Good afternoon, and welcome to the SkyWest Incorporated First Quarter 2020 Earnings Call. All participants will be in listen-only mode. [Operator Instructions] After today’s presentation, there will be an opportunity to ask questions. [Operator Instructions] Please note, this event is being recorded. I would now like to turn the conference over to Rob Simmons, Chief Financial Officer. Please go ahead.

Thanks, everyone, for joining us on the call today. As the operator indicated, this is Rob Simmons, SkyWest’s Chief Financial Officer. On the call with me today are Chip Childs, President and Chief Executive Officer; Wade Steel, Chief Commercial Officer; Eric Woodward, Chief Accounting Officer; and Mike Thompson, SkyWest Airlines’ Chief Operating Officer. I would 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. 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 2019 Form 10-K and other reports and filings with the Securities and Exchange Commission. And now, I’ll turn the call over to Chip.

Thank you, Rob and Eric. Good afternoon, everyone, and thank you for joining us on the call today. The first quarter of 2020 has been unlike anything we’ve experienced in SkyWest’s history. The speed and breadth of the coronavirus health and economic crisis could not have been anticipated, and our hearts go out to those who have lost loved ones to this disease. Our response has been focused on three critical areas, as we work to navigate within this unprecedented environment and take care of our airline, our people and our customers. First, the personal health and well-being of our people and passengers is our top priority; second, we’re focused on maintaining the cash and liquidity necessary to work through this crisis; and third, ensuring we’re flexible and well-positioned for recovery once the virus is contained. In early March, we mobilized very quickly to work with each of our partners to enhance cleaning and disinfecting measures onboard aircraft, reduce customer touch points and onboard service and implement CDC-recommended social distancing practices where possible. We expect many of these changes will remain in place indefinitely, and we appreciate the rapid response in partnership with our people as we work to implement these updates swiftly and thoroughly. Our people have demonstrated remarkable teamwork and support for each other and our customers throughout this event and I’m humbled to be a part of this incredible team. Our leadership is working constantly to address these challenges, support our people and protect our company, and I want to thank them for their continued dedication and commitment. Our SkyWest professionals are simply the best in this industry, and I’m proud of the outstanding work that they’re doing to help maintain vital air service in these challenging times. The Payroll Support Program funding, as part of the…

Today, we reported first quarter net income of $30 million, or $0.59 per diluted share. Our diluted share count for Q1 was 50.6 million shares and our effective tax rate in Q1 was 23.3%. Let me start today with the balance sheet. We ended the quarter with cash of $578 million, up from $520 million last quarter. Our CapEx during the first quarter was $77 million, including $55 million in spare engines and $22 million for other roadables and used aircraft. At this point, our expectation is to pull back our CapEx for the year from $636 million last year to $300 million to $400 million this year, including the acquisition of six new E175s by the end of the year. We ended the quarter with debt of $2.9 billion, down from $3 billion as of year-end. Let’s talk about liquidity. Our March 31 cash position was $578 million in addition to availability of $65 million on our revolving line of credit. During April, we received $219 million in payroll support funding under the CARES Act. Another $219 million will come in three additional payments this summer. As you will recall, $101 million of the $438 million in PSP funding is in the form of a 10-year term loan, with a 1% interest rate for the first five years with the remainder in a grant. At quarter end, we had unencumbered assets of over $1 billion, primarily in engines and aircraft. This unpledged collateral gives us additional liquidity alternatives, which we will evaluate, including $497 million in senior secured term financing under the loan program of the CARES Act. We have formally applied for this loan program through the U.S. Treasury, but we have until September 30, 2020, to decide on our participation level, if any. Based on ending March…

Thank you, Rob. I’ll provide a fleet status update, as well as an update on our pro rate and leasing businesses. To recap some of our agreements at a high-level, we were scheduled to add 51 aircraft to our fleet in 2020 and 12 in 2021. This included 32 aircraft financed by our partners, as well as 26 new aircraft and five used aircraft financed by SkyWest. Taking the current travel environment into account, we still anticipate taking delivery of these aircraft. However, we are working closely with our partners and manufacturers to adjust the timing of these deliveries. To update by partner, we currently have six new E175s on order under our Delta agreement. We still anticipate taking delivery of all six aircraft this year and working through the schedule with Delta and Embraer. We are also scheduled to take six used E175s sourced from another operator into Delta service. We have received all six aircraft, three of which are currently in service. We anticipate the 3 other aircraft will begin service late this year. We expect that our final CRJ900s scheduled for this quarter will be delayed, and we are working with Delta and Bombardier on delivery timing. You may recall that we have 55 CRJ200s scheduled to expire under our Delta agreement at the end of this year. And we are working with Delta on their long-term 50-seat needs. In the event these aircraft are not renewed, we’d return 19 of the aircraft back to Delta. The remaining 36 aircraft are SkyWest owned with no remaining financing obligations and will be fully depreciated by year-end. Under our United partnership, we signed an extension for our 70 CRJ200s in February, with an average extension term of three years. Both parties have early termination rights for a certain number…

Okay. Operator, we’re ready for the Q&A section.

We will now begin the question-and-answer session. [Operator Instructions] The first question comes from Joseph DeNardi with Stifel. Please go ahead.

Hey, good evening, everybody. Robert, can you just talk a little bit about – or Chip, the – maybe the size of the fleet as you see it kind of realistically on the other side of this? And I know there are a lot of moving parts and I’m sure you’re having negotiations. But can you just talk about, just given what’s happened to the mainline fleet of your partners and obviously, less demand for your service, how you see the fleet shaking out? Thank you.

Thanks, Joe. This is Chip. I would certainly say that we’re anticipating a smaller overall fleet. Part of what we also try to evaluate is how much that fleet is going to be flown. Today, we’re flying a fair portion of our fleet. But when you move from 2,500 daily departures down to 700 or 800 departures, you don’t have a ton of utilization relative to that fleet. So overall, look, the conversations are fluid. The entire industry is looking for additional demand data as we emerge out of the traditional lockdowns that we’ve experienced the last several weeks. And within those data points, we continue to watch what our partners are asking us to do. We’ll also say that we’re in very fluid conversations. But I think it goes without saying that we’ll likely be a fair bit smaller by the end of the year, potentially 10% smaller and we have a lot more data to pay attention to before we can get any more clarity beyond that at this time.

Okay, that’s helpful. And then, Rob, can you just talk kind of at a high-level, since I’m sure some of it’s sensitive, but how do you ensure that you kind of balance being flexible for your partners without taking on too much of their risk on to your balance sheet?

Yes. Well, let me start and maybe Wade can also chip in here. But I think that as far as our ability to be flexible, we’re proud that we’re in a position to be able to be helpful to our partners. We’ve got relatively strong liquidity right now in addition to other liquidity options that are made possible to us by the fact that we went into this crisis with $1 billion of unpledged collateral that we can deploy if need be down the road. But obviously, we’re trying to be collaborative and helpful to our partners, at the same time, make sure that we’ve got adequate liquidity for ourselves.

Okay. Thank you.

The next question comes from Savi Syth with Raymond James. Please go ahead.

Rob, I really appreciate the color on cash burn and liquidity and walking us through those numbers as well. But can I ask what you are assuming in the cash – that cash burn profile that you provided? Is it that just there’s no change in the current flying, or like how are you kind of building that bridge?

Yes. No, like I said, we’re expecting some modest improvement by the end of the year. We’re not trying to dial in a lot of detail over the next eight months. But over the next eight months, we see our burn on average being about $1 million a day, and we’ve got more than adequate liquidity based on that projection to cover where we are. But we’re also grateful that we’ve got other options available to us for liquidity if things turn out to be worse than they appear right now.

And is the – I understand kind of working with partners on kind of entry of service on certain things. With the CRJ700s, both at American and GoJet, how do you handle that? Because I’m guessing you have lease payments or debt payments on those. Is that something that’s just part of this cash burn until you figure that out? And I’m just trying to understand kind of what are the potential options there as you work with them.

Yes. Obviously – Savi, this is Wade.

Hi, Wade.

As we work with both the lessee and American, we’re taking into mind the financing obligations that we do have. That’s definitely included in Rob’s numbers of $1 million of cash burn. So we’re working with each one of them around those – the issues that we are going to have and we’re finding creative solutions around those, so.

All right. And if I might just ask one last one on the resizing of the fleet. Just how should we think about your flexibility in terms of kind of taking out some of the fixed costs as we go through the year? And how long that might take to kind of match the new environment when you figure out what the new environment is?

Well, Savi, this is Chip. I mean, there’s a couple of fixed costs, I think, you’re probably referring to and then we have a unique set of circumstances by fleet. As Rob said in his script, we have a fair amount of unencumbered assets. I think, we’ve also disclosed a lot of that is on our smaller fleet relative to the 200s, same as on a significant portion of our 700s and some 900s, but the large leverage point of debt is on our 175s. So we look at all of these in a unique way and what – we’re working with our partners on how each of those fleets could possibly help in a recovery process. As we’ve mentioned in the script, we’ve also worked with some of the debt holders to gain some opportunities for cash – temporary cash savings and pass those on to our partners. It’s worked out extremely well. But going forward, other fixed costs relative to the company that we have, we’re not immune to anything that you’ve heard within the industry. We are, no doubt, over the next several months going to take some very difficult decisions relative to some of our overheads and fixed costs and take the opportunity that is absolutely necessary to streamline those levels of things, because there’s – uniquely, there is a different evolution that’s taking place throughout the industry. We have been built on a very, very high level of performance, which still matters, but the investment does not pay the same return on investment that we’ve seen in the past and we’re going to evolve to different types of things. It’s going to, again, meet the needs of our people as well as our partners. And structurally, at the end of the day, find a way that we evolve to be a leaner and better operator on the other side of this.

I appreciate all those answers. Thank you.

The next question comes from Duane Pfennigwerth with Evercore. Please go ahead.

Hey, thank you. I appreciate the commentary about being collaborative, given the recency of the shock. But big picture, what percent of your capacity purchase agreements have guaranteed minimums? And how far are you operating below those minimums? I’m just a little confused. I would think of the pro rate business as being sort of 100% variable cost. So why is there really any cash burn here, given the ratable nature of your business model and what we thought were guarantees?

Yes. Duane, this is Wade. So first of all, we have been very collaborative with our partners. We’re trying to work with them. Around the minimums, the vast majority of our contracts have – our CPAs have contract minimums. As I said in my prepared remarks, we are temporarily waiving those minimums during the second and third quarters. And so we are flying about 60% –we have a reduction of about 60%, 65% of our flying right now. And so that’s why there has been some variability in the revenue.

And then can you give us a sense for what is still getting paid versus what is not getting paid? So, for example, on the aircraft ownership pass-through, if you debt finance a new E175, but it’s not being utilized, are you at least being reimbursed for the aircraft ownership? And how does that factor into your willingness to kind of take more on to the balance sheet?

Yes. So that’s a good question. So in the example that you gave there, as we’ve talked about, as Rob talked in his prepared remarks, we’ve worked with certain creditors on getting a deferral in some of our ownership charges. And so during this period of time, we have deferred certain ownership charges to our major partners based on the deferral that we’ve received from the creditors.

Okay. And then just lastly on payroll support. So you’re getting reimbursed for the labor costs that you’re carrying and those folks are not being utilized. Are you getting any requests from your partners for credit – for the credit you’re receiving?

So, Duane, great question. So we obviously are working with our partners very close and we – the CARES money is for payroll, right? And that is very clear and we are being extremely diligent around using that money for our payroll folks. We are also working with our partners, as I said, during the second and third quarters, giving them rate reductions to help with some of the issues that they’re facing. So we’re being very diligent around the CARES money.

Okay. And then just lastly, for those of you that were – I don’t think there’s any good analogy to past periods here. But if you think about post 9/11 and a decline in short-haul traffic and people more willing to drive for a period of time, how does the regional model fit with that, right? Like do you lose share to drive? On the other hand, I would have thought that it makes a lot of sense to down gauge higher trip cost mainline aircraft to regionals, which would actually be a potential growth catalyst for you on the other side, but maybe that’s hard to achieve in the current scope construct. So just big picture, how you think about this longer-term from a demand driver perspective?

Yes. So, Duane, this is Chip. You are looking at this exactly right. There’s so many different factors relative to the regional model, particularly when you go back to 9/11 and you go back to the financial crisis about what elements do we see smaller aircraft gaining advantages or being – gaining – having some handicap in some of the recovery process. Look, I still go back to one statistic that air travel is by math, any math you look at is the safest travel and always has been for the past several years or decades. Now even adding the risk of COVID on to that model, I still think that air travel, particularly relative to what we do, is still the safest mode of transportation. So the bigger question is going to be what does the overall recovery process look like. The data and statistics are relatively clear. We’re also deeply engaged in many activities with our partners and other carriers to just try to fix this – the air system that we actually travel in relative to what is the new normal. We know this – that everyone is going to need to be wearing a mask. We know the TSA is going to be wearing a mask. There’s a lot of infrastructure things that we’re working on to get to the number one question that you brought up of bringing back demand. We think that there is some advantages relative to small town flying that we go to a lot. We think there’s advantages to having a smaller aircraft with shorter duration of flights and good, strong trip costs compared to what some of the other elements are. So look, Duane, I wish we had more answers about this. But in a nutshell, you’re looking at all the right variables that we’re looking at. We’re having conversations with our partners on all of these variables, and we’re excited and very, very engaged to see some of the opportunities that will emerge as we get more data points as we come out of the lockdown process and what happens relative to demand. So – and again, back to the point, we’re doing things in the industry we’ve never done, as well as we do today. I mean, our aircraft are so amazingly clean. They were clean before, but what we’re doing at turns, overnight, midday, everything and how our people are trained to handle this crisis, the flying public is – once they start are going to get what we believe a tremendous amount of confidence in the product. Given the math that we talked about earlier in the response about how safe it is to fly even with the risk that we have associated with this current crisis.

Yes, thanks. I mean, obviously, there’s some practical limitations vis-à-vis scope as they shrink. But I would think that your aircraft would be ideally suited for help them – helping them rediscover where demand actually exists. Thanks for taking the questions, guys.

Yes. Thank you.

The next question comes from Mike Linenberg with Deutsche Bank. Please go ahead.

Hey, good afternoon. Just a couple here, I think. So, Wade, I think if I heard you right, you said that flying would be down 60% to 65% in the June quarter. Presumably, you’re talking about block hours on the CPA business. Is that right?

That’s correct, Michael.

And in September quarter, at this point, are you still planning for down 60% to 65%, or is the schedule, maybe it’s even too early?

It’s still really, really early for that. We’re obviously working with our partners. But we do anticipate that the – in all the modeling that we’ve done, we anticipate that it will still be suppressed during that quarter as well.

Okay. So it will be that. Now when we think about the revenues, right, so obviously, there are things that I think Duane covered that they will fully cover, although you are giving some rate reductions here and there. But nonetheless, it’s, call it, 1% off of a full number. So if we think that on the – at least on the contracts line, if the block is down 60% to 65%, the actual revenue received should be down – it should be down, but not down nearly as much. If you sort of incorporate some of the discounting rate reductions and the like that you’re providing that you shouldn’t see as big of a flaw. Is that accurate?

Yes. You understand our model pretty good.

Okay. Okay, good. And then just over on the pro rate, and I may have misheard, but it – and it may have been, Wade, who indicated that June quarter pro rate should be down 60%, and that’s about $100 million less of revenue than what you generated in your pro rate business in 2019. In the March quarter, how much was pro rate down?

Yes. So for the month of March and the quarter was about $25 million less than what we expected it to be.

Okay. So I got that number on revenue, but do you have just on the percentage?

The percentage of flying? So we…

Your block hours, maybe how much has it been?

…the block hours were – yes, the block hours were very consistent with the prior periods. We hadn’t – we weren’t – we didn’t have the ability to pull that down…

I see. Okay.

…the market has jumped on us pretty quickly. So the block hours were pretty still high.

Okay. So that makes sense. Then back to just the sort of the deferral and ownership costs, where you’ve reached out to your creditors and asked for relief and, of course, you’re passing that on to your partners. Presumably, I don’t know if it’s a three-month benefit, a six-month cash flow benefit, but ultimately, that will ramp back up. And so the back-half of maybe months nine through 12 or months 12 through 15, we’re going to be looking at much higher ownership charges. You are in a – presumably, your partners are in agreement with you that when they jump up a lot and they will go up above and beyond what they normally are that they will cover 100% amount of that. Is that the understanding?

Yes. So on the topic of the deferral, yes, we’re not – we can’t get into the specifics exactly what it is, but it is an interest and principal-type deferral for a time.

Okay.

And part of that will – I mean, that – and it will be recaptured, some of it will be recaptured by being reamortized over the remaining life of the contract.

Okay. That’s great. And then, Rob, you had added up the numbers and I think I just – I didn’t hear you, maybe my phone cut out, but for your cash, your liquidity position at the end of April, what was that number as of April 30?

Yes. We didn’t give an actual number, Michael. But we did – just to point out that we did end the quarter with $578 million of cash. And then during the month of April, we received, again, the first-half of our PSP funding. So, we clearly ended the end of April in a solid liquidity position and our cash burn numbers are measured from that May 1 through the end of the year, the 300 – $235 million of cash burn over that eight-month period is how you get the math to $1 million a day of burn on average.

Okay. I just – I was curious just the starting point, because we don’t know what the cash burn was for the month of April. But presumably, it was more than $1 million, right? And I’m just….

Yes.

…I’m trying to get to that April 30 number. Okay. But like you said, it was a solid level. And then just my last, and I apologize for all the questions. There was a lot of detail that was covered. Your EAS markets, I know that historically, you’re guaranteed some profit or maybe you have to have a certain volume, you have to meet volume requirements to get whatever that 5% or 10%, maybe it’s a 5% operating margin. I believe you had more EAS flying than any carrier out there, and that’s a big part of your pro rate business. So I was – I’m curious, because I know the EAS pool, what is it, $250 million a year? And I suspect that you were getting a good portion of that, but maybe you’re not. Can you talk about that EAS piece and maybe why it’s not showing up in the pro rate? And why the pro rate is getting hit so badly?

Yes. So the DOT – Michael, this is Wade, again. So the DOT, I don’t know if you saw that they came out recently and gave some relief to the carriers that they could cancel on a – so they could cancel some of the frequencies in their markets and still get some of the subsidy. And so starting May 1, we have been doing that is canceling some of our EAS markets. We still have service there seven days a week. But instead of operating two flights a day, we’re operating one. The numbers that I gave you were passenger revenues that did not include the subsidy numbers.

I see. Okay. So passenger revenues could be down a bit, but some of these markets may still be profitable because of the subsidy. Is that a fair point?

I doubt they’ll be profitable. We’ll obviously look at it. The demand is so small in these markets right now and the DOT has been very helpful in letting us reduce the frequency.

Okay.

And so I highly doubt we will be profitable. But obviously, we’re looking at that.

Okay. That’s helpful, guys. Okay, thanks. Thanks for all the time, gentlemen.

Thanks, Michael.

The next question comes from Conor Cunningham with Cowen. Please go ahead.

Hey, guys, thanks for the time. Mike asked a bunch of my questions. But just maybe on the leasing business. I mean, I assume that you guys are deferring some of those lease payments at this point. Can you just confirm if that’s the case or not?

So, as I said in my prepared remarks, we’ve had 29 airplanes that we’re supposed to put into service with one of our lessees. We’ve actually paused that deliveries. We’re currently working with the lessee right now on how we handle some of their challenges. They are in [Technical Difficulty] financial difficulties right now. And I don’t want to talk about specifics whether we’re giving deferrals or not at this point. We are working with them very closely.

Okay. Fair enough. And then just on the – so you said we have 55 aircraft coming out of place this year. Just – I think that’s the only thing that’s coming off-lease, or coming off the CPA this year. Is there anything else that could come up potentially in 2020? And then maybe you could update us on 2021. I don’t think there’s much there either, but just curious your thoughts on that. Because – I mean, in the past, like shrinking and you guys refocusing has been hugely beneficial to your overall profitability. So just curious on how your thoughts on those aircraft are coming off?

Yes. So, obviously, I talked about in my prepared remarks, our 55 airplanes that are coming out of contract with Delta. That is all that’s coming out of contract in 2020 and 2021. Obviously, we’re exploring all kinds of alternatives with those airplanes, including working with the current partner to potentially renew, but we have not got anything done yet.

Okay.

And then we also have – and I talked about in my remarks, we have 51 airplanes on order, right? And so we obviously have the six Delta airplanes that are still coming this year and then we have six used airplanes coming for Delta. We also have taken delivery of 25 used 175s in our United fleet and we’re just working with them on the in-service dates. On the American fleet, we still have 20 new 175s and we’re working with them also on the in-service dates on those, so...

Okay. Maybe just to follow-up on Duane’s question. I would think that when all this settles, that the trends that were already occurring are going to continue or probably speed up. So I would like – I would think that the move to larger regional aircraft just speeds us significantly rather than slow us down. So I mean, what’s your view on scope when all this settles? It seems like – I mean, all these airlines are going to be smaller, but it seems like this would be the time that the contracts would actually be reworked in your favor. So just – I mean, I know it’s a touchy subject, but curious if you have any thoughts there? Thanks for the time.

Yes, thanks. This is Chip. I would – relative to scope, we’ve always managed our business planning that there would be no new scope at our partners and we’re going to continue to do that. We fundamentally – I mean, I respect your hunch there. We hope that what you’re thinking is obviously true. But at this time, when none of us can answer, there’s a lot of questions what happens on the other side of this, which we’re hopeful for. But there’s so much things between here and the other side of this that we have to do right within our strategy. Otherwise, predicting what it’s going to look like won’t even be an option if we don’t handle what’s in front of us the next six months and we execute on it as good, if not better, than we have in the past four or five years. And that’s the key part of us. I mean, we’re hopeful with what the market and our partners may see happening on that. But look, we’ve just got so much in front of us that we are literally going to bury ourselves in, so that we execute what we need to execute and be disciplined and with everything that we have to execute here in the short-term, because that’s probably going to determine more about what it looks like on the other side than trying to speculate on that. So it’s a great question. We’re optimistic, but we are extremely focused on what’s going to happen in the next two to three or four, five months.

Fair enough. Thanks, again.

The next question comes from Catherine O’Brien with Goldman Sachs. Please go ahead.

Hi. This is actually Joyce on for Katie. Thank you for taking my questions. You had alluded to various ways that you’re helping your partners, just from waiving the contract minimum provisions to temporary rate reductions. I’m just wondering how you’d characterize that relief that you’ve granted. Have you noticed partners lean on any one option more than the others?

Yes. Joyce, this is Wade. It’s just – we work with every one of them on their specific needs. Each one of the contracts are different. We have very large commercial’s agreements with every one of these partners. They – every contract is unique and there’s different levers that we can pull. And so they’re not leaning on one or another. It – obviously, it’s just – a lot of it depends on how the planes are owned and financed and how we can help them.

Okay. So broadly, you’re seeing all of them use all those options then?

Yes. And this is Chip, Joyce. I think, the other thing is, I mean, the one common factor with everybody is cash, obviously. And look, this is what we’ve build ourselves into over the past several years is that, we wanted to be able to have contract flexibility, we wanted to be able to have flexibility within our risk structure to be able to provide any type of assistance. And each and every partner is unique in the fleets we fly and what we can do for them and what they’d value. And like I said, cash has obviously been the one constant thing that they all have suffer help with. And, however, we can do that in the framework of making sure that we are stable and take care of our people. We’ll continue to do what we feel like we’re really good at and that is be collaborative with them and provide value to them.

Got it. That makes sense. Just one last one then, too. You mentioned that the relief is temporary just for Q2 and Q3, but should we expect that any of these could actually translate to be more permanent? And is there any recourse you’ll be pursuing if these are permanent cuts, just given that your staffing and fleet was built around these contracts? Thank you.

Yes. I would probably add a couple of things to that. And like I’ve said before on the call, we are evaluating what all this looks like. We’re – if you look at the demand numbers, you look at the recovery numbers, you look at some of the things that the entire industry is reviewing, I would go backwards and lean on what we’ve built this airline on and that’s good, strong relationships. I’m not going to speculate what’s going to happen in the fall. Like I said, we have a lot of internal things to do here to evolve as well. And until we get to the point where some of the temporary leap kind of comes to fruition, we’re going to approach each of our partners, as well as our people with eyes wide open and being able to achieve the goal of being a strong liquid airline in the long run that can – is one of the best at providing what the flying public wants. So in essence, I don’t know that we’re going to comment any more than that. But like I said, I’ll reiterate, we have a lot in front of us that we need to execute and collaborate with our partners on long before we get to the end of the temporary leap.

Got it. Thank you for the answers.

The next question comes from Steve O’Hara with Sidoti & Company. Please go ahead. Stephen O’Hara: Hi, good afternoon, and thanks for taking the question.

Good afternoon, Steve. Stephen O’Hara: Hi. Just curious, I mean, in terms of the – your partners and the flying that you’re doing versus some of your peers, I’m just – I mean, do you get the sense that I mean, it does seem like a lot of the other regional partners might have the same type of flexibility and ability to be as helpful as you guys probably can be. And I’m just wondering, I mean, is that generally the case? And do you – from what you know, do you think the flying has been reduced kind of across the Board? Or are you guys maybe doing more of it or maybe even less of it because of your willingness to be flexible?

So, Steve, great question. I think the number one – to answer the back-half of your question first, probably the number one determinant of level of flying across the country and within the regional industry is geography. Where we have shorter-haul flying across state lines, some not across state lines, there certainly is some of the things that have happened relative to those who fly in New York, San Francisco, L.A., the Pacific Northwest. We’ve seen it evolve over even eight or nine weeks and that’s the number one, I think, determinant of what’s happening within each specific geographic area on if the carrier is flying or not, I don’t know that there’s a terrific amount of just overall preference. Relative to the first part of your question and what’s happening with peers, we really don’t focus a ton on that. We just take a very strong approach to what we can provide. The relationship with our partners are a lot more important than what we’re trying to do with our competitors, by the way. So that’s kind of the number one catalyst that we continue to try to be very, very fluid on and we don’t necessarily put a yardstick out there to see how we’re measuring up with others relative to this. It’s just – the relationship with partners is hands down externally what our priority is. Stephen O’Hara: Okay. Now, that’s helpful. And then, I mean, I guess, in terms of your – this – the length that you’re willing to go to be collaborative and things like that, I just want to – I mean, I assume you guys have kind of stayed away from M&A. I mean, would that – would you kind of delve back into that arena again in an effort to – if maybe, if you got a clearer picture on what the demand outlook looked like and things like that. I mean, is that something that you would consider again, or you’re kind of, that is a kind of road you don’t want to go down again?

We would never go down the road we have in our history, again. But we definitely would work very collaboratively with other ways to provide significant type of value from that perspective relative to what we could do for them. But our historical model of acquiring other aircraft, we would not do that again. Stephen O’Hara: Okay. All right. Thank you very much.

This concludes our question-and-answer session. I would now like to turn the conference back over to Chip Childs for any closing remarks.

Thanks, everyone, again for joining us on the call today. As I said earlier in our remarks, these are times that we have never seen in our history, times that we never predicted would come. But we are appreciative of the people that are here at SkyWest and their level of engagement on this issue. And from a very high level, we’re all around this table so humbled to be a part of such a great company, with such outstanding professionals and with partners that have – we have a great relationship with, and we look forward to working our way out of this. We think this will be a time that will be in our history books that we hopefully can look back on and remember how it defined us to become a better airline going forward. So with that, again, thank you for your interest, and we will talk to you next quarter.

The conference has now concluded. Thank you for attending today’s presentation. You may now disconnect.