REPUBLIC AIRWAYS HOLDINGS INC.RJET
REPUBLIC AIRWAYS HOLDINGS INC. Leases Disclosure
LEASES
The Company routinely enters into operating and finance leases as a financing method for aircraft, spare engines, flight training equipment, and operating facilities. The Company records a lease asset and corresponding liability for leases with terms exceeding 12 months. Such assets and liabilities are measured at the present value of remaining lease payments at the commencement of the lease or consummation of a lease modification.
Lease terms give effect to early termination and renewal options when it is reasonably certain that such options will be exercised. The Company determines present value, discounting payment streams at the interest rate implicit in the lease, when available, taking into consideration economic escalation provisions, when applicable. When this information is unknown, the Company estimates its incremental borrowing rate at the related lease commencement date, which is derived from prevailing market interest rates, recent debt acquisitions specific to the Company, or other debt instruments having similar characteristics at lease commencement. With the exception of the CPAs and operating facilities, the Company does not separate lease and non-lease contractual components. Provisions for residual value guarantees are not material.
As part of the Merger, the Company acquired leases, three of which are classified as operating in the consolidated balance sheets as of December 31, 2025. The Company measured the operating lease liabilities at present value of the remaining lease payments on the Merger date in accordance with ASC 805, Business Combinations. Further, the Company measured the right-of-use asset in exchange for the operating lease liabilities assumed and adjusted for comparable market terms on the Merger date. As a result, such leases increased operating right-of-use assets and operating lease liabilities by $7.1 million and $6.7 million, respectively. The Company elected to not recognize assets or liabilities with remaining terms of 12 months or less as a practical expedient permitted under ASC 805, Business Combinations. Refer to Note 3, Merger with Mesa Air Group Inc., for more information.
Aircraft and engines—As of December 31, 2025, the Company is party to non-cancelable operating and financing lease agreements related to 23 aircraft and 13 spare engines with varying terms extending through 2031. Of the 23 leased aircraft and 13 leased engines, 12 and nine are leased directly from Partner Airlines (“Partner Controlled Aircraft”), respectively, constituting related party lease obligations. See Note 16, Related Party Transactions. Lease terms generally coincide with the related CPA expiry.
Operating facilities—The Company’s leased operating facilities include airport terminal space, hangars and maintenance facilities, office space, and training facilities with initial terms extending from 30 days to 13 years, classified as operating leases and short-term leases. Airport terminal space, which includes crew rooms and line maintenance facilities, is generally leased directly from a governmental agency or authority. Rental rates are dependent on actual airport operating costs and require adjustment at least annually. As a result of the variable nature of rent, airport terminal space leases are not recorded to the operating lease right-of-use asset and operating lease liabilities.
Flight training equipment—The Company maintains a long-term supply agreement for fulfillment of full motion flight simulation equipment at a guaranteed minimum level through 2033 with additional capacity availability accounted for as operating leases. Pursuant to this arrangement, the Company leases training equipment, embedded with related maintenance service agreements. The Company has elected the practical expedient permissible under ASC 842, Leases, and as a result, the non-lease service component has not been separated and removed from the operating lease right-of-use assets and related operating lease liabilities.
Components of lease costs for the years ended December 31, 2025, 2024 and 2023 are as follows:
(in millions) | 2025 | 2024 | 2023 | |||||||||||||||||
Operating lease cost | $ | 21.4 | $ | 24.5 | $ | 29.3 | ||||||||||||||
| Finance lease cost | ||||||||||||||||||||
| Amortization of leased assets | 5.8 | 8.3 | 12.6 | |||||||||||||||||
Interest on lease liabilities | 3.8 | 4.4 | 4.7 | |||||||||||||||||
Variable and short-term lease cost | 4.2 | 2.8 | 2.8 | |||||||||||||||||
Total lease cost | $ | 35.2 | $ | 40.0 | $ | 49.4 | ||||||||||||||
Operating lease cost, including variable and short-term lease cost, is recorded to aircraft and engine rent and other expense in the consolidated statements of operations. Finance lease cost is recorded to depreciation and amortization expense and interest expense in the consolidated statements of operations.
Supplemental balance sheet information related to leased assets and liabilities are as follows as of December 31:
(in millions) | 2025 | 2024 | ||||||||||||
Assets: | ||||||||||||||
Operating lease right-of-use assets | $ | 131.7 | $ | 122.9 | ||||||||||
| 54.3 | 70.4 | |||||||||||||
Total lease assets | $ | 186.0 | $ | 193.3 | ||||||||||
Liabilities: | ||||||||||||||
Current | ||||||||||||||
Current operating lease liabilities | $ | 16.5 | $ | 13.5 | ||||||||||
| 6.1 | 7.2 | |||||||||||||
Non-current | ||||||||||||||
| Non-current operating lease liabilities | 123.9 | 117.6 | ||||||||||||
| 53.4 | 59.5 | |||||||||||||
Total lease liabilities | $ | 199.9 | $ | 197.8 | ||||||||||
Operating leases—Lease obligations expected to be paid within 12 months represent current maturities and are classified within the current portion of operating lease liabilities to the consolidated balance sheets. Lease obligations with
expected repayments extending beyond 12 months are recorded to operating lease liabilities— less current portion in the consolidated balance sheets.
Finance leases—The Company records finance lease assets, current liabilities, and non-current liabilities to property and equipment, net, current portion of long-term debt and finance leases, and long-term debt and finance leases—less current portion, respectively, in the consolidated balance sheets. Amortization of the finance lease asset is recorded to depreciation and amortization expense and the interest component of the lease payment is recorded to interest expense in the consolidated statements of operations.
Additional lease terms are as follows for the years ended December 31, 2025 and 2024:
| 2025 | 2024 | ||||||||||
| Weighted average remaining lease term (in years): | |||||||||||
Operating leases | 7.3 | 8.0 | |||||||||
Finance leases | 5.3 | 6.2 | |||||||||
| Weighted average discount rate: | |||||||||||
Operating leases | 6.1 | % | 5.8 | % | |||||||
Finance leases | 6.0 | 6.0 | |||||||||
Maturities of lease liabilities are as follows as of December 31, 2025 and thereafter:
(in millions) | Operating Leases | Finance Leases | Total | |||||||||||||||||
| 2026 | $ | 24.5 | $ | 9.5 | $ | 34.0 | ||||||||||||||
| 2027 | 24.9 | 9.5 | 34.4 | |||||||||||||||||
| 2028 | 23.3 | 9.5 | 32.8 | |||||||||||||||||
| 2029 | 22.6 | 9.5 | 32.1 | |||||||||||||||||
| 2030 | 21.3 | 30.0 | 51.3 | |||||||||||||||||
Thereafter | 59.4 | 4.6 | 64.0 | |||||||||||||||||
Total minimum lease payments | 176.0 | 72.6 | 248.6 | |||||||||||||||||
Less imputed interest component | (35.6) | (13.1) | (48.7) | |||||||||||||||||
Total lease obligations | 140.4 | 59.5 | 199.9 | |||||||||||||||||
Less current obligations | (16.5) | (6.1) | (22.6) | |||||||||||||||||
Long-term lease obligations | $ | 123.9 | $ | 53.4 | $ | 177.3 | ||||||||||||||
Supplemental cash flow and other information related to leases are as follows:
| Year Ended December 31, | ||||||||||||||||||||
| (in millions) | 2025 | 2024 | 2023 | |||||||||||||||||
| Cash Transactions: | ||||||||||||||||||||
Operating cash flows used in operating leases | $ | (20.5) | $ | (23.5) | $ | (28.0) | ||||||||||||||
Operating cash flows used in financing leases | (3.8) | (4.4) | (4.7) | |||||||||||||||||
Financing cash flows used in financing leases | (11.0) | (15.3) | (14.8) | |||||||||||||||||
| Non-cash transactions: | ||||||||||||||||||||
Operating leases converted to finance leases | — | — | 5.8 | |||||||||||||||||
| ROU assets acquired in connection with the Merger | 7.1 | — | — | |||||||||||||||||
ROU assets acquired in exchange for operating lease obligations | 15.8 | 8.7 | 32.9 | |||||||||||||||||
ROU assets acquired in exchange for financing lease obligations | — | — | 0.4 | |||||||||||||||||
Aircraft leasing arrangements—The Company’s CPAs include provisions for the right-to-use of the Company’s aircraft in carrying out regional jet services. Such provisions constitute embedded leases for which the Company receives reimbursement for aircraft ownership costs, as Partner Airlines obtain substantially all of the economic benefit from the
aircraft under operation for the Partner Airlines. Aircraft lease terms are commensurate with CPA terms discussed at Note 5, Revenue Recognition. The Company mitigates the risk from residual and undeployed leased assets in the event of default of one of our Partner Airlines by actively monitoring aircraft and engine financing terms compared to market terms in order to effectively sell or redeploy aircraft to the extent they become unused or underutilized, which additionally decreases with the extent to which the Company operates Partner Controlled Aircraft.
Rental revenue from operating leases for each of the next five years and total of the remaining years as of December 31, 2025 are as follows:
| (in millions) | Revenue Recognition | ||||
2026 | $ | 288.5 | |||
2027 | 282.5 | ||||
2028 | 253.2 | ||||
2029 | 227.6 | ||||
2030 | 143.8 | ||||
| Thereafter | 498.3 | ||||
| Total | $ | 1,693.9 | |||
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Mar 19, 2026 | Showing above |
| 2024 | May 14, 2025 | |
| 2023 | Jan 26, 2024 | |
| 2022 | Dec 29, 2022 | |
| 2021 | Dec 10, 2021 | |
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.