US regional carrier, SkyWest, has recorded a narrow $8.5 million net loss in 2020. The airline, which saw some quarters of profit, still suffered as it saw its flying cut down significantly due to the ongoing crisis. The airline does not fly its own routes under its own banner. Rather, it has agreements with major US carriers and flies regional jets on their behalf. SkyWest is one of the regional powerhouses in the US.
SkyWest's 2020 results
SkyWest recorded a net loss for 2020 of $8.5 million. This was against a fourth-quarter net loss of $46.5 million. The airline received operating revenues of $2.1 billion in 2020, compared to nearly $3 billion in 2019.
The airline did not suffer as much as many other airlines in the US, and an $8.5 million net loss for the year is fantastic at a time when many carriers with hundreds of aircraft in their fleet are losing money to the tune of billions of dollars. Part of the reason for SkyWest's success is its model.
Changes to its major US airline operations
With American Airlines, SkyWest is expecting to fly more Embraer E175 aircraft. A total of 18 E175s are expected to enter SkyWest's fleet for regional flying on behalf of American Airlines in the second half of 2021. Two deliveries are planned in 2022, and SkyWest plans to place those jets into operation in 2022.
In addition, the airline has 65 CRJ700 aircraft in service with American. It anticipates placing another 25 CRJ700 aircraft into service with American ratably throughout 2021. The airline plans on using its own aircraft not currently under contract with anyone to fulfill this agreement.
With Delta Air Lines, four new E175 aircraft financed by SkyWest were delivered to the airline. One new CRJ900 aircraft, financed by Delta and operated by SkyWest, is scheduled for delivery in 2021.
In addition, the airline's capacity purchase agreement with Delta for CRJ200 aircraft expired at the end of 2020 and was not extended. This comes as Delta Air Lines is looking to end CRJ200 flying by the end of 2023.
At the end of 2020, SkyWest had a fleet of 452 aircraft consisting of the following planes:
- 193 E175s
- 39 CRJ900s
- 90 CRJ700s
- 130 CRJ200s
How will SkyWest's operations change?
SkyWest will continue to fly regional routes on behalf of major US airlines. The carrier does not dictate its own routes and operations, but it works with major airlines to do the regional flying where necessary.
Over the next few years, as airlines wind down flying of smaller 50-seater jets, SkyWest will be removing the CRJ200s from service. They have had a venerable career, but airlines, and passengers, are ready to move on from those jets.
The Embraer E175s are some of the most popular regional jets out there right now. They are helping to power the global recovery and, in the United States, regional carriers are looking to fly more of the jets.
Dual-class regional jets are becoming more frequent across the US as airlines seek to provide premium customers with options. SkyWest will definitely be flying the E175s. Those jets will remain the largest single fleet type in the airline's fleet as the recovery continues and beyond until the next generation of regional jets comes out to replace them.
For the next year or two, airlines are going to be flying less from a mainline perspective. This pushes capacity contracted out to regional carriers like SkyWest down, evidenced by the 33.5% decline in total block hours across the board in 2020 year-over-year.
What do you make of SkyWest's 2020 results and its future? Let us know in the comments!