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Commitments and Contingencies
12 Months Ended
Dec. 31, 2018
Commitments and Contingencies  
Commitments and Contingencies

(5) Commitments and Contingencies

Lease Obligations

The Company leases 260 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 non‑cancelable lease terms as of December 31, 2018 (in thousands):

 

 

 

 

 

2019

    

$

87,256

 

2020

 

 

101,741

 

2021

 

 

90,787

 

2022

 

 

72,593

 

2023

 

 

65,749

 

Thereafter

 

 

59,820

 

 

 

$

477,946

 

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 (“Leveraged Lease Agreements”).  The Company is not a beneficiary of such trusts and the Company does not have an ownership interest in such trusts.  The Company’s leveraged leases do not require the Company to guarantee a portion of the residual values of the leased assets held by the trust and the Company’s leveraged lease agreements do not contain a fixed purchase option or have any other terms that represent variable interests in such trusts. As a result, the Company has not consolidated any of these trusts.

Total rental expense for non-cancelable aircraft operating leases was approximately $154.9 million, $215.8 million and $262.6 million for the years ended December 31, 2018, 2017 and 2016, respectively. The minimum rental expense for airport station rents was approximately $19.6 million, $30.3 million and $31.4 million for the years ended December 31, 2018, 2017 and 2016, 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, 2018, 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 airline partners or customers, but monitors the financial condition of its major airline partners. Under the majority of the Company’s code-share agreements, the Company receives weekly payments from its major code-share partners that approximate 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 $158,000 and $157,000 as of December 31, 2018 and 2017, respectively. For the years ended December 31, 2018, 2017 and 2016, the Company’s contractual relationships with Delta and United combined accounted for approximately 81.4%,  82.9% and 88.7%, respectively of the Company’s total revenues.

Employees Under Collective Bargaining Agreements

As of December 31, 2018, the Company had approximately 15,900 full‑time equivalent employees.  As of December 31, 2018, ExpressJet had 2,932 full-time equivalent employees of which approximately 2,320 employees where represented by a union.  Although no SkyWest Airlines employees are represented by a union, certain SkyWest Airline employees are covered under a stable and binding collective bargaining agreement that is administered by employee representatives.