Commitments and Contingencies

12 Months Ended

Dec. 31, 2020

Commitments and Contingencies Disclosure [Abstract]

8. Commitments and Contingencies

Legal Matters

The Company is subject to certain legal actions, which it considers routine to its business activities. As of December 31, 2020, the Company believes, after consultation with legal counsel, that the ultimate outcome of such legal matters, whether individually or in the aggregate, is not likely to have a material adverse effect on the Company’s financial position, liquidity, or results of operations.

Treasury Audit

The Treasury’s Office of Inspector General (OIG) commenced a routine audit in connection with Air Wisconsin’s receipt of funds under the Payroll Support Program. The audit focused, among other things, on certain calculations used to determine the amount of Treasury Payroll Support Air Wisconsin was entitled to receive under the program. Air Wisconsin has disputed in good faith the Treasury’s interpretation of varying definitions and other provisions among Air Wisconsin’s application for Treasury Payroll Support, Treasury’s guidance regarding the Payroll Support Program and the

PSP-1

Agreement. Air Wisconsin has not received written notice from the OIG as to whether the audit has been completed or what the audit results were. Nevertheless, the Treasury has entered into the

PSP-2

Agreement with Air Wisconsin, has paid to Air Wisconsin the first installment of the payroll support to be provided under the

PSP-2

Agreement and has not required Air Wisconsin to refund any amounts it received under the

PSP-1

Agreement. Air Wisconsin is not able to determine as of the date of the filing of this Annual Report how the amount of payroll support to which Air Wisconsin is entitled under the

PSP-2

Agreement was determined. Nevertheless, Air Wisconsin management believes, based on communications it has received from the Treasury, that it is probable an amount will be due as a result of the audit. However, Air Wisconsin is not able to reasonably estimate, as of the date of filing of this Annual Report, the amount which OIG may ultimately determine to be due. Further, certain provisions in the PSP Extension Law may serve to limit or eliminate the need for any funds to be due as a result of the audit by the OIG.

Standby Letters of Credit

As of December 31, 2020, Air Wisconsin had five outstanding letters of credit in the aggregate amount of $348 to guarantee the performance of its obligations under certain lease agreements and insurance policies. Air Wisconsin maintains a credit facility of $810 for the issuance of such letters of credit as needed to support its operations. Air Wisconsin’s restricted cash secures the credit facility.

Cash Obligations

The following table sets forth our cash obligations as of December 31, 2020:


	Payment Due for Year Ending December 31, (in thousands)
	Total		2021		2022		2023		2024		2025		Thereafter
Aircraft Notes principal	$	70,000	$	7,000	$	7,000	$	7,000	$	7,000	$	42,000	$	—
Aircraft Notes interest	$	10,850	$	2,730	$	2,450	$	2,170	$	1,890	$	1,610	$	—
Other Loans principal	$	36,988	$	13,922	$	16,660	$	2,727	$	2,754	$	925	$	—
Other Loans interest	$	1,853	$	1,262	$	378	$	51	$	24	$	138	$	—
Operating lease obligations	$	7,129	$	1,766	$	1,778	$	1,513	$	1,103	$	390	$	579

Total	$	126,820	$	26,680	$	28,266	$	13,461	$	12,771	$	45,063	$	579

The principal amount of the Aircraft Notes is payable in semi-annual installments of $3,500 commencing June 30, 2021, with certain additional amounts payable based on excess cash flow. No excess cash flow payments are anticipated in the above table. As of December 31, 2020, all of the Company’s long-term debt was subject to fixed interest rates.