SkyWest (SKYW) October Block Hours Fall, Load Factor Down
SkyWest, Inc. SKYW reported a year-over-year decline of 5.4% (8,300) in block hours (a measure of aircraft utilization) to 146,200 in October.
The regional carrier, focused on streamlining operations, stated that the fall in the metric was in sync with fleet transition plans. The company aims to reduce the 50-seat jets in its fleet and add new E175 aircraft.
Notably, SkyWest’s dual class aircraft (E175, CRJ900 and CRJ700) accounted for approximately 54.7% of the carrier’s total block-hour production in the month compared with approximately 52.8% a year ago. In terms of airlines, SkyWest Airlines and Express Jet Airlines represented a respective 80.4% and 19.6% of the carrier’s total block-hour production for October.
Load factor (percentage of seats filled with passengers) deteriorated 230 basis points (bps) to 80.2% in October. While the number of departures in the month fell 7.3% on a year-over-year basis, passenger count declined 7.2%. Additionally, this St. George, UT-based company reported a 4.8% decline in block hours for the first 10 months of 2018.
SkyWest, Inc. Price
SkyWest, Inc. Price | SkyWest, Inc. Quote
Apart from the traffic report, the carrier was also in news when it released third-quarter 2018 results in October. The company’s earnings of $1.57 per share benefitted from a lower effective tax rate. The bottom line also surged 55.5% on a year-over-year basis. Quarterly revenues came in at $829.3 million on the back of improved fleet mix.
Zacks Rank & Stocks to Consider
SkyWest carries a Zacks Rank #3 (Hold).
A few better-ranked stocks in the broader Transportation sector are Canadian Pacific Railway Limited CP, Norfolk Southern Corporation NSC and Hertz Global Holdings, Inc. HTZ. While Norfolk Southern carries a Zacks Rank #2 (Buy), Canadian Pacific and Hertz Global sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Shares of Canadian Pacific, Norfolk Southern and Hertz Global have gained 12.1%, 10.7% and 11.4% in the past six months, respectively.
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