Segment Reporting

3 Months Ended

Mar. 31, 2023

Segment Reporting

Segment Reporting

(5) Segment Reporting

The Company’s two reporting segments consist of the operations of SkyWest Airlines and SkyWest Leasing activities.

The Company’s chief operating decision maker analyzes the profitability of operating new aircraft financed through the issuance of debt, including the Company’s E175 fleet, separately from the profitability of the Company’s capital deployed for ownership and financing of such aircraft. The SkyWest Airlines segment includes revenue earned under the applicable capacity purchase agreements attributed to operating such aircraft and the respective operating costs. 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 leasing 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 assets leased to third parties. Additionally, aircraft removed from SkyWest Airlines’ operations and held for sale are included in the SkyWest Leasing segment.

The following represents the Company’s segment data for the three-month periods ended March 31, 2023 and 2022 (in thousands):

	Three months ended March 31, 2023
	SkyWest		SkyWest
	Airlines		Leasing		Consolidated
Operating revenues (1)	$	568,173	$	123,658	$	691,831
Operating expense		633,392		63,143		696,535
Depreciation and amortization expense		38,258		55,891		94,149
Interest expense		4,062		29,558		33,620
Segment profit (loss) (2)		(69,281)		30,957		(38,324)
Total assets (as of March 31, 2023)		2,629,521		4,604,240		7,233,761
Capital expenditures (including non-cash)		21,111		86,810		107,921

	Three months ended March 31, 2022
	SkyWest		SkyWest
	Airlines		Leasing		Consolidated
Operating revenues (1)	$	603,048	$	132,104	$	735,152
Operating expense		621,028		62,076		683,104
Depreciation and amortization expense		47,694		55,051		102,745
Interest expense		1,789		26,803		28,592
Segment profit (loss) (2)		(19,769)		43,225		23,456
Total assets (as of March 31, 2022)		2,953,902		4,195,056		7,148,958
Capital expenditures (including non-cash)		32,696		94,889		127,585

(1) Prorate revenue and airport customer service revenue are primarily reflected in the SkyWest Airlines segment.

(2) Segment profit (loss) is equal to operating income less interest expense.