SkyWest Inc. SKYW, which operates a regional airline in the U.S. through its subsidiaries SkyWest Airlines and ExpressJet Airlines, revealed a 10.4% (21,136) year-over-year decline in block hours (a measure of aircraft utilization) to 183,039 in Jul 2015. The St. George, UT-based carrier, which has been making constant efforts to streamline its operations, said that the fall in the metric was in sync with its fleet optimization plans.
To attain the objective, SkyWest is looking to add new dual-class aircraft to its fleet and simultaneously bring down the number of unprofitable aircraft. For example, SkyWest‘s additional 76-seat E175 aircraft resulted in the production of 10, 400 extra block hours in Jul 2015.
The carrier, which provides scheduled passenger and air freight services with approximately 3,500 departures per day to the U.S., Canada and Mexico, apart from the Caribbean, stated in its press release that 38% of its Jul 2015 block hour production was represented by its dual class aircraft (CRJ700s, CRJ900s and E175s). The comparable figure was 30% in the comparable month last year.
Apart from the block hour reduction in keeping with its fleet optimization exercise, SkyWest further said that consolidated capacity (measured in available seat miles) for the month of July declined 7.7% to 3.21 billion. Airline traffic, measured in revenue passenger miles, went down 6.8% year over year to 2.73 billion on a consolidated basis. Load factor (% of seats filled with passengers) on a consolidated basis was up 70 basis points (bps) at 85.1% in the month. The carrier had 109,016 departures in Jul 2015, down 11.5% year over year.
SkyWest is currently flying high as its efforts to streamline its business are bearing fruit. The company, which acquired nine E175 aircraft including engines and spare parts during the second quarter of 2015, performed excellently delivering a massive 125.93% positive earnings surprise. The favorable Zacks Rank #1 (Strong Buy) sported by the company is further proof of the good times it is currently enjoying.
Other Stocks Worth a Look
Equally-well ranked stocks in the airline space are China Eastern Airlines CEA, Ryanair Holdings RYAAY and Allegiant Travel Company ALGT.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Be the first to comment