Segment Reporting

6 Months Ended

Jun. 30, 2023

Segment Reporting

Segment Reporting

(6) Segment Reporting

The Company’s two reporting segments consist of the operations of (1) SkyWest Airlines and SWC (collectively, “SkyWest Airlines and SWC”) and (2) SkyWest Leasing activities.

The Company’s chief operating decision maker analyzes the profitability of operating new aircraft financed through the issuance of debt, including the Company’s E175 fleet, separately from the profitability of the Company’s capital deployed for ownership and financing of such aircraft. The SkyWest Airlines and SWC segment includes revenue

earned under the applicable capacity purchase agreements attributed to operating such aircraft and the respective operating costs and revenue and operating expenses attributed to charter flight services. The SkyWest Leasing segment includes applicable revenue earned under the applicable capacity purchase agreements attributed to the ownership of new aircraft acquired through the issuance of debt and the respective depreciation and interest expense of such aircraft. The SkyWest Leasing segment also includes the activity of leasing regional jet aircraft and spare engines to third parties and other activities. The SkyWest Leasing segment’s total assets and capital expenditures include new aircraft acquired through the issuance of debt and assets leased to third parties. Additionally, aircraft removed from SkyWest Airlines’ operations and held for sale are included in the SkyWest Leasing segment.

The following represents the Company’s segment data for the three-month periods ended June 30, 2023 and 2022 (in thousands):

	Three months ended June 30, 2023
	SkyWest Airlines		SkyWest
	and SWC		Leasing		Consolidated
Operating revenues (1)	$	586,476	$	139,167	$	725,643
Operating expense		624,490		69,293		693,783
Depreciation and amortization expense		37,966		59,203		97,169
Interest expense		4,695		29,023		33,718
Segment profit (loss) (2)		(42,709)		40,851		(1,858)
Total assets (as of June 30, 2023)		2,570,050		4,545,724		7,115,774
Capital expenditures (including non-cash)		25,609		410		26,019

	Three months ended June 30, 2022
	SkyWest Airlines		SkyWest
	and SWC		Leasing		Consolidated
Operating revenues (1)	$	664,203	$	134,882	$	799,085
Operating expense		636,245		74,238		710,483
Depreciation and amortization expense		44,982		52,267		97,249
Interest expense		2,650		27,783		30,433
Segment profit (2)		25,308		32,861		58,169
Total assets (as of June 30, 2022)		3,011,236		4,325,411		7,336,647
Capital expenditures (including non-cash)		20,010		181,168		201,178

(1) Prorate revenue and airport customer service revenue are primarily reflected in the SkyWest Airlines and SWC segment.

(2) Segment profit (loss) is equal to operating income less interest expense.

The following represents the Company’s segment data for the six-month periods ended June 30, 2023 and 2022 (in thousands):

	Six months ended June 30, 2023
	SkyWest Airlines		SkyWest
	and SWC		Leasing		Consolidated
Operating revenues (1)	$	1,154,649	$	262,825	$	1,417,474
Operating expense		1,257,882		132,436		1,390,318
Depreciation and amortization expense		76,224		115,094		191,318
Interest expense		8,757		58,581		67,338
Segment profit (loss) (2)		(111,990)		71,808		(40,182)
Total assets (as of June 30, 2023)		2,570,050		4,545,724		7,115,774
Capital expenditures (including non-cash)		46,720		87,220		133,940

	Six months ended June 30, 2022
	SkyWest Airlines		SkyWest
	and SWC		Leasing		Consolidated
Operating revenues (1)	$	1,267,252	$	266,985	$	1,534,237
Operating expense		1,257,273		136,314		1,393,587
Depreciation and amortization expense		92,676		107,318		199,994
Interest expense		4,439		54,586		59,025
Segment profit (2)		5,540		76,085		81,625
Total assets (as of June 30, 2022)		3,011,236		4,325,411		7,336,647
Capital expenditures (including non-cash)		52,706		276,057		328,763

(1) Prorate revenue and airport customer service revenue are primarily reflected in the SkyWest Airlines and SWC segment.

(2) Segment profit (loss) is equal to operating income less interest expense.