Investments in Other Companies

12 Months Ended

Dec. 31, 2025

(12) Investments in Other Companies

Equity Method Investments

During 2019, the Company created a joint venture with Regional One, Inc. (“Regional One”) and, as of December 31, 2025, has invested a total of $26.6 million for a 75% ownership interest in Aero Engines, LLC. (“Aero Engines”). The primary purpose of Aero Engines is to lease engines to third parties. Aero Engines requires unanimous approval from the Company and Regional One for all material transactions. Although the Company determined Aero Engines is a variable interest entity, Aero Engines has no primary beneficiary as no one party has power over Aero Engines. Accordingly, the Company accounts for its investment in Aero Engines under the equity method. The Company’s exposure in its investment in Aero Engines primarily consists of the Company’s portion of income or loss from Aero Engines’ engine lease agreements with third parties and the Company’s ownership percentage in Aero Engines’ engines book value. Aero Engines had no debt outstanding as of December 31, 2025. During the year ended December 31, 2025, the Company received a $12.0 million distribution from Aero Engines, reflected as a reduction to the Company’s investment balance in Aero Engines. As of December 31, 2025, the Company’s investment balance in Aero Engines was $12.8 million and was recorded in “Other Assets” on the Company’s consolidated balance sheet. The Company’s portion of the income generated by Aero Engines for the year ended December 31, 2025, was $0.9 million, which was recorded in “Other income, net” on the Company’s consolidated statements of comprehensive income. As of December 31, 2024, the Company’s investment balance in Aero Engines was $23.9 million and was recorded in “Other Assets” on the Company’s consolidated balance sheet. The Company’s portion of the income generated by Aero Engines for the year ended December 31, 2024, was $2.2 million, which was recorded in “Other income, net” on the Company’s consolidated statements of comprehensive income.

In December 2023, the Company invested $9.9 million for a 9.9% ownership interest in Corporate Flight Management, Inc. d/b/a Contour Airlines (“Contour”), a 14 CFR Part 135 air carrier. In January 2024, the Company invested an additional $15.1 million in Contour. The Company had a 25% ownership interest in Contour at December 31, 2025 and held one of five seats, or 20%, on Contour’s board of directors. Additionally, as part of the initial investment, the Company received an option to acquire additional ownership interest in Contour, which expired on December 31, 2024. The Contour arrangement also includes an asset provisioning agreement under which the Company will provide CRJ airframes, engines and rotable parts to Contour. The Company accounts for its investment in Contour under the equity method where the investment is reported at cost and adjusted each period for the Company’s share of Contour’s income or loss, recorded on a one quarter lag. For the year ended December 31, 2025, the Company recorded income of $1.3 million related to its Contour investment, its portion of income generated by Contour, which was recorded in “Other income, net” on the Company’s consolidated statements of comprehensive income. For the year ended December 31, 2024, the Company recorded income of $0.1 million related to its Contour investment, its portion of income generated by Contour, which was recorded in “Other income, net” on the Company’s consolidated statements of comprehensive income. Additionally, for the year ended December 31, 2024, the Company recorded a loss of $3.7 million related to the expiration of the purchase option to acquire an additional ownership interest in Contour. As of December 31, 2025, the Company’s investment balance in Contour of $22.8 million was recorded in “Other Assets” on the Company’s consolidated balance sheet. At December 31, 2025, the Company had $8.8 million in notes receivable from Contour related to the sale of aircraft under the asset provisioning agreement. The notes are secured by aircraft and collectible within four years.

The Company assesses investments for impairment whenever events or changes in circumstances indicate that the carrying value of an investment may not be recoverable.

Fair Value Method Investment

In 2021, the Company entered into a strategic arrangement with Eve, to develop a network of deployment for Eve’s electric vertical takeoff and landing aircraft.

In 2022, the Company acquired 1,000,000 shares of common stock of Eve and a warrant giving the Company the right to acquire 1,500,000 shares of common stock of Eve at an exercise price of $0.01 per share. The Company also received a put option from an Eve shareholder for the 1,000,000 shares of common stock of Eve payable in aircraft parts credits. The intent of the put option was to reduce the Company’s investment risk in Eve. The Company was restricted from selling the shares underlying the warrant until May 2025, and the warrant expires in May 2032. The Company acquired the shares of common stock, warrant and put option (collectively the “Eve Investments”) for $10.0 million. The Company evaluated the Eve Investments under ASC Topic 321, “Investments – Equity Securities” and ASC Topic 815, “Derivatives and Hedging,” and recorded the Eve Investments based on their pro rata share of the consideration paid using the fair value of the Eve Investments on the acquisition date, with subsequent changes in the fair value reported in earnings. During the year ended December 31, 2023, the Company sold 600,411 shares of common stock of Eve for $5.0 million, which concurrently forfeited the 600,411 shares subject to the put option from the Eve shareholder. During the year ended December 31, 2024, the Company exercised the remainder of the put option and received aircraft parts credits of $4.0 million in exchange for the 399,589 shares of common stock. At December 31, 2024, the Company’s only remaining investment in Eve was the warrant to acquire 1,500,000 shares of common stock of Eve.

During the year ended December 31, 2025, the Company exercised its warrant to purchase 1,500,000 shares of common stock of Eve. The Company received 1,497,635 shares of common stock of Eve resulting from a cashless exercise. The warrant was classified as Level 3 within the fair value hierarchy (“Eve Level 3 Investment”) as of December 31, 2024. The Company used the Black Scholes Option Pricing Model to determine the estimated fair market value of the Eve Level 3 Investment. Upon exercise, the Company’s shares of common stock of Eve were classified as Level 1 within the fair value hierarchy as Eve’s common shares are actively traded and are valued using quoted market prices.

The table below shows the reconciliation of the Eve Level 3 Investments (in thousands):


Eve Level 3 Investment:
Balance at December 31, 2022	$	14,180
Realized loss on forfeiture of put options		(827)
Unrealized loss		(876)
Balance at December 31, 2023		12,477
Exercise of put option for aircraft parts credits		(3,996)
Realized gain on exercise of put option		3,446
Unrealized loss		(3,767)
Balance at December 31, 2024		8,160
Unrealized loss		(2,445)
Exercise of warrant to common stock (level 1)		(5,715)
Balance at December 31, 2025	$	—

During the year ended December 31, 2025, the Company sold 431,752 shares of Eve for gross proceeds of $2.2 million. During the year ended December 31, 2025, the Company recorded a loss of $1.7 million in “Other income, net” on the Company’s consolidated statements of comprehensive income related to the Eve Investments, including a realized gain of $0.7 million from the sale of Eve common stock and unrealized losses of $2.4 million. During the year ended December 31, 2024, the Company recorded a loss of $3.3 million in “Other income, net” on the Company’s consolidated statements of comprehensive income related to the Eve Investments, including a realized gain of $3.4 million from the exercise of the put option, a realized loss of $1.4 million from the forfeited shares of Eve common stock and unrealized losses of $5.3 million. During the year ended December 31, 2023, the Company recorded a loss of $1.0 million in “Other income, net” on the Company’s consolidated statements of comprehensive income related to the Eve Investments, including a realized gain of $2.1 million from the sale of the Eve shares, net of the forfeited put options, and unrealized losses of $3.1 million. As of December 31, 2025 and 2024, the fair value of the Eve Investments was $4.3 million and $8.2 million, respectively, and was recorded in “Other Assets” on the Company’s consolidated balance sheet.

SKYWEST INC 10-K