SkyWest traverses the skies in every direction -- not just west. The airline operates through two main segments: SkyWest Airlines and ExpressJet. SkyWest has destinations to about 275 cities in the US, Canada, Mexico, and the Caribbean, supporting 3,800 daily departures. Combined, SkyWest's carriers operate a fleet of about 760 aircraft consisting of Canadair regional jets (CRJs, made by Bombardier) and turboprops. SkyWest also has a code-sharing agreement with Delta Air Lines and United Continental's United Airlines. (Code-sharing allows airlines to sell tickets on one another's flights.)
SkyWest operates through two reportable segments: SkyWest Airlines and ExpressJet (which reflects the combined operations of Atlantic Southeast and ExpressJet Delaware). SkyWest Airlines provides regional jet and turboprop service to airports primarily located in the Midwestern and western United States. ExpressJet provides regional jet service principally in the US, primarily from airports located in Atlanta; Cleveland; Chicago (O'Hare); Denver; Houston; Detroit; Memphis; Newark, New Jersey; Minneapolis; and Washington Dulles.
Along with regional passenger transportation, which accounts for nearly all of its sales (98%), SkyWest provides ground handling services -- loading and unloading of aircraft -- for other airlines at several of the airports where it operates.
Sales and Marketing
During 2013 about 90% of SkyWest's passenger revenues related to contract flights, where Delta, United, Alaska, American, and US Airways controlled scheduling, ticketing, pricing, and seat inventories.
SkyWest's balance sheet has experienced turbulence over the years. Although it posted revenues of $3.65 billion in 2011 (the highest in its history), revenues declined 3% in 2012 to $3.53 billion and fell 7% in 2013 to $3.3 billion.
The revenue drops were attributed to decreased decreases in fuel, landing fee, station rent, and engine overhaul reimbursements from major partners. It was also pained by a dip in ground handling revenue for other airlines and a reduction of rental revenue associated with the termination of an aircraft sub-lease.
After suffering a net loss of $27 million in 2011, SkyWest posted positive net income of $51 million in 2012 and $59 million in 2013. The net income growth was laregly due to a reduction in fuel costs, landing feeds, and other expenses. SkyWest's operating cash flow climbed in 2013 mainly due to the receipt of $49 million of cash from United for amounts previously deferred.
Amid growing demand by airline giants to cut costs by outsourcing regional flights, SkyWest is moving to further diversify its operations and marketplace presence. Owning ExpressJet positions SkyWest as a strong competitor for more business from Delta and United, as well as for contracts from other carriers. Industry turbulence, however, is growing as air carriers move to consolidate.