Friday, February 13, 2015

SkyWest reports $24.2 million net loss in 2014

SkyWest Inc., the St. George, Utah-based parent of regional carriers SkyWest Airlines and ExpressJet Airlines, posted a full-year net loss of $24.2 million for 2014, reversing the $59 million net profit the company recorded in 2013.

Full-year revenue was $3.24 billion, down 1.8% from $3.3 billion in 2013; SkyWest’s 2014 operating expenses increased 2.2% year-over-year (YOY) to $3.21 billion. The resulting operating profit—$24.8 million—was down 83.8% from 2013’s $153.1 million gross result.

For the 2014 fourth-quarter, SkyWest recorded a $27.9 million net loss, a reversal of the $8.6 million net profit the carrier posted in fourth quarter of 2013. Revenue for the quarter was $813.9 million, up 1.2% YOY; expenses grew 7.8% YOY to $833.6 million, resulting in a quarterly operating loss of $19.7 million.

A $70 million special item expense was incurred by the carrier during the fourth-quarter, “due to the accelerated retirement of SkyWest’s [Embraer] EMB-120 turboprop aircraft and a codeshare agreement modification that shortened the contract term for ExpressJet’s operation of the ERJ-145 aircraft type,” SkyWest said.

“SkyWest made significant progress in executing our long-term strategy in the fourth quarter, including reducing the total number of unprofitable aircraft and flying over time,” SkyWest chairman and CEO Jerry Atkin said. “We expect that reducing our total fleet count while improving the overall fleet composition will put us on a path of continued financial and operational improvement.”

In 2014, SkyWest and ExpressJet’s combined passenger traffic slipped 1.1% YOY to 31.5 billion RPMs; capacity also contracted, to 38.2 billion ASMs, or 2.5% YOY. As a result, the full-year passenger load factor for the two airlines came to 82.4%, a YOY rise of 1.2 points. SkyWest’s full-year RASM grew 1.2% YOY to 8.5¢; CASM increased 4.9% YOY to 8.6¢; Full-year yield was down 1%YOY to 10.1¢.

In addition to SkyWest Airlines’ ongoing removal of 43 EMB-120 Brasilia turboprops (due for completion by the end of 2Q 2015), ExpressJet removed 26 ERJ-145s from its United flying contract in 2014 and returned the aircraft to United. ExpressJet intends to remove from service and return to United an additional 59 ERJ-145s and nine ERJ-135s in 2015.

As of Dec. 31, 2014, SkyWest’s combined fleet consisted of “approximately 749 regional aircraft,” the company said, compared to 757 aircraft at the end of 2013. In its year-end financial statement, SkyWest estimated its combined available-for-service fleet will consist of 658 regional jets and 13 turboprops by the end of the 2015 first-quarter; 661 regional jets by the end of the 2015second-quarter; 655 regional jets by the end of the 2015 third-quarter; and 636 total regional jets in the combined fleet by the conclusion of 2015.

(Mark Nensel - ATWOnline News)

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