SkyWest: This Lesser-Known Aircraft Leasing Company Has A 15% FCF Yield

George Theodosi
525 Followers
(8min)

Summary

  • Signs the pilot shortage is abating, allowing SkyWest's 600-strong fleet to achieve operating leverage and expand margins similar to pre-covid levels.
  • The regional airline is finally overcoming the pilot shortage and expects a 25% YoY increase in pilots by 2024.
  • Despite the 96% rally in the last year, SkyWest remains a "buy" due to its 15% FCF yield, potential for further buybacks, and growing fleet utilization rate.
  • The outlook for the sector is positive, with the key risk being a US recession, which will limit domestic air travel.

Alaska Airlines / SkyWest Airlines Embraer ERJ landing at the airport.

Jon Tetzlaff/iStock Editorial via Getty Images

Introduction And Background

SkyWest (NASDAQ:SKYW) is the largest regional airline in the US with a fleet of 600 (475 owned) aircraft, flying scheduled passengers across and within the US, Canada and Mexico. SkyWest doesn't operate as a traditional

This article was written by

525 Followers
I'm an IMC qualified contributor who's followed financial markets for 5 years and has worked professionally in primary investment research for over 2 years. I'm a generalist who enjoys researching businesses from a buttom's up angle with a deep interest in smaller under covered companies where there is greater opportunity for mis-pricing and finding asymmetric opportunities where the downside is limited.

Analyst’s Disclosure:I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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