Chip Childs: I’ll try to address like kind of what you’re trying to I think ask, is what — there’s a lot of opportunity with SkyWest Charter. We’re very optimistic about some of the things that have happened within the college world, some things that are happening within certain markets of what SWC is operating in. One thing to be aware of I think that makes us most optimistic about this is the fact that we’re entering into some of these different markets that have created a lot of demand since the pandemic and they have not had good service providers operating in these types of circles. From our perspective, I mentioned earlier that as SkyWest is used to being a very strong top performer in the overall aviation industry and as we start to penetrate into some of these other markets and models, we’re finding a very strong welcome mat that people are very interested in what we have to do with this entity.
Now from the perspective of the DOT, I think we kind of know why they’re not approving what we want for commuter authority. There’s a lot of unnatural behavior relative to what they’re doing. And from our perspective, as we continue to monitor how this process works, we’re not going away. We’re going to continue to fight for what we believe the communities deserve. And so, look, I think from that perspective, I want to also make sure that we understand — we were hopeful that SWC would probably deploy about 20 to 25 aircraft in small community service with a commuter authority. That’s a very small fleet actually. We’re up to 13 or more with actual on-demand service within Charter. Look, there’s a lot of good opportunities we see with this. But when you look at the big picture, this is still extremely small relative to SkyWest Inc.
and our overall fleet with SkyWest Airlines and what we’re trying to do. I mean we’re still deploying in that plan to deploy 19 E175s to SkyWest Airlines. It’s part of the picture that we’re seeing where we can actually be motivated with our expertise, with our impeccable safety record and our procedures that we have that are absolutely proven and the best in the industry to carry our product forward to different models in different places. That’s kind of where we are with SWC.
Helane Becker: That’s really helpful. Thank you very much.
Operator: Your next question comes from Catherine O’Brien with Goldman Sachs.
Catherine O’Brien: First, congratulations on the United deal, it’s exciting. With those additional aircraft, you called out that your 175 fleet is going to increase to 23 aircraft between now and 2026. We’ve seen your CRJ900 200 seats get a bit smaller over the last year. How should we think about net growth of the total fleet between that E175 growth and any changes you would anticipate in the CRJ side? Understanding that you expect those 19 CRJs coming out of United to land somewhere else. I guess like any changes above and beyond that if there are any.
Wade Steel: Yes. Kate, this is Wade. Great question. As we said, we have 19 — well, we have 23 175s coming. 4 of them were already on order. They’re coming in ’24, ’25 and ’26. On top of that and this is our focus, our current ERJ fleet is still underutilized by 14%, right? We still have the opportunity to grow back that utilization. Our CRJ fleet is more closer to something like 35% underutilized, so there’s still plenty of opportunities there to grow back that utilization. We have enough shells on our CRJ side at the moment. And we’re always in discussions with our major partners about potential fleet needs in the future and what they need. Between what we have on order, our existing fleet and our discussions, we definitely have a lot of opportunities in the future to continue to grow and use our dual-class fleet how we anticipate to.
Catherine O’Brien: Got it. You’d expect like CRJ probably and understanding there’s tremendous capacity to increase utilization on that side of the business but you’d expect like shell count to be fairly stable over the next couple of years. Is that right?
Wade Steel: Yes. Yes. No, we have — our shell count we anticipate being very stable. We’ve got a lot of CRJ900s and a lot of CRJ700s that we can deploy in the future.
Catherine O’Brien: Got it. And then maybe another one on SWC, that being a positive contribution to earnings in November on better-than-expected demand. I know obviously things have changed with some of the delays in the commuter authority but it sounds like the on-demand charter, that’s a happy new piece of news there for you guys. What was your initial expectation of when SWC would be a positive to the bottom line? And I guess how should we think about the size of that contribution going forward? Thanks so much.
Chip Childs: Yes, Katy, this is Chip. Just real quick on it, I think that initially we anticipated that we would probably be well into 2024 before we would have a positive contribution from SWC. I mean clearly, our plans originally, as we were looking at commuter authority, we knew it would be a measured, I don’t want to say a slow but a measured and predictable process as we were starting to pick up more small communities through the process that that takes. And now we have massive demand from colleges and other entities that want on-demand service absolutely right now. That’s why the time line has certainly picked up. Now I think from our perspective, since we’re still in the infancy of how we’re trying to build up the demand, we’ll probably hold off and evaluate it and give you some more information when we meet on the fourth quarter results, maybe give some more color of what our expectation contributions are going to be there.
But so far we’re optimistic but it’s still a little bit early and we’ll know a lot more in the next 3 months and get back to you on some more specifics then.
