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Leases | 12 Months Ended
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Dec. 31, 2020
Text block [abstract] |
Leases |
14. | Leases
The Company as a lessee The Company leases some aircraft under long-term lease agreements with an average duration of 10 years. Aircraft under operating leases may be renewed in accordance with management’s business plan. Other leased assets include real estate, airport and terminal facilities, sales offices, maintenance facilities, and general offices. Most lease agreements include renewal options; a few have escalation clauses, but no purchase options. Information about leases for which the Company is a lessee is presented below: Right of use assets
|  | Aircraft |  |  | Real estate |  |  | Total |
Balance at January 1, 2018 |  | $ | 350,517 |  |  | $ | 33,833 |  |  | $ | 384,350 |
Additions |  |  | 83,389 |  |  |  | 1,381 |  |  |  | 84,770 |
Depreciation expense |  |  | (100,857 | ) |  |  | (6,270 | ) |  |  | (107,127 | )
Balance at December 31, 2018 |  | $ | 333,049 |  |  | $ | 28,944 |  |  | $ | 361,993 |
Additions |  |  | 23,162 |  |  |  | 8,512 |  |  |  | 31,674 |
Depreciation expense |  |  | (95,564 | ) |  |  | (7,260 | ) |  |  | (102,824 | )
Balance at December 31, 2019 |  | $ | 260,647 |  |  | $ | 30,196 |  |  | $ | 290,843 |
Additions/(Terminations) |  |  | 21,706 |  |  |  | (1,888 | ) |  |  | 19,818 |
Impairment |  |  | (1,541 | ) |  |  | — |  |  |  | (1,541 | )
Depreciation expense |  |  | (88,451 | ) |  |  | (6,390 | ) |  |  | (94,841 | )
Balance at December 31, 2020 |  | $ | 192,361 |  |  | $ | 21,918 |  |  | $ | 214,279 |
Additions to the right-of-use assets include new leases, contract extensions, changes in discount rate and changes in rental payments. The impairment loss relates to leased aircraft grounded until its redelivery due the capacity reductions a result of the Covid-19 pandemic. Lease liabilities
|  | 2020 |  |  | 2019 |
Current portion of lease liability |  |  |  |  |  |  |  |
Aircraft |  | $ | 77,777 |  |  | $ | 91,246 |
Real estate |  |  | 5,828 |  |  |  | 6,486 |
|  | $ | 83,605 |  |  | $ | 97,732 |
Long-term lease liability |  |  |  |  |  |  |  |
Aircraft |  | $ | 125,216 |  |  | $ | 179,031 |
Real estate |  |  | 21,689 |  |  |  | 27,801 |
|  | $ | 146,905 |  |  | $ | 206,832 |
|  | $ | 230,510 |  |  | $ | 304,564 |
For leases under IFRS 16 the Company recognizes a provision to estimate the costs for work required to be performed just before the redelivery of the aircraft to the lessors and which does not depend on the aircraft utilization. This provision is booked as a dismantling provision cost under “long term liabilities” in the consolidated statement of financial position. As of December 31, 2020 the total liability related to leases including the provision of dismantling amounts to $255.5 million (2019: $328.9 million). Total cash outflow for leases for the years ended as December 31, 2020 and 2019:
|  | 2020 |  |  | 2019 |
Aircraft |  | $ | 97,353 |  |  | $ | 107,610 |
Real estate |  |  | 6,039 |  |  |  | 9,458 |
|  | $ | 103,392 |  |  | $ | 117,068 |
As of December 31, 2020 and 2019 the average incremental borrowing rate of leased aircraft is 3.37%. The maturity analysis of lease liabilities is disclosed in note 28.5. Amounts recognized in the consolidated statement of profit or loss related to leases:
|  | 2020 |  |  | 2019 |  |  | 2018 |
Depreciation and amortization |  |  |  |  |  |  |  |  |  |  |  |
Aircraft |  | $ | 88,451 |  |  | $ | 95,564 |  |  | $ | 100,857 |
Real estate |  |  | 6,390 |  |  |  | 7,260 |  |  |  | 6,270 |
|  | $ | 94,841 |  |  | $ | 102,824 |  |  | $ | 107,127 |
Impairment of non financial assets |  |  |  |  |  |  |  |  |  |  |  |
Aircraft |  | $ | 1,541 |  |  | $ | — |  |  | $ | — |
Other operating and administrative expenses |  |  |  |  |  |  |  |  |  |  |  |
Short-term leases |  | $ | 90 |  |  | $ | 364 |  |  | $ | 1,412 |
Leases of low-value assets |  |  | 330 |  |  |  | 733 |  |  |  | 853 |
Variable lease payments not include in the measurement of lease liabilities |  |  | 827 |  |  |  | 706 |  |  |  | 611 |
Variable lease payments by rental concessions received |  |  | (489 | ) |  |  | — |  |  |  | — |
|  | $ | 758 |  |  | $ | 1,803 |  |  | $ | 2,876 |
Finance cost |  |  |  |  |  |  |  |  |  |  |  |
Aircraft |  | $ | 8,185 |  |  | $ | 11,221 |  |  | $ | 12,074 |
Real estate |  |  | 1,717 |  |  |  | 2,073 |  |  |  | 2,105 |
Unwinding of discount and changes in the discount rate |  |  | 832 |  |  |  | 846 |  |  |  | 796 |
|  | $ | 10,734 |  |  | $ | 14,140 |  |  | $ | 14,975 |
|  | $ | 107,874 |  |  | $ | 118,767 |  |  | $ | 124,978 |
Some property leases contain variable payment terms that are linked to the number of passengers or employees using the areas. Additional, some aircraft leases contain variable payment terms that depend on the aircraft’s flight hours. The unwinding of discount and changes in the discount rate over leased aircraft correspond to the interest expenses of the discounted dismantling provision. The Company as a lessor Since 2015, the Company is the lessor of two aircraft Boeing 737-700, as part of the strategy of fleet management, in order to optimize the use of aircraft in relation to the routes scheduled for that year. Each lease is scheduled to expire in 2022. The carrying amount of the two aircraft under operating leases is up to $12.3 million (2019: $37.7 million). Total lease income amounts to $3.2 million for the period ended December 31, 2020 (2019: $3.5 million and 2018: $3.5 million), included under “Other operating revenue” in the accompanying consolidated statement of profit or loss. The following table sets out a maturity analysis of lease payments, showing the undiscounted lease payments to be received after the reporting date. The future minimum lease receivables under non-cancellable leases are as follows:
|  | 2020 |  |  | 2019 |
Up to one year |  | $ | 3,000 |  |  | $ | 3,220 |
One to five years |  |  | 2,875 |  |  |  | 5,875 |
Total minimum lease rental receivables |  | $ | 5,875 |  |  | $ | 9,095 |

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- Definition The entire disclosure for leases. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Name IFRS -Number 16 -IssueDate 2020-01-01 -Section Presentation -URI http://eifrs.ifrs.org/eifrs/xifrs-link?type=IFRS&num=16&code=ifrs-tx-2020-en-r&doctype=Standard&dita_xref=IFRS16_g47-50_TI -URIDate 2020-01-01 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Name IFRS -Number 16 -IssueDate 2020-01-01 -Section Disclosure -URI http://eifrs.ifrs.org/eifrs/xifrs-link?type=IFRS&num=16&code=ifrs-tx-2020-en-r&doctype=Standard&dita_xref=IFRS16_g51-60_TI -URIDate 2020-01-01 + Details
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