Leases

12 Months Ended

Dec. 31, 2020

Leases

Leases

(7) Leases

Effective January 1, 2019, the Company adopted Topic 842. The Company leases property and equipment under operating leases. For leases with durations longer than 12 months, the Company recorded the related operating lease right-of-use asset and operating lease liability at the present value of lease payments over the term. The Company used its incremental borrowing rate to discount the lease payments based on information available at lease commencement.

Aircraft

As of December 31, 2020, excluding aircraft financed by our major partners that we operate for them under contract, the Company had 41 aircraft under long-term lease agreements with remaining terms ranging from less than one year to ten years.

With the adoption of Topic 842, the Company evaluated whether leased aircraft asset groups within the Company’s fleet were impaired. Under the transition guidance for Topic 842, a company is permitted to recognize a previously unrecognized impairment related to a right-of-use asset in the period prior to the adoption date of Topic 842 if the event giving rise to the impairment occurred before the adoption date. In 2016, the Company recorded an impairment on certain of its long-lived assets, which included the Company’s CRJ200 aircraft. In 2016, the market lease rate was less than the contractual lease rate on the Company’s CRJ200 leased aircraft. The Company recorded an impairment of $13.1 million (net of tax) as an adjustment to the Company’s January 1, 2019 retained earnings related to the previously unrecognized impairment of these leased CRJ200s.

Airport facilities

The Company has operating leases for facility space including airport terminals, office space, cargo warehouses and maintenance facilities. The Company generally leases this space from government agencies that control the use of the airport. The remaining lease terms for facility space vary from one month to 36 years. The Company’s operating leases with lease rates that are variable based on airport operating costs, use of the facilities or other variable factors are excluded from the Company’s right-of-use assets and operating lease liabilities in accordance with accounting guidance.

Leases

As of December 31, 2020, the Company’s right-of-use assets were $282.4 million, the Company’s current maturities of operating lease liabilities were $82.6 million, and the Company’s noncurrent lease liabilities were $205.8 million. During 2020, the Company paid $90.3 million in operating leases reflected as a reduction from operating cash flows.

The table below presents lease related terms and discount rates as of December 31, 2020.

	As of December 31, 2020
Weighted-average remaining lease term
Operating leases		6.50 years
Weighted-average discount rate
Operating leases		6.1%

The Company’s lease costs for 2020 and 2019 included the following components (in thousands):

	For the year ended December 31,
	2020		2019
Operating lease cost	$	94,915	$	104,011
Variable and short-term lease cost		4,619		5,232
Sublease income		(6,304)		(1,436)
Total lease cost	$	93,230	$	107,807

As of December 31, 2020, the Company leased aircraft, airport facilities, office space, and other property and equipment under non-cancelable operating leases, which are generally on a long-term, triple-net lease basis pursuant to which the Company pays taxes, maintenance, insurance and certain other operating expenses applicable to the leased property. The Company expects that, in the normal course of business, such operating leases that expire will be renewed or replaced by other leases, or the property may be purchased rather than leased. The following table summarizes future minimum rental payments primarily related to leased aircraft required under operating leases that had initial or remaining non-cancelable lease terms as of December 31, 2020 (in thousands):

2021	$	85,869
2022		77,780
2023		69,530
2024		28,091
2025		15,751
Thereafter		82,719
	$	359,740

Total rental expense for non-cancelable aircraft operating leases was approximately $65.3 million, $72.0 million and $154.9 million for the years ended December 31, 2020, 2019 and 2018, respectively. The minimum rental expense for airport station rents was approximately $20.1 million, $23.1 million and $19.6 million for the years ended December 31, 2020, 2019 and 2018, respectively.