SkyWest, the holding company for SkyWest Airlines and SkyWest Leasing, has reported full year 2022 pre-tax income of $93 million, net income of $73 million, which comes to $1.44 per diluted share.
The end of 2022 results came after a fourth quarter 2022 pre-tax loss of $62 million and net loss of $47 million, or $0.93 loss per share.
The Q4 2022 results were a swing to the negative from Q4 2021's net income of $4 million, or $0.09 per diluted share.
SkyWest said the results "reflect $69 million of deferred revenue related to fixed monthly cash payments received under SkyWest’s newly amended flying contracts" and include a $36 million non-cash impairment charge on ten CRJ700 aircraft that were placed under a held-for-sale arrangement".
The results also take in an $11 million accelerated expense on 21 leased CRJ aircraft that are in the process of being stored prior to the lease expiration, SkyWest added.
SkyWest also reported net income of $73 million, or $1.44 per diluted share, for the 2022 year, compared to net income of $112 million, or $2.20 per diluted share, for the 2021 year and adjusted net income of $176 million, or $3.46 per diluted share, for the 2021 year.
“We continue to experience strong demand for our product, and our teams performed exceptionally well through the busy holiday season to deliver a solid 99.9% adjusted completion rate for the fourth quarter. Also during the quarter, we were pleased to have finalised amendments to the flying contracts with a majority of our partners to reflect our increased pilot scales. I want to thank our people for their dedicated, world-class efforts to deliver a strong, reliable product," said Chip Childs, SkyWest chief executive.
The results showed revenue of $681 million in Q4 2022, down $96 million, or 12%, from $777 million in Q4 2021, a decrease SkyWest put down to combination of a $4 million net reduction in contract and prorate revenue and a $92 million reduction caused by revenue deferrals.
The increase in deferred revenue was driven by the terms relating to fixed monthly cash payments under SkyWest’s newly amended flying contracts, the company explained.
The fall came despite reduced operating expenses of $716 million in Q4 2022, down $28 million, or 4%, from Q4 2021, in turn "primarily due to a decrease in maintenance costs, offset by an increase in salaries, wages, and benefits", SkyWest said, reporting it had 1$bn in cash and marketable securities, up on the $860 million reported at the end of 2021.
However debt was $3.4bn, up $300 million on year-end 2021. The main capital expenditure reported during Q4 2022 was $111 million for four E175 aircraft and other fixed assets.
SkyWest said it expects to be operating 240 E175 aircraft by the end of 2025, with two lined up for delivery in Q4 2023. It has flying contracts with Delta Air Lines and Alaska Airlines for 16 and 11 aircraft respectively.