Fair Value The accounting guidance establishes a fair value hierarchy as follows: | | | Level 1 | Observable inputs such as quoted prices in active markets for identical assets or liabilities. | | | Level 2 | Observable inputs other than Level 1 prices such as quoted prices in active markets for similar assets and liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term for the assets or liabilities. | | | Level 3 | Unobservable inputs in which there is little or no market data and that are significant to the fair value of the assets or liabilities. |
The following is a listing of the Company’s assets and liabilities required to be measured at fair value on a recurring basis and where they are classified within the fair value hierarchy as of March 31, 2015 and December 31, 2014 respectively (in thousands): | | | | | | | | | | | | | | | | | | March 31, 2015 (unaudited) | | Level 1 | | Level 2 | | Level 3 | | Total | Assets (Liability) | | | | | | | | Cash equivalents | $ | 336,065 |
| | $ | — |
| | $ | — |
| | $ | 336,065 |
| Restricted cash | 18,775 |
| | — |
| | — |
| | 18,775 |
| Heating oil collars - fuel derivative instruments | — |
| | (11,768 | ) | | — |
| | (11,768 | ) | Brent calls - fuel derivative instruments | — |
| | (181 | ) | | — |
| | (181 | ) | Heating oil swaps - fuel derivative instruments | — |
| | (615 | ) | | — |
| | (615 | ) | Jet fuel swaps - fuel derivative instruments | — |
| | (636 | ) | | — |
| | (636 | ) | | $ | 354,840 |
| | $ | (13,200 | ) | | $ | — |
| | $ | 341,640 |
| | | | | | | | | | December 31, 2014 | | Level 1 | | Level 2 | | Level 3 | | Total | Assets (Liability) | | | | | | | | Cash equivalents | $ | 339,211 |
| | $ | — |
| | $ | — |
| | $ | 339,211 |
| Restricted cash | 18,775 |
| | — |
| | — |
| | 18,775 |
| Heating oil collars - fuel derivative instruments | — |
| | (27,170 | ) | | — |
| | (27,170 | ) | Brent calls - fuel derivative instruments | — |
| | 50 |
| | — |
| | 50 |
| | $ | 357,986 |
| | $ | (27,120 | ) | | $ | — |
| | $ | 330,866 |
|
A portion of the Company’s debt is privately negotiated with related parties. The estimated fair value of related-party debt was $39.7 million and $38.8 million at March 31, 2015 and December 31, 2014, respectively. The estimated fair value of the non-related party debt includes financing associated with aircraft pre-delivery payments of $58.2 million and $51.2 million at March 31, 2015 and December 31, 2014 and a $40.0 million financing of airport slots. The Company uses significant unobservable inputs in determining discounted cash flows to estimate the fair value, and therefore, such amounts are categorized as Level 3 in the fair value hierarchy. |