(9) Long-term Debt

Long-term debt consisted of the following as of March 31, 2026, and December 31, 2025 (in thousands):

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As of March 31, 2026, the Company had $2.4 billion of total long-term debt, which consisted of $2.2 billion of debt used to finance aircraft and spare engines and $200.6 million of unsecured debt payable to the U.S. Department of the Treasury (“Treasury”). As of March 31, 2026, $55.5 million of the unsecured debt payable to Treasury had a fixed annual interest rate of 1.0%, which increased to the applicable Secured Overnight Financing Rate ("SOFR") plus 2.0% in April 2026. The remaining $145.1 million had a variable interest rate of SOFR plus 2.0%. The average effective interest rate on the Company’s debt was approximately 4.4% at March 31, 2026.

During the three months ended March 31, 2026, the Company took delivery of one new E175 aircraft that the Company financed through $23.6 million of long-term debt. The debt associated with the E175 aircraft has a 12-year term, is due in quarterly installments, and is secured by the E175 aircraft.

During the three months ended March 31, 2026, the Company executed promissory notes for $94.0 million. The promissory notes have four-year terms, are due in monthly installments, and are secured by spare engines.

As of March 31, 2026 and December 31, 2025, the Company had $47.5 million and $47.2 million, respectively, in letters of credit and surety bonds outstanding with various banks and surety institutions.

As of March 31, 2026, SkyWest Airlines had a $100.0 million line of credit. The line of credit includes minimum liquidity and profitability covenants and is secured by certain assets. As of March 31, 2026, SkyWest Airlines had no amounts outstanding under the line of credit facility. However, at March 31, 2026, SkyWest Airlines had $24.6 million in letters of credit issued under the facility, which reduced the amount available under the facility to $75.4 million. The line of credit expires March 25, 2028 and has a variable interest rate of 3.5% plus the one month SOFR rate.

The Company’s debt agreements are not traded on an active market and are recorded at carrying value on the Company’s consolidated balance sheet. The fair value of the Company’s long-term debt is estimated based on current rates offered to the Company for similar debt. The fair value of debt is estimated using inputs classified as Level 2 within the fair value hierarchy. The carrying value and fair value of the Company’s long-term debt as of March 31, 2026 and December 31, 2025, were as follows (in thousands):

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