XML 32 R13.htm IDEA: XBRL DOCUMENT v3.20.4
Commitments and Contingencies
12 Months Ended
Dec. 31, 2020
Commitments and Contingencies  
Commitments and Contingencies

(6) Commitments and Contingencies

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. The Company uses judgment and estimates in determining the ultimate aggregate liabilities for claims incurred in its workers’ compensation liability. The Company also used significant assumptions in determining the workers compensation liability such as an estimation of loss payment and loss reporting development patterns. At December 31, 2020 and 2019, the Company’s accrued workers’ compensation liability totaled $20.7 million and $23.9 million, respectively. 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, 2020, 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 a credit loss reserve based upon expected collectability of all accounts receivable. For the years ended December 31, 2020, 2019 and 2018, the Company’s contractual relationships with Delta and United combined accounted for approximately 76.4%, 77.6% and 81.4%, respectively of the Company’s total revenues.

Employees Under Collective Bargaining Agreements

As of December 31, 2020, the Company had approximately 12,502 full-time equivalent employees. Although no SkyWest Airlines employees are represented by a national union, certain SkyWest Airline employees are covered under a stable and binding collective bargaining agreement that is administered by employee representatives.

Aircraft Purchase Commitments

As of December 31, 2020, the Company had a purchase commitment to purchase 20 new E175 aircraft in late 2021 and early 2022. Subsequent to December 31, 2020, the Company entered into a purchase commitment to purchase 12 used CRJ700 aircraft in 2021.