It's protected against rising fuel costs and has a near-guarantee on growth. Yes, you heard right. That may sound like a bit of a wait, but analysts seem certain the investment the company is making to expand will pay off in the long run. For now, the market seems to agree.
Many analysts think it's poised to move higher.
The key to the SkyWest oil-price hedge is in its contracts with the major U.S. carriers United Airlines and Delta. Delta and United have to pay SkyWest a fixed fee per flight. That's regardless of whether the flights are full or empty. Delta and United cover the fuel costs, which don't affect the fees paid to SkyWest in any way. As a result, SkyWest's earnings are much less volatile than other airlines.