SkyWest Airlines

Fundamental analysis
The company was founded in 1972 and is headquartered in Utah. SkyWest Airlines is America’s largest regional airline. The concept is not well known in Europe. Regional airlines connect smaller cities with major hubs (major hub airports). In Europe, on the other hand, they mainly fly direct non-stop.
In America, these airlines operate as contractors, flying on behalf of another airline. And this is where SkyWest excels. It currently flies for all major US airlines, i.e. Alaska Airlines, American Airlines, Delta Air Lines, United Airlines.
The company currently has 475 aircraft in its fleet (it would be the 3rd largest airline in Europe, bigger than Ryanair) and the number of passengers carried is over 40 million (which would put it in 7th place in Europe). As a regional airline, SkyWest has much smaller jets than the majors. The number of seats is between 40 and 80 per aircraft.
The company has held its revenues steady at around $3 billion. Revenues are growing despite the covid. The net profit was more than 116 million USD for the year 2023.
The share price has risen more than 160% in 1 year.
PE is 10.9.
Results
As many as 271 million passengers are expected to fly in America during the peak summer season. That’s a huge number that will benefit all airlines. SkyWest managed to increase block hours by 5% (fly more = get paid more) compared to 2023. They also signed a new agreement with United to lease an additional 20 Embraer 175 aircraft.
For the first quarter of 2024, the company reported net income of $60 million (about half of what it did for all of 2023 and in the worst quarter of the year for airlines).
Sales rose 16% to $804 million.
Technical analysis
SkyWest Airlines is trading at its highs. However, they climbed to a respectable $50-60 per share after Covid, then plunged. So we have a view of significant supports and resistances for most of the current upside.
The moving averages have been in an uptrend since June last year and have held their spread relatively. This points to a steady trend and not a sharp rise after the quarterly results were released.
The RSI has looked into the overbought zone several times, but is now holding below the major 70 level for several weeks.
Supports and resistances are historically few and mostly holding the price as one would expect.
Volume is around 500,000 shares traded per day. The value of this is medium to lower.
Conclusion
Airlines, especially in America, are thriving. After Covid and the lifting of travel restrictions, there is a huge demand for flying. This is evidenced by the expected 271 million passengers over the summer. Regional airlines will benefit from this as much as other carriers. SkyWest, by leasing their aircraft, often have a fixed income from the aircraft and are able to reduce costs and lease their aircraft on. You can see it in the quarterly results, the company is beating analysts’ estimates. The business is decently diversified as the company flies for all the major US airlines.
On the other hand, there can always be another constraint, a crisis that will sink air travel. Airline stocks are very cyclical and sensitive to any bad news from the world such as a natural disaster, a spike in oil prices, war and other negative news.