Yahoo Finance SkyWest Inc (SKYW) Q1 2024 Earnings Call Transcript Highlights: Soaring Revenues and Strategic ...
Net Income: $60 million for Q1 2024.
Earnings Per Share (EPS): $1.45 per diluted share for Q1 2024.
Revenue: Total Q1 revenue was $804 million, up 16% from $692 million in Q1 2023.
Pre-Tax Income: $80 million for Q1 2024.
Effective Tax Rate: 24.8% for Q1 2024.
Cash Position: Ended Q1 with $821 million, down $14 million from the previous quarter.
Debt Level: Ended Q1 with $2.9 billion in debt, down from $3 billion at year-end 2023.
Share Repurchase: Bought back 136,000 shares in Q1 for $9 million at an average price of $64.21 per share.
Free Cash Flow: Positive free cash flow from operations, with lower CapEx investment than previous years.
Deferred Revenue: $366 million cumulative deferred revenue to be recognized in future periods.
Block-Hour Production: Increased by 5% in Q1 2024 compared to Q1 2023.
2024 EPS Outlook: Expected to be in the high $6 area, reflecting stronger production outlook.
Release Date: April 25, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Q & A Highlights
Q: Hey, good afternoon and appreciate the color on the pilot what you're seeing on the pilot side and utilization. I'm just curious on the kind of increasing the utilization, the CRJ fleet, is that now the government, the pile, the captain supply or is there kind of a question on demand for that kind of level cost as well? Because some of those CRJ 700, nine hundreds, I'm guessing some are two hundreds I was kind of curious as to what's going to be the governing factor to get that to full at full utilization? A: Yes, David, this is Wade. So yes, as we talked about in the script, the pilot attrition is continuing to improve and the constraint to continue to get that back up to full utilization is still the captain issue that we have at SkyWest's. But as we are continuing to work through that, the utilization is increasing and we're seeing that every day that the CRJ utilization is increasing, like you said, that fleet is based primarily of CRJ seven hundreds. We have a very large CRJ 700 fleet and CRJ nine hundreds are 200 fleet. We still operate over 80 of those, but yes, it will be a nice mix and we're going to continue to see the utilization improvement there as the captain in balance continues to grow.
Q: That's helpful. And in my mind, just the other commentary on the 19 CRJ seven hundreds that are coming off contract, are there any others that are coming off contract this year or as we look to next year, we should be mindful the 19 CRJ seven hundreds are the only ones that are coming off in 2024. A: There are some we have contract expirations every year with all of our major partners, and we're always in constant dialogue with them about extensions and renewals and fleet replacements and all kinds of things like that. So there's additional there's no there's nothing significant or unusual in the future years, but there's plenty of opportunities to renew and extend those contracts in the future.
Q: Thanks very much, operator. Hi, team. And you mentioned a couple of few retirements that are coming and some aircraft coming out of scheduled service. But could you tell us and if I may see this in the press release and normally you include it. Can you tell us how to think about the net change in the aircraft fleet like from 2024 through 2026 or seven, maybe 27 too long that. A: Yes. So yes, so Helane, I'll give you a little bit of color on our fleet as we're going forward today, we have around 240 e. one 75 in our fleet. By the end of 2026, we will have 278 of our E. one 70 fives in our fleet. So we have a lot of growth still ahead of us on our 1.75 fleets. We talked about the 20 that are united owned that are coming in 2024 and then we have some orders out there as well than 19. That will be coming in 24, 25 and 26. And so as far as the overall fleet we anticipate that will grow slightly. The CRJ fleet, as Chip said, is still in very high demand and still has some legs on it. And so we are going to continue to operate the ERJ fleet and the CRJ fleet. And so there's great demand for both of those aircraft types with all of our major partners.
Q: Okay. That's really helpful. And then just on the two different fleet types, I should know this and I apologize that I don't have it. How do you think about the pilots and on those aircraft? Are they dedicated pilots moving through CRJs and DRGs or do you Chris train them? A: So again, this is Chip. That's an excellent question. We do not cross train them on. We keep the pilots separate based upon those two fleets and on there's interesting interest on why pilots want to fly one fleet over another. But ironically, the majority of that is based upon domicile and so from our perspective, you know, we've we've very much focused a bit on the utilization of the ERJ product over the past three or four years since the pandemic and now that we have more capital availability, we'll start to bring these assets that are essentially paid for on. And we've had for a bit backup, a higher utilization, which is extremely accretive, but they're both fantastic aircraft on we keep the pilot training separate for each one of those. Sometimes they fly from sometimes they will transition from one to another, but it requires a big training event on, but we're able to manage through that. And we're very optimistic about what we have coming up through the pipeline to be able to fill the demand for both both fleet types.
Q: Okay. That's hugely helpful. And if I could just sneak one more question in on pilots on 18. I don't know who said or talked about the pilot on training because of the pilot because the major airlines have cut back on hiring, right? You're seeing that on because of their issues. I didn't quite get the comment you made about pilot training going forward? Are you going to keep the classes large and just run excess pilots for when new those guys get back on track? Are you going to kind of keep there pilot classes sooner. So you don't run excess pilots. A: And I would say, like we mentioned last quarter, we are a very long ways away from excess pilots on particularly given the demand. I think last quarter, we gave a couple of numbers last quarter that we were 1,000 pilots short of what we were pre pandemic and given demand, we need another 1,000 pilots on top of that. So we're probably close to that even a quarter later, we're probably 1900 pilots short. So on look, we are going to. Ironically, our training programs have been very busy just with attrition and keeping up with attrition. Our training programs are going to be at least equally busy getting back to fulfilling the demand and getting the numbers back up. And we're mostly excited. Honestly, Helane, about not only do we have this good opportunity to grow back to where we were and beyond. But we also have the discipline to do it the right way where we can take care of people in the process, make sure that we're not, you know, over on over work. And the people that are, you know, number one priority is safety. We can train the right way. We can take our time and be very disciplined in how we get back to full utilization. And that's a big component about what our strategy is. But I think from the perspective of what you're trying to say is we're we're going to be largely full-bore as long as we're comfortable with it. And we're
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
This article first appeared on GuruFocus.
