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Commitments and Contingencies
12 Months Ended
Dec. 31, 2014
Commitments and Contingencies  
Commitments and Contingencies

 

(5) Commitments and Contingencies

Lease Obligations

        The Company leases 554 aircraft, as well as airport facilities, office space, and various other property and equipment under non-cancelable operating leases which are generally on a long-term net rent basis where the Company pays taxes, maintenance, insurance and certain other operating expenses applicable to the leased property. The following table summarizes future minimum rental payments required under operating leases that have initial or remaining non-cancelable lease terms in excess of one year as of December 31, 2014 (in thousands):

                                                                                                                                                                                    

Year ending December 31,

 

 

 

2015

 

$

342,984 

 

2016

 

 

269,210 

 

2017

 

 

199,009 

 

2018

 

 

153,338 

 

2019

 

 

118,273 

 

Thereafter

 

 

453,507 

 

​  

​  

 

 

$

1,536,321 

 

​  

​  

​  

​  

​  

        The majority of the Company's leased aircraft are owned and leased through trusts whose sole purpose is to purchase, finance and lease these aircraft to the Company; therefore, they meet the criteria of a variable interest entity. However, since these are single owner trusts in which the Company does not participate, the Company is not considered at risk for losses and is not considered the primary beneficiary. As a result, based on the current rules, the Company is not required to consolidate any of these trusts or any other entities in applying the accounting guidance. The Company's management believes that the Company's maximum exposure under these leases is the remaining lease payments.

        The Company's leveraged lease agreements typically obligate the Company to indemnify the equity/owner participant against liabilities that may arise due to changes in benefits from tax ownership of the respective leased aircraft. The terms of these contracts range up to 11 years. The Company did not accrue any liability relating to the indemnification to the equity/owner participant because of management's assessment that the probability of this occurring is remote.

        Total rental expense for non-cancelable aircraft operating leases was approximately $305.3 million, $325.4 million and $333.6 million for the years ended December 31, 2014, 2013 and 2012, respectively. The minimum rental expense for airport station rents was approximately $29.0 million, $35.1 million and $43.5 million for the years ended December 31, 2014, 2013 and 2012, respectively.

Self-insurance

        The Company self-insures a portion of its potential losses from claims related to workers' compensation, environmental issues, property damage, medical insurance for employees and general liability. Losses are accrued based on an estimate of the ultimate aggregate liability for claims incurred, using standard industry practices and the Company's actual experience. Actual results could differ from these estimates.

Legal Matters

        The Company is subject to certain legal actions which it considers routine to its business activities. As of December 31, 2014, management believed, after consultation with legal counsel, that the ultimate outcome of such legal matters was not likely to have a material adverse effect on the Company's financial position, liquidity or results of operations.

Concentration Risk and Significant Customers

        The Company requires no collateral from its major partners or customers but monitors the financial condition of its major partners. Under the majority of the Company's code-share agreements, the Company receives weekly payments from its major code share partners that approximates a significant percentage of the compensation earned for such period. Additionally, the Company provides certain customer service functions at multiple airports for various airlines and the Company maintains an allowance for doubtful accounts receivable based upon expected collectability of all accounts receivable. The Company's allowance for doubtful accounts totaled $326,600 and $94,000 as of December 31, 2014 and 2013, respectively. For the years ended December 31, 2014, 2013 and 2012, the Company's contractual relationships with Delta and United combined accounted for approximately 88.7%, 91.6% and 94.8%, respectively of the Company's total revenues.

Employees Under Collective Bargaining Agreements

        As of December 31, 2014, the Company had approximately 18,500 full-time equivalent employees. Approximately 45.1% of these employees were represented by unions, including the following employee groups. Notwithstanding the completion of the ExpressJet Combination, ExpressJet's employee groups continue to be represented by those unions who provided representation prior to the ExpressJet Combination.

        Accordingly, the following table refers to ExpressJet's employee groups based upon their union affiliations prior to the ExpressJet Combination.

                                                                                                                                                                                    

Employee Group

 

Approximate
Number of
Active Employees
Represented

 

Representatives

 

Status of
Agreement

Atlantic Southeast Pilots

 

 

1,631 

 

Air Line Pilots Association International

 

Amendable

Atlantic Southeast Flight Attendants

 

 

1,132 

 

International Association of Machinists and Aerospace Workers

 

Amendable

Atlantic Southeast Flight Controllers

 

 

53 

 

Transport Workers Union of America

 

Amendable

Atlantic Southeast Mechanics

 

 

554 

 

International Brotherhood of Teamsters

 

Amendable

Atlantic Southeast Stock Clerks

 

 

60 

 

International Brotherhood of Teamsters

 

Amendable

ExpressJet Delaware Pilots

 

 

2,577 

 

Air Line Pilots Association International

 

Amendable

ExpressJet Delaware Flight Attendants

 

 

1,210 

 

International Association of Machinists and Aerospace Workers

 

Amendable

ExpressJet Delaware Mechanics

 

 

942 

 

International Brotherhood of Teamsters

 

Amendable

ExpressJet Delaware Dispatchers

 

 

81 

 

Transport Workers Union of America

 

Amendable

ExpressJet Delaware Stock Clerks

 

 

97 

 

International Brotherhood of Teamsters

 

Amendable

        Between December 2013 and January 2014, the Airline Pilots Association International ("ALPA"), which represents the Atlantic Southeast pilot and ExpressJet Delaware pilot groups, conducted a vote of the two employee groups, seeking approval of a joint collective bargaining agreement that ExpressJet had negotiated with ALPA representatives. The two employee groups rejected the joint collective bargaining agreement, which resulted in the agreements with those employee groups remaining amendable as indicated in the foregoing table. ExpressJet intends to resume negotiations with ALPA in an effort to negotiate an acceptable agreement.