Analysis of SkyWest Airlines: Performance, Opportunities, and Risks

This report provides an analysis of SkyWest Airlines' financial performance in 2017 and its future prospects. The report highlights the airline's significant profit increase, driven by fleet transition and strategic decisions. It examines the company's revenue, profitability, and opportunities for growth, including expansion into new markets. The report discusses the risks associated with the airline industry and the company's strategies to overcome them. Key aspects covered include fleet composition, aircraft acquisition, and the impact of these factors on the company's financial health. The report also references the company's annual reports and industry publications to support its findings, offering insights into the airline's competitive position and future outlook. Overall, the report concludes that the airline is poised for future growth, provided it continues to capitalize on its strategic advantages and mitigate potential risks.

nnin ead T ARu g H : SKYWES IRLINES 0
e t AirlineSkyW s s

T ASKYWES IRLINES 1
Table of Contents
Current performance..................................................................................................................2
Future performance....................................................................................................................3
Profitability................................................................................................................................3
Opportunities and Risks.............................................................................................................3
References..................................................................................................................................5

T ASKYWES IRLINES 2
Current performance
SkyWest Airlines booked a profit of $428.9 million in the financial year 2017, which is 3
times more than the previous year which was 161.6 million. The diluted per share is $8.08 as
compared to the $3.14 loss per diluted share in 2016 (Air transport world, 2016).
Revenue was $797 million in Q4 2017, up from $758 million in Q4 2016. The increase in
revenue included the net impact of adding 21 new E175 aircraft since Q4 2016, partially
offset by the removal of 78 unprofitable or less profitable aircraft over the same period.
Additionally, SkyWest took delivery of 19 E175 aircraft throughout Q4 2016, which had only
a partial quarter impact on 2016 revenue for comparability purposes to 2017 SkyWest Annual
Report (2018).
SkyWest referred to its proceeding with armada progress—in which the organization is
excluding flying machine working under unprofitable flying agreements while also
consolidating new Embraer E175s—in order to accelerate the financial performance.
The improvements in 2017 were due to following accomplishments: The unstoppable
improvement in aircraft fleet mix included a reduction in the number of the aircraft which is
available for service from 652 aircraft at December 31, 2016 to 595 at December 31, 2017
(Air transport world, 2016).
21 new Embraer dual-class regional jets were delivered under flying in order to revamp the
performance of the company. The company removed 65 50-seat aircraft from unprofitable or
less profitable flying contracts and also excluded 13 CRJ700/CRJ900 aircraft from flying
contracts SkyWest Annual Report (2018).
The amount of cash with the company as well as the marketable securities was increased by
$121 as compared to the previous year.

T ASKYWES IRLINES 3
The Company had a net pay of $429 million, or $8.08 per share for the multi-year, in contrast
to net loss of $162 million, or $3.14 offer for the multi-year. Excluding the exceptional things
in the two time frames, balanced net wage was $182 million or $3.43 per share offer for the
multi-year, contrasted with a balanced net salary of $143 million, or $2.73 per share offer for
the multi-year SkyWest Annual Report (2018).
Future performance
As evaluated from the current scenario the future performance of this Airline Industry is
going to be quite impressive. Most of the investors feel that this stock is going to boom and
has just begun to climb to become one of the greatest stocks of time. This stock is a onetime
opportunity for the customers to invest in to. Moreover it is expected that the sales will reach
approximately 3.30 billion which is exactly 3.51% increase as compared to the previous year
and the company will generate a profit of the 500 billion. The earnings increase from 0.97 to
1.22 with the increase of 17.20% (Air transport world, 2016).
Profitability
2018 represents the last leg of significant fleet transition, which began in 2014 toward a
smaller but more profitable fleet mix and maintenance footprint. Our previously announced
E175 flying agreements with Delta and Alaska are in progress and we are on track to add 149
E175 aircraft SkyWest Annual Report (2018).
Opportunities and Risks
The opportunities available for the SkyWest Airlines are to capture the Southeast Asian
market in order to initialise the growth.
Despite no increase in revenue SkyWest managed to convert the loss into a profit. The new
aircrafts will also help to grab more tickets and more revenue. Also the company shall focus

T ASKYWES IRLINES 4
on internal restructuring and since the demand is high the company can expand easily
(SkyWest, 2015).

T ASKYWES IRLINES 5
References
Air transport world, (2016) Fleet transition drives SkyWest to $429 million net profit
turnaround [online] Available from http://atwonline.com/airline-financials/fleet-transition-
drives-skywest-429-million-net-profit-turnaround [Accessed on 18th August 2018]
SkyWest Annual Report (2018) [online] Available from
http://inc.skywest.com/assets/Uploads/AnnualReports/SkyWestInc2017AnnualReport.pdf
[Accessed on 18th August 2018]
SkyWest, (2015) SkyWest has a bright future ahead [online] Available from
https://seekingalpha.com/article/3199996-skywest-has-a-bright-future-ahead [Accessed on
18th August 2018]