Commitments and Contingencies

6 Months Ended

Jun. 30, 2023

Commitments and Contingencies Disclosure [Abstract]

COMMITMENTS AND CONTINGENCIES

The Company has contractual obligations and commitments primarily with regard to management and development services, lease arrangements and financing arrangements.

On October 14, 2021, the Company entered into a lease agreement for an A321f cargo aircraft. The ten year lease term commenced on January 24, 2023. Under the agreement, the Company will pay the lessor a fixed monthly rent for 72 months, plus supplemental rent for maintenance of the aircraft.

On January 27, 2023, the Company entered into a lease agreement for an A320 passenger aircraft. The six year lease term commenced on April 21, 2023. Under the agreement, the Company will pay the lessor a fixed monthly rent for 72 months, plus supplemental rent for maintenance of the aircraft.

On June 21, 2022, the Company entered into a lease agreement for a second A321f cargo aircraft. The eight year lease term commenced on June 1, 2023. Under the agreement, the Company will pay the lessor a fixed monthly rent for 96 months, plus supplemental rent for maintenance of the aircraft.

On February 24, 2023, the Company entered into a lease agreement for an A330 passenger aircraft and paid commitment fees to the lessor. The lease will commence upon aircraft delivery which is expected to be in 2024 and will run through 74 months from delivery date. In addition to basic rent due, the Company will pay the lessor supplemental rent for maintenance of the aircraft.

On June 16, 2023, the Company signed a lease agreement for an A320 passenger aircraft and paid commitment fees to the lessor. The lease will commence upon aircraft delivery which is expected to be in August 2023 and will run through 48 months from delivery date. In addition to basic rent due, the Company will pay the lessor supplemental rent for maintenance of aircraft equipment.

On July 27, 2023, the Company signed a lease agreement for an A320 passenger aircraft and paid commitment fees to the lessor. The lease will commence upon aircraft delivery which is expected to be between October 2023 and March 2024 and will run through the next heavy maintenance visit reached (estimated to be in February 2028) from delivery date. In addition to basic rent due, the Company will pay the lessor supplemental rent for maintenance of aircraft equipment.

During the six months ended June 30, 2023, the Company entered into ten finance lease agreements for equipment to support the Company's technical operations. Payments under these finance lease agreements are fixed for terms of 5 years.

The following table provides details of the Company's future minimum lease payments under finance lease liabilities and operating lease liabilities recorded on the Company's condensed consolidated balance sheets as of June 30, 2023. The table does not include commitments that are contingent on events or other factors that are currently uncertain or unknown.


	Finance Leases		Operating Leases
Remainder of 2023	$	443,839	$	8,358,750
2024		887,679		15,557,500
2025		887,679		15,455,000
2026		887,679		14,322,100
2027		770,680		11,510,000
2028 and thereafer		1,038,380		27,205,710
Total minimum lease payments		4,915,936		92,409,060
Less amount representing interest		1,346,860		28,795,674
Present value of minimum lease payments		3,569,076		63,613,386
Less current portion		488,342		9,148,095
Long-term portion		3,080,734		54,465,291

The table below presents information for lease costs related to the Company's finance and operating leases:


	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
Finance lease cost
Amortization of leased assets	$	104,646	$	-	$	218,655	$	-
Interest of lease liabilities		101,429		—		202,064		—
Operating lease cost
Operating lease cost (1)		1,799,976		2,061,074		3,646,948		1,913,191
Total lease cost		2,006,051		2,061,074		4,067,667		1,913,191

(1) Expenses are classified within Aircraft Rent on the Company's condensed consolidated statements of operations.

The Company utilizes the rate implicit in the lease whenever it is easily determined. For leases where the implicit rate is not readily available, we utilize our incremental borrowing rate as the discount rate. The table below presents lease terms and discount rates related to the Company's finance and operating leases:


	June 30, 2023			June 30, 2022
Weighted-average remaining lease term
Operating leases	6.52 years			4.81 years
Finance leases	5.71 years				—
Weighted-average discount rate
Operating leases		12.12	%		10.55	%
Finance leases		12.16	%		—

The table below presents cash and non-cash activities associated with our leases:


	Six Months Ended June 30,
	2023		2022
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	3,668,823	$	1,387,700
Financing cash flows from finance leases		220,895		—

The Company is subject to various legal proceedings in the normal course of business and records legal costs as incurred. Management believes these proceedings will not have a materially adverse effect on the Company.