SkyWest has turned a profit in the first quarter of 2021. Turning a net income of $36 million, SkyWest has benefited from its business model, which focuses on flying smaller regional jets for larger US airlines. Through this model, the airline has to focus less on turning profits and losses on individual routes. One of the key takeaways from SkyWests’s results was the return of the Embraer E175, which flew the most block hours of any fleet type in the first quarter.
SkyWest has turned a first-quarter profit. Photo: Getty Images
SkyWest turns a first-quarter profit
In the first quarter of 2021, SkyWest recorded a net income of $35.9 million. This was on $535 million of total operating revenue, the bulk of which came from flying agreements with major carriers. Revenue was down 27% from the first quarter of 2020.
The primary reduction in revenue came as a result of the carrier’s decreased flying. SkyWest’s first-quarter completed departures were down 26%, with block hours down 23%, compared to the first quarter of 2020.
SkyWest flies regional jets on behalf of major airlines. Photo: Getty Images
Operating expenses were $454 million for the first quarter, down 32% from the same quarter in 2020. SkyWest attributed the reduction to $193 million in grants from the US government and fewer costs attributed to fewer flights operated in the first quarter.
SkyWest’s fleet and contract changes
SkyWest has to work with major US airlines to determine how much flying it will do. The carrier added one new CRJ900 financed by Delta in the first quarter. This was part of a previously announced deal.
For American, a previous contract for 20 Embraer E175 aircraft continued. In the second half of 2021, SkyWest anticipates 18 E175 deliveries with two deliveries in 2022. The aircraft are scheduled to be placed into service in 2022, with SkyWest financing the aircraft through debt.
In addition to Embraer E175 flying with American, SkyWest also expanded its flying for American. The carrier placed nine used CRJ700s into service during the first quarter, with another 16 used CRJ700s planned to enter service over the remainder of 2021. This will bring the total CRJ700 flying for American by SkyWest to 90 aircraft.
The airline’s fleet at the end of March was the following:
The bulk of SkyWest’s regional fleet is made up of CRJ jets. Photo: Jay Singh | Simple Flying
The Embraer E175s are coming back
In terms of block hours, SkyWest’s total fleet-wide block hours were down nearly 23% compared to the first quarter of 2020. The aircraft type that is flying the most is the Embraer E175s. The airline’s total block hours flown by the E175 is down less than 4% compared to the same quarter in 2020.
Total Block Hours276,182357,223Down 22.7%
SkyWest is flying 30 more E175s at the end of the first quarter of 2021 than the end of the first quarter of 2020. It is flying three fewer CRJ900s, ten more CRJ700s, and 53 fewer CRJ200s. Airlines are moving away from all-economy 50-seater jets. Delta, which has some CRJ200s placed with SkyWest, is looking to end CRJ200 flying by the end of 2023.
Delta Air Lines is getting rid of its CRJ200s over the next couple of years. Photo: Getty Images
For the full-year 2020, SkyWest’s E175 block hours were down only 17.7% compared to what it flew in 2019. CRJ900 flying for the year was down 46.6%, and CRJ200 flying was down 47.2%. CRJ700 flying was down 32.7%.
So, despite a significant increase in the number of aircraft in scheduled service, the Embraer E175s block hours are down by a relatively small amount. Meanwhile, the CRJ200s are flying less than half of the block hours flown in early 2020 and are flying fewer overall block hours than the CRJ700s, a smaller fleet at SkyWest.
American Airlines is growing E175 operations with SkyWest. Photo: Vincenzo Pace | Simple Flying
With the end of the CRJ program after Bombardier sold off the program to Mitsubishi, SkyWest will mainly be taking Embraer E175 aircraft that these airlines have ordered. Airlines love the E175 thanks to its efficiency and low-cost to operate.
SkyWest will likely be flying the E175 for years to come and may, perhaps, fly the E175-E2 one day, assuming that scope clauses are renegotiated to include the next-generation aircraft with more efficient engines.
What do you make of SkyWest’s first-quarter results? Let us know in the comments!
Article Source simpleflying.com