Debt and Other Obligations

12 Months Ended

Dec. 31, 2018

Long-term debt

As of December 31, 2018, the Company had outstanding non-public and public debt instruments. During 2018, the Company acquired additional debt through the 2015-1 and 2017-1 EETCs, fixed-rate term loan facility agreements and revolving credit facility described below.

2017-1 Class AA, Class A and Class B 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 is 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 commenced on August 15, 2018 in the case of five new Airbus A321 delivered from February 2018 to March 2018 and three Airbus A320 delivered from December 2017 to January 2018 and will commence on February 15, 2019 for four Airbus A320 aircraft delivered 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 December 31, 2018, all of the proceeds from the sale of the Series 2017-1 Class AA, Class A and Class B EETCs had been used to purchase equipment notes in connection with the financing of five Airbus A321 aircraft and seven Airbus A320 aircraft. Equipment notes that are issued are reported as long-term debt on the Company's balance sheets.

2015-1C and 2017-1C EETCs

In May 2018, the Company completed a private placement of an aggregate amount of $115.2 million pass-through certificates, Series 2015-1C. The Company entered into 15 separate participation agreement amendments to existing participation agreements that were entered into by the Company during the period from October 2015 to February 2017 under the existing pass through trust formed by the Company on August 11, 2015. The Series 2015-1C equipment notes are secured by 12 Airbus A321 aircraft previously delivered from October 2015 to January 2017 and 3 Airbus A320 aircraft previously delivered from March 2016 to June 2016. The Series 2015-1C equipment notes mature in April 2023 and accrue interest at a rate of 4.93%. Principal and interest on the issued and outstanding Series 2015-1C equipment notes is payable semiannually on April 1 and October 1 of each year, commencing on October 1, 2018. Equipment notes that are issued are reported as long-term debt on the Company's balance sheets.

In May 2018, the Company also completed a private placement of an aggregate amount of $85.5 million pass-through certificates, Series 2017-1C. The Company entered into 9 separate participation agreement amendments to existing participation agreements that were entered into by the Company during the period from December 2017 to April 2018 under the existing pass through trust formed by the Company on November 28, 2017. The participation agreement amendments provide for the issuance of Series 2017-1C equipment notes, in the aggregate principal amount of $65.7 million in connection with previously delivered aircraft. The 2017-1C equipment notes are secured by five Airbus A321 aircraft previously delivered from February 2018 to March 2018 and four Airbus A320 aircraft previously delivered from December 2017 to April 2018. The Series 2017-1C equipment notes mature in February 2023 and accrue interest at a rate of 5.11%. Interest on the Class C 2017-1 issued and outstanding equipment notes are payable semiannually on February 15 and August 15 of each year, commencing on August 15, 2018. The entire principal on the issued and outstanding Series 2017-1C equipment notes is scheduled for payment on February 15, 2023. As of December 31, 2018, the remaining $19.8 million of the proceeds from the sale of the Series 2017-1 Class C had been used to purchase equipment notes in connection with the financing of three Airbus A320 aircraft delivered from August 2018 to October 2018. Equipment notes that are issued are reported as long-term debt on the Company's 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.

Fixed-rate term loans

During 2018, the Company entered into facility agreements with banks, which as of December 31, 2018 provided $139.5 million of debt financing for 4 Airbus A320 aircraft delivered during the fourth quarter of 2018. Each loan extended under the facility agreements was funded on or near the delivery date of each aircraft and is secured by a first-priority security interest on the individual aircraft. Each loan has a term life ranging from 10 to 12 years and amortizes on a mortgage-style basis, which requires quarterly principal and interest payments. Loans bear interest on a fixed-rate basis with interest rates ranging between 4.06% and 4.10%. As of December 31, 2018, the Company has taken delivery of all 4 Airbus A320 aircraft financed through these facility agreements.

Revolving credit facility

During the fourth quarter of 2018, the Company entered into a revolving credit facility for up to $160 million secured by the collateral assignment of certain of the Company's rights under the purchase agreement with Airbus, related to 43 Airbus A320neo aircraft scheduled to be delivered between August 2019 and December 2021. The final maturity of the facility is December 30, 2020. As of December 31, 2018, the Company had drawn $135.3 million on the facility which is included in long-term debt and capital leases, less current maturities on the Company's balance sheets. The revolving credit facility bears variable interest based on LIBOR.

Long-term debt is comprised of the following:



	As of				Year Ended December 31,
	2018		2017		2018		2017
	(in millions)				(weighted-average interest rates)
Fixed-rate senior term loans due through 2027	$	382.4	$	417.9	4.10	%	4.10	%
Fixed-rate junior term loans due through 2022	31.1		39.3		6.90	%	6.90	%
Fixed-rate loans due through 2030	625.1		518.0		3.88	%	3.83	%
Fixed-rate class A 2015-1 EETC due through 2028	378.6		408.6		4.10	%	4.10	%
Fixed-rate class B 2015-1 EETC due through 2024	80.0		92.0		4.45	%	4.45	%
Fixed-rate class C 2015-1 EETC due through 2023	109.5		—		4.93	%	N/A
Fixed-rate class AA 2017-1 EETC due through 2030	242.5		37.5		3.38	%	3.38	%
Fixed-rate class A 2017-1 EETC due through 2030	80.8		12.5		3.65	%	3.65	%
Fixed-rate class B 2017-1 EETC due through 2026	83.7		13.8		3.80	%	3.80	%
Fixed-rate class C 2017-1 EETC due through 2023	85.5		—		5.11	%	N/A
Revolving credit facility due in 2020	135.3		—		3.72	%	N/A
Long-term debt	$	2,234.5	$	1,539.6
Less current maturities	162.8		115.4
Less unamortized discount, net	47.7		36.7
Total	$	2,024.0	$	1,387.5

The Company's debt financings are collateralized by first priority security interest in the individual aircraft being financed with the exception of the Company's revolving credit facility secured by the Company's rights under the purchase agreement with Airbus related to certain A320neo aircraft. During the year ended December 31, 2018 and 2017, the Company made scheduled principal payments of $137.3 million and $102.3 million on its outstanding debt obligations, respectively.

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



	December 31, 2018
	(in millions)
2019	$	171.3
2020	303.6
2021	162.1
2022	159.5
2023	298.0
2024 and beyond	1,140.0
Total debt principal payments	$	2,234.5

Interest Expense

Interest expense related to long-term debt and capital leases consists of the following:



	Year Ended December 31,
	2018		2017
	(in thousands)
Fixed-rate senior term loans	$	16,869	$	18,328
Fixed-rate junior term loans	2,475		3,035
Fixed-rate term loans	19,615		8,610
Class A 2015-1 EETC	16,138		17,230
Class B 2015-1 EETC	3,781		4,446
Class C 2015-1 EETC	3,575		—
Class AA 2017-1 EETC	6,026		54
Class A 2017-1 EETC	2,172		19
Class B 2017-1 EETC	2,420		22
Class C 2017-1 EETC	2,478		—
Revolving credit facility	793		—
Capital leases	104		154
Commitment fees	262		124
Amortization of deferred financing costs	7,069		5,280
Total	$	83,777	$	57,302

As of December 31, 2018 and 2017, the Company had a line of credit for $33.6 million and $33.6 million related to corporate credit cards. Respectively, the Company had drawn $3.5 million and $1.7 million as of December 31, 2018 and 2017, which is included in accounts payable.

As of December 31, 2018 and 2017, the Company had lines of credit with counterparties for derivatives and physical fuel delivery in the amount of $41.5 million and $51.5 million, respectively. As of December 31, 2018 and 2017, the Company had drawn $23.0 million and $24.2 million on these lines of credit for physical fuel delivery, which is included in other current liabilities. The Company is required to post collateral for any excess above the lines of credit if the fuel derivatives are in a net liability position and make periodic payments in order to maintain an adequate undrawn portion for physical fuel delivery. As of December 31, 2018 and 2017, the Company did not have any outstanding fuel derivatives.