Thanks, Abby, and thanks, everyone, for joining us on the call today. As Abby indicated, this is Rob Simmons, SkyWest Chief Financial Officer.

On the call with me today are Chip Childs, President and Chief Executive Officer; Wade Steel, Chief Commercial Officer; and Eric Woodward, Chief Accounting Officer. I'd like to start today by asking Eric to read the Safe Harbor, then I will turn the time over to Chip for some comments.

Following Chip, I will take us through the financial results, then Wade will discuss the fleet and related flying arrangements. Following Wade, we will have the customary Q&A session with our sell-side analysts.

Eric?

Today's discussion contains forward-looking statements that represent our current beliefs, expectations, and assumptions regarding future events and are subject to risks and uncertainties. We assume no obligation to update any forward-looking statement, whether as a result of new information, future events, or otherwise.

Actual results will likely vary and may vary materially from those anticipated, estimated, or projected for a number of reasons. Some of the factors that may cause such differences are included in our most recent Form 10-K and other reports and filings with the Securities and Exchange Commission.

Now, I'll turn the call over to Chip.

Thank you, Rob and Eric. Good afternoon, everyone.

Thank you for joining us on the call today. Today, SkyWest reported net income of $102 million, or $2.50 per diluted share, for the first quarter of 2026.

This is slightly better than the same quarter last year and reflects increased production and fleet utilization. During the quarter, we received delivery of 1 E175, with 8 more expected this year.

We are also excited to share a prototype of the new CRJ450 product, a reimagined premium 41-seat CRJ200. This aircraft will include first class, overhead bins large enough for all roller-board luggage, and Starlink Wi-Fi.

SkyWest is very excited to launch this new product for United this fall, and we look forward to ultimately operating an all dual-class fleet. The first quarter is always difficult with winter weather.

Our people rose to the challenge despite two back-to-back storms in March affecting several of our hubs. During the first quarter, the Department of Transportation shared their full year 2025 on-time performance statistics, with SkyWest Airlines placing third in on-time performance.

That's outstanding, and I want to thank our people for working together to deliver such an exceptional product. The industry is extremely dynamic, and our model is built for durability.

With uncertainty impacting fuel costs and production, we still anticipate 2026 will be more profitable than 2025. SkyWest strategic business decisions have kept us strong and agile to the industry's volatility, and the steps we've taken in the past several years have only enhanced the strength and stability of our model.

Our ongoing investments in the diversity of our fleet ensure we're well positioned to adapt to market demands. We continue executing our fleet initiatives and advancing our unparalleled fleet flexibility.

That flexibility has never been more important, and while our E175 flying agreements are further solidified, we continue to leverage our extensive CRJ assets. The contract extensions we announced with United and Delta last quarter deliver ongoing revenue stability.

With our dual-class fleet, both CRJ and ERJ now under contract, we have no major E175 contract expirations until late 2028. We continue accepting delivery of new E175s, converting CRJ700s to CRJ550s for United, and are proud to be launching the CRJ450 with United this fall.

Additionally, we continue to reduce our debt, and we now have $1 billion less debt than we did at the end of 2022. The free cash flow that we continue to generate is still being directed toward fleet growth initiatives, debt reduction, and share repurchase.

Our steadfast commitment to maintaining a strong balance sheet and liquidity benefits our employees, our partners, and our shareholders. All of this work sets us up well for 2027 and places us in a solid position of long-term strength.

SkyWest continues to lead our industry in service and in the value of our diverse assets. We remain disciplined and steady as we execute on our growth opportunities by delivering on significant prorate demand, investing in and fully utilizing our existing fleet, and preparing to receive our deliveries in the coming years for a total of nearly 300 E175s by the end of 2028.

SkyWest is built to perform through the industry's cycles. Disciplined strategic choices and continued execution in recent years have strengthened our model, and we remain well positioned to adapt quickly and to respond to market demands better than anyone else in the industry.

Rob will now take us through the financial information.

Today, we reported a first quarter GAAP net income of $102 million, or $2.50 earnings per share. Q1 pretax income was $108 million.

Our weighted average share count for Q1 was 40.7 million, and our effective tax rate was 6%. This GAAP EPS included a 29 cents impact from this unusually low effective tax rate from a discrete benefit in the quarter compared to the Q1 rate last year.

Let's start today with revenue. Total Q1 revenue of $100—or $1.01 billion is down slightly from $1.02 billion in Q4 2025 and up 7% from $948 million in Q1 2025.

Q1 revenue includes contract revenue of $810 million, up from $803 million in Q4 2025 and up from $785 million in Q1 2025. Prorate and charter revenue was $168 million in Q1, up $1 million from Q4 2025 and up $37 million from Q1 2025.

Leasing and other revenue was $35 million in Q1, down from $54 million in Q4 and up from $32 million in Q1 2025. The sequential decrease in leasing and other revenue from Q4 related to discrete maintenance services provided to third parties in Q4 that was not expected to repeat in Q1.

Additionally, these Q1 GAAP results include the effect of recognizing $24 million of previously deferred revenue this quarter, up from the $5 million recognized in Q4 2025 and $13 million recognized in Q1 2025. As of the end of Q1, we have $241 million of cumulative deferred revenue that will be recognized in future periods.

Now, let's discuss the balance sheet. We ended the quarter with cash of $627 million, down from $707 million last quarter and down from $751 million at Q1 2025.

The ending cash balance for the quarter included the effects from repaying $116 million in debt, issuing $118 million of new debt, investing $102 million in CapEx, including the purchase of 1 E175, and buying back 783,000 shares of SkyWest stock in Q1 for $75 million. As of March 31st, we had $138 million remaining under our current share repurchase authorization.

Cash flow is obviously an important driver of our capital deployment strategy. Over the last 2 years, we generated nearly $1 billion in free cash flow and deployed it primarily to delever and de-risk the balance sheet, to the benefit of our partners, our employees, and our shareholders.

We expect to continue to deploy our ongoing generation of free cash flow by investing in our fleet, including financing the addition of 28 new E175s by the end of 2028, reducing our debt, and executing opportunistically on our share repurchase program, as you saw us do in Q1. As we remain focused on improving our return on invested capital, we'd like to highlight the following: both our debt net of cash and leverage ratios continue at favorable levels and are at their lowest point in over a decade.

Our total debt level is $1 billion lower today than it was at the end of 2022, in spite of acquiring and debt-financing 15 E175s during that time. The total 2025 capital expenditures funding our growth initiatives was approximately $580 million, including the purchase of 7 new E175s, CRJ900 airframes, and aircraft and engines supporting our CRJ550 opportunity.

We expect to take 9 new E175s during 2026 and anticipate our total CapEx in 2026 will be about flat with 2025, including 2 incremental 175 deliveries. Consistent with our practice, let me update you on some commentary on 2026 that we gave last quarter.

For 2026, we now expect to see block hour production slightly lower this summer than we modeled last quarter. We continue to work with our partners on production schedules over the rest of 2026.

Wade will talk more about this in a minute. We also anticipate our GAAP EPS for 2026 will be in the $11 area, slightly down from the color we gave last quarter, reflecting our expectation of ongoing elevated fuel costs.

Although the future cost of fuel is obviously uncertain, we are exposed to fuel costs only on roughly 10% of our flying, or 40 million gallons needed in our prorate business over the remainder of the year. We also believe, however, that higher fuel costs will come with some favorable prorate pricing offsets in that business along with ongoing strength in our core model.

In terms of how to think of quarterly EPS modeling for the rest of 2026, there are several potential puts and takes over the remaining quarters, including seasonality, fuel costs, production, and so on, that have various levels of uncertainty. To keep it simple, on a GAAP EPS basis, we anticipate directionally that Q2 could be up slightly from Q1 GAAP results of $2.50, Q3, seasonally the strongest quarter of the year, could be up over Q2, and Q4 could be down modestly from Q3.

For other modeling purposes, we anticipate our maintenance activity in 2026 will continue approximately at 2025 levels as we invest in bringing more aircraft back into service. We also anticipate our effective tax rate will be approximately 23% to 24% for the full year 2026, flat to slightly down from 2025, including the unusually low rate of 6% in Q1.

This is expected to translate to an effective tax rate of approximately 27% to 28% for the remaining quarters of 2026. We are optimistic about our ongoing growth possibilities in '26 and '27, including the following three focus areas: first, growth in our ability to increase service to underserved communities, driven partially by the redeployment of approximately 20 dual-class CRJ aircraft expected for scheduled service later this year and strong utilization of the existing fleet; second, good demand for our prorate product; and third, placing 9 new E175s into service for United and Alaska by the end of 2026, and 16 new E175s for Delta in 2027 and 2028.

We are also very pleased with the success of our CRJ550 and CRJ450 initiatives, and I will hand the mic to Wade, who will talk more about that next. We believe that we are positioned to drive long-term shareholder returns by deploying our strong balance sheet and free cash flow generation against a variety of accretive opportunities.

Wade?

Thank you, Rob. During the quarter, United announced the launch of the CRJ450, a reimagined CRJ200 featuring 41 seats.

This aircraft will offer 7 first class seats and 34 economy seats, including Economy Plus. With a large luggage [closet?]

, and no overhead bins in the first class cabin, passengers will enjoy a premium experience. We're also excited to introduce Starlink connectivity on board the CRJ450.

Operations with United will begin this fall. Last year, we announced an extension covering 40 CRJ200s with United, and we are committed to retrofitting these aircraft into CRJ450s.

We also plan to retrofit our prorate fleet and anticipate that our total CRJ450 fleet will reach approximately 100 aircraft. Turning to our E175 fleet, last quarter, we secured multi-year extensions for 40 E175s with United and 13 with Delta, further solidifying our partnerships through the end of the decade.

We now have no contract expirations on E175s until the second half of 2028. During the quarter, we took delivery of a new E175 for Alaska and currently have 68 E175s on firm order with Embraer, including 16 for Delta and 8 for United.

We expect to receive 8 additional E175s this year. Of the 68 aircraft on order, 24 are allocated to major partners, with 44 remain unassigned, allowing flexibility in our long-term fleet strategy.

Delivery slots are secured from 2027 to 2032, and the structure of the order allows us to defer or terminate if we don't secure partners. Following the completion of the Delta deliveries expected in 2028, our E175 fleet will total nearly 300 aircraft, reinforcing SkyWest status as the world's largest E175 operator.

We recently acquired 5 E170s and reached an agreement with United to operate these as we expedite the conversion of our CRJ700s to CRJ550s. As previously announced, we have a multi-year agreement to fly 50 CRJ550s with United.

As of March 31st, 29 CRJ550s were in service, and we expect the remaining 21 to enter service this year. We have also initiated a prorate agreement with American, currently operating 6 aircraft under this arrangement, with up to 9 expected by year-end 2026.

We look forward to expanding our relationship with American. Reviewing our production, Q1 2026 block hours increased 3% compared to Q1 2025.

For 2026, we anticipate production slightly lower this summer than we modeled last quarter. This year, we expect to take delivery of 9 new E175s, place 23 CRJ550s into service, capitalize on strong prorate demand, and increase fleet utilization.

These gains are partially offset by the gradual return of approximately 19 Delta-owned CRJ900s to Delta over the next couple of years at a slower pace than previously anticipated. Our revenue seasonality has normalized.

With improved utilization during the strong summer months, we still have approximately 10 dual-class CRJ aircraft currently undergoing heavy maintenance after transitioning from long-term storage. These aircraft are set to return to service in 2026 under existing flying agreements.

Additionally, over 30 parked CRJ200s that could potentially transition to the CRJ450 and further enhance our fleet flexibility. We continue to face challenges in our third-party MRO network, including labor and part shortages.

We expect maintenance expense in 2026 to remain consistent with 2025 as we bring aircraft out of long-term storage and support growing production. As expected, maintenance expenses are incurred before aircraft return to service.

Demand for our prorate business remains extremely strong, supported by great community engagement. We are seeing opportunities to restore SkyWest service to several communities and will continue to work with airports to expand our reach.

As discussed last quarter, growth in our prorate business contributes to a more seasonal model. We remain confident in our ongoing efforts to reduce risk and enhance fleet flexibility, and we are committed to collaborating with our major partners to deliver innovative solutions that meet the continued demand for our product.

Operator, we're ready for the Q&A now.

Hey, good afternoon, everyone. Thanks for the time.

We've had a couple capacity cut announcements from your partners this earnings season, and you just shared that your summer schedule is lower than you originally expected. Do you think those mainline carrier cuts are now fully reflected in your schedule?

How far in advance are you typically warned about any potential schedule changes?

Catherine, this is Wade. As I said on our call, we do expect our block hours to be slightly less than what we talked about last quarter.

We've got good schedules through the summertime for sure, and so we think that those schedules will hold, and we anticipate a strong fall as well. We do expect a little bit less than what we talked about last quarter, but we have pretty good visibility to what's going to happen over the next quarter for sure.

I apologize if I missed it, did you give us—usually you give us some type of like sequential compare on the block hour for the for the 1 quarter out versus the current quarter or year-over-year. Did you share that guidance?

We did not, but if you compare it to Q1 2026, Q2 will be seasonally higher than what we just did in Q1.

Okay. Maybe this might be another one for you, Wade.

Last quarter, you spoke about having 60 CRJ200s going through maintenance to return to service, and I think there was 20 of those that were already under contract. We now know you're going to be converting a number of those into CRJ450s to be put into service with United starting as early as this fall.

Can you help us understand what portion of those 60 CRJs you already had maintenance were slated to become CRJ450s, and if there are any incremental shells left from that pool still looking for homes that could potentially be incremental to 2026 block hours?

That's a great question. As I talked a little bit in my script, there are still about 30 CRJ200s that are parked and that we're working with our major partners to bring those back.

As we look at it, if we do bring them back now, it would be late in 2026 and rolling into 2027. We are still working on those.

We're optimistic that we will be able to find a home for those, we are working through that right now.

Great. Thanks so much for the time.

Hey, good afternoon, everyone. Just kind of building on Katie's questions on the CRJ450, curious what the conversion time around that is and just how the cost and the CapEx is handled in terms of kind of what your partner might cover?

Savi, this is Wade. That's a great question.

Like I said, we anticipate starting to transition these in the fall. The transition time will be a couple of weeks to transition them from a CRJ200 to a CRJ450.

We anticipate doing a couple of lines at a time. All of the economics are included in the rates with our major partner.

They will be included in the economics that we receive from the partner.

Got it. Wade, just to clarify, I think you mentioned this, but I I'm not sure.

I I know the, the E175 by year-end '28 wording went from nearly 300 to more than 300. Is that kind of a reflection that the rest before kind of year or most of the ones before year-end '28 have been extended or kind of what was the reason for that wording change?

No, we still anticipate around 300 airplanes. We still continue to take delivery of those.

We have 8 more for United, 16 more for Delta, and so it's still right around that 300 number. It's pretty consistent with last quarter.

We did take a delivery for Alaska in Q1, but we are continuing to work to place the remainder of those airplanes, and we are having very interesting conversations.

Got it. Just lastly, I'm not sure if I missed it, but did you say what the prorate revenue was this quarter?

We did not, but it is $168 million is our prorate in SkyWest Charter in our charter business.

Perfect. Thank you.

Oh yeah, hey. Chip, I know you talked about these airplanes, these CRJ450s, being great airplanes for these underserved communities.

I know out of Chicago you were going to launch a whole bunch of service to a lot of underserved cities. What's the status on that?

Because of the FAA order, are you going to have to withdraw that service?

Mike, it's Chip. That's a great question.

I think from our perspective, nothing has necessarily changed in our intent. The cities, like Wade mentioned in the script, all take a long time to get to the timeframe where they're open to go back to the cities.

I can tell you that sometimes it's up to even a year process. The timing of most of what you're talking about doesn't necessarily perfectly correlate to some of the things happening in Chicago for 2020 the remainder of 2026.

Some of the cities, if it doesn't work in Chicago, the bids could go to one of our other hubs. It doesn't change the interest of us going back to these communities.

If there's a network problem between some of our partners in some of these locations, and we got some flexibility that DOT is willing to work with to go to a different hub to make sure that we ensure that service. From that perspective, our intent is still to do what we do best, and that is to serve and develop these small communities like we've done for 53 years.

There's still a very good market for that, and we'll be flexible, as we mentioned in our script before, on how we do that with these communities and with our partners.

Great. Just to Wade, I apologize if you said this number.

I did get on late. Just the new block hour rate for the year, because I think you said you were planning to fly a little bit less this summer, and so what should we be modeling for block hours for the full year?

Last quarter we talked about low or mid single digits. It's slightly less than that from what we anticipate.

We're still finalizing all of our block hours through the back end, but we still do expect to be up year-over-year, but we're just kind of working through that at the moment.

Then just in that regard, though, you're still up, and the reason for the reduction, is it because of the higher fuel prices and a cut to prorate, or is it Chicago? Is it both?

How do we parse that out?

It really has nothing to do with our prorate. We're still very optimistic with our prorate.

The demand, just like our major partners talk about, the pricing is still there. The demand is still really strong.

We have not cut any of our prorate flying. There is a little bit in Chicago, like you talked about, and then some of our other CPAs just have some kind of cleanups with utilization.

Those are kind of the main drivers.

Okay. Then just my last point, though, but if fuel prices stay high, in the past, there was always this arbitrage between mainline and regional in the sense that if the majors had to cut but wanted to maintain frequency and maintain the integrity of their hubs with the number of banks, that parking an inefficient 25-year-old A319 or A320, or maybe utilizing it less and backfilling it with one of your airplanes, was far more profitable for the full ecosystem.

Does that still hold, and does that potentially create opportunities if, I don't know, the Strait of Hormuz remains closed for longer than what we thought?

Michael, that's a fantastic question, and we evaluate that data. You can go back several decades and look at some of these events from 9/11 to the financial crisis to oil at $150 and COVID and all that stuff, and the data is actually pretty clear.

Each partner might look at it a little differently depending upon where their fleet is. To the extent that we own the less seats and can be cost-competitive, there's a very strong trend of network preservation and even predatory initiatives that can happen with a smaller fleet in somewhat difficult times, particularly if you try to estimate how long this may last and what the net effect of this is, which we're not going to speculate on.

I think a lot of others in the industry have been pretty clear about that. To the extent that we have a good model and can take care of the right dynamics of the industry, we're pretty comfortable where we are and are going to be very fluid with the needs of what our partners want.

Okay. Have you had any conversations along those lines?

In order to facilitate fare increases, it's a less-is-more situation, right? You want less seats in the marketplace, and feel like you guys are best positioned to do that.

I'm not sure if you're having those conversations.

That's an interesting way to put it, but our conversations with our partners are a little bit more, I wouldn't say dynamic, maybe even simplistic about that. We continue to have conversations about the network supply that we provide, the economics at which we do it, and what long-term initiatives are.

I think the good news that you've seen throughout the script is all of our conversations are sort of wait-and-see. I think that, depending upon how this plays out, we're extremely well prepared for however turn that this takes.

I think the net effect of it is, outside of the global issue of what you talk about, our relationships with our partners are extremely good, and our fleet flexibility gives us an enormous amount of opportunities to help meet their demand. We talk more about fleet flexibility with them, we talk a lot about performance and all that kind of stuff that really helps drive more of that conversation than these specific speculative amounts of what happens.

Now, if this goes on for a very long time and things get worse, there's no doubt that we'll have different conversations with them for sure.

Great. Thanks, Chip.

Thanks, everyone.

Thanks, Mike.

Hi, everyone. Thanks very much for the time.

I'm just kind of curious on unit costs and just how you're thinking about, to the extent that you are making cuts in the rest of the year, how much you can variablize, and just how we should think about maybe unit labor costs moving around from here?

Yeah. There's a lot of our costs as you're talking about, we do have some flexibility with some of our costs, especially as you look at some of the direct labor costs.

We have some levers on training, on hiring, some of those things that we can definitely make more variable. On the maintenance side, a lot of our maintenance costs are variable based on the number of cycles or hours that we do fly, and so there is a nice chunk of maintenance costs that are also variable.

Our models reflect that, our revenue models reflect that, and so do our cost models.

That's really helpful. Then kind of just an accounting question on the discrete tax benefit, should we think about that as stacking on top of the benefit from 1Q '25, the 29 cents plus the 24 cents, or was that just a one so it goes from $2.50 GAAP to $2.21?

Just wanted to make sure I was following that correctly.

Tom, you've got it. There's typically a Q1 thing, but I would just again point out that for the year, the full year '26 tax rate is basically flat to maybe slightly down from where we were last year.

It's just the quarters are spread out a little bit.

Okay. Then just kind of questions, and this is more of just like a what-if risk, but we just kind of get to the extent if one of your partners were to be able to get to operate their own regional subsidiary, how do you think about managing through the pricing risk?

Because I could see the narrative forming, but just kind of curious. Obviously, you have a very unique fleet, you have a lot of really attractive assets, you guys have been proven to be really good stewards of them and adapting quickly to change.

Just kind of curious how you're thinking about the competitive landscape and maybe longer-term pricing power. Thanks again for the time.

That's a great question. Obviously, a lot of our current major partners have wholly owned subsidiaries.

We've been able to work with them very closely. We're fine competing with them as well.

I think it's one of those things that SkyWest has a very competitive structure. We're able to be very nimble.

A lot of things with how we do business is very unique. We've got great relationships with our labor groups and such that make it such that we bring a very unique proposition to each one of our partners, and so we'll continue to work with them.

Obviously, we're aware of what could possibly happen in the industry, and we've been through these things, and we're happy to work with our major partners.

Hey, thank you. With this light change in utilization, I wonder, are your pilot hiring plans changing at all?

Are you dialing that down? If so, is there an opportunity to maybe better match the new production with your staffing in the second half, or is it just too early to make that call?

No, Duane, that's a great question. To be candid, we're very sophisticated and very attentive in how we manage that.

I think part of our labor cost increase this year compared to last year has been more attrition and more hiring and training costs that we've had in '26 and '25. From the perspective of what we have seen, it's going to be very dependent upon what our partners are doing with their hiring, and that's the number one driver.

We have seen some slowdown in some hiring, particularly since the first quarter and even April. Major carriers are getting ready for the summer schedule and hiring, but that's tapering off.

Some of the most sophisticated analysis we do is managing flight attendants and pilots and mechanics given the production timeline, and we're seeing very good things throughout the rest of the year, stuff that is very easily managed. Now, like we said, as of today, the overall model, we're proceeding full steam ahead with the deliveries we have and with the demand that's out there for our product.

We also can pivot relatively quickly and do that evaluation relative to what may happen, and we'll be prepared to do that. We're seeing a very stable process and environment for pilot hiring today.

The pipeline is extremely full. There's a lot of employees that want to work at SkyWest at all levels, and we continue to monitor that especially during times like this that you could have some variables go one way or the other within the next couple of months.

It's a good question. Hopefully that answers your question.

Maybe just to try and put a finer point on it. The investment that you were planning to make this year to support the growth, it sounds like that investment has not changed.

Is that fair?

That's absolutely correct, yes.

Yep. Thank you.

Then just for my follow-up, on the buyback, the pacing of the buyback, it stepped up in the first quarter. How do you think about that pacing going forward, accelerating it, or dialing it back?

What are the circumstances where you might maintain this? Thank you for taking the questions.

Thanks, Duane. This is Rob.

The buyback for the quarter of $75 million was, again, something that falls well within what we've sort of always said, that we like to be opportunistic about the way that we did that, and we were very comfortable buying a little more stock this quarter at the prices we were able to get given the volatility. Going forward, we'll continue to do the same thing.

We'll continue to be opportunistic, and we'll continue to have a balanced approach to how we deploy our capital across our fleet, strengthening our balance sheet, and share repurchase.

Thank you.

Hey, guys. Thanks for taking my question.

First, I'd love to just get your perspective on Essential Air Service. The proposed budget came out not long ago, and there were some jitters in there about Essential Air Service.

I know that that can happen regularly and it doesn't normally get cut, but I'd love to just kind of get your perspective on things, your historical perspective, and how you think about just planning for what the budget is requesting?

John, that's a great question. We appreciate it.

I think that from our perspective, we see this come up quite a bit. In 53 years of SkyWest history, this has been something that's been discussed a lot.

I think that from the perspective of small community service, we're the very best at it. I also think that from the perspective of Essential Air Service, we're the best steward of the program.

We've seen certainly with the captain shortage a lot of abuse from other carriers within this program that has caused people to ask about the validity and strength of what the program actually does. I can assure you that this is a program that is very well managed from the Department of Transportation.

We take it very seriously, and our initiative is to make sure that it is efficient and works well not just for the communities, but also for the federal government as well. We take that very serious and think that we're a very strong steward of this program.

That having been said, we have a tremendous amount of studies and economics that these dollars massively support a very strong tax basis and development of a tax basis within these small communities, and we can certainly have our folks share some of those studies with you. Look, we're very comfortable about how we handle the program.

We take it very serious about making sure we do it the right way and serve the communities in the right way, and think that it has a good future moving forward. We're happy to help work in ways that can evolve it if need be, but the program is fantastic and does deliver a very strong economic tax basis wherever we do it.

Got it. Can you just remind us exposure to the program?

Just help us think through SkyWest exposure.

That's a great question, John. We serve currently about 40 different communities, and so we've worked with these communities over the long term, and as Chip said, we take the responsibility very serious, and so we'll continue to serve those markets.

Got it.

If I could just ask a completely different topic. Consolidation has been a theme in the industry in the news the last few months, and obviously very recently.

I'm just kind of curious, maybe we could just use this opportunity for you guys to remind us what opportunities and risks could consolidation present? On the opportunity side, I could see a situation where if capacity is cut under certain scenarios, that might be opportunity for you guys, or opportunity for some of the airlines who are your major customers.

On the other hand, I could see a situation where certain pairings might impact your business negatively. Maybe you can just kind of remind us historically how consolidation has affected you, how you guys think about it, and if there are any protections in contracts that are worth thinking through?

Thanks.

Yeah. No, that's a great question, John.

Let me start first by saying we have no interest in acquiring anybody, you can take us off the table from that. We fundamentally believe, for our purposes, that organic growth is the best for our shareholders as well as our employees, especially, which is why we never really consider those things.

I can tell you we do have several offers for us to be involved in this stuff, but we're not interested in it for sure this time. To the extent that our partners participate in it, we're probably in a position where we should not have any comment on that to be candid with you, but I will give you some feedback relative to what's happened, because we've got a history of the Continental-United combination and those types of things.

To the extent that there are opportunities for us to support any of our partners that go through that or want to go through that, we tend to become a very dynamic participant and stakeholder in those things, it has in the past worked out pretty well for us, but that doesn't mean it would work out well for us in the future. Nonetheless, it does make an interesting conversation that we have talks about with our partners, again, we continue to beat the drum of financial stability and fleet flexibility.

I would just say, if anything ever starts to get any type of legs, then I would remember just what our capacities are in those situations, obviously our top priority is taking care of our partners in that situation.

Got it. Appreciate it.

Thanks, guys.

Hey, guys. Thanks so much for the follow-up.

Just two quick ones, if I may. When you introduced the mid-$11 EPS guidance last quarter, were you incorporating the 29 cents tax benefit in 1Q or not?

Just trying to get a sense of the quantum of the change in your outlook driven by block hours, if that's mid-$11 back in January plus 29 cents, and then less the block hour hit to get to $11 range? Just trying to understand what the block hour swing is in there.

Katie, this is Rob. Now I would tell you that the change in our EPS color had nothing to do with tax rate.

Again, year-over-year, we would expect that the full year '26 is going to be very similar to '25, maybe flat to slightly down. The unusual benefit in the first quarter was just deduction timing differences that are generated from various quant models that we have.

Overall, the tax rate for the year is flat and had nothing to do with our color guide. The guide in our color was almost entirely related to prorate fuel.

That's why we've tried to be helpful, we've got 40 million gallons that are exposed to fuel price over the next three quarters. We wanted to be as helpful as we could for your models.

No, that's very clear. Thanks for that.

Then just a final question. If your partners were to cut your schedules this summer, could you pivot aircraft into charter operations?

I know you said there's more demand than you can fill, or are there just some logistical challenges to moving planes and people back and forth? If it is possible, how do the margins on charter flying compared to scheduled service?

Thanks so much for the extra time. I appreciate it.

Thanks. This is Chip.

Just real quick on that dynamic. Look, I think that we treat both of those certificates completely separately, it's not like you could in a very fluid basis go back and forth.

I would also reiterate we're clearly not seeing anything today that would warrant that. It would take a pretty big lift of an issue for us before we started to do something dramatic like that.

Plus, it's the timing. Our charter operation does very well in the winter months with college sports, and it's very slow in the summer months, some of that timing doesn't necessarily work out.

Overall, the margin on a charter flight is certainly better than what a normal commercial flight is, but you've got the seasonality and all the other stuff that's weighted that when the airplane is not flying that certainly weighs against that significantly. From our perspective, I would just say that we're very comfortable with what the summer schedules are today.

I think there's some expectation out there that this could last longer than anticipated, which is also driven by those schedules, and we'll continue to monitor the situation very carefully.

Thank you again for the extra time.

Thank you, Abby, and again, thanks, everybody, for joining us on the call today. I think the quarter was very good for us, particularly under the circumstances.

We appreciate how amazing our 15,000 professionals have been this last quarter. I think together, we've built a model that is built for interesting times, with stability and flexibility to respond in the coming months.

We look forward to our second quarter call in about 3 months from now. Thank you.