SkyWest (SKYW) Inks Deal With United Airlines On E175 Jets

SkyWest (NASDAQ:SKYW) became the largest operator of United Airlines’ (NASDAQ:UAL) E175 planes when it fortified its relationship with the latter through a new multi-year deal. In fact, SkyWest is now the largest operator of these planes in the United States.

The deal allows this St. George, UT-based regional airline to operate United Airlines’ 25 Embraer E175 jets. These planes will enter service over a 12-month period spanning from second-quarter 2020 to first-quarter 2021.

The jets are financed by United Airlines. Moreover, the same will be sourced from another United Express operator. Notably, United Express is the brand name for the regional arm of this Chicago-based carrier. A total of eight regional carriers operate flights under United Airlines’ regional arm. Besides United Airlines, SkyWest operates flights for the likes of Delta Air Lines (NYSE:DAL) and American Airlines (NASDAQ:AAL) .

Notably, the Zacks Rank #3 (Hold) SkyWest is constantly looking to modernize its fleet. At the end of 2019, the airlines fleet consisted of 483 scheduled service aircraft. The deal with Embraer, inked in January 2020, is also part of its fleet modernization exercise. SkyWest inked a firm order for 20 E175 jets. The contract is valued at $972 million based on the 2019 list prices. Embraer is expected to start delivering the jets from the second half of 2020 onward.

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Apart from this pact with United Airlines, SkyWest was in news recently when it hiked its quarterly dividend payout by 16.5% to 14 cents per share (56 cents annualized). The carrier is also active on the buyback front.

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