Allegiant Travel CO

Note 2 —Acquisition of Sun Country

On May 13, 2026, the Company acquired all of the issued and outstanding shares of capital stock of Sun Country, for total merger consideration of approximately $976.0 million. This acquisition, which was accounted for as a business combination, is intended to further the Company’s ambition to be a leading leisure-focused U.S. airline, expanding service to more markets across the United States, as well as international destinations, and providing more people with access to affordable, convenient air travel. Information regarding the purchase accounting applied is as follows:

Purchase Consideration

At the effective time of the Merger, each outstanding share of Sun Country common stock, par value $0.01 per share, was converted into the right to receive $4.10 in cash, without interest, and 0.1557 shares of Allegiant common stock, par value $0.001 per share. Certain outstanding Sun Country equity awards were replaced or accelerated in connection with the acquisition. In addition, purchase consideration includes certain change in control payments, including the settlement of warrants issued to Amazon and a tax receivable agreement with pre-IPO shareholders of Sun Country.

The total purchase consideration was as follows:

Preliminary Purchase Price Allocation

The excess of the purchase price over identifiable intangible assets and net tangible assets in the amount of $465.7 million was allocated to goodwill. The fair values assigned to assets acquired and liabilities assumed are based on management’s best estimates and assumptions as of the acquisition date and are considered preliminary pending finalization of closing balance items as well as valuation analyses pertaining to assets acquired and liabilities assumed. During the measurement period, which may not exceed one year from the acquisition date in accordance with Accounting Standards Codification 805, Business Combinations, the Company may record adjustments to the preliminary fair values of assets acquired and liabilities assumed. Any measurement-period adjustments identified will be recorded with a corresponding adjustment to goodwill. The following table presents the preliminary allocation of the purchase price as of the acquisition date:

Goodwill is primarily attributed to the assembled workforce and anticipated synergies and economies of scale expected from the integration of the Sun Country business. The synergies include certain cost savings, operating efficiencies and other strategic benefits projected to be achieved as a result of the Sun Country acquisition. The goodwill was assigned to the Sun Country reporting segment and the amount recognized is not deductible for tax purposes.

The operating results of Sun Country have been included in the Company's consolidated financial statements for the three and six months ended June 30, 2026 from the acquisition date of May 13, 2026.

Intangible assets

The estimated fair value and weighted average useful life of the Sun Country intangible assets are as follows:

The trademarks represent the right to use the Sun Country trade names currently used in its operations. The Company has determined the trademarks to be finite-lived intangible assets, as the Company plans to phase out the trademarks as Sun Country is integrated into the Allegiant Air network. Customer relationships include the value of relationships acquired under the Sun Country co-brand credit card. The useful life was derived from the time period over which the majority of the cash flows are expected to be generated. These finite-lived intangible assets will be amortized using the straight-line method over the useful life for the amortization of the associated intangible asset. At June 30, 2026, the amortization expense and accumulated amortization of the Company's intangible assets was $1.4 million.

Acquisition-related costs

During the six months ended June 30, 2026, the Company incurred costs directly attributable to the acquisition of $64.8 million. These costs are presented within the special charges line item within the consolidated statements of operations. Refer to Note 3 for further information on special charges.

Employee Benefit Plans

In connection with the acquisition, the Company registered 874,302 shares of common stock issuable in connection with the SCA Acquisitions Holdings, LLC Amended and Restated Incentive Equity Plan, dated as of July 1, 2019 (the "2019 Plan") and the Sun Country Airlines Holdings, Inc. 2021 Omnibus Incentive Plan ("the 2021 Plan", and together with the 2019 Plan, the "Plans"). Unvested restricted stock units ("RSUs") and performance stock units ("PSUs") outstanding under the Plans were converted to Allegiant Travel Company RSUs, and all options outstanding under the Plans were converted to Allegiant Travel Company options as provided in the merger agreement. A summary of the Plan activity is presented below:

(1)All RSUs had a grant date fair value of $75.21, which was the Allegiant Travel Company stock price at the date of acquisition, May 13, 2026.

The total fair value of RSUs issued in conjunction with the acquisition was $19.5 million. $3.7 million of the fair value was allocated to purchase consideration as the pre-acquisition value of the RSUs, and $10.3 million of the fair value was recognized as employee separation expense within special charges during the three months ended June 30, 2026. The remaining $5.6 million of unrecognized compensation cost will be recognized as salaries and wages expense through the remaining weighted average term of 1.2 years.

All Sun Country stock options were vested prior to the acquisition. Outstanding Sun Country options were converted to 324,059 Allegiant Travel Company options as provided in the merger agreement. The fair value of the converted stock options was $17.5 million, the entirety of which was recognized as purchase consideration. There have been no exercises of these options as of June 30, 2026. The weighted average exercise price of the outstanding stock options is $32.96.

Pro forma impact of the acquisition

The unaudited pro forma financial information presented below represents a summary of the consolidated results of operations for the Company and Sun Country as if the acquisition had been consummated as of January 1, 2025. The pro forma results do not include any anticipated synergies, or other expected benefits of the acquisition. Accordingly, the unaudited pro forma financial information below is not necessarily indicative of either future results of operations or results that might have been achieved had the acquisition been consummated as of January 1, 2025.

The pro forma information includes adjustments for estimated acquisition-related costs of $73.0 million assumed to have been incurred on January 1, 2025.

Note 3 —Special Charges

Allegiant Air and Sun Country

The Company has identified airframes for early retirement to coincide with 737 MAX aircraft deliveries as scheduled under an amendment to the Company's agreement with The Boeing Company signed in September 2023. To date, the Company has retired a total of 17 airframes under this plan. The remaining airframes are to be retired between August 2026 and January 2027. The accelerated depreciation on these airframes resulting from a change in the estimated useful life is recorded as a special charge during the three and six months ended June 30, 2026 and 2025.

In fourth quarter 2025, the Company committed to a plan to redevelop certain internal-use software to better suit operational needs. As a result, the estimated useful life of the existing internal-use software asset was shortened, and the accelerated amortization resulting from the change in estimated useful life is recorded as a special charge during the three and six months ended June 30, 2026.

On May 13, 2026, the Company completed its acquisition of Sun Country. During the three and six months ended June 30, 2026, the Company incurred costs directly related to integration and other transaction costs, which included legal and professional fees, change in control payments, and other employee-related expenses. These costs are presented as special charges in the Company's consolidated statements of income. The Company expects to incur additional acquisition-related costs in the future as the integration continues. The acquisition is more fully discussed in Note 2.

In second quarter 2025, the Company recorded $12.1 million of special charges related to corporate restructuring efforts taken in response to softness in air travel demand due to heightened macroeconomic uncertainty. These efforts included voluntary separation packages offered to corporate and operational personnel, termination of certain marketing agreements and abandonment of certain IT assets no longer being used.

During the six months ended June 30, 2026, the Company recorded an allowance for credit losses related to a note receivable arising from the Company's financing of the purchase oftwo flight simulators by a third party in 2016 and 2017. The counterparty to the note receivable declared bankruptcy during first quarter 2026, which led the Company to conclude that a credit loss is probable for the full amount outstanding. The Company continues to evaluate the matter, and the allowance may be adjusted as additional information becomes available.

Sunseeker Resort

In second quarter 2025, the Company recorded special charges of $102.2 million related to the sale of Sunseeker Resort at Charlotte Harbor (the "Resort" or "Sunseeker Resort") and the associated Aileron Golf Course. The sale was completed on September 4, 2025. In addition, the Resort was impacted by weather events occurring between 2022 and 2024, with the related costs and insurance recoveries recorded within special charges as incurred. No further insurance recoveries are expected.

Special Charges Table

The table below summarizes special charges recorded during the three and six months ended June 30, 2026, and 2025.

Note 4 —Revenue Recognition

Passenger Revenue

Passenger revenue is the most significant category in the Company's reported operating revenues, as outlined below:

Sales of passenger tickets not yet flown are recorded in air traffic liability. As of June 30, 2026, the air traffic liability balance was $570.6 million, of which approximately $523.6 million was related to forward bookings, with the remaining $47.0 million related to credit vouchers for future travel.

The normal contract term of passenger tickets is 12 months and passenger revenue associated with future travel will principally be recognized within this time frame. Of the $363.3 million that was recorded in the air traffic liability balance as of December 31, 2025, approximately 90.6 percent was recognized into passenger revenue during the six months ended June 30, 2026. The amount recognized in 2026 from the prior year-end air traffic liability balance does not include Sun Country passenger revenue as air traffic liability attributable to Sun Country was not included in the Company's prior year-end balance.

The Company periodically evaluates the estimated amount of credit vouchers expected to expire unused and any adjustment is removed from air traffic liability and included in passenger revenue in the period in which the evaluation is complete.

Contract Assets

The Company's contract assets primarily relate to unamortized costs incurred by Sun Country to prepare the Amazon cargo aircraft for service, as well as the value of the Amazon warrants that will be amortized against cargo revenue over the remaining term of the ATSA. The balances as of June 30, 2026, which are approximately $35.0 million, are included in Prepaid Expenses and Other Current Assets and Deposits and Other Assets on the Condensed Consolidated Balance Sheet.

Loyalty redemptions

In connection with Allegiant's co-brand credit card program and Allways Rewards® loyalty program, as well as Sun Country's co-brand credit card program and the Sun Country Rewards loyalty program, the Company has a performance obligation to its members to honor future travel award redemptions. The accounting for and recognition of the loyalty program redemptions are discussed in the Summary of Significant Accounting Policies in the Company's annual 10-K filing.

The following table presents the activity of the co-brand credit cards and the loyalty programs as of the dates indicated:

(1)Includes issuance and redemption of Sun Country Rewards loyalty points after May 13, 2026.

(2)Revenue recognized from points redeemed includes points issued under the respective loyalty programs during the period and points that were included in the loyalty program liability at the beginning of the period. Allegiant's and Sun Country's loyalty programs are administered and accounted for separately.

(3) The current portion of the loyalty program liability represents the estimate of revenue to be recognized in the next 12 months based on historical trends, with the remaining balance reflected in noncurrent liabilities expected to be recognized into revenue in periods thereafter.

Third Party Products Revenue

Third party products revenue primarily includes revenue associated with Allegiant and Sun Country's loyalty programs, which is comprised of the marketing component of point sales to the co-brand credit card provider and other marketing related payments, totaled $51.0 million and $35.9 million for the six months ended June 30, 2026 and 2025, respectively. The accounting and recognition of marketing services related to Allegiant's loyalty program are discussed in the Summary of Significant Accounting Policies in the Company's annual 10-K filing. The remaining amounts included within third party products revenue relate mostly to sales of travel insurance, hotel rooms, rental cars and ticket attractions.

Resort Revenue

The sale of Sunseeker Resort was completed on September 4, 2025. As such, only the revenues during the three and six months ended June 30, 2025 are presented in the table below:

Revenue from banquets, golf, retail, and spa services was included in other resort revenue. Resort revenue was recognized as the underlying services or goods were provided, with minimal timing differences between service delivery and payment.

Note 5 —Property and Equipment

The following table summarizes the Company's property and equipment as of the dates indicated:

As of June 30, 2026, the Company had firm commitments to purchase 30 aircraft which are expected to be delivered between 2026 and 2028.

Note 6 —Long-Term Debt

The following table summarizes the Company's long-term debt and finance lease obligations, net of related costs, as of the dates indicated:

Maturities of long term debt as of June 30, 2026, for the next five years and thereafter, in the aggregate, are:

Senior Secured Notes

In June 2026, the Company issued $650.0 million in aggregate principal amount of 7.125% Senior Secured Notes due 2031 (the “2031 Notes”) pursuant to an Indenture, dated as of June 24, 2026. The 2031 Notes are secured by first priority security interests in, subject to permitted liens, substantially all of the property and assets of the Company and its subsidiaries, except that the collateral package excludes aircraft, aircraft engines, real property and certain other assets. The collateral also secures the Company's senior secured revolving loan facility on a pari passu basis. The 2031 Notes bear interest at a fixed rate of 7.125 percent per annum, payable in cash on January 1 and July 1 of each year, beginning January 1, 2027. The 2031 Notes will mature on July 1, 2031.

The 2031 Notes contain certain covenants that limit the ability of the Company to, among other things: (i) make restricted payments; (ii) incur certain indebtedness or issue preferred stock; (iii) create or incur certain liens; (iv) dispose of loyalty program or brand intellectual property collateral; (v) merge, consolidate or sell all or substantially all assets; and (vi) enter into certain transactions with affiliates.

The 2031 Notes also require the Company to comply with certain affirmative covenants, including maintaining a minimum aggregate amount of liquidity of $300.0 million. If the Company fails to satisfy the minimum liquidity requirement, the Company will be required to pay additional interest on all outstanding 2031 Notes in an amount equal to 2.0% per annum of the principal amount of such 2031 Notes until the Company demonstrates compliance with the liquidity requirement.

The Company used the net proceeds from the sale of the 2031 Notes, to fund the purchase and redemption of approximately $377.5 million aggregate principal amount of its outstanding 7.250% Senior Secured Notes due 2027 pursuant to a tender offer and to pay related accrued interest and satisfy transaction fees and expenses. The remaining proceeds will be used for general corporate purposes.

In July 2026, the Company repurchased an additional $17.4 million aggregate principal amount of the 7.250% Senior Secured Notes due 2027 pursuant to the tender offer.

Consolidated Variable Interest Entities

The Company evaluates ownership, contractual lease arrangements and other interests in entities to determine if they are variable interest entities ("VIEs") based on the nature and extent of those interests. The Company consolidates a VIE when, among other criteria, it has the power to direct the activities that most significantly impact the VIE’s economic performance as well as the obligation to absorb losses or the right to receive benefits of the VIE, thus making the Company the primary beneficiary of the VIE.

In March 2026, the Company, through a wholly owned subsidiary, entered into similarly structured agreements with trusts to borrow $20.5 million collateralized by aircraft engines. The trusts were funded at inception. The borrowings bear interest at fixed rates and are payable in monthly installments through March 2031, at which time the Company will have purchase options at fixed amounts.

Revolving Credit Facilities

In March 2021, the Company entered into a revolving credit facility, which, as amended to date, entitles it to borrow up to $100.0 million. In April 2025, the agreement was amended to extend the maturity date to April 2028. The borrowing ability under the facility is based on the value of the aircraft and engines placed into the collateral pool. Amounts drawn under the facility will bear interest at a floating rate based on SOFR. As of June 30, 2026, the facility remains undrawn.

In August 2022, the Company entered into a credit agreement that provided a senior secured revolving loan facility of $75.0 million, with an original term of 57 months. The facility is secured by the same collateral that secures the 2027 Senior Secured Notes and 2031 Senior Secured Notes, and borrowings under the facility will bear interest at a floating rate based on SOFR. In December 2025, the Company amended the revolving loan facility to increase the total commitment to $150.0 million and extend the maturity date to December 5, 2030. As of June 30, 2026, the facility remains undrawn.

Debt Secured by Aircraft

In April 2026, the Company entered into credit agreements providing financing commitments of up to $176.0 million, to be secured by new aircraft upon delivery. During the three months ended June 30, 2026, the Company borrowed $44.0 million under the agreements and $132.0 million remained undrawn as of June 30, 2026. The loans bear interest at a variable rate based on three-month SOFR and arepayable in quarterly installments over a term of 10 years.

In April 2026, the Company entered into a credit agreement providing financing commitments of up to $115.0 million secured by aircraft. During the three months ended June 30, 2026, the Company borrowed the entirety of the $115.0 million available under the agreement, resulting in the facility being fully drawn. The borrowing carries a variable interest rate based on three-month SOFR, matures inthree years, and is payable in quarterly installments with a balloon payment at maturity.

In May 2026, the Company entered into a credit agreement with a borrowing capacity of up to $85.6 million to be secured by unencumbered aircraft and new aircraft upon delivery. During the three months ended June 30, 2026, the Company borrowed approximately $40.6 million under the agreement and $45.0 million remains undrawn as of June 30, 2026. The borrowing bears interest at a variable rate based on three-month SOFR and is payable in quarterly installments over a term of 12 years.

PDP Financing

In November 2023, the Company entered into a pre-delivery deposit financing facility to borrow up to $158.0 million, secured by the Company's purchase rights for certain Boeing 737 MAX aircraft. The facility bears a floating interest rate based on SOFR and was originally due upon delivery of each aircraft or no later than June 30, 2025. In April 2025, the Company entered into an amendment to extend the maturity date of the agreement to no later than March 2027. The Company drew a total of $132.6 million on the facility between November 2023 and February 2024, and drew the remaining $25.1 million of available capacity during the three months ended June 30, 2026. During the second quarter of 2026, the Company made prepayments totaling $13.8 million as aircraft were delivered to the Company.

Debt and Finance Leases Assumed in Sun Country Acquisition

The Company assumed debt and finance lease obligations totaling $570.3 million in the acquisition of Sun Country as further described below.

2025 Term Loan Facility

In September 2025, Sun Country entered into a term loan facility (the "2025 Term Loan Facility") and pledged five aircraft as collateral. The 2025 Term Loan Facility bears interest at a fixed rate and is repaid in quarterly installments with a balloon payment upon maturity in September 2032. The fair value of the facility was $103.6 million as of the acquisition date.

2022 Enhanced Equipment Trust Certificates ("2022-1 EETC")

In March 2022, Sun Country arranged for the issuance of the 2022-1 EETC and pledged 13 aircraft as collateral. The equipment notes bear interest at a fixed rate and are repaid in semiannual principal and interest payments each March and September, through March 2031. The fair value of the equipment notes outstanding under the 2022-1 EETC was $102.1 million as of the acquisition date.

2019 Enhanced Equipment Trust Certificates ("2019-1 EETC")

In December 2019, Sun Country arranged for the issuance of the 2019-1 EETC and pledged 13 aircraft as collateral. The equipment notes bear interest at a fixed rate and are repaid in semiannual principal and interest payments each June and December, through December 2027. The fair value of the equipment notes outstanding under the 2019-1 EETC was $101.4 million as of the acquisition date.

Finance Leases

As of June 30, 2026, Sun Country was party to 13 aircraft leases, all of which are classified as finance leases. The lease agreements generally include an option or obligation to purchase the aircraft at the end of the lease term. As the leases were not modified in connection with the acquisition, lease classification was not reassessed. The carrying amount of these lease liabilities was $263.2 million as of the acquisition date, and the lease terms end between 2026 and 2031.

Note 7 —Income Taxes

The Company recorded a $0.4 million income tax benefit at a 6.9 percent effective tax rate and a $23.4 million income tax benefit at a 26.4 percent effective tax rate for the three months ended June 30, 2026 and 2025, respectively. The effective tax rate for the three months ended June 30, 2026 differed from the statutory federal income tax rate of 21.0 percent primarily due to costs incurred as a result of the Sun Country acquisition, state income taxes, and the impact of permanent book-tax differences.

The Company recorded a $23.2 million income tax expense at an effective tax rate of 38.1 percent and a $13.6 million income tax benefit at a 29.1 percent effective tax rate for the six months ended June 30, 2026 and 2025, respectively. The effective tax rate for the six months ended June 30, 2026 differed from the statutory federal income tax rate of 21.0 percent primarily due to costs incurred as a result of the Sun Country acquisition, state income taxes, and the impact of permanent book-tax differences.

Note 8 —Fair Value Measurements

The Company utilizes the market approach to measure the fair value of its financial assets. The market approach uses prices and other relevant information generated by market transactions involving identical or comparable assets. The assets classified as Level 2 primarily utilize quoted market prices or alternative pricing sources including transactions involving identical or comparable assets and models utilizing market observable inputs for valuation of these securities. No changes in valuation techniques or inputs occurred during the six months ended June 30, 2026.

Financial instruments measured at fair value on a recurring basis:

None of the Company's long-term debt is publicly traded. The Company has determined the estimated fair value of all of its debt to be Level 3, as certain inputs used to determine the fair value of these agreements are unobservable and, therefore, could be sensitive to changes in inputs. The Company utilizes the discounted cash flow method to estimate the fair value of Level 3 debt.

Carrying value and estimated fair value of long-term debt, including current maturities and without reduction for related costs, are as follows:

Due to the short-term nature, carrying amounts of cash, restricted cash, accounts receivable and accounts payable approximate fair value.

Note 9 —Earnings per Share

Basic and diluted earnings per share are computed pursuant to the two-class method. Under this method, the Company attributes net income to two classes: common stock and unvested restricted stock. Unvested restricted stock awards granted to employees under the Company’s Long-Term Incentive Plan or the Sun Country Airlines Holdings, Inc. 2021 Omnibus Incentive Plan are considered participating securities as they receive non-forfeitable rights to cash dividends at the same rate as common stock.

Diluted net income per share is calculated using the more dilutive of the two methods. Under both methods, the exercise of employee stock options is assumed using the treasury stock method. The assumption of vesting of restricted stock, however, differs:

1. Assume vesting of restricted stock using the treasury stock method.

2. Assume unvested restricted stock awards are not vested, and allocate earnings to common shares and unvested restricted stock awards using the two-class method.

The following table sets forth the computation of net income per share, on a basic and diluted basis, for the periods indicated (share count and dollar amounts other than per-share amounts in the table are in thousands):

Note 10 —Contingencies

The Company is subject to certain legal and administrative actions it considers routine to its business activities. The Company believes the ultimate outcome of any potential and pending legal or administrative matters will not have a material adverse impact on its financial position, liquidity or results of operations.

In 2025, Allegiant Air received a formal assessment of $9.9 million from the Transportation Security Administration ("TSA") related to the remittance of TSA security fees for the period covering October 1, 2019 to December 31, 2022. The Company disputes the TSA's interpretation of the applicable regulations and believes the assessment is without merit. The Company currently has a pending case in the U.S. Court of Appeals for the Ninth Circuit regarding this matter. Oral arguments were held on April 15, 2026, and the court decision is currently pending. Sun Country is in the initial stages of a similar TSA audit and has not received any formal assessment or preliminary findings. Based on the information that is currently available, the Company does not believe a loss in this matter is probable and no corresponding liability has been recorded. The Company does not expect that any potential liability arising for periods subsequent to the 2019 to 2022 audit assessment period will be material to the consolidated financial statements.

Note 11 —Segments

Operating segments are components of a company for which separate financial and operating information is regularly evaluated and reported to the Chief Operating Decision Maker ("CODM") and is used to allocate resources and analyze performance. The Company's CODM is the CEO. The CODM assesses segment performance and makes resource allocation decisions using information about each operating segment's operating income.

Following the acquisition of Sun Country on May 13, 2026, the Company operates Allegiant Air and Sun Country as separate brands under separate FAA operating certificates. The CODM reviews financial results fortwo operating segments, Allegiant Air and Sun Country. As a result, the Company determined Sun Country was an operating and reportable segment beginning in the second quarter of 2026.

During 2025, the CODM reviewed separate financial information and made resource allocation decisions for the Company'stwo operating segments, Allegiant Air and Sunseeker Resort, using operating income and pretax income as the measures of segment profit or loss. The Resort was sold in September 2025 and deconsolidated from the Company's financial statements as of that date.

Allegiant Air Segment

The Allegiant Air segment includes scheduled service air transportation, ancillary air-related products and services, third party products and services, fixed fee contract air transportation and other airline-related revenue.

Sun Country Segment

The Sun Country segment includes scheduled service air transportation, ancillary air-related products and services, fixed fee contract air transportation, cargo transportation, third party products and services, and other airline-related revenue.

Sunseeker Resort Segment

The Company's consolidated financial statements for 2025 include the operating results of Sunseeker Resort through the completion of the sale of the Resort's assets on September 4, 2025. The Sunseeker Resort segment included hotel rooms and suites for occupancy, group meeting facilities, food and beverage options, Aileron Golf Course and other Resort amenities.

Segment profit or loss, revenues, significant segment expenses, and asset information for each of the Company's operating segments are set forth below. Sun Country profit and loss is included beginning from May 13, 2026 and forward.

(1) Other operating expenses for the Allegiant Air and Sun Country segments consist of insurance, crew training and travel, legal expense, information technology, gains and losses on the sale of flight equipment, and other general and administrative expenses. Other operating expenses in the Sunseeker segment consist of food and beverage cost of goods sold, contract labor, property tax, insurance, and other general and administrative expenses.

Total assets were as follows as of the dates indicated:

Note 12 —Subsequent Events

On July 1, 2026, the Company borrowed the remaining $45.0 million available under a credit agreement with a borrowing capacity of up to $85.6 million. Following this drawdown, the facility was fully utilized. The borrowing is secured by aircraft and bears interest at a variable rate based on three-month Term SOFR, payable in quarterly installments over a term of 12 years.

On July 17, 2026, the Company repaid approximately $11.3 million outstanding under its pre-delivery deposit financing facility related to Boeing 737 MAX aircraft purchase rights. Following the repayment, the facility was fully repaid with no outstanding borrowings remaining.

On July 27, 2026, the Company entered into a new pre-delivery payment financing facility providing commitments of up to $231.0 million to fund pre-delivery payment obligations associated with future Boeing 737-8 aircraft deliveries. The facility is secured by purchase price assignments related to the underlying aircraft and bears interest at a variable rate based on one-month SOFR. As of August 10, 2026, no amounts had been drawn under the facility.

On July 24, 2026, the Company entered into a new aircraft financing facility providing commitments of up to $177.5 million. The facility is secured by certain aircraft and bears interest at a fixed rate based on SOFR plus an applicable margin determined at the time of drawdown. As of August 10, 2026, no amounts had been drawn under the facility.

During July 2026, the Company borrowed an additional $132.0 million under a previously disclosed aircraft financing credit agreement. The borrowings were secured by recently delivered aircraft and fully utilized the remaining borrowing capacity available under the credit agreement.

Subsequent to June 30, 2026, the Company executed amendments to extend the lease terms fortwo Boeing 737-900ER aircraft currently leased to a third-party operator through the fourth quarter of 2029.

On July 31, 2026, the Company's pilots ratified a new collective bargaining agreement. The Company is evaluating the financial impact of the agreement, including the payment of accrued pilot retention bonuses and future compensation and benefit costs.