SkyWest Secures Agreement to fly 20 Additional E175s for United

Rhea-AI Summary

SkyWest, Inc. (NASDAQ: SKYW) announces a new flying agreement with United Airlines to add 20 partner-financed E175s to its fleet by 2024. The company is set to operate a total of 278 E175 aircraft by the end of 2026, strengthening its partnership with major airlines.

Financial Analyst

The new agreement between SkyWest and United Airlines to place 20 partner-financed E175s under a four-year contract represents a significant development in the regional aviation sector. The financial arrangement, with aircraft being partner-financed rather than owned by SkyWest, may indicate a strategic move to maintain liquidity and reduce capital expenditure. It is essential to assess the impact of this agreement on SkyWest's balance sheet and cash flow statements, particularly the liabilities section, as partner financing could lead to different financial obligations compared to direct ownership.

Further, the addition of these aircraft is likely to increase SkyWest's operational capacity, potentially leading to higher revenues. However, it's crucial to monitor the company's load factors and route profitability to ensure that the expanded fleet translates into improved financial performance. The four-year duration of the contract also provides a medium-term visibility into SkyWest's revenue streams from United Airlines, which is positive for forecasting and valuation purposes.

Market Research Analyst

This strategic partnership with United Airlines could enhance SkyWest's competitive position in the regional airline market. The E175 is a popular aircraft for its fuel efficiency and passenger comfort, which may allow SkyWest to secure more favorable routes and time slots. It is important to analyze market trends and the demand for regional flights to predict how this expansion might affect SkyWest's market share and bargaining power with other major airlines and partners.

Additionally, the timing of the deliveries aligns with a broader industry recovery from the impacts of the pandemic, suggesting that SkyWest is anticipating an increase in travel demand. The phased delivery schedule through 2026 also allows for flexibility in operations and fleet management, which is a prudent approach given the volatile nature of the airline industry.

Aerospace Industry Analyst

The announcement underscores the continuing industry trend towards newer, more efficient regional jets like the E175, which are favored by airlines for their operational cost savings and ability to service short to mid-range routes. For stakeholders in the aerospace sector, this deal reaffirms the E175's market position and may influence the stock performance of its manufacturer, Embraer. It's important to analyze how this order might affect Embraer's production schedules and backlog, as well as the broader supply chain dynamics within the aerospace industry.

Moreover, the partner-financed aspect of the deal may reflect innovative financing structures that are emerging in the aerospace industry, which could set precedents for future aircraft orders and deliveries. Understanding these financial mechanisms is crucial for stakeholders to evaluate the risks and benefits associated with such agreements.

Partner-financed aircraft scheduled for deliveries this year

ST. GEORGE, Utah--(BUSINESS WIRE)-- SkyWest, Inc. (NASDAQ: SKYW) is pleased to announce a new flying agreement with United Airlines to place 20 partner-financed E175s under a four-year contract. The 20 E175s will join the SkyWest fleet throughout 2024. This agreement is in addition to the previously announced 19 SkyWest-owned E175 agreement with United.

“We’re delighted to continue enhancing our United partnership and pleased that we’re able to deliver on the strong market demand,” said Chip Childs, President & CEO of SkyWest.

SkyWest is coordinating with its major airline partners to optimize the timing of upcoming announced fleet deliveries. The anticipated E175 future delivery dates summarized below are based on currently available information and are subject to change.

		2024(1)		2025		2026		Total
Delta Air Lines		1		ꟷ		ꟷ		1
United Airlines		24		7		8		39
Alaska Airlines		ꟷ		1		ꟷ		1
Total		25		8		8		41
(1) 20 of the 25 E175 deliveries scheduled for 2024 are partner financed.

By the end of 2026, SkyWest is scheduled to operate a total of 278 E175 aircraft.

About SkyWest

SkyWest, Inc. is the holding company for SkyWest Airlines and SkyWest Leasing, an aircraft leasing company. SkyWest Airlines has a fleet of approximately 500 aircraft connecting passengers to over 240 destinations throughout North America. SkyWest Airlines operates through partnerships with United Airlines, Delta Air Lines, American Airlines, and Alaska Airlines carrying more than 38 million passengers in 2023.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240303190067/en/

Investor Relations

435.634.3200

Investor.relations@skywest.com

Corporate Communications

435.634.3553

corporate.communications@skywest.com

Source: SkyWest, Inc.

How many partner-financed E175s will SkyWest add to its fleet by 2024?

SkyWest will add 20 partner-financed E175s to its fleet by 2024.

What is the total number of E175 aircraft SkyWest is scheduled to operate by the end of 2026?

SkyWest is scheduled to operate a total of 278 E175 aircraft by the end of 2026.

Who is the President & CEO of SkyWest?

Chip Childs is the President & CEO of SkyWest.