SkyWest (NASDAQ:SKYW) reported fourth-quarter 2025 net income of $91 million, or $2.21 per diluted share, and full-year net income of $428 million, or $10.35 per diluted share, management said on the company’s earnings call. Executives highlighted improved production during 2025, recent contract extensions on Embraer E175 aircraft, and continued debt reduction, while noting that the fourth quarter included disruption from a government shutdown that led to mandated flight reductions.
Fourth-quarter results reflect shutdown-related disruption
President and CEO Chip Childs said the fourth quarter was “unusually challenging,” beginning with the government shutdown and mandatory flight reductions and then moving into the peak holiday travel period. Childs said SkyWest was “disproportionately affected,” with more canceled flights than its major partners during the mandatory reductions, though he described the impact as modest.
Revenue mix and deferred revenue recognition
Simmons reported fourth-quarter revenue of $1.0 billion, down seasonally from $1.1 billion in the third quarter of 2025 and up 8% from $944 million in the fourth quarter of 2024. Contract revenue totaled $803 million, while prorate and charter revenue was $167 million and leasing and other revenue was $54 million.
Management highlighted leasing and other revenue growth, attributing the increase to discrete maintenance services provided to third parties. In response to an analyst question about the jump, Simmons said it was “an engine deal with a third party,” and noted there was also a related effect within maintenance expense.
SkyWest also discussed the timing of deferred revenue recognition. Simmons said fourth-quarter GAAP results included recognition of $5 million of previously deferred revenue, down from $17 million in the third quarter of 2025 and $20 million in the fourth quarter of 2024. As of the end of the quarter, cumulative deferred revenue totaled $265 million, to be recognized in future periods. For 2026 modeling, Simmons suggested recognizing roughly $20 million to $25 million per quarter, noting that contract extensions pushed out some of the recognition timing.
Full-year operating leverage, cash flow, and balance sheet actions
Childs and Simmons both emphasized operating leverage in 2025. Childs said SkyWest converted 15% production growth into a 31% increase in pre-tax income. Simmons reported 2025 pre-tax income of $566 million, up 31% from 2024 on a 15% increase in block hours. EBITDA for 2025 was $982 million, up more than $100 million from 2024, and free cash flow for 2025 was over $400 million, which Simmons said supported CRJ fleet initiatives and other capital deployment opportunities.
SkyWest repaid $492 million of debt in 2025 and ended the fourth quarter with total debt of $2.4 billion, down from $2.7 billion at the end of 2024. Cash at quarter-end was $707 million. Simmons said the fourth-quarter cash balance reflected repayment of $155 million of debt, $214 million of capital expenditures including the purchase of five E175s, and repurchase of 268,000 shares for $27 million during the quarter.
For the full year, SkyWest spent $85 million on share repurchases, buying nearly 850,000 shares, and finished the year with $213 million remaining under its current share repurchase authorization. In discussion of capital allocation, Simmons said the company felt it was in an “all of the above” position, citing continued fleet investment, ongoing deleveraging, and share repurchases as available uses of cash, without specifying bright-line liquidity or leverage targets.
In response to an analyst question, management said SkyWest had approximately $1.5 billion of unencumbered equipment and expected unencumbered assets to increase as more aircraft become paid off over the next several years.
Fleet agreements, E175 growth, and CRJ flexibility
Steel said the company announced multiyear extensions of flying agreements covering 40 E175s with United and 13 E175s with Delta, which he said solidify agreements “through the end of this decade.” With those extensions, Steel said SkyWest has no E175 contract expirations until the back half of 2028.
During the quarter, SkyWest took delivery of five new E175s for United. Steel said the company has 69 E175s on firm order with Embraer, including 16 for Delta, eight for United, and one for Alaska, and expects delivery of nine new E175s in 2026. He added that 25 aircraft in the order are allocated to major partners and 44 are not yet assigned, and that the order provides flexibility to defer or terminate aircraft if partner arrangements are not secured. Steel said deliveries are structured to begin in 2027 through 2032, and that after completing Delta deliveries expected in 2028, SkyWest’s E175 fleet would be “nearly 300,” which he said would keep SkyWest as the world’s largest E175 operator.
Steel also reiterated previously disclosed CRJ-related agreements with United, including an extension of up to 40 CRJ200s into the 2030s and a multi-year flying agreement for 50 CRJ550s. As of December 31, SkyWest had 27 CRJ550s in service and expects the remaining 23 to enter service later in 2026.
Separately, Steel said SkyWest began a prorate agreement with American and is currently operating four aircraft under the agreement, with up to nine aircraft expected by mid-2026.
2026 outlook: higher utilization, maintenance timing, and seasonality
Simmons said SkyWest does not provide formal EPS guidance but offered updated commentary for 2026. The company expects mid-single-digit percentage growth in block hours versus 2025 and anticipates 2026 earnings per share in the “mid-$11 area,” modestly higher than the prior quarter’s expectation. Simmons also said seasonality is expected to be sharper, resembling pre-COVID patterns, with first-quarter 2026 EPS expected to be flat to down versus fourth-quarter 2025 GAAP EPS, and with the second and third quarters expected to be the strongest.
Steel said SkyWest saw positive trends in aircraft utilization and that schedules heading into spring and summer 2026 supported increased utilization, which management said contributed to the improved block hour outlook. Steel said 2026 production expectations incorporate nine new E175 deliveries, entry into service of 23 CRJ550s, continued strong prorate demand, and increased fleet utilization, partially offset by the return of approximately 19 Delta-owned CRJ900s to Delta over the next couple of years, which he said would occur at a slower cadence than previously anticipated.
On maintenance, Steel said the company continues to face labor and parts challenges in its third-party MRO network and expects 2026 maintenance expense to be consistent with 2025 levels as SkyWest brings aircraft out of long-term storage and supports increased production. He said maintenance expense is incurred before aircraft return to service and noted that about 20 parked dual-class aircraft are in heavy maintenance and expected to return to contracted service once maintenance is complete.
Management also addressed the charter business. Childs said SkyWest Charter is seeing significant demand, particularly from sports teams, but aircraft availability is constrained due to strong demand for SkyWest’s core capacity purchase agreement flying and ongoing MRO constraints. He said 2026 is not expected to be a “historically huge year” for charter, while maintaining long-term objectives for the business.
About SkyWest (NASDAQ:SKYW)
SkyWest, Inc (NASDAQ: SKYW) is a regional airline holding company that provides air transportation services through its primary subsidiary, SkyWest Airlines. The company operates flights under capacity purchase agreements with major carriers such as United Airlines, Delta Air Lines, American Airlines and Alaska Airlines. By specializing in regional connectivity, SkyWest links smaller communities to larger hubs using a fleet of regional jets and turboprop aircraft.
Headquartered in St. George, Utah, SkyWest oversees all aspects of its airline operations, including flight scheduling, crew training and aircraft maintenance.
