Delta Regional Carrier SkyWest Posts $26 Million Loss

One of the few airlines to have posted a profit for the first quarter of 2020, regional SkyWest Airlines could not repeat its near impossible feat. The carrier, which operates codeshare flights for, among others, Delta Air Lines, posted a $26 million loss in its Q2 report.

SkyWest’s luck turned in the second quarter. Photo: Tomas Del Coro via Flickr

Q2 could not live up to Q1

SkyWest surprised everyone when it reported a net income of $30 million for the first quarter of 2020. Some services that would normally have been operated by mainline carriers were switched to smaller aircraft to better match the decrease in demand.

However, as US domestic short-haul traffic also suffered greatly in the past few months, the numbers have inevitably turned red also for the St George, Utah-based regional carrier. As such, the airline reported a $26 million loss for Q2. Operating revenues were $350 million, as opposed to $744 million for the same period in 2019.

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SkyWest operates regional flights under the Delta Connection brand. Photo: Bombardier

Fleet replacement acceleration

According to FlightGlobal, SkyWest’s Chief Operations Officer Wade Steele said that the current crisis had accelerated the airline’s fleet replacement program. Currently, it operates a mixed bag of Bombardier CRJs (200s, 700s, and 900s) and Embraer ERJ 175s. However, in January, the airline ordered 20 new ERJ 175 jets, and by mid-2022, SkyWest expects to have 213 ERJ 175s in its fleet, compared to 156 at the end of last year.

In Q2, the airline took delivery of 21 used ERJ 175 as part of an agreement with United. It also accepted three from Delta and received two new ones from the manufacture

Meanwhile, fleet replacement does not necessarily equal growth. At the end of the second quarter, SkyWest had 471 aircraft, down from 484 three months prior. Furthermore, it intends to let another 21 aircraft go by the end of the year.

Embraer E175-E1 aircraft
SkyWest intends to have 213 E175 jets in its fleet by mid-2022. Photo: Embraer

Cautious trend of increased flights

In a non-pandemic quarter, SkyWest would normally operate 2,600 daily flights as part of codeshare agreements with Delta, United, American, and Alaska Airlines. In May, that number was down to 800. It rose slightly in June and July, to 900 and 1,300 respectively. However, the domestic recovery in the US has stalled with new states emerging as virus hotspots, and it is uncertain if that trend will continue in the following months.

Early retirements despite CARES

Although SkyWest received $307 million in payroll grants through the CARES act in the second quarter, about 4,000 of SkyWest’s pre-crisis 14,000 workforce have taken leaves of absence or early retirements. As a result, the company has managed to reduce its cash-burn to about half a million dollars a day.

Our hearts truly go out to the crew members and staff that have all been a part of making travelers’ dreams come true and are now in danger of losing their jobs as the grim COVID-battered Q2 financial results come in, carrier by carrier. To celebrate their, and our, love of flying, let’s end with this video made by SkyWest for World Pilot Day.