Long-term Debt

12 Months Ended

Dec. 31, 2022

Long-term Debt

Long-term Debt

(4) Long-term Debt

Long-term debt consisted of the following as of December 31, 2022 and 2021 (in thousands):

	December 31,		December 31,
	2022		2021
Notes payable to banks, due in quarterly installments, plus interest at 2.33% to 5.95% through 2034, secured by aircraft	$	2,604,058	$	2,535,827
Notes payable to banks, due in monthly or semi-annual installments, plus interest at 2.68% to 5.66% through 2032, secured by aircraft and engines		604,613		404,471
Notes payable to U.S. Government, interest due quarterly at 1.00% through 2025 and based on SOFR plus spread from 2025 through 2031, unsecured		200,640		200,640
Long-term debt	$	3,409,311	$	3,140,938
Current portion of long-term debt		(442,360)		(395,371)
Less long-term portion of unamortized debt issue cost, net		(25,179)		(28,147)
Long-term debt, net of current maturities and debt issue costs	$	2,941,772	$	2,717,420
Current portion of long-term debt		442,360		395,371
Less current portion of unamortized debt issue cost, net		(3,858)		(3,573)
Current portion of long-term debt, net of debt issue costs	$	438,502	$	391,798

During 2022, the Company took delivery of 25 new E175 aircraft that the Company financed through $516.6 million of long-term debt. The debt associated with the 25 E175 aircraft has 5- to 12-year terms, is due in monthly or quarterly installments, and is secured by the E175 aircraft.

During 2022, the Company executed promissory notes for $167.9 million. The promissory notes have three- to four-year terms, are due in monthly installments with fixed annual interest rates of 3.6% to 4.7% and are secured by spare engines.

As of December 31, 2022 and 2021, the Company had $3.05 billion and $2.94 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, 2022 and 2021, was approximately 4.0% and 3.8%, respectively.

The aggregate amounts of principal maturities of long-term debt as of December 31, 2022 were as follows (in thousands):

2023	$	442,360
2024		443,642
2025		527,564
2026		504,269
2027		457,326
Thereafter		1,034,150
	$	3,409,311

As of December 31, 2022, SkyWest Airlines had a $100 million line of credit. As of December 31, 2021, 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, 2022 and 2021, SkyWest Airlines had no amounts outstanding under the line of credit facility. However, at December 31, 2022 and 2021, the Company had $29.9 million and $31.4 million, respectively, in letters of credit issued under the facility which reduced the amount available under the facility to $70.1 million and $43.6 million, respectively. The line of credit expires March 25, 2025 and has a variable interest rate of 3.5% plus the one month SOFR rate.

As of December 31, 2022 and 2021, the Company had $59.2 million and $61.4 million, respectively, in letters of credit and surety bonds outstanding with various banks and surety institutions.

The Company’s debt agreements are not traded on an active market and are recorded at carrying value on the Company’s consolidated balance sheet. The fair value of the Company’s long-term debt is estimated based on current rates offered to the Company for similar debt. Debt is primarily classified as Level 2 within the fair value hierarchy. The carrying value and fair value of the Company’s long-term debt as of December 31, 2022 and 2021, were as follows (in thousands):

	December 31, 2022		December 31, 2021
Carrying value	$	3,409,311	$	3,140,938
Fair value	$	3,264,704	$	3,132,072