During a fourth-quarter earnings call on Thursday, SkyWest, the U.S.’s largest regional operator, announced that it had acquired a 25% stake in Contour Airlines, a Tennessee-based Part 135 operator. The acquisition includes supplying Contour with Bombardier CRJ airframes, engines, and parts. Specific financial terms were not disclosed.
“Shifting gears, we recently completed the acquisition of a 25% stake of Contour Airlines, a small operator in the Part 135 space for $25 million,” said SkyWest President and CEO Chip Childs during the call. “This minority interest stake strategically positions us to further monetize our existing CRJ assets through an asset provisioning agreement and to establish another pipeline for pilot supply.”
Expanding into the Charter Market
Contour Airlines operates over 20 Embraer E-Jets largely to smaller communities, aligning with SkyWest’s newly launched SkyWest Charter (SWC) initiative. With the acquisition, SkyWest is looking for broader access to Contour’s infrastructure, personnel, and operational expertise in the Part 135 charter market.
“To be candid, Contour is almost exactly like SWC and what we would like to accomplish with SWC,” Childs added. “There is a lot of alignment… with what both of the carriers could do.”
Like many of its regional peers, SkyWest continues to face pilot shortage headwinds, particularly related to captain retention. While the company says this trend has improved, SkyWest executives say that the Contour acquisition will create additional opportunities to manage captain retention.
“Now, the most important part that we probably would tag on to that is we’re working very diligently with partners in creative ways in which we can produce captains faster than what we producing today. That’s the Contour investment. That’s the pilot program investment with United,” Childs continued. SkyWest recently entered into a pilot pathway agreement with United last year.
