Segment Reporting

9 Months Ended

Sep. 30, 2023

Segment Reporting

Segment Reporting

(6) Segment Reporting

The Company’s two reporting segments consist of (1) the operations of 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 September 30, 2023 and 2022 (in thousands):

	Three months ended September 30, 2023
	SkyWest Airlines		SkyWest
	and SWC		Leasing		Consolidated
Operating revenues (1)	$	626,780	$	139,391	$	766,171
Operating expense		652,599		64,281		716,880
Depreciation and amortization expense		37,320		59,240		96,560
Interest expense		4,450		28,093		32,543
Segment profit (loss) (2)		(30,269)		47,017		16,748
Total assets (as of September 30, 2023)		2,557,850		4,501,268		7,059,118
Capital expenditures (including non-cash)		33,436		14,816		48,252

	Three months ended September 30, 2022
	SkyWest Airlines		SkyWest
	and SWC		Leasing		Consolidated
Operating revenues (1)	$	651,494	$	137,949	$	789,443
Operating expense		649,466		64,401		713,867
Depreciation and amortization expense		43,787		53,646		97,433
Interest expense		4,067		29,216		33,283
Segment profit (loss) (2)		(2,039)		44,332		42,293
Total assets (as of September 30, 2022)		2,973,223		4,480,981		7,454,204
Capital expenditures (including non-cash)		12,419		208,667		221,086

(1) Prorate revenue and airport customer service revenue are included 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 nine-month periods ended September 30, 2023 and 2022 (in thousands):

	Nine months ended September 30, 2023
	SkyWest Airlines		SkyWest
	and SWC		Leasing		Consolidated
Operating revenues (1)	$	1,781,429	$	402,216	$	2,183,645
Operating expense		1,910,481		196,717		2,107,198
Depreciation and amortization expense		113,544		174,334		287,878
Interest expense		13,207		86,674		99,881
Segment profit (loss) (2)		(142,259)		118,825		(23,434)
Total assets (as of September 30, 2023)		2,557,850		4,501,268		7,059,118
Capital expenditures (including non-cash)		80,156		102,036		182,192

	Nine months ended September 30, 2022
	SkyWest Airlines		SkyWest
	and SWC		Leasing		Consolidated
Operating revenues (1)	$	1,918,746	$	404,934	$	2,323,680
Operating expense		1,906,739		200,715		2,107,454
Depreciation and amortization expense		136,463		160,964		297,427
Interest expense		8,506		83,802		92,308
Segment profit (2)		3,501		120,417		123,918
Total assets (as of September 30, 2022)		2,973,223		4,480,981		7,454,204
Capital expenditures (including non-cash)		65,125		484,724		549,849

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

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