SkyWest, Inc. (NASDAQ:SKYW) Q4 2023 Earnings Call Transcript

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Catherine O’Brien: And then maybe just I can squeeze on last one in for you also, Rob. You mentioned you expect the pace of share repurchases to flow going forward. Is that a function of just CapEx stepping up over the next couple of years or something else? And kind of rephrasing [indiscernible] earlier question, if your free cash flow projections came in better than expected, would you maybe change your tune on the pace of those repurchases slowing?

Rob Simmons: Yeah, I mean in terms of how we think about deploying capital, it starts as you indicated with generating free cash flow and then we look at the best ways to deploy that whether it be debt repayment, whether it be other operational initiatives, whether it’s new flying. I mean, there’s a number of ways that we can accretively deploy capital. Obviously, share repurchase has been a very good one in 2023, but as we go forward and continue to generate that free cash flow. We’ll look at the spectrum of capital opportunities we have and pick the best NPVs and go from there.

Catherine O’Brien: And I know I said that was my last one, but maybe you’ll allow it. Just on SkyWest Charter, can you just help us think about what the delta to earnings should be between 4Q? I think you said it didn’t contribute in 4Q and it’s going in 1Q. So how much of a drag was in 4Q and how much do you think it will contribute in 1Q if you have that?

Wade Steel: The specific profitability, we’re not going to get into that now, but I can kind of directionally give you some revenue numbers that may be helpful for you. So like in the fourth quarter, it was around $5 million or $6 million and then the first quarter, we anticipate it being over $10 million to $12 million in revenue in the first quarter. And so there is a pretty big swing. We’re still growing that entity right now. We’re still learning a lot about the Charter business. We’re still learning about the efficiencies and all of that. So we’re still — we’re growing, we’re learning, we’re getting better at it every day. And so I think with all of those things, we’re going to get more cost efficient, and then we’re also going to, we’re finding more and more revenue opportunities as well.

Operator: I’ll now turn the call over to Chip Childs for closing remarks.

Chip Childs : Great. Thank you, Regina. We’re really pleased with what we’ve done in 2023. I mean, there’s a lot of challenges and a lot of headwinds and thanks to our amazing professionals at SkyWest for everything that was done this last year. We really look forward to what’s going to happen in 2024. We don’t doubt that there will be any less headwinds and probably surprises along the way. But I think that we are in the process of making sure we’re controlling the line of scrimmage, if you will, so that we have options and flexibility to work with our people and our partners to move forward in a very, very positive way. We appreciate the analysts that are following us as well and the interest that you’ve given to our company, and we look forward to talking to you next quarter. Thank you.

Operator: That does conclude today’s conference. We thank you all for joining, and you may now disconnect.

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