Long-term Debt

12 Months Ended

Dec. 31, 2023

Long-term Debt

Long-term Debt

(3) Long-term Debt

Long-term debt consisted of the following as of December 31, 2023 and 2022 (in thousands):

	December 31,		December 31,
	2023		2022
Notes payable to banks, due in quarterly installments, plus interest at 2.33% to 5.95% through 2035, secured by aircraft	$	2,302,578	$	2,604,058
Notes payable to banks, due in monthly or semi-annual installments, plus interest at 2.68% to 5.94% through 2032, secured by aircraft and engines		527,092		604,613
Notes payable to U.S. Government, interest due quarterly at 1.00% through 2025 and based on SOFR plus 2.0% from 2025 through 2031, unsecured		200,640		200,640
Long-term debt	$	3,030,310	$	3,409,311
Current portion of long-term debt		(447,534)		(442,360)
Less long-term portion of unamortized debt issue cost, net		(20,593)		(25,179)
Long-term debt, net of current maturities and debt issue costs	$	2,562,183	$	2,941,772
Current portion of long-term debt	$	447,534	$	442,360
Less current portion of unamortized debt issue cost, net		(3,665)		(3,858)
Current portion of long-term debt, net of debt issue costs	$	443,869	$	438,502

As of December 31, 2023 and 2022, the Company had $3.0 billion and $3.4 billion, respectively, of total long-term debt. The average effective interest rate on the Company’s debt was approximately 4.1% and 4.0% at December 31, 2023 and 2022, respectively.

During 2023, the Company took delivery of two new E175 aircraft that the Company financed through $44.7 million of long-term debt. The debt associated with the two E175 aircraft has 12-year terms, is due in quarterly installments, and is secured by the E175 aircraft.

During 2023, the Company executed a promissory note for $25 million. The promissory note has an eight-year term, is due in monthly installments, has a fixed annual interest rates of 5.6% and is secured by spare engines.

The aggregate amounts of principal maturities of long-term debt as of December 31, 2023 were as follows (in thousands):

2024	$	447,534
2025		532,314
2026		510,625
2027		464,280
2028		292,812
Thereafter		782,745
	$	3,030,310

As of December 31, 2023 and 2022, SkyWest Airlines had a $100.0 million line of credit. The line of credit includes minimum liquidity and profitability covenants and is secured by certain assets. As of December 31, 2023 and 2022, SkyWest Airlines had no amounts outstanding under the line of credit facility. However, at December 31, 2023 and 2022, the Company had $29.2 million and $29.9 million, respectively, in letters of credit issued under the facility which reduced the amount available under the facility to $70.8 million and $70.1 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, 2023 and 2022, the Company had $49.1 million and $59.2 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, 2023 and 2022, were as follows (in thousands):

	December 31, 2023		December 31, 2022
Carrying value	$	3,030,310	$	3,409,311
Fair value	$	2,918,012	$	3,264,704