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Operating Revenues | 3 Months Ended
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Mar. 31, 2026
Operating Revenues |
Operating Revenues | (2) Operating Revenues The Company recognizes revenue under its flying agreements and under its lease, airport services and other service agreements when the service is provided under the applicable agreement. Under the Company’s fixed-fee agreements (referred to as “capacity purchase” agreements) with United Airlines, Inc. (“United”), Delta Air Lines, Inc. (“Delta”), American Airlines, Inc. (“American”) and Alaska Airlines, Inc. (“Alaska”) (each, a “major airline partner”), the major airline partner generally pays the Company a fixed-fee for each departure, flight hour (measured from takeoff to landing, excluding taxi time) or block hour (measured from takeoff to landing, including taxi time) incurred, and an amount per aircraft in service each month, with additional incentives based on flight completion, on-time performance or other performance metrics. The major airline partner also directly pays for or reimburses the Company for certain direct expenses incurred under the capacity purchase agreement, such as fuel, airport landing fees and airport rents. Under the capacity purchase agreements, the Company’s performance obligation is met when each flight is completed, measured in completed block hours, and is reflected in flying agreements revenue. The transaction price for the capacity purchase agreements is determined from the fixed-fee consideration, incentive consideration and directly reimbursed expenses earned as flights are completed over the agreement term. For the three months ended March 31, 2026 and 2025, capacity purchase agreements represented approximately 82.8% and 85.7% of the Company’s flying agreements revenue, respectively. Under the Company’s “prorate” agreements, the major airline partner and the Company negotiate a passenger fare proration formula, pursuant to which the Company receives a percentage of the ticket revenues for those passengers traveling for one portion of their trip on a Company aircraft and the other portion of their trip on the major airline partner. Under the Company’s prorate agreements, the performance obligation is met and revenue is recognized when each flight is completed based upon the portion of the prorate passenger fare the Company determines that it will receive for each completed flight. The transaction price for the prorate agreements is determined from the proration formula derived from each passenger ticket amount on each completed flight over the agreement term. Certain routes under the Company’s prorate agreements are subsidized by the U.S. Department of Transportation under the Essential Air Service (“EAS”) program, a program created to ensure small communities in the United States maintain a minimum level of scheduled air service. The EAS contracts are generally between two and three years in duration and the Company recognizes EAS revenue on a per-completed-flight basis pursuant to the terms of each contract. In the event the Company receives upfront consideration for an EAS contract, the Company recognizes the revenue on a per-completed flight basis over the EAS contract term. Under the Company’s charter operations, SWC, the Company negotiates a fare for the charter flight with the customer. The performance obligation is met and revenue is recognized upon completion of the flight. For the three months ended March 31, 2026 and 2025, prorate agreements and SWC revenue represented approximately 17.2% and 14.3% of the Company’s flying agreements revenue, respectively. The following table disaggregates the Company’s flying agreements revenue by type for the three months ended March 31, 2026 and 2025 (in thousands):
​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | For the three months ended March 31,
​ | ​ ​ ​ | 2026 | ​ ​ ​ | 2025
Capacity purchase agreements flight operations revenue (non-lease component) | ​ | $ | 633,869 | ​ | $ | 639,153
Capacity purchase agreements fixed aircraft lease revenue | ​ | ​ | 104,455 | ​ | ​ | 110,988
Capacity purchase agreements variable aircraft lease revenue | ​ |  | 71,373 | ​ |  | 35,039
Prorate agreements and SWC revenue | ​ |  | 168,188 | ​ |  | 130,814
Flying agreements revenue | ​ | $ | 977,885 | ​ | $ | 915,994
​ The Company allocates the total consideration received under its capacity purchase agreements between lease and non-lease components based on stand-alone selling prices. A portion of the Company’s compensation under its capacity purchase agreements relates to operating the aircraft, identified as the non-lease component of the capacity purchase agreement. The Company recognizes revenue attributed to the non-lease component received as fixed-fees for each departure, flight hour or block hour on an as-completed basis for each reporting period. The Company recognizes revenue attributed to the non-lease component received as fixed monthly payments per aircraft proportionate to the number of block hours completed during each reporting period, relative to the estimated number of block hours the Company anticipates completing over the remaining contract term. Accordingly, the Company’s revenue recognition will likely vary from the timing of cash receipts under the Company’s capacity purchase agreements. The Company refers to cash received under its capacity purchase agreements prior to recognizing revenue as “deferred revenue,” and the Company refers to revenue recognized prior to billing its major airline partners under its capacity purchase agreements as “unbilled revenue” for each reporting period. A portion of the Company’s compensation under its capacity purchase agreements is designed to reimburse the Company for certain aircraft ownership costs. The consideration for aircraft ownership costs varies by agreement but is intended to compensate the Company for providing its aircraft under the contract. The consideration received for the use of the aircraft under the Company’s capacity purchase agreements is accounted for as lease revenue, inasmuch as the agreements identify the “right of use” of a specific type and number of aircraft over a stated period of time. The lease revenue associated with the Company’s capacity purchase agreements is accounted for as an operating lease and is reflected as flying agreements revenue on the Company’s consolidated statements of comprehensive income. The Company recognizes fixed monthly lease payments as lease revenue using the straight-line basis over the capacity purchase agreement term and variable lease payments in the period when the block hours are completed. The Company has not separately stated aircraft rental income and aircraft rental expense in the consolidated statement of comprehensive income because the use of the aircraft is not a separate activity of the total service provided under the capacity purchase agreements. The following table summarizes the amount of deferred revenue, recognition of previously deferred revenue and change in unbilled revenue for revenue recognized that is in excess of (or less than) the fixed monthly non-lease and lease payments received under the Company’s capacity purchase agreements for the three months ended March 31, 2026 and 2025 (in thousands):
​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | For the three months ended March 31,
​ | ​ | 2026 | ​ ​ ​ | 2025
Non-lease fixed monthly payments: | ​ ​ ​ | ​ | ​ | ​ | ​ | ​
Revenue deferred on fixed monthly payments received | ​ | $ | — | ​ | $ | —
Revenue recognized that was deferred in a prior period | ​ |  | 17,491 | ​ |  | 9,460
Increase (decrease) in unbilled revenue | ​ | ​ | (1,942) | ​ | ​ | 88
Total non-lease revenue recognized in excess of fixed monthly payments received during the period | ​ | $ | 15,549 | ​ | $ | 9,548
Lease fixed monthly payments: | ​ | ​ | ​ | ​ | ​ | ​
Revenue deferred on fixed monthly payments received | ​ | $ | — | ​ | $ | —
Revenue recognized that was deferred in a prior period | ​ | ​ | 7,257 | ​ | ​ | 2,235
Increase in unbilled revenue | ​ |  | 1,108 | ​ |  | 1,127
Total lease revenue recognized in excess of fixed monthly payments received during the period | ​ | $ | 8,365 | ​ | $ | 3,362
Total revenue recognized in excess of fixed monthly payments received during the period | ​ | $ | 23,914 | ​ | $ | 12,910
The Company's unbilled revenue and deferred revenue balances were reflected in the following balance sheet line items at March 31, 2026 and December 31, 2025 (in thousands):
​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | March 31, | ​ ​ ​ | December 31,
​ | ​ | 2026 | ​ ​ ​ | 2025
Unbilled revenue - other current assets | ​ | $ | 1,133 | ​ | $ | 1,133
Unbilled revenue - other long-term assets | ​ | ​ | 25,827 | ​ | ​ | 26,661
Total unbilled revenue | ​ | $ | 26,960 | ​ | $ | 27,794
​ | ​ | ​ | ​ | ​ | ​ | ​
Deferred revenue - other current liabilities | ​ | ​ | 85,785 | ​ | ​ | 163,894
Deferred revenue - other long-term liabilities | ​ | ​ | 181,870 | ​ | ​ | 128,509
Total deferred revenue | ​ | $ | 267,655 | ​ | $ | 292,403
Net deferred revenue balance | ​ | $ | 240,695 | ​ | $ | 264,609
​ The Company’s capacity purchase and prorate agreements include weekly provisional cash payments from the respective major airline partner based on a projected level of flying each month. The Company and each major airline partner subsequently reconcile these payments to the actual completed flight activity on a monthly or quarterly basis. In several of the Company’s agreements, the Company is eligible to receive incentive compensation upon the achievement of certain performance criteria. The incentives are defined in the agreements and are measured and determined on a monthly or annual basis. At the end of each period during the term of an agreement, the Company calculates the incentives achieved during that period and recognizes revenue attributable to that agreement accordingly, subject to the variable constraint guidance under ASC Topic 606. As of March 31, 2026, the Company had 500 aircraft in scheduled service or under contract pursuant to code-share agreements. The Company’s fleet includes Embraer E175 regional jet aircraft (“E175”), Canadair CRJ900 regional jet aircraft (“CRJ900”), Canadair CRJ700 regional jet aircraft (“CRJ700”), a 50-seat configuration of the CRJ700 aircraft, commonly referred to as a “CRJ550,” and Canadair CRJ200 regional jet aircraft (“CRJ200”). The following table summarizes the significant provisions of each code-share agreement the Company has with each major airline partner through SkyWest Airlines: ​
​ | ​ | ​ | ​ | ​ | ​ | ​
United Express Agreements | ​ | ​ | ​ | ​ | ​ | ​
Agreement | ​ | Aircraft type | ​ | Number of Aircraft | ​ | Term / Termination Dates
United Express Agreements | ​ | • E175 | ​ | 121 | ​ | Individual aircraft have scheduled
(capacity purchase agreements) | ​ | • CRJ700 | ​ | 8 | ​ | removal dates under the agreements
​ | ​ | • CRJ550 | ​ | 30 | ​ | between 2026 and 2035
​ | ​ | • CRJ200 | ​ | 34 | ​ | ​
​ | ​ | ​ | ​ | ​ | ​ | ​
United Express Prorate Agreement | ​ | • CRJ200 | ​ | 33* | ​ | Terminable with 120-day notice
Total under United Express Agreements | ​ | ​ | ​ | 226 | ​ | ​
​ | ​ | ​ | ​ | ​ | ​ | ​
Delta Connection Agreements | ​ | ​ | ​ | ​ | ​ | ​
Agreement | ​ | Aircraft type | ​ | Number of Aircraft | ​ | Term / Termination Dates
Delta Connection Agreement | ​ | • E175 | ​ | 87 | ​ | Individual aircraft have scheduled
(capacity purchase agreement) | ​ | • CRJ900 | ​ | 34 | ​ | removal dates under the agreement
​ | ​ | • CRJ700 | ​ | 2 | ​ | between 2026 and 2035
​ | ​ | ​ | ​ | ​ | ​ | ​
Delta Connection Prorate Agreement | ​ | • CRJ550 | ​ | 16* | ​ | Terminable with 30-day notice
Total under Delta Connection Agreements | ​ | ​ | ​ | 139 | ​ | ​
​ | ​ | ​ | ​ | ​ | ​ | ​
American Agreements | ​ | ​ | ​ | ​ | ​ | ​
Agreement | ​ | Aircraft type | ​ | Number of Aircraft | ​ | Term / Termination Dates
American Agreement | ​ | • E175 | ​ | 20 | ​ | Individual aircraft have scheduled
(capacity purchase agreement) | ​ | • CRJ700 | ​ | 68 | ​ | removal dates under the agreement
​ | ​ | ​ | ​ | ​ | ​ | between 2027 and 2032
​ | ​ | ​ | ​ | ​ | ​ | ​
American Prorate Agreement | ​ | • CRJ900 | ​ | 4* | ​ | Terminable with 180-day notice
Total under American Agreements | ​ | ​ | ​ | 92 | ​ | ​
​ | ​ | ​ | ​ | ​ | ​ | ​
Alaska Agreement | ​ | ​ | ​ | ​ | ​ | ​
Agreement | ​ | Aircraft type | ​ | Number of Aircraft | ​ | Term / Termination Dates
Alaska Agreement | ​ | • E175 | ​ | 43 | ​ | Individual aircraft have scheduled
(capacity purchase agreement) | ​ | ​ | ​ | ​ | ​ | removal dates under the agreement
​ | ​ | ​ | ​ | ​ | ​ | between 2030 and 2038
* | The Company’s prorate agreements are based on specific routes, not a specific aircraft count. The number of aircraft listed above for each prorate agreement approximates the number of aircraft the Company uses to serve the prorate routes.
In addition to the contractual agreements described above, as of March 31, 2026, SkyWest Airlines reached agreements with certain major airline partners to place additional aircraft under capacity purchase agreements as summarized below. The Company is coordinating with its major airline partners regarding the timing of upcoming fleet deliveries and the delivery timing referenced below is subject to change.
| ● | Capacity purchase agreement with United for eight new E175 aircraft, which are scheduled for delivery in 2026. The Company anticipates financing the aircraft through debt.
| ● | Capacity purchase agreement with Delta for 16 new E175 aircraft. 10 new E175 aircraft are currently scheduled for delivery in 2027 and six new E175 aircraft are scheduled for delivery in 2028. The Company anticipates financing the aircraft through debt.
| ● | Capacity purchase agreement with United for 18 used CRJ550 aircraft that are anticipated to be placed into service by 2027. Pursuant to this agreement, the Company is in the process of converting its owned CRJ700s to CRJ550s.
When an aircraft is scheduled for expiration from a capacity purchase agreement, the Company may, as practical under the circumstances, negotiate an extension with the respective major airline partner, negotiate the placement of the aircraft with another major airline partner, return the aircraft to the major airline partner when the aircraft is provided by the major airline partner, place owned aircraft for sale or pursue other uses for the aircraft. Other uses for the aircraft may include placing the aircraft in a prorate agreement, leasing the aircraft to a third party or disassembling aircraft components such as the engines and parts to be used as spare inventory. Lease, airport services and other revenues primarily consist of revenue generated from aircraft and spare engines leased to third parties, maintenance services provided to third parties and airport customer service agreements, such as gate and ramp agent services at various airports where the Company has been contracted by third parties to provide such services. The following table represents the Company’s lease, airport services and other revenues for the three months ended March 31, 2026 and 2025 (in thousands): ​
​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | For the three months ended March 31,
​ | ​ ​ ​ | 2026 | ​ ​ ​ | 2025
Operating lease fixed revenue | ​ | $ | 17,742 | ​ | $ | 16,065
Operating lease variable revenue | ​ | ​ | 7,445 | ​ | ​ | 7,009
Airport customer service and other revenue | ​ | ​ | 10,105 | ​ | ​ | 9,387
Lease, airport services and other | ​ | $ | 35,292 | ​ | $ | 32,461
​ The following table summarizes future minimum rental income under operating leases primarily related to leased aircraft and engines that had remaining non-cancelable lease terms as of March 31, 2026 (in thousands):
​ | ​ | ​ | ​
April 2026 - December 2026 | ​ ​ ​ | $ | 36,703
2027 | ​ |  | 45,159
2028 | ​ |  | 44,276
2029 | ​ |  | 42,748
2030 | ​ |  | 26,459
Thereafter | ​ |  | 2,723
Total future minimum rental income under operating leases | ​ | $ | 198,068
​ Of the Company’s $5.9 billion of property and equipment, net of accumulated depreciation, as of March 31, 2026, $240.8 million of regional jet aircraft and spare engines were leased to third parties under operating leases. The Company’s mitigation strategy for the residual asset risks of these assets includes leasing aircraft and engine types that can be operated by the Company in the event of a default. Additionally, the operating leases typically have specified lease return condition requirements paid by the lessee to the Company and the Company typically maintains inspection rights under the leases. The transaction price for airport customer service agreements is determined from an agreed-upon rate by location applied to the applicable number of flights handled by the Company over the agreement term. The Company’s operating revenues could be impacted by several factors, including changes to the Company’s code-share agreements with its major airline partners, changes in flight schedules, contract modifications resulting from contract renegotiations, the Company’s ability to earn incentive payments contemplated under the Company’s code-share agreements and settlement of reimbursement disputes with the Company’s major airline partners. Other ancillary revenues commonly associated with airlines, such as baggage fee revenue, ticket change fee revenue and the marketing component of the sale of mileage credits, are retained by the Company’s major airline partners on flights that the Company operates under its code-share agreements. Allowance for Credit Losses The Company has an allowance for credit losses associated with its accounts receivable, notes receivable and third-party debt guarantees. The Company monitors publicly available credit ratings for entities for which the Company has a significant receivable balance or guarantee. As of March 31, 2026, the Company had gross receivables of $176.6 million in current assets and gross receivables of $256.7 million in other long-term assets. As of December 31, 2025, the Company had gross receivables of $163.3 million in current assets and gross receivables of $266.3 million in other long-term assets. The Company has established credit loss reserves based on publicly available historic default rates issued by a third party for companies with similar credit ratings, factoring in the amount and term of the Company’s respective accounts receivable, notes receivable or guarantees. During the three months ended March 31, 2026, there were no significant changes in the outstanding accounts receivable, notes receivable, guarantees or credit ratings of the entities. The following table summarizes the changes in allowance for credit losses (in thousands):
​ | ​ | ​ | ​
​ | ​ ​ ​ | Allowance for Credit Losses
Balance at December 31, 2025 | ​ | $ | 22,509
Adjustments to credit loss reserves | ​ | ​ | (45)
Write-offs charged against allowance | ​ | ​ | (94)
Balance at March 31, 2026 | ​ | $ | 22,370
​

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