SkyWest Inc (SKYW) 2025 Q4 法說會逐字稿

Hello, and welcome, everyone, to the SkyWest Inc. fourth-quarter and full-year 2025 results call. Today's conference is being recorded. (Operator Instructions)

At this time I would like to turn the conference over to Rob Simmons, Chief Financial Officer. Please go ahead.

Thanks, [Audra], and thanks, everyone, for joining us on the call today. As the operator indicated, this is Rob Simmons, SkyWest's Chief Financial Officer. On the call with me today are Chip Childs, President and Chief Executive Officer; Wade Steel, Chief Commercial Officer; and Eric Woodward, Chief Accounting Officer.

I'd like to start today by asking Eric to read the Safe Harbor. Then I will turn the time over to Chip for some comments. Following Chip, I will take us through the financial results, then Wade will discuss the fleet and related flying arrangements. Following Wade, we'll have the customary Q&A session with our sell-side analysts.

Eric?

Today's discussion contains forward-looking statements that represent our current beliefs, expectations and assumptions regarding future events and are subject to risks and uncertainties. We assume no obligation to update any forward-looking statement, whether as a result of new information, future events or otherwise. Actual results will likely vary and may vary materially from those anticipated, estimated or projected for a number of reasons. Some of the factors that may cause such differences are included in our most recent Form 10-K and other reports and filings with the Securities and Exchange Commission.

And now I'll turn the call over to Chip.

Thank you, Rob and Eric. Good afternoon, everyone, and thank you for joining us on the call today. Today, SkyWest reported net income of $91 million or $2.21 per diluted share for the fourth quarter of 2025 and full-year net income of $428 million or $10.35 per diluted share. These results reflect the challenges of the fourth quarter as well as the overall improved production in 2025 and compared to the previous year.

For the 2025 year, our model converted a growth of 15% in production to a 31% increase in pretax income, reflecting the strong operating leverage within our model. We're also pleased to announce extensions on key flying agreements 40 E175 with United and 13 E175 with Delta. These agreements continue to strengthen our partnerships and demonstrate the ongoing long-term demand for our product.

Our fleet flexibility has never been more important. And while our E175 flying agreements are further solidified, we continue to leverage our extensive CRJ assets. Our ongoing investments in and the diversity of our fleet ensure we're well positioned to adapt to future market demands.

I'm humbled and honored that SkyWest was named a Fortune world's most admired companies for 2026, a distinction our people helped us earn for the third time now. SkyWest was named in the top 10 and the only regional airline on the list. This is an outstanding accomplishment, and I'm so proud of our exceptional team.

Throughout 2025, SkyWest Airlines achieved more than 250 days of 100% controllable completion, a solid team accomplishment during the year we regularly reached over 2,500 daily scheduled departures. The fourth quarter was unusually challenging starting out with the government shutdown and mandatory flight reductions and leading right into the peak holiday season travel.

I want to thank our team of over 15,000 aviation professionals for their continued teamwork and dedication to excellence. As expected, we were disproportionately affected with more canceled flights than our major partners during the mandatory flight reductions, and we experienced a modest impact from the shutdown. Rob will talk more about that in a minute.

We continue executing to derisk our model. The contract extensions we announced today with United and Delta deliver ongoing revenue stability. With all of our dual class suite, both CRJ and ERJ now under contract, we have no major E175 contract expirations until late 2028. Additionally, over the past three years, we've reduced our debt by $1 billion. All this work continues to place us in a solid position of long-term strength.

The investments we're making today set us up well for 2027 and beyond. SkyWest continues to lead our segment of the industry in service and in value of our diverse assets. We remain disciplined and steady as we execute on our growth opportunities by delivering on significant prorate demand, investing and fully utilize our existing fleet and preparing to receive our deliveries in the coming years for a total of nearly 300 E175 by the end of 2028.

We spent years strengthening our balance sheet and fleet flexibility as well as reinvesting in our future growth. We continue to play the long game and invest in our fleet and our future to ensure we're in the best possible position to respond to market demand in a way that no one else can.

Rob will now take us through the financial data.

Today, we reported a fourth-quarter GAAP net income of $91 million or $2.21 earnings per share. Q4 pretax income was $125 million. Our weighted average share count for Q4 was 41.3 million, and our effective tax rate was 27%.

Let's start today with revenue. Total Q4 revenue of $1 billion is down seasonally from $1.1 billion in Q3 2025 and up 8% from $944 million in Q4 2024. Q4 revenue includes contract revenue of $803 million down from $844 million in Q3 2025 and up from $786 million in Q4 2024. Prorate and Charter revenue was $167 million in Q4, flat with Q3 2025 and up from $126 million in Q4 2024. Leasing and other revenue was $54 million in Q4, up from $39 million in Q3 and up from $32 million in Q4 2024 driven by discrete maintenance services provided to third parties.

For comparability purposes, the mandated flight cancellations from the government shutdown in November negatively impacted our Q4 2025 results by $7 million or $0.13 in earnings per share. Additionally, these Q4 GAAP results include the effect of recognizing $5 million of previously deferred revenue this quarter down from the $17 million recognized in Q3 2025 and $20 million recognized in Q4 2024. As of the end of Q4, we have $265 million of cumulative deferred revenue that will be recognized in future periods.

As we close out 2025, here are a few financial highlights to recap our 2025 year. Our pretax income in 2025 of $566 million was up 31% from 2024 on a 15% increase in block hours, reflecting the strong operating leverage in our model. Our EBITDA for 2025 was $982 million, up over $100 million from 2024. Our free cash flow for 2025 was over $400 million providing the liquidity to invest in our long-term CRJ fleet initiatives and other accretive capital deployment opportunities.

We repaid $492 million of debt in 2025, part of a 10% reduction to our debt balance since the end of 2024, including the effect from seven new E175s we financed in 2025. We ended Q4 with debt of $2.4 billion, down from $2.7 billion as of 12/31/2024. We used $85 million in 2025 per share repurchases, doubling our investment from 2024. We bought nearly 850,000 shares in 2025 and up 50% from the shares bought in 2024.

Now let's discuss the balance sheet. We ended the quarter with cash of $707 million down from $753 million last quarter and down from $802 million at Q4 2024. The ending cash balance for the quarter included the effects from repaying $155 million in debt, investing $214 million in CapEx, including the purchase of five E175s and buying back 268,000 shares of SkyWest stock in Q4 for $27 million. As of December 31, we had $213 million remaining under our current share repurchase authorization.

Cash flow is obviously an important driver of our capital deployment strategy. Over the last two years, we generated nearly $1 billion in free cash flow and deployed it primarily to delever and derisk the balance sheet to the benefit of our partners, our employees, and our shareholders. Our balance sheet and liquidity are powerful tools as we pursue a variety of growth and capital opportunities for 2026 and beyond including acquiring and financing 29 additional E175s by the end of 2028 and continuing to pay down our debt.

As we remain focused on improving our return on invested capital, we'd like to highlight the following: both our debt net of cash and leverage ratios continue at favorable levels and are at their lowest point in over a decade. Our total debt level is $1 billion lower today than it was at the end of 2022 in spite of acquiring and debt financing 14 E175s during that time.

The total 2025 capital expenditures funding our growth initiatives was approximately $580 million, including the purchase of seven new E175s, CRJ 900 airframes and aircraft and engines supporting our CRJ550 opportunity. We expect to take nine new E175s during 2026, and we anticipate approximately $600 million to $625 million in total CapEx in 2026, approximately flat with 2025 except for two incremental 175 deliveries.

Consistent with our practice, we're not giving any specific EPS guidance today. But let me update you on some commentary on 2026 we gave last quarter. For 2026, we now expect to see mid-single-digit percentage growth in block hours over 2025, moderately up from the color we provided last quarter. We also now anticipate our earnings per share for 2026 will be in the mid-$11 area, up modestly from our expectation last quarter.

In addition to this full year EPS color, we would expect sharper quarterly seasonality, a bit more like pre-COVID patterns with our Q1 2026 EPS being flat to down from Q4 2025 GAAP EPS, and with Q2 and Q3 being the strongest quarters of the year. For modeling purposes, we anticipate our maintenance activity in 2026 will continue approximately at current rates as we invest in bringing more aircraft back into service. We also anticipate our effective tax rate will be approximately 24% for 2026, similar to 2025, including a lower expected rate in Q1 and than the remaining quarters.

We are optimistic about our growth possibilities going into 2026, including the following three focus areas. First, growth in our ability to increase service to underserved communities, driven partially by the redeployment of approximately 20 parked dual-class CRJ aircraft and strong utilization of the existing fleet. Second, good demand for our prorate product. And third, placing nine new E175s into service for United and Alaska by the end of 2026 and 16 new E175s for Delta in 2027 and 2028.

We believe that we are positioned to drive long-term total shareholder returns by deploying our strong balance sheet and free cash flow generation against a variety of accretive opportunities.

Wade?

Thank you, Rob. Today, we announced a multiyear extension of 40 E175s with United and 13 with Delta. These extensions continue to solidify our flying agreements with United and Delta through the end of this decade. We now have no contract expirations on E175 until the back half of 2028.

During the quarter, we took delivery of five new E175s for United. We currently have 69 E175s on firm order with Embraer, including 16 for Delta, 8 for United, 1 for Alaska. We expect delivery of nine new E175s this year.

Let me talk a little more about our firm order of 69 aircraft. Of the 69, 25 aircraft are allocated to our major partners and 44 are not yet assigned. Our long-term fleet plan has positioned us well and re-fleeting continues to be an important part of that strategy. This order locks in delivery slots starting in 2027 through 2032.

However, the order is structured with good flexibility to defer or terminate the aircraft in the event we don't arrange for a partner to take them. After we finished the delta deliveries expected in 2028, our E175 fleet will be nearly 300 and continuing to enhance SkyWest position as the biggest E175 operator in the world.

Last quarter, we announced an agreement with United to extend up to 40 CRJ200s into the 2030s. These aircraft were set to expire at the end of 2025, and we're pleased with the continued strength of our United agreement. As we previously announced, we have a multiyear flying agreement for a total of 50 CRJ550s with United. As of December 31, we had 27 CRJ550s in service and expect the last 23 entering service later this year.

We have begun a prorate agreement with American. We are currently operating four aircraft under this agreement with up to nine aircraft expected by the middle of 2026. We are excited to expand our relationship with American.

Let me review our production. For the full-year 2025, we increased block hours by 15% compared to 2024. We anticipate that our 2026 block hours will be up mid-single-digit percentage compared to 2025. For 2026, we anticipate delivery of 9 new E175s, placing 23 CRJ550s into service, capitalizing on strong prorate demand and anticipating an increase in fleet utilization.

These increases are offset by the return of approximately 19 Delta-owned CRJ900 over the next couple of years to Delta. We anticipate the return of these aircraft will be slow -- will be at a slower cadence than we originally anticipated.

Our revenue seasonality has returned to the model as utilization improves during the strong summer months. We still have approximately 20 part dual-class CRJ aircraft that will be returned to service. Many of these aircraft are currently under flying agreements and will begin operating in 2026. We also have over 40 parked CRJ200s, further enhancing our overall fleet flexibility.

Also during the quarter, we canceled approximately 2,000 flights and 3,000 block hours due to the government shutdown. These cancellations decreased our results by approximately $7 million. This is net of any reimbursements from our major partners.

As we shared during the year, we continue experiencing challenges in our third-party MRO network, including labor and parts challenges. We expect our 2026 maintenance expense to be consistent with our 2025 levels as we continue to bring aircraft out of long-term storage and service the current fleet as production continues to increase. As you would expect, the maintenance expense will happen before the aircraft goes back into surface.

As far as our prorate business, demand remains extremely strong. With great community support, we are seeing opportunities to return SkyWest service to several communities and we will continue to work with airports we serve on the best way to expand our service.

As we discussed last quarter, the increase in our prorate business results in an increasingly seasonal model consistent with the typical industry seasonality. We expect Q1 production will be flat to down from Q4. We feel good about our ongoing efforts to reduce risk and enhance fleet flexibility and remain committed to continuing our work with each of our major partners to provide strong innovative solutions to the continued demand for our products.

Okay. Operator, we're ready for our Q&A now.

(Operator Instructions)

Savi Syth, Raymond James.

Just on the FAA cuts in the last quarter, I was kind of curious on how that was handled, and I know usually when there are weather events that there's a lot more coverage of the costs we incurred. So I was wondering if you can expand a little bit more on why that was that level of impact?

Yes, Savi, this is Chip. I think you're thinking about weather is kind of consistent with the government shutdown. Obviously, as we said in our script, we got a fairly strong cancellation relative to what happened in the industry. And honestly, we're okay with that. We have various provisions in our contract to help mitigate that.

But in the partnership spirit that we have with these partners, we're going to do things together to get through some of these challenges. And extensive as the last one was, certainly -- and had an impact on us. But again, this is something that you work with your partners with and make sure that you do what you need to, to take care of customers and partners and everything. And so it worked out well. And we don't want to do it again, obviously.

But from that perspective, the way you're thinking about it being like a weather, an IROP event, was extensively longer, but consistent within the contract.

Understood. I wonder if I can -- on the extensions that are happening this year. I'm guessing a lot of those are aircraft that are coming fully paid in the next year or two. Wondering if you could provide kind of an update on encumbered assets and kind of where they are today and where you see them kind of going by maybe the end of this year and next year?

Yeah, Savi, this is Rob. In terms of unencumbered assets, we have a very strong portfolio of those that can be converted into debt, obviously, very easily. But we have somewhere in the neighborhood of $1.5 billion of unencumbered equipment at this point.

And does that step up quite a bit this year next year? Or is it just a kind of maybe a steady increase? How should we think about as those E175 start coming off contract?

Yeah. I think, Savi, that -- you're exactly right. It certainly increases as more than become paid off. We're in a great position today with our unencumbered assets. And as we discuss, and as Rob discussed about debt repayments and stuff that those -- obviously, our number of assets unencumbered continues to increase relatively aggressively over the next several years as 175 has become paid for.

Duane Pfennigwerth, Evercore ISI.

With respect to your order book, and I think you have capacity out to 2028, maybe some availability in 2027, can you speak to how discussions are evolving around placement of the next kind of slug of new aircraft you can take delivery of?

Yeah, Duane, this is Wade. So yeah, we have an order of 69 aircraft currently on order with Embraer, 24 of those are under contract with our major partners, 16 for Delta, 8 for United, and 1 for Alaska. So we're always talking to them about the order book.

So our orders -- the deliveries that are coming in '27 are all spoken for. The majority of them in '28 are spoken for. So after that, it's really '29, '30, '31 and beyond that we're still working with our major partners. But those conversations are ongoing, and we're very optimistic about continuing to work with them and place them.

And then I'm sure there was noise around shutdown and maybe some weather. But can you speak to the underlying trend in utilization and kind of what your target is and where you're at relative to that target in terms of utilization recovery?

Yes, Duane, that's a great question. So yeah, we've seen positive trends in aircraft utilization for sure. And as we are looking at our schedules going into the spring and summer of '26, those trends are continuing to be extremely positive for us, honestly. And so we will get better utilization out of our assets. We are seeing that.

It's slightly higher than what we had anticipated last quarter. That's why the guidance on block hours did go up. That's one of the reasons. And so yeah, we're optimistic about the increased utilization on our fleet and where it's going.

Catherine O'Brien, Goldman Sachs.

Maybe just one more on the E175 renewals. It's really helpful to know your next renewal is it until the second half of 2028. Could you provide any color on how the terms of these renewals compared to the prior purchase -- CPAs that they are on? Was there any impact in the rate discussions to the fact that you guys don't -- there's not any debt associated or that didn't factor in and the terms are pretty similar?

Yeah, Katie, this is Chip. I would basically say that the contracts, as you continue to go through the maturity of the life of the aircraft, certainly evolved. Certainly, certain things of contracts -- because this is such a dynamic industry change, various things that we thought were important five years ago have changed to other things are important today. So I won't -- I will certainly underline that there's a lot of evolution that takes place mostly due to market conditions.

In large, I think you're mostly asking about economics and that type of stuff with the renewals. I would only say that everything is roughly economically very similar to what we've experienced in the past, although there are some things embedded within the contracts that evolve for just changing market conditions that help both of us as partners.

The dynamics of the conversation is good because of the outstanding demand that's in the marketplace right now. So in all honesty, we try to be very transparent, very present with our partners all the time and the conversations are very, very good. Particularly, as you know, this is a tough industry to be in, and you have to be in that mode with your partners all the time to be dynamic and being able to evolve.

And I don't know of anybody in the industry that can evolve as well as we can. So that's kind of how the contract conversations going. And we're going to continue to prepare ourselves for future ones to make it even easier so.

That's great. Maybe just one quick follow-up to feel just to make sure I don't want to put words in your mouth. But on the economics under the terms of the agreement, that looks pretty similar to, okay, this is now 13-year-old aircraft versus a brand-new aircraft, like the -- if there -- and I actually don't know if there's a step down usually when you move from the first contract to a second contract under a CPA agreement. But like whatever that normal step between contract one and contract two, that's what it looks like here for these? Is that right?

Yeah. The rate economics are very consistent with where they were before. So we will see a very consistent level of revenue continuing on with these airplanes in the future.

That's great. And then just for my second question, maintenance elevated here around the industry, we're seeing that not surprised, rates flat are tight. Can you walk us through how much of the maintenance is on aircraft under contract? And what is for aircraft that are currently parked not on contract?

And on that second group of aircraft, like how -- like you're putting in the work now. You talked about being flexible. That's a competitive advantage. Are you pretty advanced in conversations around some of these aircraft you're working on now that you might have an MRO slot for? Or this is really just like if a partner calls, you could answer. Just trying to understand how much you're investing and what you think the prospects are for return on that investment?

No, that's a great question. So as I talked about a little bit in my script, we have 20 aircraft that are currently parked or have been parked that are in heavy maintenance that are going to be done very shortly that are going into contracts, that are -- the contracts are signed, they're ready to go. They're just waiting for the airplane to be done with its maintenance cycles.

And so obviously, the maintenance come comes in advance of the airplane being returned to service. And so there are 20 airplanes that will be going through that return of maintenance right now. That's the 20 dual-class airplanes.

We also have some CRJ200s that I said we have 40 of those parked, and we are returning some of those to service. And we do believe -- we know very good opportunities in the marketplace for those and we're very optimistic that we will find a very good revenue model for those.

Mike Linenberg, Deutsche.

Yeah, talking about a very good revenue model. I mean I -- we're sort of watching the build-out of Chicago, and it does seem like a lot of the growth at least at that hub over the next several months is going to be driven by regional flying. Are you able to capitalize on both of your relationships with those carriers to grow into that market? Or is it one sided?

Yeah, Mike, that's a great question. So we work with each of our major partners. As you know, under these capacity purchase agreements, they dictate the schedule, they dictate where these aircraft fly. They tell us where to go.

And so we are working with each of our major partners on the deployment of where they would like these airplanes. And we will operate these at the extreme highest levels of reliability that are out there. And so we will work with each of our major partners where they wish to deploy those. And we will -- and that's how the CPAs work.

Okay. And then just my second question, Rob, on the revenue piece -- the revenue recognized in excess of fixed cash payments. Obviously, that came down quarter over quarter. How is that trending? Are we back to sort of $5 million a quarter as we march through 2026? Or is there -- like how should we think about that with respect to modeling?

Yeah, sure, Mike. No, I think was a little down as we extended some of the contracts and pushed out some of the recognition of deferred revenue. But in 2026 for modeling purposes, I would suggest you're probably in the $20 million to $25 million a quarter area for recognizing the deferred revenue that remains. And again, there's $265 million of deferred revenue that remains to be recognized.

So Rob, to clarify, the extension was -- and what was announced today, right, I guess, maybe that drove part of it, right, to extend the E175 flying with both Delta and United.

That's right. Yeah. Those contract extensions also push out the timing of the recognition of the deferred revenue.

Okay. That's what I thought. And then just lastly, one other piece. When -- and it may have been Chip or you who talked about this seasonality where earnings will be down March Q over Q4, obviously, because now we're getting back to more normal seasonality with respect to your prorate business.

When we think about down, are we thinking down on the reported Q4 number? Or should we think down from a Q4 number that would not be impacted by government shutdown? I'm just -- again, this is modeling.

Yeah. Just to make it easy, I mean, it's just the GAAP number that we reported. We do expect that it will be flat to down in Q1, again, because of the sharper seasonality in the model.

John Godyn, Citi.

I wanted to sensitize and brainstorm bit about the $11.50. You guys mentioned operating leverage a few times in the prepared remarks. We're seeing that in the numbers.

If in a couple of quarters, $11.50 is becoming $12 what happened? Just help us kind of sensitize that a bit, and I'd love to just kind of hear your thoughts.

Yeah, John, and again, welcome the guidance for next year, the mid-$11 guidance, I think, is something that we always look at there being a possibility of coming in either ahead of that or behind it. But as Wade mentioned in his script, we see strong demand in various areas of our model right now, including prorate and contract.

And so as things play out, we'll continue to update the Street on how we're seeing the year evolving, but right now, we were comfortable bringing up both our expectation around production and our expectation around earnings for the year compared to what we were seeing a quarter ago.

Do you think that prorate would be the biggest swing factor?

So there's three or four things that will affect our block hours. Prorate being one of them. I would say the more meaningful one is probably the increase in utilization that we are anticipating and seeing from each of our major partners.

And then also just the return to service of some of our airplanes that have been parked over the for a while. So those are really the three drivers that will help us increase the production, which in turn increases the profitability.

Got it. And if I could ask about the balance sheet. Certainly moving in the right direction for some time. I think you guys mentioned no contract extensions for a bit. It seems like we may be in a window here where we can potentially deploy the balance sheet more offensively, more strategically.

I'm curious if that's how you think about it. Could there be a change to the attitude toward buybacks or maybe there's other calls for cash that you think are even more exciting?

Yes, John, I think when it comes to the sort of the topic of capital allocation or the balance sheet, I think we're comfortable enough and confident in our free cash flow generation going forward that we feel like we're in sort of an all-of-the-above position where we can continue to invest in the fleet like we have been, which we love doing. We can continue to delever and derisk the model and the balance sheet is, as we talked about, we've been paying down our debt with a good cadence over time.

And finally, obviously, as we've proven, we're strong believers in the value-creation possibilities of share repurchase. And so I think we're in a position with the balance sheet that's got the liquidity and the strength and the leverage that will allow us to do all of the above.

Tom Fitzgerald, TD Cowen.

There was a pretty big jump in lased airport services and other revenue this quarter. And I was just kind of curious what drove that. Was that maybe third-party engine overhaul work or something else?

That's right. I mean, there's a piece of it on the revenue side and another piece in maintenance. So yeah, it was an engine deal with the third party.

Okay. Great. That's really helpful. And then just any updates on the Charter business if you look out 2026 I don't know if that could be a driver of incremental positivity for the year, maybe around the World Cup or this summer or maybe not just given that everything else is going to be utilized in the core business.

Yeah, Tom, this is Chip. Just real quick. It's a great question about SkyWest Charter. We've got a lot of leeway and permission to do a lot of very cool things with that. Certainly, we're seeing as of right now, significant demand with sports teams and everything. In fact, it's demand that we can't meet honestly, because of aircraft availability.

We're seeing certainly a very strong demand for SkyWest Airlines aircraft at this time that we're trying to fulfill with our major partners. As you know, that's the core of what our business is to try to take care of these four customers of ours. So it does put some of our initial objectives with SkyWest Charter on the back burner. We're not saying that it's never going to happen.

We mentioned on the call several times, we have a lot of CRJ200 aircraft available. And there's a lot of -- and we've also talked about MRO availability and getting these aircraft available to us. So I would not say that 2026 is going to be a historically huge year for Charter because of the backlog of supply chain issues we have with certain MROs and the fleet that we have. But we still have the same long-term objectives that we've always had with that enterprise because the demand and the things that we can do with that enterprise are still extraordinarily promising.

But I think you can get a tone on the call. There's just a lot of demand and we're trying to get as much aircraft resources in place to meet that demand for 2026. So hopefully, we can do some other things in '27 or '28 with that enterprise.

Savi Syth, Raymond James.

Just wondering on -- operationally, you've been kind of executing really well. And as your partners need extra lift, I think you've been able to step in from time to time. I was curious -- and I think the industry as a whole, the operational execution has kind of taken a leg up maybe versus kind of 10, 15 years ago.

Curious how you stack up compared to some of these kind of internal partners at your mainline partners, like the internal regional airlines. How do you stack up in terms of performance and execution?

Savi, this is Wade. That's a great question. SkyWest -- you can look at some of the DOT data. SkyWest is always a very high performer on our A14 or completion percentages. So that is one thing that we emphasize around highly.

It's just our execution to our mainline partners and then also ultimately their customers. And so we put a lot of emphasis around that, and we are typically one of the top-tier performers. So yeah.

I would add just one thing also, Savi. I think you have to have the utmost respect to our people and certainly our management team because we're one of the only airlines in the world that has four customers that strategically at times, operate for completely different ways, yet we have to consolidate that operation into exceptional overall performance in our own way.

So we're used to this challenge. We've been doing it for decades. And to that end, our people are fantastic at making sure that they meet our objectives and what we want to do and also meet the needs of our partners.

But I can tell you the level of effort and talent that it takes to go as many days as we indicated, with 100% controllable completion over 250 days this last year is exceptional. And to that end, we're doing it in a way which we're trying to make four partners happy along the way, which we do a pretty good job of, which is why they keep giving us contract extensions and more flying.

So from that perspective, on a micro level and a macro level, we're pretty proud of the efforts that our people put forth in those endeavors.

That's helpful. And if I might just follow up on John's question about use of the -- how you're thinking about the use of cash. Any -- are there any kind of liquidity targets or leverage targets that you want to stay within?

So Savi, as we've said in the past, we don't really have a bright-line number. But again, we want to be careful that we have the liquidity and the balance sheet capacity to make sure we can monetize all the opportunities that are in front of us. And again, those opportunities are numerous right now in terms of investing in the fleet and other ways that we can deploy the balance sheet.

So I think as you see the progress that we've made over the past few years, we're in a great place from a balance sheet leverage standpoint. We haven't been in a lower leverage position in a decade. We're in a great position in terms of liquidity. We've got plenty of unpledged collateral if we were to need it. And so again, I think that, that provides the opportunity for us to look at all of our accretive opportunities and monetize them.

Catherine O'Brien, Goldman Sachs.

I just -- I was thinking about your answer to that question on the CRJ opportunities. And so a follow-up there. On those 40 CRJs you're investing in, you noted that you know of good opportunities for those.

Are any of those slated to come out of the shop this year? And if they did, and you executed on one of the opportunities you noted, would that be incremental to your current mid-single-digit block hour growth rate?

It's a great question. A lot of that is baked into our operating plans already. Obviously, if we do have upside -- especially for the summertime, a lot of that. We know what's in front of us. We know the opportunities right there. And so if we do get the airplanes out quicker, then there could be sooner opportunities for us.

We are looking at opportunities in the fall, and we are looking at those opportunities right now. And so potentially, eight, nine months from now, for sure, there could be some additional opportunities that we're looking at. But things that are -- for the summer, six months in advance of us, that's all pretty much in our operating plans right now.

And that concludes our Q&A session. I will now turn the conference back over to Chip Childs for closing remarks.

Thank you, Audra. Again, thank you all so much for your interest in SkyWest. We're very proud of what's happened in 2025, but mostly we're very focused and grateful for the opportunities which we have and we put ourselves in a good position with our people in '26 and beyond. And we look forward to giving the first quarter update in -- three months from now. So thanks for your interest.

And this concludes today's conference call. Thank you for your participation. You may now disconnect.