SkyWest : Announces First Quarter 2019 Profit

NEWS RELEASE

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SkyWest, Inc. Announces First Quarter 2019 Profit

First Quarter Highlights:

∙Net income of $88 million, or $1.69 per diluted share

∙Adjusted net income of $69 million, or $1.33 per diluted share

∙Q1 2019 adjusted net income excludes the gain on sale of ExpressJet, net of other special items1

∙Secured a multi-year extension on 38 CRJ700 aircraft with American; SkyWest also adding two used CRJ700s to its American contract

∙Secured a conditional agreement to lease 29 CRJ700 aircraft to a third-party for a ten-year term

ST. GEORGE, UTAH, April 25, 2019 -- SkyWest, Inc. (NASDAQ: SKYW) ("SkyWest") today reported financial and operating results for Q1 2019, including net income of $88 million, or $1.69 per diluted share, compared to net income of $54 million, or $1.03 per diluted share, for Q1 2018. Adjusted net income in Q1 2019 was $69 million, up 27% from Q1 2018 primarily due to SkyWest's ongoing fleet transition, as SkyWest has added 43 new aircraft since Q1 2018, and reduced aircraft ownership costs resulting from early lease buyouts executed in early 2019.

Commenting on the results, Chip Childs, Chief Executive Officer and President of SkyWest, said "This quarter was significant for SkyWest as we move forward as one airline with a smaller, but more efficient footprint. Our team performed well this quarter through a series of severe weather events. We are encouraged with our progress and are working together with our

1See Reconciliation of non-GAAP financial measures section of this release for more information

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14,000 employees to deliver the best possible product to our partners."

Financial Highlights

Revenue was $724 million in Q1 2019, down from $783 million in Q1 2018 due to the sale of ExpressJet Airlines ("ExpressJet") in January 2019. Excluding ExpressJet revenue in both periods, revenue increased to $700 million in Q1 2019 from $622 million in Q1 2018 primarily from the impact of adding 35 new E175 and eight new CRJ900 aircraft since Q1 2018.

Operating expenses were $627 million in Q1 2019, down from $695 million in Q1 2018 due to the sale of ExpressJet. Excluding ExpressJet operating expenses in both periods, operating expenses increased to $599 million in Q1 2019 from $528 million in Q1 2018, primarily from the additional aircraft placed into service, higher labor costs and special item operating expenses in Q1 2019.

The adjusted results for the quarter exclude $24.7 million of pre-tax earnings comprised of the gain on the sale of ExpressJet of $46.6 million (pre-tax) and a $21.9 million (pre-tax) expense primarily due to a non-cashwrite-off of aircraft manufacturer part credits forfeited to settle future lease return obligations.

Operational Update

Flying contract extension

SkyWest announced today that it has agreed to a multi-year extension with American Airlines ("American") on 38 CRJ700 aircraft. These aircraft previously had contract maturities scheduled to begin in late 2019. SkyWest also expects to add two used CRJ700 aircraft to the American contract in Q2 2019 under a multi-year term.

Lease agreement with a third-party for 29 CRJ700 aircraft

SkyWest also announced today that it has agreed to lease 29 CRJ700 aircraft to a third-party for a ten-year term, subject to the finalization of their flying contract. SkyWest anticipates the aircraft will be placed under lease in increments from mid-2019 to mid-2020.

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Delivery schedule under previously announced agreements

E175 aircraft to be financed by SkyWest and operated for Delta Air Lines ("Delta") and Alaska Airlines ("Alaska"):

∙Took delivery of one aircraft during Q1 2019 (Delta contract)

∙Scheduled to take delivery of four aircraft in Q2 2019 (Delta contract)

∙Scheduled to take delivery of four aircraft in mid-2020 (Delta contract)

∙Scheduled to take delivery of three aircraft in 2021 (Alaska contract)

SkyWest expects to remove a used CRJ900 aircraft from its contract with Delta as each of these ERJ175 aircraft is placed into service with Delta (total of nine CRJ900 expected removals). As previously announced, SkyWest anticipates leasing five CRJ900s to a third party under a six-year term and returning four CRJ900s to a lessor following removal of service with Delta.

CRJ900 aircraft to be financed by Delta and operated by SkyWest for Delta:

∙Took delivery of three aircraft during Q1 2019

∙Scheduled to take delivery of four aircraft in mid-2019

∙Scheduled to take delivery of eight aircraft in 2020

SkyWest expects to remove a used CRJ700 from its contract with Delta as each of these CRJ900 financed by Delta is placed into service. As previously announced, SkyWest anticipates transitioning the CRJ700s removed under this arrangement with Delta to an agreement with American.

Joint venture with Regional One

SkyWest entered into a joint venture with Regional One during Q1 2019. The primary purpose of the joint venture is to lease spare engines to third parties. SkyWest anticipates initiating transactions through the joint venture beginning in Q2 2019, including the transfer of 14 engines into the joint venture.

Previously announced transactions that closed in Q1 2019

In January 2019, SkyWest completed the previously announced sale of ExpressJet to ManaAir, LLC. The transaction was completed in two parts, through an asset sale and stock sale, for an aggregate sales price of $77 million. SkyWest loaned $26 million to ManaAir in conjunction with

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the closing.

SkyWest also completed the previously-announced early leveraged lease buyout on 16 CRJ700s and 36 CRJ200s. SkyWest used $110 million in Q1 2019 to acquire these aircraft off lease. SkyWest assumed no debt on these aircraft.

Capital and Liquidity

SkyWest had $544 million in cash and marketable securities at March 31, 2019, down from $689 million at December 31, 2018. During the first quarter of 2019, SkyWest:

∙Used $110 million to acquire 52 CRJ aircraft under an early lease buyout

∙Used $90 million to acquire 16 used CRJ700s previously operated and leased by a SkyWest entity. SkyWest anticipates leasing the majority of airframes and engines to third parties and using a portion of aircraft components as spare parts.

∙Received $51 million net cash from the sale of ExpressJet

∙Used $25 million to repurchase stock, of which $21 million was purchased under

SkyWest's $250 million share repurchase program approved during Q1 2019

∙Used $4 million toward the purchase of one E175 aircraft

∙Used $28 million for other capital investments, primarily related to spare engines, aircraft parts and maintenance assets

Total debt at March 31, 2019 was $3.1 billion, down from $3.2 billion as of December 31, 2018. Q1 2019 ending debt balance included debt issued for one E175 aircraft acquired during the quarter, offset by principal payments.

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Reconciliation to Adjusted Net Income and Diluted Earnings per Share (unaudited)

(Dollars in thousands, except per diluted share)

			For the three months ended March 31, 2019
				Income tax
		Pre-tax			benefit						Net income per
		income			(expense)		Net income				diluted share
GAAP income	$	114,444	$		(26,263)	$		88,181			$	1.69
Q1 2019 adjustments (1)		(24,656)			5,646			(19,010)
Adjusted income	$	89,788	$		(20,617)	$		69,171			$	1.33

(1)Excludes the gain on the sale of ExpressJet of $46.6 million (pre-tax); also excludes special item operating expenses of $21.9 million (pre-tax), primarily consisting of a non-cashwrite-off of aircraft manufacturer part credits that SkyWest forfeited to settle future lease return obligations.

The non-GAAP information presented in this release should not be considered in isolation or as a substitute for any measure derived in accordance with GAAP. The non-GAAP information may also be inconsistent with the manner in which similar measures are derived or used by other companies. Management uses such non-GAAP information for financial and operational decision-making purposes and as a means to evaluate period-over-period comparisons and in forecasting SkyWest's business going forward. Management believes that the presentation of such non-GAAP information, when considered in conjunction with the most directly comparable GAAP information, provides additional useful comparative information for investors in their assessment of the underlying performance of SkyWest's business without regard to these items.

About SkyWest

SkyWest, Inc. is the holding company for SkyWest Airlines and SkyWest Leasing, an aircraft leasing company. SkyWest Airlines has a fleet of nearly 500 aircraft connecting millions of passengers each month to over 250 destinations and provides commercial air service in cities throughout North America with more than 2,100 daily flights. SkyWest Airlines operates through partnerships with United Airlines, Delta Air Lines, American Airlines and Alaska Airlines to carry more than 35 million passengers annually. Based in St. George, Utah, SkyWest continues to set the standard for excellence across the regional industry with exceptional value for customers, shareholders and its nearly 14,000 employees.

SkyWest will host its conference call to discuss first quarter 2019 results today, April 25, 2019, at 2:30 p.m. Mountain Time. The conference call number is 1-877-418-5293 for domestic callers, 1-866-605-3852 for Canada callers and 1-412-717-9593 for other international callers. Please call up to ten minutes in advance to ensure you are connected prior to the start of the call. The conference call will also be available live on the Internet at https://www.webcaster4.com/Webcast/Page/1088/30064. This press release and additional information regarding SkyWest, including access information for the digital rebroadcast of the first quarter 2019 earnings call, participation at investor conferences, investor presentations and monthly traffic statistic releases, can be accessed at inc.skywest.com.

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