SkyWest Q2 profit falls on higher fuel costs

Overview

• U.S. regional airline's Q2 revenue rose 7% yr/yr, net income declined on higher fuel costs

• Company approved $250 mln increase to stock repurchase program

• SkyWest secured agreement to purchase and operate 11 new E175 aircraft for American Airlines

Outlook

• SkyWest expects to invest in owning and operating 34 more E175s through end of 2028

• Company anticipates having 300 E175 aircraft in its fleet by end of 2027

• SkyWest scheduled to purchase 11 E175s for American Airlines with deliveries in 2026 and 2027

Result Drivers

• HIGHER BLOCK HOURS - Co said Q2 block hour production rose 5% yr/yr and 9% sequentially, reflecting increased fleet utilization and demand

• FUEL COSTS - Co said higher fuel cost per gallon in prorate business negatively impacted Q2 net income

• INCREMENTAL OPERATING COSTS - Co attributed higher operating expenses to increased direct operating costs from higher production and increased fuel costs

Company press release: ID:nBw6PTzVsa

Key Details

Analyst Coverage

• The current average analyst rating on the shares is "buy" and the breakdown of recommendations is 4 "strong buy" or "buy", 3 "hold" and no "sell" or "strong sell"

• The average consensus recommendation for the airlines peer group is "buy"

• Wall Street's median 12-month price target for SkyWest Inc is $115.00, about 20.2% above its July 22 closing price of $95.70

• The stock recently traded at 8 times the next 12-month earnings vs. a P/E of 8 three months ago

Reuters Recommended Reads

• July 23 - American Airlines cuts 2026 outlook as fuel shock overwhelms revenue gains

• July 22 - Southwest Airline lowers 2026 profit floor as fuel costs blunt pricing gains

• July 21 - Alaska Air Q2 swings to loss on fuel cost spike, offsetting revenue gains

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(This story was created using Reuters automation and AI based on LSEG and company data. It was checked and edited by a Reuters journalist prior to publication.)