SKYW - NASDAQ

Hello, and thank you for standing by. My name is Tiffany, and I will be your conference operator today. At this time, I would like to welcome everyone to the SkyWest, Inc. Second Quarter 2025 Results Call. [Operator Instructions] I would now like to turn the call over to Rob Simmons, Chief Financial Officer. Rob, please go ahead.

Thanks, Tiffany, 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 will 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 $120 million or $2.91 per diluted share for the second quarter of 2025. These results reflect the second quarter's higher production and the ongoing exceptionally strong demand for our products. The continued demand in small and midsized communities is as strong as we've ever seen it, and it's clear that there is no replacement for face-to-face connection facilitated by air travel. As we near and even exceed our 2019 departures, our teams have worked very hard to plan, execute and deliver an exceptional and consistent product. I want to thank our team of nearly 15,000 aviation professionals for their continued teamwork and dedication to excellence. Also during the quarter, we were excited to be named one of America's greatest workplaces by Newsweek for the second year running. We earned this honor by working together with our people every day, and we're proud to be the only regional airline on the list. We're committed to ensuring SkyWest remains the premier place to build a rewarding career. Last month, we announced an agreement to purchase and operate 16 new E175s under a multiyear contract with Delta with deliveries expected to begin in 2027. We also secured firm delivery positions with Embraer for 44 more E175s from 2028 to 2032. As we shared previously, it is our intent to deliver those aircraft. These agreements continue to deliver unparalleled fleet flexibility for the future. Our long-term position is secured with these 44 delivery slots starting in 2028 through 2032 with flexibility to defer or cancel these aircraft. In the near term, we anticipate our remaining Embraer delivery scheduled for this year will be delayed into the fourth quarter or early 2026. As we look ahead and evaluate the macroeconomic landscape with regard to tariffs, it's clear that our focus on fleet flexibility has prepared us very well. I want to make a couple of important points as we plan for the near and long term. If implemented, tariffs on Brazil are not expected to change our 2025 production forecast. However, we are not willing to pay a 50% tariff on new aircraft deliveries. While all regional aircraft are produced outside the United States, SkyWest is best positioned in our segment of the industry to manage through these macroeconomic challenges. We have very strong relationships with our major partners and with Embraer, all of whom are very interested in securing sustainable solutions. Undoubtedly, the fleet flexibility we have developed over the last decade will continue to serve us well. We look forward to continuing to deploy additional CRJ550s for our partners, and we expect our existing CRJ fleet to produce accretively well into the next decade. Demand for our product is very strong, and SkyWest continues to lead our segment of the industry. We remain disciplined and steady as we execute on our growth opportunities to: one, restore or bring new service to underserved communities; two, redeploy and fully utilize our existing fleet; and three, prepare to receive our deliveries in the coming years for a total of nearly 300 E175s by the end of 2028. We have spent several years strengthening our balance sheet and fleet flexibility as well as reinvesting in our future growth. We remain very confident that the steps that we have taken have us exceptionally positioned despite ongoing macroeconomic uncertainty. Overall, with our well-positioned fleet, excellent operation and our strong partnerships and demand, we remain optimistic about 2025 and 2026. We continue to play the long game and invest in our fleet and future to ensure we are in the best possible situation to respond to market demand. Rob will now take us through the financial data.

Today, we reported a second quarter GAAP net income of $120 million or $2.91 earnings per share. Q2 pretax income was $163 million. Our weighted average share count for Q2 was 41.4 million, and our effective tax rate was 26%. First, let's talk about revenue. Total Q2 revenue of $1 billion is up 9% from $948 million in Q1 2025 and up 19% from $867 million in Q2 2024. Q2 revenue breaks down with contract revenue at $842 million, up from $785 million in Q1 and up from $731 million in Q2 2024. Prorate and charter revenue was $145 million in Q2, up from $131 million in Q1 and up from $107 million in Q2 2024. Leasing and other revenue was $47 million in Q2, up from $32 million in Q1 2025 and up from $29 million in Q2 2024. These Q2 GAAP results include the effect of recognizing $23 million of previously deferred revenue this quarter, up from the $13 million recognized in Q1 2025. As of the end of Q2, we have $286 million of cumulative deferred revenue that will be recognized in future periods. We anticipate recognizing approximately $10 million to $20 million of previously deferred revenue per quarter over the remainder of 2025, subject to production levels and other factors. For modeling purposes, our EPS for the quarter included approximately $0.20 from discrete nonoperating gains, primarily consisting of a mark-to-market gain on our equity investments and sale of fixed assets. Let me move to the balance sheet. We ended the quarter with cash of $727 million down from $751 million last quarter and $834 million at Q2 2024. The decrease in cash during the quarter included the accretive actions of: one, repaying $111 million in debt; two, buying back 195,000 shares of SkyWest stock in Q2 for $17.3 million. With the volatility in the equity markets in Q2, we opportunistically repurchased 39% more shares than we bought in Q1. As of June 30, we had $267 million remaining under our current share repurchase authorization updated in May 2025. And three, investing $169 million in CapEx, including the purchase of 2 new E175s, 4 additional CRJ900s, investment in our expanding CRJ550 fleet, spare engines and other fixed assets. We ended Q2 with debt of $2.5 billion, down from $2.7 billion as of 12/31/2024. Cash flow is an important component of our shareholder value creation calculus. We generated approximately $500 million in free cash flow in 2024 and deployed it primarily to delever and derisk the balance sheet to the benefit of our partners, our employees and our shareholders. We generated over $200 million in free cash flow in the first half of 2025, including $68 million in Q2. Our strong balance sheet and well-grounded liquidity are powerful tools as we pursue a variety of growth opportunities, including acquiring and financing 30 additional 175s by the end of 2028, repaying approximately $490 million in debt in 2025 and continuing to execute opportunistically on our newly reauthorized share repurchase program. 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 at their lowest point in over a decade. We anticipate that total 2025 capital expenditures funding our growth initiatives will be approximately $575 million to $625 million, including the purchase of 8 new E175s, CRJ900 airframes as announced last quarter and aircraft and engines supporting our CRJ550 opportunity. The remaining 6 175s are scheduled for delivery in late 2025 and could possibly slip into 2026 without any impact on 2025 production. Consistent with our policy and practice, we are not giving any specific EPS guidance at this time. But let me give you a little additional color on 2025. As Wade will discuss in a minute, we now anticipate our 2025 block hours to be up approximately 14% over 2024. The improved outlook in our 2025 block hours is driven primarily by improving fleet utilization and availability and ongoing strong demand for our production. We now expect our 2025 GAAP EPS could be in the $10 per share area if we are successful in executing on the opportunities in front of us. We continue to expect to deliver solid operating leverage with 14% year-over-year production growth translating into a roughly 28% increase in EPS in 2025. For modeling purposes, we anticipate our maintenance activity will continue at Q2 levels adjusted for production. We also anticipate our effective tax rate will be approximately 26% to 27% for the remaining 2 quarters of 2025. We are optimistic about our growth possibilities going into 2026, including the following 3 focus areas: first, growth in our ability to increase service to underserved communities, driven partially by the deployment of over 30 additional CRJ550 aircraft; second, improved aircraft utilization and availability on our ERJ and CRJ fleets; and third, placing 14 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 our strong balance sheet, operating leverage, free cash flow and liquidity and the actions we will be taking to deploy our capital against a variety of accretive opportunities will position us well to drive total shareholder returns. Wade?

Thank you, Rob. During the quarter, we announced a new flying agreement with Delta for 16 new E175s under a multiyear flying contract. The 16 new E175s are expected to replace 11 SkyWest-owned CRJ900s and 5 CRJ700s that we are currently operating. We expect the 16 new E175s will be delivered in 2027 and 2028. We expect to redeploy the SkyWest-owned CRJ aircraft with our major partners. We also currently operate 24 Delta-owned CRJ900s. We anticipate most of these aircraft will be returned to Delta over the next couple of years and are preparing to return 4 of them during the fourth quarter of this year. As we previously announced, we have a multiyear flying agreement for a total of 50 CRJ550s with United. As of June 30, we had 18 CRJ550s under contract and expect to operate 30 by the end of this year, with the last 20 entering service during 2026. I want to point out that this agreement represents net growth aircraft, along with the additional new E175s expected to arrive by the end of 2026. We are excited about our continued strong partnership with United. We also began a prorate agreement with American during the quarter. We are currently operating 3 aircraft under this agreement and anticipate operating up to 9 aircraft under this agreement by the middle of 2026. We are very excited to expand our relationship with American. During the quarter, we announced a new purchase agreement with Embraer. This order is for 60 firm aircraft, and we have purchased rights for an additional 50 aircraft. This is in addition to the 14 we already have on order, 13 for United and 1 for Alaska. We expect delivery of 6 more aircraft through the end of this year and 8 in 2026. We took delivery of 2 E175s for United during the quarter and paid the 10% tariff. We do expect to see delivery delays from Embraer this year, and we now anticipate that the majority of our 2025 deliveries will be in the fourth quarter of the year or could be delayed into early 2026. The tariffs are also creating delivery uncertainty. If the 50% tariff with Brazil is implemented, we plan on working with our major partners and Embraer to delay the delivery until the tariff situation is resolved. All parties are motivated to work together on the tariff issue. Let me talk a little bit more about our new order of 60 firm aircraft. Of the 60, 16 are allocated to our Delta agreement and 44 have not yet been assigned to one of our major partners. Our long-term fleet plan has positioned us well, and refleeting is 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. After we finish the Delta deliveries expected in 2028, our E175 fleet total will be nearly 300, continuing to enhance SkyWest's position as the largest Embraer operator in the world. Let me review our production. Q2 completed block hours were up 7% compared to Q1 2025. Based on our current Q3 schedules from our major partners, we anticipate a 2% increase in Q3 as compared to Q2. For the full year, we anticipate an increase of approximately 14% in 2025 compared to 2024, approaching our 2019 levels. We expect block hour seasonality to return to the model as utilization improves during the strong summer months. We still have approximately 25 parked dual-class CRJ aircraft that will be returned to service. Many of these aircraft are currently under flying agreements and will be operating in 2025 and 2026. We also have over 40 parked CRJ200s, further enhancing our overall fleet flexibility. As we shared last quarter, we continue experiencing challenges in our third-party MRO network, including labor and parts challenges. We expect maintenance expense to be at Q2 levels for the remainder of 2025 as we 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 service. Our partners remain very engaged in supporting our efforts to restore production. Under a previously announced agreement with another regional carrier, we expect to purchase 30 used CRJ900 airframes for $29 million. We expect to utilize many of these airframes for parts to mitigate any supply chain challenges we may face over the next few years. We do anticipate operating 6 of these aircraft in the future. As of June 30, we had closed on 10 of these aircraft. 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 as we restore CRJ production. We will continue to work with the communities we serve on the best way to expand our service. As we discussed last quarter, the increase in our prorate business will reintroduce more seasonality into our model. As typical with all airlines, Q2 and Q3 are strong revenue quarters and Q3 and Q4 are softer. We feel good about our ongoing effort to reduce risk and enhance fleet flexibility and remain committed to continuing our work with each of our major partners to provide strong solutions to the continued demand for our products.

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

[Operator Instructions] Your first question comes from Hillary Cacanando with Deutsche Bank.

I'm calling in for Mike. Could you talk about your CRJ200 fleet? I think you had about, I think, 53 unassigned CRJ200s available for various opportunities. If you could kind of talk about what opportunities you're looking at for those aircraft, it would be great.

This is Wade. So yes, the CRJ200 fleet is a fleet that gives us a lot of flexibility. As you said, we have about 50 airplanes that are parked. Our current priority levels would be to continue to fly those and add more to current contracts with our major partners. The second priority would be to fly prorate with our major partners. And then the third is to lease them out to some of the people that we've talked to in the past like Contour and others and then also just consume the excess parts and engines on those assets as well.

Okay. Great. And I was wondering -- you talked about the 29 airframes that you're planning to part out just given the MRO challenges. If you could just kind of talk about what you're seeing out there, like how long do you think those challenges will last and just what you're seeing in terms of like the maintenance issues out there and the MRO challenges.

Yes. That's a great question. So we are buying 30 aircraft. We plan on operating 6 of those aircraft. So there are 24 that we do plan on parting out. There are challenges at the moment, especially on the CRJ side with parts and labor, as we've talked. It is improving every day. MHI is working diligently. We are working with them closely on how to mitigate these risks. But we do think it will continue on, and that's why we have purchased these assets. So we don't know exactly how long, but what we did want to do is derisk the situation. And so we felt it was in our best interest to buy those airplanes and kind of derisk the supply chain.

Just one follow-up question. Is this coming from like engine -- from like the shortage of engines out there? Is this really coming -- or just other parts? Like -- or is it more of an engine issue?

The MHI issue is primarily an airframe issue. We are working with them on the airframe issues. There's challenges also in the engines, and we're working with GE on that side, too. But on the engine issue, we -- during COVID, we did not stop doing engine events. We -- during the pilot shortage, we continued to do engine events. And so as of this moment, we are in good shape on the engine side because of the advanced planning that we did on that.

Your next question comes from Savi Syth with Raymond James.

I wonder if I can just touch on the tariff topic briefly. Just curious, as you pay the 10% tariff, was that on like a full aircraft cost or just certain components and therefore, maybe not 10% of the aircraft costs? And also just -- I know there is a Section 232 investigation. And I wonder if you have any understanding as to -- if that -- how that goes and how that might affect the tariff discussion versus the 50% country-level tariff.

Well, Savi, this is Chip. Just real quick, I will say that the tariff that we have paid so far at the 10% is not on the full aircraft. You do a calculation of the certain components, there's a lot of American components in the 175, particularly the engine. So it's not a full component. It's just between 1/3 and 1/2 of what the 10% rate would be. So from that perspective, it's not the full 10% on the entire airplane. A couple of the other questions relative to the challenges associated with it at the industry level, we continue to monitor that type of stuff. We think that it certainly would have an impact on certain level of tariffs that are already integrated in the business model. And then there will be obviously some challenges to the 50% with Brazil at the same time. And from that perspective, there's -- I will say this, that the teamwork between us, our partners and Embraer is exceptional. We do get a sense that people are understanding the importance of this to small communities in the United States, the impact economically of what this does for our country. So look, we're going to continue to fight hard to make headway on the tariff front. But at the same time, we're also really well positioned to pivot and be patient with that conversation and continue to execute on some pretty strong growth possibilities within our partner structure.

That's helpful, Chip. And if I might, on the SkyWest Charter, just getting the commuter authorization, wondering if there's any update there. But just somewhat related, now that you have an FAA administrator that's one, permanent; and two, comes from the industry, are you expecting to see any kind of positive or negative changes in terms of how the FAA might kind of move forward with things?

Well, I think that, to be candid, to start with the status of the 380, we're very optimistic about that. I know that with an administration change, we would have hoped that this would have happened sooner. We know the Department of Transportation has had a very busy 6 months since they've changed the administration. We're very excited and confident that Bryan Bedford will be an exceptional FAA administrator. We get along very well with him. It's good to have someone that has the insights that we do. I don't know that's going to necessarily help the DOT because the FAA gave us authorization to fly in this profile years ago. So from that perspective, I think that the DOT has still got a lot of things they're trying to work through from a new administrator perspective. And the plans that we have with that charter operation, some of it is a little bit of a supply chain issue that we need to be patient with. So I think that we should see something hopefully here relatively soon, but we're optimistic eventually it's going to happen and maybe on a time line that may be beneficial to us as well still.

Your next question comes from the line of Tom Fitzgerald with TD Cowen.

Chip, I don't know if you mind just providing like a state of the union of the recovery in the prorate and small community market. Maybe it's hard just with how many folks that are out there, but I don't know at a high level if there any broad green shoots that you're seeing or any gating factors that are maybe delaying the recovery in certain places or things that are accelerating in other places.

Well, I'll give a general statement and then let Wade, who is more detailed on that, give some more feedback. In general, we've seen some commentary in the public as of late about small communities. And I can tell you fundamentally, I just do not know what they're talking about. Ever since COVID hit, small, midsized communities have very, very strong demand for our product. Right now, we are still trying to do some things with supply chain challenges to meet that demand. And like I said in my script, I think we've seen it stronger than it's ever been before. Things have happened over the last 5 years where communities who haven't had air service are being creative to try to pull us into certain markets to develop their economy. The foundational economics of service in small communities is stronger than it ever has been. Communities recognize that. And we have a large fleet with a lot of opportunity that we can meet that need. We just -- we have to be patient as we go back and address that. Let me turn it over to Wade and see if Wade has anything else to add.

The only thing I would add, the demand is extremely strong. There's many, many, many communities that we're working with right now to restore and enhance their current air service. SkyWest has a very unique offering. We offer very good service with a codeshare. And so the communities understand the value. As Chip said, the supply chain is probably constraining us more than the demand at this moment. And so as we continue to work through that through the end of this year and the first part of next year, we'll continue to restore that service. And so we've seen very good year-over-year growth, quarter-over-quarter growth, and we will continue to see that for the next foreseeable future.

Okay. Got it. That's really helpful. And then just -- if there is any CapEx that gets deferred or pushed to the right due to delays, how are you thinking about capital allocation, if there's any periodically stuff freed up? Would you focus on the balance sheet? Or would you look to buy back stock?

Yes. Look, I think from a CapEx standpoint, we've got a lot of flexibility. Obviously, we have a nice order book that we're looking at. But the thing I would point out, Tom, is that we're in a place where from a capital deployment standpoint, we've got a lot of options. We've obviously proven ourselves capable and willing to buy back our own stock. We've got plenty of liquidity, plenty of free cash flow to continue to invest in our fleet and our fleet flexibility. So I think we're in a really strong place right now with a lot of optionality.

Tom, the only thing I would add to that as well, if some of our current 175s get deferred, we have so much fleet flexibility that we can defer the 175s, continue to fly CRJ700s in those scope slots. The 700s that were slated to go with CRJ550s will probably be delayed, but we will continue to operate the CRJ200s. And so that's really the fleet flexibility that we've all been talking about for a long, long time. And so this is why SkyWest is so uniquely positioned to be able to handle some of these challenges that may come with the supply chain over the next couple of years.

Your next question comes from the line of Duane Pfennigwerth with Evercore ISI.

So just assuming the tariff uncertainty gets resolved, either tariffs get to a reasonable place or you and your partners figure it out, what is your early view for '26 block hour growth? And is this quarter kind of showing the operating leverage you'd expect in terms of earnings growth relative to block hour growth as we think about 2026?

So Duane, I'll tackle that first, this is Wade, and then Rob and Chip can chime in as well on this. So for 2026, in my prepared remarks, we talked about that we have 25 dual-class CRJ airplanes that are currently parked that we are bringing out and going to be able to reactivate. And so there is the natural growth from those airplanes. We have -- and that will add to 2026 production that we have. And so we do have the flexibility that we're going -- we're not giving 2026 guidance at this point, but we do feel optimistic there are still opportunities out there for us.

Okay. I guess would you take a shot at the growth rate, again, assuming that you resolve these tariffs? Mid-single digits, low double digits or could you potentially have another year like this?

Yes. This is Rob. So we're not going to give a number on this call. We'll probably talk more about it next quarter. But what we would say is, as Wade pointed out, that our growth opportunities are still very much intact across different scenarios, different tariff scenarios, whatever. We're in the unique situation and unique position that we've got the CRJ fleet, that we can just fly a little longer than we may have planned on 6 months ago or a year ago. So I think our growth story is very much intact, and we'll give a little more color on '26 next quarter in all likelihood.

Okay. Appreciate the attempt. And then maybe in the prepared remarks, I might have missed it, you said it kind of quickly. Was there a gain this quarter? And if there was, what were the assets that you actually sold, if you're willing to speak to that?

Yes. Sure. We had about $10 million or about $0.20 EPS that were related to a couple of items. One was just a mark-to-market on some of our equity investments that we have and then some of it was just the gain on sale of assets as part of our normal practice to sell -- opportunistically sell assets. So we had about $10 million in that category or about $0.20 for the quarter.

Your final question comes from the line of Catherine O'Brien with Goldman Sachs.

So I know we talked a little bit about capital allocation with Tom already, but we spent a lot of time in the last couple of quarters talking about capital allocations with deliveries expected to step down pretty meaningfully over the next couple of years. Is this E175 order the answer to where you expect to direct capital over the next couple of years? Or how do you see share repurchases trending broadly in the context of the higher CapEx commitments as we look out through the end of the decade?

So Catie, I would answer your question that -- I mean, we have been trying to position ourselves over the past several years to strengthen our balance sheet, derisk our balance sheet, delever our balance sheet. So the answer to your question can be sort of all of the above. Where we have the ability to continue to execute on our share repurchase program, obviously, we're interested in our order book and our refleeting activities that we've been going after. And we feel very good about the optionality that we've got as a result of our strong capital position and liquidity.

That's great. And maybe just for my second question, in the release, you mentioned that you're working with your partners on optimizing delivery timing. Are we meant to infer from that, that partners are asking you to push out deliveries given the current demand backdrop? Or is that more reflective of your commentary around potential delays from tariffs on the E175?

Yes. This is Chip. I would say that there's a lot of cohesive philosophies between us and our partners and Embraer about dealing with tariffs. So when we mentioned the fact that you could defer some -- again, I think we've probably overcooked the term flexibility so much on this call. Hopefully, you kind of get the message. But from our perspective, that conversation with our partners is very, very pointing. And it's not like it's really any type of dynamic conversation. We're all on the exact same page. Everybody knows what the game plan is. Our job right now is to make sure when it comes to capital allocation, we put our situation into a decade-long matrix that we've had for quite some time, look at opportunities. Maybe there's some opportunities with some of this fleet outside the United States that we could lease. Maybe there's some other creative things that we may be talking about next quarter. I can tell you that the dynamic philosophy of how we can deal with this is somewhat exciting. But at the end of the day, if this can be settled, we have plenty of capital and plenty of capability to have that be our top priority, take these airplanes when this gets resolved. If not, go to second, third, fourth and fifth option and utilize the capital appropriately in that case. So look, we're very comfortable in the position that we are in. It's taken us many, many years to get to this position to deal with these challenges. But I think that's part of the unique thing that we have with solid performance, great culture, fantastic relationships with our people, great partnerships, great manufacturers. All those things are coming together for this issue, and we're not panicked at all. We feel like we've got some really good options to deal with this and deploy capital appropriately.

That's great. Maybe just a very quick follow-up to that and will squeeze in a third one, if you'll let me. So just to be clear, like the -- optimizing the delivery slots has nothing to do with demand for those aircraft. That comment was entirely focused -- related on tariffs.

That could not be overestimated. The demand is not our problem for sure. I mean demand for this stuff today, like we've said in the script, it's as strong as we've ever seen it. It just takes a little bit of a calculus to meet that demand today, and we've got a lot of good options to do so.

Okay. Great. And maybe just on the 25 dual-class CRJ aircraft that you're reactivating. Is that because those got signed up for new flying agreements? Or they were already under agreement that you couldn't fly them before because MRO wait times or pilots or something like that?

Yes. So Catie, this is Wade. So the 25 -- or it's a combination of that. We have purchased some that we parked for a while. There are also some that during the COVID and pilot issues that we just parked. And these are new flying arrangements that we have signed up over the last 6 months that we are restoring all of those airplanes and bringing them back. And so that's what's really creating all of that.

That will conclude our question-and-answer session. And I will now turn the call back over to Chip Childs for closing remarks.

Thank you, Tiffany. Thank you, everyone, for your interest in SkyWest this quarter. We really appreciate you paying attention to what we're trying to do as a company. We feel like we're in a fantastic position. Like I said, great people that we work with, fantastic partners, great vendors. A lot of challenges. Demand is not one of the challenges. Meeting that demand is one of the things that we get very, very excited about, particularly with the opportunities that we're considering. And we look forward to updating you next quarter. Thank you.