SEC Form 10-Q filed by SkyWest Inc.

4/24/26 4:02:43 PM ET

$SKYW

Air Freight/Delivery Services

Consumer Discretionary

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SKYWEST INC_March 31, 2026

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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, 2026


☐	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 17, 2026
Common stock, no par value		39,660,281

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SKYWEST, INC.

QUARTERLY REPORT ON FORM 10-Q

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PART I	FINANCIAL INFORMATION:
	Item 1.	Financial Statements	3
		Consolidated Balance Sheets	3
		Consolidated Statements of Comprehensive Income	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

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PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

SKYWEST, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(Dollars in thousands)

ASSETS


		March 31,			December 31,
		2026			2025
		(unaudited)
CURRENT ASSETS:
Cash and cash equivalents		$	65,841		$	122,673
Marketable securities			561,413			584,236
Receivables, net			172,797			159,803
Inventories, net			173,635			168,547
Other current assets			38,959			55,935
Total current assets			1,012,645			1,091,194

PROPERTY AND EQUIPMENT:
Aircraft and rotable spares			9,430,096			9,302,510
Deposits on aircraft			100,000			100,000
Buildings, ground equipment and other			334,075			328,401
Total property and equipment, gross			9,864,171			9,730,911
Less-accumulated depreciation and amortization			(3,973,990)			(3,887,943)
Total property and equipment, net			5,890,181			5,842,968

OTHER ASSETS:
Operating lease right-of-use assets			82,965			81,943
Long-term receivables and other assets			360,547			370,144
Total other assets			443,512			452,087
Total assets		$	7,346,338		$	7,386,249

See accompanying notes to condensed consolidated financial statements.

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SKYWEST, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS (Continued)

(Dollars in thousands)

LIABILITIES AND STOCKHOLDERS’ EQUITY


		March 31,			December 31,
		2026			2025
		(unaudited)
CURRENT LIABILITIES:
Current maturities of long-term debt		$	598,438		$	546,812
Accounts payable and accrued liabilities			652,484			633,633
Accrued salaries, wages and benefits			215,234			240,954
Current maturities of operating lease liabilities			20,832			19,629
Taxes other than income taxes			24,030			22,694
Other current liabilities			122,568			203,886
Total current liabilities			1,633,586			1,667,608

LONG-TERM DEBT, net of current maturities			1,795,692			1,845,272

DEFERRED INCOME TAXES PAYABLE			915,034			910,731

NONCURRENT OPERATING LEASE LIABILITIES			62,133			62,314

OTHER LONG-TERM LIABILITIES			207,638			153,891

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; 85,373,814 and 84,270,723 shares issued as of March 31, 2026 and December 31, 2025, respectively			804,232			798,470
Retained earnings			3,124,199			3,022,507
Treasury stock, at cost, 45,612,892 and 44,399,241 shares as of March 31, 2026 and December 31, 2025, respectively			(1,195,810)			(1,074,822)
Accumulated other comprehensive income (loss)			(366)			278
Total stockholders’ equity			2,732,255			2,746,433
Total liabilities and stockholders’ equity		$	7,346,338		$	7,386,249

See accompanying notes to condensed consolidated financial statements.

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SKYWEST, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(UNAUDITED)

(In thousands, except per share amounts)


	Three months ended
	March 31,
	2026			2025
OPERATING REVENUES:
Flying agreements	$	977,885		$	915,994
Lease, airport services and other		35,292			32,461
Total operating revenues		1,013,177			948,455
OPERATING EXPENSES:
Salaries, wages and benefits		422,104			377,311
Aircraft maintenance, materials and repairs		213,027			209,100
Depreciation and amortization		90,216			89,446
Airport-related expenses		36,170			27,823
Aircraft fuel		38,904			24,488
Other operating expenses		89,070			80,910
Total operating expenses		889,491			809,078
OPERATING INCOME		123,686			139,377
OTHER INCOME (EXPENSE):
Interest income		8,597			10,086
Interest expense		(24,465)			(27,118)
Other expense, net		(48)			(1,627)
Total other expense, net		(15,916)			(18,659)
INCOME BEFORE INCOME TAXES		107,770			120,718
PROVISION FOR INCOME TAXES		6,078			20,167
NET INCOME	$	101,692		$	100,551

BASIC EARNINGS PER SHARE	$	2.54		$	2.48
DILUTED EARNINGS PER SHARE	$	2.50		$	2.42
Weighted average common shares:
Basic		39,999			40,490
Diluted		40,668			41,599

COMPREHENSIVE INCOME:
Net income	$	101,692		$	100,551
Net unrealized depreciation on marketable securities, net of taxes		(644)			(75)
TOTAL COMPREHENSIVE INCOME	$	101,048		$	100,476

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 (Loss)		Total
Balance at December 31, 2025	84,271	$	798,470	$	3,022,507	(44,399)	$	(1,074,822)	$	278	$	2,746,433
Net income	—		—		101,692	—		—		—		101,692
Stock issued under the long-term incentive plan	1,089		—		—	—		—		—		—
Employee income tax paid on vested equity awards	—		—		—	(431)		(45,637)		—		(45,637)
Sale of common stock under employee stock purchase plan	14		1,313		—	—		—		—		1,313
Stock-based compensation expense	—		4,449		—	—		—		—		4,449
Treasury stock purchases	—		—		—	(783)		(75,351)		—		(75,351)
Net unrealized depreciation on marketable securities, net of tax of $208	—		—		—	—		—		(644)		(644)
Balance at March 31, 2026	85,374	$	804,232	$	3,124,199	(45,613)	$	(1,195,810)	$	(366)	$	2,732,255


									Accumulated
									Other
	Common Stock			Retained		Treasury Stock			Comprehensive
	Shares	Amount		Earnings		Shares	Amount		Income		Total
Balance at December 31, 2024	83,639	$	777,090	$	2,594,173	(43,310)	$	(962,650)	$	168	$	2,408,781
Net income	—		—		100,551	—		—		—		100,551
Stock issued under the long-term incentive plan	598		—		—	—		—		—		—
Employee income tax paid on vested equity awards	—		—		—	(240)		(27,242)		—		(27,242)
Sale of common stock under employee stock purchase plan	14		1,293		—	—		—		—		1,293
Stock-based compensation expense	—		4,665		—	—		—		—		4,665
Treasury stock purchases and related excise tax	—		—		—	(141)		(13,682)		—		(13,682)
Net unrealized depreciation on marketable securities, net of tax of $23	—		—		—	—		—		(75)		(75)
Balance at March 31, 2025	84,251	$	783,048	$	2,694,724	(43,691)	$	(1,003,574)	$	93	$	2,474,291

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,
	2026		2025
NET CASH PROVIDED BY OPERATING ACTIVITIES	$	144,477	$	171,023

CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of marketable securities		(169,843)		(349,334)
Sales of marketable securities		192,022		351,614
Acquisition of property and equipment:
Aircraft and rotable spare parts		(88,109)		(64,857)
Buildings and ground equipment		(14,046)		(8,453)
Deposits on aircraft		(6,457)		(5,140)
Proceeds from the sale of property and equipment		247		118
Decrease in other assets, net		3,358		9,943
NET CASH USED IN INVESTING ACTIVITIES		(82,828)		(66,109)

CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of long-term debt		117,565		—
Principal payments on long-term debt		(116,196)		(113,672)
Payment of debt issuance cost		(175)		—
Net proceeds from issuance of common stock		1,313		1,293
Employee income tax paid on vested equity awards		(45,637)		(27,242)
Purchase of treasury stock and related excise tax		(75,351)		(13,682)
NET CASH USED IN FINANCING ACTIVITIES		(118,481)		(153,303)

Decrease in cash and cash equivalents		(56,832)		(48,389)
Cash and cash equivalents at beginning of period		122,673		227,362
CASH AND CASH EQUIVALENTS AT END OF PERIOD	$	65,841	$	178,973

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Non-cash investing and financing activities:
Change in accrued capital expenditures for the period	$	27,974	$	45,606
Cash paid during the period for:
Interest, net of capitalized amounts	$	28,680	$	27,637
Income taxes, net of refunds	$	1,080	$	(18)

See accompanying notes to condensed consolidated financial statements.

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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. 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, 2025. The results of operations for the three months ended March 31, 2026, are not necessarily indicative of the results that may be expected for the year ending December 31, 2026.

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 March 2024, the Financial Accounting Standards Board issued Accounting Standards Update No. 2024-03, “Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures (Accounting Standards Codification (“ASC”) Subtopic 220-40) – Disaggregation of Income Statement Expenses”, which enhances the transparency and comparability of financial statements by requiring companies to disclose more granular information about expense components. The guidance is effective for annual periods beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027, 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 agreements (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, 2026 and 2025, capacity

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purchase agreements represented approximately 82.8% and 85.7% of the Company’s flying agreements revenue, respectively.

Under the Company’s “prorate” agreements, 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 aircraft and the other portion of their trip on the major airline partner. Under the Company’s prorate 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 agreements 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 between two and three years in duration and the Company recognizes EAS revenue on a per-completed-flight basis pursuant to the terms of each contract. In the event the Company receives upfront consideration for an EAS contract, the Company recognizes the revenue on a per-completed flight basis over the EAS contract term. 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, 2026 and 2025, prorate agreements and SWC revenue represented approximately 17.2% and 14.3% of the Company’s flying agreements revenue, respectively.

The following table disaggregates the Company’s flying agreements revenue by type for the three months ended March 31, 2026 and 2025 (in thousands):


	For the three months ended March 31,
	2026		2025
Capacity purchase agreements flight operations revenue (non-lease component)	$	633,869	$	639,153
Capacity purchase agreements fixed aircraft lease revenue		104,455		110,988
Capacity purchase agreements variable aircraft lease revenue		71,373		35,039
Prorate agreements and SWC revenue		168,188		130,814
Flying agreements revenue	$	977,885	$	915,994

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.

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 compensate the Company for providing its aircraft under the 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 has not separately stated aircraft rental income and aircraft rental expense in the consolidated statement of

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comprehensive income because the use of the aircraft is not a separate activity of the total service provided under the capacity purchase agreements.

The following table summarizes the amount of deferred revenue, recognition of previously deferred revenue and change in unbilled revenue for revenue recognized that is in excess of (or less than) the fixed monthly non-lease and lease payments received under the Company’s capacity purchase agreements for the three months ended March 31, 2026 and 2025 (in thousands):


	For the three months ended March 31,
	2026		2025
Non-lease fixed monthly payments:
Revenue deferred on fixed monthly payments received	$	—	$	—
Revenue recognized that was deferred in a prior period		17,491		9,460
Increase (decrease) in unbilled revenue		(1,942)		88
Total non-lease revenue recognized in excess of fixed monthly payments received during the period	$	15,549	$	9,548
Lease fixed monthly payments:
Revenue deferred on fixed monthly payments received	$	—	$	—
Revenue recognized that was deferred in a prior period		7,257		2,235
Increase in unbilled revenue		1,108		1,127
Total lease revenue recognized in excess of fixed monthly payments received during the period	$	8,365	$	3,362
Total revenue recognized in excess of fixed monthly payments received during the period	$	23,914	$	12,910

The Company's unbilled revenue and deferred revenue balances were reflected in the following balance sheet line items at March 31, 2026 and December 31, 2025 (in thousands):


	March 31,			December 31,
	2026			2025
Unbilled revenue - other current assets	$	1,133		$	1,133
Unbilled revenue - other long-term assets		25,827			26,661
Total unbilled revenue	$	26,960		$	27,794

Deferred revenue - other current liabilities		85,785			163,894
Deferred revenue - other long-term liabilities		181,870			128,509
Total deferred revenue	$	267,655		$	292,403
Net deferred revenue balance	$	240,695		$	264,609

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 or 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, 2026, the Company had 500 aircraft in scheduled service or under contract pursuant to code-share agreements. The Company’s fleet includes Embraer E175 regional jet aircraft (“E175”), Canadair CRJ900 regional jet aircraft (“CRJ900”), Canadair CRJ700 regional jet aircraft (“CRJ700”), a 50-seat configuration of the CRJ700 aircraft, commonly referred to as a “CRJ550,” and Canadair CRJ200 regional jet aircraft (“CRJ200”). The following

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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	• E175	121	Individual aircraft have scheduled
(capacity purchase agreements)	• CRJ700	8	removal dates under the agreements
	• CRJ550	30	between 2026 and 2035
	• CRJ200	34

United Express Prorate Agreement	• CRJ200	33*	Terminable with 120-day notice
Total under United Express Agreements		226

Delta Connection Agreements
Agreement	Aircraft type	Number of Aircraft	Term / Termination Dates
Delta Connection Agreement	• E175	87	Individual aircraft have scheduled
(capacity purchase agreement)	• CRJ900	34	removal dates under the agreement
	• CRJ700	2	between 2026 and 2035

Delta Connection Prorate Agreement	• CRJ550	16*	Terminable with 30-day notice
Total under Delta Connection Agreements		139

American Agreements
Agreement	Aircraft type	Number of Aircraft	Term / Termination Dates
American Agreement	• E175	20	Individual aircraft have scheduled
(capacity purchase agreement)	• CRJ700	68	removal dates under the agreement
			between 2027 and 2032

American Prorate Agreement	• CRJ900	4*	Terminable with 180-day notice
Total under American Agreements		92

Alaska Agreement
Agreement	Aircraft type	Number of Aircraft	Term / Termination Dates
Alaska Agreement	• E175	43	Individual aircraft have scheduled
(capacity purchase agreement)			removal dates under the agreement
			between 2030 and 2038

*	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 agreements described above, as of March 31, 2026, SkyWest Airlines reached agreements with certain major airline partners to place additional aircraft under capacity purchase agreements as summarized below. The Company is coordinating with its major airline partners regarding the timing of upcoming fleet deliveries and the delivery timing referenced below is subject to change.

●

Capacity purchase agreement with United for eight new E175 aircraft, which are scheduled for delivery in 2026. The Company anticipates financing the aircraft through debt.

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●

Capacity purchase agreement with Delta for 16 new E175 aircraft. 10 new E175 aircraft are currently scheduled for delivery in 2027 and six new E175 aircraft are scheduled for delivery in 2028. The Company anticipates financing the aircraft through debt.

●

Capacity purchase agreement with United for 18 used CRJ550 aircraft that are anticipated to be placed into service by 2027. Pursuant to this agreement, the Company is in the process of converting its owned CRJ700s to CRJ550s.

When an aircraft is scheduled for expiration from a capacity purchase agreement, 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, maintenance services provided to third parties and 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, 2026 and 2025 (in thousands):


	For the three months ended March 31,
	2026		2025
Operating lease fixed revenue	$	17,742	$	16,065
Operating lease variable revenue		7,445		7,009
Airport customer service and other revenue		10,105		9,387
Lease, airport services and other	$	35,292	$	32,461

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, 2026 (in thousands):


April 2026 - December 2026	$	36,703
2027		45,159
2028		44,276
2029		42,748
2030		26,459
Thereafter		2,723
Total future minimum rental income under operating leases	$	198,068

Of the Company’s $5.9 billion of property and equipment, net of accumulated depreciation, as of March 31, 2026, $240.8 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 settlement of reimbursement disputes with the Company’s major airline partners.

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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 has an allowance for credit losses associated with its accounts receivable, notes receivable and third-party debt guarantees. The Company monitors publicly available credit ratings for entities for which the Company has a significant receivable balance or guarantee. As of March 31, 2026, the Company had gross receivables of $176.6 million in current assets and gross receivables of $256.7 million in other long-term assets. As of December 31, 2025, the Company had gross receivables of $163.3 million in current assets and gross receivables of $266.3 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 amount and term of the Company’s respective accounts receivable, notes receivable or guarantees. During the three months ended March 31, 2026, 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 (in thousands):


		Allowance for Credit Losses
Balance at December 31, 2025		$	22,509
Adjustments to credit loss reserves			(45)
Write-offs charged against allowance			(94)
Balance at March 31, 2026		$	22,370

(3) Capital Transactions

Stock-Based Compensation

During the three months ended March 31, 2026, the Company granted 76,648 performance shares and 32,850 restricted stock units to certain employees of the Company under the SkyWest, Inc. Amended and Restated 2019 Long-Term Incentive Plan. The 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 2026 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. The restricted stock units granted in 2026 will vest in three equal installments, with one-third vesting each year on the grant date anniversary. Upon vesting, each performance share and restricted stock unit will be replaced with one share of common stock. The weighted average fair value of these performance shares and restricted stock units on their date of grant was $101.47 per share.

The Company accounts for forfeitures of restricted stock units and performance shares when forfeitures occur. The estimated fair value of the performance shares and restricted stock units 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, 2026 and 2025, the Company recorded pre-tax stock-based compensation expense of $4.4 million and $4.7 million, respectively.

(4) Stock Repurchase

The Company’s Board of Directors (the “Board”) 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 repurchase program, the Board initially authorized up to $250.0 million for the repurchase of the Company’s common stock. In May 2025, the Board approved a $250.0 million increase to the existing repurchase program. At March 31, 2026, $137.8 million remained available under the repurchase program.

During the three months ended March 31, 2026, the Company repurchased 782,900 shares of common stock for $75.3 million at a weighted average price per share of $96.18. The Company also recorded $0.1 million of excise tax

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related to the stock repurchases as treasury stock in the Company’s stockholders’ equity for the three months ended March 31, 2026. During the three months ended March 31, 2025, the Company repurchased 140,658 shares of common stock for $13.7 million at a weighted average price per share of $97.27. The Company did not record excise tax related to the stock repurchases for the three months ended March 31, 2025.

(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. During the three months ended March 31, 2026 and 2025, 155,000 and 268,000 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 as of March 31, 2026 and 2025, respectively.

The calculation of the weighted average number of common shares 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,
	2026		2025
Numerator:
Net income	$	101,692	$	100,551
Denominator:
Basic earnings per share weighted average shares		39,999		40,490
Dilution due to employee equity awards		669		1,109
Diluted earnings per share weighted average shares		40,668		41,599

Basic earnings per share	$	2.54	$	2.48
Diluted earnings per share	$	2.50	$	2.42

(6) Segment Reporting

GAAP requires disclosures related to components of a company for which separate financial information is available to, and regularly evaluated by, the Company’s chief operating decision maker when deciding how to allocate resources and in assessing performance.

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 aircraft separately from the profitability of the Company’s capital deployed for new aircraft and the related aircraft financings, including the Company’s E175 fleet. 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, and revenue and operating expenses attributed to prorate 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.

The chief operating decision maker assesses performance for each segment and decides how to allocate resources based on income before income taxes. The chief operating decision maker uses the segment profit or loss

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measure when assessing performance of the segment and monitors budget versus actual results to allocate resources for each segment predominantly in the annual budget and forecasting process.

The following represents the Company’s segment data for the three-month periods ended March 31, 2026 and 2025 (in thousands).


	Three months ended March 31, 2026
	SkyWest Airlines			SkyWest
	and SWC			Leasing			Consolidated
Operating revenues	$	855,182		$	157,995		$	1,013,177

Salaries, wages and benefits		421,439			665			422,104
Aircraft maintenance, materials and repairs		206,492			6,535			213,027
Depreciation and amortization		37,346			52,870			90,216
Interest expense		2,735			21,730			24,465
Other segment expense (income) items⁽¹⁾		161,660			(6,065)			155,595
Segment profit⁽²⁾	$	25,510		$	82,260		$	107,770

Total assets (as of March 31, 2026)	$	3,227,598		$	4,118,740		$	7,346,338
Capital expenditures (including non-cash)	$	110,680		$	19,449		$	130,129
Deposits on aircraft	$	—		$	6,457		$	6,457


	Three months ended March 31, 2025
	SkyWest Airlines			SkyWest
	and SWC			Leasing			Consolidated
Operating revenues	$	801,651		$	146,804		$	948,455

Salaries, wages and benefits		376,646			665			377,311
Aircraft maintenance, materials and repairs		201,476			7,624			209,100
Depreciation and amortization		37,748			51,698			89,446
Interest expense		2,981			24,137			27,118
Other segment expense (income) items⁽¹⁾		128,530			(3,768)			124,762
Segment profit⁽²⁾	$	54,270		$	66,448		$	120,718

Total assets (as of March 31, 2025)	$	3,040,242		$	4,074,024		$	7,114,266
Capital expenditures (including non-cash)	$	118,916		$	—		$	118,916
Deposits on aircraft	$	—		$	5,140		$	5,140

(1)	Other segment items include aircraft fuel; airport related expenses; other operating expenses consisting primarily of property taxes, hull and liability insurance, simulator costs, aircraft rentals, crew per diem and crew hotel costs; interest income and other expense, net.

(2)	Segment profit is equal to income before income taxes.

(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, 2026, 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 three to four years. The Company is subleasing these eight aircraft to a third party.

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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 30 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, 2026, the Company’s right-of-use assets were $82.9 million, the Company’s current maturities of operating lease liabilities were $20.8 million, and the Company’s noncurrent lease liabilities were $62.1 million. During the three months ended March 31, 2026, the Company paid $11.9 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, 2026:


Weighted-average remaining lease term for operating leases	10.0 years
Weighted-average discount rate for operating leases	6.2%

The Company’s lease costs for the three months ended March 31, 2026 and 2025 included the following components (in thousands):


	For the three months ended March 31,
	2026		2025
Operating lease cost	$	10,862	$	8,250
Variable and short-term lease cost		505		489
Sublease income		(940)		(1,115)
Total lease cost	$	10,427	$	7,624

As of March 31, 2026, the Company leased aircraft, airport facilities, office space and other property and equipment under non-cancelable operating leases, which are generally under long-term agreements 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.

As of March 31, 2026, the Company had a firm purchase commitment for 68 E175 aircraft from Embraer with anticipated delivery dates through 2032. Under this commitment, the Company expects to purchase and place into service eight E175 aircraft with United and 16 E175 aircraft with Delta. Additionally, the Company secured delivery positions for 44 additional E175 aircraft between 2028 and 2032.

The following table summarizes the Company’s commitments and obligations for future minimum rental payments required under operating leases that had initial or remaining non-cancelable lease terms as of March 31, 2026, firm aircraft and spare engine commitments, interest commitments and principal maturities on long-term debt as noted for each of the next five years and thereafter (in thousands):

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		Total			Apr - Dec 2026			2027			2028			2029			2030			Thereafter
Operating lease payments for aircraft and facility obligations		$	119,358		$	16,250		$	21,112		$	15,467		$	13,093		$	6,297		$	47,139
Firm aircraft and spare engine commitments			2,240,083			375,433			323,580			330,370			316,363			336,020			558,317
Interest commitments			360,708			73,092			77,090			58,069			43,420			31,104			77,933
Principal maturities on long-term debt			2,409,467			449,933			530,036			362,288			261,068			288,097			518,045
Total commitments and obligations		$	5,129,616		$	914,708		$	951,818		$	766,194		$	633,944		$	661,518		$	1,201,434

In addition to the table above, in 2024, the Company entered into a master equipment purchase agreement with another airline to acquire certain airframes and engines and lease the assets back to the airline under a five-year term. The Company accounted for the transaction as a failed sale-leaseback in accordance with ASC 842 as the criteria for a sale were not met. At March 31, 2026, the Company estimated the remaining financing obligation under the agreement will be between $20.0 million and $25.0 million and anticipated closing on the remaining financings during 2026.

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 purpose of this guarantee is to help reduce the financing costs of aircraft for the third party in an effort to increase the potential number of commercial pilots in the Company’s hiring pipeline. The balance of the debt under the guarantee was $12.2 million as of March 31, 2026.

The Company 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.

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As of March 31, 2026, and December 31, 2025, 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, 2026
	Total		Level 1		Level 2		Level 3
Marketable Securities
Bonds and bond funds	$	521,186	$	—	$	521,186	$	—
Commercial paper		40,227		—		40,227		—
		561,413		—		561,413		—
Investments in Other Companies		2,643		2,643		—		—
Cash and Cash Equivalents		65,841		65,841		—		—
Total Assets Measured at Fair Value	$	629,897	$	68,484	$	561,413	$	—


	Fair Value Measurements as of December 31, 2025
	Total		Level 1		Level 2		Level 3
Marketable Securities
Bonds and bond funds	$	487,699	$	—	$	487,699	$	—
Commercial paper		96,537		—		96,537		—
		584,236		—		584,236		—
Investments in Other Companies		4,253		4,253		—		—
Cash and Cash Equivalents		122,673		122,673		—		—
Total Assets Measured at Fair Value	$	711,162	$	126,926	$	584,236	$	—

The Company’s “Marketable Securities” classified as Level 2 securities primarily utilize broker quotes in a non-active market for valuation of these securities.

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, 2026. 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, 2026, and December 31, 2025, the Company classified $561.4 million and $584.2 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 expense, net. As of March 31, 2026, and December 31, 2025, the cost of the Company’s marketable securities was $561.9 million and $583.9 million, respectively.

(9) Long-term Debt

Long-term debt consisted of the following as of March 31, 2026, and December 31, 2025 (in thousands):


		March 31, 2026		December 31, 2025
Current portion of long-term debt	$	601,592	$	550,028
Current portion of unamortized debt issue cost, net		(3,154)		(3,216)
Current portion of long-term debt, net of debt issue costs	$	598,438	$	546,812

Long-term debt, net of current maturities	$	1,807,875	$	1,858,341
Long-term portion of unamortized debt issue cost, net		(12,183)		(13,069)
Long-term debt, net of current maturities and debt issue costs	$	1,795,692	$	1,845,272

Total long-term debt (including current portion)	$	2,409,467	$	2,408,369
Total unamortized debt issue cost, net		(15,337)		(16,285)
Total long-term debt, net of debt issue costs	$	2,394,130	$	2,392,084

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As of March 31, 2026, the Company had $2.4 billion of total long-term debt, which consisted of $2.2 billion of debt used to finance aircraft and spare engines and $200.6 million of unsecured debt payable to the U.S. Department of the Treasury (“Treasury”). As of March 31, 2026, $55.5 million of the unsecured debt payable to Treasury had a fixed annual interest rate of 1.0%, which increased to the applicable Secured Overnight Financing Rate ("SOFR") plus 2.0% in April 2026. The remaining $145.1 million had a variable interest rate of SOFR plus 2.0%. The average effective interest rate on the Company’s debt was approximately 4.4% at March 31, 2026.

During the three months ended March 31, 2026, the Company took delivery of one new E175 aircraft that the Company financed through $23.6 million of long-term debt. The debt associated with the E175 aircraft has a 12-year term, is due in quarterly installments, and is secured by the E175 aircraft.

During the three months ended March 31, 2026, the Company executed promissory notes for $94.0 million. The promissory notes have four-year terms, are due in monthly installments, and are secured by spare engines.

As of March 31, 2026 and December 31, 2025, the Company had $47.5 million and $47.2 million, respectively, in letters of credit and surety bonds outstanding with various banks and surety institutions.

As of March 31, 2026, 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, 2026, SkyWest Airlines had no amounts outstanding under the line of credit facility. However, at March 31, 2026, SkyWest Airlines had $24.6 million in letters of credit issued under the facility, which reduced the amount available under the facility to $75.4 million. The line of credit expires March 25, 2028 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. The fair value of debt is estimated using inputs 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, 2026 and December 31, 2025, were as follows (in thousands):


	March 31, 2026		December 31, 2025
Carrying value	$	2,409,467	$	2,408,369
Fair value	$	2,385,905	$	2,376,943

(10) Investments in Other Companies

Equity Method Investments

During 2019, the Company created a joint venture with Regional One, Inc. (“Regional One”) and, as of March 31, 2026, has invested a total of $26.6 million for a 75% ownership interest in Aero Engines, LLC. (“Aero Engines”). The primary purpose of Aero Engines is to lease engines to third parties. Aero Engines requires unanimous approval from the Company and Regional One for all material transactions. Although the Company determined Aero Engines is a variable interest entity, Aero Engines has no primary beneficiary as no one party has power over Aero Engines. Accordingly, 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, 2026. During 2025, the Company received a $12.0 million distribution from Aero Engines, which reduced the Company’s investment balance in Aero Engines. As of March 31, 2026 and December 31, 2025, the Company’s investment balance in Aero Engines was $13.4 million and $12.8 million, respectively, and was 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, 2026 and 2025, was $0.5 million and $0.6 million, respectively, which was recorded in “Other expense, 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 had a 25% ownership interest in Contour at March 31,

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2026 and held 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. For the three months ended March 31, 2026 and 2025, the Company recorded income of $0.7 million and $0.9 million, respectively, related to its Contour investment, its portion of income generated by Contour, which was recorded in “Other expense, net” on the Company’s consolidated statements of comprehensive income. As of March 31, 2026 and December 31, 2025, the Company’s investment balance in Contour was $23.5 million and $22.8 million, respectively, and was recorded in “Other Assets” on the Company’s consolidated balance sheet. At March 31, 2026, the Company had $7.9 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 three 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 Investment

In 2021, the Company entered into a strategic arrangement with Eve Holding, Inc. (“Eve”), to develop a network of deployment for Eve’s electric vertical takeoff and landing aircraft. As of March 31, 2026 and December 31, 2025, the Company held 1.1 million common shares of Eve. During the three months ended March 31, 2026, the Company recorded an unrealized loss of $1.6 million in “Other expense, net” on the Company’s consolidated statements of comprehensive income related to its investment in Eve. During the three months ended March 31, 2025, the Company recorded an unrealized loss of $3.2 million in “Other expense, net” on the Company’s consolidated statements of comprehensive income related to its investment in Eve. As of March 31, 2026 and December 31, 2025, the fair value of the Company’s investment in Eve was $2.6 million and $4.3 million, respectively, and was recorded in “Other Assets” on the Company’s consolidated balance sheet.

(11) Income Taxes

The Company’s effective tax rate for the three months ended March 31, 2026 was 5.6%. The Company’s effective tax rate for the three months ended March 31, 2026 varied from the federal statutory rate of 21.0% primarily due to the impact of a discrete tax benefit from additional tax deductions generated from employee equity awards that vested at a stock price above the grant date price during the three months ended March 31, 2026, offset by the provision for state income taxes and the impact of non-deductible expenses.

The Company’s effective tax rate for the three months ended March 31, 2025 was 16.7%. The Company’s effective tax rate for the three months ended March 31, 2025 varied from the federal statutory rate of 21.0% primarily due to the impact of a discrete tax benefit from additional tax deductions generated from employee equity awards that vested during the three months ended March 31, 2025, offset by the provision for state income taxes and the impact of non-deductible expenses.

(12) Legal Matters

The Company is subject to certain legal actions which it considers routine to its business activities. As of March 31, 2026, 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, 2026 and 2025. Also discussed is our financial condition as of March 31, 2026, and December 31, 2025. You should read this discussion in conjunction with our condensed consolidated financial statements for the three months ended March 31, 2026, 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 timing of scheduled aircraft deliveries and returns, fleet expansion, changes in aircraft seat configurations, transition and anticipated fleet size for SkyWest in upcoming periods, expected production levels in future periods and associated recovery from captain 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”) regarding the delivery of aircraft under previously announced agreements and timing of placing new aircraft deliveries into service, the expected terms, timing and benefits related to SkyWest’s leasing, strategic arrangements, strategic agreements and equity investments in third parties, the potential use of SkyWest Charter, LLC (“SWC”) as a commuter air carrier, SkyWest’s provision of assets to Corporate Flight Management, Inc. d/b/a Contour Airlines, increasing the utilization and efficiency of all fleet types 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 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; uncertainty regarding timing and performance of key third-party service providers; 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, mechanics and other personnel in operations; 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 debt commitments; estimated useful life of long-lived assets, residual aircraft values and related asset impairments; labor relations and costs; 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 international hostilities, including those between Russia and Ukraine, Israel and Hamas, and Israel, the United States and Iran, and the related impacts on macroeconomic conditions, fuel costs and the international operations of any of our major airline partners as a result of such conflicts; the availability of parts used in connection with maintenance and repairs of the aircraft; the availability of suitable replacement aircraft for aging aircraft; the impact of enacted and proposed U.S. tariffs on global

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economic conditions and the financial markets, passenger demand, the cost of aircraft parts and supplies sourced internationally and the cost of service providers located outside of the United States; the impact of potential future U.S. government shutdowns on air traffic controller staffing, flight cancellations and federal Essential Air Service subsidies; 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, 2025, 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.

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, 2026, we offered scheduled passenger and air freight service with approximately 2,370 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”), including a 50-seat configuration of the CRJ700 aircraft, commonly referred to as a “CRJ550,” have a multiple-class seat configuration, whereas our Canadair CRJ200 regional jet aircraft (“CRJ200”) have a single-class seat configuration. SWC offers on-demand charter services using CRJ200 aircraft in a 30-seat configuration. As of March 31, 2026, we had 639 total aircraft in our fleet, including 500 aircraft in scheduled service or under contract pursuant to our code-share agreements, summarized as follows:


		E175	CRJ900		CRJ700	CRJ550		CRJ200		Total
United		121	—		8	30		67		226
Delta		87	34		2	16		—		139
American		20	4		68	—		—		92
Alaska		43	—		—	—		—		43
Aircraft in scheduled service or under contract		271	38		78	46		67		500
SWC		—	—		—	—		11		11
Leased to third parties		—	5		1	41		—		47
Operational spares ⁽¹⁾		—	7		14	—		24		45
In storage⁽²⁾		—	—		—	—		36		36
Total Fleet		271	50		93	87		138		639

(1)	Includes supplemental spare aircraft supporting our code-share agreements or aircraft undergoing cabin reconfigurations.

(2)	Aircraft in storage may be available for future flying opportunities.

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. In exchange for such services, our major airline partners pay us either fixed fees to operate the flight, referred to as “capacity purchase agreement,” or we receive a percentage of applicable passenger ticket revenues on the designated flights we operate, referred to as “prorate agreement.” 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, 2025, to March 31, 2026, we made changes to our fleet, including the addition of eight new E175 aircraft and one partner-financed E175 aircraft.

We anticipate our fleet will continue to evolve, as we are scheduled to add a total of eight new E175 aircraft with United in 2026 and 16 new E175 aircraft with Delta between 2027 and 2028 (which are expected to replace 15 CRJ900s and two CRJ700s we are currently flying under contract with Delta). We also have multiple agreements with United to place 18 used CRJ550 aircraft into service between 2026 and 2027. Timing of placing these additional aircraft into service, including delivery timing on acquired aircraft, may be subject to change as we are coordinating with our

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major airline partners in response to labor availability or other factors. As of March 31, 2026, we operated 19 CRJ900s owned by Delta, and we anticipate returning these 19 aircraft to Delta over the next two years. Our primary objective in the fleet changes is to improve our profitability by adding new E175 aircraft and used CRJ700, CRJ550, CRJ900 and E175 aircraft, commonly referred to as “dual-class aircraft” due to the first-class seat offerings, to our capacity purchase agreements or prorate agreements, and potentially removing older aircraft from service that typically require higher maintenance costs. Additionally, during the three months ended March 31, 2026, we announced a new configuration of the CRJ200 aircraft that will have 41 seats, including seven first-class seats (referred to as a “CRJ450” aircraft). We anticipate operating the first CRJ450 in scheduled service by the end of 2026. We anticipate completing the conversion of approximately 50 CRJ200s to the CRJ450 configuration by 2028.

As of March 31, 2026, approximately 45.2% of our aircraft in scheduled service or under contract were operated for United, approximately 27.8% were operated for Delta, approximately 18.4% were operated for American and approximately 8.6% 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 our capacity purchase agreements and our prorate agreements. For the three months ended March 31, 2026, our capacity purchase revenue represented approximately 82.8% of our total flying agreements revenue and our prorate and SWC revenue, combined, represented approximately 17.2% of our total flying agreements revenue. On capacity 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 $1.0 billion for the three months ended March 31, 2026, a 6.8% increase compared to total operating revenues of $948.5 million for the three months ended March 31, 2025. We had net income of $101.7 million, or $2.50 per diluted share, for the three months ended March 31, 2026, compared to net income of $100.6 million, or $2.42 per diluted share, for the three months ended March 31, 2025. The significant items affecting our revenue and operating expenses during the three months ended March 31, 2026, 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 agreements. The number of aircraft we have in scheduled service or under contract pursuant to our code-share agreements increased from 488 as of March 31, 2025 to 500 as of March 31, 2026, or by 2.5%; and the number of block hours increased from 352,155 for the three months ended March 31, 2025 to 362,933 for the three months ended March 31, 2026, or by 3.1%, primarily due to an increase in the number of aircraft operating under our capacity purchase agreements.

Our capacity purchase revenue increased $24.5 million, or 3.1%, for the three months ended March 31, 2026, as compared to the three months ended March 31, 2025, primarily as a result of an increase in completed block hours for the comparable periods. 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 $37.4 million, or 28.6%, for the three months ended March 31, 2026, as compared to the three months ended March 31, 2025.

Operating Expenses

Our total operating expenses increased $80.4 million, or 9.9%, for the three months ended March 31, 2026, compared to the three months ended March 31, 2025. 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 and higher

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pilot training costs for the three months ended March 31, 2026, compared to the three months ended March 31, 2025. Departures increased from 201,838 for the three months ended March 31, 2025 to 204,019 for the three months ended March 31, 2026, or by 1.1%, and our total block hours increased 3.1% for the three months ended March 31, 2026, as compared to the three months ended March 31, 2025. 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, 2026		December 31, 2025		March 31, 2025
E175s		271		270		262
CRJ900s		38		36		35
CRJ700s		78		82		88
CRJ550s		46		41		26
CRJ200s		67		58		77
Total		500		487		488

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, 2025, 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, 2025. 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, 2026.

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, 2026 and 2025

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 and departures during the three months ended March 31, 2026, compared to the three months ended March 31, 2025, was primarily due to additional aircraft operating under our capacity purchase agreements and an increase in the number of block hours incurred per aircraft due to the higher scheduled utilization of our aircraft during the three months ended March 31, 2026, compared to the three months ended March 31, 2025.

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	For the three months ended March 31,
Block hours by aircraft type:	2026		2025		% Change
E175s	211,459		207,362		2.0	%
CRJ900s	27,970		22,988		21.7	%
CRJ700s	57,703		64,005		(9.8)	%
CRJ550s	24,471		11,072		121.0	%
CRJ200s	41,330		46,728		(11.6)	%
Total block hours	362,933		352,155		3.1	%


Departures	204,019		201,838		1.1	%
Passengers carried	10,332,510		10,390,364		(0.6)	%
Passenger load factor	78.0	%	78.6	%	(0.6)	pts
Average passenger trip length (miles)	472		465		1.5	%

Operating Revenues

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


	For the three months ended March 31,
	2026		2025		$ Change		% Change
Flying agreements	$	977,885	$	915,994	$	61,891	6.8	%
Lease, airport services and other		35,292		32,461		2,831	8.7	%
Total operating revenues	$	1,013,177	$	948,455	$	64,722	6.8	%

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, airport services and other revenues consist of revenue earned from leasing aircraft and spare engines to third parties separate from our capacity purchase agreements, providing maintenance services to other airlines 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,
	2026		2025		$ Change		% Change
Capacity purchase agreements flight operations revenue	$	633,869	$	639,153	$	(5,284)	(0.8)	%
Capacity purchase agreements aircraft lease revenue		175,828		146,027		29,801	20.4	%
Prorate agreements and SWC revenue		168,188		130,814		37,374	28.6	%
Flying agreements revenue	$	977,885	$	915,994	$	61,891	6.8	%

Combined “Capacity purchase agreements flight operations revenue” and “Capacity purchase agreements aircraft lease revenue” increased 3.1% for the three months ended March 31, 2026, compared to the three months ended March 31, 2025, driven primarily by a 3.1% increase in block hour production during the three months ended March 31, 2026, compared to the three months ended March 31, 2025. The increase in aircraft lease revenue and decrease in flight operations revenue was primarily due to a reallocation of variable consideration between non-lease and lease components based on relative standalone selling prices as a result of capacity purchase agreement contract amendments entered into since March 31, 2025.

The increase in prorate agreements and SWC revenue of $37.4 million, or 28.6%, for the three months ended March 31, 2026, compared to the three months ended March 31, 2025, was primarily due to an increase in prorate departures, passengers and passenger revenue we received on routes we operated under our prorate agreements during the three months ended March 31, 2026, compared to the three months ended March 31, 2025.

The increase in lease, airport services and other revenues of $2.8 million, or 8.7%, for the three months ended March 31, 2026, compared to the three months ended March 31, 2025, was primarily due to an increase in the number of

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leased assets and an increase in lease rates during the three months ended March 31, 2026, compared to the three months ended March 31, 2025.

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,
	2026		2025		$ Change		% Change
Salaries, wages and benefits	$	422,104	$	377,311	$	44,793	11.9	%
Aircraft maintenance, materials and repairs		213,027		209,100		3,927	1.9	%
Depreciation and amortization		90,216		89,446		770	0.9	%
Airport-related expenses		36,170		27,823		8,347	30.0	%
Aircraft fuel		38,904		24,488		14,416	58.9	%
Other operating expenses		89,070		80,910		8,160	10.1	%
Total operating expenses	$	889,491	$	809,078	$	80,413	9.9	%

Salaries, wages and benefits. The $44.8 million, or 11.9%, increase in salaries, wages and benefits for the three months ended March 31, 2026, compared to the three months ended March 31, 2025, was primarily due to an increase in direct labor costs supporting the higher number of flights we operated during the three months ended March 31, 2026, compared to the three months ended March 31, 2025, and due to an increase in pilot training costs associated with higher attrition rates since March 31, 2025.

Aircraft maintenance, materials and repairs. The $3.9 million, or 1.9%, increase in aircraft maintenance expense for the three months ended March 31, 2026, compared to the three months ended March 31, 2025, was primarily due to an increase in our flight volume, which increased our maintenance activity and related expenses for the three months ended March 31, 2026, compared to the three months ended March 31, 2025.

Depreciation and amortization. The $0.8 million, or 0.9%, increase in depreciation and amortization expense for the three months ended March 31, 2026, compared to the three months ended March 31, 2025, was primarily due to an increase in depreciation expense related to the acquisition of eight new E175 aircraft and spare engines since March 31, 2025, offset by certain CRJ aircraft and engines that were depreciated to their estimated residual value since March 31, 2025.

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. The $8.3 million, or 30.0%, increase in airport-related expenses for the three months ended March 31, 2026, compared to the three months ended March 31, 2025, was primarily due to an increase in subcontracted airport services, station rents, weather-related aircraft deicing costs and landing fees as a result of an increase in the number of flights we operated under our prorate agreements. 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.

Aircraft fuel. The $14.4 million, or 58.9%, increase in fuel cost for the three months ended March 31, 2026, compared to the three months ended March 31, 2025, was primarily due to an increase in the number of flights we operated under our prorate agreements and under SWC and the corresponding increase in gallons of fuel we purchased, and an increase in our average fuel cost per gallon from $3.03 for the three months ended March 31, 2025 to $3.40 for the three months ended March 31, 2026. 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:

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	For the three months ended March 31,
(in thousands)	2026		2025		% Change
Fuel gallons purchased		11,429		8,073	41.6	%
Fuel expense	$	38,904	$	24,488	58.9	%

Other operating expenses. Other operating expenses primarily consist of aircraft rentals, property taxes, hull and liability insurance, simulator costs, crew per diem, crew hotel costs and credit loss reserves. The $8.2 million, or 10.1%, increase in other operating expenses was primarily due to higher training‑related hotel costs, driven by pilot training, and an increase in other operating costs as a result of the higher number of flights we operated during the three months ended March 31, 2026, compared to the three months ended March 31, 2025.

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

Interest expense. The $2.7 million, or 9.8%, decrease in interest expense for the three months ended March 31, 2026 as compared to the three months ended March 31, 2025 was primarily related to a decrease in outstanding debt. At March 31, 2026 we had $2.4 billion of outstanding debt, compared to $2.6 billion at March 31, 2025. Our average effective interest rate for the three months ended March 31, 2026 and 2025, was 4.4% and 4.3%, respectively.

Interest income. Interest income decreased $1.5 million, from $10.1 million for the three months ended March 31, 2025, to $8.6 million for the three months ended March 31, 2026. The decrease in interest income was primarily related to a decrease in interest rates on our marketable securities from March 31, 2025 to March 31, 2026.

Other expense, net. Other expense, net of income decreased $1.6 million for the three months ended March 31, 2026, compared to the three months ended March 31, 2025. Other expense, net primarily consists of the unrealized and realized gains and losses on our investments in other companies, income or loss related to our equity method investments and gains or losses on the sale of assets. The decrease in other expense, net of income was primarily the result of a smaller decrease in the fair value of our investments in other companies for the three months ended March 31, 2026, compared to the three months ended March 31, 2025.

Provision for income taxes. For the three months ended March 31, 2026 and 2025, our effective income tax rates were 5.6% and 16.7%, 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 on employee equity awards that vested during the period. The decrease in the effective tax rate was primarily related to a higher discrete tax benefit from additional tax deductions generated from employee equity awards that vested for the three months ended March 31, 2026, compared to the three months ended March 31, 2025.

Net income. Primarily due to the factors described above, we generated net income of $101.7 million, or $2.50 per diluted share, for the three months ended March 31, 2026, compared to net income of $100.6 million, or $2.42 per diluted share, for the three months ended March 31, 2025.

Our Business Segments

Three Months Ended March 31, 2026 and 2025

For the three months ended March 31, 2026, our reportable segments, which were the basis of our internal financial reporting, consisted of (1) the operations of SkyWest Airlines and SWC (collectively, “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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The following table sets forth our SkyWest Airlines and SWC segment data for the three months ended March 31, 2026 and 2025 (in thousands):


		For the three months ended March 31,
		(dollar amounts in thousands)
		2026			2025			$ Change			% Change
Operating revenues		$	855,182		$	801,651		$	53,531		6.7	%

Salaries, wages and benefits			421,439			376,646			44,793		11.9	%
Aircraft maintenance, materials and repairs			206,492			201,476			5,016		2.5	%
Depreciation and amortization			37,346			37,748			(402)		(1.1)	%
Interest expense			2,735			2,981			(246)		(8.3)	%
Other segment items⁽¹⁾			161,660			128,530			33,130		25.8	%
SkyWest Airlines and SWC Segment profit⁽²⁾		$	25,510		$	54,270		$	(28,760)		(53.0)	%

(1)

Other segment items for SkyWest Airlines and SWC include aircraft fuel; airport related expenses; other operating expenses consisting primarily of property taxes, hull and liability insurance, simulator costs, crew per diem and crew hotel costs and credit loss reserves; interest income and other expense, net.

(2)	Segment profit is equal to income before income taxes.

SkyWest Airlines and SWC Segment Profit. SkyWest Airlines and SWC segment profit was $25.5 million for the three months ended March 31, 2026, compared to $54.3 million for the three months ended March 31, 2025.

SkyWest Airlines and SWC block hour production increased 3.1%, from 352,155 for the three months ended March 31, 2025 to 362,933 for the three months ended March 31, 2026, primarily due to additional aircraft operating under our capacity purchase agreements and an increase in the utilization of our aircraft. Significant items contributing to the SkyWest Airlines and SWC segment profit for the three months ended March 31, 2026 are set forth below.

SkyWest Airlines and SWC operating revenues increased $53.5 million, or 6.7%, for the three months ended March 31, 2026, compared to the three months ended March 31, 2025, primarily due to an increase in block hour production and higher prorate revenue during the three months ended March 31, 2026, compared to the three months ended March 31, 2025.

SkyWest Airlines and SWC’s salaries, wages and benefits expense increased $44.8 million, or 11.9%, for the three months ended March 31, 2026, compared to the three months ended March 31, 2025, 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, 2026, compared to the three months ended March 31, 2025, and due to an increase in pilot training costs associated with higher attrition rates since March 31, 2025.

SkyWest Airlines and SWC’s aircraft maintenance, materials and repairs expense increased $5.0 million, or 2.5%, for the three months ended March 31, 2026, compared to the three months ended March 31, 2025, primarily due to higher flight volume, which increased the maintenance activity and related expenses, for the three months ended March 31, 2026, compared to the three months ended March 31, 2025.

SkyWest Airlines and SWC’s depreciation and amortization expense decreased $0.4 million, or 1.1%, for the three months ended March 31, 2026, compared to the three months ended March 31, 2025, primarily due to certain CRJ aircraft and engines that were depreciated to their estimated residual value since March 31, 2025, offset by an increase in depreciation from the acquisition of additional assets, including engines and used CRJ900 airframes, since March 31, 2025.

SkyWest Airlines and SWC’s interest expense decreased $0.2 million, or 8.3%, for the three months ended March 31, 2026, compared to the three months ended March 31, 2025, primarily due to a decrease in outstanding debt from March 31, 2025 to March 31, 2026.

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SkyWest Airlines and SWC’s other segment items increased $33.1 million, or 25.8%, for the three months ended March 31, 2026, compared to the three months ended March 31, 2025, primarily related to an increase in fuel costs, airport-related expenses, such as subcontracted airport services, station rents, weather-related aircraft deicing costs and landing fees and other operating costs, such as crew per diem and crew hotel costs, as a result of the higher number of flights we operated during the three months ended March 31, 2026, compared to the three months ended March 31, 2025.

The following table sets forth our SkyWest Leasing segment data for the three months ended March 31, 2026 and 2025 (in thousands):


		For the three months ended March 31,
		(dollar amounts in thousands)
		2026			2025			$ Change			% Change
Operating revenues		$	157,995		$	146,804		$	11,191		7.6	%

Salaries, wages and benefits			665			665			—		—	%
Aircraft maintenance, materials and repairs			6,535			7,624			(1,089)		(14.3)	%
Depreciation and amortization			52,870			51,698			1,172		2.3	%
Interest expense			21,730			24,137			(2,407)		(10.0)	%
Other segment items⁽¹⁾			(6,065)			(3,768)			(2,297)		61.0	%
SkyWest Leasing Segment profit⁽²⁾		$	82,260		$	66,448		$	15,812		23.8	%

(1)	Other segment items for SkyWest Leasing include other operating expenses consisting primarily of property taxes and credit loss reserves; aircraft rentals; interest income and other expense, net.

(2)	Segment profit is equal to income before income taxes.

SkyWest Leasing Segment Profit. SkyWest Leasing profit increased $15.8 million, or 23.8%, for the three months ended March 31, 2026, compared to the three months ended March 31, 2025, primarily due to an increase in revenue earned under our capacity purchase agreements attributed to the ownership of new E175 aircraft acquired since March 31, 2025 and a decrease in interest expense due to a decrease in outstanding debt from March 31, 2025 to March 31, 2026.

Liquidity and Capital Resources

As of March 31, 2026, we had $627.3 million in cash and cash equivalents and marketable securities. As of March 31, 2026, we had $75.4 million available for borrowings under our line of credit. Given our available liquidity as of March 31, 2026, 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, cash equivalents and marketable securities decreased from $706.9 million as of December 31, 2025 to $627.3 million as of March 31, 2026, or by $79.6 million. Our total long-term debt, including current maturities, was $2.4 billion as of both March 31, 2026 and December 31, 2025. Additionally, during the three months ended March 31, 2026, we repurchased 782,900 shares of our common stock for $75.3 million under a share repurchase program authorized by our Board of Directors. At March 31, 2026, our total capital mix (measured as a ratio of total stockholder equity and total long-term debt, including current maturities) was 53.3% equity and 46.7% total long-term debt, compared to 53.4% equity and 46.6% total long-term debt at December 31, 2025.

As of March 31, 2026, and December 31, 2025, we had $47.5 million and $47.2 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, 2026, and December 31, 2025.

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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, 2026 and 2025, and our total cash and marketable securities positions as of March 31, 2026, and December 31, 2025 (in thousands):


	For the three months ended March 31,
	2026		2025		$ Change		% Change
Net cash provided by operating activities	$	144,477	$	171,023	$	(26,546)	(15.5)	%
Net cash used in investing activities		(82,828)		(66,109)		(16,719)	25.3	%
Net cash used in financing activities		(118,481)		(153,303)		34,822	(22.7)	%


		March 31,			December 31,
		2026			2025			$ Change			% Change
Cash and cash equivalents		$	65,841		$	122,673		$	(56,832)		(46.3)	%
Marketable securities			561,413			584,236			(22,823)		(3.9)	%
Total		$	627,254		$	706,909		$	(79,655)		(11.3)	%

Cash Flows provided by Operating Activities

Our cash flows provided by operating activities was $144.5 million for the three months ended March 31, 2026, compared to $171.0 million for the three months ended March 31, 2025. 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, income taxes, accrued liabilities, deferred revenue and unbilled revenue.

The decrease in our cash flow from operations for the three months ended March 31, 2026, compared to the three months ended March 31, 2025, was primarily due to a decrease in income before income taxes for the three months ended March 31, 2026, compared the three months ended March 31, 2025, and an increase in accounts payable due to the timing of cash payments for the comparable periods.

Cash Flows used in Investing Activities

Our cash flows used in investing activities was $82.8 million for the three months ended March 31, 2026, compared to cash flows used in investing activities of $66.1 million for the three months ended March 31, 2025. 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.

Excluding the purchase and sale of marketable securities, which results in the transfer of dollars between our investments in marketable securities and our cash accounts, our cash used in investing activities increased from $68.4 million for the three months ended March 31, 2025, to $105.0 million for the three months ended March 31, 2026. Excluding the transfer of dollars between our investments in marketable securities and our cash accounts, the remaining increase in cash used in investing activities was primarily due to an increase of $29.0 million used in the acquisition of property and equipment for the three months ended March 31, 2026, compared to the three months ended March 31, 2025, primarily due to the acquisition of one new E175 aircraft and spare engines during the three months ended March 31, 2026.

Cash Flows used in Financing Activities

Our cash flows used in financing activities was $118.5 million for the three months ended March 31, 2026, compared to cash used in financing activities of $153.3 million for the three months ended March 31, 2025. Our

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financing cash flows are typically impacted by various factors including proceeds from issuance of debt, principal payments on debt obligations and repurchases of our common stock.

The $34.8 million decrease in cash used in financing activities for the three months ended March 31, 2026, compared to the three months ended March 31, 2025, was primarily due to an increase of $115.0 million in proceeds from the issuance of long-term debt for the purchase of one new E175 aircraft and engine financings, net of principal payments on long-term debt, offset by an increase of $18.4 million in cash used for employee income taxes paid on vested equity awards in lieu of shares and an increase of $61.7 million in cash used to purchase treasury stock during the three months ended March 31, 2026, compared to the three months ended March 31, 2025.

Significant Commitments and Obligations

General

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

Purchase Commitments and Options

As of March 31, 2026, we had a firm purchase commitment for 68 new E175 aircraft from Embraer with delivery dates anticipated into 2032.

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 a combination of 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 68 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 three years to four years as of March 31, 2026. These eight leased aircraft are subleased to a third party. Future minimum lease payments due under all long-term operating leases were approximately $119.4 million at March 31, 2026. 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 $82.9 million at March 31, 2026.

Long-term Debt Obligations

As of March 31, 2026, we had $2.4 billion of long-term debt, which consisted of $2.2 billion of debt used to finance aircraft and spare engines and $200.6 million of unsecured debt payable to the U.S. Department of the Treasury (“Treasury”). The average effective interest rate on our debt obligations was approximately 4.4% at March 31, 2026.

Under our capacity purchase agreements, our major airline partners compensate us for our costs of the aircraft on a monthly basis. The consideration for aircraft ownership costs we receive varies by agreement but is intended to compensate us for our ownership of the aircraft 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 our aircraft financing and leasing agreements.

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We have guaranteed $12.2 million in promissory notes of a third party in the event the third party defaults on its payments. The third party’s 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.

ITEM 3: QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

There have been no material changes in market risk from the information provided in Part II, Item 7A. Quantitative and Qualitative Disclosures About Market Risk, in our Annual Report on Form 10-K for the year ended December 31, 2025, except as follows:

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 capacity purchase agreements, 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, 2026, approximately 17.2% of our total flying agreements revenue was derived from prorate agreements and SWC. For the three months ended March 31, 2026, the average price per gallon of aircraft fuel was $3.40. 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 $9.7 million in fuel expense for the three months ended March 31, 2026.

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, accurately and 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, 2026, those controls and procedures were effective to ensure that information we are required to disclose in the reports we file 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, 2026, 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).

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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, 2026, 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, 2025, 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 a stock repurchase program which authorizes us to repurchase shares of our common stock in the public market or in private transactions, from time to time, at prevailing prices. Our stock repurchase program adopted in May 2023 authorized the repurchase of up to $250.0 million of our common stock. In May 2025, the Board approved a $250.0 million increase to the existing stock repurchase program. The following table summarizes the repurchases under our stock repurchase program during the three months ended March 31, 2026:


	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, 2026 - January 31, 2026	111,030	$	99.74		111,030	$	202,006
February 1, 2026 - February 28, 2026	174,605	$	104.95		174,605	$	183,681
March 1, 2026 - March 31, 2026	497,265	$	92.30		497,265	$	137,784
Total	782,900	$	96.18		782,900	$	137,784

(1)

In May 2023, our Board of Directors approved a stock repurchase program and authorized us to repurchase up to $250.0 million of our common stock. In May 2025, the Board approved a $250.0 million increase to the existing stock repurchase program. Purchases are made at management’s discretion based on market conditions and financial resources. As of March 31, 2026, we had repurchased 6,458,719 shares of our common stock for $362.2 million and had $137.8 million remaining availability under the stock repurchase program.

ITEM 5. OTHER INFORMATION

During the three months ended March 31, 2026, 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


3.1		Restated Articles of Incorporation (incorporated by reference to Exhibit 3.1 of the Company’s Registration Statement on Form S-3 filed on November 18, 2005).
3.2		Amended and Restated Bylaws of SkyWest Inc., effective August 6, 2024 (incorporated by reference to Exhibit 3.1 of the Company’s Current Report on Form 8-K filed on August 8, 2024).
10.1		Amendment No. 1, dated February 20, 2026, to Purchase Agreement COM0247-25, dated June 17, 2025, between Embraer S.A. and SkyWest Inc.
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, 2026, to be signed on its behalf by the undersigned, thereunto duly authorized, on April 24, 2026.


	SKYWEST, INC.

	By	/s/ Robert J. Simmons
		Robert J. Simmons
		Chief Financial Officer

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Date	Price Target	Rating	Analyst
4/17/2026	$122.00 → $106.00	Buy	TD Cowen
1/26/2026	$132.00 → $122.00	Buy	TD Cowen
12/4/2025	$112.00	Neutral	Citigroup
10/31/2025	$124.00 → $132.00	Buy	TD Cowen
10/1/2025	$140.00	Outperform → Strong Buy	Raymond James
7/1/2025	$120.00	In-line → Outperform	Evercore ISI
4/8/2025	$117.00	Neutral → Buy	Goldman
11/15/2024	$119.00	Neutral	Goldman

SEC Form 10-Q filed by SkyWest Inc.

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