During the second quarter of 2018, SkyWest reported net income of $76 million, or $1.43 per diluted share, up from $50 million or $0.95 per diluted share in Q2 2017. The airline’s pre-tax income was $98 million, up 21% from $81 million in the year-ago period.
Revenue was $806 million in Q2 2018, up from $792 million in Q2 2017. The increase in revenue included the net impact of adding 23 new E175 aircraft and other economic improvements within SkyWest's fleet mix since Q2 2017, partially offset by the removal of unprofitable or less-profitable aircraft over the same period.
Operating expenses were $679 million in Q2 2018, down from $685 million in Q2 2017. The decrease in operating expenses was primarily due to the reduction in direct operating costs with the net removal of 43 aircraft from service.
The effective tax rate for Q2 2018 was 23% compared to 38% in Q2 2017. The lower tax rate in Q2 2018 was primarily due to the reduced federal rate under the new tax law enacted in Q4 2017.
Also during the reporting period, SkyWest announced a new agreement to operate 20 new CRJ900s for Delta Air Lines under a nine-year term, replacing 20 CRJ700s expiring from contract. It also signed a new agreement to place 20 used CRJ700s with American Airlines under a four-year term, a three-year extension on 19 CRJ700s scheduled to expire in 2019/2020 with United Airlines, as well as signing a new agreement to place 20 internally-sourced CRJ200s under a three-year contract with United.
Commenting on the results, Chip Childs, Chief Executive Officer and President of SkyWest, said "We are focused on remaining disciplined in our execution of fleet solutions that meet the needs of our customers. The agreements and extensions announced this quarter are expected to continue to improve our fleet mix in alignment with our overall fleet transition strategy. I appreciate the dedicated service our professionals consistently provide to our customers.