SkyWest Airlines 2008 Annual Report Download - page 54

Significant Commitments and Obligations
General
The following table summarizes our commitments and obligations as noted for each of the next
five years and thereafter (in thousands):
Total 2009 2010 2011 2012 2013 Thereafter
Firm aircraft commitments . . . $ 459,695 $361,684 $ 98,011 $ — $ — $ — $ —
Operating lease payments for
aircraft and facility
obligations ............. 3,006,296 325,134 309,593 300,221 300,596 292,941 1,477,811
Interest commitments ....... 716,107 98,291 91,404 84,296 76,073 67,083 298,960
Principal maturities on
long-term debt .......... 1,811,488 129,783 135,480 139,108 189,472 137,861 1,079,784
Total commitments and
obligations ............. $5,993,586 $914,892 $634,488 $523,625 $566,141 $497,885 $2,856,555
Purchase Commitments and Options
On October 12, 2007, we announced SkyWest Airlines’ plans to acquire 22 additional regional jet
aircraft through 2010, 18 of which SkyWest Airlines intends to operate for United Express as part of an
aircraft transition plan, allowing United Express to remove 23 30-seat Brasilia turboprops from the
contract reimbursement model contemplated by the United Express Agreement and add 66-seat
regional jet aircraft for United Express flying. Generally, the turboprop removals under the United
Express Agreement are intended to occur in conjunction with deliveries of new regional jet aircraft in
order to facilitate a smooth transition in existing markets. Additionally, SkyWest Airlines intends to
exchange four CRJ200s for four CRJ900s in its Delta Connection operations. These four 50-seat
CRJ200s are scheduled to be placed into service under other capacity purchase agreements. In
November 2007, SkyWest Airlines placed a firm order with Bombardier for the 22 new aircraft. During
the fourth quarter of 2008, SkyWest Airlines took delivery of three CRJ900s. SkyWest Airlines is
scheduled to take delivery of the remaining aircraft during 2009 and the first quarter of 2010.
On January 9, 2009, we announced that ASA reached an agreement with Delta to operate 10
additional CRJ900 regional jet aircraft. The aircraft were previously ordered by Delta and are now
being contracted for flying with ASA. ASA expects to take delivery of these aircraft between February
and May 2009. We expect to acquire these aircraft under sublease arrangements with Delta at nominal
monthly amounts. ASA intends to use the aircraft as replacements for 20 CRJ200s that are scheduled
for removal from contract service between April 2010 and August 2010, which is earlier than the
existing scheduled termination dates as contained in the Delta Connection Agreement.
Total expenditures for these aircraft and related flight equipment, including amounts for
contractual price escalations, are estimated to be approximately $459.7 million through the first quarter
of 2010. Additionally, SkyWest Airlines’ agreement with Bombardier includes options for another 22
aircraft that can be delivered in either 70 or 90-seat configurations. Delivery dates for these aircraft
remain subject to final determination as we agree upon with our major partners.
We have not historically funded a substantial portion of our aircraft acquisitions with working
capital. Rather, we have generally funded our aircraft acquisitions through a combination of operating
leases and long-term debt financing. At the time of each aircraft acquisition, we evaluate the financing
alternatives available to us, and select one or more of these methods to fund the acquisition. In the
event that alternative financing cannot be arranged at the time of delivery, Bombardier has typically
financed our aircraft acquisitions until more permanent arrangements can be made. Subsequent to this
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