Do SkyWest’s (SKYW) Extended E175 Deals Redefine Its Regional Capacity Moat?

• In January 2026, SkyWest reported fourth-quarter 2025 results showing revenue rising to US$1,024.49 million while net income and EPS slipped slightly year-on-year, and confirmed multi-year extensions on E175 flying agreements with United and Delta alongside ongoing debt reduction and share repurchases.
• An interesting angle is that despite mixed quarterly earnings, SkyWest’s long-dated E175 contracts and growing block hours point to increasingly visible partner-driven demand for its regional flying capacity.
• We’ll now examine how this blend of modest earnings underperformance and extended E175 partner contracts shapes SkyWest’s broader investment narrative.

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What Is SkyWest's Investment Narrative?

To own SkyWest today, you have to believe in a partner-driven, contract-backed regional airline model where long-term E175 agreements with United and Delta underpin demand, even when quarterly earnings are a touch soft. The latest results fit that pattern: revenue pushed past US$1,024.49 million in Q4 2025, but EPS missed consensus and the share price sold off, despite a strong full-year profit outcome and ongoing debt reduction and buybacks. The key near-term catalysts now look tied to execution on growing block hours, adding nine new E175s and redeploying idle aircraft, rather than to big contract wins, which are largely locked in through at least 2028. That makes the immediate impact of this earnings miss more sentiment-driven than fundamental, though it does sharpen the focus on cost control, pilot availability and SkyWest’s high debt load as the main risks to watch.

However, investors should be mindful of how that debt burden could limit flexibility. Despite retreating, SkyWest's shares might still be trading above their fair value and there could be some more downside. Discover how much.

Exploring Other Perspectives

Three Simply Wall St Community fair value estimates cluster between about US$128 and US$206, suggesting some see very large upside. Set that against the recent earnings miss and high debt, and it becomes clear you should weigh several viewpoints before judging SkyWest’s longer term performance potential.

Explore 3 other fair value estimates on SkyWest - why the stock might be worth just $128.33!

Build Your Own SkyWest Narrative

Disagree with this assessment? Create your own narrative in under 3 minutes - extraordinary investment returns rarely come from following the herd.

• A great starting point for your SkyWest research is our analysis highlighting 5 key rewards and 2 important warning signs that could impact your investment decision.
• Our free SkyWest research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate SkyWest's overall financial health at a glance.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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