SKYWEST INC (SKYW)

CIK: 0000793733. SIC: 4512 Air Transportation, Scheduled. Latest 10-K as of: 2026-02-17.

SIC breadcrumb: Transportation, Communications, Electric, Gas, And Sanitary Services > SIC Major Group 45 > SIC 4512 Air Transportation, Scheduled

SEC company page: https://www.sec.gov/edgar/browse/?CIK=793733. Latest filing source: 0001104659-26-016358.

Selected Fundamentals

Metric	Value	Unit	FY	Filed
Revenue	4,058,202,000	USD	2025	2026-02-17
Net income	428,334,000	USD	2025	2026-02-17
Assets	7,386,249,000	USD	2025	2026-02-17

Financials

Annual standardized facts from SEC companyfacts as of latest extracted filing date 2026-02-17. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0000793733.json. Derived margins are computed from the extracted annual SEC facts.

Flow metrics use full-year FY periods from 10-K/10-K/A filings; balance-sheet metrics use FY-end instants. Missing metrics are omitted rather than fabricated.

Metric	2016	2017	2018	2019	2020	2021	2022	2023	2024	2025
Revenue	3,063,702,000	3,122,592,000	3,221,679,000	2,971,963,000	2,127,106,000	2,713,491,000	3,004,925,000	2,935,432,000	3,527,920,000	4,058,202,000
Net income								34,342,000	322,962,000	428,334,000
Operating income	-172,684,000	388,199,000	474,280,000	512,258,000	108,802,000	275,867,000	181,162,000	104,069,000	494,657,000	617,846,000
Diluted EPS	-3.14	8.08	5.30	6.62	-0.17	2.20	1.44	0.77	7.77	10.35
Assets	5,007,966,000	5,474,400,000	6,313,212,000	6,657,129,000	6,887,622,000	7,125,947,000	7,414,553,000	7,026,293,000	7,139,867,000	7,386,249,000
Stockholders' equity	1,350,943,000	1,754,322,000	1,964,281,000	2,175,014,000	2,139,545,000	2,267,514,000	2,347,631,000	2,113,502,000	2,408,781,000	2,746,433,000
Cash and cash equivalents	146,766,000	181,792,000	328,384,000	87,206,000	215,723,000	258,421,000	102,984,000	148,277,000	227,362,000	122,673,000
Net margin								1.17%	9.15%	10.55%
Operating margin	-5.64%	12.43%	14.72%	17.24%	5.12%	10.17%	6.03%	3.55%	14.02%	15.22%

Financial Charts

Quarterly

Quarterly standardized facts from SEC companyfacts as of latest extracted filing date 2026-04-24. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0000793733.json.

Flow metrics use discrete quarter-length periods from 10-Q/10-Q/A filings. Q4 revenue and net income are derived only when annual FY and nine-month YTD facts exist for the same fiscal year; derived Q4 values are labeled. EPS Q4 is not derived.

Quarter	End Date	Revenue	Net Income	Diluted EPS	Method
2022-Q2	2022-06-30			1.07	reported discrete quarter
2022-Q3	2022-09-30			0.96	reported discrete quarter
2023-Q1	2023-03-31			-0.45	reported discrete quarter
2023-Q2	2023-06-30	725,643,000		0.35	reported discrete quarter
2023-Q3	2023-09-30	766,171,000		0.55	reported discrete quarter
2023-Q4	2023-12-31	751,787,000			derived Q4 = FY annual - nine-month YTD
2024-Q1	2024-03-31	803,614,000		1.45	reported discrete quarter
2024-Q2	2024-06-30	867,118,000		1.82	reported discrete quarter
2024-Q3	2024-09-30	912,786,000		2.16	reported discrete quarter
2024-Q4	2024-12-31	944,402,000			derived Q4 = FY annual - nine-month YTD
2025-Q1	2025-03-31	948,455,000		2.42	reported discrete quarter
2025-Q2	2025-03-31		100,551,000		reported discrete quarter
2025-Q3	2025-06-30		120,269,000		reported discrete quarter
2025-Q2	2025-06-30	1,035,227,000		2.91	reported discrete quarter
2025-Q3	2025-09-30	1,050,029,000		2.81	reported discrete quarter
2025-Q4	2025-12-31	1,024,491,000	91,156,000		derived Q4 = FY annual - nine-month YTD
2026-Q1	2026-03-31	1,013,177,000	101,692,000	2.50	reported discrete quarter

Quarterly Charts

Macro Cross-References

CPIAUCSL - Consumer Price Index for All Urban Consumers: All Items in U.S. City Average
UNRATE - Unemployment Rate
FEDFUNDS - Federal Funds Effective Rate
CES0500000003 - Average Hourly Earnings of All Employees, Total Private
DFEDTARU - Federal Funds Target Range - Upper Limit
DFEDTARL - Federal Funds Target Range - Lower Limit
DGS3MO - Market Yield on U.S. Treasury Securities at 3-Month Constant Maturity
DGS2 - Market Yield on U.S. Treasury Securities at 2-Year Constant Maturity
DGS10 - Market Yield on U.S. Treasury Securities at 10-Year Constant Maturity
DGS30 - Market Yield on U.S. Treasury Securities at 30-Year Constant Maturity
T10Y2Y - 10-Year Treasury Constant Maturity Minus 2-Year Treasury Constant Maturity
CPILFESL - Consumer Price Index for All Urban Consumers: All Items Less Food and Energy
CPIUFDSL - Consumer Price Index for All Urban Consumers: Food
CPIENGSL - Consumer Price Index for All Urban Consumers: Energy
CUSR0000SAH1 - Consumer Price Index for All Urban Consumers: Shelter
PCEPI - Personal Consumption Expenditures: Chain-type Price Index
PCEPILFE - Personal Consumption Expenditures Excluding Food and Energy: Chain-type Price Index
PPIACO - Producer Price Index by Commodity: All Commodities
T10YIE - 10-Year Breakeven Inflation Rate
U6RATE - Total Unemployed, Plus All Marginally Attached Workers Plus Total Employed Part Time for Economic Reasons
PAYEMS - All Employees, Total Nonfarm
CIVPART - Labor Force Participation Rate
EMRATIO - Employment-Population Ratio
UNEMPLOY - Unemployed
CE16OV - Employment Level
ICSA - Initial Claims
JTSJOL - Job Openings: Total Nonfarm
JTSQUR - Quits: Total Nonfarm
GDPC1 - Real Gross Domestic Product
A191RL1Q225SBEA - Real Gross Domestic Product: Percent Change from Preceding Period
INDPRO - Industrial Production: Total Index
TCU - Capacity Utilization: Total Index
HOUST - New Privately-Owned Housing Units Started: Total Units
PERMIT - New Privately-Owned Housing Units Authorized in Permit-Issuing Places: Total Units
RSAFS - Advance Retail Sales: Retail Trade
PCE - Personal Consumption Expenditures
DSPIC96 - Real Disposable Personal Income
PSAVERT - Personal Saving Rate
M2SL - M2
BOPGSTB - U.S. International Trade in Goods and Services: Balance
MSPUS - Median Sales Price of Houses Sold for the United States
HSN1F - New One Family Houses Sold: United States
RHORUSQ156N - Homeownership Rate in the United States
TTLCONS - Total Construction Spending: Total Construction in the United States
RRVRUSQ156N - Rental Vacancy Rate in the United States
TOTALSL - Total Consumer Credit Owned and Securitized
REVOLSL - Revolving Consumer Credit Owned and Securitized
DRCCLACBS - Delinquency Rate on Credit Card Loans, All Commercial Banks
GDP - Gross Domestic Product
GPDI - Gross Private Domestic Investment
GCE - Government Consumption Expenditures and Gross Investment
PCEC - Personal Consumption Expenditures
NETEXP - Net Exports of Goods and Services
GFDEBTN - Federal Debt: Total Public Debt
GFDEGDQ188S - Federal Debt: Total Public Debt as Percent of Gross Domestic Product
FYFSD - Federal Surplus or Deficit
FGRECPT - Federal Government Current Receipts
FGEXPND - Federal Government: Current Expenditures
MANEMP - All Employees, Manufacturing
USCONS - All Employees, Construction
USTRADE - All Employees, Retail Trade
USFIRE - All Employees, Financial Activities
USGOVT - All Employees, Government
AWHAETP - Average Weekly Hours of All Employees, Total Private
DGORDER - Manufacturers' New Orders: Durable Goods
NEWORDER - Manufacturers' New Orders: Nondefense Capital Goods Excluding Aircraft
BUSINV - Total Business Inventories
EXPGS - Exports of Goods and Services
IMPGS - Imports of Goods and Services
IR - Import Price Index (End Use): All Commodities
PPIFIS - Producer Price Index by Commodity: Final Demand

Latest quarter (10-Q)

Latest 10-Q source: 0001104659-26-048542.

Extracted between Part I Item 2 and the next Item 3/4 or Part II heading after HTML sanitization. Confidence: high. Filing date: 2026-04-24. Report date: 2026-03-31.

ITEM 2: MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis presents factors that had a material effect on the results of operations of SkyWest, Inc. (“SkyWest,” “we” or “us”) during the three-month periods ended March 31, 2026 and 2025. Also discussed is our financial condition as of March 31, 2026, and December 31, 2025. You should read this discussion in conjunction with our condensed consolidated financial statements for the three months ended March 31, 2026, including the notes thereto, appearing elsewhere in this Report. This discussion and analysis contains forward-looking statements. Please refer to the section of this Report entitled “Cautionary Statement Concerning Forward-Looking Statements” for discussion of uncertainties, risks and assumptions associated with these statements.

Cautionary Statement Concerning Forward-Looking Statements

Certain of the statements contained in this Report should be considered “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements may be identified by words such as “may,” “will,” “expect,” “intend,” “forecast,” “anticipate,” “believe,” “estimate,” “plan,” “project,” “could,” “should,” “hope,” “likely,” and “continue” and similar terms used in connection with statements regarding our outlook, anticipated operations, the revenue environment, our contractual relationships, and our anticipated financial performance. These statements include, but are not limited to, statements about the continued demand for our product, the effect of economic conditions on SkyWest’s business, financial condition and results of operations, the timing of scheduled aircraft deliveries and returns, fleet expansion, changes in aircraft seat configurations, transition and anticipated fleet size for SkyWest in upcoming periods, expected production levels in future periods and associated recovery from captain staffing challenges, pilot attrition trends, SkyWest’s coordination with United Airlines, Inc. (“United”), Delta Air Lines, Inc. (“Delta”), American Airlines, Inc. (“American”) and Alaska Airlines, Inc. (“Alaska”) (each, a “major airline partner” and together, “major airline partners”) regarding the delivery of aircraft under previously announced agreements and timing of placing new aircraft deliveries into service, the expected terms, timing and benefits related to SkyWest’s leasing, strategic arrangements, strategic agreements and equity investments in third parties, the potential use of SkyWest Charter, LLC (“SWC”) as a commuter air carrier, SkyWest’s provision of assets to Corporate Flight Management, Inc. d/b/a Contour Airlines, increasing the utilization and efficiency of all fleet types as well as SkyWest’s future financial and operating results, plans, objectives, expectations, estimates, intentions and outlook, and other statements that are not historical facts. All forward-looking statements included in this Report are made as of the date hereof and are based on information available to SkyWest as of such date. SkyWest assumes no obligation to update any forward-looking statements unless required by law. Readers should note that many factors could affect the future operating and financial results of SkyWest and could cause actual results to vary materially from those expressed in forward-looking statements set forth in this Report. These factors include, but are not limited to the challenges of competing successfully in a highly competitive and rapidly changing industry; developments associated with fluctuations in the economy and the demand for air travel, including related to inflationary pressures, and related decreases in customer demand and spending; uncertainty regarding potential future outbreaks of infectious diseases or other health concerns, and the consequences of such outbreaks to the travel industry, including travel demand and travel behavior, and our major airline partners in general and the financial condition and operating results of SkyWest in particular; the prospects of entering into agreements with existing or other carriers to fly new aircraft; uncertainty regarding timing and performance of key third-party service providers; ongoing negotiations between SkyWest and its major airline partners regarding their contractual obligations; uncertainties regarding operation of new aircraft; the ability to attract and retain qualified pilots, mechanics and other personnel in operations; the impact of regulatory issues such as pilot rest rules and qualification requirements; the ability to obtain aircraft financing; the financial stability of SkyWest’s major airline partners and any potential impact of their financial condition on the operations of SkyWest; fluctuations in flight schedules, which are determined by the major airline partners for whom SkyWest conducts flight operations; variations in market and economic conditions; significant aircraft debt commitments; estimated useful life of long-lived assets, residual aircraft values and related asset impairments; labor relations and costs; the impact of global instability; rapidly fluctuating fuel costs and potential fuel shortages; the impact of weather-related, natural disasters and other air safety incidents on air travel and airline costs; aircraft deliveries; uncertainty regarding ongoing international hostilities, including those between Russia and Ukraine, Israel and Hamas, and Israel, the United States and Iran, and the related impacts on macroeconomic conditions, fuel costs and the international operations of any of our major airline partners as a result of such conflicts; the availability of parts used in connection with maintenance and repairs of the aircraft; the availability of suitable replacement aircraft for aging aircraft; the impact of enacted and proposed U.S. tariffs on global

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economic conditions and the financial markets, passenger demand, the cost of aircraft parts and supplies sourced internationally and the cost of service providers located outside of the United States; the impact of potential future U.S. government shutdowns on air traffic controller staffing, flight cancellations and federal Essential Air Service subsidies; as well as the other factors identified under the heading “Risk Factors” in Part I, Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2025, under the heading “Risk Factors” in Part II, Item 1A of this Report, elsewhere in this Report, in our other filings with the Securities and Exchange Commission (the “SEC”) and other unanticipated factors.

There may be other factors that may affect matters discussed in forward-looking statements set forth in this Report, which factors may also cause actual results to differ materially from those discussed. We assume no obligation to publicly update any forward-looking statement to reflect actual results, changes in assumptions or changes in other factors affecting these statements other than as required by applicable law.

Overview

We have the largest regional airline operation in the United States through our operating subsidiary SkyWest Airlines, Inc. (“SkyWest Airlines”). As of March 31, 2026, we offered scheduled passenger and air freight service with approximately 2,370 total daily departures to destinations in the United States, Canada and Mexico. Our fleet of Embraer E175 regional jet aircraft (“E175”), Canadair CRJ900 regional jet aircraft (“CRJ900”) and Canadair CRJ700 regional jet aircraft (“CRJ700”), including a 50-seat configuration of the CRJ700 aircraft, commonly referred to as a “CRJ550,” have a multiple-class seat configuration, whereas our Canadair CRJ200 regional jet aircraft (“CRJ200”) have a single-class seat configuration. SWC offers on-demand charter services using CRJ200 aircraft in a 30-seat configuration. As of March 31, 2026, we had 639 total aircraft in our fleet, including 500 aircraft in scheduled service or under contract pursuant to our code-share agreements, summarized as follows:





























    

E175



CRJ900

    

CRJ700



CRJ550

    

CRJ200

    

Total

United

121



—



8



30



67

226

Delta



87



34



2



16



—



139

American

20



4



68



—



—

92

Alaska

43



—



—



—



—

43

Aircraft in scheduled service or under contract



271



38



78



46



67



500

SWC



—



—



—



—



11



11

Leased to third parties

—



5



1



41



—



47

Operational spares (1)



—



7



14



—



24



45

In storage(2)

—



—



—



—



36



36

Total Fleet

271



50



93



87



138



639

(1)

Includes supplemental spare aircraft supporting our code-share agreements or aircraft undergoing cabin reconfigurations.

(2)

Aircraft in storage may be available for future flying opportunities.

Our business model is based on providing scheduled regional airline service under code-share agreements (commercial agreements between airlines that, among other things, allow one airline to use another airline’s flight designator codes on its flights) with our major airline partners. In exchange for such services, our major airline partners pay us either fixed fees to operate the flight, referred to as “capacity purchase agreement,” or we receive a percentage of applicable passenger ticket revenues on the designated flights we operate, referred to as “prorate agreement.” Our success is principally centered on our ability to meet the needs of our major airline partners by providing a reliable and safe operation at attractive economics. From March 31, 2025, to March 31, 2026, we made changes to our fleet, including the addition of eight new E175 aircraft and one partner-financed E175 aircraft.

We anticipate our fleet will continue to evolve, as we are scheduled to add a total of eight new E175 aircraft with United in 2026 and 16 new E175 aircraft with Delta between 2027 and 2028 (which are expected to replace 15 CRJ900s and two CRJ700s we are currently flying under contract with Delta). We also have multiple agreements with United to place 18 used CRJ550 aircraft into service between 2026 and 2027. Timing of placing these additional aircraft into service, including delivery timing on acquired aircraft, may be subject to change as we are coordinating with our

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major airline partners in response to labor availability or other factors. As of March 31, 2026, we operated 19 CRJ900s owned by Delta, and we anticipate returning these 19 aircraft to Delta over the next two years. Our primary objective in the fleet changes is to improve our profitability by adding new E175 aircraft and used CRJ700, CRJ550, CRJ900 and E175 aircraft, commonly referred to as “dual-class aircraft” due to the first-class seat offerings, to our capacity purchase agreements or prorate agreements, and potentially removing older aircraft from service that typically require higher maintenance costs. Additionally, during the three months ended March 31, 2026, we announced a new configuration of the CRJ200 aircraft that will have 41 seats, including seven first-class seats (referred to as a “CRJ450” aircraft). We anticipate operating the first CRJ450 in scheduled service by the end of 2026. We anticipate completing the conversion of approximately 50 CRJ200s to the CRJ450 configuration by 2028.

As of March 31, 2026, approximately 45.2% of our aircraft in scheduled service or under contract were operated for United, approximately 27.8% were operated for Delta, approximately 18.4% were operated for American and approximately 8.6% were operated for Alaska.

Historically, multiple contractual relationships with major airlines have enabled us to reduce our reliance on any single major airline code and to enhance and stabilize operating results through

[Excerpt truncated for page length; source filing is linked above.]

Latest 10-K MD&A

Extracted between Item 7 and the next Item 7A/8 heading after HTML sanitization. Confidence: high. Filing date: 2026-02-17. Report date: 2025-12-31.

ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis presents factors that had a material effect on our results of operations during the years ended December 31, 2025 and 2024. Also discussed is our financial condition as of December 31, 2025 and 2024. You should read this discussion in conjunction with our consolidated financial statements, including the notes thereto, appearing elsewhere in this Report or incorporated herein by reference. This discussion and analysis contains forward-looking statements. Please refer to the sections of this Report entitled “Cautionary Statement Concerning Forward-Looking Statements” and “Item 1A. Risk Factors” for discussion of some of the uncertainties, risks and assumptions associated with these statements.

This section of this Annual Report on Form 10-K generally discusses 2025 and 2024 items and year-to-year comparisons between 2025 and 2024. Discussions of 2023 items and year-to-year comparisons between 2024 and 2023 that are not included in this Annual Report on Form 10-K can be found in the section entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 of the Company’s Annual Report on Form 10-K for the year ended December 31, 2024.

Overview

We have the largest regional airline operation in the United States through our operating subsidiary SkyWest Airlines. As of December 31, 2025, we offered scheduled passenger and air freight service with approximately 2,260 total daily departures to destinations in the United States, Canada and Mexico. Our fleet of E175, CRJ900, CRJ700 and

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CRJ550 have a multiple-class seat configuration, whereas our CRJ200 have a single-class seat configuration. During 2022, we formed SWC, which offers on-demand charter services using CRJ200 aircraft in a 30-seat configuration. As of December 31, 2025, we had 637 total aircraft in our fleet, including 487 aircraft in scheduled service or under contract pursuant to our code-share agreements, summarized as follows:

























    

E175

    

CRJ900

    

CRJ700/CRJ550

    

CRJ200

    

Total

United

121



—



37



58



216

Delta



87



32



18



—



137

American

20



4



68



—



92

Alaska

42



—



—



—



42

Aircraft in scheduled service or under contract



270



36



123



58



487

SWC



—



—



—



11



11

Leased to third parties

—



5



40



—



45

Other (1)

—



10



15



69



94

Total Fleet

270



51



178



138



637

(1)

As of December 31, 2025, other aircraft included: supplemental spare aircraft supporting our code-share agreements that may be placed under future code-share or leasing agreements, aircraft scheduled to be placed under a code-share agreement with one of our major airline partners or aircraft that are scheduled to be disassembled for use as spare parts.

Our business model is based on providing scheduled regional airline service under code-share agreements (commercial agreements between airlines that, among other things, allow one airline to use another airline’s flight designator codes on its flights) with our major airline partners. In exchange for such services, our major airline partners pay us either fixed fees to operate the flight, referred to as “capacity purchase agreement,” or we receive a percentage of applicable passenger ticket revenues on the designated flights we operate, referred to as “prorate agreement.” Our success is principally centered on our ability to meet the needs of our major airline partners by providing a reliable and safe operation at attractive economics. During the year ended December 31, 2025, we made changes to our fleet, including the addition of seven new E175 aircraft and one partner-financed E175 aircraft.

We anticipate our fleet will continue to evolve, as we are scheduled to add a total of eight new E175 aircraft with United in 2026, 16 new aircraft with Delta between 2027 and 2028 (which are expected to replace 12 CRJ900s and four CRJ700s we are currently flying under contract with Delta) and one new E175 aircraft with Alaska in 2026. We also have multiple agreements with United to place 23 used CRJ550 aircraft into service in 2026. Timing of placing these additional aircraft into service, including delivery timing on acquired aircraft, may be subject to change as we are coordinating with our major airline partners in response to labor availability or other factors. Our primary objective in the fleet changes is to improve our profitability by adding new E175 aircraft and used CRJ700, CRJ550, CRJ900 and E175 aircraft, commonly referred to as “dual-class aircraft” due to the first-class seat offerings, to our capacity purchase agreements or prorate agreements, and potentially removing older aircraft from service that typically require higher maintenance costs.

For the year ended December 31, 2025, approximately 44.4% of our aircraft in scheduled service or under contract were operated for United, approximately 28.1% were operated for Delta, approximately 18.9% were operated for American and approximately 8.6% were operated for Alaska.

Historically, multiple contractual relationships with major airlines have enabled us to reduce our reliance on any single major airline code and to enhance and stabilize operating results through a mix of our capacity purchase agreements and our prorate agreements. For the year ended December 31, 2025, our capacity purchase revenue represented approximately 84.3% of our total flying agreements revenue and our prorate and SWC revenue, combined, represented approximately 15.7% of our total flying agreements revenue. On capacity purchase routes, the major airline partner controls scheduling, ticketing, pricing and seat inventories and we are compensated by the major airline partner at contracted rates based on completed block hours (measured from takeoff to landing, including taxi time), flight departures, the number of aircraft under contract and other operating measures. We control scheduling, pricing and seat inventories on certain prorate routes, and we share passenger fares with our major airline partners according to prorate formulas. We are also responsible for the operating costs of the prorate flights, including fuel and airport costs.

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Financial Highlights

We had total operating revenues of $4.1 billion for the year ended December 31, 2025, a 15.0% increase compared to total operating revenues of $3.5 billion for the year ended December 31, 2024. We had net income of $428.3 million, or $10.35 per diluted share, for the year ended December 31, 2025, compared to net income of $323.0 million, or $7.77 per diluted share, for the year ended December 31, 2024. The significant items affecting our revenue and operating expenses during the year ended December 31, 2025, are outlined below:

Revenue

The number of aircraft we have in scheduled service or under contract pursuant to our code-share agreements and the number of block hours we incur on our flights are primary drivers of our flying agreements revenue under our capacity purchase agreements. The number of flights we operate and the corresponding number of passengers we carry are the primary drivers of our revenue under our prorate agreements. The number of aircraft we have in scheduled service or under contract pursuant to our code-share agreements decreased from 492 as of December 31, 2024, to 487 as of December 31, 2025, or by 1.0%; and the number of block hours increased from 1.3 million in 2024 to 1.5 million in 2025, or by 14.7%, primarily due to an increase in the scheduled daily utilization of our aircraft driven by an increase in the number of available captains.

Our capacity purchase revenue increased $319.3 million, or 10.8%, from 2024 to 2025, primarily as a result of an increase in completed block hours for the comparable periods. As a result of a higher number of passengers carried on our prorate routes and an increase in the number of prorate and charter flights operated year-over-year, our prorate and SWC revenue increased $153.0 million, or 33.5%, in 2025, as compared to 2024.

Operating Expenses

Our total operating expenses increased $407.1 million, or 13.4%, for the year ended December 31, 2025, compared to the year ended December 31, 2024. The increase in operating expenses was primarily due to an increase in our direct operating expenses associated with the increase in the number of flights we operated for the year ended December 31, 2025, compared to the year ended December 31, 2024. Departures increased from 766,742 for the year ended December 31, 2024 to 863,513 for the year ended December 31, 2025, or by 12.6%, and our total block hours increased 14.7% in 2025, as compared to 2024. Additional details regarding the increase in our operating expenses are described in the section of this Report entitled “Results of Operations.”

Fleet Activity

The following table summarizes our fleet in service or under contract as of December 31, 2024 and December 31, 2025:



















Aircraft in Service or Under Contract

    

December 31, 2024

    

Additions

    

Removals



December 31, 2025

E175s

262



8



—



270

CRJ900s

36



4



(4)



36

CRJ700/CRJ550s

119



18



(14)



123

CRJ200s

75



—



(17)



58

Total

492

30

(35)



487

During 2025, we took delivery of seven new E175 aircraft and placed the aircraft into service under capacity purchase agreements, and we placed one partner-financed E175 aircraft into service under a capacity purchase agreement. We placed 18 SkyWest owned CRJ550 aircraft into service under a capacity purchase agreement or prorate agreement, while removing 14 CRJ700 aircraft from flying agreements. We placed four SkyWest owned CRJ900 aircraft into service under a prorate agreement while removing four partner-financed CRJ900 aircraft from flying agreements. We also removed 17 CRJ200 aircraft from service during 2025. We are evaluating alternative uses for the CRJ200 aircraft removed from service.

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Results of Operations

2025 Compared to 2024

Operational Statistics

The following table sets forth our major operational statistics and the associated percentage changes for the periods identified below. The increase in block hours, departures and passengers carried during the year ended December 31, 2025, compared to the year ended December 31, 2024, was primarily due to an increase in the number of block hours incurred per aircraft as the number of available captains did not significantly limit our flight schedules during 2025, compared to 2024, which allowed for a higher scheduled utilization of our aircraft.





















For the year ended December 31,

Block hours by aircraft type:

    

2025

    

2024

    

% Change

E175s

863,876



792,318



9.0

%

CRJ900s



94,568



84,883



11.4

%

CRJ700s/CRJ550s



329,347



244,909



34.5

%

CRJ200s

193,932



169,930



14.1

%

Total block hours



1,481,723



1,292,040



14.7

%





























Departures

863,513



766,742



12.6

%

Passengers carried

46,021,999



42,335,302



8.7

%

Passenger load factor

81.5

%  

82.8

%  

(1.3)

pts

Average passenger trip length (miles)

457



464



(1.5)

%

Operating Revenues

The following table summarizes our operating revenue for the periods indicated (dollar amounts in thousands):































For the year ended December 31,



    

2025

    

2024

    

$ Change

    

% Change

Flying agreements



$

3,885,153



$

3,412,798



$

472,355



13.8

%

Lease, airport services and other



173,049



115,122



57,927



50.3

%

Total operating revenues



$

4,058,202



$

3,527,920



$

530,282

15.0

%

Flying agreements revenue primarily consists of revenue earned on flights we operate under our capacity purchase agreements and prorate agreements with our major airline partners and on-demand charter flights. Lease, airport services and other revenues consist of revenue earned from leasing aircraft and spare engines to third parties separate from our capacity purchase agreements, providing maintenance services to other airlines and providing airport counter, gate and ramp services.

We disaggregate our flying agreements revenue into the following categories (dollar amounts in thousands):































For the year ended December 31,





2025



2024



$ Change



% Change

Capacity purchase agreements flight operations revenue

    

$

2,590,735

    

$

2,415,598

    

$

175,137

    

7.3

%

Capacity purchase agreements aircraft lease revenue



684,005



539,810



144,195

26.7

%

Prorate agreements and SWC revenue



610,413





457,390





153,023

33.5

%

Flying agreements revenue



$

3,885,153



$

3,412,798



$

472,355

13.8

%

The increase in “Capacity purchase agreements flight operations revenue” of $175.1 million, or 7.3%, for the year ended December 31, 2025, compared to the year ended December 31, 2024, was primarily due to a 14.7% year-over-year increase in block hour production from aircraft under our capacity purchase agreements, offset by a capacity purchase agreement contract extension in 2025 that decreased the allocation of certain fixed monthly revenue from flight

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operations revenue and increased the allocation of such payments to aircraft lease revenue based on relative standalone selling prices of the lease and non-lease components for the year ended December 31, 2025.

Under our capacity purchase agreements, we are paid a fixed amount per month per aircraft over the contract term. We recognize the total projected fixed monthly payments per aircraft as revenue proportionately to the number of block hours we complete for each reporting period, relative to the estimated number of block hours we anticipate completing over the remaining contract term. Under our capacity purchase agreements, the performance obligation of each completed flight is measured in block hours incurred for each completed flight. Based on the number of completed block hours during the year ended December 31, 2025, we recognized a total of $38.3 million of previously deferred revenue and unbilled revenue related to the non-lease fixed monthly payments we received associated with our flight operations revenues. For the year ended December 31, 2024, we recognized a total of $43.4 million of previously deferred revenue and unbilled revenue related to non-lease fixed monthly payments received associated with our flight operations revenues. The timing of our revenue recognition related to the fixed payments associated with our flight operations will be adjusted over the remaining contract term for each capacity purchase agreement based on the number of block hours we complete each reporting period relative to the number of block hours we anticipate completing over the remaining contract term of each capacity purchase agreement.

The increase in “Capacity purchase agreements aircraft lease revenue” of $144.2 million, or 26.7%, for the year ended December 31, 2025, compared to the year ended December 31, 2024, was primarily driven by a change in the mix of aircraft under our capacity purchase agreements from the year ended December 31, 2024 and a capacity purchase agreement contract extension in 2025 that decreased the allocation of certain fixed monthly revenue from flight operations revenue and increased the allocation of such payments to aircraft lease revenue based on relative standalone selling prices of the lease and non-lease components for the year ended December 31, 2025. Under our capacity purchase agreements, a portion of the consideration we are paid is designed as reimbursement for certain aircraft ownership costs and is considered lease revenue, including fixed monthly payments and variable payments. We recognize the fixed monthly lease payments as lease revenue using the straight-line basis over the capacity purchase agreement term and variable lease payments are recognized in the period when the block hours are completed. Additionally, we recognized a total of $19.5 million of previously deferred lease revenue and unbilled revenue during the year ended December 31, 2025, using the straight-line basis for fixed monthly lease payments, compared to recognizing a total of $1.5 million of previously deferred revenue and unbilled revenue during the year ended December 31, 2024.

The deferred revenue balance applicable to each contract will be recorded as revenue over the term of each respective contract. For clarity, under our “Capacity purchase agreements flight operations revenue” and “Capacity purchase agreements aircraft lease revenue” combined, we recognized a total of $57.8 million of previously deferred revenue and unbilled revenue during the year ended December 31, 2025, compared to recognizing a total of $44.9 million of previously deferred revenue and unbilled revenue during the year ended December 31, 2024. Our total deferred revenue balance, associated with our “Capacity purchase agreements flight operations revenue” and our “Capacity purchase agreements aircraft lease revenue,” net of unbilled revenue, was $264.6 million as of December 31, 2025, compared to total deferred revenue, net of unbilled revenue of $322.4 million as of December 31, 2024.

The increase in prorate agreements and SWC revenue of $153.0 million, or 33.5%, for the year ended December 31, 2025, compared to the year ended December 31, 2024, was primarily due to an increase in prorate departures, passengers and passenger revenue we received on routes we operated under our prorate agreements driven by an improvement in the number of available captains during the year ended December 31, 2025, compared to the year ended December 31, 2024.

The increase in lease, airport services and other revenues of $57.9 million, or 50.3%, for the year ended December 31, 2025, compared to the year ended December 31, 2024, was primarily due to an increase in maintenance services provided to third parties, an increase in the number of leased assets, and increase in lease rates during 2025 compared to 2024.

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Operating Expenses

Individual expense components attributable to our operations are set forth in the following table (dollar amounts in thousands):































For the year ended December 31,





2025



2024



$ Change



% Change

Salaries, wages and benefits



$

1,559,356



$

1,463,932



$

95,424



6.5

%  

Aircraft maintenance, materials and repairs



943,779



712,642



231,137

32.4

%  

Depreciation and amortization



364,497



383,880



(19,383)

(5.0)

%  

Airport-related expenses



121,589



85,836



35,753

41.7

%  

Aircraft fuel



120,368



87,409



32,959

37.7

%  

Other operating expenses



330,767



299,564



31,203

10.4

%  

Total operating expenses



$

3,440,356



$

3,033,263



$

407,093

13.4

%  

Salaries, wages and benefits. The $95.4 million, or 6.5%, increase in salaries, wages and benefits for the year ended December 31, 2025, compared to the year ended December 31, 2024, was primarily due to an increase in direct labor costs that resulted from the higher number of flights we operated, partially offset by operating efficiencies from higher utilization of our aircraft during the year ended December 31, 2025, compared to the year ended December 31, 2024.

Aircraft maintenance, materials and repairs. The $231.1 million, or 32.4%, increase in aircraft maintenance expense for the year ended December 31, 2025, compared to the year ended December 31, 2024, was primarily due to incremental maintenance costs incurred on our CRJ fleet, an increase in our flight volume, which increased our maintenance activity and related expenses, and an increase in maintenance service activities provided to third parties for the year ended December 31, 2025, compared to the year ended December 31, 2024.

Depreciation and amortization. The $19.4 million, or 5.0%, decrease in depreciation and amortization expense for the year ended December 31, 2025, compared to the year ended December 31, 2024, was primarily due to certain fixed assets that became fully depreciated during 2024 and as a result of extending the estimated useful lives on our CRJ700/CRJ550 fleet by an average of three years and revising the residual values of the assets accordingly during the fourth quarter of 2024, which had a full year effect in 2025, partially offset by an increase in depreciation expense related to the acquisition of seven new E175 aircraft and spare engines since December 31, 2024.

Airport-related expenses. Airport-related expenses include airport-related customer service costs such as outsourced airport gate and ramp agent services, airport security fees, passenger interruption costs, deicing, landing fees and station rents. The $35.8 million, or 41.7%, increase in airport-related expenses for the year ended December 31, 2025, compared to the year ended December 31, 2024, was primarily due to an increase in subcontracted airport services, station rents, weather related aircraft deicing costs and landing fees as a result of an increase in the number of flights we operated under our prorate agreements. For clarity, our employee airport customer service labor costs are reflected in salaries, wages and benefits and customer service labor costs we outsource to third parties are included in airport-related expenses.

Aircraft fuel. The $33.0 million, or 37.7%, increase in fuel cost for the year ended December 31, 2025, compared to the year ended December 31, 2024, was primarily due to an increase in the number of flights we operated under our prorate agreements and under SWC and the corresponding increase in gallons of fuel we purchased, offset by a decrease in our average fuel cost per gallon from $3.19 in 2024 to $3.00 in 2025. We purchase and incur expense for all fuel on flights operated under our prorate agreements and SWC. All fuel costs incurred under our capacity purchase agreements are either purchased directly by our major airline partner, or if purchased by us, we record the direct reimbursement as a reduction to our fuel expense. The following table summarizes the gallons of fuel we purchased under our prorate agreements and SWC, for the periods indicated:

























For the year ended December 31,

(in thousands)

    

2025

    

2024

    

% Change

Fuel gallons purchased





40,160





27,386



46.6

%

Fuel expense



$

120,368



$

87,409

37.7

%

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Other operating expenses. Other operating expenses primarily consist of aircraft rentals, property taxes, hull and liability insurance, simulator costs, crew per diem, crew hotel costs and credit loss reserves. The $31.2 million, or 10.4%, increase in other operating expenses for the year ended December 31, 2025, compared to the year ended December 31, 2024, was primarily related to an increase in operating expenses associated with our higher flight volume in 2025 compared to 2024, such as crew per diem and crew hotel costs, and an increase in our credit loss reserve in 2025 as a result of our assessment of higher credit risk of certain outstanding receivables.

Summary of interest expense, interest income, other income (expense) and provision for income taxes:

Interest expense. The $9.9 million, or 8.7%, decrease in interest expense for the year ended December 31, 2025, compared to the year ended December 31, 2024, was primarily related to a decrease in outstanding debt from $2.7 billion at December 31, 2024 to $2.4 billion at December 31, 2025. Our average effective interest rate for 2025 and 2024 was 4.3% and 4.2%, respectively.

Interest income. Interest income decreased $4.6 million, from $47.9 million for the year ended December 31, 2024 to $43.3 million for the year ended December 31, 2025. The decrease in interest income was primarily related to a decrease in interest rates earned on our marketable securities from December 31, 2024 to December 31, 2025.

Other income, net. Other income, net of expenses increased $5.0 million for the year ended December 31, 2025, compared to the year ended December 31, 2024. Other income, net primarily consists of the unrealized and realized gains and losses on our investments in other companies, income or loss related to our equity method investments and gains or losses on the sale of assets. The increase in other income, net of expenses was primarily a result of an increase in the fair value of our investments in other companies for the year ended December 31, 2025, compared to the year ended December 31, 2024.

Provision for income taxes. For the years ended December 31, 2025, and December 31, 2024, our effective income tax rates were 24.3% and 25.3%, respectively, which included the statutory federal income tax rate of 21.0% and other reconciling income tax items, including state income taxes and the impact of non-deductible expenses. For the year ended December 31, 2025, the lower effective tax rate was primarily related to a higher deduction benefit related to employee equity awards that vested in 2025 compared to 2024. Our income tax provision rate may fluctuate each reporting period based on various factors including, but not limited to, the amount of our non-deductible operating expenses, relative to our income before income taxes.

Net income. Primarily due to the factors described above, we generated net income of $428.3 million, or $10.35 per diluted share, for the year ended December 31, 2025, compared to net income of $323.0 million, or $7.77 per diluted share, for the year ended December 31, 2024.

Our Business Segments 2025 compared to 2024:

Our reportable segments consist of (1) the operations of SkyWest Airlines and SWC (collectively, “SkyWest Airlines and SWC”) and (2) SkyWest Leasing activities.

Our chief operating decision maker analyzes the profitability of operating aircraft separately from the profitability of our capital deployed for new aircraft and the related financings of such aircraft, including our E175 fleet. The SkyWest Airlines and SWC segment includes revenue earned under the applicable capacity purchase agreements attributed to operating such aircraft and the respective operating costs, and revenue and operating expenses attributed to prorate agreements, airport services agreements and charter flight services. The SkyWest Leasing segment includes applicable revenue earned under the applicable capacity purchase agreements attributed to the ownership of new aircraft acquired through the issuance of debt and the respective depreciation and interest expense of such aircraft. The SkyWest Leasing segment also includes the activity of acquiring and leasing used regional jet aircraft and spare engines to third parties and other activities. The SkyWest Leasing segment’s total assets and capital expenditures include new aircraft acquired through the issuance of debt and our aircraft and engines leased to third parties.

Corporate overhead expenses, primarily consisting of administrative labor costs, were allocated to the operating expenses of SkyWest Airlines and SWC and SkyWest Leasing. Overhead expenses allocated to SkyWest Leasing reflect our estimated labor expense incurred to support SkyWest Leasing activities.

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The following table sets forth our SkyWest Airlines and SWC segment data for the years ended December 31, 2025 and 2024 (in thousands):































For the year ended December 31,





(dollar amounts in thousands)



    

2025

    

2024

    

$ Change

    

% Change

Operating revenues



$

3,415,066



$

2,905,339



$

509,727

17.5

%



























Salaries, wages and benefits





1,556,695





1,461,271





95,424



6.5

%

Aircraft maintenance, materials and repairs





877,369





684,805





192,564



28.1

%

Depreciation and amortization





157,560





145,052





12,508



8.6

%

Interest expense





11,698





12,916





(1,218)



(9.4)

%

Other segment items(1)





548,776





462,404





86,372



18.7

%

SkyWest Airlines and SWC Segment profit(2)



$

262,968



$

138,891



$

124,077



89.3

%

(1)

Other segment items for SkyWest Airlines and SWC include aircraft fuel; airport related expenses; other operating expenses consisting primarily of property taxes, hull and liability insurance, simulator costs, crew per diem and crew hotel costs and credit loss reserves; interest income and other income, net.

(2)

Segment profit is equal to income before income taxes.

SkyWest Airlines and SWC Segment Profit. SkyWest Airlines and SWC segment profit was $263.0 million for the year ended December 31, 2025, compared to $138.9 million for the year ended December 31, 2024.

SkyWest Airlines and SWC block hour production increased 14.7%, from 1,292,040 for the year ended December 31, 2024 to 1,481,723 for the year ended December 31, 2025, primarily due to an increase in the number of available captains, which allowed for a higher scheduled utilization of our aircraft. Significant items contributing to the SkyWest Airlines and SWC segment profit for the year ended December 31, 2025 are set forth below.

SkyWest Airlines and SWC operating revenues increased $509.7 million, or 17.5%, for the year ended December 31, 2025, compared to the year ended December 31, 2024, primarily due to an increase in block hour production during the year ended December 31, 2025, compared to the year ended December 31, 2024.

SkyWest Airlines and SWC’s salaries, wages and benefits expense increased $95.4 million, or 6.5%, for the year ended December 31, 2025, compared to the year ended December 31, 2024, primarily due to an increase in direct labor costs that resulted from the higher number of flights we operated, partially offset by operating efficiencies from higher utilization of our aircraft during the year ended December 31, 2025, compared to the year ended December 31, 2024.

SkyWest Airlines and SWC’s aircraft maintenance, materials and repairs expense increased $192.6 million, or 28.1%, for the year ended December 31, 2025, compared to the year ended December 31, 2024, primarily due to incremental maintenance costs incurred on our CRJ fleet and higher flight volume, which increased the maintenance activity and related expenses, for the year ended December 31, 2025, compared to the year ended December 31, 2024.

SkyWest Airlines and SWC’s depreciation and amortization expense increased $12.5 million, or 8.6%, for the year ended December 31, 2025, compared to the year ended December 31, 2024, primarily due to acquiring additional assets, including spare engines and CRJ550 aircraft since December 31, 2024.

SkyWest Airlines and SWC’s interest expense decreased $1.2 million, or 9.4%, for the year ended December 31, 2025, compared to the year ended December 31, 2024, primarily due to a decrease in outstanding debt from December 31, 2024 to December 31, 2025.

SkyWest Airlines and SWC’s other segment items increased $86.4 million, or 18.7%, for the year ended December 31, 2025, compared to the year ended December 31, 2024, primarily related to an increase in fuel costs, airport-related expenses, such as subcontracted airport services, station rents, weather-related aircraft deicing costs and

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landing fees and other operating costs, such as crew per diem and crew hotel costs, as a result of the higher number of flights we operated during the year ended December 31, 2025, compared to the year ended December 31, 2024.

The following table sets forth our SkyWest Leasing segment data for the years ended December 31, 2025 and 2024 (in thousands):































For the year ended December 31,





(dollar amounts in thousands)



    

2025

    

2024

    

$ Change

    

% Change

Operating revenues



$

643,136



$

622,581



$

20,555

3.3

%



























Salaries, wages and benefits





2,661





2,661





—



—

%

Aircraft maintenance, materials and repairs





66,410





27,837





38,573



138.6

%

Depreciation and amortization





206,937





238,828





(31,891)



(13.4)

%

Interest expense





92,747





101,424





(8,677)



(8.6)

%

Other segment items(1)





(28,242)





(41,421)





13,179



(31.8)

%

SkyWest Leasing Segment profit(2)



$

302,623



$

293,252



$

9,371



3.2

%

(1)

Other segment items for SkyWest Leasing include other operating expenses consisting primarily of property taxes and credit loss reserves; aircraft rentals; interest income and other income, net.

(2)

Segment profit is equal to income before income taxes.

SkyWest Leasing Segment Profit. SkyWest Leasing profit increased $9.4 million, or 3.2%, for the year ended December 31, 2025, compared to the year ended December 31, 2024, primarily due to an increase in revenue from maintenance services provided to third parties, a decrease in interest expense due to a decrease in outstanding debt from December 31, 2024 to December 31, 2025 and a decrease in depreciation and amortization expense primarily due to certain fixed assets that became fully depreciated during 2024 and as a result of extending the estimated useful lives on our CRJ700/CRJ550 fleet during the fourth quarter of 2024 with a full year effect in 2025. These increases in segment profit were partially offset by an increase in aircraft maintenance, materials and repairs due to incremental maintenance services provided to third parties and an increase in our credit loss reserve as a result of our assessment of the credit risk of the outstanding receivables.

Liquidity and Capital Resources

As of December 31, 2025, we had $706.9 million in cash and cash equivalents and marketable securities. As of December 31, 2025, we had $75.6 million available for borrowings under our line of credit. Given our available liquidity as of December 31, 2025, we believe the working capital currently available to us will be sufficient to meet our present financial requirements, including planned capital expenditures, scheduled lease payments and debt service obligations for at least the next 12 months.

Our total cash, cash equivalents and marketable securities decreased from $801.6 million as of December 31, 2024, to $706.9 million as of December 31, 2025, or by $94.7 million. Our total long-term debt, including current maturities decreased from $2.7 billion as of December 31, 2024, to $2.4 billion as of December 31, 2025, or by $0.3 billion, primarily due to scheduled debt payments for the 2025 year, partially offset by debt issued to finance seven new E175 aircraft. Additionally, we repurchased 0.8 million shares of our common stock for $84.5 million under a share repurchase program authorized by our Board of Directors during the year ended December 31, 2025. At December 31, 2025, our total capital mix (measured as a ratio of total stockholder equity and total long-term debt, including current maturities) was 53.4% equity and 46.6% total long-term debt, compared to 47.4% equity and 52.6% total long-term debt at December 31, 2024.

As of December 31, 2025 and 2024, we had $47.2 million and $47.1 million, respectively, in letters of credit and surety bonds outstanding with various banks and surety institutions. We had no restricted cash as of December 31, 2025 and 2024.

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Sources and Uses of Cash

Cash Position and Liquidity. The following table provides a summary of the net cash provided by (used in) our operating, investing and financing activities for the years ended December 31, 2025 and 2024, and our total cash and marketable securities positions as of December 31, 2025 and December 31, 2024 (in thousands):































For the year ended December 31,



    

2025

    

2024

    

$ Change

    

% Change

Net cash provided by operating activities



$

940,364



$

692,462



$

247,902



35.8

%

Net cash used in investing activities



(651,834)



(228,627)



(423,207)

185.1

%

Net cash used in financing activities



(393,219)



(384,750)



(8,469)

2.2

%































    

December 31,

    

December 31,

    





    







2025



2024



$ Change



% Change

Cash and cash equivalents



$

122,673



$

227,362



$

(104,689)

(46.0)

%

Marketable securities



584,236



574,266



9,970

1.7

%

Total



$

706,909



$

801,628



$

(94,719)

(11.8)

%



Cash Flows provided by Operating Activities

Our cash flows provided by operating activities was $940.4 million for the year ended December 31, 2025, compared to $692.5 million for the year ended December 31, 2024. Our operating cash flows are typically impacted by various factors including our net income, adjusted for non-cash expenses and gains such as depreciation expense, stock based compensation expense and gains or losses on the disposal of assets; and timing of cash payments and cash receipts attributed to our various current asset and liability accounts, such as accounts receivable, inventory, accounts payable, income taxes, accrued liabilities, deferred revenue and unbilled revenue.

The increase in our cash flow from operations for the year ended December 31, 2025, compared to the year ended December 31, 2024, was primarily due to an increase in income before income taxes for the year ended December 31, 2025, compared to the year ended December 31, 2024, and an increase in accounts payable and other liabilities due to the timing of cash payments for the comparable periods.

Cash Flows used in Investing Activities

Our cash flows used in investing activities was $651.8 million for the year ended December 31, 2025, compared to cash flows used in investing activities of $228.6 million for the year ended December 31, 2024. Our investing cash flows are typically impacted by various factors including our capital expenditures, such as the acquisition of aircraft and spare engines; deposit payments and refunds of previously made deposits on new aircraft; purchase and sales of marketable securities; proceeds from the sale of assets; and timing of cash payments and cash receipts attributed to our investments in other entities.

Excluding the purchase and sale of marketable securities, which results in the transfer of dollars between our investments in marketable securities and our cash accounts, our cash used in investing activities increased from $341.2 million for the year ended December 31, 2024, to $642.0 million for the year ended December 31, 2025. Excluding the transfer of dollars between our investments in marketable securities and our cash accounts, the remaining increase in cash used in investing activities was primarily due to an increase of $267.3 million used in the acquisition of property and equipment and an increase of $57.8 million used for aircraft deposits for the year ended December 31, 2025, compared to the year ended December 31, 2024, primarily due to the acquisition of seven new E175 aircraft and spare engines in 2025.

Cash Flows used in Financing Activities

Our cash flows used in financing activities was $393.2 million for the year ended December 31, 2025, compared to cash used in financing activities of $384.8 million for the year ended December 31, 2024. Our financing cash flows are typically impacted by various factors including proceeds from issuance of debt, principal payments on debt obligations, repurchases of our common stock and payment of cash dividends.

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The $8.5 million increase in cash used in financing activities for the year ended December 31, 2025, compared to the year ended December 31, 2024, was primarily due to an increase of $41.6 million in cash used to purchase treasury stock and an increase of $20.3 million in cash used for employee income taxes paid on vested equity awards in lieu of shares, offset by an increase of $53.6 million in proceeds from the issuance of long-term debt for the purchase of seven new E175 aircraft, net of principal payments on long-term debt during the year ended December 31, 2025, compared to the year ended December 31, 2024.

Significant Commitments and Obligations

General

The following table summarizes our commitments and obligations for future minimum rental payments required under operating leases that had initial or remaining non-cancelable lease terms as of December 31, 2025, firm aircraft and spare engine commitments, interest commitments and principal maturities on long-term debt as noted for each of the next five years and thereafter (in thousands):















































    

Total

    

2026

    

2027

    

2028

    

2029

    

2030

    

Thereafter

Operating lease payments for aircraft and facility obligations



$

118,999



$

20,264



$

19,680



$

13,874



$

12,143



$

6,079



$

46,959

Firm aircraft and spare engine commitments



2,275,664





277,592





323,267





329,050





309,213





335,674





700,868

Interest commitments



369,778





96,412





72,307





54,593





41,333





30,155





74,978

Principal maturities on long-term debt



2,408,369





550,028





505,986





336,930





234,322





279,818





501,285

Total commitments and obligations



$

5,172,810



$

944,296



$

921,240



$

734,447



$

597,011



$

651,726



$

1,324,090

In addition to the table above, in 2024, we entered into a master equipment purchase agreement with another airline to acquire certain airframes and engines and lease the assets back to the airline under a five-year term. We accounted for the transaction as a failed sale-leaseback in accordance with Accounting Standard Codification Topic 842 as the criteria for a sale were not met. At December 31, 2025, we estimated the remaining financing obligation under the agreement will be between $20.0 million and $25.0 million and anticipated closing on the remaining financings during 2026.

Purchase Commitments and Options

As of December 31, 2025, we had a firm purchase commitment for 69 new E175 aircraft from Embraer with delivery dates anticipated into 2032.  We also had firm purchase commitments to purchase two used E170 aircraft with anticipated delivery dates in 2026.

At the time of each aircraft acquisition, we evaluate the financing alternatives available to us and select one or more of these methods to fund the acquisition. In recent years, we have issued long-term debt to finance our new aircraft. At present, we intend to fund our aircraft purchase commitments through a combination of cash on hand and debt financing. Based on current market conditions and discussions with prospective leasing organizations and financial institutions, we currently believe that we will be able to obtain financing for our committed acquisitions, as well as additional aircraft. We intend to finance the firm purchase commitment for 69 E175 aircraft with approximately 75-85% debt and the remaining balance with cash. We intend to use cash to purchase the two used E170 aircraft.

Aircraft Lease and Facility Obligations

We also have long-term lease obligations, primarily relating to our facilities, aircraft and engines. Excluding aircraft financed by our major airline partners that we operate for them under contract, we had eight aircraft under lease with remaining terms ranging from three years to five years as of December 31, 2025. These eight leased aircraft are subleased to a third party. Future minimum lease payments due under all long-term operating leases were approximately $119.0 million at December 31, 2025. Assuming a 6.2% discount rate, which is the average incremental borrowing rate

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we anticipate we would have incurred on debt obtained over a similar term to acquire these assets, the present value of these lease obligations would have been equal to approximately $81.9 million at December 31, 2025.

Long-term Debt Obligations

As of December 31, 2025, we had $2.4 billion of long-term debt, which consisted of $2.2 billion of debt used to finance aircraft and spare engines and $200.6 million of unsecured debt payable to Treasury. The average effective interest rate on our debt obligations was approximately 4.3% at December 31, 2025.

Under our capacity purchase agreements, our major airline partners compensate us for our costs of the aircraft on a monthly basis. The consideration for aircraft ownership costs we receive varies by agreement but is intended to compensate us for our ownership of the aircraft while the aircraft is under contract.

Guarantees

We have guaranteed the obligations of SkyWest Airlines under the United Express Agreement and the Delta Connection Agreement for the E175 aircraft. In addition, we have guaranteed certain other obligations under our aircraft financing and leasing agreements.

We have guaranteed $12.6 million in promissory notes of a third party in the event the third party defaults on their payments. The third party’s loans are secured by aircraft and engines.

Critical Accounting Policies and Estimates

Our significant accounting policies are summarized in Note 1 to our Consolidated Financial Statements included in Item 8 of this Report. Critical accounting policies are those policies that are most important to the preparation of our consolidated financial statements and require management’s subjective and complex judgments due to the need to make estimates about the effect of matters that are inherently uncertain. Our critical accounting policies relate to revenue recognition, long-lived assets and income tax as discussed below. The application of these accounting policies involves the exercise of judgment and the use of assumptions as to future uncertainties and, as a result, actual results will likely differ, and could differ materially, from such estimates.

Revenue Recognition

Flying agreements and airport customer service and other revenues are recognized when service is provided. Under our capacity purchase and prorate flying agreements with our major airline partners, our performance obligation is determined on a per completed flight basis. Under our capacity purchase agreements, the performance obligation of each completed flight is measured using block hours incurred for each completed flight, which factors the duration of each flight. Under our airport customer service agreements, our performance obligation is measured on a per departure basis for each flight we provide customer service.

A portion of our compensation under our capacity purchase agreements is designed to reimburse us for the use of the aircraft we provide under such agreements. This compensation is deemed to be lease revenue, because the agreements identify the “right of use” or a specific type and number of aircraft over the agreement term. We allocate the total consideration received under our capacity purchase agreements between the lease and non-lease components based on stand-alone selling prices. A portion of the consideration received for the use of the aircraft is a fixed monthly payment per aircraft. We recognize the fixed monthly lease payments as lease revenue using the straight-line basis over the capacity purchase agreement term and variable lease payments in the period when the block hours are completed. We recognized $13.9 million of previously deferred lease revenue and $5.6 million unbilled revenue during the year ended December 31, 2025, under the straight-line basis.

Additionally, a portion of our compensation under our capacity purchase agreements relates to operating the aircraft, identified as the non-lease component of the capacity purchase agreement. We recognize revenue attributed to the non-lease component received as fixed monthly payments per aircraft proportionate to the number of block hours completed during each reporting period, relative to the estimated number of block hours we anticipate completing over the remaining contract term. In 2025, we recognized $30.1 million of previously deferred fixed monthly payments as revenue and $8.2 million of unbilled revenue. The amount of deferred revenue and unbilled revenue from fixed monthly payments we recognize will increase or decrease in future reporting periods depending on the number of block hours we

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complete during such reporting period and our then-current forecast of block hours we anticipate completing over the remaining contract term based on information available to us as that time.

Our revenues could be impacted by several factors, such as our flight schedules, passenger fares we receive under our prorate agreements, terminations, extensions or other amendments to our code-share agreements (which may also cause a reassessment of stand-alone selling prices of the lease and non-lease consideration), our estimates used to determine the amount of revenue we defer under our capacity purchase agreements, and our ability to earn incentive payments contemplated under applicable agreements. In the event contracted rates are not finalized at a quarterly or annual financial statement date, we record that period’s revenues based on the lower of the prior period’s approved rates or our estimate of rates that will be implemented upon completion of negotiations. Also, in the event we have a reimbursement dispute with a major airline partner at a quarterly or annual financial statement date, we evaluate the dispute under established revenue recognition criteria and, provided the revenue recognition criteria have been met, we recognize revenue for that period based on our estimate of the resolution of the dispute. Our rates were finalized under our code-share agreements as of December 31, 2025.

Long-Lived Assets

As of December 31, 2025, we had approximately $5.8 billion of property and equipment and related assets net of accumulated depreciation. In accounting for these long-lived assets, we make estimates about the expected useful lives of the assets, the expected residual values of certain of these assets, and the potential for impairment based on the fair value of the assets and the cash flows they generate. Factors indicating potential impairment include, but are not limited to, significant decreases in the market value of the long-lived assets, a significant change in the condition of the long-lived assets and operating cash flow losses associated with the use of the long-lived assets. When considering whether or not impairment of long-lived assets exists, we group similar assets together at the lowest level for which identifiable cash flows are largely independent of the cash flows of other assets and liabilities and compare the undiscounted cash flows for each asset group to the net carrying amount of the assets supporting the asset group. Asset groupings are done at the fleet type or contract level.

Factors that may impact our estimates used for depreciation include anticipated useful lives of each aircraft type and estimated residual values of each aircraft. As we operate our aircraft under code-share agreements with our major airline partners, changes in anticipated demand by our major airline partners for regional aircraft may impact our estimated useful lives and residual values for our aircraft, spare engines and other long-lived assets.

Income Tax

Deferred income taxes are determined based on the temporary differences between the financial reporting and tax bases of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. Estimating our tax liabilities involves judgments related to uncertainties in the application of complex tax regulations. We make certain estimates and judgments to determine tax expense for financial statement purposes as we evaluate the effect of tax credits, tax benefits and deductions, some of which result from differences in the timing of recognition of revenue or expense for tax and financial statement purposes. Changes to these estimates may result in significant changes to our tax provision in future periods. Each fiscal quarter we re-evaluate our tax provision and reconsider our estimates and assumptions related to specific tax assets and liabilities, making adjustments as circumstances change.

Recent Accounting Pronouncements

See Note 1 to the Consolidated Financial Statements included in Item 8 of this Report for a description of recent accounting pronouncements.