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Leases and Commitments | 9 Months Ended
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Jun. 30, 2020
Commitments And Contingencies Disclosure [Abstract] |
Leases and Commitments |
1 5. | Leases and Commitments
Effective October 1, 2019, the Company adopted Topic 842 and recorded ROU assets and lease liabilities of $154.6 million and $141.9 million, respectively. As part of the adoption, prepaid aircraft rent, deferred rent credits and accrued aircraft rents of $35.8 million, $21.3 million and $1.8 million, respectively, were classified as a component of the Company’s ROU assets. At June 30, 2020, the Company leased 18 aircraft, airport facilities, office space, and other property and equipment under non-cancelable operating leases. The leases require the Company to pay all taxes, maintenance, insurance, and other operating expenses. Rental expense is recognized on a straight-line basis over the lease term, net of lessor rebates and other incentives. The Company expects that, in the normal course of business, such operating leases that expire will be renewed or replaced by other leases, or the property may be purchased rather than leased. Aggregate rental expense under all operating aircraft, equipment and facility leases totaled approximately $15.6 million and $18.1 million for the three months ended June 30, 2020 and 2019, respectively, and $51.0 million and $55.9 million for the nine months ended June 30, 2020 and 2019, respectively. As of June 30, 2020, the Company’s operating lease right-of-use assets were $131.5 million, the Company’s current maturities of operating lease liabilities were $43.2 million, and the Company’s noncurrent lease liabilities were $71.1 million. As of June 30, 2020, the Company’s operating lease payments in operating cash flows for the nine months ended June 30, 2020 is $34.9 million. The disclosure is not applicable for the nine months ended June 30, 2019 due to the method of adoption of the new leasing Standard ASC-842. (1) The table below presents lease related terms and discount rates as of June 30, 2 020:
As of June 30, 2020 |  |  |  |
Weighted average remaining lease term Operating leases |  | 3.8 years |
Weighted average discount rate Operating leases |  |  | 4.2 | %
|  | Three Months Ended June 30, |
|  | 2020 |  |  | 2019 |  |  | $ Change |  |  | % Change |
Operating lease cost |  | $ | 15,634 |  |  | $ | 18,094 |  |  | $ | (2,460 | ) |  |  | (13.6 | )%
|  | Nine Months Ended June 30, |
|  | 2020 |  |  | 2019 |  |  | $ Change |  |  | % Change |
Operating lease cost |  | $ | 51,000 |  |  | $ | 55,897 |  |  | $ | (4,897 | ) |  |  | (8.8 | )%
The following table summarizes future minimum rental payments primarily related to leased aircraft required under operating leases that had initial or remaining non-cancelable lease terms as of June 30, 2020 (in thousands):
Periods Ending June 30, |  | Total Maturities |
2020 |  | $ | 9,390 |
2021 |  |  | 47,377 |
2022 |  |  | 33,216 |
2023 |  |  | 15,947 |
2024 |  |  | 14,682 |
Thereafter |  |  | 1,654 |
Less: Interest |  | $ | (7,892 | )
Amounts recorded in the Consolidated Balance Sheet |  | $ | 114,374 |
The following represents future minimum lease obligations under non-cancelable operating leases as of September 30, 2019 (in thousands):
Periods Ending September 30, |  | Total Payments |
2020 |  | $ | 47,814 |
2021 |  |  | 46,007 |
2022 |  |  | 31,090 |
2023 |  |  | 13,726 |
2024 |  |  | 13,185 |
Thereafter |  |  | 1,368 |
Total |  | $ | 153,190 |
Engine Purchase Commitments On March 26, 2020, the Company and General Electric Company (“GE”), acting through its GE-Aviation business unit, entered into (a) Amended and Restated Letter Agreement No. 13-1 (“Letter Agreement No. 13-1”), which amends and restates Letter Agreement No. 13 entered into by the parties effective December 11, 2019, and (b) Amended and Restated Letter Agreement No. 12-1 (“Letter Agreement No. 12-1” and together with Letter Agreement No. 13-1, the “Amended and Restated Letter Agreements”), which amends and restates Letter Agreement No. 12 entered into by the parties effective October 22, 2019. The Amended and Restated Letter Agreements each provide that they are effective March 20, 2020. Under Letter Agreement No. 13-1, the Company has agreed to purchase and take delivery of 20 new spare CF34-8C5 engines. Delivery of the new spare engines will now commence in April 2021, with the final spare engine being delivered in December 2021. The parties had previously agreed to commence delivery of the new spare engines in August 2020. The payment terms for the new spare engines were also amended, with payments to now be made in four (4) separate tranches commencing in October and December 2020 and February and March 2021. The total purchase commitment under these agreements is approximately $108.0 million. If the Company fails to accept delivery of the spare engines when duly tendered, the Company may be assessed a minimum cancellation charge based on the engine price determined as of the date of scheduled engine delivery to the Company.

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- Definition The entire disclosure for significant arrangements with third parties, which includes operating lease arrangements and arrangements in which the entity has agreed to expend funds to procure goods or services, or has agreed to commit resources to supply goods or services, and operating lease arrangements. Descriptions may include identification of the specific goods and services, period of time covered, minimum quantities and amounts, and cancellation rights. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 440 -URI http://asc.fasb.org/topic&trid=2144648 + Details
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