Property and Equipment

12 Months Ended

Dec. 31, 2020

Property, Plant and Equipment [Abstract]

Property and Equipment

4. Property and Equipment

The following presents Air Wisconsin’s aircraft as of December 31, 2020 and 2019.

December 31, 2020	Owned		Leased
CRJ-200		64		0

December 31, 2019	Owned		Leased
CRJ-200		51		13

As part of an agreement reached in January 2018 Bombardier Inc. (BBD) agreed to pay Air Wisconsin $25,192 in installments through September 2019, provided that BBD had the right to deliver to Air Wisconsin the unencumbered title to certain CRJ-200 aircraft in satisfaction of any installment payments that remained at the time of such delivery. Under the agreement, Air Wisconsin and BBD also agreed to terminate all residual value guarantee agreements (RVG’s) on 35 owned aircraft and to terminate certain other agreements that limited BBD’s obligations under such guarantee agreements.

On July 1, 2019, BBD exercised its right under the agreement and delivered to Air Wisconsin 14 CRJ-200 aircraft which had previously been leased to Air Wisconsin. The delivery of the aircraft was in lieu of remaining installment payments due to Air Wisconsin totaling $8,212. All installment payments received from BBD prior to July 1, 2019, were recorded as “Other income” in the statements of operations and amounted to $2,537 for the year ended December 31, 2019.

Air Wisconsin recorded the 14 CRJ-200 aircraft as “Flight property and equipment” on the Balance Sheet at their fair market value based on recent asset valuations completed around that time. Fair market value was determined to be $15,832 based on one hundred and forty dollars per remaining engine cycle with a minimum value of $50 per engine, and each of the aircraft airframes was assigned a fair market value of $100. The airframes and engines were then depreciated in accordance with the table under “Property and Equipment and Depreciation” as set forth in Note 1. The transaction resulted in a lease termination expense of $19,539 which is included as part of “Aircraft rent” on

the 2019 statement of operations. The lease termination expense, net of the recording of the assets at fair market value as noted above, included a charge for the following Balance Sheet items at the time the aircraft were acquired in July 2019: 

• Right-of-use assets in the amount of $26,275, offset by lease liabilities of $1,182.

• Unamortized engine overhauls of $9,535, recorded under “Flight property and equipment” on the Balance Sheet, related to the 28 engines acquired as part of the transaction.

• Leasehold improvements with a remaining book value of $738 and included on the Balance Sheet as “Flight property and equipment,” related to the 14 acquired aircraft.

• Other lease and financing costs incurred at the inception of the aircraft leases and recorded on the Balance Sheet as “Other assets,” had a remaining net book value of $184 at the acquisition date.

In January 2020, the Company completed an asset acquisition from Southshore Leasing, LLC (Southshore Leasing), through its affiliates (the Southshore Affiliates and, together with Southshore Leasing, Southshore), of three CRJ-200 regional jets, each having two General Electric (GE) engines, plus five additional GE engines, in exchange for the issuance of shares of the Company’s Series C Convertible Redeemable Preferred Stock (Series C Preferred). The Company had leased each of these regional jets and engines prior to the acquisition. Refer to Note 12 for additional information.

In May 2020, Air Wisconsin completed an acquisition of eight CRJ-200 regional jets, each having two GE engines, for $3,000. Air Wisconsin had leased each of these regional jets and engines prior to the acquisition.

In September 2020, Air Wisconsin completed an acquisition of two CRJ-200 regional jets, each having two GE engines, for $818. Air Wisconsin had leased each of these regional jets and engines prior to the acquisition.