Fourth Quarter Highlights:

• $1.43 earnings per diluted share, up 12% from $1.28 in Q4 2018
• Pre-tax income of $98 million, up from $91 million in Q4 2018; net income of $73 million, up from $67 million in Q4 2018
• Secured new flying contract for 20 new E175 aircraft with American Airlines ("American")

SkyWest, Inc. (NASDAQ: SKYW) ("SkyWest") today reported financial and operating results for Q4 2019, including net income of $73 million, or $1.43 per diluted share, compared to net income of $67 million, or $1.28 per diluted share, for Q4 2018. Earnings per diluted share increased 12% in Q4 2019 from Q4 2018, primarily due to SkyWest's ongoing fleet transition. SkyWest has added ten new E175 aircraft and seven new CRJ900 aircraft since Q4 2018 and reduced aircraft ownership costs through early lease buyouts on 56 aircraft executed in 2019.

SkyWest reported net income of $340 million, or $6.62 per diluted share for the 2019 year.  Adjusted net income for the 2019 year was $321 million, or $6.25 per diluted share, excluding the gain on the sale of ExpressJet Airlines ("ExpressJet") and other special items recorded in Q1 2019¹.  Net income for the 2018 year was $280 million or $5.30 per diluted share.

Commenting on the results, Chip Childs, Chief Executive Officer and President of SkyWest, said "2020 represents the start of the next phase of our fleet transition as we increase new E175 aircraft and invest in our older CRJ fleet, driven by strong demand for both aircraft types. We expect this will make 2020 a pivot year to position us for a new trajectory in 2021 and 2022."

Financial Highlights
Revenue was $744 million in Q4 2019, down from $803 million in Q4 2018 due to the sale of ExpressJet in January 2019. Excluding ExpressJet revenue in Q4 2018, Q4 2019 revenue increased $59 million, primarily from adding 17 new aircraft since Q4 2018.

Operating expenses were $618 million in Q4 2019, down from $682 million in Q4 2018, also due to the sale of ExpressJet. Excluding ExpressJet operating expenses in Q4 2018, Q4 2019 operating expenses increased $59 million, primarily from growth in operations as a result of additional aircraft placed into service since Q4 2018 and an increase in maintenance expense.

Operational Update
New flying contract with American for 20 new E175 aircraft

• SkyWest awarded 20 aircraft under a ten-year contract, with the anticipated delivery of ten aircraft in late 2020 and ten aircraft during the first half of 2021
• SkyWest anticipates financing the aircraft through debt
• Financial terms of the contract were not disclosed

Aircraft deliveries under previously announced deals for Delta Air Lines ("Delta")
New E175 aircraft to be financed and operated by SkyWest:

• Five aircraft were delivered in Q4 2019
• Six aircraft are scheduled for delivery from early to mid-2020

Upcoming new and used aircraft to be financed by Delta and operated by SkyWest:

• One new CRJ900 aircraft scheduled for delivery in mid-2020
• Six used E175 aircraft scheduled for in-service dates from early to mid-2020

In conjunction with new aircraft deliveries for Delta, SkyWest anticipates removing eight CRJ700 and four CRJ900 aircraft from its flying agreement with Delta by the end of 2020. Following the respective agreement expirations, SkyWest anticipates utilizing these 12 aircraft in various ways: placing them with other partners, using the airframes/engines as spares and/or leasing the airframes/engines to third parties.

Aircraft deliveries under a previously announced deal with American
SkyWest placed two of ten used CRJ700s with American during Q4 2019. SkyWest is scheduled to place the remaining eight CRJ700 aircraft with American throughout 2020. SkyWest anticipates acquiring five used CRJ700s from a third party and internally sourcing three CRJ700s through contract expirations.

Lease agreement with a third party for 29 CRJ700 aircraft
As of December 31, 2019, SkyWest has placed ten of 29 CRJ700 aircraft under a previously announced lease agreement with a third party under a ten-year lease term. SkyWest anticipates the remaining aircraft will be placed under the lease in increments through mid-2020.

Capital and Liquidity
SkyWest had $520 million in cash and marketable securities at December 31, 2019, down from $572 million at September 30, 2019. During the fourth quarter of 2019, SkyWest:

• Used $18 million in cash toward the purchase of five new E175 aircraft (total capital expenditure of $118 million on the acquired aircraft with $100 million of debt financing)
• Used $39 million toward the purchase of spare engines and used airframes and $24 million for other capital investments, primarily related to spare aircraft parts
• Used $10 million to repurchase stock under SkyWest's $250 million repurchase program

Total debt was $3.0 billion at December 31, 2019 and September 30, 2019.