SkyWest Airlines (OO, St. George Municipal) does not expect Delta Air Lines (DL, Atlanta Hartsfield Jackson) to renew a capacity purchase agreement covering fifty-five CRJ200s, which expires in increments between the second and the fourth quarter of 2020, the regional capacity provider said in its quarterly report.
"SkyWest leases 19 of the 55 aircraft from Delta and anticipates returning the leased aircraft to Delta in 2020. SkyWest owns the remaining thirty-six CRJ200 aircraft and anticipates parking the 36 aircraft on an individual basis following removal from service," the airline said.
Chief Commercial Officer Wade Steel added during a follow-up earnings call that SkyWest was "working with Delta on their long-term 50-seat needs".
According to the ch-aviation fleets module, SkyWest currently operates 200 CRJ200s, of which a total of 86 are used to operate the Delta Connection CPA (as is common practice, US regional capacity providers operate fleets exceeding the number of aircraft covered by the CPAs to ensure reliability), and the remainder flies for United Airlines (UA, Chicago O'Hare). Until late 2019, the airline also operated CR200s for American Airlines (AA, Dallas/Fort Worth) with the last unit, N256PS (msn 7937), retired on December 22, 2019, according to Flightradar24 ADS-B data.
SkyWest just recently extended its CPA with United covering seventy CRJ200s.
It owns the bulk of its CRJ200s, the ch-aviation fleets ownership module shows, with just 37 aircraft on operating leases (including the 19 dry-leased from Delta). It also dry-leases two of its owned units to Endeavor Air (9E, Minneapolis St. Paul International).
SkyWest said it recorded "approximately USD15 million of incremental depreciation expense in Q1 2020" related to the expected retirement of its 36 owned CRJ200s covered by the Delta CPA.
On top of the aircraft operated by SkyWest, Endeavor Air also operates forty-four CRJ200s for Delta Connection.
In terms of other fleet developments, SkyWest said that it still counts on the delivery of 21 second-hand E175s, financed by United Airlines, throughout 2020. The airline is also working with American Airlines "on revised delivery dates" for twenty new E175s to be financed by SkyWest through debt. Of the latter batch, ten were due to deliver in the second half of 2020 and the first half of 2021, but Steele said that SkyWest no longer expected any of these aircraft to deliver by early 2021.
In terms of its non-CRJ200 commitments with Delta, SkyWest expects delivery of one CRJ900 by the end of 2020. The airline plans to remove three CRJ700s and four CRJ900s through the end of the third quarter of 2020.
SkyWest said it was in talks regarding the timeline for the induction into service of the remaining nine CRJ700s to be operated for American and for the dry-lease of thirteen CRJ700s to a third-party airline (GoJet Airlines (G7, St. Louis Lambert International)).
"The lessee has requested that we pause delivery on the other 13 aircraft. The lessee has extraordinary financial issues, and we are evaluating all of our options under the lease," Steele said.
"We were scheduled to add 51 aircraft to our fleet in 2020 and 12 in 2021. This included 32 aircraft financed by our partners, as well as 26 new aircraft and five used aircraft financed by SkyWest. Taking the current travel environment into account, we still anticipate taking delivery of these aircraft. However, we are working closely with our partners and manufacturers to adjust the timing of these deliveries," Steele added.
