SkyWest (SKYW)

What Moves the Stock

1. 01CPA renewal announcements and contract rate negotiations with United, Delta, American - multi-year extensions with improved economics drive 10-15% stock moves
2. 02Pilot staffing levels and regional pilot shortage dynamics - ability to fully staff aircraft determines fleet utilization and revenue capture
3. 03Aircraft delivery schedules and fleet transition plans - E175 additions (higher margins) versus CRJ retirements impact profitability trajectory
4. 04Major carrier domestic capacity plans - United and Delta regional flying growth directly translates to SkyWest block hour demand
5. 05Operational performance metrics - completion factors below 98% trigger CPA penalty clauses and signal execution issues
6. 06United Express operations (~45-50% of revenue) - CRJ and E175 flying under United capacity purchase agreements
7. 07Delta Connection operations (~30-35% of revenue) - CRJ fleet serving Delta's regional network
8. 08American Eagle and Alaska operations (~15-20% of revenue) - E175 aircraft under long-term CPAs

SKYW Chart

My Notes

• value - Trades at 6.8x EV/EBITDA versus mainline carriers at 8-10x despite lower volatility from CPA model.
• Rising interest rates increase aircraft financing costs for new deliveries and lease renewals, compressing returns on capital deployed.
• Watch on earnings: WTI crude oil prices (DCOILWTICO) - while fuel costs pass through CPAs, extreme volatility affects major carrier capacity planning decisions, TSA daily passenger throughput trends - leading indicator for major carrier domestic capacity adjustments that drive regional flying demand, Regional airline pilot hiring and attrition rates - determines fleet utilization capability and wage inflation trajectory.