Oct 29, 2026 earnings call — E175 fleet growth and fuel cost headwinds
SkyWest reported net income of $120 million, or $3.08 per diluted share, for the third quarter of 2026.
Revenue $1.1B (est $1.1B) · EPS $3.08 (est $3.07)
Key quotes
"We currently have 63 future E175s on firm order with Embraer, including 16 for Delta, 11 for American and 2 for United."
"The fuel price per gallon on our prorate flying was $4.56 in Q3, up from $3.04 in Q3 2025 and $4.45 in Q2 2026."
"We continued to reduce our debt, and we now have $1 billion less debt than we did at the end of 2022."
Analyst Q&A 6
E175 delivery timing impact
Q (Thomas Fitzgerald · TD Cowen): The analyst asked why block hours growth drops in 2027 and whether E175s are back-weighted. He also asked if next year’s cash earnings improvement is mainly from new E175s or from CRJ450 conversions.
A: Management said most Delta E175 deliveries happen late in the year, so most block-hour benefit shows in 2028. They also said cash earnings next year will be nice and help offset noncash headwinds, and flat EPS guidance does not include the improved cash flow quality.
"And so yes, we won't see all of the benefit of that block hours until -- really until 2028 as we get into this." — Wade Steel (COO)
Prorate fuel headwind and revenue
Q (Duane Pfennigwerth · Evercore): The analyst asked how large the prorate headwind is year-over-year and whether revenue or unit revenue progress is reducing that headwind. He wanted to know if the headwind is diminishing.
A: Management said they added 16 airplanes to prorate and are seeing yield increases and strong demand. They said they will not fully offset the fuel increase but are making consistent progress, and they will be conservative in modeling 2027 given uncertainty in fuel.
"We will not offset 100% of the fuel increase, but we are making consistent progress that our major partners are..." — Wade Steel (COO)
Adding prorate planes and depreciation change
Q (Michael Linenberg · Deutsche Bank): The analyst asked if they plan to add more airplanes to prorate next year and how profitable fixed-fee is versus prorate given fuel. He also asked what the depreciation change was for the E175s.
A: Management said demand is strong but they will be patient and disciplined about adding prorate aircraft and only add markets that are accretive. They said for the E175 fleet they extended useful life from 22 years to 30 years, citing contract extensions and strong demand for the airplane.
"So for the E175 fleet, Mike, we were at 22 years, and we extended that to 30 years, consistent with other practices in the industry." — Robert Simmons (CFO)
CRJ450 conversion timing and downtime
Q (Savanthi Syth · Raymond James): The analyst asked whether unpledged asset value changed after revaluation and how long CRJ450 conversions take, plus how many aircraft will be out of service during conversions.
A: Management said unpledged assets remain over $1.5 billion. They said the first CRJ450 conversions take longer but thereafter conversions take two to three weeks, they will add Wi-Fi, and they expect to pull down three or four lines, meaning some temporary reduced flying in 2027.
"We do anticipate pulling down three or four lines to do these conversions, right?" — Wade Steel (COO)
Load factor and capital priorities
Q (Citi): The analyst asked if the lower load factor shows weakening prorate demand or partner pricing changes. He also asked how management plans to deploy capital over the next few years.
A: Management said they are not reading much into the load factor decline and that partner pricing strategies can shift loads, but total revenue matters and operations remain very busy with high loads. On capital, they said their favorite use of cash is investing in the fleet and its flexibility, with a heavy E175 delivery year in 2027 and CapEx likely easing in 2028.
"I mean our favorite investment is always investing in our fleet and the flexibility of our fleet." — Russell A. Childs (CEO)
CRJ contract status and Embraer slots
Q (Catherine O'Brien · Goldman Sachs): The analyst asked how many CRJ200 and CRJ700 aircraft are off contract or will come off contract, whether partners will use converted aircraft in CPA or prorate, and questions on the $16 million depreciation change and Embraer slot timing.
A: Management said they have a multiyear agreement with United for 40 CRJ450s and expect about 100 CRJ450s under long-term agreement with United; they operate about 50 to 60 CRJ200s in prorate and have 20 to 25 parked beyond the 100. They said the $16 million was a Q3 depreciation savings, the 175 change is effective and remains, and the 33 unallocated Embraer slots sit in the back half of 2028 and need a little more than a year to firm.
"So as we said in our script, we have about 100 -- we'll have about 100 of these CRJ450s under a long-term agreement with United." — Wade Steel (COO)