Related-Party Debt And Transactions

12 Months Ended

Dec. 31, 2011

Related Party Transactions [Abstract]

Related-Party Debt And Transactions

Related-Party Debt and Transactions

As of December 31, 2011 and 2010, the following amounts were due to related parties (in thousands):

	As of December 31,
	2011		2010
Tranche A notes payable bearing interest at 17% due April 30, 2012, except for $20.0 million of Tranche A notes which are due December 30, 2011. Secured*. Accrued interest at December 31, 2010 and 2011 was $0 and $0 million, respectively	$	—	$	137,360
Tranche B notes payable bearing interest at 17% due April 30, 2012. Secured*. Accrued interest at December 31, 2010 and 2011 was $0 and $0 million, respectively	—		128,261
Total due to related parties	$	—	$	265,621

* Secured by accounts receivable, inventory, property and equipment, not including airframes or engines.

In connection with the closing of the IPO, the Company consummated the transaction contemplated by the Recapitalization Agreement on June 1, 2011, which resulted in the repayment or exchange for common stock of all of the Company’s notes and preferred stock (see Note 20).

All Tranche A and B notes were held by Indigo and Oaktree. Interest on these notes was not paid in cash but accrued on a periodic basis on both the Tranche A and Tranche B notes at a rate of 17% per annum, compounded annually on December 31. All Tranche A and Tranche B notes would have matured on April 30, 2012 except for $20.0 million of Tranche A notes which were due December 30, 2011.

Tranche A and B notes and approximately $3.2 million of other secured notes due to unrelated parties had a first-priority security interest in substantially all assets of the company (the “Security Package”). Certain other secured notes held by unrelated parties, aggregating approximately $12.0 million in principal amount, had a second-priority security interest in the Security Package. Pursuant to intercreditor and other security agreements, the holders of Tranche A and B notes, and of the $3.2 million of other secured notes, agreed to:

• Permit a first-priority interest in the Security Package to the payee of reimbursement obligations under the LC described in Note 5, and

• Restrict their right to receive repayment of principal and, except for the $3.2 million of secured notes, current payment of interest on the obligations owed to them prior to the full discharge of, the Company’s reimbursement obligations under the LC.

Pursuant to the terms of the securities purchase agreement covering the Tranche A and Tranche B notes, if the Company’s unrestricted cash balance fell below a stated level, Indigo could have elected to require the Tranche B holders to purchase, on a pro rata basis, up to $16.8 million in additional Tranche B notes. During 2009, unrestricted cash was above the minimum stated level. However in 2008, the level of unrestricted cash fell below the stated level, and the Tranche B holders amended the securities purchase agreement to provide for the full amount of the $16.8 million as follows:

• The Tranche B holders funded $5.0 million in cash in exchange for additional Tranche B notes, and

• The Tranche B holders provided a guarantee of up to $11.8 million in favor of an investment banking firm in connection with the renewal in December 2008 of the letter of credit facility that serves to reduce the cash collateral the Company was required to maintain with credit card processors. The Company was obligated to pay to the guarantors a commitment fee on the amount of this guarantee, at a rate of 17% per annum, which became due upon the expiration of the LC on April 30, 2011.

The Company’s principal stockholders provided certain consulting services to the Company for a management fee of $0.8 million in each of 2010 and 2009. For the year ended December 31, 2011, the Company expensed $0.3 million related to these consulting services. In addition, in 2009, the Company reimbursed one of its stockholders for $0.7 million of professional expenses incurred in connection with strategic projects involving the Company. These fees are recorded in “other operating expenses” in the accompanying statements of operations.