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Long-term Debt

12 Months Ended

Dec. 31, 2021

(4) Long-term Debt

Long-term debt consisted of the following as of December 31, 2021 and 2020 (in thousands):


	December 31,		December 31,
	2021		2020
Notes payable to banks, due in quarterly installments, plus interest at 2.33% to 5.08% through 2033, secured by aircraft	$	2,535,827	$	2,618,777
Notes payable to banks, due in monthly or semi-annual installments, plus interest at 2.68% to 5.03% through 2031, secured by aircraft		404,471		424,407
Notes payable to US Government, interest due quarterly at 1.00% through 2025 and based on SOFR plus spread from 2025 through 2031, unsecured		200,640		105,210
Notes payable to US Government, interest due quarterly based on LIBOR plus interest spread currently at 3.22% through 2025, secured by parts and engines		—		60,000
Notes payable to bank, due in monthly installments interest based on LIBOR plus interest spread at 2.65% through 2021		—		13,795
Notes payable to banks, due in semi-annual installments plus interest at 6.24% to 6.51% through 2021, secured by aircraft		—		7,608
Notes payable to a financing company, due in semi-annual installments, with a fixed interest rate of 3.25% through 2021, secured by aircraft		—		6,205
Long-term debt	$	3,140,938	$	3,236,002
Current portion of long-term debt		(395,371)		(406,005)
Less long-term portion of unamortized debt issue cost, net		(28,147)		(28,459)
Long-term debt, net of current maturities and debt issue costs	$	2,717,420	$	2,801,538

Current portion of long-term debt		395,371		406,005
Less current portion of unamortized debt issue cost, net		(3,573)		(3,847)
Current portion of long-term debt, net of debt issue costs	$	391,798	$	402,158

During 2021, the Company took delivery of 18 new E175 aircraft that the Company financed through $354.6 million of long-term debt. The debt associated with the 18 E175 aircraft has a 5-year to 12-year term range, is due in monthly or quarterly installments with fixed annual interest rates of 2.7% to 3.1% and is secured by the E175 aircraft.

During 2021, in connection with the payroll support programs, the Company issued to Treasury promissory notes for an aggregate principal amount of $95.4 million and issued warrants to purchase up to 203,090 shares of the Company’s common stock. The Company has recorded the value of the promissory note and warrants on a relative fair value basis as $95.4 million of long-term debt and $5.8 million in common stock, respectively. The warrants have a five-year term from the date of issuance and 124,773 of the warrants have an exercise price of $40.41 per share and 78,317 of the warrants have an exercise price of $57.47 per share.

In 2020, in connection with the CARES Act, the Company entered into the Secured Loan with Treasury and borrowed $60 million under the agreement. During 2021, the Company repaid all amounts outstanding under the Secured Loan with Treasury, and in connection with such repayment, terminated the Secured Loan agreement. The total repayment amount was $61.2 million, which included all outstanding principal and accrued interest under the Secured Loan. As a result of the repayment, the collateral securing the obligations of SkyWest Airlines under the Secured Loan agreement, consisting of aircraft engines and aircraft parts, was released.

Additionally, in 2021, the Company repaid $80.1 million of debt related to aircraft early.

As of December 31, 2021 and 2020, the Company had $2.94 billion and $3.07 billion, respectively, of long-term debt obligations primarily related to the acquisition of aircraft and certain spare engines. The average effective interest rate on the debt related to those long-term debt obligations at December 31, 2021 and 2020, was approximately 3.8% and 4.0%, respectively.

The aggregate amounts of principal maturities of long-term debt as of December 31, 2021 were as follows (in thousands):


2022	$	395,371
2023		403,091
2024		398,084
2025		413,846
2026		423,227
Thereafter		1,107,319
	$	3,140,938

As of December 31, 2021 and 2020, SkyWest Airlines had a $75 million line of credit. The line of credit includes minimum liquidity and profitability covenants and is secured by certain assets. As of December 31, 2021 and 2020, SkyWest Airlines had no amount outstanding under the line of credit facility. However, at December 31, 2021 and 2020, the Company had $31.4 million and $35.5 million, respectively, in letters of credit issued under the facility which reduced the amount available under the facility to $43.6 million and $39.5 million, respectively. During the year ended December 31, 2021, the Company extended the expiration date of the line of credit to March 31, 2022. The facility has a variable interest rate of LIBOR plus 2.5% at December 31, 2021.

As of December 31, 2021 and 2020, the Company had $61.4 million and $61.1 million, respectively, in letters of credit and surety bonds outstanding with various banks and surety institutions.