Skywest, Inc. · NASDAQ:SKYW
Skywest — Q3 2020 Earnings Presentation
24 slides from Skywest's earnings presentation, Nov 4, 2020
Slide 1: Investor Update
a ey, SKYWEST INCORPORATED INVESTOR UPDATE —— 42020 ——— A DELTA 4 UNITED SY American « “Maska Airlines
Slide 2: Slide 2
Slide 3: Forward Looking Statements
Forward Looking Statements In addition to historical information, this release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Words such as “forecasts,” “expects,” “intends,” “believes,” “anticipates,” “estimates,” “should,” “likely” a
Slide 4: Strategic Plan: Positioning for Recovery
Strategic Plan POSITIONING FOR RECOVERY Long-Game Strategy Liquidity Preservation Cash burn ~ $250k per day remainder of 2020 Provide flexibility, stability and performance for our partners Borrowed $60m of $725m CARES Act secured loan. ($665m still available) Looking to avoid furloughs for our pilo
Slide 5: Strategic Plan: Fleet Transition Continues
Strategic Plan FLEET TRANSITION CONTINUES Upcoming New Aircraft Deliveries Used Aircraft to Place Into Service 4 New E175s 29 Used CRJ700s Contract with: Timing: Q4 2020 Financed by: SkyWest Contract with: Timing: Q4 2020-2021 Financed by: SkyWest 1 New CRJ900 Contract with: Older CRJ200s Reductions
Slide 6: Aircraft in Service September 30, 2020
Aircraft in Service September 30, 2020 CONTRACT PRORATE CONTRACT PRORATE CONTRACT PRORATE CONTRACT PRORATE E175 • Debt (158) and partner financed (31) 189 67 - 90 - - - 32 - • Average age 4 years CRJ900 • Debt (15), lease (1) and partner financed (23) 39 39 - - - - - - - • Average age 10 years CRJ70
Slide 7: Deliveries for Dual-Class Aircraft
Deliveries for Dual-Class Aircraft E175s (new) CRJ900s (new) E175s (used) CRJ700s (used) 2019 2020 2021 & 2022 10 7 2 6 31 4 20 1 25 19 41 46 Delivered during the year I N V E S T O R U P D AT E Q4 2020 7 PR OPRIE TARY – MAY NOT BE SHARED WITHOUT PERMISSION
Slide 8: 5-Year Fleet Transition
5-Year Fleet Transition = Qty. of 10 2017 2018 2019 FORECAST - ENDING 2020 E175 20 E175s expected 2021-2022 107 146 156 193 CRJ700/900 120 140 137 129 CRJ200 195 184 190 117 TOTAL TOTAL TOTAL TOTAL 422 470 483 439 COVID-19 accelerating transition from older CRJ200s to E175s. I N V E S T O R U P D AT
Slide 9: Regional Market Share Q3-20
Regional Market Share Q3-20 12% 61 Aircraft ~600 REGIONAL AIRCRAFT ~600 REGIONAL AIRCRAFT Envoy SkyWest PSA Mesa Piedmont Republic Republic Air Wisconsin SkyWest 21% 54% 46% GoJet Mesa CommutAir 205 Aircraft 66% Regional partner removed: Regional partners removed: Compass ExpressJet Trans States 8%
Slide 10: Road to Recovery
Road to Recovery AVERAGE DAILY SCHEDULED DEPARTURES Pre COVID, would have anticipated ~ 2,600 Daily Flights for Q3 2020 approx. approx. 1,600 1,600 approx. 1,300 approx. approx. 900 approx. 800 700 APRIL MAY JUNE JULY AUGUST SEPTEMBER Q2 Q3 Q4 EST. 2020 COMPARED Total Block Hours 66% 41% 30-35% TO 2
Slide 11: COVID Impact on Revenue
COVID Impact on Revenue $ in Millions 2019 2020 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Revenue Contract Flying $ 593 $ 590 $ 593 $ 592 $ 610 $ 369 $ 414 Contract Deferred Revenue - - - - - (69) (30) Prorate Flying 107 135 146 133 100 36 61 Lease & Airport Services 24 19 21 19 20 14 12 Total Revenue $ 724 $ 744 $ 760
Slide 12: Headwinds & Tailwinds
Headwinds & Tailwinds HEADWINDS TAILWINDS Prorate revenue is still weak Production should continue to 58% trend slightly higher. $85m from Q3 of last year Partner concessions from Q2 and Q3 have mostly ended. Maintenance expense 24% The discrete increase to our $29m credit loss reserve in Q3 is not
Slide 13: 2020 Cash Burn
2020 Cash Burn 2020 Cash Burn CEO Report: 2020 Cash Burn A CTU A L CA SH A T SEP TEMBER 3 0 $822m MOD E LED CA SH A T DECEMBER 3 1 $800m CASH BURN P ER MONTH P ER DA Y $7m $0.25m CA SH BU RN BY YEA R END (no anticipated CARES Act draws in Q4) $22m SOURCES OF ADDITIONAL LIQUIDITY IF NEEDED $665m $40m
Slide 14: Income Waterfall Q3-19 to Q3-20
Income Waterfall Q3-19 to Q3-20 $ in Millions Q3-19 to Q3-20 $150 $100 $(39) $17 $(17) $119 $12 $50 $(29) $(78) $(186) $46 $- $- $190 -$50 $(101) Contract -$100 -$100 $(85) -$150 -$150 Prorate $57 -$200 -$200 -$250 -$250 -$300 -$300 -$350 -$350 Q3-19 Q3-19 Actual E175s: E175s: CRJ700/900s: CRJ700/90
Slide 15: Income Waterfall Q2-20 to Q3-20
Income Waterfall Q2-20 to Q3-20 $ in Millions Q2-20 TO Q3-20 $150 $100 $(7) $27 $2 Contract $38 $(29) $10 $(24) $25 Prorate $(17) $50 $26 $46 $- $55 $(33) -$50 -$100 Q2-20 Q 2-20 Actual E175s E175s: CRJ700/900s CRJ700/900s: CRJ200s CRJ200s: Labor up Labor up on on CARESAct CARES Act Prorate Prorate
Slide 16: Cash Waterfall for Q3-2020
Cash Waterfall for Q3-2020 $ in Millions Q2-2020 TO Q3-2020 $1,100 $1,100 $1,000 $1,000 $900 $900 $(43) $43 $60 $800 $800 $700 $700 $600 $600 $500 $500 $400 $400 $822 $762 $300 $300 $200 $200 $100 $100 $-$- Q2-20 Q2-20Cash Cash PSP Debt Debt CARES Act Secured Loan Loan Burn Cash Burn Q3-20 Q3-20 Cas
Slide 17: Capital Expenditures
Capital Expenditures $ in Thousands YTD 9/30/2020 2019 2018 2017 Capital Expenditures by Type (Actual) (Actual) (Actual) (Actual) New E175 Aircraft $ (43,000) $ (215,000) $ (880,000) $ (548,000) Used Aircraft (6,000) (188,000) (74,000) (35,000) Rotable Spares, Spare Engines, Other (139,000) (233,000
Slide 18: Q3-20 Aircraft Summary by Financing
Q3-20 Aircraft Summary by Financing $ in Billions Debt aircraft 158 E175s $2.6 debt balance (total 210) 52 CRJs $0.3 debt balance Leased aircraft 43 CRJs $0.3 future lease obligations Owned aircraft 139 CRJs No debt outstanding 1/3 of fleet 31 E175s Partner provided aircraft No financing obligation
Slide 19: SkyWest Airlines Contract & Prorate
SkyWest Airlines Contract & Prorate As of September 30, 2020 15% 85% CONTRACT 1,340 PRORATE 240 Total Flights Per Day 1,580 I N V E S T O R U P D AT E Q4 2020 19 PR OPRIE TARY – MAY NOT BE SHARED WITHOUT PERMISSION
Slide 20: Awards
Awards I N V E S T O R U P D AT E Q4 2020 20 PR OPRIE TARY – MAY NOT BE SHARED WITHOUT PERMISSION
Slide 21: Notes
Notes I N V E S T O R U P D AT E Q4 2020 21 PR OPRIE TARY – MAY NOT BE SHARED WITHOUT PERMISSION
Slide 22: Notes
Notes I N V E S T O R U P D AT E Q4 2020 22 PR OPRIE TARY – MAY NOT BE SHARED WITHOUT PERMISSION
Slide 23: Notes
Notes I N V E S T O R U P D AT E Q4 2020 23 PR OPRIE TARY – MAY NOT BE SHARED WITHOUT PERMISSION
Slide 24: inc.skywest.com
ey ey SKYWEST INCORPORATED —————_INC.SKYWEST.COM