Checked bag fees revenue exceeded expectations, trending at the higher end of bag revenue per passenger compared to legacy peers, with an estimated $350 million EBIT contribution for full year 2025.
Fleet deliveries increased to 47 aircraft for 2025, with 17 delivered in Q2, and retirements expected at roughly 55 aircraft.
Fuel cost per gallon for Q3 is estimated between $2.40 and $2.50 after terminating remaining hedge portfolio.
Load factor declined over 400 basis points year-over-year, but efforts are underway to improve it through network connectivity and product initiatives.
Nonfuel CASM-X increased 4.7% in Q2, near midpoint of guidance, including a 0.5 point headwind from noncash mark-to-market adjustments.
Southwest Airlines reported second quarter 2025 RASM down 3.1% year-over-year, including a 0.5 point impact from the decline in bookings following May 28 policy changes.
The company repurchased $1.5 billion under the previous $2.5 billion buyback and announced a new $2 billion share repurchase program over up to 2 years.
Cost per shipment increased 7.7% year-over-year but decreased 4% sequentially from the first quarter due to cost management and reduced headcount by 4.2%.
Diluted earnings per share were $2.67, down from $3.83 in the second quarter of the prior year.
Fuel surcharge revenue declined 5.8% and represented 14.6% of total revenue compared to 15.4% a year ago.
Operating ratio improved sequentially by 330 basis points to 87.8%, outperforming the historical average improvement of 250 to 300 basis points.
Revenue per shipment excluding fuel surcharge increased 2.7%, and including fuel surcharge increased 1.8% compared to the prior year.
Second quarter revenue was $817.1 million, a decrease of 0.7% year-over-year due to muted volume trends amid the macroeconomic landscape.
Shipments per workday declined 2.8% year-over-year, while tonnage per workday increased 1.1%, driven by a 4% increase in average weight per shipment.
Total operating expenses increased 4.7% year-over-year, driven by a 5% increase in salaries, wages, and benefits, and a 21.2% increase in claims and insurance expense.
EPS for Q4 was $2.80, up 5.9% year-over-year and beating guidance by nearly 5%.
Fiscal 2025 achieved record sales, EBITDA, and EPS with full year EPS growth of 4%, exceeding high-end guidance.
Fourth quarter sales increased 5.5% year-over-year, with organic daily sales up 0.2%, reversing prior declines.
Free cash flow reached a record $465 million, up 34% year-over-year, supporting $560 million in capital deployment including acquisitions and share buybacks.
Gross margins expanded nearly 50 basis points, surpassing 30% for the first time in company history.
Net leverage ended at 0.3x EBITDA, slightly higher than prior year but stable.
Reported EBITDA margin declined 73 basis points year-over-year to 12.5%, impacted by higher AR provisioning and LIFO expense.
Service Center segment sales declined 0.4% organically, while Engineered Solutions segment sales grew 1.8% organically.
Capital expenditures were $4 million in the first half of 2025; dividends paid totaled $97 million and share repurchases approximately $102 million.
Cash and short-term investments ended at $426 million; cash flow from operations was $63 million for the first half of 2025.
Depreciation and amortization decreased to $12.1 million from $14.5 million, primarily due to lower software application depreciation.
Gross profit was $109.3 million in Q2 2025 compared to $120 million in Q2 2024, with gross profit margin at 9% versus 9.8% prior year.
Heavy haul revenue grew 9% year-over-year to approximately $138 million, driven by a 5% increase in revenue per load and 4% increase in volume.
Insurance and claims costs increased to $30.4 million from $27.2 million, representing 6.6% of BCO revenue versus 5.8% prior year, driven by increased severity of accidents and cargo claims.
Non-truck transportation service revenue declined 22% or $21 million year-over-year, mainly due to decreases in ocean and intermodal revenue and volume.
Operating income declined as a percentage of gross profit and variable contribution due to fixed cost infrastructure and increased selling, general and administrative costs.
Overall revenue was down 1% year-over-year in Q2 2025, but truck revenue was up year-over-year for the first time since Q3 2022.
Selling, general and administrative costs were $55.7 million in Q2 2025, up from $54.9 million in Q2 2024, excluding a $4.8 million reclassification impact.
Truck revenue per load increased 2.6% in Q2 2025 compared to Q2 2024, with a 3.2% increase on unsided platform equipment and 1.2% on van equipment.
Variable contribution margin was 14.1% of revenue in Q2 2025, slightly down from 14.3% in Q2 2024, mainly due to higher rates paid to truck brokerage carriers.
Strategic Fleet Expansion with Embraer and Major Airline Partners
SkyWest announced a multiyear agreement to purchase 16 new E175s for Delta, with deliveries starting in 2027.
Firm delivery positions secured for 44 additional E175s from 2028 to 2032, providing fleet flexibility.
Order structure allows deferral or cancellation, with nearly 300 E175s expected by 2028, solidifying SkyWest's position as the largest Embraer operator.
Long-term fleet plan emphasizes refleeting and fleet flexibility to adapt to market and tariff challenges.
Dafinchi