Debt and Other Obligations

3 Months Ended

Mar. 31, 2018

As of March 31, 2018, the Company held non-public and public debt instruments. During the three months ended March 31, 2018, the Company acquired additional debt through the 2017-1 EETCs described below.

2017-1 EETCs

In November 2017, the Company created three separate pass-through trusts, which issued $420.5 million aggregate face amount of Series 2017-1 Class AA, Class A and Class B EETCs in connection with the financing of seven new Airbus A320 aircraft and five new Airbus A321 aircraft. Each class of certificates represents a fractional undivided interest in the respective pass-through trusts and is not an obligation of the Company. The proceeds from the issuance of these certificates are initially held in escrow by a depositary and, upon satisfaction of certain terms and conditions, are released and used to purchase equipment notes which are issued by the Company and secured by the Company's aircraft. Interest on the issued and outstanding equipment notes are payable semiannually on February 15 and August 15 of each year, commencing on August 15, 2018, and principal on such equipment notes is scheduled for payment on February 15 and August 15 of certain years. Principal payments commence on August 15, 2018 in the case of five new Airbus A321 scheduled for delivery from February 2018 to March 2018 and three Airbus A320 scheduled for delivery from December 2017 to January 2018 and on February 15, 2019 for four Airbus A320 aircraft scheduled for delivery from April 2018 to October 2018. Issued and outstanding Series AA and Series A equipment notes mature in February 2030 and Series B equipment notes mature in February 2026. Issued and outstanding Series AA, Series A and Series B equipment notes accrue interest at a rate of 3.375%, 3.650% and 3.800%, respectively. As of March 31, 2018, $291.0 million of the proceeds from the sale of the Series 2017-1 EETCs had been used to purchase equipment notes in connection with the financing of three Airbus A321 aircraft and five Airbus A320 aircraft. The remaining $129.5 million of escrowed proceeds held by the pass-through trusts will be used to purchase equipment notes as the remaining 4 new aircraft are delivered. Equipment notes that are issued are reported as debt on the Company's condensed balance sheets.

The Company evaluated whether the pass-through trusts formed are variable interest entities (VIEs) required to be consolidated by the Company under applicable accounting guidance. The Company determined that the pass-through trusts are VIEs and that it does not have a variable interest in the pass-through trusts. Based on this analysis, the Company determined that it is not required to consolidate these pass-through trusts.

Long-term debt is comprised of the following:



	As of				Three Months Ended March 31,
	March 31, 2018		December 31, 2017		2018		2017
	(in millions)				(weighted-average interest rates)
Fixed-rate senior term loans due through 2027	$	409.1	$	417.9	4.10	%	4.10	%
Fixed-rate junior term loans due through 2022	37.3		39.3		6.90	%	6.90	%
Fixed-rate loans due through 2029	510.1		518.0		3.83	%	3.88	%
Fixed-rate class A 2015-1 EETC due through 2028	408.6		408.6		4.10	%	4.10	%
Fixed-rate class B 2015-1 EETC due through 2024	92.0		92.0		4.45	%	4.45	%
Fixed-rate class AA 2017-1 EETC due through 2030	171.0		37.5		3.38	%	N/A
Fixed-rate class A 2017-1 EETC due through 2030	57.0		12.5		3.65	%	N/A
Fixed-rate class B 2017-1 EETC due through 2026	63.0		13.8		3.80	%	N/A
Long-term debt	1,748.1		1,539.6
Less current maturities	136.5		115.4
Less unamortized discounts	40.7		36.7
Total	$	1,570.9	$	1,387.5

During the three months ended March 31, 2018 and March 31, 2017, the Company made scheduled principal payments of $18.7 million and $10.2 million on its outstanding debt obligations, respectively.

At March 31, 2018, long-term debt principal payments for the next five years and thereafter are as follows:



	March 31, 2018
	(in millions)
2018	$	112.9
2019	138.2
2020	135.9
2021	133.6
2022	130.6
2023 and beyond	1,096.9
Total debt principal payments	$	1,748.1

Interest Expense

Interest expense related to long-term debt consisted of the following:



	Three Months Ended March 31,
	2018		2017
	(in thousands)
Senior term loans	$	4,317	$	4,672
Junior term loans	667		803
Fixed-rate loans	4,911		159
Class A 2015-1 EETC	4,142		4,308
Class B 2015-1 EETC	1,012		1,185
Class AA 2017-1 EETC	682		—
Class A 2017-1 EETC	246		—
Class B 2017-1 EETC	283		—
Commitment fees	52		30
Amortization of debt discounts	1,491		1,231
Total	$	17,803	$	12,388