Commenting on the results, Chip Childs, Chief Executive Officer of SkyWest, said, “We continued to see very strong demand for our product during the fourth quarter. While we are facing new headwinds as the industry prepares to operate in a post-pandemic environment and we work to rebalance staffing, we remain focused on delivering an exceptional product. I want to thank our people for their ongoing flexibility and good work as we navigate this very dynamic period.”
Financial Results
Revenue was $777 million in Q4 2021, up from $590 million in Q4 2020, or 32%, as SkyWest’s Q4 2021 block hours on completed flights were up 30% from Q4 2020.
SkyWest recognized $23 million of previously deferred revenue of fixed monthly payments in Q4 2021, whereas SkyWest deferred recognizing revenue on $12 million of fixed monthly payments in Q4 2020. SkyWest will recognize the remaining $104 million of deferred revenue from the fixed monthly payments on a completed block hour basis over the term of the remaining contracts.
Operating expenses were $744 million in Q4 2021, up from $617 million in Q4 2020, or 21%. The increase in operating expenses was primarily due to an increase in flights operated in Q4 2021 compared to the same period in 2020.
Capital and Liquidity
SkyWest had $860 million in cash and marketable securities at December 31, 2021, up from $826 million at December 31, 2020.
Total debt at December 31, 2021 was $3.1 billion, down from $3.2 billion at December 31, 2020. Capital expenditures during Q4 2021 were $304 million for the purchase of twelve new E175 aircraft, four used CRJ700 aircraft and spare engines and $18 million for other fixed assets.
Status Update on Previously Announced Agreements
SkyWest is coordinating with its major airline partners to optimize the timing of upcoming fleet deliveries under previously announced agreements. The anticipated future delivery dates summarized below are based on currently available information and are subject to change.
Flying contract with American for 20 E175 aircraft
Six aircraft were delivered in Q3 2021, twelve aircraft were delivered in Q4 2021, and two deliveries are expected in the first half of 2022. The 20 aircraft are scheduled to be placed into service in 2022.
SkyWest used debt to finance the 18 aircraft delivered in 2021 and anticipates financing the remaining two aircraft through debt.
Flying contract with Delta for 16 E175 aircraft
16 aircraft deliveries are anticipated in 2022. The aircraft are scheduled to be placed into service in 2022.SkyWest anticipates financing the aircraft through debt.The 16 new E175 aircraft will replace 16 CRJ900 aircraft we have under contract with Delta.
Flying contract with Alaska for eleven E175 aircraft
Ten aircraft deliveries are anticipated in 2022 and one delivery in the first half of 2023. The aircraft are scheduled to be placed into service in 2022 and early 2023.SkyWest anticipates financing the aircraft through debt.
Combined, SkyWest anticipates placing 47 new E175 aircraft into service in 2022 and early 2023, of which 18 aircraft were delivered and debt financed as of December 31, 2021 and 29 aircraft have deliveries scheduled in 2022 or early 2023.
Flying contract with American for CRJ700 aircraft
SkyWest placed eight CRJ700s under contract during Q4 2021.SkyWest had 90 CRJ700s under contract with American at the end of 2021.
Partnership with Eve for eVTOL aircraft
SkyWest previously announced a partnership with Eve, an Embraer company, giving SkyWest an opportunity to further its commitment to sustainability. SkyWest’s non-binding agreement with Eve gives SkyWest the option to purchase up to 100 electric vertical takeoff and landing (eVTOL) aircraft. Eve anticipates its four-passenger eVTOL aircraft will be certified and available for service after 2025.
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