10-Q

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q

☒ QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2024

OR

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from                              to                             

Commission file number 0-14719

SKYWEST, INC.

Incorporated under the laws of Utah	87-0292166
	(I.R.S. Employer ID No.)

444 South River Road

St. George, Utah 84790

(435) 634-3000

(Address of principal executive offices and telephone number)

Securities registered pursuant to Section 12(b) of the Act:

Title of Each Class	Trading Symbol(s)	Name of Each Exchange on which Registered
Common Stock, No Par Value	SKYW	The Nasdaq Global Select Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ⌧ No ◻

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ⌧ No ◻

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act:

Large accelerated filer ⌧	Accelerated filer ◻
Non-accelerated filer ◻	Smaller reporting company ☐
Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ◻

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ⌧

Indicate the number of shares outstanding of each of the registrant’s classes of common stock, as of the latest practicable date.

Class	Outstanding at April 19, 2024
Common stock, no par value	40,259,473

SKYWEST, INC.

QUARTERLY REPORT ON FORM 10-Q

TABLE OF CONTENTS

PART I	FINANCIAL INFORMATION:
	Item 1.	Financial Statements	3
		Consolidated Balance Sheets	3
		Consolidated Statements of Comprehensive Income (Loss)	5
		Consolidated Statements of Stockholders Equity	6
		Condensed Consolidated Statements of Cash Flows	7
		Notes to Condensed Consolidated Financial Statements	8
	Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	21
	Item 3.	Quantitative and Qualitative Disclosures About Market Risk	32
	Item 4.	Controls and Procedures	32
PART II	OTHER INFORMATION:
	Item 1.	Legal Proceedings	33
	Item 1A.	Risk Factors	33
	Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	33
	Item 5.	Other Information	33
	Item 6.	Exhibits	34
		Signature	35
Exhibit 31.1	Certification of Chief Executive Officer
Exhibit 31.2	Certification of Chief Financial Officer
Exhibit 32.1	Certification of Chief Executive Officer
Exhibit 32.2	Certification of Chief Financial Officer

2

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

SKYWEST, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(Dollars in Thousands)

ASSETS

	March 31,		December 31,
	2024		2023
CURRENT ASSETS:
Cash and cash equivalents	$	179,979	$	148,277
Marketable securities		641,185		686,946
Receivables, net		85,882		82,854
Inventories, net		129,866		127,114
Other current assets		32,449		86,705
Total current assets		1,069,361		1,131,896
PROPERTY AND EQUIPMENT:
Aircraft and rotable spares		8,405,513		8,323,107
Deposits on aircraft		77,282		77,282
Buildings and ground equipment		292,633		282,398
Total property and equipment, gross		8,775,428		8,682,787
Less-accumulated depreciation and amortization		(3,284,609)		(3,199,820)
Total property and equipment, net		5,490,819		5,482,967
OTHER ASSETS:
Operating lease right-of-use assets		85,905		86,727
Long-term receivables and other assets		336,658		324,703
Total other assets		422,563		411,430
Total assets	$	6,982,743	$	7,026,293

See accompanying notes to condensed consolidated financial statements.

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SKYWEST, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(Dollars in Thousands)

LIABILITIES AND STOCKHOLDERS’ EQUITY

	March 31,		December 31,
	2024		2023
CURRENT LIABILITIES:
Current maturities of long-term debt	$	506,602	$	443,869
Accounts payable		480,654		470,251
Accrued salaries, wages and benefits		181,154		194,881
Current maturities of operating lease liabilities		19,668		19,335
Taxes other than income taxes		20,924		26,077
Other current liabilities		103,294		99,879
Total current liabilities		1,312,296		1,254,292
LONG-TERM DEBT, net of current maturities		2,389,227		2,562,183
DEFERRED INCOME TAXES PAYABLE		703,602		687,600
NONCURRENT OPERATING LEASE LIABILITIES		66,237		67,392
OTHER LONG-TERM LIABILITIES		346,478		341,324
COMMITMENTS AND CONTINGENCIES (Note 7)
STOCKHOLDERS’ EQUITY:
Preferred stock, 5,000,000 shares authorized; none issued		—		—
Common stock, no par value, 120,000,000 shares authorized; 83,137,744 and 82,840,372 shares issued as of March 31, 2024, and December 31, 2023, respectively		761,318		754,362
Retained earnings		2,331,509		2,271,211
Treasury stock, at cost, 42,868,446 and 42,615,347 shares as of March 31, 2024, and December 31, 2023, respectively		(928,076)		(912,396)
Accumulated other comprehensive income		152		325
Total stockholders’ equity		2,164,903		2,113,502
Total liabilities and stockholders’ equity	$	6,982,743	$	7,026,293

See accompanying notes to condensed consolidated financial statements.

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SKYWEST, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(UNAUDITED)

(Dollars and Shares in Thousands, Except per Share Amounts)

	Three months ended
	March 31,
	2024		2023
OPERATING REVENUES:
Flying agreements	$	778,289	$	663,838
Lease, airport services and other		25,325		27,993
Total operating revenues		803,614		691,831
OPERATING EXPENSES:
Salaries, wages and benefits		350,999		335,201
Aircraft maintenance, materials and repairs		145,415		142,226
Depreciation and amortization		95,870		94,149
Aircraft fuel		21,164		20,964
Airport-related expenses		20,888		18,295
Aircraft rentals		1,276		19,528
Other operating expenses		68,496		66,172
Total operating expenses		704,108		696,535
OPERATING INCOME (LOSS)		99,506		(4,704)
OTHER INCOME (EXPENSE):
Interest income		11,626		10,033
Interest expense		(29,829)		(33,620)
Other income (loss), net		(1,128)		2,174
Total other expense, net		(19,331)		(21,413)
INCOME (LOSS) BEFORE INCOME TAXES		80,175		(26,117)
PROVISION (BENEFIT) FOR INCOME TAXES		19,877		(4,046)
NET INCOME (LOSS)	$	60,298	$	(22,071)
BASIC EARNINGS (LOSS) PER SHARE	$	1.50	$	(0.45)
DILUTED EARNINGS (LOSS) PER SHARE	$	1.45	$	(0.45)
Weighted average common shares:
Basic		40,299		49,391
Diluted		41,492		49,391
COMPREHENSIVE INCOME (LOSS):
Net income (loss)	$	60,298	$	(22,071)
Net unrealized appreciation (depreciation) on marketable securities, net of taxes		(173)		1,480
TOTAL COMPREHENSIVE INCOME (LOSS)	$	60,125	$	(20,591)

See accompanying notes to condensed consolidated financial statements

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SKYWEST, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF STOCKHOLDERS EQUITY

(UNAUDITED)

(In Thousands)

									Accumulated
									Other
	Common Stock			Retained		Treasury Stock			Comprehensive
	Shares	Amount		Earnings		Shares	Amount		Income		Total
Balance at December 31, 2023	82,840	$	754,362	$	2,271,211	(42,615)	$	(912,396)	$	325	$	2,113,502
Net income	—		—		60,298	—		—		—		60,298
Vested employee stock awards	269		—		—	—		—		—		—
Employee income tax paid on vested equity awards	—		—		—	(117)		(6,930)		—		(6,930)
Sale of common stock under employee stock purchase plan	29		1,446		—	—		—		—		1,446
Stock based compensation expense	—		5,510		—	—		—		—		5,510
Treasury stock purchases	—		—		—	(136)		(8,750)		—		(8,750)
Net unrealized depreciation on marketable securities, net of tax of $56	—		—		—	—		—		(173)		(173)
Balance at March 31, 2024	83,138	$	761,318	$	2,331,509	(42,868)	$	(928,076)	$	152	$	2,164,903

									Accumulated
									Other
	Common Stock			Retained		Treasury Stock			Comprehensive
	Shares	Amount		Earnings		Shares	Amount		Loss		Total
Balance at December 31, 2022	82,593	$	734,426	$	2,236,869	(31,994)	$	(619,862)	$	(3,802)	$	2,347,631
Net loss	—		—		(22,071)	—		—		—		(22,071)
Exercise of common stock options and vested employee stock awards	130		57		—	—		—		—		57
Employee income tax paid on vested equity awards	—		—		—	(32)		(585)		—		(585)
Sale of common stock under employee stock purchase plan	78		1,218		—	—		—		—		1,218
Stock based compensation expense	—		4,329		—	—		—		—		4,329
Treasury stock purchases	—		—		—	(5,067)		(100,001)		—		(100,001)
Net unrealized appreciation on marketable securities, net of tax of $476	—		—		—	—		—		1,480		1,480
Balance at March 31, 2023	82,801	$	740,030	$	2,214,798	(37,093)	$	(720,448)	$	(2,322)	$	2,232,058

See accompanying notes to condensed consolidated financial statements.

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SKYWEST, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

(In Thousands)

	Three months ended
	March 31,
	2024		2023
NET CASH PROVIDED BY OPERATING ACTIVITIES	$	157,648	$	150,203
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of marketable securities		(337,694)		(289,116)
Sales of marketable securities		383,282		373,492
Acquisition of property and equipment:
Aircraft and rotable spare parts		(33,525)		(92,953)
Buildings and ground equipment		(4,250)		(10,319)
Proceeds from the sale of property and equipment		2,212		2,162
Decrease (increase) in other assets		(10,579)		19,766
NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES		(554)		3,032
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of long-term debt		—		25,000
Principal payments on long-term debt		(111,158)		(107,276)
Payment of debt issuance cost		—		(108)
Net proceeds from issuance of common stock		1,446		1,275
Employee income tax paid on vested equity awards		(6,930)		(585)
Purchase of treasury stock		(8,750)		(100,001)
NET CASH USED IN FINANCING ACTIVITIES		(125,392)		(181,695)
Increase (decrease) in cash and cash equivalents		31,702		(28,460)
Cash and cash equivalents at beginning of period		148,277		102,984
CASH AND CASH EQUIVALENTS AT END OF PERIOD	$	179,979	$	74,524
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Non-cash investing and financing activities:
Acquisition of property and equipment	$	6,575	$	4,649
Derecognition of right of use assets	$	—	$	(35,062)
Derecognition of operating lease liabilities	$	—	$	35,062
Cash paid during the period for:
Interest, net of capitalized amounts	$	30,362	$	33,838
Income taxes	$	42	$	533

See accompanying notes to condensed consolidated financial statements.

7

SKYWEST, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

(1) Condensed Consolidated Financial Statements

Basis of Presentation

The condensed consolidated financial statements of SkyWest, Inc. (“SkyWest” or the “Company”), its operating subsidiary SkyWest Airlines, Inc. (“SkyWest Airlines”), its leasing subsidiary SkyWest Leasing, Inc. (“SkyWest Leasing”) and its charter service subsidiary SkyWest Charter, LLC (“SWC”) included herein have been prepared, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). Certain information and disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) have been condensed or omitted pursuant to such rules and regulations, although the Company believes that the following disclosures are adequate to make the information presented not misleading. These condensed consolidated financial statements reflect all adjustments that, in the opinion of management, are necessary to present fairly the results of operations for the interim periods presented. All adjustments are of a normal recurring nature, unless otherwise disclosed. These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and the notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023. The results of operations for the three months ended March 31, 2024, are not necessarily indicative of the results that may be expected for the year ending December 31, 2024.

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ materially from those estimates and assumptions.

Recent Accounting Pronouncements

In November 2023, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) No. 2023-07, “Segment Reporting (Accounting Standard Codification (“ASC”) Topic 280) – Improvements to Reportable Segment Disclosures,” which is intended to improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses. This ASU also expands disclosure requirements to enable users of financial statements to better understand the entity’s measurement and assessment of segment performance and resource allocation. The guidance is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted. The Company is currently evaluating the potential impact of adopting this new guidance on its consolidated financial statements and related disclosures.

In December 2023, the FASB issued ASU No. 2023-09, “Income Taxes (ASC Topic 740) – Improvements to Income Tax Disclosures”, which enhances the transparency, effectiveness and comparability of income tax disclosures by requiring consistent categories and greater disaggregation of information related to income tax rate reconciliations and the jurisdictions in which income taxes are paid. The guidance is effective for annual periods beginning after December 15, 2024, with early adoption permitted. The Company is currently evaluating the potential impact of adopting this new guidance on its consolidated financial statements and related disclosures.

(2) Operating Revenues

The Company recognizes revenue under its flying agreements and under its lease, airport services and other service agreements when the service is provided under the applicable agreement. Under the Company’s fixed-fee arrangements (referred to as “capacity purchase” agreements) with United Airlines, Inc. (“United”), Delta Air Lines, Inc. (“Delta”), American Airlines, Inc. (“American”) and Alaska Airlines, Inc. (“Alaska”) (each, a “major airline partner”), the major airline partner generally pays the Company a fixed-fee for each departure, flight hour (measured from takeoff to landing, excluding taxi time) or block hour (measured from takeoff to landing, including taxi time) incurred, and an

8

amount per aircraft in service each month, with additional incentives based on flight completion, on-time performance or other performance metrics. The major airline partner also directly pays for or reimburses the Company for certain direct expenses incurred under the capacity purchase agreement, such as fuel, airport landing fees and airport rents. Under the capacity purchase agreements, the Company’s performance obligation is met when each flight is completed, measured in completed block hours, and is reflected in flying agreements revenue. The transaction price for the capacity purchase agreements is determined from the fixed-fee consideration, incentive consideration and directly reimbursed expenses earned as flights are completed over the agreement term. For the three months ended March 31, 2024 and 2023, capacity purchase agreements represented approximately 87.0% and 88.4% of the Company’s flying agreements revenue, respectively.

Under the Company’s “prorate” arrangements, the major airline partner and the Company negotiate a passenger fare proration formula, pursuant to which the Company receives a percentage of the ticket revenues for those passengers traveling for one portion of their trip on a Company airline and the other portion of their trip on the major airline partner. Under the Company’s prorate flying agreements, the performance obligation is met and revenue is recognized when each flight is completed based upon the portion of the prorate passenger fare the Company determines that it will receive for each completed flight. The transaction price for the prorate agreements is determined from the proration formula derived from each passenger ticket amount on each completed flight over the agreement term. Certain routes under the Company’s prorate arrangements are subsidized by the U.S. Department of Transportation under the Essential Air Service (“EAS”) program, a program created to ensure small communities in the United States maintain a minimum level of scheduled air service. The EAS contracts are generally two years in duration and the Company recognizes EAS revenue on a per-completed-flight basis pursuant to the terms of each contract. Under the Company’s charter operations, SWC, the Company negotiates a fare for the charter flight with the customer. The performance obligation is met and revenue is recognized upon completion of the flight. For the three months ended March 31, 2024 and 2023, prorate flying agreements and SWC revenue represented approximately 13.0% and 11.6% of the Company’s flying agreements revenue, respectively.

The following table represents the Company’s flying agreements revenue by type for the three months ended March 31, 2024 and 2023 (in thousands):

	For the three months ended March 31,
	2024		2023
Capacity purchase agreements flight operations revenue (non-lease component)	$	544,160	$	468,916
Capacity purchase agreements fixed aircraft lease revenue		75,159		74,480
Capacity purchase agreements variable aircraft lease revenue		57,886		43,105
Prorate agreements and SWC revenue		101,084		77,337
Flying agreements revenue	$	778,289	$	663,838

The Company allocates the total consideration received under its capacity purchase agreements between lease and non-lease components based on stand-alone selling prices. A portion of the Company’s compensation under its capacity purchase agreements relates to operating the aircraft, identified as the non-lease component of the capacity purchase agreement. The Company recognizes revenue attributed to the non-lease component received as fixed-fees for each departure, flight hour or block hour on an as-completed basis for each reporting period. The Company recognizes revenue attributed to the non-lease component received as fixed monthly payments per aircraft proportionate to the number of block hours completed during each reporting period, relative to the estimated number of block hours the Company anticipates completing over the remaining contract term. Accordingly, the Company’s revenue recognition will likely vary from the timing of cash receipts under the Company’s capacity purchase agreements. The Company refers to cash received under its capacity purchase agreements prior to recognizing revenue as “deferred revenue,” and the Company refers to revenue recognized prior to billing its major airline partners under its capacity purchase agreements as “unbilled revenue” for each reporting period. During the three months ended March 31, 2024, the Company recognized $0.7 million of previously deferred revenue associated with the non-lease fixed monthly payments under certain agreements and decreased unbilled revenue by $0.3 million under certain other agreements, compared to deferring revenue of $39.3 million and decreasing unbilled revenue by $3.3 million during the three months ended March 31, 2023.

9

A portion of the Company’s compensation under its capacity purchase agreements is designed to reimburse the Company for certain aircraft ownership costs. The consideration for aircraft ownership costs varies by agreement but is intended to cover either the Company’s aircraft principal and interest debt service costs, its aircraft depreciation and interest expense or its aircraft lease expense costs while the aircraft is under contract. The consideration received for the use of the aircraft under the Company’s capacity purchase agreements is accounted for as lease revenue, inasmuch as the agreements identify the “right of use” of a specific type and number of aircraft over a stated period of time. The lease revenue associated with the Company’s capacity purchase agreements is accounted for as an operating lease and is reflected as flying agreements revenue on the Company’s consolidated statements of comprehensive income. The Company recognizes fixed monthly lease payments as lease revenue using the straight-line basis over the capacity purchase agreement term and variable lease payments in the period when the block hours are completed. The Company recognized $0.5 million of previously deferred lease revenue during the three months ended March 31, 2024, whereas the Company deferred recognizing lease revenue of $20.6 million during the three months ended March 31, 2023, under the straight-line basis. The Company has not separately stated aircraft rental income and aircraft rental expense in the consolidated statement of comprehensive income because the use of the aircraft is not a separate activity of the total service provided under the capacity purchase agreements.

The Company’s total deferred revenue balance as of March 31, 2024 was $373.4 million, including $58.0 million in other current liabilities and $315.4 million in other long-term liabilities. The Company’s unbilled revenue balance was $7.0 million as of March 31, 2024, including $1.1 million in other current assets and $5.9 million in other long-term assets. The Company’s total deferred revenue balance was $374.6 million as of December 31, 2023, including $61.0 million in other current liabilities and $313.6 million in other long-term liabilities. The Company’s unbilled revenue balance was $7.3 million as of December 31, 2023, including $1.2 million in other current assets and $6.1 million in other long-term assets.

The Company’s capacity purchase and prorate agreements include weekly provisional cash payments from the respective major airline partner based on a projected level of flying each month. The Company and each major airline partner subsequently reconcile these payments to the actual completed flight activity on a monthly or quarterly basis.

In several of the Company’s agreements, the Company is eligible to receive incentive compensation upon the achievement of certain performance criteria. The incentives are defined in the agreements and are measured and determined on a monthly, quarterly or semi-annual basis. At the end of each period during the term of an agreement, the Company calculates the incentives achieved during that period and recognizes revenue attributable to that agreement accordingly, subject to the variable constraint guidance under ASC Topic 606.

As of March 31, 2024, the Company had 475 aircraft in scheduled service or under contract pursuant to code-share agreements. The following table summarizes the significant provisions of each code-share agreement the Company has with each major airline partner through SkyWest Airlines:

United Express Agreements
Agreement	Aircraft type	Number of Aircraft	Term / Termination Dates
United Express Agreements (capacity purchase agreement)	• E175 • CRJ 700 • CRJ 200	93 19 70	• Individual aircraft have scheduled removal dates from 2024 to 2029
United Express Prorate Agreement	• CRJ 200	19*	• Terminable with 120-days’ notice
Total under United Express Agreements		201

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Delta Connection Agreements
Agreement	Aircraft type	Number of Aircraft	Term / Termination Dates
Delta Connection Agreement (capacity purchase agreement)	• E175 • CRJ 900 • CRJ 700	85 35 5	• Individual aircraft have scheduled removal dates from 2025 to 2034
Delta Connection Prorate Agreement	• CRJ 900 • CRJ 700	6* 4*	•Terminable with 30-days’ notice
Total under Delta Connection Agreements		135

American Capacity Purchase Agreement
Agreement	Aircraft type	Number of Aircraft	Term / Termination Dates
American Agreement (capacity purchase agreement)	• E175 • CRJ 700	20 77	• Individual aircraft have scheduled removal dates from 2024 to 2032
Total under American Agreement		97

Alaska Capacity Purchase Agreement
Agreement	Aircraft type	Number of Aircraft	Term / Termination Dates
Alaska Agreement (capacity purchase agreement)	• E175	42	• Individual aircraft have scheduled removal dates from 2030 to 2034

* The Company’s prorate agreements are based on specific routes, not a specific aircraft count. The number of aircraft listed above for each prorate agreement approximates the number of aircraft the Company uses to serve the prorate routes.

In addition to the contractual arrangements described above, as of March 31, 2024, SkyWest Airlines reached agreements to place the following E175 aircraft under a capacity purchase agreement with the respective major airline partners:

	2024	2025	2026	Total
Delta Air Lines	1	—	—	1
United Airlines(1)	21	7	8	36
Alaska Airlines	—	1	—	1
Total	22	8	8	38

(1) 17 of the E175 deliveries scheduled for 2024 are partner-financed so the aircraft will be provided by the major airline partner for SkyWest to operate.

Final delivery and in-service dates for aircraft to be placed under contract may be adjusted based on various factors.

When an aircraft is scheduled to be removed from a capacity purchase arrangement, the Company may, as practical under the circumstances, negotiate an extension with the respective major airline partner, negotiate the placement of the aircraft with another major airline partner, return the aircraft to the major airline partner when the aircraft is provided by the major airline partner, place owned aircraft for sale or pursue other uses for the aircraft. Other uses for the aircraft may include placing the aircraft in a prorate agreement, leasing the aircraft to a third party or disassembling aircraft components such as the engines and parts to be used as spare inventory.

Lease, airport services and other revenues primarily consist of revenue generated from aircraft and spare engines leased to third parties and from airport customer service agreements, such as gate and ramp agent services at various airports where the Company has been contracted by third parties to provide such services.. The following table

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represents the Company’s lease, airport services and other revenues for the three months ended March 31, 2024 and 2023 (in thousands):

	For the three months ended March 31,
	2024		2023
Operating lease revenue	$	16,668	$	16,560
Airport customer service and other revenue		8,657		11,433
Lease, airport services and other	$	25,325	$	27,993

The following table summarizes future minimum rental income under operating leases primarily related to leased aircraft and engines that had remaining non-cancelable lease terms as of March 31, 2024 (in thousands):

April 2024 through December 2024	$	34,787
2025		41,476
2026		35,946
2027		35,915
2028		35,139
Thereafter		53,500
Total future minimum rental income under operating leases	$	236,763

Of the Company’s $5.5 billion of net property and equipment as of March 31, 2024, $210.4 million of regional jet aircraft and spare engines were leased to third parties under operating leases. The Company’s mitigation strategy for the residual asset risks of these assets includes leasing aircraft and engine types that can be operated by the Company in the event of a default. Additionally, the operating leases typically have specified lease return condition requirements paid by the lessee to the Company and the Company typically maintains inspection rights under the leases.

The transaction price for airport customer service agreements is determined from an agreed-upon rate by location applied to the applicable number of flights handled by the Company over the agreement term.

The Company’s operating revenues could be impacted by several factors, including changes to the Company’s code-share agreements with its major airline partners, changes in flight schedules, contract modifications resulting from contract renegotiations, the Company’s ability to earn incentive payments contemplated under the Company’s code-share agreements and resolution of unresolved items with the Company’s major airline partners.

Other ancillary revenues commonly associated with airlines, such as baggage fee revenue, ticket change fee revenue and the marketing component of the sale of mileage credits, are retained by the Company’s major airline partners on flights that the Company operates under its code-share agreements.

Allowance for Credit Losses

The Company monitors publicly available credit ratings for entities for which the Company has a significant receivable balance. As of March 31, 2024, the Company had gross receivables of $89.5 million in current assets and gross receivables of $203.9 million in other long-term assets. The Company has established credit loss reserves based on publicly available historic default rates issued by a third party for companies with similar credit ratings, factoring in the term of the respective accounts receivable, notes receivable or guarantees. During the three months ended March 31, 2024, there were no significant changes in the outstanding accounts receivable, notes receivable, guarantees or credit ratings of the entities.

The following table summarizes the changes in allowance for credit losses:

	Allowance for Credit Losses
Balance at December 31, 2023	$	18,699
Adjustments to credit loss reserves		943
Write-offs charged against allowance		—
Balance at March 31, 2024	$	19,642

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(3) Stock-Based Compensation

During the three months ended March 31, 2024, the Company granted 50,577 restricted stock units and 118,021 performance shares to certain employees of the Company under the SkyWest, Inc. 2019 Long-Term Incentive Plan. Both the restricted stock units and performance shares have a three-year vesting period, during which the recipient must remain employed with the Company. The number of performance shares awardable from the 2024 grants can range from 0% to 200% of the original amount granted depending on the Company’s performance over three one-year measurement periods against the pre-established targets. Upon vesting, each restricted stock unit and performance share will be replaced with one share of common stock. The weighted average fair value of these restricted stock units and performance shares on their date of grant was $59.57 per share. During the three months ended March 31, 2024, the Company did not grant any options to purchase shares of common stock to employees. Additionally, during the three months ended March 31, 2024, the Company granted 12,634 fully vested shares of common stock and 2,632 fully vested restricted stock units to the Company’s directors at a grant date fair value of $59.57.

The Company accounts for forfeitures of restricted stock units and performance shares when forfeitures occur. The estimated fair value of the restricted stock units and performance shares is amortized over the applicable vesting periods. Stock-based compensation expense for the performance shares is based on the Company’s anticipated outcome of achieving the performance metrics. During the three months ended March 31, 2024 and 2023, the Company recorded pre-tax stock-based compensation expense of $5.5 million and $4.3 million, respectively.

(4) Stock Repurchase

The Company’s Board of Directors adopted a stock repurchase program in May 2023, which authorizes the Company to repurchase shares of the Company’s common stock in the public market or in private transactions, from time to time, at prevailing prices. Under the May 2023 repurchase program, the Company’s Board of Directors authorized up to $250.0 million for the repurchase of the Company’s common stock, superseding a prior Board authorization. At March 31, 2024, $82.2 million remains available under the May 2023 authorization.

During the three months ended March 31, 2024, the Company repurchased 136,261 shares of common stock for $8.7 million at a weighted average price per share of $64.21. During the three months ended March 31, 2023, the Company repurchased 5.1 million shares of common stock for $100.0 million at a weighted average price per share of $19.74.

(5) Net Income Per Common Share

Basic net income per common share (“Basic EPS”) excludes dilution and is computed by dividing net income by the weighted average number of common shares outstanding during the period. Diluted net income per common share (“Diluted EPS”) reflects the potential dilution that could occur if stock options or other contracts to issue common stock were exercised or converted into common stock. The computation of Diluted EPS does not assume exercise or conversion of securities that would have an anti-dilutive effect on net income per common share. Securities that could potentially dilute Basic EPS in the future, and which were excluded from the calculation of Diluted EPS because inclusion of such share would be anti-dilutive, are as follows (in thousands):

	Three Months Ended
	March 31,
	2024		2023
Treasury Warrants (1)		—		785
Employee Stock Awards		—		700
Total antidilutive securities		—		1,485

(1) U.S. Department of the Treasury (“U.S. Treasury”) warrants to purchase shares of SkyWest common stock issued pursuant to the three Payroll Support Program Agreements and a loan agreement with the U.S. Treasury.

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Additionally, during the three months ended March 31, 2024 and 2023, 452,000 and 538,000 performance shares (at target performance) were excluded from the computation of Diluted EPS because the Company had not achieved the minimum target thresholds for these shares for the three months ended March 31, 2024 and 2023, respectively.

The calculation of the weighted average number of shares of common stock outstanding for Basic EPS and Diluted EPS are as follows for the periods indicated (in thousands, except per share data):

	Three Months Ended
	March 31,
	2024		2023
Numerator:
Net income (loss)	$	60,298	$	(22,071)
Denominator:
Basic earnings per share weighted average shares		40,299		49,391
Dilutive effect of employee stock awards and warrants		1,193		—
Diluted earnings per share weighted average shares		41,492		49,391
Basic earnings per share	$	1.50	$	(0.45)
Diluted earnings per share	$	1.45	$	(0.45)

(6) Segment Reporting

The Company’s two reportable segments consist of (1) the operations of SkyWest Airlines and SWC (collectively, “SkyWest Airlines and SWC”) and (2) 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 and SWC segment includes revenue earned under the applicable capacity purchase agreements attributed to operating such aircraft and the respective operating costs. The SkyWest Airlines and SWC segment also includes revenue and operating expenses attributed to other flying agreements and airport services agreements. 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, 2024 and 2023 (in thousands):

	Three months ended March 31, 2024
	SkyWest Airlines		SkyWest
	and SWC		Leasing		Consolidated
Operating revenues (1)	$	646,809	$	156,805	$	803,614
Operating expense		641,363		62,745		704,108
Depreciation and amortization expense		36,108		59,762		95,870
Interest expense		3,476		26,353		29,829
Segment profit (2)		1,970		67,707		69,677
Total assets (as of March 31, 2024)		2,608,104		4,374,639		6,982,743
Capital expenditures (including non-cash)		44,350		—		44,350

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	Three months ended March 31, 2023
	SkyWest Airlines		SkyWest
	and SWC		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

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

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

(7) Leases, Commitments, Guarantees and Contingencies

The Company leases property and equipment under operating leases. For leases with durations longer than 12 months, the Company recorded the related operating lease right-of-use asset and operating lease liability at the present value of lease payments over the term. The Company used its incremental borrowing rate to discount the lease payments based on information available at lease commencement.

Aircraft

As of March 31, 2024, excluding aircraft financed by the Company’s major airline partners that the Company operates for them under contract, the Company leased eight aircraft under long-term lease agreements with remaining terms ranging from five to six years.

Airport facilities

The Company has operating leases for facility space including airport terminals, office space, cargo warehouses and maintenance facilities. The Company generally leases this space from government agencies that control the use of the various airports. The remaining lease terms for facility space vary from one month to 32 years. The Company’s operating leases with lease rates that are variable based on airport operating costs, use of the facilities or other variable factors are excluded from the Company’s right-of-use assets and operating lease liabilities in accordance with accounting guidance.

Leases

As of March 31, 2024, the Company’s right-of-use assets were $85.9 million, the Company’s current maturities of operating lease liabilities were $19.7 million, and the Company’s noncurrent lease liabilities were $66.2 million. During the three months ended March 31, 2024, the Company paid $5.7 million under operating leases reflected as a reduction from operating cash flows.

The table below presents lease related terms and discount rates as of March 31, 2024:

Weighted-average remaining lease term for operating leases	11.4 years
Weighted-average discount rate for operating leases	6.2%

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The Company’s lease costs for the three months ended March 31, 2024 and 2023 included the following components (in thousands):

	For the three months ended March 31,
	2024		2023
Operating lease cost	$	7,259	$	24,948
Variable and short-term lease cost		1,033		803
Sublease income		(1,246)		(1,350)
Total lease cost	$	7,046	$	24,401

As of March 31, 2024, the Company leased aircraft, airport facilities, office space and other property and equipment under non-cancelable operating leases, which are generally on a long-term, triple-net lease basis pursuant to which the Company pays taxes, maintenance, insurance and certain other operating expenses applicable to the leased property. The Company expects that, in the normal course of business, such operating leases that expire will be renewed or replaced by other leases. The following table summarizes future minimum rental payments required under operating leases that had initial or remaining non-cancelable lease terms as of March 31, 2024 (in thousands):

April 2024 through December 2024	$	15,726
2025		17,974
2026		14,910
2027		12,983
2028		9,976
Thereafter		56,592
Total future minimum operating lease payments	$	128,161

As of March 31, 2024, the Company had a firm purchase commitment for 21 E175 aircraft from Embraer with anticipated delivery dates through 2026.

The following table summarizes the Company’s commitments and obligations as noted for each of the next five years and thereafter (in thousands):

	Total		Apr - Dec 2024		2025		2026		2027		2028		Thereafter
Operating lease payments for aircraft and facility obligations	$	128,161	$	15,726	$	17,974	$	14,910	$	12,983	$	9,976	$	56,592
Firm aircraft and spare engine commitments		610,945		143,810		230,725		236,410		—		—		—
Interest commitments (1)		442,822		84,964		97,933		78,149		56,289		40,947		84,540
Principal maturities on long-term debt		2,918,971		339,156		532,255		510,598		464,289		292,862		779,811
Total commitments and obligations	$	4,100,899	$	583,656	$	878,887	$	840,067	$	533,561	$	343,785	$	920,943

(1) At March 31, 2024, the Company’s long-term debt had fixed interest rates.

Guarantees

In 2022, the Company agreed to guarantee $19.8 million of debt for a 14 CFR Part 135 air carrier. The debt is secured by the Part 135 air carrier’s aircraft and engines and has a five-year term. In exchange for providing the guarantee, the Company received 6.5% of the guaranteed amount as consideration, payable in the estimated value of common stock of the Part 135 air carrier, all of which was sold in 2023. The balance of the debt under the guarantee was $16.1 million as of March 31, 2024.

In 2023, the Company agreed to guarantee up to $12.0 million of debt for an aviation school. The debt is secured by the school’s aircraft and engines and has a five-year term. In exchange for providing the guarantee, the

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Company receives 2.0% annually of the guaranteed amount as consideration in cash. The balance of the debt under the guarantee was $7.2 million as of March 31, 2024.

The purpose of these guarantees is to help reduce the financing costs of aircraft for the third-parties in an effort to increase the potential number of commercial pilots in the Company’s hiring pipeline. The Company also recorded the estimated credit loss associated with the guarantees based on publicly available historical default rates issued by a third party for companies with similar credit ratings, factoring the collateral and guarantee term.

(8) Fair Value Measurements

The Company holds certain assets that are required to be measured at fair value in accordance with GAAP. The Company determined the fair value of these assets based on the following three levels of inputs:

Level 1	—	Quoted prices in active markets for identical assets or liabilities.
Level 2	—	Observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Some of the Company’s marketable securities primarily utilize broker quotes in a non-active market for valuation of these securities.
Level 3	—	Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities, therefore requiring an entity to develop its own assumptions.

As of March 31, 2024, and December 31, 2023, the Company held certain assets that are required to be measured at fair value on a recurring basis. Assets measured at fair value on a recurring basis are summarized below (in thousands):

	Fair Value Measurements as of March 31, 2024
	Total		Level 1		Level 2		Level 3
Marketable Securities
Bonds and bond funds	$	628,994	$	—	$	628,994	$	—
Commercial paper		12,191		—		12,191		—
		641,185		—		641,185		—
Investments in Other Companies		11,904		2,158		—		9,746
Cash and Cash Equivalents		179,979		179,979		—		—
Total Assets Measured at Fair Value	$	833,068	$	182,137	$	641,185	$	9,746

	Fair Value Measurements as of December 31, 2023
	Total		Level 1		Level 2		Level 3
Marketable Securities
Bonds and bond funds	$	677,074	$	—	$	677,074	$	—
Commercial paper		9,872		—		9,872		—
		686,946		—		686,946		—
Investments in Other Companies		15,402		2,925		—		12,477
Cash and Cash Equivalents		148,277		148,277		—		—
Total Assets Measured at Fair Value	$	850,625	$	151,202	$	686,946	$	12,477

The Company’s “Marketable Securities” classified as Level 2 securities primarily utilize broker quotes in a non-active market for valuation of these securities. See Note 11 “Investments in Other Companies” regarding the Company’s investments in other companies, for the three months ended March 31, 2024.

The Company did not make any significant transfers of securities between Level 1, Level 2 and Level 3 during the three months ended March 31, 2024. The Company’s policy regarding the recording of transfers between levels is to record any such transfers at the end of the reporting period.

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As of March 31, 2024, and December 31, 2023, the Company classified $641.2 million and $686.9 million of marketable securities, respectively, as short-term because it had the intent to maintain a liquid portfolio and the ability to redeem the securities within one year. At the time of sale, any realized appreciation or depreciation, calculated by the specific identification method, is recognized in other income and expense. As of March 31, 2024, and December 31, 2023, the cost of the Company’s marketable securities was $641.0 million and $686.5 million, respectively.

(9) Assets Held for Sale

In 2022, the Company committed to a formal plan to sell 14 CRJ700 aircraft and determined the aircraft met the criteria to be classified as assets held for sale. At December 31, 2023, the Company presented the $54.3 million of assets held for sale at their fair market value less costs to sell and included the amount in “Other current assets” on the Company’s consolidated balance sheet. During the three months ended March 31, 2024, the Company changed its plan to sell the 14 CRJ700 aircraft and reclassified them as held for use assets in “Aircraft and rotable spares” on the Company’s consolidated balance sheet. The Company remeasured the fair value of the held for use assets at the time of the reclassification and, as a result, for the three months ended March 31, 2024, the Company recorded a $4.2 million gain (pre-tax) as an offset to other operating expenses primarily due to the elimination of the estimated costs to sell the assets.

(10) Long-term Debt

Long-term debt consisted of the following as of March 31, 2024, and December 31, 2023 (in thousands):

		March 31, 2024		December 31, 2023
Current portion of long-term debt	$	510,204	$	447,534
Current portion of unamortized debt issue cost, net		(3,602)		(3,665)
Current portion of long-term debt, net of debt issue costs	$	506,602	$	443,869
Long-term debt, net of current maturities	$	2,408,767	$	2,582,776
Long-term portion of unamortized debt issue cost, net		(19,540)		(20,593)
Long-term debt, net of current maturities and debt issue costs	$	2,389,227	$	2,562,183
Total long-term debt (including current portion)	$	2,918,971	$	3,030,310
Total unamortized debt issue cost, net		(23,142)		(24,258)
Total long-term debt, net of debt issue costs	$	2,895,829	$	3,006,052

As of March 31, 2024, the Company had $2.9 billion of total long-term debt, which consisted of $2.7 billion of debt used to finance aircraft and spare engines and $200.6 million of unsecured debt payable to U.S. Treasury. The average effective interest rate on the Company’s debt was approximately 4.1% at March 31, 2024.

As of March 31, 2024 and December 31, 2023, the Company had $45.0 million and $49.1 million, respectively, in letters of credit and surety bonds outstanding with various banks and surety institutions.

As of March 31, 2024, SkyWest Airlines had a $100.0 million line of credit. The line of credit includes minimum liquidity and profitability covenants and is secured by certain assets. As of March 31, 2024, SkyWest Airlines had no amounts outstanding under the facility. However, at March 31, 2024, SkyWest Airlines had $24.9 million in letters of credit issued under the facility, which reduced the amount available under the facility to $75.1 million. The line of credit expires March 25, 2025 and has a variable interest rate of 3.5% plus the one month SOFR rate.

The Company’s debt agreements are not traded on an active market and are recorded at carrying value on the Company’s consolidated balance sheet. The fair value of the Company’s long-term debt is estimated based on current rates offered to the Company for similar debt. Debt is primarily classified as Level 2 within the fair value hierarchy. The

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carrying value and fair value of the Company’s long-term debt as of March 31, 2024 and December 31, 2023, were as follows (in thousands):

	March 31, 2024		December 31, 2023
Carrying value	$	2,918,971	$	3,030,310
Fair value	$	2,820,034	$	2,918,012

(11) Investments in Other Companies

Equity Method Investments

During 2019, the Company created a joint venture with Regional One, Inc. and, as of March 31, 2024, has invested a total of $26.6 million for an ownership interest in Aero Engines, LLC. (“Aero Engines”). The primary purpose of Aero Engines is to lease engines to third parties. The Company accounts for its investment in Aero Engines under the equity method. The Company’s exposure in its investment in Aero Engines primarily consists of the Company’s portion of income or loss from Aero Engines’ engine lease agreements with third parties and the Company’s ownership percentage in Aero Engines’ engines book value. Aero Engines had no debt outstanding as of March 31, 2024. As of March 31, 2024, the Company’s investment balance in Aero Engines was $25.3 million and has been recorded in “Other Assets” on the Company’s consolidated balance sheet. The Company’s portion of income generated by Aero Engines for the three months ended March 31, 2024, was $0.2 million, which is recorded in “Other income (loss), net” on the Company’s consolidated statements of comprehensive income.

In December 2023, the Company invested $9.9 million for a 9.9% ownership interest in Corporate Flight Management, Inc. d/b/a Contour Airlines (“Contour”), a 14 CFR Part 135 air carrier. In January 2024, the Company invested an additional $15.1 million in Contour. The Company has a 25% ownership interest in Contour at March 31, 2024 and holds one of five seats, or 20%, on Contour’s board of directors. The Contour arrangement also includes an asset provisioning agreement under which the Company will provide CRJ airframes, engines and rotable parts to Contour. The Company accounts for its investment in Contour under the equity method where the investment is reported at cost and adjusted each period for the Company’s share of Contour’s income or loss, recorded on a one quarter lag. Accordingly, for the three months ended March 31, 2024, the Company recorded a loss of less than $0.1 million, its portion of loss generated by Contour during the fourth quarter of 2023, which was recorded in “Other income (loss), net” on the Company’s consolidated statements of comprehensive income. As of March 31, 2024, the Company’s investment balance in Contour of $25.0 million was recorded in “Other Assets” on the Company’s consolidated balance sheet. At March 31, 2024, the Company had $14.0 million in notes receivable from Contour related to the sale of aircraft under the asset provisioning agreement. The notes are secured by aircraft and collectible within four years.

The Company assesses investments for impairment whenever events or changes in circumstances indicate that the carrying value of an investment may not be recoverable.

Fair Value Method Investments

In 2021, the Company entered into a strategic partnership with Eve UAM, LLC (“Eve UAM”), to develop a network of deployment for Eve UAM’s electric vertical takeoff and landing (“eVTOL”) aircraft.

In 2022, the Company acquired 1,000,000 shares of common stock of Eve Holding, Inc. (“Eve”) and a warrant giving the Company the right to acquire 1,500,000 shares of common stock of Eve at an exercise price of $0.01 per share. The Company also received a put option from an Eve shareholder for the 1,000,000 shares of common stock of Eve payable in aircraft parts credits. The intent of the put option is to reduce the Company’s investment risk in Eve, and the put option expires in December 2031. The Company is restricted from selling the shares underlying the warrant until May 2025, and the warrant expires in May 2032. The Company acquired the shares of common stock, warrant and put option (collectively the “Eve Investments”) for $10.0 million. The Company evaluated the Eve Investments under ASC Topic 321, “Investments – Equity Securities” and ASC Topic 815, “Derivatives and Hedging,” and recorded the Eve Investments based on their pro rata share of the consideration paid using the fair value of the Eve Investments on the acquisition date, with subsequent changes in the fair value reported in earnings. During the year ended December 31, 2023, the Company sold 600,411 shares of common stock of Eve, which concurrently forfeited the 600,411 shares subject to the put option from the Eve shareholder.

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The shares of common stock of Eve are classified as Level 1 within the fair value hierarchy as Eve stock is actively traded on the New York Stock Exchange, and the value is determined using quoted market prices for the equity security. The warrant and put option are classified as Level 3 within the fair value hierarchy (“Eve Level 3 Investments”), and the Company used the Black Scholes Option Pricing Model to determine the estimated fair market value of the Eve Level 3 Investments, including an expected volatility of 52%, which is a significant unobservable input that was derived from historical volatility of comparable companies.

The table below shows the reconciliation of the Eve Level 3 Investments (in thousands):

Eve Level 3 Investments:
Balance at December 31, 2023	$	12,477
Unrealized loss		(2,731)
Balance at March 31, 2024	$	9,746

The Company recognized unrealized losses of $3.5 million in “Other income (loss), net” on the Company’s consolidated statements of comprehensive income for the three months ended March 31, 2024, related to the Eve Investments. As of March 31, 2024, the fair value of the Eve Investments was $11.9 million and was recorded in “Other Assets” on the Company’s consolidated balance sheet.

(12) Income Taxes

The Company’s effective tax rate for the three months ended March 31, 2024 was 24.8%. The Company’s effective tax rate for the three months ended March 31, 2024 varied from the federal statutory rate of 21.0% primarily due to the provision for state income taxes and the impact of non-deductible expenses, partially offset by a discrete tax benefit from excess tax deductions generated from employee equity transactions that occurred during the three months ended March 31, 2024.

The Company’s effective tax rate for the three months ended March 31, 2023 was 15.5%. The Company’s effective tax rate for the three months ended March 31, 2023 varied from the federal statutory rate of 21.0% primarily due to the impact of non-deductible expenses and a discrete tax expense on employee equity transactions that occurred during the three months ended March 31, 2023, partially offset by the provision for state income taxes.

(13) Legal Matters

The Company is subject to certain legal actions which it considers routine to its business activities. As of March 31, 2024, the Company’s management believed, after consultation with legal counsel, that the ultimate outcome of such legal matters was not likely to have a material adverse effect on the Company’s financial position, liquidity or results of operations.

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ITEM 2: MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis presents factors that had a material effect on the results of operations of SkyWest, Inc. (“SkyWest” “we” or “us”) during the three-month periods ended March 31, 2024 and 2023. Also discussed is our financial condition as of March 31, 2024, and December 31, 2023. You should read this discussion in conjunction with our condensed consolidated financial statements for the three months ended March 31, 2024, including the notes thereto, appearing elsewhere in this Report. This discussion and analysis contains forward-looking statements. Please refer to the section of this Report entitled “Cautionary Statement Concerning Forward-Looking Statements” for discussion of uncertainties, risks and assumptions associated with these statements.

Cautionary Statement Concerning Forward-Looking Statements

Certain of the statements contained in this Report should be considered “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements may be identified by words such as “may,” “will,” “expect,” “intend,” “forecast,” “anticipate,” “believe,” “estimate,” “plan,” “project,” “could,” “should,” “hope,” “likely,” and “continue” and similar terms used in connection with statements regarding our outlook, anticipated operations, the revenue environment, our contractual relationships, and our anticipated financial performance. These statements include, but are not limited to, statements about the continued demand for our product, the effect of economic conditions on SkyWest’s business, financial condition and results of operations, the scheduled aircraft deliveries for SkyWest in upcoming periods and the related execution of SkyWest’s fleet transition strategy and expected timing thereof, expected production levels in future periods and associated staffing challenges, pilot attrition trends, SkyWest’s coordination with United Airlines, Inc. (“United”), Delta Air Lines, Inc. (“Delta”), American Airlines, Inc. (“American”) and Alaska Airlines, Inc. (“Alaska”) (each, a “major airline partner” and together, “major airline partners”) to optimize the delivery of aircraft under previously announced agreements, the expected terms, timing and benefits related to SkyWest’s leasing and joint venture transactions, SkyWest’s provision of assets to Contour Airlines, as well as SkyWest’s future financial and operating results, plans, objectives, expectations, estimates, intentions and outlook, and other statements that are not historical facts. All forward-looking statements included in this Report are made as of the date hereof and are based on information available to SkyWest as of such date. SkyWest assumes no obligation to update any forward-looking statements unless required by law. Readers should note that many factors could affect the future operating and financial results of SkyWest and could cause actual results to vary materially from those expressed in forward-looking statements set forth in this Report. These factors include, but are not limited to the challenges of competing successfully in a highly competitive and rapidly changing industry; developments associated with fluctuations in the economy and the demand for air travel, including related to inflationary pressures, and related decreases in customer demand and spending; uncertainty regarding continued recovery from the COVID-19 pandemic and other potential future outbreaks of infectious diseases or other health concerns, and the consequences of such outbreaks to the travel industry, including travel demand and travel behavior, and our major airline partners in general and the financial condition and operating results of SkyWest in particular; the prospects of entering into agreements with existing or other carriers to fly new aircraft; ongoing negotiations between SkyWest and its major airline partners regarding their contractual obligations; uncertainties regarding operation of new aircraft; the ability to attract and retain qualified pilots, including captains, and related staffing challenges; the impact of regulatory issues such as pilot rest rules and qualification requirements; the ability to obtain aircraft financing; the financial stability of SkyWest’s major airline partners and any potential impact of their financial condition on the operations of SkyWest; fluctuations in flight schedules, which are determined by the major airline partners for whom SkyWest conducts flight operations; variations in market and economic conditions; significant aircraft lease and debt commitments; estimated useful life of long-lived assets, residual aircraft values and related impairment charges; labor relations and costs and labor shortages; the impact of global instability; rapidly fluctuating fuel costs and potential fuel shortages; the impact of weather-related, natural disasters and other air safety incidents on air travel and airline costs; aircraft deliveries; uncertainty regarding ongoing hostility between Russia and the Ukraine, as well as Israel and Hamas, and the related impacts on macroeconomic conditions and on the international operations of any of our major airline partners as a result of such conflict; as well as the other factors identified under the heading “Risk Factors” in Part I, Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2023, under the heading “Risk Factors” in Part II, Item 1A of this Report, elsewhere in this Report, in our other filings with the Securities and Exchange Commission (the “SEC”) and other unanticipated factors.

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There may be other factors that may affect matters discussed in forward-looking statements set forth in this Report, which factors may also cause actual results to differ materially from those discussed. We assume no obligation to publicly update any forward-looking statement to reflect actual results, changes in assumptions or changes in other factors affecting these statements other than as required by applicable law.

Overview

We have the largest regional airline operation in the United States through our operating subsidiary SkyWest Airlines, Inc. (“SkyWest Airlines”). As of March 31, 2024, we offered scheduled passenger and air freight service with approximately 1,860 total daily departures to destinations in the United States, Canada and Mexico. Our fleet of Embraer E175 regional jet aircraft (“E175”), Canadair CRJ900 regional jet aircraft (“CRJ900”) and Canadair CRJ700 regional jet aircraft (“CRJ700”) have a multiple-class seat configuration, whereas our Canadair CRJ200 regional jet aircraft (“CRJ200”) aircraft have a single-class seat configuration. During 2022, we formed SkyWest Charter, LLC (“SWC”), which offers on-demand charter services. As of March 31, 2024, we had 601 total aircraft in our fleet, including 475 aircraft in scheduled service or under contract under our code-share agreements, summarized as follows:

	E175	CRJ900	CRJ700	CRJ200	Total
United	93	—	19	89	201
Delta	85	41	9	—	135
American	20	—	77	—	97
Alaska	42	—	—	—	42
Aircraft in scheduled service or under contract	240	41	105	89	475
SWC	—	—	—	16	16
Leased to third parties	—	5	35	—	40
Other (1)	—	3	27	40	70
Total Fleet	240	49	167	145	601

(1) As of March 31, 2024, other aircraft included: supplemental spare aircraft supporting our code-share agreements that may be placed under future code-share or leasing arrangements, aircraft transitioning between code-share agreements with our major airline partners or aircraft that are scheduled to be disassembled for use as spare parts.

Our business model is based on providing scheduled regional airline service under code-share agreements (commercial agreements between airlines that, among other things, allow one airline to use another airline’s flight designator codes on its flights) with our major airline partners. Our success is principally centered on our ability to meet the needs of our major airline partners by providing a reliable and safe operation at attractive economics. From March 31, 2023, to March 31, 2024, we made changes to our fleet, including the addition of two new E175 aircraft and three partner-financed E175 aircraft.

We anticipate our fleet will continue to evolve, as we are scheduled to add one new E175 aircraft with Delta in 2024, a total of 36 E175 aircraft with United from 2024 to 2026 (including 19 new aircraft financed by us and 17 aircraft financed by United) and one new E175 aircraft with Alaska in 2025. Timing of these anticipated deliveries may be subject to change as we are coordinating with our major airline partners in response to labor availability or other factors. Our primary objective in the fleet changes is to improve our profitability by adding new E175 aircraft and used CRJ aircraft to capacity purchase agreements, and potentially removing older aircraft from service that typically require higher maintenance costs.

As of March 31, 2024, approximately 42.3% of our aircraft in scheduled service or under contract were operated for United, approximately 28.5% were operated for Delta, approximately 20.4% were operated for American and approximately 8.8% were operated for Alaska.

Historically, multiple contractual relationships with major airlines have enabled us to reduce our reliance on any single major airline code and to enhance and stabilize operating results through a mix of fixed-fee arrangements (referred to as “capacity purchase” agreements) and “prorate” arrangements. For the three months ended March 31, 2024, our capacity purchase revenue represented approximately 87.0% of our total flying agreement revenue and our prorate and SWC revenue, combined, represented approximately 13.0% of our total flying agreements revenue. On capacity

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purchase routes, the major airline partner controls scheduling, ticketing, pricing and seat inventories and we are compensated by the major airline partner at contracted rates based on completed block hours (measured from takeoff to landing, including taxi time), flight departures, the number of aircraft under contract and other operating measures. We control scheduling, pricing and seat inventories on certain prorate routes, and we share passenger fares with our major airline partners according to prorate formulas. We are also responsible for the operating costs of the prorate flights, including fuel and airport costs.

First Quarter Summary

We had total operating revenues of $803.6 million for the three months ended March 31, 2024, a 16.2% increase compared to total operating revenues of $691.8 million for the three months ended March 31, 2023. We had net income of $60.3 million, or $1.45 per diluted share, for the three months ended March 31, 2024, compared to net loss of $22.1 million, or $0.45 loss per share, for the three months ended March 31, 2023. The significant items affecting our revenue and operating expenses during the three months ended March 31, 2024, are outlined below:

Revenue

The number of aircraft we have in scheduled service or under contract pursuant to our code-share agreements and the number of block hours we incur on our flights are primary drivers of our flying agreements revenue under our capacity purchase agreements. The number of flights we operate and the corresponding number of passengers we carry are the primary drivers of our revenue under our prorate flying agreements. The number of aircraft we have in scheduled service or under contract under code-share agreements decreased from 491 as of March 31, 2023 to 475 as of March 31, 2024; and the number of block hours increased from 276,241 for the three months ended March 31, 2023 to 289,801 for the three months ended March 31, 2024, or by 4.9%, due to an increase in scheduled daily utilization of our aircraft.

Our capacity purchase revenue increased $90.7 million, or 15.5%, from the three months ended March 31, 2023 to the three months ended March 31, 2024, primarily as a result of an increase in completed block hours for the comparable periods and recognizing previously deferred revenue for the three months ended March 31, 2024, compared to deferring revenue for the three months ended March 31, 2023. As a result of a higher number of passengers carried on our prorate routes and an increase in the number of prorate and charter flights operated year-over-year, our prorate and SWC revenue increased $23.7 million, or 30.7%, for the three months ended March 31, 2024, as compared to the three months ended March 31, 2023.

Operating Expenses

Our total operating expenses increased $7.6 million, or 1.1%, for the three months ended March 31, 2024, compared to the three months ended March 31, 2023. The increase in operating expenses was primarily due to an increase in our direct operating expenses associated with the increase in the number of flights we operated, partially offset by lower aircraft rent expense from early lease buyouts we executed during 2023. Departures increased from 160,623 for the three months ended March 31, 2023 to 169,432 for the three months ended March 31, 2024, or by 5.5%. Additional details regarding the increase in our operating expenses are described in the section of this Report entitled “Results of Operations.”

Fleet Activity

The following table summarizes our fleet scheduled for service or under contract as of:

Aircraft in Service or Under Contract	March 31, 2024	December 31, 2023	March 31, 2023
E175s	240	237	236
CRJ900s	41	41	36
CRJ700s	105	118	103
CRJ200s	89	89	116
Total	475	485	491

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Critical Accounting Policies and Estimates

Our significant accounting policies are summarized in Note 1 to our consolidated financial statements for the year ended December 31, 2023, and Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” which are presented in our Annual Report on Form 10-K for the year ended December 31, 2023. Critical accounting policies are those policies that are most important to the preparation of our consolidated financial statements and require management’s subjective and complex judgments due to the need to make estimates about the effect of matters that are inherently uncertain. Our critical accounting policies relate to revenue recognition, long-lived assets, and income tax. The application of these accounting policies involves the exercise of judgment and the use of assumptions as to future uncertainties and, as a result, actual results will likely differ, and may differ materially, from such estimates. There have been no significant changes in our critical accounting estimates during the three months ended March 31, 2024.

Recent Accounting Pronouncements

See Note 1 to the condensed consolidated financial statements for a description of recent accounting pronouncements.

Results of Operations

Three Months Ended March 31, 2024 and 2023

Operational Statistics

The following table sets forth our major operational statistics and the associated percentage changes for the periods identified below. The increase in block hours, departures and passengers carried during the three months ended March 31, 2024, compared to the three months ended March 31, 2023, was primarily due to an increase in the number of available captains during the three months ended March 31, 2024, compared to the three months ended March 31, 2023.

	For the three months ended March 31,
Block hours by aircraft type:	2024		2023		% Change
E175s	178,985		160,751		11.3	%
CRJ900s	17,392		20,713		(16.0)	%
CRJ700s	58,285		52,028		12.0	%
CRJ200s	35,139		42,749		(17.8)	%
Total block hours	289,801		276,241		4.9	%
Departures	169,432		160,623		5.5	%
Passengers carried	9,149,453		8,575,870		6.7	%
Passenger load factor	80.8	%	80.2	%	0.6	pts
Average passenger trip length (miles)	461		472		(2.3)	%

Operating Revenues

The following table summarizes our operating revenue for the periods indicated (dollar amounts in thousands):

	For the three months ended March 31,
	2024		2023		$ Change		% Change
Flying agreements	$	778,289	$	663,838	$	114,451	17.2	%
Lease, airport services and other		25,325		27,993		(2,668)	(9.5)	%
Total operating revenues	$	803,614	$	691,831	$	111,783	16.2	%

Flying agreements revenue primarily consists of revenue earned on flights we operate under our capacity purchase agreements and prorate agreements with our major airline partners and on-demand charter flights. Lease,

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airport services and other revenues consist of revenue earned from leasing aircraft and spare engines to third parties separate from our capacity purchase agreements and providing airport counter, gate and ramp services.

We disaggregate our flying agreements revenue into the following categories (dollar amounts in thousands):

	For the three months ended March 31,
	2024		2023		$ Change		% Change
Capacity purchase agreements flight operations revenue	$	544,160	$	468,916	$	75,244	16.0	%
Capacity purchase agreements aircraft lease revenue		133,045		117,585		15,460	13.1	%
Prorate agreements and SWC revenue		101,084		77,337		23,747	30.7	%
Flying agreements revenue	$	778,289	$	663,838	$	114,451	17.2	%

The increase in “Capacity purchase agreements flight operations revenue” of $75.2 million, or 16.0%, was primarily due to a 4.9% increase in block hour production and a decrease in deferred revenue related to fixed monthly payments for flight operations received under our capacity purchase agreements for the three months ended March 31, 2024, compared to the three months ended March 31, 2023. Under our capacity purchase agreements, we are paid a fixed amount per month per aircraft over the contract term. We recognize the fixed amount per aircraft related to operating the aircraft as revenue proportionately to the number of block hours we complete for each reporting period. Under our capacity purchase agreements, the performance obligation of each completed flight is measured in block hours incurred for each completed flight. Beginning January 1, 2024, certain scheduled fixed monthly payments under our capacity purchase agreements transitioned to variable payments, which are calculated at a rate per block hour. Based on the number of completed block hours during the three months ended March 31, 2024, we recognized $0.4 million of previously deferred revenue, net of unbilled revenue, related to the non-lease fixed monthly payments we received associated with our flight operations revenues. For the three months ended March 31, 2023, we deferred recognizing $42.6 million of revenue, net of unbilled revenue, related to fixed monthly payments received associated with our flight operations revenues. The timing of our revenue recognition related to the fixed payments associated with our flight operations will be adjusted over the remaining contract term for each capacity purchase agreement based on the number of block hours we complete each reporting period relative to the number of block hours we anticipate completing over the remaining contract term of each capacity purchase agreement.

The increase in “Capacity purchase agreements aircraft lease revenue” of $15.5 million, or 13.1%, was primarily due to an increase in variable lease revenue as a result of certain scheduled fixed monthly lease payments that transitioned beginning January 1, 2024 to variable payments under our capacity purchase agreements. Under our capacity purchase agreements, a portion of the consideration we are paid is designed as reimbursement for certain aircraft ownership costs and is considered lease revenue, including fixed monthly payments and variable payments. We recognize the fixed monthly lease payments as lease revenue using the straight-line basis over the capacity purchase agreement term and variable lease payments are recognized in the period when the block hours are completed. We recognized $0.5 million of previously deferred lease revenue during the three months ended March 31, 2024, using the straight-line basis for fixed monthly lease payments, whereas we deferred recognizing lease revenue on $20.6 million during the three months ended March 31, 2023.

The deferred revenue balance applicable to each contract will be recorded as revenue over the term of each respective contract. For clarity, in total we recognized $0.9 million of previously deferred revenue, net of unbilled revenue, during the three months ended March 31, 2024, compared to deferring revenue, net of unbilled revenue, of $63.2 million during the three months ended March 31, 2023. Our total deferred revenue balance, net of unbilled revenue, was $366.4 million as of March 31, 2024, compared to total deferred revenue, net of unbilled revenue, of $367.3 million as of December 31, 2023.

The increase in prorate agreements and SWC revenue of $23.7 million, or 30.7%, was primarily due to an increase in prorate passengers and passenger revenue we received on routes we operated under our prorate agreements during the three months ended March 31, 2024, compared to the three months ended March 31, 2023. Additionally, a portion of the increase is attributed to SWC revenue during the three months ended March 31, 2024, as SWC began operations in May 2023.

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The decrease in lease, airport services and other revenues of $2.7 million, or 9.5%, was primarily due to a decrease in airport service revenue driven by a decrease in the number of locations where we were contracted to provide airport customer service during the three months ended March 31, 2024, compared to the three months ended March 31, 2023.

Operating Expenses

Individual expense components attributable to our operations are set forth in the following table (dollar amounts in thousands):

	For the three months ended March 31,
	2024		2023		$ Change		% Change
Salaries, wages and benefits	$	350,999	$	335,201	$	15,798	4.7	%
Aircraft maintenance, materials and repairs		145,415		142,226		3,189	2.2	%
Depreciation and amortization		95,870		94,149		1,721	1.8	%
Aircraft fuel		21,164		20,964		200	1.0	%
Airport-related expenses		20,888		18,295		2,593	14.2	%
Aircraft rentals		1,276		19,528		(18,252)	(93.5)	%
Other operating expenses		68,496		66,172		2,324	3.5	%
Total operating expenses	$	704,108	$	696,535	$	7,573	1.1	%

Salaries, wages and benefits. The $15.8 million, or 4.7%, increase in salaries, wages and benefits was primarily due to an increase in direct labor costs that resulted from the higher number of flights we operated during the three months ended March 31, 2024, compared to the three months ended March 31, 2023, and from pay increases to several labor groups since March 31, 2023.

Aircraft maintenance, materials and repairs. The $3.2 million, or 2.2%, increase in aircraft maintenance expense was primarily due to higher flight volume, which increased maintenance activity, for the three months ended March 31, 2024, compared to the three months ended March 31, 2023.

Depreciation and amortization. The $1.7 million, or 1.8%, increase in depreciation and amortization expense was primarily due to an increase in depreciation expense due to the acquisition of two new E175 aircraft and spare engines since March 31, 2023.

Aircraft fuel. The $0.2 million, or 1.0%, increase in fuel cost was primarily due to an increase in the number of flights we operated under our prorate arrangements and SWC and the corresponding increase in gallons of fuel we purchased, offset by a decrease in our average fuel cost per gallon from $4.01 for the three months ended March 31, 2023, to $3.51 for the three months ended March 31, 2024. We purchase and incur expense for all fuel on flights operated under our prorate agreements and SWC. All fuel costs incurred under our capacity purchase agreements are either purchased directly by our major airline partner, or if purchased by us, we record the direct reimbursement as a reduction to our fuel expense. The following table summarizes the gallons of fuel we purchased under our prorate agreements and SWC, for the periods indicated:

	For the three months ended March 31,
(in thousands)	2024		2023		% Change
Fuel gallons purchased		6,025		5,228	15.2	%
Fuel expense	$	21,164	$	20,964	1.0	%

Airport-related expenses. Airport-related expenses include airport-related customer service costs such as outsourced airport gate and ramp agent services, airport security fees, passenger interruption costs, deicing, landing fees and station rents. For clarity, our employee airport customer service labor costs are reflected in salaries, wages and benefits and customer service labor costs we outsource to third parties are included in airport-related expenses. The $2.6 million, or 14.2%, increase in airport-related expenses for the three months ended March 31, 2024, compared to the three months ended March 31, 2023, was primarily due to an increase in subcontracted airport services and landing fees as a result of an increase in the number of flights we operated under our prorate agreements.

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Aircraft rentals. The $18.3 million, or 93.5%, decrease in aircraft rentals was primarily related to a decrease in our leased aircraft since the three months ended March 31, 2023. During 2023, we acquired 26 CRJ700 aircraft, eight CRJ200 aircraft and one CRJ900 aircraft under early lease buyouts.

Other operating expenses. Other operating expenses primarily consist of property taxes, hull and liability insurance, simulator costs, crew per diem and crew hotel costs. The $2.3 million, or 3.5%, increase was primarily related to an increase in other operating costs as a result of the higher number of flights we operated during the three months ended March 31, 2024, compared to the three months ended March 31, 2023, such as crew per diem and crew hotel costs.

Summary of interest expense, interest income, other income (loss), net and provision for income taxes

Interest Expense. The $3.8 million, or 11.3%, decrease in interest expense was primarily related to a decrease in outstanding debt. At March 31, 2024 we had $2.9 billion of outstanding debt, compared to $3.3 billion at March 31, 2023.

Interest income. Interest income increased $1.6 million, from $10.0 million for the three months ended March 31, 2023, to $11.6 million for the three months ended March 31, 2024. The increase in interest income was primarily related to an increase in average interest rates attributed to our marketable securities for the three months ended March 31, 2024, compared to the three months ended March 31, 2023.

Other income (loss), net. Other income (loss), net decreased $3.3 million during the three months ended March 31, 2024, compared to the three months ended March 31, 2023. Other income (loss), net primarily consists of the unrealized gains on our investments in other companies, income related to our equity method investments and gains or losses on the sale of assets. The decrease in other income (loss), net was primarily a result of a decrease in the fair value of our investments in other companies for the three months ended March 31, 2024, compared to the three months ended March 31, 2023.

Provision (benefit) for income taxes. For the three months ended March 31, 2024 and 2023, our effective income tax rates were 24.8% and 15.5%, respectively, which included the statutory federal income tax rate of 21% and other reconciling income tax items, including state income taxes, the impact of non-deductible expenses and a discrete tax benefit or expense on employee equity transactions. The increase in the effective tax rate primarily related to the impact of non-deductible expenses relative to the pre-tax earnings for the three months ended March 31, 2024, compared to pre-tax loss for the three months ended March 31, 2023, and the impact of a discrete tax benefit from excess tax deductions generated from employee equity transactions that occurred during the three months ended March 31, 2024, compared to a discrete tax expense from excess tax deductions generated from employee equity transactions that occurred during the three months ended March 31, 2023.

Net income. Primarily due to the factors described above, we generated net income of $60.3 million, or $1.45 per diluted share, for the three months ended March 31, 2024, compared to a net loss of $22.1 million, or $0.45 loss per share, for the three months ended March 31, 2023.

Our Business Segments

Three Months Ended March 31, 2024 and 2023

For the three months ended March 31, 2024, we had two reporting segments, which were the basis of our internal financial reporting: (1) the operations of SkyWest Airlines and SWC and (2) SkyWest Leasing activities. Our segment disclosure relates to components of our business for which separate financial information is available to, and regularly evaluated by, our chief operating decision maker.

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	For the three months ended March 31,
	(dollar amounts in thousands)
	2024		2023		$ Change		% Change
Operating Revenues:
SkyWest Airlines and SWC	$	646,809	$	568,173	$	78,636	13.8	%
SkyWest Leasing		156,805		123,658		33,147	26.8	%
Total Operating Revenues		803,614		691,831		111,783	16.2	%
Operating Expenses and Interest Expense:
SkyWest Airlines and SWC		644,839		637,454		7,385	1.2	%
SkyWest Leasing		89,098		92,701		(3,603)	(3.9)	%
Total Operating Expenses and Interest Expense (1)		733,937		730,155		3,782	0.5	%
Segment profit (loss):
SkyWest Airlines and SWC		1,970		(69,281)		71,251	(102.8)	%
SkyWest Leasing		67,707		30,957		36,750	118.7	%
Total Segment Profit (Loss)		69,677		(38,324)		108,001	(281.8)	%
Interest Income		11,626		10,033		1,593	15.9	%
Other Income (Loss), net		(1,128)		2,174		(3,302)	(151.9)	%
Consolidated Income (Loss) Before Taxes	$	80,175	$	(26,117)	$	106,292	(407.0)	%

(1) We include interest expense in our segment profit (loss) given our interest expense is primarily attributed to debt associated with financing aircraft under our capacity purchase agreements and revenue earned under our capacity purchase agreements is intended to compensate us for our aircraft ownership costs, including interest expense.

SkyWest Airlines and SWC Segment Profit (Loss). SkyWest Airlines and SWC segment profit was $2.0 million for the three months ended March 31, 2024, compared to a segment loss of $69.3 million for the three months ended March 31, 2023.

SkyWest Airlines and SWC block hour production increased to 289,801, or 4.9%, for the three months ended March 31, 2024, from 276,241 for the three months ended March 31, 2023, primarily due to improvements in the number of available captains. Significant items contributing to the SkyWest Airlines and SWC segment profit for the three months ended March 31, 2024 are set forth below.

SkyWest Airlines and SWC operating revenues increased $78.6 million, or 13.8%, from the three months ended March 31, 2023, to the three months ended March 31, 2024. SkyWest Airlines recognizes revenue attributed to flight operations received as fixed monthly payments per aircraft proportionate to the number of block hours completed during each reporting period, relative to the estimated number of block hours we anticipate completing over the remaining contract term. During the three months ended March 31, 2024, SkyWest Airlines recognized $0.4 million of previously deferred revenue, net of unbilled revenue, related to fixed monthly payments we received associated with our flight operations revenues, compared to deferring $42.6 million of revenue, net of unbilled revenue, related to fixed monthly payments received associated with our flight operations revenues during the three months ended March 31, 2023. Additionally, the increase in SkyWest Airlines and SWC operating revenues was attributed to an increase in block hour production during the three months ended March 31, 2024, compared to the three months ended March 31, 2023.

SkyWest Airlines and SWC operating expenses and interest expense increased $7.4 million, or 1.2%, from the three months ended March 31, 2023, to the three months ended March 31, 2024, due to the following primary factors:

● SkyWest Airlines and SWC’s salaries, wages and benefits expense increased $15.8 million, or 4.7%, primarily due to an increase in direct labor costs that resulted from the higher number of flights we operated during the three months ended March 31, 2024, compared to the three months ended March 31, 2023.

● SkyWest Airlines and SWC’s aircraft maintenance, materials and repairs expense increased $3.3 million, or 2.4%, primarily due to higher flight volume, which increased the maintenance activity, for the three months ended March 31, 2024, compared to the three months ended March 31, 2023.

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● SkyWest Airlines and SWC’s depreciation and amortization expense decreased by $2.1 million, or 5.6%, primarily due to certain CRJ aircraft and engines that were depreciated to their estimated residual value since March 31, 2023.

● SkyWest Airlines and SWC’s fuel expense increased $0.2 million, or 1.0%, due to an increase in the number of flights we operated under our prorate arrangements and SWC and the corresponding increase in gallons of fuel we purchased, offset by a decrease in our average fuel cost per gallon from $4.01 for the three months ended March 31, 2023, to $3.51 for the three months ended March 31, 2024.

● SkyWest Airlines and SWC’s remaining airline expense decreased $9.8 million, or 9.2%, primarily related to a decrease in aircraft rent expense due to the early lease buyouts of 35 CRJ aircraft in 2023.

SkyWest Leasing Segment Profit. SkyWest Leasing profit increased $36.8 million, or 118.7%, during the three months ended March 31, 2024, compared to the three months ended March 31, 2023. For the three months ended March 31, 2023, SkyWest Leasing deferred recognizing lease revenue under the straight-line basis on $20.6 million of the fixed monthly lease payments received, compared to recognizing $0.5 million of previously deferred lease revenue for the three months ended March 31, 2024. Additionally, SkyWest Leasing profit increased due to additional lease revenue from the E175 aircraft placed under contract since March 31, 2023, a decrease in interest expense as a result of a lower outstanding debt balance for the three months ended March 31, 2024, compared to the three months ended March 31, 2023, and a gain related to reclassifying assets held for sale as held and used during the three months ended March 31, 2024.

Liquidity and Capital Resources

As of March 31, 2024, we had $821.2 million in cash and cash equivalents and marketable securities. As of March 31, 2024, we had $75.1 million available for borrowings under our line of credit. Given our available liquidity as of March 31, 2024, we believe the working capital currently available to us will be sufficient to meet our present financial requirements, including planned capital expenditures, scheduled lease payments and debt service obligations for at least the next 12 months.

Our total cash and marketable securities decreased from $835.2 million as of December 31, 2023 to $821.2 million as of March 31, 2024, or by $14.1 million. At March 31, 2024, our total capital mix was 47.5% equity and 52.5% long-term debt, compared to 45.2% equity and 54.8% long-term debt at December 31, 2023. During the three months ended March 31, 2024, we repurchased 136,261 shares of our common stock for $8.7 million under share repurchase programs authorized by our Board of Directors.

As of March 31, 2024, and December 31, 2023, we had $45.0 million and $49.1 million, respectively, in letters of credit and surety bonds outstanding with various banks and surety institutions. We had no restricted cash as of March 31, 2024, and December 31, 2023.

Sources and Uses of Cash

Cash Position and Liquidity. The following table provides a summary of the net cash provided by (used in) our operating, investing and financing activities for the three months ended March 31, 2024 and 2023, and our total cash and marketable securities positions as of March 31, 2024, and December 31, 2023 (in thousands):

	For the three months ended March 31,
	2024		2023		$ Change		% Change
Net cash provided by operating activities	$	157,648	$	150,203	$	7,445	5.0	%
Net cash provided by (used in) investing activities		(554)		3,032		(3,586)	(118.3)	%
Net cash used in financing activities		(125,392)		(181,695)		56,303	(31.0)	%

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	March 31,		December 31,
	2024		2023		$ Change		% Change
Cash and cash equivalents	$	179,979	$	148,277	$	31,702	21.4	%
Marketable securities		641,185		686,946		(45,761)	(6.7)	%
Total	$	821,164	$	835,223	$	(14,059)	(1.7)	%

Cash Flows provided by Operating Activities

Our cash flows provided by operating activities was $157.6 million for the three months ended March 31, 2024, compared to $150.2 million for the three months ended March 31, 2023. Our operating cash flows are typically impacted by various factors including our net income, adjusted for non-cash expenses and gains such as depreciation expense, stock-based compensation expense and gains or losses on the disposal of assets; and timing of cash payments and cash receipts attributed to our various current asset and liability accounts, such as accounts receivable, inventory, accounts payable, accrued liabilities, deferred revenue and unbilled revenue.

The increase in our cash flow from operations for the three months ended March 31, 2024, compared to the three months ended March 31, 2023, was primarily due to the increase in net income, adjusted for non-cash items, for the three months ended March 31, 2024, compared to the three months ended March 31, 2023, offset by the timing of cash payments on our current liability accounts for the three months ended March 31, 2024, compared to the three months ended March 31, 2023.

Cash Flows provided by (used in) Investing Activities

Our cash flows used in investing activities was $0.6 million for the three months ended March 31, 2024, compared to cash flows provided by investing activities of $3.0 million for the three months ended March 31, 2023. Our investing cash flows are typically impacted by various factors including our capital expenditures, such as the acquisition of aircraft and spare engines; deposit payments and refunds of previously made deposits on new aircraft; purchase and sales of marketable securities; proceeds from the sale of assets; and timing of cash payments and cash receipts attributed to our various long-term asset and long-term liability accounts.

The increase in our cash used in investing activities for the three months ended March 31, 2024, was primarily due to cash used to acquire other long-term assets, including our investment in Contour, and a decrease in cash provided by the sale of marketable securities, net of purchases of marketable securities, of $38.8 million from the three months ended March 31, 2023. Cash used for the acquisition of property and equipment decreased $65.5 million for the three months ended March 31, 2024, compared to the three months ended March 31, 2023, primarily due to the early lease buyouts we executed during the three months ended March 31, 2023.

Cash Flows provided by (used in) Financing Activities

Our cash flows used in financing activities was $125.4 million for the three months ended March 31, 2024, compared to cash used in financing activities of $181.7 million for the three months ended March 31, 2023. Our financing cash flows are typically impacted by various factors including proceeds from issuance of debt, principal payments on debt obligations, repurchases of our common stock and payment of cash dividends.

The $56.3 million decrease in cash used for financing activities for the three months ended March 31, 2024, compared to the three months ended March 31, 2023, was primarily due to a decrease of $91.3 million in cash used to purchase treasury stock, offset by a decrease of $25.0 million in proceeds from the issuance of long-term debt during the three months ended March 31, 2024, compared to the three months ended March 31, 2023.

Significant Commitments and Obligations

General

See Note 7, "Leases, Commitments and Contingencies," to the condensed consolidated financial statements for our commitments and obligations for each of the next five years and thereafter.

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Purchase Commitments and Options

As of March 31, 2024, we had a firm purchase commitment for 21 new E175 aircraft from Embraer with delivery dates anticipated into 2026.

At the time of each aircraft acquisition, we evaluate the financing alternatives available to us, and select one or more of these methods to fund the acquisition. In recent years, we have issued long-term debt to finance our new aircraft. At present, we intend to fund our aircraft purchase commitments through cash on hand and debt financing. Based on current market conditions and discussions with prospective leasing organizations and financial institutions, we currently believe that we will be able to obtain financing for our committed acquisitions, as well as additional aircraft. We intend to finance the firm purchase commitment for 21 E175 aircraft with approximately 75-85% debt and the remaining balance with cash.

Aircraft Lease and Facility Obligations

We also have long-term lease obligations, primarily relating to our facilities, aircraft and engines. Excluding aircraft financed by our major airline partners that we operate for them under contract, we had eight aircraft under lease with remaining terms ranging from five years to six years as of March 31, 2024. Future minimum lease payments due under all long-term operating leases were approximately $128.2 million at March 31, 2024. Assuming a 6.2% discount rate, which is the average incremental borrowing rate we anticipate we would have incurred on debt obtained over a similar term to acquire these assets, the present value of these lease obligations would have been equal to approximately $85.9 million at March 31, 2024.

Long-term Debt Obligations

As of March 31, 2024, we had $2.9 billion of long-term debt, which consisted of $2.7 billion of debt used to finance aircraft and spare engines and $200.6 million of unsecured debt payable to U.S. Department of the Treasury. The average effective interest rate on our debt was approximately 4.1% at March 31, 2024.

Under our capacity purchase agreements, our major airline partners compensate us for our costs of owning or leasing the aircraft on a monthly basis. The aircraft compensation structure varies by agreement, but is intended to cover either our aircraft principal and interest debt service costs, our aircraft depreciation and interest expense or our aircraft lease expense costs while the aircraft is under contract.

Guarantees

We have guaranteed the obligations of SkyWest Airlines under the United Express Agreement and the Delta Connection Agreement for the E175 aircraft. In addition, we have guaranteed certain other obligations under SkyWest Airlines’ aircraft financing and leasing agreements.

We have guaranteed $23.3 million in promissory notes of third parties in event the third parties default on their payments. The third parties’ loans are secured by aircraft and engines.

Seasonality

Our results of operations for any interim period are not necessarily indicative of those for an entire year, because the airline industry is subject to seasonal fluctuations and general economic conditions. Our operations are somewhat favorably affected by increased travel on our prorate routes, historically occurring during the summer months, and unfavorably affected by decreased travel during the months of November through February and by inclement weather, which may occasionally or frequently, depending on the severity of the inclement weather in any given winter, result in cancelled flights during the winter months.

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ITEM 3: QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Aircraft Fuel

In the past, we have not experienced sustained material difficulties with fuel availability, and we currently expect to be able to obtain fuel at prevailing prices in quantities sufficient to meet our future needs. Pursuant to our contract flying arrangements, United, Delta, American and Alaska have agreed to bear the economic risk of fuel price fluctuations on our contracted flights. We bear the economic risk of fuel price fluctuations on our prorate and SWC operations. For the three months ended March 31, 2024, approximately 13.0% of our total flying agreements revenue was derived from prorate agreements and SWC. For the three months ended March 31, 2024, the average price per gallon of aircraft fuel was $3.51. For illustrative purposes only, we have estimated the impact of the market risk of fuel price fluctuations on our prorate and SWC operations using a hypothetical increase of 25% in the price per gallon we purchase. Based on this hypothetical assumption, we would have incurred an additional $5.3 million in fuel expense for the three months ended March 31, 2024.

Interest Rates

As of March 31, 2024, our long-term debt had fixed interest rates. We currently intend to finance the acquisition of aircraft through manufacturer financing or long-term borrowings. Changes in interest rates may impact our actual cost to acquire future aircraft. To the extent we place new aircraft in service under our capacity purchase agreements with United, Delta, American, Alaska or other carriers, our capacity purchase agreements currently provide that reimbursement rates will be adjusted to reflect the interest rates effective at the closing of the respective aircraft financing. A hypothetical 50 basis point change in market interest rates would not have a material effect on our financial results.

Labor and Inflation Risk

The global economy has experienced, and continues to experience high rates of inflation. We cannot predict how long these inflationary pressures will continue, or how they may change over time, but we expect to see continued impacts on the global economy and our Company.

As a result, our costs have become, and we expect they will continue to be, subject to significant inflationary pressures, and we may not be able to fully offset such higher costs through price increases under our capacity purchase agreements. Salaries, wages and benefits expense represented 49.9% of our total operating expense for the three months ended March 31, 2024. For illustrative purposes, a hypothetical increase of 25% to our salaries, wages and benefits during the three months ended March 31, 2024, would have increased our operating expenses by approximately $87.7 million.

Our inability or failure to offset a material increase in costs due to inflation and/or labor costs could harm our business, financial condition and operating results. Additionally, in the event we are unable to hire and retain qualified pilots or other operational personnel, including flight attendants and maintenance technicians, we may be unable to operate requested flight schedules under our capacity purchase agreements, which could result in a reduction in revenue and operating inefficiencies, such as incremental new-hire training costs, and could harm our business, financial condition and operating results.

ITEM 4. CONTROLS AND PROCEDURES

Disclosure Controls and Procedures

Our management, including our Chief Executive Officer and Chief Financial Officer, performed an evaluation of our disclosure controls and procedures, which have been designed to ensure that information we are required to disclose in the reports we file or submit under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), is recorded, processed, summarized and reported, within the time periods specified in the rules and forms of the SEC. Our management, including our Chief Executive Officer and Chief Financial Officer, concluded that, as of March 31, 2024, those controls and procedures were effective to ensure that information we are required to disclose in the reports we file

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or submit under the Exchange Act is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.

Changes in Internal Control

During the three months ended March 31, 2024, there were no changes in our internal control over financial reporting that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f) under the Exchange Act).

PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

We are subject to certain legal actions which we consider routine to our business activities. As of March 31, 2024, our management believed, after consultation with legal counsel, that the ultimate outcome of such legal matters was not likely to have a material adverse effect on our financial position, liquidity or results of operations.

ITEM 1A. RISK FACTORS

In addition to the other information set forth in this Report, you should carefully consider the factors discussed in Part I, Item 1A, “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2023, and in our other filings with the SEC, which factors could materially affect our business, financial condition and results of operations. The risks described in our reports filed with the SEC are not the only risks facing our company. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition and results of operations.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

Our Board of Directors has adopted stock repurchase programs which authorize us to repurchase shares of our common stock in the public market or in private transactions, from time to time, at prevailing prices. Our current stock repurchase program was authorized in May 2023 for the repurchase of up to $250.0 million of our common stock. The following table summarizes the repurchases under our stock purchase program during the three months ended March 31, 2024:

	Total Number of Shares Purchased	Average Price Paid Per Share		Total Number of Shares Purchased as Part of a Publicly Announced Program (1)	Maximum Dollar Value of Shares that May Yet Be Purchased Under the Program (in Thousands)
January 1, 2024 - January 31, 2024	18,707	$	51.23	18,707	$	89,964
February 1, 2024 - February 29, 2024	18,255	$	59.79	18,255	$	88,872
March 1, 2024 - March 31, 2024	99,299	$	67.47	99,299	$	82,172
Total	136,261	$	64.21	136,261	$	82,172

(1) In May 2023, our Board of Directors approved a stock purchase program, which superseded our prior repurchase program and authorized us to repurchase up to $250.0 million of our common stock. Purchases are made at management’s discretion based on market conditions and financial resources. As of March 31, 2024, we had repurchased 4,385,422 shares of our common stock for $167.8 million and had $82.2 million remaining availability under the May 2023 authorization.

ITEM 5.  OTHER INFORMATION

During the three months ended March 31, 2024, no director or officer of the Company adopted or terminated a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement,” as each term is defined in Item 408(a) of Regulation S-K.

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ITEM 6. EXHIBITS

10.1	Deferred Compensation Plan for Non-Employee Directors
10.2	2019 Long-Term Incentive Plan Form of Restricted Stock Unit Award Agreement
10.3	2019 Long-Term Incentive Plan Form of Performance Share Award Agreement
31.1	Certification of Chief Executive Officer
31.2	Certification of Chief Financial Officer
32.1	Certification of Chief Executive Officer
32.2	Certification of Chief Financial Officer
101.INS	Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
101.SCH	Inline XBRL Taxonomy Extension Schema Document
101.CAL	Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF	Inline XBRL Taxonomy Extension Definition Linkbase Document
101.LAB	Inline XBRL Taxonomy Extension Label Linkbase Document
101.PRE	Inline XBRL Taxonomy Extension Presentation Linkbase Document
104	Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

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SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this Quarterly Report on Form 10-Q for the quarter ended March 31, 2024, to be signed on its behalf by the undersigned, thereunto duly authorized, on April 26, 2024.

SKYWEST, INC.
By	/s/ Robert J. Simmons
	Robert J. Simmons
	Chief Financial Officer

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EX-10.1

Exhibit 10.1

SKYWEST, INC.

DEFERRED COMPENSATION PLAN FOR NON-EMPLOYEE DIRECTORS,

1.Purpose and Effective Date. The purpose of this Plan is to provide the non-employee members of the Board of Directors (the “Board”) of SkyWest, Inc., a Delaware corporation, and it successors (the “Company”) with an opportunity to defer payment of all or a portion of their annual cash compensation and annual Stock Award. The Plan is effective as of February 7, 2024 (the “Effective Date”).

2.Definitions. The following terms shall have the meanings given in this section unless a different meaning is clearly implied by the context:

(a)“Cash Compensation” means compensation payable to a director in cash for serving as a member of Board, but excluding any expense reimbursements.

(b)“Change in Control” shall have the same meaning as defined in the Equity Plan as in effect on the Effective Date; provided, that, for purposes of the Plan, in no event will a Change in Control be deemed to have occurred if the transaction is not also a “change in control event” under Section 409A of the Code.

(c)“Common Stock” means the common stock of the Company.

(d)“Compensation Committee” means the Compensation Committee of the Board.

(e)“Deferred Compensation Account” means an account maintained for each director who makes a deferral election as described in Section 4.

(f)“Deferred Stock Unit” means a Stock Unit that is received by a participant pursuant to this Plan and provides for the deferred receipt compensation.  The Deferred Stock Units shall be considered “Other Share-Based Awards” for purposes of the Equity Plan.

(g)“Director Compensation” means Cash Compensation and Stock Awards.

(h)“Disability” means (i) a permanent and total disability under Section 22(e)(3) of the Internal Revenue Code of 1986, as amended, or (ii) if a non-employee director shall become physically or mentally incapacitated or disabled or otherwise unable fully to discharge his or her duties to the Company, including as a result of illness, for a period of 30 consecutive calendar days or such other period of time as determined by either the Board or the director in good faith, provided that, in the case of each of clauses (i) and (ii), such disability, incapacity or illness also qualifies as a “disability” for purposes of Section 409A.

(i)“Equity Plan” means the Company’s 2019 Long-Term Incentive Plan, as it may be amended or restated from time to time, or, to the extent applicable, any future or successor equity compensation plan of the Company

(j)“Fair Market Value” means “Fair Market Value” as defined in the Equity Plan.

(k)“Other Share-Based Award” means an “Other Share-Based Award” as defined in the Equity Plan and granted to a director for serving as a member of Board

(l)“Plan” means this SkyWest, Inc. Deferred Compensation Plan for Non-Employee

Directors.

(m)“Plan Year” means a calendar year.

(n)“Plan Administrator” means the Board.

(o)“Restricted Stock” means “Restricted Stock” as defined in the Equity Plan and granted to a director for serving as a member of Board.

(p)“Restricted Stock Unit” means a “Restricted Stock Unit” as defined in the Equity Plan and granted to a director for serving as a member of Board.

(q)“Section 409A” means Section 409A of the Internal Revenue Code of 1986, as amended.

(r)“Separation from Service” means a “separation from service” within the meaning of Section 409A.

(s)“Stock Award” means an award of Restricted Stock, a Restricted Stock Unit or an Other Share-Based Award.

(t)“Stock Unit” means an economic unit equal in value to one share (or fraction thereof) of Common Stock.

3.Eligibility.  All members of the Board who are not employees of the Company or any subsidiary of the Company shall be eligible to participate in the Plan.

4.Election to Defer Director Compensation.

(a)Manner and Amount of Deferral Election. A participant may elect to defer receipt of all or a specified portion of his or her Director Compensation by giving written notice on an election form provided by the Plan Administrator specifying the amount of the deferral. A participant’s election to defer is irrevocable and may not be changed, except as may be provided in the election form.

(b)Time of Election. Elections to defer the Director Compensation shall be made at the following times:

(i)A director may elect to defer Director Compensation at such time or times during the calendar year as permitted by the Plan Administrator. Except as expressly permitted by the Plan Administrator and specified in a deferral election form in a manner that complies with Section 409A, such election shall be effective for Cash Compensation earned and Stock Awards granted in the following calendar year.

(ii)A nominee for election to director (who is not at the time of nomination a sitting director and was not previously eligible to participate in this Plan) may elect to defer Director Compensation no later than 30 days after the date of the director’s commencement of services as a director. Such deferral election shall be effective for Cash Compensation earned and Stock Awards granted following the later of (A) the date of the director’s commencement of services as a director, and (B) the date an irrevocable election form is filed with the Company.

(c)Duration of Deferral Election. Unless otherwise specified in a deferral election form in a

manner permitted by the Plan Administrator, a deferral election will only apply to one Plan Year. A participant must make a new deferral election with respect to each Plan Year that the participant decides to defer Director Compensation.

5.Deferred Compensation Accounts. The Company shall establish on its books and records a Deferred Compensation Account for each participant, as provided below.

(a)Crediting of Cash Compensation. Deferred Cash Compensation shall be credited to the participant’s Deferred Compensation Account in the form of Deferred Stock Units on the date the deferred Cash Compensation would otherwise have been paid. On such date, the Company shall credit to the Deferred Compensation Account with a number of Deferred Stock Units determined by dividing (i) the portion of the Cash Compensation that the participant elected to defer, by (ii) the Fair Market Value of a share of Common Stock on such date, rounded down to the nearest whole Deferred Stock Unit. No fractional Deferred Stock Units will be credited to a participant’s account. Unused cash attributable to a fractional Deferred Stock Unit will be refunded to the participant in cash as soon as practicable following the original payment date. A participant will be fully vested in each Deferred Stock Unit that relates to deferred Cash Compensation.

(b)Crediting of Stock Awards. Deferred Stock Awards shall be credited to the participant’s Deferred Compensation Account in an equal amount of Deferred Stock Units. The Deferred Stock Units related to such deferred Stock Awards shall be subject to the same vesting or other forfeiture restrictions that would have otherwise applied to such Stock Awards. In the event the participant forfeits Deferred Stock Units in accordance with the foregoing, the participant’s Deferred Compensation Account shall be debited for the number of Deferred Stock Units forfeited.

(c)Dividend Equivalents. Each Deferred Stock Unit credited to a participant’s Deferred Compensation Account shall carry with it a right to receive dividend equivalents in respect of the share of Common Stock underlying such Deferred Stock Unit. Dividend equivalents shall be paid to participants in cash on the Company’s applicable dividend payment date based on the number of Deferred Stock Units, whether vested or unvested, held in the director’s Deferred Compensation Account on the applicable Company record date. The dividend equivalent right associated with a Deferred Stock Unit shall remain outstanding until the delivery to the participant of the share of Common Stock underlying such Deferred Stock Unit.

(d)Adjustment of Deferred Stock Units. If the number of outstanding shares of Common Stock is increased or decreased or the shares of Common Stock are changed into or exchanged for a different number or kind of stock or other securities of the Company on account of any recapitalization, reclassification, stock split, reverse split, combination of stock, exchange of stock, stock dividend, or other distribution payable in capital stock, or other increase or decrease in such stock effected without receipt of consideration by the Company occurring after the Effective Date, the Plan Administrator will make appropriate adjustments to (i) the number and kind of shares of Common Stock for which Deferred Stock Units are outstanding, and (ii) the number of Deferred Stock Units credited to each participant’s Deferred Compensation Account.

6. Payment of Deferred Compensation.

(a)Distributions. Payment from the Deferred Stock Units shall be made in one lump sum on the earliest to occur of:

(i) within 90 days following the participant’s Separation From Service;

(ii) immediately prior to, on or within 30 days following a Change in Control;

(iii) within 90 days following the participant’s Disability; and

(iv) the participant’s death.

Notwithstanding anything to the contrary in the Plan, if on the date of the participant’s Separation from Service, the participant is a “specified employee” within the meaning of Section 409A, the payment will occur on the later to occur of (x) the scheduled distribution date and (y) the first day of the seventh month following the date of the participant’s Separation from Service or, if earlier, the date of the participant’s death.

(b)Medium of Payment. Payments from the Deferred Compensation Account shall be made in whole shares of Common Stock for each whole Deferred Stock Unit, and in cash for any fractional Deferred Stock Unit; provided, that, the Company may choose in its discretion to pay the participant cash in lieu of all or a portion of the shares of Common Stock. Deferred Stock Units issued to and shares of Common Stock paid to participants under the Plan shall be issued and paid from the Equity Plan.

7.Unfunded Promise to Pay; No Segregation of Funds or Assets. Nothing in this Plan shall require the segregation of any assets of the Company or any type of funding by the Company, it being the intention of the parties that the Plan be an unfunded arrangement for federal income tax purposes. No participant shall have any rights to or interest in any specific assets or shares of Common Stock by reason of the Plan, and any participant’s rights to enforce payment of the obligations of the Company hereunder shall be those of a general creditor of the Company.

8.Nonassignability; Beneficiary Designation. The right of a participant to receive any unpaid portion of the participant’s Deferred Compensation Account shall not be assigned, transferred, pledged or encumbered or subjected in any manner to alienation or anticipation. However, in the event of a participant’s death, the Company will pay the unpaid portion of the participant’s Deferred Compensation Account to the participant’s designated beneficiaries. If the participant fails to complete a valid beneficiary designation, the participant’s beneficiary will be his or her estate.

9.Administration. The Plan will be administered under the supervision of the Plan Administrator. The Plan Administrator will prescribe guidelines and forms for the implementation and administration of the Plan, interpret the terms of the Plan, and make all other substantive decisions regarding the operation of the Plan. The Plan Administrator’s decisions in its administration of the Plan are conclusive and binding on all persons.

10.Construction. The Plan is intended to comply with Section 409A and any regulations and guidance thereunder and shall be interpreted and operated in accordance with such intent. Notwithstanding anything to the contrary in the Plan, neither the Company, its affiliates, the Board, nor the Committee will have any obligation to take any action to prevent the assessment of any excise tax or penalty on any participant under Section 409A, and neither the Company, its affiliates, the Board, nor the Committee will have any liability to any participant for such tax or penalty. The laws of the State of Delaware shall govern all questions of law arising with respect to the Plan, without regard to the choice of law principles of any jurisdiction, except where the laws governing the Plan are preempted by the laws of the United States. The Plan is intended to be construed so that participation in the Plan will be exempt from Section 16(b) of the Securities Exchange Act of 1934, as amended, pursuant to regulations and interpretations issued from time to time by the Securities and Exchange Commission. If any provision of the Plan is held to be illegal or void, such illegality or invalidity shall not affect the remaining provisions of the Plan, but shall be fully severable, and the Plan shall be construed and enforced as if the illegal or invalid provision had never been

inserted. This document constitutes the entire Plan, and supersedes any prior oral or written agreements on the subject matter hereof.

11.Claw-back. All awards of Deferred Stock Units under the Plan will be subject to mandatory repayment by the participant to the Company to the extent the participant is, or in the future becomes, subject to any Company or affiliate “claw-back” or recoupment policy that is adopted to comply with the requirements of any applicable law, rule, regulation or otherwise, or any law, rule, or regulation that imposes mandatory recoupment, under circumstances set forth in such law, rule or regulation.

12.Amendment and Termination. The Board may amend, suspend, or terminate the Plan at any time and for any reason. No amendment, suspension, or termination will, without the consent of the participant, materially impair rights or obligations under any Deferred Stock Units previously awarded to the participant under the Plan, except as provided below. The Board may terminate the Plan and distribute the Deferred Compensation Accounts to participants in accordance with and subject to the rules of Treas. Reg. Section 1.409A-3(j)(4)(ix), or successor provisions, and any generally applicable guidance issued by the Internal Revenue Service permitting such termination and distribution.

EX-10.2

Exhibit 10.2

SKYWEST, INC. 2019 LONG-TERM INCENTIVE PLAN

FORM OF RESTRICTED STOCK UNIT AWARD AGREEMENT

SkyWest, Inc. (the “Company”) hereby grants to the participant listed below (“Participant”) the restricted stock units (the “RSUs”) described in this Restricted Stock Unit Award Agreement (this “Award Agreement”), subject to the terms and conditions of this Award Agreement and the 2019 Long-Term Incentive Plan (as amended from time to time, the “Plan”), which is incorporated into this Award Agreement by reference. Capitalized terms not specifically defined in this Award Agreement have the meanings given to them in the Plan.

Participant:	[Participant Name]
Grant Date:	[Grant Date]
Total Number of RSUs:	[Awards Granted]

ELECTRONIC ACCEPTANCE OF AWARD:

By clicking on the “ACCEPT” box on the “[Grant Acceptance: View/Accept Grant]” page, the Participant agrees to be bound by the terms and conditions of this Award Agreement and the Plan.  The Participant acknowledges that the Participant has reviewed and fully understands all of the provisions of this Award Agreement and the Plan, and has had the opportunity to obtain advice of counsel prior to accepting the grant of the RSUs pursuant to this Award Agreement.  The Participant hereby agrees to accept as binding, conclusive and final all decisions or interpretations of the Committee upon any questions arising under the Plan, this Award Agreement or relating to the RSUs.

1.Grant of RSUs.  Pursuant to Section 7 of the Plan, the Company hereby grants to the Participant the RSUs, on the terms and conditions set forth below and in the Plan. Each RSU constitutes the mere contractual right, subject to certain vesting conditions, to receive on the applicable payment date described below one Share.  The Participant shall not have any of the rights of a stockholder with respect to the Shares subject to the RSUs, including the right to vote those Shares or receive dividends on those Shares, until payment of the Shares is made under this Award Agreement.

2.Subject to the Plan.  This Award Agreement and the RSUs are subject to, and governed by, the provisions of the Plan and, unless the context requires otherwise, terms used herein shall have the same meaning as in the Plan.  In the event of a conflict between the provisions of the Plan and this Award Agreement, the Plan shall control.

3.Adjustment.  The RSUs subject to this Award Agreement shall be subject to adjustment as provided in Section 12.2 of the Plan.

4.Vesting.  [Vesting schedule to be specified in individual agreements]; provided the Participant remains an Employee, Consultant or Director of the Company or a Subsidiary from the Grant Date until the Scheduled Vesting Date.

5.Termination of Employment or Other Service. In the event that the Participant ceases to serve as an Employee, Consultant or Director of the Company and/or its Subsidiaries for any reason (whether voluntarily or involuntarily, including on account of death, disability, resignation, retirement or discharge with or without cause) prior to the Scheduled Vesting Date, the Participant shall immediately and automatically forfeit and relinquish all of the then unvested RSUs (computed after taking into account any accelerated vesting of such RSUs under Section 4(b) or 4(c) above) without any right to receive any compensation, remuneration or other payment therefor. Neither the Participant nor any of the Participant’s successors, heirs, assigns or personal representatives shall have any rights or interests in any RSUs that are so forfeited. For avoidance of doubt, transfers of employment or service between Subsidiaries or the Company shall not be treated as terminations of employment or service triggering forfeiture of RSUs.

6.Payment of RSUs.

(a)The Company shall make a payment to the Participant (or if deceased to his or her estate) with respect to the vested RSUs credited to the Participant in the form and amount provided in Section 7 below upon or within twenty (20) days after the date the RSUs first vest under Section 4 above or Section 6(b) below.

(b)Notwithstanding anything to the contrary in Section 6(a) above, in the event that the RSUs are not assumed or continued, or an equivalent award substituted for the RSUs, by the successor corporation or a parent or subsidiary of the successor corporation in a Change in Control, the RSUs shall become fully vested immediately prior to the consummation of such Change in Control, and Shares shall be distributed to Participant in settlement of such RSUs immediately prior to the consummation of such Change in Control.

(c)Neither the Participant nor any of the Participant’s successors, heirs, assigns

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or personal representatives shall have any further rights or interests in any RSUs that are so paid. Notwithstanding the foregoing, the Company shall have no obligation to issue Shares in payment of the RSUs unless such issuance and payment shall comply with all relevant provisions of applicable securities and other laws and the requirements of any stock exchange on which the Company’s common stock is then traded. The Company’s obligation to deliver Shares or otherwise make any payment with respect to vested RSUs is further subject to the condition precedent that the Participant deliver to the Company any representations or other documents or assurances reasonably required by the Company to ensure compliance with applicable laws.

(d)Notwithstanding any provisions of this Award Agreement or the Plan to the contrary, the time of distribution of the RSUs under this Award Agreement may not be changed except as may be permitted by the Administrator in accordance with Section 409A and the applicable Treasury Regulations promulgated thereunder.

7.Form and Amount of Payment.  Payments pursuant to Section 6 above with respect to the RSUs shall be made in the form of whole Shares. In lieu of any fractional Share, the Company shall make a cash payment to Participant equal to the Fair Market Value of such fractional Share on the date the RSUs are settled pursuant to Section 6 above.

8.Withholding.

(a)The Participant must remit to the Company or the applicable Subsidiary, an amount sufficient to satisfy applicable federal, state, local and foreign taxes (including the employee portion of any FICA obligation) required by applicable law to be withheld with respect to any taxable event arising pursuant to this Award Agreement.  The Participant may satisfy, the tax withholding obligation in one or more of the forms specified below: (i) in cash or cash equivalents (including certified check or bank check or wire transfer of immediately available funds); (ii) by the deduction of such amount from other wages or other amounts otherwise payable to the Participant; (iii) with the consent of the Committee, by tendering previously acquired Shares (either actually or by attestation) with a Fair Market Value on the date of delivery not exceeding the amount necessary to satisfy the tax withholding obligation of the Company and its Subsidiaries; (iv) with the consent of the Committee, by the withholding of Shares issuable upon settlement of the RSUs by the Company with a Fair Market Value on the date of delivery not exceeding the amount necessary to satisfy the tax withholding obligation of the Company and its Subsidiaries; (v) through the delivery (including telephonically to the extent permitted by the Company) of a notice that the Participant has placed a market sell order with a broker acceptable to the Company with respect to Shares then issuable upon settlement of the RSUs, and that the broker has been directed to deliver promptly to the Company funds sufficient to satisfy the applicable tax withholding; provided, that payment of such proceeds is then made to the Company at such time as may be required by the Committee, but in any event not later than the settlement of such sale; or (vi) in any combination of the foregoing.  Subject to Section 13.2 of the Plan, the applicable tax withholding obligation will be determined based on the minimum applicable statutory withholding rates for federal, state, local and foreign income tax and payroll tax purposes as of the date of delivery (or such higher withholding rates as may be determined by the Committee, which rates shall in no event exceed the maximum individual statutory tax rate in the applicable jurisdiction at the time of such withholding (or such other rate as may be required to avoid adverse accounting

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consequences)); provided, however, that the number of Shares tendered or withheld pursuant to clauses (iii) or (iv) above shall be rounded up to the nearest whole Share sufficient to cover the applicable tax withholding obligation, to the extent rounding up to the nearest whole Share does not result in the liability classification of the RSUs under generally accepted accounting principles.

(b)In the event the Participant fails to provide timely payment of all sums required pursuant to Section 8(a) prior to the time the tax withholding obligation arises pursuant to one of the permitted payment forms specified in Section 8(a), the Company shall have the right and option, but not the obligation, to treat such failure as an election by the Participant to satisfy all or any portion of the Participant's required payment obligation pursuant to Section 8(a)(iv) above.

9.Nontransferability.  Except as otherwise permitted by the Committee under the Plan or upon the death of the Participant, this Award Agreement and the RSUs shall not be assignable or transferable by the Participant, but may be assigned by the Company to successors of the Company, and no amounts payable under this Award Agreement, or any rights therein, shall be subject in any manner to any anticipation, alienation, sale, transfer, assignment, pledge, encumbrance, levy, lien, attachment, garnishment, debt or other charge or disposition of any kind.

10.Notices.  All notices required or permitted under this Award Agreement shall be in writing and shall be delivered personally, by mailing by registered or certified mail, postage prepaid, or by electronic means as provided in Section 18 below to the other party.  Notice by mail shall be deemed delivered at the time and on the date the same is postmarked.  Electronic notices shall be deemed delivered when received.

Notices to the Company should be addressed to:

SkyWest, Inc.

444 South River Road

St. George, Utah 84790

Attention:  Chief Financial Officer

Notices to the Participant shall be sufficient if addressed to the Participant at the Participant’s address (including email address) as it appears on the Company’s records.  The Company or the Participant may by writing to the other party, designate a different address for notices.

11.Headings.  The headings in this Award Agreement are for reference purposes only and shall not affect the meaning or interpretation of this Award Agreement.

12.Successors and Assigns.  This Award Agreement shall inure to the benefit of and be binding upon the heirs, legatees, distributees, executors and administrators of the Participant and the successors and assigns of the Company.

13.Governing Law; Dispute Resolution; Waiver of Jury Trial.

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(a)This Award Agreement shall be governed by, and interpreted in accordance with, the laws of the State of Utah, other than its conflict of laws principles.

(b)Any legal suit, action or proceeding arising out of or based upon or relating to this Award Agreement, the Plan or the transactions contemplated hereby shall be instituted in the federal courts of the United States of America or the courts of the State of Utah in each case located in Salt Lake City, Utah, and the Participant and the Company irrevocably submit to the exclusive jurisdiction of such courts in any such suit, action or proceeding. The parties irrevocably and unconditionally waive any objection to the laying of venue of any suit, action or proceeding in such courts and irrevocably waive and agree not to plead or claim in any such court that any such suit, action or proceeding brought in any such court has been brought in an inconvenient forum.

(c)The Participant and the Company agree that any controversy which may arise under this Award Agreement or the Plan is likely to involve complicated and difficult issues and, therefore, each such party irrevocably and unconditionally waives any right it may have to a trial by jury in respect of any legal action arising out of or relating to this Award Agreement or the transactions contemplated hereby. Each party agrees that (i) no representative of any other party has represented, expressly or otherwise, that such other party would not seek to enforce the foregoing waiver in the event of a legal action, (ii) such party has considered the implications of this waiver, and (iii) such party makes this waiver voluntarily.

14. Award Agreement Not an Employment Contract.  This Award Agreement (and the grant of RSUs) is not an employment or service contract, and nothing in this Award Agreement shall be deemed to create in any way whatsoever any obligation on the Participant’s part to continue as an Employee, Consultant or Director of the Company or a Subsidiary or upon the Company or any Subsidiary to continue the Participant’s service as an Employee, Consultant or Director.

15.Entire Agreement; Modification.  This Award Agreement and the Plan contain the entire agreement between the parties with respect to the subject matter hereof. This Award Agreement may be modified as provided in the Plan or, to the extent such amendment would impair the rights of Participant under this Award Agreement in any material respect, in a written document executed by both parties.

16.Compliance with Section 409A of the Code; Taxes.

(a)  Section 409A. The RSUs and all amounts payable under this Award Agreement are intended to comply with or be exempt from Section 409A and the regulations and guidance promulgated thereunder and, accordingly, to the maximum extent permitted, this Award Agreement shall be interpreted consistently with that intent.  For purposes of Code Section 409A, all payments with respect to the RSUs are hereby designated as separate payments from any other payments or benefits to which the Participant is entitled (whether under the Plan, any other agreement, or any non-qualified deferred compensation or arrangement to which the Participant is a party or in which the Participant is a participant). In no event shall the Participant have any right to accelerate or defer the payment of the RSUs.

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(b)Taxes. Regardless of any action the Company and/or the Participant’s employer (the “Employer”) take with respect to any or all income tax (including U.S. federal, state and local tax and/or non-U.S. tax), social insurance, payroll tax, payment on account or other tax-related items related to the Participant’s participation in the Plan and legally applicable to the Participant or deemed by the Company or the Employer to be an appropriate charge to the Participant even if technically due by the Company or the Employer (“Tax-Related Items”), the Participant acknowledges that the ultimate liability for all Tax-Related Items is and remains the Participant’s responsibility and may exceed the amount actually withheld by the Company or the Employer. The Participant further acknowledges that the Company and the Participant’s Employer (i) make no representations or undertakings regarding the treatment of any Tax-Related Items in connection with any aspect of the Award Agreement, including the grant of the RSUs, the vesting of the RSUs, the delivery of Shares, the subsequent sale of any Shares acquired at vesting; and (ii) do not commit to and are under no obligation to structure the terms of the RSU grant or any aspect of the Award to reduce or eliminate the Participant’s liability for Tax-Related Items or achieve any particular tax result. Further, if the Participant is or becomes subject to tax in more than one jurisdiction, the Participant acknowledges that the Company and/or the Employer (or former employer, as applicable) may be required to withhold or account for Tax-Related Items in more than one jurisdiction. The Participant shall bear and be solely responsible for any taxes and tax-related interest and penalties imposed on the Participant with respect to, or as a result of the grant, vesting or payment, of the RSUs, including without limitation any income taxes and any taxes payable under Code Sections 4999 or 409A. The Company, its Subsidiaries and their respective directors, officers, employees and agents have no obligation or liability to reimburse, indemnify or otherwise gross-up the Participant for any Tax-Related Items, tax-related interest or penalties incurred by or imposed on the Participant with respect to, or as a result of the grant, vesting or payment, of the RSUs.  THE PARTICIPANT SHOULD CONSULT A TAX ADVISER BEFORE ACCEPTING THIS AWARD AGREEMENT OR DISPOSING OF THE SHARES.

17.Severability.  If any provision of this Award Agreement shall be held unlawful or otherwise invalid or unenforceable in whole or in part by a court of competent jurisdiction, such provision shall (a) be deemed limited to the extent that such court of competent jurisdiction deems it lawful, valid and/or enforceable and as so limited shall remain in full force and effect, and (b) not affect any other provision of this Award Agreement or part thereof, each of which shall remain in full force and effect.

18.Electronic Delivery and Acceptance.  The Company may, in its sole discretion, deliver any documents related to this Award Agreement or the RSUs by electronic means or request the Participant’s consent to participate in the Plan or accept the RSUs by electronic means. The Participant hereby consents to receive all applicable documentation by electronic delivery and to participate in the Plan through an on-line (and/or voice activated) system established and maintained by the Company or a third party vendor designated by the Company.

19.Imposition of Other Requirements.  The Company reserves the right to impose other requirements on the Participant’s participation in the Plan, on the RSUs and on any Shares acquired under the Plan, to the extent the Company determines it is necessary or advisable in order

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to comply with local law or facilitate the administration of the Plan, and to require the Participant to sign any additional agreements or undertakings that may be necessary to accomplish the foregoing. The RSUs (including any proceeds, gains or other economic benefit actually or constructively received by the Participant upon vesting or settlement of the RSUs or upon the receipt or resale of any Shares underlying the RSUs) shall be subject to Section 13.5 of the Plan and the applicable provisions of any claw-back policy implemented by the Company, whether implemented prior to or after the grant of the RSUs, including without limitation, any claw-back policy adopted to comply with the requirements of Applicable Law, including without limitation, the Dodd-Frank Wall Street Reform and Consumer Protection Act and any rules or regulations promulgated thereunder, to the extent set forth in such claw-back policy.

20.Counterparts. This Award Agreement may be executed in counterparts, each of which shall be deemed an original and all of which together shall constitute one and the same instrument.

21.Limitation on Participant’s Rights.  Participation in the Plan confers no rights or interests other than as herein provided.  This Award Agreement creates only a contractual obligation on the part of the Company as to amounts payable and may not be construed as creating a trust.  Neither the Plan nor any underlying program, in and of itself, has any assets.  The Participant will have only the rights of a general unsecured creditor of the Company with respect to amounts credited and benefits payable, if any, with respect to the RSUs, and rights no greater than the right to receive the Shares as a general unsecured creditor with respect to the RSUs, as and when vested and settled pursuant to the terms hereof.

22.Limitations Applicable to Section 16 Persons.  Notwithstanding any other provision of the Plan or this Award Agreement, if the Participant is subject to Section 16 of the Exchange Act, the Plan, this Award Agreement and the RSUs will be subject to any additional limitations set forth in any applicable exemptive rule under Section 16 of the Exchange Act (including any amendment to Rule 16b-3) that are requirements for the application of such exemptive rule.  To the extent applicable laws permit, this Award Agreement will be deemed amended as necessary to conform to such applicable exemptive rule.

23.Broker-Assisted Sales.

(a)In the event of any broker-assisted sale of Shares in connection with the payment of withholding taxes as provided in Section 8(a)(iv) or Section 8(a)(v) or Section 8(b): (i) any Shares to be sold through a broker-assisted sale will be sold on the day the tax withholding obligation arises, or as soon thereafter as practicable; (ii) such Shares may be sold as part of a block trade with other participants in the Plan in which all participants receive an average price; (iii) the Participant will be responsible for all broker’s fees and other costs of sale, and the Participant agrees to indemnify and hold the Company and its Subsidiaries harmless from any losses, costs, damages, or expenses relating to any such sale; (iv) to the extent the proceeds of such sale exceed the applicable tax withholding obligation, the Company agrees to pay such excess in cash to the Participant as soon as reasonably practicable; (v) the Participant acknowledges that the Company or its designee is under no obligation to arrange for such sale at any particular price, and that the proceeds of any such sale may not be sufficient to satisfy the applicable tax withholding

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obligation; and (vi) in the event the proceeds of such sale are insufficient to satisfy the applicable tax withholding obligation, the Participant agrees to pay immediately upon demand to the Company or its Subsidiaries with respect to which the withholding obligation arises, an amount sufficient to satisfy any remaining portion of the Company’s or the applicable Subsidiary’s withholding obligation.

(b)In the event any tax withholding obligation arising in connection with the RSUs will be satisfied under Section 8(a)(iv) or Section 8(b) above, then, unless the Participant is subject to Section 16 of the Exchange Act at the time the tax withholding obligation arises (in which case the approval of the Committee shall be required for any election by the Company pursuant to this Section 23(b)), the Company may elect to instruct any brokerage firm determined acceptable to the Company for such purpose to sell on the Participant's behalf a whole number of shares from those Shares that are issuable upon settlement of the RSUs as the Company determines to be appropriate to generate cash proceeds sufficient to satisfy the tax withholding obligation and to remit the proceeds of such sale to the Company or the Subsidiary with respect to which the withholding obligation arises.  The Participant's acceptance of the RSUs constitutes the Participant's instruction and authorization to the Company and such brokerage firm to complete the transactions described in this Section 23(b), including the transactions described in the previous sentence, as applicable.

24.Definitions.  For purposes of this Award Agreement, the following terms shall have the meanings provided below:

(a)For purposes of this Award Agreement, “Cause” shall mean (i) the Committee’s determination that the Participant failed to substantially perform the Participant’s duties (other than any such failure resulting from the Participant’s disability); (ii) the Committee’s determination that the Participant failed to carry out, or comply with any lawful and reasonable directive of the Board or the Participant’s immediate supervisor; (iii) the Participant’s conviction, plea of no contest, plea of nolo contendere, or imposition of unadjudicated probation for any felony, indictable offense or crime involving moral turpitude; (iv) the Participant’s unlawful use (including being under the influence) or possession of illegal drugs on the premises of the Company or any of its Subsidiaries or while performing the Participant’s duties and responsibilities; or (v) the Participant’s commission of an act of fraud, embezzlement, misappropriation, willful or gross misconduct, or breach of fiduciary duty against the Company or any of its Subsidiaries.  Notwithstanding the foregoing, if the Participant is a party to a written employment or consulting agreement with the Company or any of its Subsidiaries in which the term “cause” is defined, then “Cause” shall be as such term is defined in the applicable written employment or consulting agreement.

(b)For purposes of this Award Agreement, “Good Reason” shall mean (i) a change in the Participant’s position with the Company or a Subsidiary employing Participant that materially reduces the Participant’s authority, duties or responsibilities or the level of management to which he or she reports, (ii) a material diminution in the Participant’s base compensation (and Participant and the Company agree that a diminution of ten percent (10%) or more will be deemed to be material for purposes of this Program), or (iii) a relocation of the Participant’s place of employment by more than fifty (50) miles, provided that such change, reduction or relocation is

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effected by the Company or a Subsidiary employing Participant without the Participant’s consent. A Participant must provide written notice to the Company of the occurrence of any of the foregoing events or conditions without the Participant’s written consent within ninety (90) days of the occurrence of such event.  The Company shall have a period of thirty (30) days to cure such event or condition after receipt of written notice of such event from the Participant.  Participant’s termination by reason of resignation for Good Reason must occur within six months following the initial existence of the act or failure to act constituting Good Reason. Notwithstanding the foregoing, if Participant is a party to a written employment or consulting agreement with the Company or a Subsidiary employing Participant in which the term “good reason” is defined, then “Good Reason” shall be as such term is defined in the applicable written employment or consulting agreement.

25.Confidentiality.  Except with the approval of the Committee, the Participant shall not disclose to any person, and shall preserve the confidentiality of, the performance vesting terms set forth in this Award Agreement.  The foregoing restrictions on disclosure shall not apply to disclosures required by law or disclosures to the Participant’s professional advisors.

26.Cancellation of Award; Forfeiture of Gain; Clawbacks.  For the avoidance of doubt, the RSUs and any Shares issuable upon vesting of the RSUs are subject to Section 13.5 of the Plan.

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EX-10.3

Exhibit 10.3

SKYWEST, INC. 2019 LONG-TERM INCENTIVE PLAN

FORM OF PERFORMANCE SHARE AWARD AGREEMENT

SkyWest, Inc. (the “Company”) hereby grants to the participant listed below (“Participant”) the performance shares (the “Performance Shares”) described in this Performance Share Award Agreement (this “Award Agreement”), subject to the terms and conditions of this Award Agreement and the 2019 Long-Term Incentive Plan (as amended from time to time, the “Plan”), which is incorporated into this Award Agreement by reference. Capitalized terms not specifically defined in this Award Agreement have the meanings given to them in the Plan.

Participant:	[Participant Name]
Grant Date:	[Grant Date]
Target Number of Performance Shares:	[Target Number of Awards Granted]

Maximum Number of Performance Shares: [Maximum Number of Awards Granted]

ELECTRONIC ACCEPTANCE OF AWARD:

By clicking on the “ACCEPT” box on the “[Grant Acceptance: View/Accept Grant]” page, the Participant agrees to be bound by the terms and conditions of this Award Agreement and the Plan.  The Participant acknowledges that the Participant has reviewed and fully understands all of the provisions of this Award Agreement and the Plan, and has had the opportunity to obtain advice of counsel prior to accepting the grant of the Performance Shares pursuant to this Award Agreement.  The Participant hereby agrees to accept as binding, conclusive and final all decisions or interpretations of the Committee upon any questions arising under the Plan, this Award Agreement or relating to the Performance Shares.

1.Grant of Performance Shares.  Pursuant to Section 9 of the Plan, the Company hereby grants to the Participant the Performance Shares, on the terms and conditions set forth below and in the Plan. Each Performance Share constitutes the mere contractual right, subject to certain vesting conditions, to receive on the applicable payment date described below one Share.  The Participant shall not have any of the rights of a stockholder with respect to the Shares subject to the Performance Shares, including the right to vote those Shares or receive dividends on those Shares, until payment of the Shares is made under this Award Agreement.

2.Subject to the Plan.  This Award Agreement and the Performance Shares are subject to, and governed by, the provisions of the Plan and, unless the context requires otherwise, terms used herein shall have the same meaning as in the Plan.  In the event of a conflict between the provisions of the Plan and this Award Agreement, the Plan shall control.

3.Adjustment.  The Performance Shares subject to this Award Agreement shall be subject to adjustment as provided in Section 12.2 of the Plan.

4.Vesting.  Subject to the terms of this Award Agreement, the Performance Shares shall vest as set forth on Exhibit A to this Award Agreement.

5.Termination of Employment or Other Service. Except as otherwise provided in Exhibit A to this Award Agreement, in the event that the Participant ceases to serve as an Employee, Consultant or Director of the Company and/or its Subsidiaries for any reason (whether voluntarily or involuntarily, including on account of death, disability, resignation, retirement or discharge with or without cause) prior to the otherwise applicable vesting date of the Performance Shares, the Participant shall immediately and automatically forfeit and relinquish all of the then unvested Performance Shares (computed after taking into account any accelerated vesting of such Performance Shares under Exhibit A to this Award Agreement) without any right to receive any compensation, remuneration or other payment therefor. Neither the Participant nor any of the Participant’s successors, heirs, assigns or personal representatives shall have any rights or interests in any Performance Shares that are so forfeited. For avoidance of doubt, transfers of employment or service between Subsidiaries or the Company shall not be treated as terminations of employment or service triggering forfeiture of Performance Shares.

6.Payment of Performance Shares.

(a)The Company shall make a payment to the Participant (or if deceased to his or her estate) with respect to the vested Performance Shares credited to the Participant in the form and amount provided in Section 6 below upon or within twenty (20) days after the date the Performance Shares vest as set forth on Exhibit A to this Award Agreement or Section 6(b) below.

(b)Notwithstanding anything to the contrary in Section 6(a) above or in Exhibit A to this Award Agreement, in the event that the Performance Shares are not assumed or continued, or an equivalent award substituted for the Performance Shares, by the successor corporation or a parent or subsidiary of the successor corporation in a Change in Control, the Vesting Eligible Shares (as defined in Exhibit A to this Award Agreement and calculated as of the date of such

1

Change in Control in accordance with Section 1(b) of Exhibit A) shall become fully vested immediately prior to the consummation of such Change in Control, and Shares shall be distributed to Participant in settlement of such Performance Shares immediately prior to the consummation of such Change in Control.

(c)Neither the Participant nor any of the Participant’s successors, heirs, assigns or personal representatives shall have any further rights or interests in any Performance Shares that are so paid. Notwithstanding the foregoing, the Company shall have no obligation to issue Shares in payment of the Performance Shares unless such issuance and payment shall comply with all relevant provisions of applicable securities and other laws and the requirements of any stock exchange on which the Company’s common stock is then traded. The Company’s obligation to deliver Shares or otherwise make any payment with respect to vested Performance Shares is further subject to the condition precedent that the Participant deliver to the Company any representations or other documents or assurances reasonably required by the Company to ensure compliance with applicable laws.

(d)Notwithstanding any provisions of this Award Agreement or the Plan to the contrary, the time of distribution of the Performance Shares under this Award Agreement may not be changed except as may be permitted by the Administrator in accordance with Section 409A and the applicable Treasury Regulations promulgated thereunder.

7.Form and Amount of Payment.  Payments pursuant to Section 6 above with respect to the Performance Shares shall be made in the form of whole Shares. In lieu of any fractional Share, the Company shall make a cash payment to Participant equal to the Fair Market Value of such fractional Share on the date the Performance Shares are settled pursuant to Section 6 above.

8.Withholding.

(a)The Participant must remit to the Company or the applicable Subsidiary, an amount sufficient to satisfy applicable federal, state, local and foreign taxes (including the employee portion of any FICA obligation) required by applicable law to be withheld with respect to any taxable event arising pursuant to this Award Agreement.  The Participant may satisfy, the tax withholding obligation in one or more of the forms specified below: (i) in cash or cash equivalents (including certified check or bank check or wire transfer of immediately available funds); (ii) by the deduction of such amount from other wages or other amounts otherwise payable to the Participant; (iii) with the consent of the Committee, by tendering previously acquired Shares (either actually or by attestation) with a Fair Market Value on the date of delivery not exceeding the amount necessary to satisfy the tax withholding obligation of the Company and its Subsidiaries; (iv) with the consent of the Committee, by the withholding of Shares issuable upon settlement of the Performance Shares by the Company with a Fair Market Value on the date of delivery not exceeding the amount necessary to satisfy the tax withholding obligation of the Company and its Subsidiaries; (v) through the delivery (including telephonically to the extent permitted by the Company) of a notice that the Participant has placed a market sell order with a broker acceptable to the Company with respect to Shares then issuable upon settlement of the Performance Shares, and that the broker has been directed to deliver promptly to the Company funds sufficient to satisfy

2

the applicable tax withholding; provided, that payment of such proceeds is then made to the Company at such time as may be required by the Committee, but in any event not later than the settlement of such sale; or (vi) in any combination of the foregoing. Subject to Section 13.2 of the Plan, the applicable tax withholding obligation will be determined based on the minimum applicable statutory withholding rates for federal, state, local and foreign income tax and payroll tax purposes as of the date of delivery (or such higher withholding rates as may be determined by the Committee, which rates shall in no event exceed the maximum individual statutory tax rate in the applicable jurisdiction at the time of such withholding (or such other rate as may be required to avoid adverse accounting consequences)); provided, however, that the number of Shares tendered or withheld pursuant to clauses (iii) or (iv) above shall be rounded up to the nearest whole Share sufficient to cover the applicable tax withholding obligation to the extent rounding up to the nearest whole Share does not result in the liability classification of the Performance Shares under generally accepted accounting principles.

(b)In the event the Participant fails to provide timely payment of all sums required pursuant to Section 8(a) prior to the time the tax withholding obligation arises pursuant to one of the permitted payment forms specified in Section 8(a), the Company shall have the right and option, but not the obligation, to treat such failure as an election by the Participant to satisfy all or any portion of the Participant's required payment obligation pursuant to Section 8(a)(iv) above.

9.Nontransferability.  Except as otherwise permitted by the Committee under the Plan or upon the death of the Participant, this Award Agreement and the Performance Shares shall not be assignable or transferable by the Participant, but may be assigned by the Company to successors of the Company, and no amounts payable under this Award Agreement, or any rights therein, shall be subject in any manner to any anticipation, alienation, sale, transfer, assignment, pledge, encumbrance, levy, lien, attachment, garnishment, debt or other charge or disposition of any kind.

10.Notices.  All notices required or permitted under this Award Agreement shall be in writing and shall be delivered personally, by mailing by registered or certified mail, postage prepaid, or by electronic means as provided in Section 18 below to the other party.  Notice by mail shall be deemed delivered at the time and on the date the same is postmarked. Electronic notices shall be deemed delivered when received.

Notices to the Company should be addressed to:

SkyWest, Inc.

444 South River Road

St. George, Utah 84790

Attention:  Chief Financial Officer

Notices to the Participant shall be sufficient if addressed to the Participant at the Participant’s address (including email address) as it appears on the Company’s records.  The Company or the Participant may by writing to the other party, designate a different address for notices.

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11.Headings.  The headings in this Award Agreement are for reference purposes only and shall not affect the meaning or interpretation of this Award Agreement.

12.Successors and Assigns.  This Award Agreement shall inure to the benefit of and be binding upon the heirs, legatees, distributees, executors and administrators of the Participant and the successors and assigns of the Company.

13.Governing Law; Dispute Resolution; Waiver of Jury Trial.

(a)This Award Agreement shall be governed by, and interpreted in accordance with, the laws of the State of Utah, other than its conflict of laws principles.

(b)Any legal suit, action or proceeding arising out of or based upon or relating to this Award Agreement, the Plan or the transactions contemplated hereby shall be instituted in the federal courts of the United States of America or the courts of the State of Utah in each case located in Salt Lake City, Utah, and the Participant and the Company irrevocably submit to the exclusive jurisdiction of such courts in any such suit, action or proceeding. The parties irrevocably and unconditionally waive any objection to the laying of venue of any suit, action or proceeding in such courts and irrevocably waive and agree not to plead or claim in any such court that any such suit, action or proceeding brought in any such court has been brought in an inconvenient forum.

(c)The Participant and the Company agree that any controversy which may arise under this Award Agreement or the Plan is likely to involve complicated and difficult issues and, therefore, each such party irrevocably and unconditionally waives any right it may have to a trial by jury in respect of any legal action arising out of or relating to this Award Agreement or the transactions contemplated hereby. Each party agrees that (i) no representative of any other party has represented, expressly or otherwise, that such other party would not seek to enforce the foregoing waiver in the event of a legal action, (ii) such party has considered the implications of this waiver, and (iii) such party makes this waiver voluntarily.

14. Award Agreement Not an Employment Contract.  This Award Agreement (and the grant of Performance Shares) is not an employment or service contract, and nothing in this Award Agreement shall be deemed to create in any way whatsoever any obligation on the Participant’s part to continue as an Employee, Consultant or Director of the Company or a Subsidiary or upon the Company or any Subsidiary to continue the Participant’s service as an Employee, Consultant or Director.

15.Entire Agreement; Modification.  This Award Agreement and the Plan contain the entire agreement between the parties with respect to the subject matter hereof. This Award Agreement may be modified as provided in the Plan or, to the extent such amendment would impair the rights of Participant under this Award Agreement in any material respect, in a written document executed by both parties.

16.Compliance with Section 409A of the Code; Taxes.

4

(a)  Section 409A. The Performance Shares and all amounts payable under this Award Agreement are intended to comply with or be exempt from Section 409A and the regulations and guidance promulgated thereunder and, accordingly, to the maximum extent permitted, this Award Agreement shall be interpreted consistently with that intent. For purposes of Code Section 409A, all payments with respect to the Performance Shares are hereby designated as separate payments from any other payments or benefits to which the Participant is entitled (whether under the Plan, any other agreement, or any non-qualified deferred compensation or arrangement to which the Participant is a party or in which the Participant is a participant). In no event shall the Participant have any right to accelerate or defer the payment of the Performance Shares.

(b)Taxes. Regardless of any action the Company and/or the Participant’s employer (the “Employer”) take with respect to any or all income tax (including U.S. federal, state and local tax and/or non-U.S. tax), social insurance, payroll tax, payment on account or other tax-related items related to the Participant’s participation in the Plan and legally applicable to the Participant or deemed by the Company or the Employer to be an appropriate charge to the Participant even if technically due by the Company or the Employer (“Tax-Related Items”), the Participant acknowledges that the ultimate liability for all Tax-Related Items is and remains the Participant’s responsibility and may exceed the amount actually withheld by the Company or the Employer. The Participant further acknowledges that the Company and the Participant’s Employer (i) make no representations or undertakings regarding the treatment of any Tax-Related Items in connection with any aspect of the Award Agreement, including the grant of the Performance Shares, the vesting of the Performance Shares, the delivery of Shares, the subsequent sale of any Shares acquired at vesting; and (ii) do not commit to and are under no obligation to structure the terms of the Performance Share grant or any aspect of the Award to reduce or eliminate the Participant’s liability for Tax-Related Items or achieve any particular tax result. Further, if the Participant is or becomes subject to tax in more than one jurisdiction, the Participant acknowledges that the Company and/or the Employer (or former employer, as applicable) may be required to withhold or account for Tax-Related Items in more than one jurisdiction. The Participant shall bear and be solely responsible for any taxes and tax-related interest and penalties imposed on the Participant with respect to, or as a result of the grant, vesting or payment, of the Performance Shares, including without limitation any income taxes and any taxes payable under Code Sections 4999 or 409A. The Company, its Subsidiaries and their respective directors, officers, employees and agents have no obligation or liability to reimburse, indemnify or otherwise gross-up the Participant for any Tax-Related Items, tax-related interest or penalties incurred by or imposed on the Participant with respect to, or as a result of the grant, vesting or payment, of the Performance Shares. THE PARTICIPANT SHOULD CONSULT A TAX ADVISER BEFORE ACCEPTING THIS AWARD AGREEMENT OR DISPOSING OF THE SHARES.

17.Severability.  If any provision of this Award Agreement shall be held unlawful or otherwise invalid or unenforceable in whole or in part by a court of competent jurisdiction, such provision shall (a) be deemed limited to the extent that such court of competent jurisdiction deems it lawful, valid and/or enforceable and as so limited shall remain in full force and effect, and (b) not affect any other provision of this Award Agreement or part thereof, each of which shall remain in full force and effect.

5

18.Electronic Delivery and Acceptance.  The Company may, in its sole discretion, deliver any documents related to this Award Agreement or the Performance Shares by electronic means or request the Participant’s consent to participate in the Plan or accept the Performance Shares by electronic means. The Participant hereby consents to receive all applicable documentation by electronic delivery and to participate in the Plan through an on-line (and/or voice activated) system established and maintained by the Company or a third party vendor designated by the Company.

19.Imposition of Other Requirements.  The Company reserves the right to impose other requirements on the Participant’s participation in the Plan, on the Performance Shares and on any Shares acquired under the Plan, to the extent the Company determines it is necessary or advisable in order to comply with local law or facilitate the administration of the Plan, and to require the Participant to sign any additional agreements or undertakings that may be necessary to accomplish the foregoing. The Performance Shares (including any proceeds, gains or other economic benefit actually or constructively received by the Participant upon vesting or settlement of the Performance Shares or upon the receipt or resale of any Shares underlying the Performance Shares) shall be subject to Section 13.5 of the Plan and the applicable provisions of any claw-back policy implemented by the Company, whether implemented prior to or after the grant of the Performance Shares, including without limitation, any claw-back policy adopted to comply with the requirements of Applicable Law, including without limitation, the Dodd-Frank Wall Street Reform and Consumer Protection Act and any rules or regulations promulgated thereunder, to the extent set forth in such claw-back policy.

20.Counterparts. This Award Agreement may be executed in counterparts, each of which shall be deemed an original and all of which together shall constitute one and the same instrument.

21.Limitation on Participant’s Rights.  Participation in the Plan confers no rights or interests other than as herein provided.  This Award Agreement creates only a contractual obligation on the part of the Company as to amounts payable and may not be construed as creating a trust.  Neither the Plan nor any underlying program, in and of itself, has any assets.  The Participant will have only the rights of a general unsecured creditor of the Company with respect to amounts credited and benefits payable, if any, with respect to the Performance Shares, and rights no greater than the right to receive the Shares as a general unsecured creditor with respect to the Performance Shares, as and when vested and settled pursuant to the terms hereof.

22.Limitations Applicable to Section 16 Persons.  Notwithstanding any other provision of the Plan or this Award Agreement, if the Participant is subject to Section 16 of the Exchange Act, the Plan, this Award Agreement and the Performance Shares will be subject to any additional limitations set forth in any applicable exemptive rule under Section 16 of the Exchange Act (including any amendment to Rule 16b-3) that are requirements for the application of such exemptive rule.  To the extent applicable laws permit, this Award Agreement will be deemed amended as necessary to conform to such applicable exemptive rule.

23.Broker-Assisted Sales.

6

(a)In the event of any broker-assisted sale of Shares in connection with the payment of withholding taxes as provided in Section 8(a)(iv) or Section 8(a)(v) or Section 8(b): (i) any Shares to be sold through a broker-assisted sale will be sold on the day the tax withholding obligation arises, or as soon thereafter as practicable; (ii) such Shares may be sold as part of a block trade with other participants in the Plan in which all participants receive an average price; (iii) the Participant will be responsible for all broker’s fees and other costs of sale, and the Participant agrees to indemnify and hold the Company and its Subsidiaries harmless from any losses, costs, damages, or expenses relating to any such sale; (iv) to the extent the proceeds of such sale exceed the applicable tax withholding obligation, the Company agrees to pay such excess in cash to the Participant as soon as reasonably practicable; (v) the Participant acknowledges that the Company or its designee is under no obligation to arrange for such sale at any particular price, and that the proceeds of any such sale may not be sufficient to satisfy the applicable tax withholding obligation; and (vi) in the event the proceeds of such sale are insufficient to satisfy the applicable tax withholding obligation, the Participant agrees to pay immediately upon demand to the Company or its Subsidiaries with respect to which the withholding obligation arises, an amount sufficient to satisfy any remaining portion of the Company’s or the applicable Subsidiary’s withholding obligation.

(b)In the event any tax withholding obligation arising in connection with the Performance Shares will be satisfied under Section 8(a)(iv) or Section 8(b) above, then, unless the Participant is subject to Section 16 of the Exchange Act at the time the tax withholding obligation arises (in which case the approval of the Committee shall be required for any election by the Company pursuant to this Section 23(b)), the Company may elect to instruct any brokerage firm determined acceptable to the Company for such purpose to sell on the Participant's behalf a whole number of shares from those Shares that are issuable upon settlement of the Performance Shares as the Company determines to be appropriate to generate cash proceeds sufficient to satisfy the tax withholding obligation and to remit the proceeds of such sale to the Company or the Subsidiary with respect to which the withholding obligation arises.  The Participant's acceptance of the Performance Shares constitutes the Participant's instruction and authorization to the Company and such brokerage firm to complete the transactions described in this Section 23(b), including the transactions described in the previous sentence, as applicable.

24.Confidentiality.  Except with the approval of the Committee, the Participant shall not disclose to any person, and shall preserve the confidentiality of, the performance vesting terms set forth in this Award Agreement.  The foregoing restrictions on disclosure shall not apply to disclosures required by law or disclosures to the Participant’s professional advisors.

25.Cancellation of Award; Forfeiture of Gain; Clawbacks.  For the avoidance of doubt, the Performance Shares and any Shares issuable upon vesting of the Performance Shares are subject to Section 13.5 of the Plan.

7

EXHIBIT A

VESTING SCHEDULE

[Vesting Schedule]

A-1

EX-31.1

Exhibit 31.1

CERTIFICATION

I, Russell A. Childs, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of SkyWest, Inc. for the quarter ended March 31, 2024.

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report.

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of and for the periods presented in this report.

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

ay

Date: April 26, 2024

/s/ Russell A. Childs

Russell A. Childs

Chief Executive Officer and President

EX-31.2

Exhibit 31.2

CERTIFICATION

I, Robert J. Simmons, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of SkyWest, Inc. for the quarter ended March 31, 2024.

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report.

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of and for the periods presented in this report.

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: April 26, 2024

/s/ Robert J. Simmons

Robert J. Simmons

Chief Financial Officer

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report on Form 10-Q of SkyWest, Inc. (the “Company”) for the quarter ended March 31, 2024, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Russell A. Childs, Chief Executive Officer and President of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that, to the best of my knowledge:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934, as amended; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ Russell A. Childs

Russell A. Childs

Chief Executive Officer and President

April 26, 2024

This certification accompanies the Report pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and shall not, except to the extent required by the Sarbanes-Oxley Act of 2002, be deemed filed by the Company for purposes of Section 18 of the Securities Exchange Act of 1934, as amended.

EX-32.2

Exhibit 32.2

CERTIFICATION PURSUANT
TO 18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report on Form 10-Q of SkyWest, Inc. (the “Company”) for the quarter ended March 31, 2024, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Robert J. Simmons, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that, to the best of my knowledge:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934, as amended; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ Robert J. Simmons

Robert J. Simmons

Chief Financial Officer

April 26, 2024

This certification accompanies the Report pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and shall not, except to the extent required by the Sarbanes-Oxley Act of 2002, be deemed filed by the Company for purposes of Section 18 of the Securities Exchange Act of 1934, as amended.

XML

Document and Entity Information - shares	3 Months Ended
	Mar. 31, 2024	Apr. 19, 2024
Document and Entity Information
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Mar. 31, 2024
Document Transition Report	false
Entity File Number	0-14719
Entity Registrant Name	SKYWEST INC
Entity Incorporation, State or Country Code	UT
Entity Tax Identification Number	87-0292166
Entity Address, Address Line One	444 South River Road
Entity Address, City or Town	St. George
Entity Address, State or Province	UT
Entity Address, Postal Zip Code	84790
City Area Code	435
Local Phone Number	634-3000
Title of 12(b) Security	Common Stock, No Par Value
Trading Symbol	SKYW
Security Exchange Name	NASDAQ
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Large Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		40,259,473
Entity Central Index Key	0000793733
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2024
Document Fiscal Period Focus	Q1
Amendment Flag	false

XML

CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Mar. 31, 2024	Dec. 31, 2023
CURRENT ASSETS:
Cash and cash equivalents	$ 179,979	$ 148,277
Marketable securities	641,185	686,946
Receivables, net	85,882	82,854
Inventories, net	129,866	127,114
Other current assets	32,449	86,705
Total current assets	1,069,361	1,131,896
PROPERTY AND EQUIPMENT:
Aircraft and rotable spares	8,405,513	8,323,107
Deposits on aircraft	77,282	77,282
Buildings and ground equipment	292,633	282,398
Total property and equipment, gross	8,775,428	8,682,787
Less-accumulated depreciation and amortization	(3,284,609)	(3,199,820)
Total property and equipment, net	5,490,819	5,482,967
OTHER ASSETS:
Operating lease right-of-use assets	85,905	86,727
Long-term receivables and other assets	336,658	324,703
Total other assets	422,563	411,430
Total assets	6,982,743	7,026,293
CURRENT LIABILITIES:
Current maturities of long-term debt	506,602	443,869
Accounts payable	480,654	470,251
Accrued salaries, wages and benefits	181,154	194,881
Current maturities of operating lease liabilities	19,668	19,335
Taxes other than income taxes	20,924	26,077
Other current liabilities	103,294	99,879
Total current liabilities	1,312,296	1,254,292
LONG-TERM DEBT, net of current maturities	2,389,227	2,562,183
DEFERRED INCOME TAXES PAYABLE	703,602	687,600
NONCURRENT OPERATING LEASE LIABILITIES	66,237	67,392
OTHER LONG-TERM LIABILITIES	346,478	341,324
COMMITMENTS AND CONTINGENCIES (Note 7)
STOCKHOLDERS' EQUITY:
Preferred stock, 5,000,000 shares authorized; none issued
Common stock, no par value, 120,000,000 shares authorized; 83,137,744 and 82,840,372 shares issued as of March 31, 2024, and December 31, 2023, respectively	761,318	754,362
Retained earnings	2,331,509	2,271,211
Treasury stock, at cost, 42,868,446 and 42,615,347 shares as of March 31, 2024, and December 31, 2023, respectively	(928,076)	(912,396)
Accumulated other comprehensive income	152	325
Total stockholders' equity	2,164,903	2,113,502
Total liabilities and stockholders' equity	$ 6,982,743	$ 7,026,293

XML

CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares	Mar. 31, 2024	Dec. 31, 2023
CONSOLIDATED BALANCE SHEETS
Preferred stock, shares authorized	5,000,000	5,000,000
Preferred stock, shares issued	0	0
Common stock, par value (in dollars per share)	$ 0	$ 0
Common stock, shares authorized	120,000,000	120,000,000
Common stock, shares issued	83,137,744	82,840,372
Treasury stock, at cost, shares	42,868,446	42,615,347

XML

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($) shares in Thousands, $ in Thousands	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
OPERATING REVENUES:
Total operating revenues	$ 803,614	$ 691,831
OPERATING EXPENSES:
Salaries, wages and benefits	350,999	335,201
Aircraft maintenance, materials and repairs	145,415	142,226
Depreciation and amortization	95,870	94,149
Aircraft fuel	21,164	20,964
Airport-related expenses	20,888	18,295
Aircraft rentals	1,276	19,528
Other operating expenses	68,496	66,172
Total operating expenses	704,108	696,535
OPERATING INCOME (LOSS)	99,506	(4,704)
OTHER INCOME (EXPENSE):
Interest income	11,626	10,033
Interest expense	(29,829)	(33,620)
Other income (loss), net	(1,128)	2,174
Total other expense, net	(19,331)	(21,413)
INCOME (LOSS) BEFORE INCOME TAXES	80,175	(26,117)
PROVISION (BENEFIT) FOR INCOME TAXES	19,877	(4,046)
NET INCOME (LOSS)	$ 60,298	$ (22,071)
BASIC EARNINGS (LOSS) PER SHARE (in dollars per share)	$ 1.50	$ (0.45)
DILUTED EARNINGS (LOSS) PER SHARE (in dollars per share)	$ 1.45	$ (0.45)
Weighted average common shares:
Basic (in shares)	40,299	49,391
Diluted (in shares)	41,492	49,391
COMPREHENSIVE INCOME (LOSS):
Net income (loss)	$ 60,298	$ (22,071)
Net unrealized appreciation (depreciation) on marketable securities, net of taxes	(173)	1,480
TOTAL COMPREHENSIVE INCOME (LOSS)	60,125	(20,591)
Flying agreements
OPERATING REVENUES:
Total operating revenues	778,289	663,838
Lease, airport services and other
OPERATING REVENUES:
Total operating revenues	$ 25,325	$ 27,993

XML

CONSOLIDATED STATEMENTS OF STOCKHOLDERS EQUITY - USD ($) shares in Thousands, $ in Thousands	Common Stock	Retained Earnings	Treasury Stock	Accumulated Other Comprehensive Loss	Total
Balance at Dec. 31, 2022	$ 734,426	$ 2,236,869	$ (619,862)	$ (3,802)	$ 2,347,631
Balance (in shares) at Dec. 31, 2022	82,593		(31,994)
Increase (Decrease) in Stockholders' Equity
Net Income (loss)		(22,071)			(22,071)
Vested employee stock awards	$ 57				57
Vested employee stock awards (in shares)	130
Employee income tax paid on vested equity awards			$ (585)		(585)
Employee income tax paid on vested equity awards (in shares)			(32)
Sale of common stock under employee stock purchase plan	$ 1,218				1,218
Sale of common stock under employee stock purchase plan (in shares)	78
Stock based compensation expense	$ 4,329				4,329
Treasury stock purchases			$ (100,001)		(100,001)
Treasury stock purchases (in shares)			(5,067)
Net unrealized appreciation (depreciation) on marketable securities, net of tax				1,480	1,480
Balance at Mar. 31, 2023	$ 740,030	2,214,798	$ (720,448)	(2,322)	2,232,058
Balance (in shares) at Mar. 31, 2023	82,801		(37,093)
Balance at Dec. 31, 2023	$ 754,362	2,271,211	$ (912,396)	325	2,113,502
Balance (in shares) at Dec. 31, 2023	82,840		(42,615)
Increase (Decrease) in Stockholders' Equity
Net Income (loss)		60,298			60,298
Vested employee stock awards (in shares)	269
Employee income tax paid on vested equity awards			$ (6,930)		(6,930)
Employee income tax paid on vested equity awards (in shares)			(117)
Sale of common stock under employee stock purchase plan	$ 1,446				1,446
Sale of common stock under employee stock purchase plan (in shares)	29
Stock based compensation expense	$ 5,510				5,510
Treasury stock purchases			$ (8,750)		(8,750)
Treasury stock purchases (in shares)			(136)
Net unrealized appreciation (depreciation) on marketable securities, net of tax				(173)	(173)
Balance at Mar. 31, 2024	$ 761,318	$ 2,331,509	$ (928,076)	$ 152	$ 2,164,903
Balance (in shares) at Mar. 31, 2024	83,138		(42,868)

XML

CONSOLIDATED STATEMENTS OF STOCKHOLDERS EQUITY (Parenthetical) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
CONSOLIDATED STATEMENTS OF STOCKHOLDERS EQUITY
Net unrealized appreciation (depreciation) on marketable securities, tax	$ 56	$ 476

XML

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
NET CASH PROVIDED BY OPERATING ACTIVITIES	$ 157,648	$ 150,203
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of marketable securities	(337,694)	(289,116)
Sales of marketable securities	383,282	373,492
Acquisition of property and equipment:
Aircraft and rotable spare parts	(33,525)	(92,953)
Buildings and ground equipment	(4,250)	(10,319)
Proceeds from the sale of property and equipment	2,212	2,162
Decrease (increase) in other assets	(10,579)	19,766
NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES	(554)	3,032
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of long-term debt		25,000
Principal payments on long-term debt	(111,158)	(107,276)
Payment of debt issuance cost		(108)
Net proceeds from issuance of common stock	1,446	1,275
Employee income tax paid on vested equity awards	(6,930)	(585)
Purchase of treasury stock	(8,750)	(100,001)
NET CASH USED IN FINANCING ACTIVITIES	(125,392)	(181,695)
Increase (decrease) in cash and cash equivalents	31,702	(28,460)
Cash and cash equivalents at beginning of period	148,277	102,984
CASH AND CASH EQUIVALENTS AT END OF PERIOD	179,979	74,524
Non-cash investing and financing activities:
Acquisition of property and equipment	6,575	4,649
Derecognition of right of use assets		(35,062)
Derecognition of operating lease liabilities		35,062
Cash paid during the period for:
Interest, net of capitalized amounts	30,362	33,838
Income taxes	$ 42	$ 533

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Condensed Consolidated Financial Statements

3 Months Ended

Mar. 31, 2024

Condensed Consolidated Financial Statements

Condensed Consolidated Financial Statements

(1) Condensed Consolidated Financial Statements

Basis of Presentation

The condensed consolidated financial statements of SkyWest, Inc. (“SkyWest” or the “Company”), its operating subsidiary SkyWest Airlines, Inc. (“SkyWest Airlines”), its leasing subsidiary SkyWest Leasing, Inc. (“SkyWest Leasing”) and its charter service subsidiary SkyWest Charter, LLC (“SWC”) included herein have been prepared, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). Certain information and disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) have been condensed or omitted pursuant to such rules and regulations, although the Company believes that the following disclosures are adequate to make the information presented not misleading. These condensed consolidated financial statements reflect all adjustments that, in the opinion of management, are necessary to present fairly the results of operations for the interim periods presented. All adjustments are of a normal recurring nature, unless otherwise disclosed. These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and the notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023. The results of operations for the three months ended March 31, 2024, are not necessarily indicative of the results that may be expected for the year ending December 31, 2024.

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ materially from those estimates and assumptions.

Recent Accounting Pronouncements

In November 2023, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) No. 2023-07, “Segment Reporting (Accounting Standard Codification (“ASC”) Topic 280) – Improvements to Reportable Segment Disclosures,” which is intended to improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses. This ASU also expands disclosure requirements to enable users of financial statements to better understand the entity’s measurement and assessment of segment performance and resource allocation. The guidance is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted. The Company is currently evaluating the potential impact of adopting this new guidance on its consolidated financial statements and related disclosures.

In December 2023, the FASB issued ASU No. 2023-09, “Income Taxes (ASC Topic 740) – Improvements to Income Tax Disclosures”, which enhances the transparency, effectiveness and comparability of income tax disclosures by requiring consistent categories and greater disaggregation of information related to income tax rate reconciliations and the jurisdictions in which income taxes are paid. The guidance is effective for annual periods beginning after December 15, 2024, with early adoption permitted. The Company is currently evaluating the potential impact of adopting this new guidance on its consolidated financial statements and related disclosures.

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Operating Revenues

3 Months Ended

Mar. 31, 2024

Operating Revenues

Operating Revenues

(2) Operating Revenues

The Company recognizes revenue under its flying agreements and under its lease, airport services and other service agreements when the service is provided under the applicable agreement. Under the Company’s fixed-fee arrangements (referred to as “capacity purchase” agreements) with United Airlines, Inc. (“United”), Delta Air Lines, Inc. (“Delta”), American Airlines, Inc. (“American”) and Alaska Airlines, Inc. (“Alaska”) (each, a “major airline partner”), the major airline partner generally pays the Company a fixed-fee for each departure, flight hour (measured from takeoff to landing, excluding taxi time) or block hour (measured from takeoff to landing, including taxi time) incurred, and an

amount per aircraft in service each month, with additional incentives based on flight completion, on-time performance or other performance metrics. The major airline partner also directly pays for or reimburses the Company for certain direct expenses incurred under the capacity purchase agreement, such as fuel, airport landing fees and airport rents. Under the capacity purchase agreements, the Company’s performance obligation is met when each flight is completed, measured in completed block hours, and is reflected in flying agreements revenue. The transaction price for the capacity purchase agreements is determined from the fixed-fee consideration, incentive consideration and directly reimbursed expenses earned as flights are completed over the agreement term. For the three months ended March 31, 2024 and 2023, capacity purchase agreements represented approximately 87.0% and 88.4% of the Company’s flying agreements revenue, respectively.

Under the Company’s “prorate” arrangements, the major airline partner and the Company negotiate a passenger fare proration formula, pursuant to which the Company receives a percentage of the ticket revenues for those passengers traveling for one portion of their trip on a Company airline and the other portion of their trip on the major airline partner. Under the Company’s prorate flying agreements, the performance obligation is met and revenue is recognized when each flight is completed based upon the portion of the prorate passenger fare the Company determines that it will receive for each completed flight. The transaction price for the prorate agreements is determined from the proration formula derived from each passenger ticket amount on each completed flight over the agreement term. Certain routes under the Company’s prorate arrangements are subsidized by the U.S. Department of Transportation under the Essential Air Service (“EAS”) program, a program created to ensure small communities in the United States maintain a minimum level of scheduled air service. The EAS contracts are generally two years in duration and the Company recognizes EAS revenue on a per-completed-flight basis pursuant to the terms of each contract. Under the Company’s charter operations, SWC, the Company negotiates a fare for the charter flight with the customer. The performance obligation is met and revenue is recognized upon completion of the flight. For the three months ended March 31, 2024 and 2023, prorate flying agreements and SWC revenue represented approximately 13.0% and 11.6% of the Company’s flying agreements revenue, respectively.

The following table represents the Company’s flying agreements revenue by type for the three months ended March 31, 2024 and 2023 (in thousands):

	For the three months ended March 31,
	2024		2023
Capacity purchase agreements flight operations revenue (non-lease component)	$	544,160	$	468,916
Capacity purchase agreements fixed aircraft lease revenue		75,159		74,480
Capacity purchase agreements variable aircraft lease revenue		57,886		43,105
Prorate agreements and SWC revenue		101,084		77,337
Flying agreements revenue	$	778,289	$	663,838

The Company allocates the total consideration received under its capacity purchase agreements between lease and non-lease components based on stand-alone selling prices. A portion of the Company’s compensation under its capacity purchase agreements relates to operating the aircraft, identified as the non-lease component of the capacity purchase agreement. The Company recognizes revenue attributed to the non-lease component received as fixed-fees for each departure, flight hour or block hour on an as-completed basis for each reporting period. The Company recognizes revenue attributed to the non-lease component received as fixed monthly payments per aircraft proportionate to the number of block hours completed during each reporting period, relative to the estimated number of block hours the Company anticipates completing over the remaining contract term. Accordingly, the Company’s revenue recognition will likely vary from the timing of cash receipts under the Company’s capacity purchase agreements. The Company refers to cash received under its capacity purchase agreements prior to recognizing revenue as “deferred revenue,” and the Company refers to revenue recognized prior to billing its major airline partners under its capacity purchase agreements as “unbilled revenue” for each reporting period. During the three months ended March 31, 2024, the Company recognized $0.7 million of previously deferred revenue associated with the non-lease fixed monthly payments under certain agreements and decreased unbilled revenue by $0.3 million under certain other agreements, compared to deferring revenue of $39.3 million and decreasing unbilled revenue by $3.3 million during the three months ended March 31, 2023.

A portion of the Company’s compensation under its capacity purchase agreements is designed to reimburse the Company for certain aircraft ownership costs. The consideration for aircraft ownership costs varies by agreement but is intended to cover either the Company’s aircraft principal and interest debt service costs, its aircraft depreciation and interest expense or its aircraft lease expense costs while the aircraft is under contract. The consideration received for the use of the aircraft under the Company’s capacity purchase agreements is accounted for as lease revenue, inasmuch as the agreements identify the “right of use” of a specific type and number of aircraft over a stated period of time. The lease revenue associated with the Company’s capacity purchase agreements is accounted for as an operating lease and is reflected as flying agreements revenue on the Company’s consolidated statements of comprehensive income. The Company recognizes fixed monthly lease payments as lease revenue using the straight-line basis over the capacity purchase agreement term and variable lease payments in the period when the block hours are completed. The Company recognized $0.5 million of previously deferred lease revenue during the three months ended March 31, 2024, whereas the Company deferred recognizing lease revenue of $20.6 million during the three months ended March 31, 2023, under the straight-line basis. The Company has not separately stated aircraft rental income and aircraft rental expense in the consolidated statement of comprehensive income because the use of the aircraft is not a separate activity of the total service provided under the capacity purchase agreements.

The Company’s total deferred revenue balance as of March 31, 2024 was $373.4 million, including $58.0 million in other current liabilities and $315.4 million in other long-term liabilities. The Company’s unbilled revenue balance was $7.0 million as of March 31, 2024, including $1.1 million in other current assets and $5.9 million in other long-term assets. The Company’s total deferred revenue balance was $374.6 million as of December 31, 2023, including $61.0 million in other current liabilities and $313.6 million in other long-term liabilities. The Company’s unbilled revenue balance was $7.3 million as of December 31, 2023, including $1.2 million in other current assets and $6.1 million in other long-term assets.

The Company’s capacity purchase and prorate agreements include weekly provisional cash payments from the respective major airline partner based on a projected level of flying each month. The Company and each major airline partner subsequently reconcile these payments to the actual completed flight activity on a monthly or quarterly basis.

In several of the Company’s agreements, the Company is eligible to receive incentive compensation upon the achievement of certain performance criteria. The incentives are defined in the agreements and are measured and determined on a monthly, quarterly or semi-annual basis. At the end of each period during the term of an agreement, the Company calculates the incentives achieved during that period and recognizes revenue attributable to that agreement accordingly, subject to the variable constraint guidance under ASC Topic 606.

As of March 31, 2024, the Company had 475 aircraft in scheduled service or under contract pursuant to code-share agreements. The following table summarizes the significant provisions of each code-share agreement the Company has with each major airline partner through SkyWest Airlines:

United Express Agreements
Agreement	Aircraft type	Number of Aircraft	Term / Termination Dates
United Express Agreements (capacity purchase agreement)	• E175 • CRJ 700 • CRJ 200	93 19 70	• Individual aircraft have scheduled removal dates from 2024 to 2029
United Express Prorate Agreement	• CRJ 200	19*	• Terminable with 120-days’ notice
Total under United Express Agreements		201

Delta Connection Agreements
Agreement	Aircraft type	Number of Aircraft	Term / Termination Dates
Delta Connection Agreement (capacity purchase agreement)	• E175 • CRJ 900 • CRJ 700	85 35 5	• Individual aircraft have scheduled removal dates from 2025 to 2034
Delta Connection Prorate Agreement	• CRJ 900 • CRJ 700	6* 4*	•Terminable with 30-days’ notice
Total under Delta Connection Agreements		135

American Capacity Purchase Agreement
Agreement	Aircraft type	Number of Aircraft	Term / Termination Dates
American Agreement (capacity purchase agreement)	• E175 • CRJ 700	20 77	• Individual aircraft have scheduled removal dates from 2024 to 2032
Total under American Agreement		97

Alaska Capacity Purchase Agreement
Agreement	Aircraft type	Number of Aircraft	Term / Termination Dates
Alaska Agreement (capacity purchase agreement)	• E175	42	• Individual aircraft have scheduled removal dates from 2030 to 2034

* The Company’s prorate agreements are based on specific routes, not a specific aircraft count. The number of aircraft listed above for each prorate agreement approximates the number of aircraft the Company uses to serve the prorate routes.

In addition to the contractual arrangements described above, as of March 31, 2024, SkyWest Airlines reached agreements to place the following E175 aircraft under a capacity purchase agreement with the respective major airline partners:

	2024	2025	2026	Total
Delta Air Lines	1	—	—	1
United Airlines(1)	21	7	8	36
Alaska Airlines	—	1	—	1
Total	22	8	8	38

(1) 17 of the E175 deliveries scheduled for 2024 are partner-financed so the aircraft will be provided by the major airline partner for SkyWest to operate.

Final delivery and in-service dates for aircraft to be placed under contract may be adjusted based on various factors.

When an aircraft is scheduled to be removed from a capacity purchase arrangement, the Company may, as practical under the circumstances, negotiate an extension with the respective major airline partner, negotiate the placement of the aircraft with another major airline partner, return the aircraft to the major airline partner when the aircraft is provided by the major airline partner, place owned aircraft for sale or pursue other uses for the aircraft. Other uses for the aircraft may include placing the aircraft in a prorate agreement, leasing the aircraft to a third party or disassembling aircraft components such as the engines and parts to be used as spare inventory.

Lease, airport services and other revenues primarily consist of revenue generated from aircraft and spare engines leased to third parties and from airport customer service agreements, such as gate and ramp agent services at various airports where the Company has been contracted by third parties to provide such services.. The following table

represents the Company’s lease, airport services and other revenues for the three months ended March 31, 2024 and 2023 (in thousands):

	For the three months ended March 31,
	2024		2023
Operating lease revenue	$	16,668	$	16,560
Airport customer service and other revenue		8,657		11,433
Lease, airport services and other	$	25,325	$	27,993

The following table summarizes future minimum rental income under operating leases primarily related to leased aircraft and engines that had remaining non-cancelable lease terms as of March 31, 2024 (in thousands):

April 2024 through December 2024	$	34,787
2025		41,476
2026		35,946
2027		35,915
2028		35,139
Thereafter		53,500
Total future minimum rental income under operating leases	$	236,763

Of the Company’s $5.5 billion of net property and equipment as of March 31, 2024, $210.4 million of regional jet aircraft and spare engines were leased to third parties under operating leases. The Company’s mitigation strategy for the residual asset risks of these assets includes leasing aircraft and engine types that can be operated by the Company in the event of a default. Additionally, the operating leases typically have specified lease return condition requirements paid by the lessee to the Company and the Company typically maintains inspection rights under the leases.

The transaction price for airport customer service agreements is determined from an agreed-upon rate by location applied to the applicable number of flights handled by the Company over the agreement term.

The Company’s operating revenues could be impacted by several factors, including changes to the Company’s code-share agreements with its major airline partners, changes in flight schedules, contract modifications resulting from contract renegotiations, the Company’s ability to earn incentive payments contemplated under the Company’s code-share agreements and resolution of unresolved items with the Company’s major airline partners.

Other ancillary revenues commonly associated with airlines, such as baggage fee revenue, ticket change fee revenue and the marketing component of the sale of mileage credits, are retained by the Company’s major airline partners on flights that the Company operates under its code-share agreements.

Allowance for Credit Losses

The Company monitors publicly available credit ratings for entities for which the Company has a significant receivable balance. As of March 31, 2024, the Company had gross receivables of $89.5 million in current assets and gross receivables of $203.9 million in other long-term assets. The Company has established credit loss reserves based on publicly available historic default rates issued by a third party for companies with similar credit ratings, factoring in the term of the respective accounts receivable, notes receivable or guarantees. During the three months ended March 31, 2024, there were no significant changes in the outstanding accounts receivable, notes receivable, guarantees or credit ratings of the entities.

The following table summarizes the changes in allowance for credit losses:

	Allowance for Credit Losses
Balance at December 31, 2023	$	18,699
Adjustments to credit loss reserves		943
Write-offs charged against allowance		—
Balance at March 31, 2024	$	19,642

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Stock-Based Compensation

3 Months Ended

Mar. 31, 2024

Stock-Based Compensation

Stock-Based Compensation

(3) Stock-Based Compensation

During the three months ended March 31, 2024, the Company granted 50,577 restricted stock units and 118,021 performance shares to certain employees of the Company under the SkyWest, Inc. 2019 Long-Term Incentive Plan. Both the restricted stock units and performance shares have a three-year vesting period, during which the recipient must remain employed with the Company. The number of performance shares awardable from the 2024 grants can range from 0% to 200% of the original amount granted depending on the Company’s performance over three one-year measurement periods against the pre-established targets. Upon vesting, each restricted stock unit and performance share will be replaced with one share of common stock. The weighted average fair value of these restricted stock units and performance shares on their date of grant was $59.57 per share. During the three months ended March 31, 2024, the Company did not grant any options to purchase shares of common stock to employees. Additionally, during the three months ended March 31, 2024, the Company granted 12,634 fully vested shares of common stock and 2,632 fully vested restricted stock units to the Company’s directors at a grant date fair value of $59.57.

The Company accounts for forfeitures of restricted stock units and performance shares when forfeitures occur. The estimated fair value of the restricted stock units and performance shares is amortized over the applicable vesting periods. Stock-based compensation expense for the performance shares is based on the Company’s anticipated outcome of achieving the performance metrics. During the three months ended March 31, 2024 and 2023, the Company recorded pre-tax stock-based compensation expense of $5.5 million and $4.3 million, respectively.

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Stock Repurchase

3 Months Ended

Mar. 31, 2024

Stock Repurchase

Stock Repurchase

(4) Stock Repurchase

The Company’s Board of Directors adopted a stock repurchase program in May 2023, which authorizes the Company to repurchase shares of the Company’s common stock in the public market or in private transactions, from time to time, at prevailing prices. Under the May 2023 repurchase program, the Company’s Board of Directors authorized up to $250.0 million for the repurchase of the Company’s common stock, superseding a prior Board authorization. At March 31, 2024, $82.2 million remains available under the May 2023 authorization.

During the three months ended March 31, 2024, the Company repurchased 136,261 shares of common stock for $8.7 million at a weighted average price per share of $64.21. During the three months ended March 31, 2023, the Company repurchased 5.1 million shares of common stock for $100.0 million at a weighted average price per share of $19.74.

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Net Income Per Common Share

3 Months Ended

Mar. 31, 2024

Net Income Per Common Share

Net Income Per Common Share

(5) Net Income Per Common Share

Basic net income per common share (“Basic EPS”) excludes dilution and is computed by dividing net income by the weighted average number of common shares outstanding during the period. Diluted net income per common share (“Diluted EPS”) reflects the potential dilution that could occur if stock options or other contracts to issue common stock were exercised or converted into common stock. The computation of Diluted EPS does not assume exercise or conversion of securities that would have an anti-dilutive effect on net income per common share. Securities that could potentially dilute Basic EPS in the future, and which were excluded from the calculation of Diluted EPS because inclusion of such share would be anti-dilutive, are as follows (in thousands):

	Three Months Ended
	March 31,
	2024		2023
Treasury Warrants (1)		—		785
Employee Stock Awards		—		700
Total antidilutive securities		—		1,485

(1) U.S. Department of the Treasury (“U.S. Treasury”) warrants to purchase shares of SkyWest common stock issued pursuant to the three Payroll Support Program Agreements and a loan agreement with the U.S. Treasury.

Additionally, during the three months ended March 31, 2024 and 2023, 452,000 and 538,000 performance shares (at target performance) were excluded from the computation of Diluted EPS because the Company had not achieved the minimum target thresholds for these shares for the three months ended March 31, 2024 and 2023, respectively.

The calculation of the weighted average number of shares of common stock outstanding for Basic EPS and Diluted EPS are as follows for the periods indicated (in thousands, except per share data):

	Three Months Ended
	March 31,
	2024		2023
Numerator:
Net income (loss)	$	60,298	$	(22,071)
Denominator:
Basic earnings per share weighted average shares		40,299		49,391
Dilutive effect of employee stock awards and warrants		1,193		—
Diluted earnings per share weighted average shares		41,492		49,391
Basic earnings per share	$	1.50	$	(0.45)
Diluted earnings per share	$	1.45	$	(0.45)

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Segment Reporting

3 Months Ended

Mar. 31, 2024

Segment Reporting

Segment Reporting

(6) Segment Reporting

The Company’s two reportable segments consist of (1) the operations of SkyWest Airlines and SWC (collectively, “SkyWest Airlines and SWC”) and (2) 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 and SWC segment includes revenue earned under the applicable capacity purchase agreements attributed to operating such aircraft and the respective operating costs. The SkyWest Airlines and SWC segment also includes revenue and operating expenses attributed to other flying agreements and airport services agreements. 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, 2024 and 2023 (in thousands):

	Three months ended March 31, 2024
	SkyWest Airlines		SkyWest
	and SWC		Leasing		Consolidated
Operating revenues (1)	$	646,809	$	156,805	$	803,614
Operating expense		641,363		62,745		704,108
Depreciation and amortization expense		36,108		59,762		95,870
Interest expense		3,476		26,353		29,829
Segment profit (2)		1,970		67,707		69,677
Total assets (as of March 31, 2024)		2,608,104		4,374,639		6,982,743
Capital expenditures (including non-cash)		44,350		—		44,350

	Three months ended March 31, 2023
	SkyWest Airlines		SkyWest
	and SWC		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

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

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

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Leases, Commitments, Guarantees and Contingencies

3 Months Ended

Mar. 31, 2024

Leases, Commitments, Guarantees and Contingencies

Leases, Commitments, Guarantees and Contingencies

(7) Leases, Commitments, Guarantees and Contingencies

The Company leases property and equipment under operating leases. For leases with durations longer than 12 months, the Company recorded the related operating lease right-of-use asset and operating lease liability at the present value of lease payments over the term. The Company used its incremental borrowing rate to discount the lease payments based on information available at lease commencement.

Aircraft

As of March 31, 2024, excluding aircraft financed by the Company’s major airline partners that the Company operates for them under contract, the Company leased eight aircraft under long-term lease agreements with remaining terms ranging from five to six years.

Airport facilities

The Company has operating leases for facility space including airport terminals, office space, cargo warehouses and maintenance facilities. The Company generally leases this space from government agencies that control the use of the various airports. The remaining lease terms for facility space vary from one month to 32 years. The Company’s operating leases with lease rates that are variable based on airport operating costs, use of the facilities or other variable factors are excluded from the Company’s right-of-use assets and operating lease liabilities in accordance with accounting guidance.

Leases

As of March 31, 2024, the Company’s right-of-use assets were $85.9 million, the Company’s current maturities of operating lease liabilities were $19.7 million, and the Company’s noncurrent lease liabilities were $66.2 million. During the three months ended March 31, 2024, the Company paid $5.7 million under operating leases reflected as a reduction from operating cash flows.

The table below presents lease related terms and discount rates as of March 31, 2024:

Weighted-average remaining lease term for operating leases	11.4 years
Weighted-average discount rate for operating leases	6.2%

The Company’s lease costs for the three months ended March 31, 2024 and 2023 included the following components (in thousands):

	For the three months ended March 31,
	2024		2023
Operating lease cost	$	7,259	$	24,948
Variable and short-term lease cost		1,033		803
Sublease income		(1,246)		(1,350)
Total lease cost	$	7,046	$	24,401

As of March 31, 2024, the Company leased aircraft, airport facilities, office space and other property and equipment under non-cancelable operating leases, which are generally on a long-term, triple-net lease basis pursuant to which the Company pays taxes, maintenance, insurance and certain other operating expenses applicable to the leased property. The Company expects that, in the normal course of business, such operating leases that expire will be renewed or replaced by other leases. The following table summarizes future minimum rental payments required under operating leases that had initial or remaining non-cancelable lease terms as of March 31, 2024 (in thousands):

April 2024 through December 2024	$	15,726
2025		17,974
2026		14,910
2027		12,983
2028		9,976
Thereafter		56,592
Total future minimum operating lease payments	$	128,161

As of March 31, 2024, the Company had a firm purchase commitment for 21 E175 aircraft from Embraer with anticipated delivery dates through 2026.

The following table summarizes the Company’s commitments and obligations as noted for each of the next five years and thereafter (in thousands):

	Total		Apr - Dec 2024		2025		2026		2027		2028		Thereafter
Operating lease payments for aircraft and facility obligations	$	128,161	$	15,726	$	17,974	$	14,910	$	12,983	$	9,976	$	56,592
Firm aircraft and spare engine commitments		610,945		143,810		230,725		236,410		—		—		—
Interest commitments (1)		442,822		84,964		97,933		78,149		56,289		40,947		84,540
Principal maturities on long-term debt		2,918,971		339,156		532,255		510,598		464,289		292,862		779,811
Total commitments and obligations	$	4,100,899	$	583,656	$	878,887	$	840,067	$	533,561	$	343,785	$	920,943

(1) At March 31, 2024, the Company’s long-term debt had fixed interest rates.

Guarantees

In 2022, the Company agreed to guarantee $19.8 million of debt for a 14 CFR Part 135 air carrier. The debt is secured by the Part 135 air carrier’s aircraft and engines and has a five-year term. In exchange for providing the guarantee, the Company received 6.5% of the guaranteed amount as consideration, payable in the estimated value of common stock of the Part 135 air carrier, all of which was sold in 2023. The balance of the debt under the guarantee was $16.1 million as of March 31, 2024.

In 2023, the Company agreed to guarantee up to $12.0 million of debt for an aviation school. The debt is secured by the school’s aircraft and engines and has a five-year term. In exchange for providing the guarantee, the

Company receives 2.0% annually of the guaranteed amount as consideration in cash. The balance of the debt under the guarantee was $7.2 million as of March 31, 2024.

The purpose of these guarantees is to help reduce the financing costs of aircraft for the third-parties in an effort to increase the potential number of commercial pilots in the Company’s hiring pipeline. The Company also recorded the estimated credit loss associated with the guarantees based on publicly available historical default rates issued by a third party for companies with similar credit ratings, factoring the collateral and guarantee term.

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Fair Value Measurements

3 Months Ended

Mar. 31, 2024

Fair Value Measurements

Fair Value Measurements

(8) Fair Value Measurements

The Company holds certain assets that are required to be measured at fair value in accordance with GAAP. The Company determined the fair value of these assets based on the following three levels of inputs:

Level 1	—	Quoted prices in active markets for identical assets or liabilities.
Level 2	—	Observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Some of the Company’s marketable securities primarily utilize broker quotes in a non-active market for valuation of these securities.
Level 3	—	Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities, therefore requiring an entity to develop its own assumptions.

As of March 31, 2024, and December 31, 2023, the Company held certain assets that are required to be measured at fair value on a recurring basis. Assets measured at fair value on a recurring basis are summarized below (in thousands):

	Fair Value Measurements as of March 31, 2024
	Total		Level 1		Level 2		Level 3
Marketable Securities
Bonds and bond funds	$	628,994	$	—	$	628,994	$	—
Commercial paper		12,191		—		12,191		—
		641,185		—		641,185		—
Investments in Other Companies		11,904		2,158		—		9,746
Cash and Cash Equivalents		179,979		179,979		—		—
Total Assets Measured at Fair Value	$	833,068	$	182,137	$	641,185	$	9,746

	Fair Value Measurements as of December 31, 2023
	Total		Level 1		Level 2		Level 3
Marketable Securities
Bonds and bond funds	$	677,074	$	—	$	677,074	$	—
Commercial paper		9,872		—		9,872		—
		686,946		—		686,946		—
Investments in Other Companies		15,402		2,925		—		12,477
Cash and Cash Equivalents		148,277		148,277		—		—
Total Assets Measured at Fair Value	$	850,625	$	151,202	$	686,946	$	12,477

The Company’s “Marketable Securities” classified as Level 2 securities primarily utilize broker quotes in a non-active market for valuation of these securities. See Note 11 “Investments in Other Companies” regarding the Company’s investments in other companies, for the three months ended March 31, 2024.

The Company did not make any significant transfers of securities between Level 1, Level 2 and Level 3 during the three months ended March 31, 2024. The Company’s policy regarding the recording of transfers between levels is to record any such transfers at the end of the reporting period.

As of March 31, 2024, and December 31, 2023, the Company classified $641.2 million and $686.9 million of marketable securities, respectively, as short-term because it had the intent to maintain a liquid portfolio and the ability to redeem the securities within one year. At the time of sale, any realized appreciation or depreciation, calculated by the specific identification method, is recognized in other income and expense. As of March 31, 2024, and December 31, 2023, the cost of the Company’s marketable securities was $641.0 million and $686.5 million, respectively.

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Assets Held for Sale

3 Months Ended

Mar. 31, 2024

Assets Held for Sale

Assets Held for Sale

(9) Assets Held for Sale

In 2022, the Company committed to a formal plan to sell 14 CRJ700 aircraft and determined the aircraft met the criteria to be classified as assets held for sale. At December 31, 2023, the Company presented the $54.3 million of assets held for sale at their fair market value less costs to sell and included the amount in “Other current assets” on the Company’s consolidated balance sheet. During the three months ended March 31, 2024, the Company changed its plan to sell the 14 CRJ700 aircraft and reclassified them as held for use assets in “Aircraft and rotable spares” on the Company’s consolidated balance sheet. The Company remeasured the fair value of the held for use assets at the time of the reclassification and, as a result, for the three months ended March 31, 2024, the Company recorded a $4.2 million gain (pre-tax) as an offset to other operating expenses primarily due to the elimination of the estimated costs to sell the assets.

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Long-term Debt

3 Months Ended

Mar. 31, 2024

Long-term Debt

Long-term Debt

(10) Long-term Debt

Long-term debt consisted of the following as of March 31, 2024, and December 31, 2023 (in thousands):

		March 31, 2024		December 31, 2023
Current portion of long-term debt	$	510,204	$	447,534
Current portion of unamortized debt issue cost, net		(3,602)		(3,665)
Current portion of long-term debt, net of debt issue costs	$	506,602	$	443,869
Long-term debt, net of current maturities	$	2,408,767	$	2,582,776
Long-term portion of unamortized debt issue cost, net		(19,540)		(20,593)
Long-term debt, net of current maturities and debt issue costs	$	2,389,227	$	2,562,183
Total long-term debt (including current portion)	$	2,918,971	$	3,030,310
Total unamortized debt issue cost, net		(23,142)		(24,258)
Total long-term debt, net of debt issue costs	$	2,895,829	$	3,006,052

As of March 31, 2024, the Company had $2.9 billion of total long-term debt, which consisted of $2.7 billion of debt used to finance aircraft and spare engines and $200.6 million of unsecured debt payable to U.S. Treasury. The average effective interest rate on the Company’s debt was approximately 4.1% at March 31, 2024.

As of March 31, 2024 and December 31, 2023, the Company had $45.0 million and $49.1 million, respectively, in letters of credit and surety bonds outstanding with various banks and surety institutions.

As of March 31, 2024, SkyWest Airlines had a $100.0 million line of credit. The line of credit includes minimum liquidity and profitability covenants and is secured by certain assets. As of March 31, 2024, SkyWest Airlines had no amounts outstanding under the facility. However, at March 31, 2024, SkyWest Airlines had $24.9 million in letters of credit issued under the facility, which reduced the amount available under the facility to $75.1 million. The line of credit expires March 25, 2025 and has a variable interest rate of 3.5% plus the one month SOFR rate.

The Company’s debt agreements are not traded on an active market and are recorded at carrying value on the Company’s consolidated balance sheet. The fair value of the Company’s long-term debt is estimated based on current rates offered to the Company for similar debt. Debt is primarily classified as Level 2 within the fair value hierarchy. The

carrying value and fair value of the Company’s long-term debt as of March 31, 2024 and December 31, 2023, were as follows (in thousands):

	March 31, 2024		December 31, 2023
Carrying value	$	2,918,971	$	3,030,310
Fair value	$	2,820,034	$	2,918,012

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Investments in Other Companies

3 Months Ended

Mar. 31, 2024

Investments in Other Companies

Investments in Other Companies

(11) Investments in Other Companies

Equity Method Investments

During 2019, the Company created a joint venture with Regional One, Inc. and, as of March 31, 2024, has invested a total of $26.6 million for an ownership interest in Aero Engines, LLC. (“Aero Engines”). The primary purpose of Aero Engines is to lease engines to third parties. The Company accounts for its investment in Aero Engines under the equity method. The Company’s exposure in its investment in Aero Engines primarily consists of the Company’s portion of income or loss from Aero Engines’ engine lease agreements with third parties and the Company’s ownership percentage in Aero Engines’ engines book value. Aero Engines had no debt outstanding as of March 31, 2024. As of March 31, 2024, the Company’s investment balance in Aero Engines was $25.3 million and has been recorded in “Other Assets” on the Company’s consolidated balance sheet. The Company’s portion of income generated by Aero Engines for the three months ended March 31, 2024, was $0.2 million, which is recorded in “Other income (loss), net” on the Company’s consolidated statements of comprehensive income.

In December 2023, the Company invested $9.9 million for a 9.9% ownership interest in Corporate Flight Management, Inc. d/b/a Contour Airlines (“Contour”), a 14 CFR Part 135 air carrier. In January 2024, the Company invested an additional $15.1 million in Contour. The Company has a 25% ownership interest in Contour at March 31, 2024 and holds one of five seats, or 20%, on Contour’s board of directors. The Contour arrangement also includes an asset provisioning agreement under which the Company will provide CRJ airframes, engines and rotable parts to Contour. The Company accounts for its investment in Contour under the equity method where the investment is reported at cost and adjusted each period for the Company’s share of Contour’s income or loss, recorded on a one quarter lag. Accordingly, for the three months ended March 31, 2024, the Company recorded a loss of less than $0.1 million, its portion of loss generated by Contour during the fourth quarter of 2023, which was recorded in “Other income (loss), net” on the Company’s consolidated statements of comprehensive income. As of March 31, 2024, the Company’s investment balance in Contour of $25.0 million was recorded in “Other Assets” on the Company’s consolidated balance sheet. At March 31, 2024, the Company had $14.0 million in notes receivable from Contour related to the sale of aircraft under the asset provisioning agreement. The notes are secured by aircraft and collectible within four years.

The Company assesses investments for impairment whenever events or changes in circumstances indicate that the carrying value of an investment may not be recoverable.

Fair Value Method Investments

In 2021, the Company entered into a strategic partnership with Eve UAM, LLC (“Eve UAM”), to develop a network of deployment for Eve UAM’s electric vertical takeoff and landing (“eVTOL”) aircraft.

In 2022, the Company acquired 1,000,000 shares of common stock of Eve Holding, Inc. (“Eve”) and a warrant giving the Company the right to acquire 1,500,000 shares of common stock of Eve at an exercise price of $0.01 per share. The Company also received a put option from an Eve shareholder for the 1,000,000 shares of common stock of Eve payable in aircraft parts credits. The intent of the put option is to reduce the Company’s investment risk in Eve, and the put option expires in December 2031. The Company is restricted from selling the shares underlying the warrant until May 2025, and the warrant expires in May 2032. The Company acquired the shares of common stock, warrant and put option (collectively the “Eve Investments”) for $10.0 million. The Company evaluated the Eve Investments under ASC Topic 321, “Investments – Equity Securities” and ASC Topic 815, “Derivatives and Hedging,” and recorded the Eve Investments based on their pro rata share of the consideration paid using the fair value of the Eve Investments on the acquisition date, with subsequent changes in the fair value reported in earnings. During the year ended December 31, 2023, the Company sold 600,411 shares of common stock of Eve, which concurrently forfeited the 600,411 shares subject to the put option from the Eve shareholder.

The shares of common stock of Eve are classified as Level 1 within the fair value hierarchy as Eve stock is actively traded on the New York Stock Exchange, and the value is determined using quoted market prices for the equity security. The warrant and put option are classified as Level 3 within the fair value hierarchy (“Eve Level 3 Investments”), and the Company used the Black Scholes Option Pricing Model to determine the estimated fair market value of the Eve Level 3 Investments, including an expected volatility of 52%, which is a significant unobservable input that was derived from historical volatility of comparable companies.

The table below shows the reconciliation of the Eve Level 3 Investments (in thousands):

Eve Level 3 Investments:
Balance at December 31, 2023	$	12,477
Unrealized loss		(2,731)
Balance at March 31, 2024	$	9,746

The Company recognized unrealized losses of $3.5 million in “Other income (loss), net” on the Company’s consolidated statements of comprehensive income for the three months ended March 31, 2024, related to the Eve Investments. As of March 31, 2024, the fair value of the Eve Investments was $11.9 million and was recorded in “Other Assets” on the Company’s consolidated balance sheet.

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Income Taxes

3 Months Ended

Mar. 31, 2024

Income Taxes

Income Taxes

(12) Income Taxes

The Company’s effective tax rate for the three months ended March 31, 2024 was 24.8%. The Company’s effective tax rate for the three months ended March 31, 2024 varied from the federal statutory rate of 21.0% primarily due to the provision for state income taxes and the impact of non-deductible expenses, partially offset by a discrete tax benefit from excess tax deductions generated from employee equity transactions that occurred during the three months ended March 31, 2024.

The Company’s effective tax rate for the three months ended March 31, 2023 was 15.5%. The Company’s effective tax rate for the three months ended March 31, 2023 varied from the federal statutory rate of 21.0% primarily due to the impact of non-deductible expenses and a discrete tax expense on employee equity transactions that occurred during the three months ended March 31, 2023, partially offset by the provision for state income taxes.

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Legal Matters

3 Months Ended

Mar. 31, 2024

Legal Matters

Legal Matters

(13) Legal Matters

The Company is subject to certain legal actions which it considers routine to its business activities. As of March 31, 2024, the Company’s management believed, after consultation with legal counsel, that the ultimate outcome of such legal matters was not likely to have a material adverse effect on the Company’s financial position, liquidity or results of operations.

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Condensed Consolidated Financial Statements (Policies)

3 Months Ended

Mar. 31, 2024

Condensed Consolidated Financial Statements

Basis of Presentation

Basis of Presentation

The condensed consolidated financial statements of SkyWest, Inc. (“SkyWest” or the “Company”), its operating subsidiary SkyWest Airlines, Inc. (“SkyWest Airlines”), its leasing subsidiary SkyWest Leasing, Inc. (“SkyWest Leasing”) and its charter service subsidiary SkyWest Charter, LLC (“SWC”) included herein have been prepared, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). Certain information and disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) have been condensed or omitted pursuant to such rules and regulations, although the Company believes that the following disclosures are adequate to make the information presented not misleading. These condensed consolidated financial statements reflect all adjustments that, in the opinion of management, are necessary to present fairly the results of operations for the interim periods presented. All adjustments are of a normal recurring nature, unless otherwise disclosed. These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and the notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023. The results of operations for the three months ended March 31, 2024, are not necessarily indicative of the results that may be expected for the year ending December 31, 2024.

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ materially from those estimates and assumptions.

Recent Accounting Pronouncements

Recent Accounting Pronouncements

In November 2023, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) No. 2023-07, “Segment Reporting (Accounting Standard Codification (“ASC”) Topic 280) – Improvements to Reportable Segment Disclosures,” which is intended to improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses. This ASU also expands disclosure requirements to enable users of financial statements to better understand the entity’s measurement and assessment of segment performance and resource allocation. The guidance is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted. The Company is currently evaluating the potential impact of adopting this new guidance on its consolidated financial statements and related disclosures.

In December 2023, the FASB issued ASU No. 2023-09, “Income Taxes (ASC Topic 740) – Improvements to Income Tax Disclosures”, which enhances the transparency, effectiveness and comparability of income tax disclosures by requiring consistent categories and greater disaggregation of information related to income tax rate reconciliations and the jurisdictions in which income taxes are paid. The guidance is effective for annual periods beginning after December 15, 2024, with early adoption permitted. The Company is currently evaluating the potential impact of adopting this new guidance on its consolidated financial statements and related disclosures.

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Operating Revenues (Tables)

3 Months Ended

Mar. 31, 2024

Agreements with other airlines

Schedule of revenue by type

The following table represents the Company’s flying agreements revenue by type for the three months ended March 31, 2024 and 2023 (in thousands):

	For the three months ended March 31,
	2024		2023
Capacity purchase agreements flight operations revenue (non-lease component)	$	544,160	$	468,916
Capacity purchase agreements fixed aircraft lease revenue		75,159		74,480
Capacity purchase agreements variable aircraft lease revenue		57,886		43,105
Prorate agreements and SWC revenue		101,084		77,337
Flying agreements revenue	$	778,289	$	663,838

Schedule of aircraft and agreements with major airline partners

United Express Agreements
Agreement	Aircraft type	Number of Aircraft	Term / Termination Dates
United Express Agreements (capacity purchase agreement)	• E175 • CRJ 700 • CRJ 200	93 19 70	• Individual aircraft have scheduled removal dates from 2024 to 2029
United Express Prorate Agreement	• CRJ 200	19*	• Terminable with 120-days’ notice
Total under United Express Agreements		201

Delta Connection Agreements
Agreement	Aircraft type	Number of Aircraft	Term / Termination Dates
Delta Connection Agreement (capacity purchase agreement)	• E175 • CRJ 900 • CRJ 700	85 35 5	• Individual aircraft have scheduled removal dates from 2025 to 2034
Delta Connection Prorate Agreement	• CRJ 900 • CRJ 700	6* 4*	•Terminable with 30-days’ notice
Total under Delta Connection Agreements		135

American Capacity Purchase Agreement
Agreement	Aircraft type	Number of Aircraft	Term / Termination Dates
American Agreement (capacity purchase agreement)	• E175 • CRJ 700	20 77	• Individual aircraft have scheduled removal dates from 2024 to 2032
Total under American Agreement		97

Alaska Capacity Purchase Agreement
Agreement	Aircraft type	Number of Aircraft	Term / Termination Dates
Alaska Agreement (capacity purchase agreement)	• E175	42	• Individual aircraft have scheduled removal dates from 2030 to 2034

	2024	2025	2026	Total
Delta Air Lines	1	—	—	1
United Airlines(1)	21	7	8	36
Alaska Airlines	—	1	—	1
Total	22	8	8	38

(1) 17 of the E175 deliveries scheduled for 2024 are partner-financed so the aircraft will be provided by the major airline partner for SkyWest to operate.

Schedule of future minimum rental payments for operating leases

April 2024 through December 2024	$	34,787
2025		41,476
2026		35,946
2027		35,915
2028		35,139
Thereafter		53,500
Total future minimum rental income under operating leases	$	236,763

Schedule of allowance for credit losses

The following table summarizes the changes in allowance for credit losses:

	Allowance for Credit Losses
Balance at December 31, 2023	$	18,699
Adjustments to credit loss reserves		943
Write-offs charged against allowance		—
Balance at March 31, 2024	$	19,642

Airport customer service and other

Agreements with other airlines

Schedule of revenue by type

represents the Company’s lease, airport services and other revenues for the three months ended March 31, 2024 and 2023 (in thousands):

	For the three months ended March 31,
	2024		2023
Operating lease revenue	$	16,668	$	16,560
Airport customer service and other revenue		8,657		11,433
Lease, airport services and other	$	25,325	$	27,993

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Net Income Per Common Share (Tables)

3 Months Ended

Mar. 31, 2024

Net Income Per Common Share

Schedule of antidilutive securities excluded from calculation of diluted EPS

The computation of Diluted EPS does not assume exercise or conversion of securities that would have an anti-dilutive effect on net income per common share. Securities that could potentially dilute Basic EPS in the future, and which were excluded from the calculation of Diluted EPS because inclusion of such share would be anti-dilutive, are as follows (in thousands):

	Three Months Ended
	March 31,
	2024		2023
Treasury Warrants (1)		—		785
Employee Stock Awards		—		700
Total antidilutive securities		—		1,485

(1) U.S. Department of the Treasury (“U.S. Treasury”) warrants to purchase shares of SkyWest common stock issued pursuant to the three Payroll Support Program Agreements and a loan agreement with the U.S. Treasury.

Schedule of Basic EPS and Diluted EPS

The calculation of the weighted average number of shares of common stock outstanding for Basic EPS and Diluted EPS are as follows for the periods indicated (in thousands, except per share data):

	Three Months Ended
	March 31,
	2024		2023
Numerator:
Net income (loss)	$	60,298	$	(22,071)
Denominator:
Basic earnings per share weighted average shares		40,299		49,391
Dilutive effect of employee stock awards and warrants		1,193		—
Diluted earnings per share weighted average shares		41,492		49,391
Basic earnings per share	$	1.50	$	(0.45)
Diluted earnings per share	$	1.45	$	(0.45)

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Segment Reporting (Tables)

3 Months Ended

Mar. 31, 2024

Segment Reporting

Schedule of Company's segment data

The following represents the Company’s segment data for the three-month periods ended March 31, 2024 and 2023 (in thousands):

	Three months ended March 31, 2024
	SkyWest Airlines		SkyWest
	and SWC		Leasing		Consolidated
Operating revenues (1)	$	646,809	$	156,805	$	803,614
Operating expense		641,363		62,745		704,108
Depreciation and amortization expense		36,108		59,762		95,870
Interest expense		3,476		26,353		29,829
Segment profit (2)		1,970		67,707		69,677
Total assets (as of March 31, 2024)		2,608,104		4,374,639		6,982,743
Capital expenditures (including non-cash)		44,350		—		44,350

	Three months ended March 31, 2023
	SkyWest Airlines		SkyWest
	and SWC		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

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

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

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Leases, Commitments, Guarantees and Contingencies (Tables)

3 Months Ended

Mar. 31, 2024

Leases, Commitments, Guarantees and Contingencies

Summary of related terms and discount rates

Weighted-average remaining lease term for operating leases	11.4 years
Weighted-average discount rate for operating leases	6.2%

Summary of lease costs

	For the three months ended March 31,
	2024		2023
Operating lease cost	$	7,259	$	24,948
Variable and short-term lease cost		1,033		803
Sublease income		(1,246)		(1,350)
Total lease cost	$	7,046	$	24,401

Schedule of future minimum rental income under operating leases

April 2024 through December 2024	$	15,726
2025		17,974
2026		14,910
2027		12,983
2028		9,976
Thereafter		56,592
Total future minimum operating lease payments	$	128,161

Summary of commitments and obligations

The following table summarizes the Company’s commitments and obligations as noted for each of the next five years and thereafter (in thousands):

	Total		Apr - Dec 2024		2025		2026		2027		2028		Thereafter
Operating lease payments for aircraft and facility obligations	$	128,161	$	15,726	$	17,974	$	14,910	$	12,983	$	9,976	$	56,592
Firm aircraft and spare engine commitments		610,945		143,810		230,725		236,410		—		—		—
Interest commitments (1)		442,822		84,964		97,933		78,149		56,289		40,947		84,540
Principal maturities on long-term debt		2,918,971		339,156		532,255		510,598		464,289		292,862		779,811
Total commitments and obligations	$	4,100,899	$	583,656	$	878,887	$	840,067	$	533,561	$	343,785	$	920,943

(1) At March 31, 2024, the Company’s long-term debt had fixed interest rates.

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Fair Value Measurements (Tables)

3 Months Ended

Mar. 31, 2024

Fair Value Measurements

Schedule of assets measured at fair value on a recurring basis

Assets measured at fair value on a recurring basis are summarized below (in thousands):

	Fair Value Measurements as of March 31, 2024
	Total		Level 1		Level 2		Level 3
Marketable Securities
Bonds and bond funds	$	628,994	$	—	$	628,994	$	—
Commercial paper		12,191		—		12,191		—
		641,185		—		641,185		—
Investments in Other Companies		11,904		2,158		—		9,746
Cash and Cash Equivalents		179,979		179,979		—		—
Total Assets Measured at Fair Value	$	833,068	$	182,137	$	641,185	$	9,746

	Fair Value Measurements as of December 31, 2023
	Total		Level 1		Level 2		Level 3
Marketable Securities
Bonds and bond funds	$	677,074	$	—	$	677,074	$	—
Commercial paper		9,872		—		9,872		—
		686,946		—		686,946		—
Investments in Other Companies		15,402		2,925		—		12,477
Cash and Cash Equivalents		148,277		148,277		—		—
Total Assets Measured at Fair Value	$	850,625	$	151,202	$	686,946	$	12,477

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Long-term Debt (Tables)

3 Months Ended

Mar. 31, 2024

Long-term Debt

Schedule of long-term debt

Long-term debt consisted of the following as of March 31, 2024, and December 31, 2023 (in thousands):

		March 31, 2024		December 31, 2023
Current portion of long-term debt	$	510,204	$	447,534
Current portion of unamortized debt issue cost, net		(3,602)		(3,665)
Current portion of long-term debt, net of debt issue costs	$	506,602	$	443,869
Long-term debt, net of current maturities	$	2,408,767	$	2,582,776
Long-term portion of unamortized debt issue cost, net		(19,540)		(20,593)
Long-term debt, net of current maturities and debt issue costs	$	2,389,227	$	2,562,183
Total long-term debt (including current portion)	$	2,918,971	$	3,030,310
Total unamortized debt issue cost, net		(23,142)		(24,258)
Total long-term debt, net of debt issue costs	$	2,895,829	$	3,006,052

Carrying value and fair value of long-term debt

The carrying value and fair value of the Company’s long-term debt as of March 31, 2024 and December 31, 2023, were as follows (in thousands):

	March 31, 2024		December 31, 2023
Carrying value	$	2,918,971	$	3,030,310
Fair value	$	2,820,034	$	2,918,012

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Investments in Other Companies (Tables)

3 Months Ended

Mar. 31, 2024

Investments in Other Companies

Schedule of reconciliation of Eve Level 3 investments

The table below shows the reconciliation of the Eve Level 3 Investments (in thousands):

Eve Level 3 Investments:
Balance at December 31, 2023	$	12,477
Unrealized loss		(2,731)
Balance at March 31, 2024	$	9,746

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Operating Revenues (Details) $ in Thousands	3 Months Ended
	Mar. 31, 2024 USD ($) aircraft	Mar. 31, 2023 USD ($)	Dec. 31, 2023 USD ($)
Agreements with other airlines
Percentage of ASMs flown under fixed-fee arrangements	87.00%	88.40%
EAS contract term	2 years
Percentage of ASMs flown under pro-rate arrangements	13.00%	11.60%
Rental income under operating leases
Operating lease revenue	$ 16,668	$ 16,560
Total operating revenues	803,614	691,831
Future minimum rental income
April 2024 through December 2024	34,787
2025	41,476
2026	35,946
2027	35,915
2028	35,139
Thereafter	53,500
Total future minimum rental income under operating leases	236,763
Deferred revenue recognized	700	39,300
Decreased unbilled revenue	300	3,300
Deferred revenue	373,400		$ 374,600
Deferred revenue in other current liabilities	58,000		61,000
Deferred revenue in other long-term liabilities	315,400		313,600
Unbilled revenue	7,000		7,300
Property and equipment and related assets	5,490,819		5,482,967
Gross receivables current	89,500
Gross receivables Non-current	203,900
Balance	18,699
Adjustments to credit loss reserves	943
Balance	19,642
Other Current Assets
Future minimum rental income
Unbilled revenue	1,100		1,200
Other Noncurrent Assets
Future minimum rental income
Unbilled revenue	5,900		$ 6,100
Other Noncurrent Liabilities
Future minimum rental income
Deferred lease revenue	$ 500	20,600
Aircraft in schedule service or under contract
Future minimum rental income
Number of aircraft | aircraft	475
Sky West Airlines Inc.
Future minimum rental income
2024 | aircraft	17
United
Future minimum rental income
Number of aircraft | aircraft	201
United | United Express Prorate Agreement
Future minimum rental income
Agreement term	120 days
Delta
Future minimum rental income
Number of aircraft | aircraft	135
Delta | Delta Connection Prorate Agreement
Future minimum rental income
Agreement term	30 days
American
Future minimum rental income
Number of aircraft | aircraft	97
Jet aircraft and spare engines leased to third parties
Future minimum rental income
Property and equipment and related assets	$ 210,400
CRJ 200 | United | United Express Agreements
Future minimum rental income
Number of aircraft | aircraft	70
CRJ 200 | United | United Express Prorate Agreement
Future minimum rental income
Number of aircraft | aircraft	19
CRJ 700 | United | United Express Agreements
Future minimum rental income
Number of aircraft | aircraft	19
CRJ 700 | Delta | Delta Connection Prorate Agreement
Future minimum rental income
Number of aircraft | aircraft	4
CRJ 700 | Delta | Delta Connection Agreements
Future minimum rental income
Number of aircraft | aircraft	5
CRJ 700 | American | American Capacity Purchase Agreement
Future minimum rental income
Number of aircraft | aircraft	77
CRJ 900 | Delta | Delta Connection Prorate Agreement
Future minimum rental income
Number of aircraft | aircraft	6
CRJ 900 | Delta | Delta Connection Agreements
Future minimum rental income
Number of aircraft | aircraft	35
E175
Future minimum rental income
2024 | aircraft	22
2025 | aircraft	8
2026 | aircraft	8
Total | aircraft	38
Number of aircraft under purchase agreement | aircraft	21
E175 | Sky West Airlines Inc. | Alaska Capacity Purchase Agreement
Future minimum rental income
Number of aircraft | aircraft	42
E175 | United | United Express Agreements
Future minimum rental income
2024 | aircraft	21
2025 | aircraft	7
2026 | aircraft	8
Total | aircraft	36
Number of aircraft | aircraft	93
E175 | Delta | Delta Capacity Purchase Agreement
Future minimum rental income
2024 | aircraft	1
Total | aircraft	1
E175 | Delta | Delta Connection Agreements
Future minimum rental income
Number of aircraft | aircraft	85
E175 | American | American Capacity Purchase Agreement
Future minimum rental income
Number of aircraft | aircraft	20
E175 | Alaska | Alaska Capacity Purchase Agreement
Future minimum rental income
2025 | aircraft	1
Total | aircraft	1
Flying agreements
Rental income under operating leases
Total operating revenues	$ 778,289	663,838
Flight operations revenue
Rental income under operating leases
Total operating revenues	544,160	468,916
Capacity purchase agreements fixed aircraft lease revenue
Rental income under operating leases
Total operating revenues	75,159	74,480
Capacity purchase agreements variable aircraft lease revenue
Rental income under operating leases
Total operating revenues	57,886	43,105
Prorate agreements and SWC revenue
Rental income under operating leases
Total operating revenues	101,084	77,337
Airport customer service and other revenue
Rental income under operating leases
Total operating revenues	8,657	11,433
Lease, airport services and other.
Rental income under operating leases
Total operating revenues	$ 25,325	$ 27,993

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Stock-Based Compensation (Details) $ / shares in Units, $ in Millions	3 Months Ended
	Mar. 31, 2024 USD ($) item $ / shares shares	Mar. 31, 2023 USD ($)
Share-Based Compensation
Upon vesting, each restricted stock unit and performance share replaced with common stock	1
Stock based compensation expense | $	$ 5.5	$ 4.3
Restricted Stock Units (RSUs)
Share-Based Compensation
Granted (in dollars per share) | $ / shares	$ 59.57
Restricted Stock Units (RSUs) | Long Term Incentive Plan 2019
Share-Based Compensation
Granted (in shares)	50,577
Vesting period	3 years
Performance Share Units (PSUs)
Share-Based Compensation
Granted (in dollars per share) | $ / shares	$ 59.57
Performance Share Units (PSUs) | Long Term Incentive Plan 2019
Share-Based Compensation
Granted (in shares)	118,021
Vesting period	3 years
Number of performance period | item	3
Performance period	1 year
Performance Share Units (PSUs) | Minimum | Long Term Incentive Plan 2019
Share-Based Compensation
Award percentage	0.00%
Performance Share Units (PSUs) | Maximum | Long Term Incentive Plan 2019
Share-Based Compensation
Award percentage	200.00%
Director
Share-Based Compensation
Granted (in shares)	12,634
Granted (in dollars per share) | $ / shares	$ 59.57
Director | Restricted Stock Units (RSUs)
Share-Based Compensation
Granted (in shares)	2,632

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Stock Repurchase (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023	May 31, 2023
Stock Repurchase
Common stock authorized for repurchase, maximum			$ 250.0
Common stock remaining number of shares authorized to repurchase	82.2
Stock repurchased (shares)	136,261.0	5.1
Stock repurchased during period (value)	$ 8.7	$ 100.0
Weighted average price per share of common stock (in dollars per share)	$ 64.21	$ 19.74

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Net Income Per Common Share - Antidilutive securities (Details) shares in Thousands	3 Months Ended
	Mar. 31, 2023 shares
Net Income Per Common Share
Total antidilutive securities (in shares)	1,485
Treasury Warrants
Net Income Per Common Share
Total antidilutive securities (in shares)	785
Employee Stock Awards
Net Income Per Common Share
Total antidilutive securities (in shares)	700

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Net Income Per Common Share (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Number of outstanding units not included in computation of Diluted EPS (in shares)		1,485,000
Numerator:
Net income (loss)	$ 60,298	$ (22,071)
Denominator:
Basic earnings per share weighted average shares	40,299,000	49,391,000
Dilutive effect of employee stock awards and warrants	1,193,000
Diluted earnings per share weighted average shares	41,492,000	49,391,000
Basic earnings per share (in dollars per share)	$ 1.50	$ (0.45)
Diluted earnings per share (in dollars per share)	$ 1.45	$ (0.45)
Performance Share Units (PSUs)
Number of outstanding units not included in computation of Diluted EPS (in shares)	452,000	538,000

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Segment Reporting (Details) $ in Thousands	3 Months Ended
	Mar. 31, 2024 USD ($) segment	Mar. 31, 2023 USD ($)	Dec. 31, 2023 USD ($)
Segment Reporting
Number of reporting segments | segment	2
Operating revenues	$ 803,614	$ 691,831
Operating expense	704,108	696,535
Depreciation and amortization expense	95,870	94,149
Interest expense	29,829	33,620
Segment profit	69,677	(38,324)
Total assets	6,982,743	7,233,761	$ 7,026,293
Capital expenditures (including non-cash)	44,350	107,921
SkyWest Airlines and SWC
Segment Reporting
Operating revenues	646,809	568,173
Operating expense	641,363	633,392
Depreciation and amortization expense	36,108	38,258
Interest expense	3,476	4,062
Segment profit	1,970	(69,281)
Total assets	2,608,104	2,629,521
Capital expenditures (including non-cash)	44,350	21,111
SkyWest Leasing
Segment Reporting
Operating revenues	156,805	123,658
Operating expense	62,745	63,143
Depreciation and amortization expense	59,762	55,891
Interest expense	26,353	29,558
Segment profit	67,707	30,957
Total assets	$ 4,374,639	4,604,240
Capital expenditures (including non-cash)		$ 86,810

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Leases, Commitments, Guarantees and Contingencies (Details) $ in Thousands	3 Months Ended
	Mar. 31, 2024 USD ($) aircraft	Mar. 31, 2023 USD ($)	Dec. 31, 2023 USD ($)
Lessee, Lease, Description [Line Items]
Operating lease right-of-use assets	$ 85,905		$ 86,727
Current maturities of lease liabilities	19,668		19,335
Noncurrent operating leases	66,237		$ 67,392
Operating leases	$ 5,700
Weighted-average remaining lease term for operating leases	11 years 4 months 24 days
Weighted-average discount rate for operating leases	6.20%
Lease costs
Operating lease cost	$ 7,259	$ 24,948
Variable and short-term lease cost	1,033	803
Sublease income	(1,246)	(1,350)
Total lease cost	$ 7,046	$ 24,401
Aircraft
Lessee, Lease, Description [Line Items]
Number of aircraft acquired | aircraft	8
Aircraft | Minimum
Lessee, Lease, Description [Line Items]
Remaining lease term	5 years
Aircraft | Maximum
Lessee, Lease, Description [Line Items]
Remaining lease term	6 years
Airport Facilities | Minimum
Lessee, Lease, Description [Line Items]
Remaining lease term	1 month
Airport Facilities | Maximum
Lessee, Lease, Description [Line Items]
Remaining lease term	32 years

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Leases, Commitments, Guarantees and Contingencies - Operating Leases (Details) $ in Thousands	3 Months Ended
	Mar. 31, 2024 USD ($) aircraft
Future minimum rental payments required under operating leases
April 2024 through December 2024	$ 15,726
2025	17,974
2026	14,910
2027	12,983
2028	9,976
Thereafter	56,592
Total future minimum operating lease payments	$ 128,161
E175
Future minimum rental payments required under operating leases
Number of aircraft under purchase agreement | aircraft	21

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Leases, Commitments, Guarantees and Contingencies - Commitments and Obligations (Details) - USD ($) $ in Thousands	Mar. 31, 2024	Dec. 31, 2023
Operating lease payments for aircraft and facility obligations
Apr - Dec 2024	$ 15,726
2025	17,974
2026	14,910
2027	12,983
2028	9,976
Thereafter	56,592
Total future minimum operating lease payments	128,161
Firm aircraft and spare engine commitments
Apr - Dec 2024	143,810
2025	230,725
2026	236,410
Total	610,945
Interest commitments
Apr - Dec 2024	84,964
2025	97,933
2026	78,149
2027	56,289
2028	40,947
Thereafter	84,540
Total	442,822
Principal maturities on long-term debt
Apr - Dec 2024	339,156
2025	532,255
2026	510,598
2027	464,289
2028	292,862
Thereafter	779,811
Total	2,918,971	$ 3,030,310
Total commitments and obligations
Apr - Dec 2024	583,656
2025	878,887
2026	840,067
2027	533,561
2028	343,785
Thereafter	920,943
Total	$ 4,100,899

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Leases, Commitments, Guarantees and Contingencies - Guarantees (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Mar. 31, 2024
Leases, Commitments, Guarantees and Contingencies
Guaranteed amount received as consideration, percentage		6.50%
Debt
Leases, Commitments, Guarantees and Contingencies
Guarantor Obligations, Current Carrying Value			$ 7.2
Debt | Aircraft and engines
Leases, Commitments, Guarantees and Contingencies
Guaranteed amount	$ 12.0	$ 19.8
Term of guarantee obligations	5 years	5 years
Guaranteed amount received as consideration, percentage	2.00%
Guarantor Obligations, Current Carrying Value			$ 16.1

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Fair Value Measurements (Details) - USD ($) $ in Thousands	3 Months Ended	12 Months Ended
	Mar. 31, 2024	Dec. 31, 2023
Fair Value Measurements
Marketable Securities	$ 641,185	$ 686,946
Maximum period for redemption	1 year	1 year
Marketable securities at cost	$ 641,000	$ 686,500
Recurring | Estimate of Fair Value Measurement
Fair Value Measurements
Marketable Securities	641,185	686,946
Investments in Other Companies	11,904	15,402
Cash and Cash Equivalents	179,979	148,277
Total Assets Measured at Fair Value	833,068	850,625
Recurring | Estimate of Fair Value Measurement | Bonds and bond funds
Fair Value Measurements
Marketable Securities	628,994	677,074
Recurring | Estimate of Fair Value Measurement | Commercial Paper
Fair Value Measurements
Marketable Securities	12,191	9,872
Recurring | Level 1
Fair Value Measurements
Investments in Other Companies	2,158	2,925
Cash and Cash Equivalents	179,979	148,277
Total Assets Measured at Fair Value	182,137	151,202
Recurring | Level 2
Fair Value Measurements
Marketable Securities	641,185	686,946
Total Assets Measured at Fair Value	641,185	686,946
Recurring | Level 2 | Bonds and bond funds
Fair Value Measurements
Marketable Securities	628,994	677,074
Recurring | Level 2 | Commercial Paper
Fair Value Measurements
Marketable Securities	12,191	9,872
Recurring | Level 3
Fair Value Measurements
Investments in Other Companies	9,746	12,477
Total Assets Measured at Fair Value	$ 9,746	$ 12,477

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Assets Held for Sale (Details) - CRJ 700 - Held for sale $ in Millions	3 Months Ended	12 Months Ended
	Mar. 31, 2024 USD ($) aircraft	Dec. 31, 2022 aircraft	Dec. 31, 2023 USD ($)
Assets Held for Sale
Number of aircraft held-for-sale | aircraft	14	14
Gain due to elimination of the costs to sell in other operating expenses	$ 4.2
Assets held for sale			$ 54.3

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Long-term Debt (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2024	Dec. 31, 2023
Debt Instrument [Line Items]
Current portion of long-term debt	$ 510,204	$ 447,534
Current portion of unamortized debt issue cost, net	(3,602)	(3,665)
Current portion of long-term debt, net of debt issue costs	506,602	443,869
Long-term debt, net of current maturities	2,408,767	2,582,776
Long-term portion of unamortized debt issue cost, net	(19,540)	(20,593)
Long-term debt, net of current maturities and debt issue costs	2,389,227	2,562,183
Total long-term debt (including current portion)	2,918,971	3,030,310
Total unamortized debt issue cost, net	(23,142)	(24,258)
Total long-term debt, net of debt issue costs	2,895,829	3,006,052
Maximum borrowing capacity	$ 100,000
Effective interest rate (as a percent)	4.10%
Basis spread on variable rate	3.50%
Letters of credit and surety bonds
Debt Instrument [Line Items]
Letters of credit and surety bonds outstanding with various banks and surety institutions	$ 45,000	$ 49,100
Letters of credit
Debt Instrument [Line Items]
Amount outstanding	$ 24,900
Basis spread on variable rate	3.50%
Unsecured debt payable to U.S. Treasury
Debt Instrument [Line Items]
Total long-term debt, net of debt issue costs	$ 200,600
Line of credit
Debt Instrument [Line Items]
Amount outstanding	0
Maximum borrowing capacity	75,100
Primarily related to acquisition of aircraft and certain spare engines
Debt Instrument [Line Items]
Total long-term debt (including current portion)	2,900,000
Total long-term debt, net of debt issue costs	$ 2,700,000

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Long-term Debt - Carrying Value and Fair Value (Details) - USD ($) $ in Thousands	Mar. 31, 2024	Dec. 31, 2023
Debt Instrument [Line Items]
Carrying value	$ 2,895,829	$ 3,006,052
Recurring | Level 2
Debt Instrument [Line Items]
Carrying value	2,918,971	3,030,310
Fair value	$ 2,820,034	$ 2,918,012

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Investments in Other Companies (Details) $ / shares in Units, $ in Thousands	1 Months Ended		3 Months Ended		12 Months Ended
	Jan. 31, 2024 USD ($)	Dec. 31, 2023 USD ($)	Mar. 31, 2024 USD ($) item	Mar. 31, 2023 USD ($)	Dec. 31, 2023 USD ($) shares	Dec. 31, 2022 USD ($) $ / shares shares
Long-term debt		$ 3,006,052	$ 2,895,829		$ 3,006,052
Aircraft maintenance, materials and repairs			$ 145,415	$ 142,226
Fair Value, Net Derivative Asset (Liability), Recurring Basis, Still Held, Unrealized Gain (Loss), Statement of Income or Comprehensive Income [Extensible Enumeration]			Other Nonoperating Income (Expense)
Aero Engines, LLC. ("Aero Engines")
Payments to acquire interest in joint venture			$ 26,600
Long-term debt			0
Aero Engines, LLC. ("Aero Engines") | Other Assets
Investment balance in other companies			25,300
Aero Engines, LLC. ("Aero Engines") | Other income (loss), net
Company's portion of income (loss) generated by other companies			$ 200
Contour Airlines
Investment ownership (as a percent)		9.90%	25.00%		9.90%
Aircraft maintenance, materials and repairs			$ 14,000
Aircraft and collectible years			4 years
Payments to acquire equity method investment	$ 15,100	$ 9,900
Number of Board of Directors Seat Held | item			1
Total Number of Board of Directors Seat | item			5
Percentage of Board of Directors Seat Held			20.00%
Contour Airlines | Other Assets
Investment balance in other companies			$ 25,000
Contour Airlines | Other income (loss), net
Company's portion of income (loss) generated by other companies			(100)
Eve Holdings, Inc. ("Eve")
Warrants to purchase shares | shares						1,500,000
Warrants exercise price (in dollars per share) | $ / shares						$ 0.01
Initial investment						$ 10,000
Unrealized loss			3,500
Eve Holdings, Inc. ("Eve") | Level 3
Beginning balance	$ 12,477		12,477
Unrealized loss			2,731
Ending balance		$ 12,477	9,746		$ 12,477
Eve Holdings, Inc. ("Eve") | Level 3 | Black Scholes Option Pricing Model | Volatility
Measurement input						0.52
Eve Holdings, Inc. ("Eve") | Put option
Shares obtained | shares						1,000,000
Shares sold | shares					600,411
Shares reduced | shares					600,411
Eve Holdings, Inc. ("Eve") | Other Assets
Investment balance in other companies			$ 11,900
Eve Holdings, Inc. ("Eve") | Class A common stock
Number of shares acquired | shares						1,000,000

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Income Taxes (Details)	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Income Taxes
Effective tax rate (as a percent)	24.80%	15.50%
Statutory Federal income tax rate (as a percent)	21.00%	21.00%

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Insider Trading Arrangements	3 Months Ended
	Mar. 31, 2024
Trading Arrangements, by Individual
Rule 10b5-1 Arrangement Adopted	false
Non-Rule 10b5-1 Arrangement Adopted	false
Rule 10b5-1 Arrangement Terminated	false
Non-Rule 10b5-1 Arrangement Terminated	false