Leases
The Company had 23 aircraft under finance leases and nine aircraft under operating leases as of December 31, 2025 (excluding six aircraft under operating lease which have been removed from service pending redelivery), with remaining terms through 2032. As of December 31, 2024, there were 23 aircraft under finance lease and 17 aircraft under operating lease.
Lease Costs
The components of lease costs recognized on the statements of income were as follows:
| | | | | | | | | | | | | | | | | | | | |
| | Year Ended December 31, |
| (in thousands) | Classification on the Statements of Income | 2025 | | 2024 | | 2023 |
| Finance lease costs: | | | | | | |
| Amortization of assets | Depreciation and amortization | $ | 24,013 | | | $ | 23,855 | | | $ | 27,170 | |
| Interest on lease liabilities | Interest expense | 24,505 | | | 25,994 | | | 27,502 | |
| Operating lease cost | Aircraft lease rentals; Station operations; Maintenance and repairs; Other operating expense | 25,250 | | | 26,178 | | | 25,246 | |
| | | | | | |
Variable lease cost(1) | Aircraft lease rentals; Station operations; Maintenance and repairs; Other operating expense | 13,509 | | | 492 | | | 1,563 | |
| Total lease cost | | $ | 87,277 | | | $ | 76,519 | | | $ | 81,481 | |
(1) In 2025, includes estimated lease return costs which we began to accrue in second quarter 2025 for certain aircraft on operating leases related to redeliveries in 2025 and future years.
Lease position as of December 31, 2025 and December 31, 2024
The table below presents the lease-related assets and liabilities recorded on the balance sheet.
| | | | | | | | | | | | | | |
| | As of December 31, |
| (in thousands) | Classification on the Balance Sheet | 2025 | | 2024 |
| Assets | | | | |
| Operating lease assets | Operating lease right-of-use assets, net | $ | 63,389 | | | $ | 81,218 | |
| Finance lease assets | Property and equipment, net of accumulated depreciation | 403,783 | | | 427,664 | |
| Total lease assets | | $ | 467,172 | | | $ | 508,882 | |
| | | | |
| Liabilities | | | | |
| Current | | | | |
| Operating | Current operating lease liabilities | $ | 10,936 | | | $ | 20,714 | |
| Finance | Current maturities of long-term debt and finance lease obligations | 28,106 | | | 26,836 | |
| Noncurrent | | | | |
| Operating | Noncurrent operating lease liabilities | 54,170 | | | 62,392 | |
| Finance | Long-term debt and finance lease obligations | 374,954 | | | 403,060 | |
| Total lease liabilities | | $ | 468,166 | | | $ | 513,002 | |
| | | | |
| Weighted-average remaining lease term | | | | |
| Operating leases | | 7.6 years | | 7.2 years |
| Finance leases | | 5.1 years | | 6.1 years |
| Weighted-average discount rate | | | | |
| Operating leases | | 5.7 | % | | 5.6 | % |
| Finance leases | | 5.9 | % | | 5.9 | % |
Other Information
The table below presents supplemental cash flow information related to leases during the years ended December 31, 2025, 2024 and 2023.
| | | | | | | | | | | | | | | | | |
| Year Ended December 31, |
| (in thousands) | 2025 | | 2024 | | 2023 |
| Cash paid for amounts included in the measurement of lease liabilities | | | | | |
| Operating cash flows for operating leases | $ | 24,545 | | | $ | 26,679 | | | $ | 25,774 | |
| Operating cash flows for finance leases | 24,572 | | | 26,056 | | | 27,672 | |
| Financing cash flows for finance leases | 26,836 | | | 25,352 | | | 39,044 | |
Maturities of Lease Liabilities
The table below indicates the future minimum payments of lease liabilities as of December 31, 2025.
| | | | | | | | | | | |
| (in thousands) | Operating Leases | | Finance Leases |
| 2026 | $ | 14,143 | | | $ | 51,108 | |
| 2027 | 12,048 | | | 51,108 | |
| 2028 | 10,382 | | | 65,908 | |
| 2029 | 10,447 | | | 104,396 | |
| 2030 | 9,952 | | | 105,233 | |
| Thereafter | 25,176 | | | 126,539 | |
| Total lease payments | 82,148 | | | 504,292 | |
| Less imputed interest | (17,042) | | | (101,232) | |
| Total lease obligations | 65,106 | | | 403,060 | |
| Less current obligations | (10,936) | | | (28,106) | |
| Long-term lease obligations | $ | 54,170 | | | $ | 374,954 | |
About Leases Disclosures
Lease disclosures under ASC 842 provide a comprehensive view of a company's leased asset portfolio, including the split between operating and finance leases, discount rates used to present-value future payments, and the maturity schedule of lease obligations. This section reveals a significant source of off-balance-sheet commitments that were largely hidden before the current standard.
Key signals: the weighted-average discount rate affects the size of recorded lease liabilities — a higher rate reduces the reported obligation, so compare the chosen rate against the company's incremental borrowing rate. The operating versus finance lease mix affects both EBITDA and operating income presentation. Watch the maturity table for concentration risk: large payment cliffs in specific years may create cash flow pressure. Variable lease payments excluded from the liability measurement represent real obligations that do not appear on the balance sheet. Compare total lease costs against prior-year operating lease expense to assess the true economic burden.