SkyWest, Inc. (SKYW) is poised to benefit from increased air travel demand and its associated fleet modernization initiatives. A solid balance sheet enables SKYW to consistently reward shareholders with share repurchases.
Let’s delve deeper into the factors favoring SKYW.
SkyWest's top line benefits from flying contract rate increases. As of March 31, 2026, SkyWest had cumulative deferred revenues of $240.69 million under its flying contracts. Revenues from flying agreements (contributing 96.5% to the top line) grew 6.7% year over year during first-quarter 2026. Departures increased 1.1% on a year-over-year basis in the first quarter.
SkyWest's fleet-modernization efforts to cater to the improvement in travel demand are commendable. In a bid to modernize its fleet, SKYW has fleet-related agreements with airline heavyweights like United Airlines UAL, Delta Air Lines DAL and Alaska Airlines ALK.
Concurrent with its first-quarter 2026 results, SkyWest intends to convert its CRJ200 aircraft, operating for United Airlines, into 41-seat, dual-class CRJ450s, with the first aircraft entering service in fall 2026. SkyWest had one E175 aircraft delivery for Alaska Airlinesin the first quarter of 2026. The company’s aircraft lease agreements for the E175 fleet, which supports Alaska’s capacity purchase agreement, are set to expire between 2030 and 2034.
Further, UAL is scheduled to deliver eight E175 planes in 2026. Alaska Airlines is expected to deliver one E175 in 2026. DAL is likely to deliver 10 E175 planes in 2027 and six in 2028.
By 2028-end, SkyWest anticipates having nearly 300 E175 aircraft in its fleet. As previously announced, SkyWest entered into a purchase agreement with Embraer, which secures delivery positions for 44 additional E175s from 2028 through 2032 for potential future flying opportunities. SkyWest also secured purchase rights on 50 additional E175s from Embraer.
SkyWest’s solid balance sheet increases financial flexibility. The company ended first-quarter 2026 with cash and marketable securities of $627.25 million, higher than the current debt level of $598.43 million. This implies that the company has sufficient cash to meet its current debt obligations. Meanwhile, long-term debt level has decreased to $1.79 billion at the end of first-quarter 2026 from $2.07 billion at the end of the first quarter of 2025.
A strong balance sheet enables the company to reward shareholders with share repurchases. As a reflection of its shareholder-friendly stance, in May 2025, SKYW's existing repurchase plan was increased by $250 million. SkyWest repurchased 783,000 shares for $75 million during the first quarter of 2026. As of March 31, 2026, SkyWest had $138 million available under its current share repurchase program. Buybacks not only reduce the total outstanding share count, thereby increasing earnings per share, but also signal management's belief in the intrinsic value of the stock.
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