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Leases
 12 Months Ended
Dec. 31, 2023
Disclosure of quantitative information about leases for lessee [abstract]  
Leases
14. Leases
The Company as a lessee
The Company leases some aircraft under long-term lease agreements with an average duration of 13 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, 2021$192,361 $21,918 $214,279 
Additions29,157 1,085 30,242 
Depreciation expense(73,687)(4,506)(78,193)
Balance at December 31, 2021$147,831 $18,497 $166,328 
Additions132,122 10,069 142,191 
Depreciation expense(69,167)(4,972)(74,139)
Balance at December 31, 2022$210,786 $23,594 $234,380 
Additions120,747 1,960 122,707 
Depreciation expense(70,622)(5,319)(75,941)
Balance at December 31, 2023$260,911 $20,235 $281,146 
Additions to the right-of-use assets include new leases, contract extensions, changes in discount rate and changes in rental payments.
During 2023, the Company entered into lease transactions with third parties, for 1 new Boeing 737 MAX 9 aircraft for approximately 8 years (2022: 3 new Boeing 737 MAX 9).
Lease liabilities
20232022
Current portion of lease liability
Aircraft$62,234 $74,906 
Real estate6,070 5,178 
$68,304 $80,084 
Long-term lease liability  
Aircraft$196,873 $135,609 
Real estate18,480 22,680 
$215,353 $158,289 
$283,657 $238,373 
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, 2023 the total liability related to leases including the provision of dismantling amounts to $310.8 million (2022: $266.4 million).
The Company had total cash outflows for leases of $92.2 million the year ended as December 31, 2023 (2022: $85.6 million ).
As of December 31, 2023 the average incremental borrowing rate of leased aircraft is 4.6% (2022: 3.6%).
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:
202320222021
Depreciation and amortization
Depreciation expense of right of use assets$75,941 $74,139 $78,193 
Other operating and administrative expenses
Short-term leases$12,310 $9,530 $440 
Leases of low-value assets425 377 279 
Variable lease payments not include in the measurement of lease liabilities2,895 3,222 1,352 
Variable lease payments by rental concessions received— — (1,295)
$15,630 $13,129 $776 
Finance cost
Interest expense on lease liability$12,173 $6,626 $6,806 
Unwinding of discount and changes in the discount rate1,106 819 762 
$13,279 $7,445 $7,568 
$104,850 $94,713 $86,537 
Some property leases contain variable payment terms that are linked to the number of passengers or employees using the areas. Additionally, 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.
As of December 31, 2023 and 2022, the Company did not receive concessions as a direct consequence of the Covid-19 pandemic. As of December 31, 2021, the Company received rent concessions occurred as a direct consequence of the Covid-19 pandemic only for its real estate leases, and applied the practical expedient, accounting the concession in the form of forgiveness or deferral of lease payments, as a negative variable lease payment to the concessions.
The Company as a lessor
From June 2015 to August 2022, the Company leased 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 those years. Both leases expired during 2022 and both aircraft airframes were sold to third parties.
Total lease income amounts to $1.7 million for the period ended December 31, 2022 (2021: $3.0 million), and is included under “Other operating revenue” in the accompanying consolidated statement of profit or loss.