https://seekingalpha.com/article/455...all-transcript

Looking like things getting really ugly at Skywest. From the earnings call above, this reduction is 100% about lack of pilots and training pipeline issues (read check airmen/instructor Captains leaving in droves).
With the retirement numbers of the big 3, I can't see Skywest being able to fulfill all their agreements for much longer. How much slack are the legacy carriers Skywest flies for willing to give?

 

You are assuming they are the only regional in this position. I said a year ago that this is a triage situation. The regionals will fly whatever they can and slowly shrink. The only question is how much before it's over.

 

You sound like an expressjeter. Does SkyWest reducing block hours concern you?

 

OO was the place to be pre-covid.

 

Not really until they cant staff the ERJ’s. CRJ’s are paid for… they can park them for awhile… If things keep trending at the rate of -100 a month i see the CRJ’s parked and focus on a ERJ fleet… just my take

 

why do you think it will change from a -100 a month rate?

I guess we will see once the Gone List is out

 

We lost 139 Captains in October. I’ll be joining the gone list for November. It’s not about the money, it’s about not being left behind at this point. SkyWest won’t be around by 2025 if they continue to operate like they always have been. The regional gig is up. They’ll probably be under 4,000 pilots by early spring. They’re delusional in SGU atm.

We will continue to have 100+ Captains leave each month. After December they’ll be lucky to have 20 upgrades available per month. What’s their plan stated in the earnings call? To just sit and watch their business shrink helplessly. Seriously that’s what the CEO said. Don’t worry though because the hiring will slow down in 2024… lol not a chance.

SkyWest isn’t on the brink of collapse like the majority of United Express regionals, but they’re on pace to join them shortly after.

 

OTOH OO had about 2000 pilots when I got hired, and they were successful back then. I'm guessing they still have some room to shrink to profitability, although at some point they'd have to make deals with creditors to unload excess capital overhead and leases. Obviously have to unload some non-pilot employees too.

Where it gets ugly is if they have so many un-utilized assets that they can no longer make deals, and need to look at Ch.11 to restructure obligations.

I think even worst case, they survive Ch.11 (assuming the majors don't bring it all in-house).

 

From the earnings call, doesn't sound so gloomy to me. Shrink to profitability? SkyWest is profitable now.

"In spite of only modest profits expected in 2023, there are six notable expectations for 2023 that I would like to call out. Number one, we expect CapEx to be down over $400 million year-over-year in 2023. Number two, this CapEx reduction could drive the best free cash flow in the last five years. Number three, we expect cash at the end of 2023 to still be near $1 billion. Number four, we expect debt at the end of 2023 to be below 2019 levels. Number five, our end of 2023 leverage could be the lowest in the last five years. And number six, debt net of cash could be $400 million lower than at the end of 2019." - SkyWest CFO

 

yeah. I don’t think they’ll shrink to profitability. They’ll just shrink. And shrink. They already said a 20% fall in 2023. What about the next year. And the year after? CC saying he hoped a recession would save his company wasn’t exactly what people wanted to hear. Not a great business plan. Sounds like throwing in the towel to me.