SkyWest Inc., the St. George, Utah-based parent of regional carriers SkyWest Airlines and ExpressJet Airlines, posted a $161.6 million net loss for the full-year 2016, reversed from a $117.8 million net profit in 2015. SkyWest’s full-year 2016 operating revenue was $3.1 billion, up 0.8% from 2015.
SkyWest’s operating expenses totaled $3.3 billion, up 15.1% from $2.9 billion in 2015, and included a $466 million non-cash impairment charge related to the December 2016 termination of residual value guarantees (RVGs) with Bombardier over 76 CRJ200 50-seater aircraft owned by SkyWest and American Airlines. SkyWest was also assessed an additional $16 million in early lease return charges on eight CRJ700s.
Excluding these charges, SkyWest said its adjusted net income for the year was $143.1 million, up 39.5% from adjusted net income of $103 million in 2015.
SkyWest president and CEO Chip Childs attributed 2016’s results to “the addition, removal or redeployment of over 125 aircraft across our base fleet of 652 aircraft” as the company transitions from flying 50-seat aircraft to flying dual-class 76-seat aircraft such as Embraer E175s and Bombardier CRJ700s/900s.
During 2016, SkyWest Inc. removed 28ERJ145s, 12 CRJ200s and nine CRJ700s from its fleet while adding 41 E175s. Nineteen ERJs were delivered in the fourth quarter alone. The company’s total fleet decreased 1.2%, from 660 to 652 aircraft, over the year.
As of Dec. 31, 2016, SkyWest’s fleet comprised 86 E175s, 194 CRJ700s/900s, 213 CRJ200s and 159 ERJ145s/135s. By the end of 2017, the company expects to reduce its fleet 13.4%, to 565 aircraft, removing 46 CRJ200s and 59 ERJ145s/135s while adding 18 E175s. The company expects to take delivery of seven E175s in the 2017 first quarter, 10 in 2Q 2017 and one in the fourth quarter, for a total of 104 E175s in service by year-end 2017. 65 of the E175s will be in service with United Airlines, 20 with Alaska Airlines and 19 with Delta Air Lines.
SkyWest’s 2016 traffic decreased 5.6% year-over-year to 28.1 billion RPMs as the company’s consolidated capacity fell 5% to 34.1 billion ASMs, producing a load factor of 82.1%, down 0.5 point from 2015. Yield was up 6.9% year-over-year to 10.9 cents.
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