XML 25 R14.htm IDEA: XBRL DOCUMENT

Note 7 - Leases

3 Months Ended

Mar. 31, 2025

Lessee and Lessor, Operating Lease [Text Block]

7.	Leases

Lessee

The table below sets forth a summary of operating lease expense for the three months ended March 31, 2025 and 2024 recorded in the captions within our consolidated statement of operations:

	Three months ended
	March 31, 2025		March 31, 2024
Ground lease expenses	$	2,904	$	1,231
Fuel expenses		164		44
General and administrative expenses		28		27
Total operating lease expense	$	3,096	$	1,302

The Company’s ground leases at airports are classified as operating leases under ASC Topic 842. Management has determined that it is reasonably certain that the Company will exercise its options to renew the leases, and therefore the renewal options are included in the lease term and the resulting ROU asset and operating lease liability balances. As the Company’s lease agreements do not provide a readily determinable implicit rate, nor is the rate available to the Company from its lessors, the Company uses its incremental borrowing rate to determine the present value of the lease payments. In addition to the Company’s ground leases, the Company has operating leases for office space and ground support vehicles, and finance leases for vehicles supporting operations at our pre-engineered metal building subsidiary.

The Company’s lease population does not include any residual value guarantees. The Company has operating leases that contain variable payments, most commonly in the form of common area maintenance and operating expense charges, which are based on actual costs incurred. These variable payments were excluded from the calculation of the ROU asset and operating lease liability balances since they are not fixed or in-substance fixed payments. These variable payments were not material in amount for the three months ended March 31, 2025 and 2024. Some of the leases contain covenants that require the Company to construct the hangar facilities on the leased grounds within a certain period and spend a set minimum dollar amount. For one of the leases, the shortfall (if any) must be paid to the lessor. See Note 15 — Commitments and Contingencies.

The Company’s ground leases have remaining terms ranging between 16 to 73 years, including options for the Company to extend the terms. These leases expire between 2040 and 2097, which include all lease extension options available to the Company. Certain of the Company's ground leases contain options to lease additional parcels of land at the Company's option within a specified period of time.

On January 1, 2025, the Company executed a lease amendment with respect to its ground lease at APA to add an approximately 1 acre parcel of land to the existing lease (the “APA Lease Amendment”). The land associated with the APA Lease Amendment became immediately available for possession in January 2025 and is co-terminus with the other parcels covered by the Company's ground lease at APA.

Supplemental consolidated cash flow information related to the Company’s leases was as follows:

	*Three months ended*
	*March 31,*		*March 31,*
	*2025*		*2024*
Cash paid for amounts included in measurement of lease liabilities:
Operating cash flows from operating leases	$	1,558	$	482
Operating cash flows from finance leases		1		1
Financing cash flows from finance leases		5		7

Supplemental consolidated balance sheet information related to the Company’s leases was as follows:

Weighted Average Remaining Lease Term (in years)	*March 31, 2025*			*December 31, 2024*
Operating leases
Ground leases - Unimproved at commencement		54.7			54.6
Ground leases - Existing improvements		30.8			31.0
Equipment leases		5.0			5.2
Office leases		0.8			1.1
All operating leases		44.7			44.6
Finance leases		1.6			1.9

Weighted Average Discount Rate
Operating leases
Ground leases - Unimproved at commencement		5.43	%		5.45	%
Ground leases - Existing improvements		5.18	%		5.18	%
Equipment leases		5.51	%		5.46	%
Office leases		4.82	%		4.82	%
All operating leases		5.38	%		5.39	%
Finance leases		4.98	%		4.98	%

The Company’s future minimum lease payments required under leases as of March 31, 2025 were as follows:

Year Ending December 31,	Operating Leases			Finance Leases
2025 (remainder of year)	$	4,928		$	18
2026		7,602			17
2027		8,448			2
2028		8,822			-
2029		9,197			-
Thereafter		490,013			-
Total lease payments		529,010			37
Less imputed interest		(373,319	)		(1	)
Total	$	155,691		$	36

Lessor

The Company leases the hangar facilities that it constructs or rents from municipal landlords to third-party tenants. These leases have been classified as operating leases. The Company does not have any leases classified as sales-type or direct financing leases. Lease agreements with tenants are either on a month-to-month basis or have a defined term with an option to extend the term. The defined term leases vary in length from one to ten years with options to renew for additional term(s) given to the lessee. There are no options given to the lessee to purchase the underlying assets.

The leases may contain variable fees, most commonly in the form of tenant reimbursements, which are recoveries of the common area maintenance and operating expenses of the property and are recognized as income in the same period as the expenses are incurred. The leases did not have any initial direct costs. The leases do not contain any restrictions or covenants to incur additional financial obligations by the lessee.

Tenant leases to which the Company is the lessor require the following non-cancelable future minimum lease payments from tenants as of March 31, 2025:

Year Ending December 31,	*Operating Leases*
2025 (remainder of year)	$	11,394
2026		13,024
2027		9,620
2028		7,170
2029		3,736
Thereafter		16,017
Total	$	60,961