Lease Obligations

6 Months Ended

Jun. 30, 2022

7. Lease Obligations

Air Wisconsin has operating leases with terms greater than twelve months for training simulators and facility space including office space and maintenance facilities. The remaining lease terms for training simulators and facility space vary from 2 months to 12 years. 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 the lease payments over the lease term. The Company used Air Wisconsin’s incremental borrowing rate to discount the lease payments based on information available at lease conception. Air Wisconsin’s operating leases with lease rates that are variable based on 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 the applicable accounting guidance.

Leasehold improvements are capitalized at cost and amortized over the lesser of their expected useful life or the lease term.

Certain leases contain an option to extend or terminate the lease agreement. The Company evaluates each option prior to its expiration and may or may not exercise such option depending on conditions present at the time. At the inception of the lease, if it is reasonably certain that the Company will exercise an option to extend or terminate a lease, the Company considers the option in determining the classification and measurement of the lease. The Company expects that in the normal course of business operating leases that expire will be renewed or replaced by other leases.

As of June 30, 2022, the

Company’s right-of-use assets

were $16,005, current maturities of operating lease liabilities were $5,103, and noncurrent lease liabilities were $8,304. During the six months ended June 30, 2022, the Company paid $2,960 in operating lease payments.

The table below presents operating lease related terms and discount rates as of June 30, 2022:


Weighted-average remaining lease term	3.30 years
Weighted-average discount rate	5.44	%

Components of lease costs were as follows for the dates presented:


	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021

Operating lease costs	$	1,472	$	1,110	$	2,946	$	1,876
Short-term lease costs		125		163		229		309
Variable lease costs		60		34		95		67

Total Lease Costs	$	1,657	$	1,307	$	3,270	$	2,252

As of June 30, 2022, Air Wisconsin leased or subleased certain training simulators and facilities for terms of greater than 12 months. Rent expense recorded under all operating leases, inclusive of engine leases, was $1,657 and $1,307 for the three months ended June 30, 2022 and 2021, respectively. Rent expense recorded under all operating leases, inclusive of engine leases, was $3,270 and $2,252 for the six months ended June 30, 2022 and 2021, respectively.

The following table summarizes the future minimum rental payments required under operating leases that had initial or

remaining non-cancelable lease

terms greater than one year as of June 30, 2022:


Fiscal Year	Amount
July 2022 through December 2022	$	3,032
2023		5,832
2024		3 356
2025		2,645
2026		147
Thereafter		511

Total lease payments		15,523
Less imputed interest		(2,116	)

Total Lease Liabilities	$	13,407