Financial Performance:
SkyWest reported Q4 net income of $91 million ($2.21 per share) and full-year net income of $428 million ($10.35 per share). Q4 pretax income reached $125 million with total revenue of $1 billion, up 8% year-over-year. Full-year 2025 pretax income of $566 million increased 31% on 15% block hour growth, demonstrating strong operating leverage. EBITDA totaled $982 million, up over $100 million from 2024.

Government Shutdown Impact:
November’s mandated flight cancellations negatively impacted Q4 by $7 million ($0.13 EPS). SkyWest canceled approximately 2,000 flights and 3,000 block hours, experiencing disproportionately higher cancellations than major partners due to contract provisions.

Major Contract Extensions:
Announced multi-year extensions for 40 E175s with United Airlines and 13 E175s with Delta Air Lines in January 2026. With all dual-class aircraft now under contract, no major E175 expirations occur until late 2028, providing significant revenue stability.

Fleet & Aircraft:

Current Fleet: 440 total aircraft with nearly 300 E175s targeted by end of 2028

Q4 2025 Deliveries: 5 new E175s for United Airlines

2026 Plan:
- 9 new E175 deliveries expected (United, Alaska, Delta)
- 23 CRJ550s entering service (total fleet target: 50 CRJ550s for United)
- Returning ~20 parked dual-class CRJs to service (contracts signed, awaiting maintenance completion)
- 40+ parked CRJ200s available for deployment
- Extended up to 40 CRJ200s with United into 2030s
- Anticipate return of ~19 Delta-owned CRJ900s over next couple of years (slower than originally expected)

Outstanding Orders: 69 E175s on firm order with Embraer through 2032:
- 25 allocated: 16 Delta, 8 United, 1 Alaska
- 44 unassigned with flexibility to defer/terminate if no partner placement
- Order structured with good deferral/termination flexibility
- 2027 deliveries all allocated; majority of 2028 allocated

Purchase Rights: Secured rights for 50 additional E175s from Embraer

Balance Sheet Strength:
Ended Q4 with $707 million cash and $2.4 billion debt (down from $2.7 billion at YE 2024). Repaid $492 million debt in 2025—a 10% reduction and $1 billion total debt reduction since end of 2022. Generated over $400 million free cash flow in 2025. Debt and leverage ratios at lowest levels in over a decade with ~$1.5 billion unencumbered assets.

Capital Allocation:
2025 CapEx: $580 million (7 new E175s, CRJ900 airframes, CRJ550 conversion assets). Share repurchases: $85 million (850,000 shares), double 2024 investment with $213 million remaining under authorization.

2026 Outlook:
Mid-single-digit block hour growth (up from prior guidance). EPS expected in “mid-$11 area” (up modestly from previous quarter). CapEx: $600-625 million. Tax rate: ~24%. Growth drivers: increased fleet utilization, 9 new E175 deliveries, 23 CRJ550 additions, strong prorate demand, ~20 parked dual-class CRJs returning to service.

Operational Excellence:
Achieved 250+ days of 100% controllable completion in 2025 while operating 2,500+ daily departures. Named Fortune World’s Most Admired Companies 2026 (top 10, only regional airline listed—third time receiving this distinction).

New Partnerships:
Launched prorate agreement with American Airlines, currently operating 4 aircraft with up to 9 expected by mid-2026.

Challenges:
Ongoing third-party MRO network constraints (labor/parts shortages). Maintenance expense expected to remain elevated in 2026 as parked aircraft return to service. Sharper quarterly seasonality returning with Q1 2026 EPS expected flat to down versus Q4 2025.