SkyWest has announced additional fleet transitions and contract updates designed to reduce its long-term fleet risk.
SkyWest’s ExpressJet operation will remove its CRJ200 aircraft from service over the next year. ExpressJet and American Airlines have agreed to place 12 dual-class CRJ700s, which had been scheduled to be removed from service, will not be put into service under a multiyear term.
SkyWest and Bombardier have entered into a termination agreement covering Bombardier’s residual value guarantee agreements on 76 CRJ200 aircraft owned by SkyWest Airlines and ExpressJet. Bombardier agreed to pay SkyWest $90 million by January 2017 along with certain other consideration in exchange for the release. As a result, SkyWest is evaluating its total 50-seat CRJ200 fleet and related long-lived assets for impairment in Q4 2016 but it expects a noncash impairment charge to be around $440 million to $490 million (pretax) on its CRJ200 aircraft and other 50-seat aircraft assets.
“Streamlining our fleet and taking early settlement of Bombardier’s RVG obligations reduce both our overall risk profile and the future investment that would have been required in the CRJ200 fleet,” SkyWest President and CEO Chip Childs said. “These moves strategically position us to continue to deploy our capital against our best investment opportunities and are expected to help improve future liquidity and fleet flexibility.”