LEASES

9 Months Ended

Sep. 30, 2022

Leases primarily pertain to certain controlled aircraft, corporate headquarters, and operational facilities, including aircraft hangars, which are primarily accounted for as operating leases. We sublease the corporate headquarters from a third party and sublease the aircraft hangar at Cincinnati/Northern Kentucky International Airport from Delta Air Lines, Inc. (“Delta”).

We have certain variable lease agreements with aircraft owners that contain payment terms based on an hourly lease rate multiplied by the number of flight hours during a month. Variable lease payments were $3.6 million and $12.5 million for the three and nine months ended September 30, 2022, respectively, and $3.2 million and $12.1 million for the three and nine months ended September 30, 2021, respectively.

The components of net lease cost were as follows (in thousands):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
Operating lease costs	$	9,789	$	12,643	$	28,614	$	29,900
Short-term lease costs	8,086		3,331		22,600		16,139
Total lease costs	$	17,875	$	15,974	$	51,214	$	46,039

Costs related to leased aircraft and operational facilities were $15.0 million and $43.3 million for the three and nine months ended September 30, 2022, respectively, and $14.0 million and $40.7 million for the three and nine months ended September 30, 2021, respectively, and are included in cost of revenue in the condensed consolidated statements of operations. Costs related to leased corporate headquarters and other office space including expenses for non-lease components were $2.9 million and $7.9 million for the three and nine months ended September 30, 2022, respectively, and $2.0 million and $5.1 million for the three and nine months ended September 30, 2021,

respectively, and are included in general and administrative expense in the condensed consolidated statements of operations.

Supplemental cash flow information related to leases were as follows (in thousands):


	Nine Months Ended September 30,
	2022		2021
Cash paid for amounts included in the measurement of operating lease liabilities:
Operating cash flows paid for operating leases	$	28,865	$	27,773
Right-of-use assets obtained in exchange for operating lease obligations	$	46,916	$	62,856

Supplemental balance sheet information related to leases are as follows:


	September 30, 2022		December 31, 2021
Weighted-average remaining lease term (in years):
Operating leases	5.8		6.4
Weighted-average discount rate:
Operating leases	9.0	%	9.5	%

Maturities of lease liabilities, as of September 30, 2022, were as follows (in thousands):


Year ending December 31,	Operating Leases
2022 (excluding the nine months ended September 30, 2022)	$	10,074
2023	38,557
2024	33,090
2025	19,384
2026	11,230
Thereafter	42,441
Total lease payments	154,776
Less: Imputed interest	(37,698)
Total lease obligations	$	117,078