Long-Term Debt

12 Months Ended

Dec. 31, 2019

Long-Term Debt

Long-Term Debt

(3) Long-term Debt

Long-term debt consisted of the following as of December 31, 2019 and 2018 (in thousands):

	December 31,		December 31,
	2019		2018
Notes payable to banks, due in semi-annual installments, variable interest based on LIBOR, or with an interest rate of 4.00% through 2019, secured by aircraft	$	—	$	6,429
Notes payable to a financing company, due in semi-annual installments, with a fixed interest rate of 3.25% through 2021, secured by aircraft		18,412		36,324
Notes payable to banks, due in semi-annual installments plus interest at 6.10% to 6.51% through 2021, secured by aircraft		22,557		41,592
Notes payable to banks, due in monthly installments, plus interest at 1.95% to 6.86% through 2029, secured by aircraft		438,878		476,369
Notes payable to banks, due in quarterly installments, plus interest at 3.39% to 5.08% through 2031, secured by aircraft		2,537,676		2,621,416
Notes payable to banks due in monthly installments, interest at 3.30% through 2019, secured by spare engines		—		3,308
Long-term debt	$	3,017,523	$	3,185,438
Current portion of long-term debt		(367,954)		(354,072)
Less long-term portion of unamortized debt issue cost, net		(20,580)		(21,598)
Long-term debt, net of current maturities and debt issue costs	$	2,628,989	$	2,809,768
Current portion of long-term debt		367,954		354,072
Less current portion of unamortized debt issue cost, net		(3,828)		(3,866)
Current portion of long-term debt, net of debt issue costs	$	364,126	$	350,206

During the year ended December 31, 2019, the Company took delivery of ten E175 aircraft that the Company financed through $200.0 million of long-term debt. The debt associated with the ten E175 aircraft has a 12-year term, is due in quarterly installments with fixed annual interest rates ranging from 3.4% to 4.1% and is secured by the E175 aircraft. Additionally, the Company purchased two previously leased aircraft during the first quarter of 2019, for which the Company assumed $14.5 million of long-term debt. The debt associated with the two previously leased aircraft has a term of 18 months with monthly interest only payments with a fixed annual interest rate of 2.0% and is secured by the previously leased aircraft.

As of December 31, 2019 and 2018, the Company had $3.0 billion and $3.2 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, 2019 and 2018, was approximately 4.2%.

During the year ended December 31, 2019, the Company used $30.1 million in cash to extinguish $30.1 million in debt early. During the year ended December 31, 2018, the Company used $43.5 million in cash to extinguish $43.5 million in debt early. These payments did not result in a pre-tax gain or loss in the consolidated statements of comprehensive income.

The aggregate amounts of principal maturities of long-term debt as of December 31, 2019 were as follows (in thousands):

2020	$	367,954
2021		352,005
2022		365,907
2023		374,906
2024		327,630
Thereafter		1,229,121
	$	3,017,523

As of December 31, 2019 and 2018, 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, 2019, the Company was in compliance with the line of credit covenants. As of December 31, 2019 and 2018, SkyWest Airlines had no amount outstanding under the facility. However, at December 31, 2019 and 2018 the Company had $8.8 million and $9.7 million, respectively, in letters of credit issued under the facility which reduced the amount available under the facility to $66.2 million and $65.3 million, respectively. The facility expires on September 1, 2021 and has a variable interest rate of LIBOR plus 2.5% at December 31, 2019.

As of December 31, 2019 and 2018, the Company had $61.7 million and $78.7 million, respectively, in letters of credit and surety bonds outstanding with various banks and surety institutions in addition to the letters of credit outstanding under the line of credit.