SkyWest Inc. (NASDAQ:SKYW) Q1 2019 Earnings Conference Call - Final Transcript

Apr 26, 2018 • 04:30 pm ET


SkyWest Inc. (NASDAQ:SKYW) Q1 2019 Earnings Conference Call - Final Transcript


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Good afternoon, everyone, and welcome to the SkyWest First Quarter 2018 Earnings Conference Call. All participants will be in a listen-only mode. [Operator Instructions] After today's presentation, there will be opportunity to ask questions. [Operator Instructions] Please also note today's event is being recorded.

At this time, I'd like to turn the conference call over to Mr. Rob Simmons, SkyWest's Chief Financial Officer. Sir, please go ahead.

Rob Simmons

Thanks, everyone, for joining us on the call today. As the operator indicated, this is Rob Simmons, SkyWest's Chief Financial Officer. On the call with me today are Chip Childs, President and Chief Executive Officer; Wade Steel, Chief Commercial Officer; Eric Woodward, Chief Accounting Officer; Mike Thompson, SkyWest Airlines' Chief Operating Officer; and Terry Vais, ExpressJet Airlines' Chief Operating Officer.

I'd like to start today by asking Eric to read the Safe Harbor. Then I'll turn the time over to Chip for some comments. Following Chip, I will take us through the financial results. Then Wade will discuss the fleet and related flying arrangements. Following Wade, we will have the customary Q&A session with our sell-side analysts. Eric?

Eric Woodward

Today's discussion contains forward-looking statements that represent our current beliefs, expectations and assumptions regarding future events and are subject to risks and uncertainties. We assume no obligation to update any forward-looking statement. Actual results will likely vary and may vary materially from those anticipated, estimated or projected for a number of reasons. Some of the factors that may cause such differences are included in our 2017 Form 10-K and other reports and filings with the Securities and Exchange Commission. Chip?

Chip Childs

Thank you, Rob and Eric. The first quarter is generally a challenging one particularly in terms of weather, but both of our airlines delivered well during the quarter. Our fleeting business plan continued to move forward and we accepted a number of new E175 aircraft, including the first of our E175 special configuration aircraft for a Delta operation. I want to thank our more than 17,000 professionals for their ongoing commitment to delivering an exceptional product during the quarter.

We operated during the quarter approximately 250,000 flights with strong operating reliability. SkyWest Airlines delivered 99.8% adjusted completion factor and ExpressJet despite being affected by severe weather in their East Coast operations delivered an impressive 99.9% completion when adjusted for that weather.

Looking forward to the remainder of the year, we continue to see very strong demand for both our 50-seat and dual-class products. We anticipate an additional 34 E175s on property by year-end and expect these aircraft will continue to create solid growth and cash flow in 2018 and beyond. Specific to our ExpressJet business, I want to remind you as we've mentioned in our previous guidance, we do not expect at any of the breakeven this year. However they're making strong progress and as this quarter's operational performance shows they are more focused than ever with a smaller footprint. This progress sets them up well for 2019 improvement.

We also continue working through opportunities in