model is very strong on everything. But certainly, the trend today is a little bit more on prorate.

Speaker #1: That may continue in the future, but it's not like it's something that we only want to continue to grow. There are a lot of good business lines that we're still, you know, actively working with some great partners to continue to provide good value to them and our shareholders.

Speaker #5: Makes sense. Thank you.

[Analyst] (Citigroup): Makes sense. Thank you.

Max Lesnik: Makes sense. Thank you.

Speaker #3: Your next question comes from the line of Catherine O'Brien with Goldman Sachs. Please go ahead.

Operator 2: Your next question comes from the line of Catherine O'Brien with Goldman Sachs. Please go ahead.

Operator: Your next question comes from the line of Catherine O'Brien with Goldman Sachs. Please go ahead.

Speaker #8: Hey, good afternoon, team. Another congratulations from me to Wade and on the American deal. Maybe just sticking with the American deal—how much of an impact are those four incremental E175s at American this year?

Catherine O'Brien: Hey, good afternoon, team. Another congratulations from me to Wade and on the American deal. Sticking with the American deal, how much of an impact are those 4 incremental E175s in American this year? It sounds like they're pretty year-end weighted. Just wondering if there are any other puts and takes on flying for the rest of your year besides those American planes. Maybe just my interpretation. I think on the last call, it sounded like you thought maybe you'd be a little under mid-single, and I wasn't sure if very back-end weighted American deliveries were enough to put you over back into mid-single. Just any incremental color there would be helpful. Thanks.

Speaker #8: It sounds like they're pretty, like, year-end weighted. So just wondering if there are any other puts and takes on flying for the rest of your year, besides those American planes?

Speaker #8: You know, maybe it's just my interpretation, but I think on the last call, it sounded like you thought maybe it’d be a little under mid-single, and I wasn’t sure if very back-end weighted American deliveries were enough to put you back over into mid-single.

Speaker #8: So just any incremental color there would be helpful. Thanks.

Speaker #1: Yeah, so first of all, Catherine, thank you. As far as the American airplanes, they'll have very little impact on the Black Hours in 2026.

Wade Steel: Yeah. First of all, Catherine, thank you. As far as the American airplanes, they'll have very little impact on the block hours in 2026. I do want to reiterate, we are confident that we are going to increase year-over-year 5% in our block hours, and we're very confident we do not need the American airplanes to hit that 5%. We are very confident in our block hours and where we're going.

Speaker #1: But I do want to reiterate, we are confident that we are going to increase year over year. 5% in our Black Hours and we're very confident.

Speaker #1: We do not need the American airplanes to hit that 5%. So we are very confident in our block hours and where we're going.

Speaker #8: We've got it. And then you know, you've got the 11 CRJ 700s that are coming back from American and then a couple of the CRJ 900s.

Catherine O'Brien: Got it. You've got the 11 CRJ-700s that are coming back from American, and then a couple of the CRJ-900s Michael was asking you about that are coming off lease. It sounds like you're in discussions with your partners between placing them under prorate, contract, on lease. Could you just walk us through what the margin profile of each of those choices look like? I realize prorate may be more variable given moving fuel and demand, just looking for higher-level comments. Thanks.

Speaker #8: Mike was asking you about that are coming off lease. And it sounds like you're in discussions with your partners between placing them under prorate, contract, on lease.

Speaker #8: Could you just walk us through what the margin profile of each of those choices look like? I realize prorate may be more variable given moving fuel and demand.

Speaker #8: But just looking for a higher level comments. Thanks.

Speaker #1: Yeah, so on the margins, you know, as you said, you know, prorate at this moment is a little bit more variable. But our contracts will be very consistent with where, you know, anything we sign up will be very consistent with what we have today.

Wade Steel: Yeah. On the margins, as you said, prorate at this moment is a little bit more variable, but our contracts will be very consistent with where anything we sign up will be very consistent with what we have today. Leasing does have a little bit higher margin attributes. We are looking at all of these options right now. Stay tuned. We will get something figured out here really quick.

Speaker #1: And leasing, you know, leasing does have a little bit higher margin attributes, but, you know, so we're looking at all of these options right now.

Speaker #1: Stay tuned. We'll get something figured out here really quick. So.

Catherine O'Brien: Okay, great. Thanks.

Speaker #8: Okay, great. Thanks.

Speaker #3: That concludes our question and answer session. I will now turn the call back over to Chip Childs for closing remarks.

Operator 2: That concludes our question-and-answer session. I will now turn the call back over to Chip Childs for closing remarks.

Operator: That concludes our question-and-answer session. I will now turn the call back over to Chip Childs for closing remarks.

Speaker #1: Thank you, Tiffany. Appreciate it. And we really appreciate everybody's interest on the call today. We're obviously in a position where we're trying to capitalize on the playbook that we've had for over the last decade.

Chip Childs: Thank you, Tiffany. Appreciate it, and we really appreciate everybody's interest on the call today. We are obviously in a position where we are trying to capitalize on the playbook that we have had over the last decade. We think that our opportunities are even better along those lines with strong capital, the best professionals in the industry, and some amazing partners. We will continue to update you as we continue on our journey to continue to provide value to all of our stakeholders, and we will look forward to talking again in three months from now. Thank you.

Speaker #1: We think that our opportunities are even better along those lines with strong capital, the best professionals in the industry, and some amazing partners. We'll continue to update you as we continue on our journey to continue to provide value to all these all of our stakeholders.

Speaker #1: And we will look forward to talking again in three months from now. Thank you.

Speaker #3: Ladies and gentlemen, this concludes today's call. Thank you all for joining. You may now disconnect.

Operator 2: Ladies and gentlemen, this concludes today's call. Thank you all for joining. You may now disconnect.

Operator: Ladies and gentlemen, this concludes today's call. Thank you all for joining. You may now disconnect.

Operator 1: Please wait. The conference will begin shortly.

Operator: Please wait. The conference will begin shortly.

Q2 2026 SkyWest Inc Earnings Call

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