Cover
Cover - shares | 9 Months Ended | |
Sep. 30, 2023 | Nov. 07, 2023 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Sep. 30, 2023 | |
Document Transition Report | false | |
Entity File Number | 001-34584 | |
Entity Registrant Name | HARBOR DIVERSIFIED, INC. | |
Entity Incorporation State Country Code | DE | |
Entity Tax Identification Number | 13-3697002 | |
Entity Address Address Line1 | W6390 Challenger Drive | |
Entity Address Address Line2 | Suite 203 | |
Entity Address City Or Town | Appleton | |
Entity Address State Or Province | WI | |
Entity Address Postal Zip Code | 54914-9120 | |
City Area Code | 920 | |
Local Phone Number | 749-4188 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 43,319,412 | |
Entity Central Index Key | 0000899394 | |
Current Fiscal Year End Date | --12-31 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2023 | |
Document Fiscal Period Focus | Q3 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Current Assets | ||
Cash and cash equivalents | $ 15,839 | $ 33,333 |
Restricted cash | 707 | 849 |
Marketable securities | 136,562 | 153,827 |
Receivables, net | 40,391 | 40,341 |
Notes receivable | 21,093 | 19,452 |
Spare parts and supplies, net | 5,029 | 4,579 |
Contract costs | 108 | 143 |
Contract assets, net | 1,618 | 0 |
Prepaid expenses and other | 2,594 | 3,732 |
Total Current Assets | 223,941 | 256,256 |
Property and Equipment | ||
Flight property and equipment | 265,636 | 263,970 |
Ground property and equipment | 8,596 | 8,055 |
Less accumulated depreciation and amortization | (190,606) | (169,766) |
Net Property and Equipment | 83,626 | 102,259 |
Other Assets | ||
Operating lease right-of-use asset | 9,708 | 13,480 |
Intangibles | 5,300 | 5,300 |
Long-term investments | 4,275 | 4,275 |
Long-term contract costs | 613 | 0 |
Other | 969 | 1,077 |
Total Other Assets | 20,865 | 24,132 |
Total Assets | 328,432 | 382,647 |
Current Liabilities | ||
Accounts payable | 14,295 | 20,165 |
Accrued payroll and employee benefits | 13,235 | 12,989 |
Current portion of operating lease liability | 3,649 | 5,091 |
Other accrued expenses | 166 | 137 |
Contract liabilities | 0 | 1,985 |
Deferred revenues | 0 | 16,561 |
Current portion of long-term debt (stated principal amount of $48,600 at September 30, 2023 and $3,500 at December 31, 2022) | 52,554 | 9,154 |
Total Current Liabilities | 83,899 | 66,082 |
Other Long-Term Liabilities | ||
Long-term debt (stated principal amount of $0 at September 30, 2023 and $48,600 December 31, 2022) | 0 | 52,068 |
Long-term promissory note | 4,275 | 4,275 |
Deferred tax liability | 4,424 | 7,990 |
Long-term operating lease liability | 3,659 | 5,849 |
Long-term contract liabilities, net | 2,792 | 0 |
Other | 1,755 | 1,977 |
Total Long-Term Liabilities | 16,905 | 72,159 |
Total Liabilities | 100,804 | 138,241 |
Commitments and Contingencies (Note 8) | ||
Mezzanine Equity (Note 10) | ||
Series C Convertible Redeemable Preferred Stock, $0.01 par value per share, 4,000,000 shares authorized, issued and outstanding at September 30, 2023 and December 31, 2022 | 13,200 | 13,200 |
Stockholders’ Equity | ||
Common Stock, $0.01 par value per share, 100,000,000 shares authorized, 55,481,140 shares issued at September 30, 2023 and December 31, 2022, 43,456,071 shares outstanding at September 30, 2023 and 45,219,737 shares outstanding at December 31, 2022 | 555 | 555 |
Additional paid-in capital | 284,753 | 285,668 |
Retained deficit | (52,009) | (40,034) |
Treasury stock | (18,871) | (14,983) |
Total Stockholders’ Equity | 214,428 | 231,206 |
Total Liabilities and Stockholders’ Equity | $ 328,432 | $ 382,647 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Current portion of long-term debt, stated principal amount | $ 48,600 | $ 3,500 |
Long-term debt, stated principal amount | $ 0 | $ 48,600 |
Common Stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common Stock, shares authorized (in shares) | 100,000,000 | 100,000,000 |
Common Stock, shares issued (in shares) | 55,481,140 | 55,481,140 |
Common Stock, shares outstanding (in shares) | 43,456,071 | 45,219,737 |
Mezzanine Equity Series C Convertible Redeemable Preferred Stock | ||
Series C Convertible Redeemable Preferred Stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Series C Convertible Redeemable Preferred Stock, shares authorized (in shares) | 4,000,000 | 4,000,000 |
Series C Convertible Redeemable Preferred Stock, shares issued (in shares) | 4,000,000 | 4,000,000 |
Series C Convertible Redeemable Preferred Stock, shares outstanding (in shares) | 4,000,000 | 4,000,000 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Operating Revenues | ||||
Total Operating Revenues | $ 50,056 | $ 68,410 | $ 160,260 | $ 213,315 |
Operating Expenses | ||||
Payroll and related costs | 29,444 | 26,801 | 89,165 | 81,096 |
Aircraft fuel and oil | 115 | 49 | 438 | 134 |
Aircraft maintenance, materials and repairs | 11,175 | 17,494 | 48,393 | 48,331 |
Other rents | 1,459 | 1,617 | 4,527 | 4,887 |
Depreciation, amortization and obsolescence | 6,398 | 6,639 | 19,125 | 19,957 |
Purchased services, legal and other | 6,537 | 3,310 | 18,511 | 10,589 |
Total Operating Expenses | 55,128 | 55,910 | 180,159 | 164,994 |
(Loss) Income from Operations | (5,072) | 12,500 | (19,899) | 48,321 |
Other Income (Expense) | ||||
Interest income | 1,540 | 1,732 | 4,335 | 3,898 |
Interest expense | 0 | 0 | (12) | 0 |
Loss on marketable securities | (955) | (3,749) | (10) | (9,774) |
Gain on extinguishment of debt | 0 | 53 | 70 | 53 |
Other, net | 0 | (7) | (14) | (10) |
Total Other Income (Expense) | 585 | (1,971) | 4,369 | (5,833) |
Net (Loss) Income Before Taxes | (4,487) | 10,529 | (15,530) | 42,488 |
Income Tax (Benefit) Expense | (799) | 2,507 | (3,555) | 10,122 |
Net (Loss) Income | (3,688) | 8,022 | (11,975) | 32,366 |
Preferred stock dividends | 358 | 198 | 915 | 594 |
Net (loss) income available to common stockholders | $ (4,046) | $ 7,824 | $ (12,890) | $ 31,772 |
Basic (Loss) Earnings per share (in dollars per share) | $ (0.09) | $ 0.17 | $ (0.29) | $ 0.68 |
Diluted (Loss) Earnings per share (in dollars per share) | $ (0.09) | $ 0.13 | $ (0.29) | $ 0.50 |
Weighted average common shares: | ||||
Basic (in shares) | 43,654 | 45,776 | 44,299 | 46,637 |
Diluted (in shares) | 43,654 | 62,276 | 44,299 | 63,268 |
Contract revenues | ||||
Operating Revenues | ||||
Total Operating Revenues | $ 49,958 | $ 68,389 | $ 159,965 | $ 213,280 |
Contract services and other | ||||
Operating Revenues | ||||
Total Operating Revenues | $ 98 | $ 21 | $ 295 | $ 35 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Stockholders' Equity - USD ($) $ in Thousands | Total | Mezzanine Equity Series C Convertible Redeemable Preferred Stock | Mezzanine Equity - Series C Convertible Redeemable Preferred Stock Mezzanine Equity Series C Convertible Redeemable Preferred Stock | Common Stock | Treasury Stock | Additional Paid-In Capital | Retained Deficit | Cost of Treasury Stock |
Mezzanine Equity - Series C Convertible Redeemable Preferred Stock, beginning balance (in shares) at Dec. 31, 2021 | 4,000,000 | |||||||
Beginning Balance at Dec. 31, 2021 | $ 205,560 | $ 13,200 | $ 555 | $ 287,429 | $ (79,144) | $ (3,280) | ||
Common Stock, beginning balance (in shares) at Dec. 31, 2021 | 53,316,000 | |||||||
Treasury Stock, beginning balance (in shares) at Dec. 31, 2021 | 2,165,000 | |||||||
Net (loss) income | 32,366 | 32,366 | ||||||
Dividends | (594) | (594) | ||||||
Cancellation of stock option | (969) | (969) | ||||||
Treasury stock purchases (in shares) | 7,664,000 | 7,664,000 | ||||||
Treasury stock purchases | (10,733) | (10,733) | ||||||
Mezzanine Equity - Series C Convertible Redeemable Preferred Stock, ending balance (in shares) at Sep. 30, 2022 | 4,000,000 | |||||||
Ending Balance at Sep. 30, 2022 | 225,630 | $ 13,200 | $ 555 | 285,866 | (46,778) | (14,013) | ||
Common Stock, ending balance (in shares) at Sep. 30, 2022 | 45,652,000 | |||||||
Treasury Stock, ending balance (in shares) at Sep. 30, 2022 | 9,829,000 | |||||||
Mezzanine Equity - Series C Convertible Redeemable Preferred Stock, beginning balance (in shares) at Jun. 30, 2022 | 4,000,000 | |||||||
Beginning Balance at Jun. 30, 2022 | 218,605 | $ 13,200 | $ 555 | 286,064 | (54,800) | (13,214) | ||
Common Stock, beginning balance (in shares) at Jun. 30, 2022 | 46,016,000 | |||||||
Treasury Stock, beginning balance (in shares) at Jun. 30, 2022 | 9,465,000 | |||||||
Net (loss) income | 8,022 | 8,022 | ||||||
Dividends | (198) | (198) | ||||||
Treasury stock purchases (in shares) | 364,000 | 364,000 | ||||||
Treasury stock purchases | (799) | (799) | ||||||
Mezzanine Equity - Series C Convertible Redeemable Preferred Stock, ending balance (in shares) at Sep. 30, 2022 | 4,000,000 | |||||||
Ending Balance at Sep. 30, 2022 | 225,630 | $ 13,200 | $ 555 | 285,866 | (46,778) | (14,013) | ||
Common Stock, ending balance (in shares) at Sep. 30, 2022 | 45,652,000 | |||||||
Treasury Stock, ending balance (in shares) at Sep. 30, 2022 | 9,829,000 | |||||||
Mezzanine Equity - Series C Convertible Redeemable Preferred Stock, beginning balance (in shares) at Dec. 31, 2022 | 4,000,000 | 4,000,000 | ||||||
Beginning Balance at Dec. 31, 2022 | $ 231,206 | $ 13,200 | $ 555 | 285,668 | (40,034) | (14,983) | ||
Common Stock, beginning balance (in shares) at Dec. 31, 2022 | 45,219,737 | 45,220,000 | ||||||
Treasury Stock, beginning balance (in shares) at Dec. 31, 2022 | 10,261,000 | |||||||
Net (loss) income | $ (11,975) | (11,975) | ||||||
Preferred stock dividends | (915) | (915) | ||||||
Dividends | (915) | |||||||
Treasury stock purchases (in shares) | 1,764,000 | 1,764,000 | ||||||
Treasury stock purchases | (3,888) | (3,888) | ||||||
Mezzanine Equity - Series C Convertible Redeemable Preferred Stock, ending balance (in shares) at Sep. 30, 2023 | 4,000,000 | 4,000,000 | ||||||
Ending Balance at Sep. 30, 2023 | $ 214,428 | $ 13,200 | $ 555 | 284,753 | (52,009) | (18,871) | ||
Common Stock, ending balance (in shares) at Sep. 30, 2023 | 43,456,071 | 43,456,000 | ||||||
Treasury Stock, ending balance (in shares) at Sep. 30, 2023 | 12,025,000 | |||||||
Mezzanine Equity - Series C Convertible Redeemable Preferred Stock, beginning balance (in shares) at Jun. 30, 2023 | 4,000,000 | |||||||
Beginning Balance at Jun. 30, 2023 | $ 219,290 | $ 13,200 | $ 555 | 285,111 | (48,321) | (18,055) | ||
Common Stock, beginning balance (in shares) at Jun. 30, 2023 | 43,830,000 | |||||||
Treasury Stock, beginning balance (in shares) at Jun. 30, 2023 | 11,651,000 | |||||||
Net (loss) income | (3,688) | (3,688) | ||||||
Preferred stock dividends | (358) | (358) | ||||||
Dividends | (358) | |||||||
Treasury stock purchases (in shares) | 374,000 | 374,000 | ||||||
Treasury stock purchases | (816) | (816) | ||||||
Mezzanine Equity - Series C Convertible Redeemable Preferred Stock, ending balance (in shares) at Sep. 30, 2023 | 4,000,000 | 4,000,000 | ||||||
Ending Balance at Sep. 30, 2023 | $ 214,428 | $ 13,200 | $ 555 | $ 284,753 | $ (52,009) | $ (18,871) | ||
Common Stock, ending balance (in shares) at Sep. 30, 2023 | 43,456,071 | 43,456,000 | ||||||
Treasury Stock, ending balance (in shares) at Sep. 30, 2023 | 12,025,000 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
Cash Flows from Operating Activities | ||
Net (loss) income | $ (11,975) | $ 32,366 |
Adjustments to reconcile net (loss) income to net cash (used) in/provided by operating activities: | ||
Depreciation, amortization and obsolescence allowance | 19,125 | 19,957 |
Amortization of contract costs | (1,654) | (3,314) |
Amortization of engine overhauls | 2,485 | 2,098 |
Deferred income taxes | (3,566) | (118) |
Loss on disposition of property and equipment | 219 | 62 |
Loss on marketable securities | 10 | 9,774 |
Gain on extinguishment of debt | (70) | (53) |
Changes in operating assets and liabilities: | ||
Receivables, net | (51) | (25,850) |
Notes receivable | (1,641) | (12,747) |
Spare parts and supplies | (450) | (149) |
Prepaid expenses and other | 471 | 3,699 |
Operating lease right-of-use asset | 140 | 41 |
Accounts payable | (5,870) | (3,467) |
Accrued payroll and employee benefits | 246 | (1,828) |
Other accrued expenses | 29 | 81 |
Long-term deferred revenue | 0 | (9,046) |
Contract liabilities | 843 | (2,534) |
Deferred revenues | (16,561) | (13,474) |
Income taxes payable | 0 | 4,633 |
Other long-term liabilities | (222) | 35 |
Net Cash (Used) in/Provided by Operating Activities | (18,492) | 166 |
Cash Flows from Investing Activities | ||
Additions to property and equipment | (3,017) | (2,963) |
Proceeds on disposition of property and equipment | 19 | 10 |
Purchase of marketable securities | (2,745) | (1,921) |
Sale of marketable securities | 20,000 | 0 |
Net Cash Provided by/(Used) in Investing Activities | 14,257 | (4,874) |
Cash Flows from Financing Activities | ||
Repayment of long-term debt | (8,598) | (2,184) |
Dividends paid on preferred stock | (915) | (594) |
Cancellation of stock option | 0 | (969) |
Repurchased stock | (3,888) | (10,733) |
Net Cash Used in Financing Activities | (13,401) | (14,480) |
Decrease in Cash, Cash Equivalents and Restricted Cash | (17,636) | (19,188) |
Cash, Cash Equivalents and Restricted Cash, beginning of period | 34,182 | 38,619 |
Cash, Cash Equivalents and Restricted Cash, end of period | $ 16,546 | $ 19,431 |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2023 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies Basis of Presentation The accompanying condensed consolidated financial statements (the "condensed consolidated financial statements") have been prepared, without audit, in conformity with accounting principles generally accepted in the United States of America (“GAAP”) and include the accounts of Harbor Diversified, Inc. (“Harbor”) and its subsidiaries (collectively, the “Company”). Harbor is a non-operating holding company that is the parent of a consolidated group of subsidiaries, including AWAC Aviation, Inc. (“AWAC”), which is the sole member of Air Wisconsin Airlines LLC (“Air Wisconsin”), which is a regional air carrier. Harbor is also the direct parent of three other subsidiaries: (1) Lotus Aviation Leasing, LLC (“Lotus”), which leases flight equipment to Air Wisconsin, (2) Air Wisconsin Funding LLC, which provides flight equipment financing to Air Wisconsin, and (3) Harbor Therapeutics, Inc., which is a non-operating entity with no material assets. The condensed consolidated financial statements have been prepared, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). Certain information and disclosures normally included in the financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations, although the Company believes that the following disclosures are adequate to make the information presented not misleading. The condensed consolidated financial statements reflect all adjustments that, in the opinion of management, are necessary to present fairly in all material respects the financial condition and results of operations for the interim periods presented. All adjustments are of a normal recurring nature, unless otherwise disclosed. All of the dollar and share amounts set forth in these condensed notes to condensed consolidated financial statements are presented in thousands except per share and par value amounts. These condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and the notes thereto included in Harbor’s Annual Report on Form 10-K for the year ended December 31, 2022, which was filed with the SEC on April 3, 2023 (“2022 Annual Report”). As a result of numerous factors, including those discussed throughout this Quarterly Report, the results of operations for the three and nine months ended September 30, 2023 are not necessarily indicative of the results that may be expected for any other reporting period. Description of Operations The Company has principal lines of business focused on (1) providing regional air services through Air Wisconsin (airline business), (2) acquiring flight equipment for the purpose of leasing the equipment to Air Wisconsin, and (3) providing flight equipment financing to Air Wisconsin. Additionally, Air Wisconsin is continuing to explore aircraft leasing opportunities. The airline business is operated entirely through Air Wisconsin, which is an independent regional air carrier. For the three months ended September 30, 2023, Air Wisconsin was engaged in the business of providing scheduled passenger service for American Airlines, Inc. ("American") under a capacity purchase agreement ("American capacity purchase agreement") which was entered into in August 2022. Prior to early June 2023, Air Wisconsin was also engaged in the business of providing scheduled passenger service for United Airlines, Inc. (“United”) under a capacity purchase agreement (“United capacity purchase agreement”) which was entered into in February 2017 and which terminated in early June 2023. Air Wisconsin has provided scheduled passenger service for American since March 1, 2023. Pursuant to the American capacity purchase agreement, Air Wisconsin agreed to provide up to 60 CRJ-200 regional jet aircraft for regional airline services for American. The American capacity purchase agreement also provides that the parties may discuss the possibility of adding CRJ-700 regional jets to Air Wisconsin’s fleet for the purpose of providing regional airline services under the agreement, but neither party is currently under any obligation with respect to these aircraft. American became Air Wisconsin’s sole airline partner when all its aircraft were removed from United’s flying operations in early June 2023. As of September 30, 2023, Air Wisconsin had 45 aircraft in service for American under the American capacity purchase agreement. For additional information, refer to Note 3, Capacity Purchase Agreements with United and American . Contract Revenues For the three and nine months ended September 30, 2023, approximately 0.1% and 50.1%, respectively, of the Company’s operating revenues were derived from operations associated with the United capacity purchase agreement and approximately 99.7% and 49.7%, respectively, of the Company’s operating revenues were derived from operations associated with the American capacity purchase agreement. In performing an analysis of the United capacity purchase agreement and the American capacity purchase agreement within the framework of Accounting Standards Update (“ASU”) No. 2016-02, Leases (“Topic 842”) and Financial Accounting Standards Board (“FASB”) ASU No. 606, Revenue from Contracts with Customers (“Topic 606”) , the Company determined that a portion of the payments it receives under the capacity purchase agreements that is designed to reimburse Air Wisconsin for use of a certain number of aircraft, which is referred to as “right of use,” is considered lease revenue. All other revenue received by Air Wisconsin under the capacity purchase agreements is considered non-lease revenue. After consideration of the lease and non-lease components, within the context of Topic 842, the Company determined the non-lease component to be the predominant component of each capacity purchase agreement and elected a practical expedient to not separate the lease and non-lease components. Therefore, all compensation received by Air Wisconsin pursuant to the United capacity purchase agreement and the American capacity purchase agreement has been accounted for under Topic 606. The Company has recognized revenue under each capacity purchase agreement over time as services are provided. Under each agreement, Air Wisconsin is entitled to receive a fixed rate for each departure and block hour (measured from takeoff to landing, including taxi time), and a fixed amount per covered aircraft per day (subject to Air Wisconsin’s ability to meet certain block hour utilization thresholds), in each case subject to annual increases during the term of the agreement. Air Wisconsin’s performance obligation is met and revenue is recognized over time, which is then reflected in contract revenues. Each agreement also provides for the reimbursement to Air Wisconsin of certain direct operating expenses, such as certain insurance premiums and property taxes. Prior to the termination of the United capacity purchase agreement in early June 2023, United made provisional cash payments to Air Wisconsin during each month of service based on projected flight schedules. These provisional cash payments were then subsequently reconciled with United based on actual completed flight activity. As of the date of this filing, these payments were reconciled through June 2023, the last month of United operations. As of September 30, 2023, Air Wisconsin believes, but United disputes, that United owes Air Wisconsin $30,149, of which $29,509 is recorded in receivables, net on the condensed consolidated balance sheets. For additional information, refer to Note 3, Capacity Purchase Agreements with United and American and Note 8, Commitments and Contingencies . American makes provisional cash payments to Air Wisconsin during each month of service based on projected flight schedules. These provisional cash payments are subsequently reconciled with American based on actual completed flight activity. As of the date of this filing, payments through September 2023 have been reconciled. As of September 30, 2023, American owed Air Wisconsin approximately $608, which is recorded in receivables, net, on the condensed consolidated balance sheets. Prior to the termination of the United capacity purchase agreement in early June 2023, Air Wisconsin was eligible to receive incentive payments, or was required to pay penalties, upon the achievement of, or failure to achieve, certain performance criteria primarily based on flight completion, on-time performance, and customer satisfaction ratings. The incentives were defined in the agreement, and performance was measured on a monthly basis. At the end of each month during the term of the agreement, Air Wisconsin calculated the incentives achieved, or penalties payable, during that period and recognized revenue accordingly, subject to the variable constraint guidance under Topic 606. Final reconciliations have been completed with United through June 2023. Air Wisconsin has received net payments of $(6) and $1,236 for the three and nine months ended September 30, 2023, respectively, as compared to $2,137 and $5,443 for the three and nine months ended September 30, 2022, respectively. As of September 30, 2023, Air Wisconsin had no amount recorded as part of receivables, net, on the condensed consolidated balance sheets related to net incentive amounts. As of December 31, 2022, Air Wisconsin recorded $2,307 as part of receivables, net, in the condensed consolidated balance sheets related to net incentive amounts. Commencing in September 2023, Air Wisconsin became eligible under the American capacity purchase agreement to receive bonus payments, and may be required to pay rebates, upon the achievement of, or failure to achieve, certain performance criteria primarily based on flight completion, on-time performance, and customer satisfaction ratings. The bonus and rebate amounts are defined in the agreement, and performance will be measured on a monthly or quarterly basis. At the end of each month or quarter, Air Wisconsin will calculate the bonus amounts achieved, or rebates payable, during that period and recognize revenue accordingly, subject to the variable constraint guidance under Topic 606. As of September 30, 2023, Air Wisconsin had not recorded any bonus or rebate amounts under the American capacity purchase agreement. Under the United capacity purchase agreement, Air Wisconsin was entitled to receive a fixed amount per aircraft per day for each month during the term of the agreement. In accordance with GAAP, the Company recognized revenue related to the fixed payments on a proportional basis taking into account the number of flights actually completed in that period relative to the number of flights expected to be completed in subsequent periods during the remaining term of the agreement. Air Wisconsin deferred fixed revenues between April 2020 and June 2021 due to the significant decrease in its completed flights as a result of the COVID-19 pandemic. Beginning in July 2021, due to an increase in completed flights and based on projected future completed flight activity, Air Wisconsin began reversing this deferral of fixed revenues, and it continued to do so until the termination of the agreement in early June 2023. Accordingly, during the three and nine months ended September 30, 2023, Air Wisconsin recognized $0 and $16,561 of fixed revenues that were previously deferred, respectively, compared to a recognition of $5,180 and $22,548 of fixed revenues in the three and nine months ended September 30, 2022, respectively. As of September 30, 2023 and December 31, 2022, deferred fixed revenues in the amount of $0 and $16,561, respectively, were recorded as part of deferred revenues on the condensed consolidated balance sheets. Under the United capacity purchase agreement, Air Wisconsin also recognized decreased non-refundable upfront fee revenues and increased fulfillment costs, both of which were amortized over the remaining term of the United capacity purchase agreement in proportion to the number of flights completed in the period relative to the number of flights expected to be completed in subsequent periods. During the three and nine months ended September 30, 2023, Air Wisconsin recorded $0 and $1,335 of revenue from upfront fees, respectively, and $0 and $143 of fulfillment costs, respectively, compared to $932 and $3,314 in revenue from upfront fees, respectively, and $100 and $355 of fulfillment costs for the three and nine months ended September 30, 2022, respectively. As of September 30, 2023 and December 31, 2022, deferred upfront fee revenue in the amount of $0 and $1,335, respectively, is recorded as part of contract liabilities on the condensed consolidated balance sheets. Under the American capacity purchase agreement, Air Wisconsin is entitled to receive a fixed amount per aircraft per day for each month during the term of the agreement based on a formula which takes into account pilot availability for any given month. Air Wisconsin will recognize this revenue related to the specific flight activity for the month in which the flights occur. Under the American capacity purchase agreement, Air Wisconsin is also entitled to be reimbursed for certain startup costs ("non-refundable upfront fee revenue"), such as livery changes to the aircraft, to prepare the aircraft for American flight services. Through September 30, 2023, Air Wisconsin had incurred $3,998 in reimbursable costs, and it estimates that it will incur an additional $602 in reimbursable costs over the term of the American capacity purchase agreement. In accordance with GAAP, the Company will recognize revenue related to the total estimated non-refundable upfront fee revenue of $4,600 on a proportional basis taking into account the number of flights actually completed in the period relative to the number of flights expected to be completed in subsequent periods during the remaining term of the agreement. Accordingly, during the three and nine months ended September 30, 2023, Air Wisconsin recognized $193 and $319 of non-refundable upfront fee revenues, respectively, compared to a recognition of $0 of non-refundable upfront fee revenues in the three and nine months ended September 30, 2022. As of September 30, 2023 and December 31, 2022, Air Wisconsin deferred $3,680, and $0, respectively, in non-refundable upfront fee revenues under the American capacity purchase agreement. Air Wisconsin’s deferred revenues related to the non-refundable upfront fee revenues under the American capacity purchase agreement will adjust over the remaining contract term, based on the actual expenses incurred that will be reimbursed and recognized based on the number of flights actually completed in the period relative to the number of flights expected to be completed in subsequent periods during the remaining term of the agreement. As of September 30, 2023 and December 31, 2022, deferred non-refundable upfront fee revenues in the amount of $641 and $0, respectively, were netted as part of short-term contract assets, and $3,039 and $0, respectively, were recorded as part of long-term contract liabilities on the condensed consolidated balance sheets. As noted above, Air Wisconsin incurred certain startup costs ("fulfillment costs") prior to the start of flying operations for American on March 1, 2023. These costs included changes to the livery, fuel costs, and certain training expenses. The total fulfillment costs incurred were $774. These costs will be amortized on a proportional basis taking into account the number of flights actually completed in the period relative to the number of flights expected to be completed in subsequent periods during the remaining term of the agreement. For the three and nine months ended September 30, 2023, Air Wisconsin recorded $33 and $54, respectively, and $0 for the three and nine months ended September 30, 2022 for amortization expense related to fulfillment costs. As of September 30, 2023 and December 31, 2022, fulfillment costs of $108 and $0, respectively, are recorded as part of short-term contract costs, and $613 and $0, respectively, are recorded as part of long-term contract costs on the condensed consolidated balance sheets. Under the American capacity purchase agreement, Air Wisconsin will also receive a monthly support fee and be reimbursed for heavy maintenance expenses based on the fixed covered per aircraft per day rate over the term of the agreement. In addition, amendments to the American capacity purchase agreement entered into by Air Wisconsin and American in February 2023 and November 2023 ("Amendment No. 1" and "Amendment No. 3", respectively) provided for a one-time payment to assist with increased costs related to pilot compensation and revised compensation rates assessed under the agreement from 2023 to 2028 to assist Air Wisconsin with pilot compensation and retention.. In accordance with GAAP, the Company recognizes revenue related to the monthly support fee, heavy maintenance revenue, and one-time pilot compensation assistance payment on a proportional basis taking into account the number of flights actually completed in the period relative to the number of flights expected to be completed in subsequent periods during the remaining term of the agreement. Accordingly, during the three and nine months ended September 30, 2023, Air Wisconsin recognized $1,946 and $3,206, respectively, of revenue related to the one-time assistance payment, the estimated monthly support fee and the heavy maintenance revenues, compared to $0 for the three and nine months ended September 30, 2022. As of September 30, 2023 and December 31, 2022, revenues related to the monthly support fee and anticipated heavy maintenance reimbursements in the amounts of $2,259 and $0, respectively, were recorded as part of short-term contract assets, and $247 and $0, respectively, were netted in long-term contract liabilities on the condensed consolidated balance sheets. Air Wisconsin’s contract liabilities related to the one-time assistance payment and estimated monthly support fee and heavy maintenance revenues under the American capacity purchase agreement will adjust over the remaining contract term, based on the actual reimbursement of the monthly support fee and heavy maintenance revenues and on the number of flights actually completed in each reporting period relative to the number of flights expected to be completed in subsequent periods during the remaining term of the agreement. For additional information regarding Amendment No. 3, refer to Note 14, Subsequent Events , and Part II, Item 5, Other Information , in this Quarterly Report. As part of an October 2020 amendment to the United capacity purchase agreement (“CPA Amendment”), United made a cash settlement payment of $670 and issued a note receivable to Air Wisconsin in the amount of $11,048, of which $4,410 was deferred as of December 31, 2020, with the remaining portion recognized in proportion to the number of flights completed in subsequent periods through the end of the wind-down period. In October 2021, in accordance with the CPA Amendment, Air Wisconsin received $294 from United for the opening of a crew base, of which $73 was deferred as of December 31, 2021, with the remaining portion recognized in proportion to the number of flights completed in subsequent periods through the end of the wind-down period. For the three and nine months ended September 30, 2023, Air Wisconsin recorded $0 and $649 of revenue related to these items, respectively, compared to $453 and $1,611 of revenue related to these items for the three and nine months ended September 30, 2022, respectively. As of September 30, 2023, there was no deferred CPA Amendment revenue recorded as part of contract liabilities on the condensed consolidated balance sheets. The timing of the recognition under the American capacity purchase agreement of non-refundable upfront fee revenue, fulfillment costs, monthly support fee revenues, heavy check maintenance revenues and one-time support fee revenues in future periods is subject to considerable uncertainty due to a number of factors, including the estimated revenue amounts to be received and the number of flights actually completed in the period relative to the number of flights expected to be completed in subsequent periods during the remaining term of the agreement. The amount of revenues recognized for the three and nine months ended September 30, 2023, that were related to the United capacity purchase agreement and previously recorded as contract liabilities was $0 and $1,985, respectively. During the three and nine months ended September 30, 2023, there were no revenues recognized that were previously recorded as contract liabilities related to the American capacity purchase agreement. The CPA Amendment provided, among other things, for the payment or accrual of certain amounts by United to Air Wisconsin based on certain scheduling benchmarks. In conjunction with the significant reduction in departures and block hours resulting from the COVID-19 pandemic in 2020, and consistent with the terms of the CPA Amendment, management determined that, from an accounting perspective, a new performance obligation was created by United, requiring Air Wisconsin to stand ready to deliver flight services. Air Wisconsin determined, using the expected cost plus a margin method, that the United “stand ready” rate represented the relative stand-alone selling price of the performance obligation. The stand ready performance obligation was recognized over time on a straight-line basis based on the number of unscheduled block hours below a minimum threshold at the stand ready rate as determined in a manner consistent with the CPA Amendment. For the three and nine months ended September 30, 2023, Air Wisconsin recorded $0 and $1,641, respectively, in revenue related to this performance obligation compared to $5,138 and $12,746 for the three and nine months ended September 30, 2022, respectively. Under the CPA Amendment, United was required to accrue this amount and, upon request by Air Wisconsin, deliver a note evidencing this amount each quarter. Therefore, this amount is recorded in notes receivable on the condensed consolidated balance sheets. The notes receivable contain a significant financing component and any interest income is separately reported on the condensed consolidated statements of operations. United has disputed that it owes these amounts in respect of certain quarters and has refused to deliver notes for those quarters. On November 4, 2022, United prepaid to Air Wisconsin $50,126 to satisfy all of the outstanding, undisputed notes receivable, including all accrued interest, pursuant to the CPA Amendment in respect of the period from the second quarter of 2020 through the third quarter of 2021 and the $11,048 note receivable described above. The unpaid disputed notes came due on February 28, 2023. As of September 30, 2023, the principal amount of the unpaid disputed notes totaled $21,093. Prior to February 28, 2023, the unpaid disputed notes bore interest at the rate of 4.5% per annum. After February 28, 2023, the notes bear interest at the default interest rate of 12% per annum. As of September 30, 2023, interest receivable on the disputed notes, calculated at the pre-default contractual rate without any default interest, totaled $1,034 and is recorded in receivables, net, on the condensed consolidated balance sheets. For additional information, refer to Note 8, Commitments and Contingencies , in this Quarterly Report. Other Revenues Other revenues primarily consist of the sales of parts to other airlines and aircraft lease payments. These other revenues are immaterial in all periods presented. The transaction price for these other revenues generally is fair market value. Cash and Cash Equivalents Money market funds and investments and deposits with an original maturity of three months or less when acquired are considered cash and cash equivalents. Restricted Cash As of September 30, 2023 and December 31, 2022, the Company had a restricted cash balance of $707 and $849, respectively. A portion of the balance secures a credit facility for the issuance of letters of credit guaranteeing the performance of Air Wisconsin’s obligations under certain lease agreements, airport agreements and insurance policies. The remaining portion is cash held for the repurchase of shares under Harbor’s stock repurchase program. For additional information, refer to Note 8, Commitments and Contingencies and Note 13, Stock Repurchase Program , in this Quarterly Report. Receivables, net Subsequent to June 30, 2023, the Company changed the description of Accounts receivable, net to Receivables, net on its condensed consolidated balance sheets. The change did not result in the reclassification of items presented in prior periods. As of September 30, 2023 and December 31, 2022, the Company had a receivables, net balance of $40,391 and $40,341, respectively. The table below sets forth the major categories that make up the balances: September 30, 2023 December 31, 2022 Trade receivables 31,151 30,019 Insurance and warranty claim receivables 3,385 2,710 Federal and state tax receivables 3,022 3,901 Other industry related receivables 2,843 3,729 Allowance for expected credit losses (10) (18) Receivables, net 40,391 40,341 Marketable Securities The Company’s equity security investments, consisting of exchange-traded funds and mutual funds, are recorded at fair value based on quoted market prices (Level 1) in marketable securities on the condensed consolidated balance sheets, in accordance with the guidance in ASC Topic 321 , Investments-Equity Securities , with the change in fair value during the period included on the condensed consolidated statements of operations. As of September 30, 2023 and December 31, 2022, the fair value of the Company’s marketable securities was $136,562 and $153,827, respectively. For additional information, refer to Fair Value of Financial Instruments in this Note 1, in this Quarterly Report. The calculation of net unrealized gains and losses that relate to marketable securities held as of September 30, 2023 is as follows: Three Months Ended Nine Months Ended Unrealized (losses) gains recognized during the period on equity securities held as of the end of the period $ (925) $ 102 Plus: Net losses recognized during the period on equity securities sold during the period (30) (112) Net losses recognized during the period on equity securities $ (955) $ (10) The calculation of net unrealized gains and losses that relate to marketable securities held as of September 30, 2022 is as follows: Three Months Ended Nine Months Ended Unrealized losses recognized during the period on equity securities held as of the end of the period $ (3,749) $ (9,774) Plus: Net gains (losses) recognized during the period on equity securities sold during the period — — Net losses recognized during the period on equity securities $ (3,749) $ (9,774) Property and Equipment Property and equipment are stated at cost and depreciated over their useful lives to their estimated residual values using the straight-line method as follows: Assets Depreciable Life Current Residual Value Aircraft 7 years $ 50 Spare engines 7 years $ 25 Rotable parts 7 years 10 % Ground equipment up to 10 years 0 % Office equipment up to 10 years 0 % Leasehold improvements Shorter of asset or lease life 0 % The table below sets forth the original cost of the Company’s fixed assets and accumulated depreciation or amortization as of the dates presented: September 30, 2023 December 31, 2022 Assets Original Accumulated Original Cost Accumulated Aircraft $ 70,779 $ 47,655 $ 70,089 $ 40,544 Spare engines 164,706 117,372 163,708 103,834 Rotable parts 27,412 18,406 27,936 18,655 Ground equipment 2,850 2,217 2,718 2,063 Office equipment 4,692 4,331 4,519 4,218 Leasehold improvements 1,052 625 818 452 Total $ 271,491 $ 190,606 $ 269,788 $ 169,766 The amounts in the table exclude construction in process of $2,741 and $2,237 at September 30, 2023 and December 31, 2022, respectively. Construction in process primarily relates to the cost of parts that are not capitalized until the parts are placed into service. Air Wisconsin’s capitalized engine maintenance costs are amortized over their estimated useful life measured in remaining engine cycles to the next scheduled shop visit. Lotus’ engine maintenance costs are expensed. Depreciation expense in the three and nine months ended September 30, 2023 was $6,365 and $18,928, respectively, compared to $6,224 and $18,656 for the three and nine months ended September 30, 2022, respectively, and is included in depreciation, amortization, and obsolescence in the accompanying condensed consolidated statements of operations. Impairment of Long-Lived Assets and Indefinite-Lived Intangible Assets The Company evaluates long-lived assets and indefinite-lived intangible assets for potential impairment and records impairment losses when events and circumstances indicate the assets might be impaired and the undiscounted cash flows estimated to be generated by those assets are less than their carrying amounts. Impairment losses are measured by comparing the fair value of the assets to their carrying amounts. In determining the need to record impairment charges, the Company is required to make certain estimates and assumptions regarding such things as the current fair market value of the assets and future net cash flows to be generated by the assets. If there are subsequent changes to these estimates or assumptions, or if actual results differ from these estimates or assumptions, such changes could impact the financial statements in the future. The Company conducted a qualitative impairment assessment of its long-lived assets and indefinite-lived intangible assets and determined that no quantitative impairment tests were required to be performed as of September 30, 2023 and December 31, 2022. Air Wisconsin in the future may include aircraft other than the CRJ-200 as part of its flying operations. Such an event would likely lead Air Wisconsin to conduct quantitative tests for impairment of the CRJ-200 fleet and related assets. Income Taxes The Company utilizes the asset and liability method for accounting for income taxes. Under this method, deferred tax assets and liabilities are determined based upon the estimated future tax effects of differences between the financial statement and tax basis of assets and liabilities, as measured by the current applicable tax rates. Deferred tax expense represents the result of changes in deferred tax assets and liabilities. As required by the uncertain tax position guidance, the Company recognizes the financial statement benefit of a tax position only after determining that the relevant tax authority would more-likely-than-not sustain the position following an audit. For tax positions meeting the more-likely-than-not threshold, the amount recognized in the condensed consolidated financial statements is the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement with the relevant tax authority. The Company has applied the uncertain tax position guidance to all tax positions for which the statute of limitations remains open. The Company is subject to federal, state and local income taxes in the United States. Tax regulations within each jurisdiction are subject to the interpretation of the related tax laws and regulations and require the application of significant judgment. The Company is no longer subject to U.S. federal income tax examinations for the years prior to 2019. With a few exceptions, the Company is no longer subject to state or local income tax examinations for years prior to 2018. As of September 30, 2023, the Company had no outstanding tax examinations. Concentration of Credit Risk and Customer Risk Financial instruments that potentially expose the Company to a concentration of credit risk consist principally of cash and cash equivalents that are held by financial institutions in the United States and accounts receivable. The Company at times has had bank deposits in excess of the Federal Deposit Insurance Corporation insurance limit. The Company maintains its cash accounts with high credit quality financial institutions and, accordingly, the Company believes it has minimal credit risk with respect to these financial institutions. As of September 30, 2023, in addition to cash and cash equivalents of $15,839, the Company had $ |
Liquidity
Liquidity | 9 Months Ended |
Sep. 30, 2023 | |
Risks and Uncertainties [Abstract] | |
Liquidity | Liquidity The Company’s ability to meet its liquidity needs is dependent upon its cash, cash equivalents and marketable securities balances and its ability to generate cash flows from operations in the future in amounts sufficient to meet its obligations and repay its liabilities arising from normal business operations when they come due. The Company currently believes its available working capital and anticipated cash flows from operations will be sufficient to meet the Company’s liquidity requirements for at least the next 12 months from the date of this filing. However, there can be no assurance that the Company will be able to generate sufficient cash flows from operations, or that additional funds will be available, to meet its future liquidity needs, particularly if Air Wisconsin receives an adverse determination in the arbitration with United. Reduced Block Hours Since the beginning of the COVID-19 pandemic, Air Wisconsin has experienced significantly reduced block hours relative to historical levels, both as a result of the pandemic and the prevailing industry-wide pilot shortage. Although the disruption in passenger demand due to the pandemic has largely subsided, the pilot shortage is expected to continue for the foreseeable future and is currently the leading factor preventing Air Wisconsin from consistently achieving block hours in line with pre-pandemic levels. As of September 30, 2023, Air Wisconsin had 45 aircraft in service for American under the American capacity purchase agreement. For additional information, refer to Part I, Item 1, “ Business — American Capacity Purchase Agreement |
Capacity Purchase Agreements wi
Capacity Purchase Agreements with United and American | 9 Months Ended |
Sep. 30, 2023 | |
Extractive Industries [Abstract] | |
Capacity Purchase Agreements with United and American | Capacity Purchase Agreements with United and American In February 2017, Air Wisconsin entered into the United capacity purchase agreement. That agreement terminated and Air Wisconsin ceased flying for United in early June 2023. Although the agreement has terminated, a dispute exists under the agreement. Air Wisconsin has claimed that United owes it certain amounts under the capacity purchase agreement. United has denied that it owes those amounts and has claimed that Air Wisconsin improperly terminated the agreement and that Air Wisconsin owes it certain amounts for the alleged wrongful termination. In October 2022, United initiated arbitration under the agreement. An arbitration hearing commenced in July 2023 before three arbitrators. Air Wisconsin expects the arbitrators will issue their decision and award in the first quarter of 2024. Since the arbitration decision has not yet been issued, Air Wisconsin cannot reasonably estimate the likely outcome of the arbitration including any potential award of the disputed amounts. Air Wisconsin, however, maintains that it has a strong position, that it was entitled to terminate the agreement and that it is entitled to the disputed amounts, including the amounts recorded in the condensed consolidated balance sheets, under the terms of the agreement. For additional information, refer to Note 1, Summary of Significant Accounting Policies—Contract Revenues and Note 8, Commitments and Contingencies , in this Quarterly Report . In August 2022, Air Wisconsin entered into the American capacity purchase agreement, pursuant to which Air Wisconsin agreed to provide up to 60 CRJ-200 regional jet aircraft for regional airline services for American. Air Wisconsin commenced flying operations for American in March 2023. American became Air Wisconsin’s sole airline partner when the last remaining aircraft covered by the United capacity purchase agreement were removed from United’s flying operations in early June 2023. In February 2023 and November 2023, American and Air Wisconsin entered into Amendment No. 1 and Amendment No. 3, respectively, to the American capacity purchase agreement which, among other things, provided for a one-time payment to assist with increased costs related to pilot compensation and revised compensation rates for 2023 through 2028 and obligated American to make a payment to assist Air Wisconsin with current pilot compensation and retention. For additional information regarding Amendment No. 3, refer to Note 14, Subsequent Events , and Part II, Item 5, Other Information , in this Quarterly Report. |
Property and Equipment
Property and Equipment | 9 Months Ended |
Sep. 30, 2023 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment | Property and Equipment As of September 30, 2023, Air Wisconsin owned 64 CRJ-200 regional jets. |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2023 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The Company’s effective tax rate for the three and nine months ended September 30, 2023 was 17.8% and 22.9%, respectively, which varied from the federal statutory rate of 21.0% primarily due to the impact of the increase of the valuation allowance on federal and state deferred tax assets that are capital in nature due to the unrealized losses on marketable securities during the periods, state income taxes, and permanent differences between financial statement and taxable income. The Company’s effective tax rate for the three and nine months ended September 30, 2022 was 23.8%, which varied from the federal statutory rate of 21.0% primarily due to the impact of state income taxes and permanent differences between financial statement and taxable income. |
Debt
Debt | 9 Months Ended |
Sep. 30, 2023 | |
Debt Disclosure [Abstract] | |
Debt | Debt Debt Debt consists of the following (with interest rates, as of the dates presented): September 30, December 31, Aircraft Notes, due December 31, 2025 (4.0%) $ 52,554 $ 61,222 Less: current maturities 52,554 9,154 Long-term debt $ — $ 52,068 On August 4, 2023, Air Wisconsin received a notice of default and reservation of rights ("Notice") related to certain credit agreements ("Aircraft Credit Agreements") Air Wisconsin entered into with a senior lender and loan trustee. The Notice alleges a default under the Aircraft Credit Agreements relating to Air Wisconsin's failure to pay certain amounts thereunder. If the Notice were correct, the total outstanding principal balance of $48,600 would have been due and payable. Air Wisconsin believes the alleged default is without merit and intends to contest the claims in the Notice. However, Air Wisconsin has notified the lender that it would be willing to prepay the entire outstanding principal balance of the loans subject to certain terms and conditions and is negotiating a prepayment agreement with the lender. If such an agreement were entered into, the agreed upon amount of the balance of the loans outstanding under the Aircraft Credit Agreements would likely become due within the next 12-month period. Although there can be no assurance that the parties will enter into an agreement, given its receipt of the Notice and the existence of the negotiations regarding the proposed prepayment, the Company has reclassified, as of September 30, 2023, the entire balance of the loans outstanding under the Aircraft Credit Agreements as current portion of long-term debt on the condensed consolidated balance sheets. In June 2023, Air Wisconsin prepaid approximately $3,500 of the principal amount outstanding under the Aircraft Notes due December 31, 2025 (the "Aircraft Notes"). The prepayment resulted in a $70 gain on extinguishment of debt due to the decrease in previously expected future interest that was capitalized. Maturities of debt for the periods subsequent to September 30, 2023, are as follows: Fiscal Year Amount October 2023 through December 2023 $ 486 2024 52,068 2025 — Total $ 52,554 The debt agreements include certain covenants. At September 30, 2023 and December 31, 2022, Air Wisconsin believes it was in compliance with all of the covenants in its debt agreements. As of September 30, 2023, all of the Company’s debt was subject to fixed interest rates. For additional information, refer to Note 6, Debt, in the audited consolidated financial statements within the 2022 Annual Report. Long-Term Promissory Note |
Lease Obligations
Lease Obligations | 9 Months Ended |
Sep. 30, 2023 | |
Leases [Abstract] | |
Lease Obligations | Lease Obligations The Company reviews all contracts and service agreements for criteria meeting the definition of a lease within the frameworks of Topic 842 and Topic 606. Those that were determined to be a lease may contain both a lease and a non-lease component. In those instances, the Company elected to account for such components as a single lease component. The Company’s operating lease activities are recorded in operating lease right-of-use assets, current portion of operating lease liability, and long-term operating lease liability on the condensed consolidated balance sheets. Air Wisconsin has operating leases with terms greater than 12 months for training simulators and facility space including office space and maintenance facilities. The remaining lease terms for training simulators and facility space vary from three months to 10.3 years. For leases of 12 months or less, the Company elected a short-term lease practical expedient for all leases, regardless of the underlying class of asset, that allows the lessee to not recognize a lease right-of-use asset or lease liability. As a result, the Company recognized lease payments for short-term leases as an expense on a straight-line basis over the lease term. For leases with durations longer than 12 months, the Company recorded the related operating lease right-of-use asset and operating lease liability at the present value of the lease payments over the lease term. The Company used Air Wisconsin’s incremental borrowing rate to discount the lease payments based on information available at lease inception. Air Wisconsin’s operating leases with lease rates that are variable based on operating costs, use of the facilities, or other variable factors were excluded from the Company’s right-of-use assets and operating lease liabilities in accordance with the applicable accounting guidance. Leasehold improvements are capitalized at cost and amortized over the lesser of their expected useful life or the lease term. Certain leases contain an option to extend or terminate the lease agreement. The Company evaluates each option prior to its expiration and may or may not exercise such option depending on conditions present at the time. At the inception of the lease, if it is reasonably certain that the Company will exercise an option to extend or terminate a lease, the Company considers the option in determining the classification and measurement of the lease. The Company expects that in the normal course of business operating leases that expire will be renewed or replaced by other leases. As of September 30, 2023, the Company’s right-of-use assets were $9,708, the Company’s current maturities of operating lease liabilities were $3,649, and the Company’s long-term operating lease liabilities were $3,659. During the nine months ended September 30, 2023, the Company paid $4,285 in operating lease payments, which are reflected as a reduction to operating cash flows. The table below presents operating lease related terms and discount rates as of: September 30, Weighted-average remaining lease term 2.62 years Weighted-average discount rate 6.15 % Components of lease costs were as follows for the periods presented: Three Months Ended Nine Months Ended 2023 2022 2023 2022 Operating lease costs $ 1,467 $ 1,477 $ 4,425 $ 4,423 Short-term lease costs 81 77 207 306 Variable lease costs (89) 63 (105) 158 Total Lease Costs $ 1,459 $ 1,617 $ 4,527 $ 4,887 Certain leases are subject to non-cancellable lease terms or may include variable rate increases tied to the consumer price index. One of our leases also provides that Air Wisconsin reimburse the lessor for Air Wisconsin’s pro-rata share of taxes and other operating expenses applicable to the leased property. During the second and third quarters of 2023, Air Wisconsin received a temporary rent concession due to construction at a leased facility, which is being recorded as negative variable rent. Rent expense recorded under all operating leases, inclusive of engine leases, was $1,459 and $1,617 in the three months ended September 30, 2023 and September 30, 2022, respectively. Rent expense recorded under all operating leases, inclusive of engine leases, was $4,527 and $4,887 for the nine months ended September 30, 2023 and September 30, 2022, respectively. The following table summarizes the future minimum rental payments required under operating leases that had initial or remaining non-cancelable lease terms greater than 12 months as of September 30, 2023: Fiscal Year Amount October 2023 through December 2023 $ 1,369 2024 3,328 2025 2,596 2026 202 2027 75 Thereafter 358 Total lease payments 7,928 Less imputed interest 620 Total Lease Liabilities $ 7,308 |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Legal Matters From time to time, the Company is involved in various legal proceedings, regulatory matters, and other disputes or claims arising from or related to claims incident to the normal course of the Company’s business activities. Although the results of such legal proceedings and claims cannot be predicted with certainty, as of September 30, 2023, the Company believes that it is not currently a party to any legal proceedings, regulatory matters, or other disputes or claims for which a material loss is considered probable and for which the amount (or range) of loss was reasonably estimable. However, regardless of the merit of the claims raised, legal proceedings may have an adverse impact on the Company as a result of adverse determinations, defense and settlement costs, diversion of management’s time and resources, and other factors. Dispute with United Although the United capacity purchase agreement terminated in early June 2023, a dispute exists under that agreement. Air Wisconsin has claimed that United owes it certain amounts under the capacity purchase agreement. United has denied that it owes those amounts and has claimed that Air Wisconsin improperly terminated the agreement and that Air Wisconsin owes it certain amounts for the alleged wrongful termination. As of September 30, 2023, the aggregate amount in dispute recorded in the condensed consolidated financial statements was approximately $52,276. In October 2022, United initiated arbitration under the agreement. An arbitration hearing commenced in July 2023 before three arbitrators. Air Wisconsin expects the arbitrators will issue their decision and award in the first quarter of 2024. Air Wisconsin cannot reasonably estimate the likely outcome of the arbitration including any potential award of the disputed amounts. Air Wisconsin, however, maintains that it has a strong position, that it was entitled to terminate the agreement and that it is entitled to the disputed amounts, including the amounts recorded in the condensed consolidated balance sheets, under the terms of the agreement. For additional information, refer to Note 1, Summary of Significant Accounting Policies – Contract Revenues , and Note 3, Capacity Purchase Agreements with United and American , in this Quarterly Report. Treasury Payroll Support Program Audit In April 2020, Air Wisconsin entered into a Payroll Support Program Agreement (“PSP-1 Agreement”) with respect to payroll support (“Treasury Payroll Support”) from the U.S. Department of Treasury (“Treasury”) under a program (“Payroll Support Program”) provided by the Coronavirus Aid, Relief, and Economic Security Act, pursuant to which Air Wisconsin received approximately $42,185 (“PSP-1”). In September 2020, the Treasury’s Office of Inspector General (“OIG”) commenced a routine audit in connection with Air Wisconsin’s receipt of funds under the PSP-1 Agreement. The audit focused on, among other things, certain calculations used to determine the amount of Treasury Payroll Support Air Wisconsin was entitled to receive under the program. Air Wisconsin has disputed in good faith the Treasury’s interpretation of certain provisions of the application for Treasury Payroll Support and the PSP-1 Agreement, as well as the Treasury’s guidance regarding the Payroll Support Program. Air Wisconsin received preliminary results from the OIG of the audit in June 2023. Those results are subject to Air Wisconsin’s opportunity to contest the findings and the OIG releasing its final determination. The OIG initially determined that Air Wisconsin overstated its awardable amount on its PSP-1 application; however, Air Wisconsin does not believe this results in any amounts due back to the Treasury and the Treasury has not required Air Wisconsin to repay any PSP-1 amounts. As part of Air Wisconsin’s application for a Payroll Support Program Agreement 2 ("PSP-2 Agreement", and such award granted thereunder, "PSP-2"), Air Wisconsin was required to recertify its PSP-1 application and amend portions of the application pursuant to further guidance by the Treasury. Air Wisconsin’s recertified PSP-1 application resulted in a reduction to its PSP-2 award to reconcile the difference between its initial PSP-1 award and a recalculated award based on its PSP-1 recertification. Based on the OIG’s audit results, Air Wisconsin believes the Treasury may have reduced its PSP-2 award by more than it should have; however, Air Wisconsin does not reasonably believe it will be able to recover any underpayment from the Treasury. Subsequent to the September 2020 audit, the Treasury entered into the PSP-2 Agreement and a Payroll Support Program Agreement 3 ("PSP-3 Agreement") with Air Wisconsin and has paid to Air Wisconsin the amounts to be paid under the PSP-2 Agreement and the PSP-3 Agreement. Standby Letters of Credit As of September 30, 2023, Air Wisconsin had six outstanding letters of credit in the aggregate amount of $372 to guarantee the performance of its obligations under certain lease agreements, airport agreements and insurance policies, and it maintained a credit facility with a borrowing capacity of $377 for the issuance of such letters of credit. A significant portion of Air Wisconsin’s restricted cash balance secures the credit facility. Cash Obligations The following table sets forth the Company’s cash obligations for the periods presented: Payment Due for Year Ending Total 2023 (October 2024 2025 2026 2027 Thereafter Aircraft Notes Principal $ 48,600 $ — $ 48,600 $ — $ — $ — $ — Aircraft Notes Interest 3,954 486 3,468 — — — — Operating Lease Obligations 7,928 1,369 3,328 2,596 202 75 358 Total $ 60,482 $ 1,855 $ 55,396 $ 2,596 $ 202 $ 75 $ 358 The principal amount of the Aircraft Notes is payable in semi-annual installments of $3,500, and certain additional amounts may be payable based on excess cash. In June 2023, Air Wisconsin prepaid the semi-annual installment due December 31, 2023. As of September 30, 2023, all of the Company’s debt was subject to fixed interest rates. On August 4, 2023, Air Wisconsin received a notice of default and reservation of rights ("Notice") related to certain credit agreements ("Aircraft Credit Agreements") Air Wisconsin entered into with a senior lender and loan trustee. The Notice alleges a default under the Aircraft Credit Agreements relating to Air Wisconsin's failure to pay certain amounts thereunder. If the Notice were correct, the total outstanding principal balance of $48,600 would have been due and payable. Air Wisconsin believes the alleged default is without merit and intends to contest the claims in the Notice. However, Air Wisconsin has notified the lender that it would be willing to prepay the entire outstanding principal balance of the loans subject to certain terms and conditions and is negotiating a prepayment agreement with the lender. If such an agreement were entered into, the agreed upon amount of the balance of the loans outstanding under the Aircraft Credit Agreements would likely become due within the next 12-month period. Although there can be no assurance that the parties will enter into an agreement, given its receipt of the Notice and the existence of the negotiations regarding the proposed prepayment, the Company has reclassified, as of September 30, 2023, the entire balance of the loans outstanding under the Aircraft Credit Agreements as current portion of long-term debt on the condensed consolidated balance sheets. For additional information, refer to Note 6, Debt , in the audited consolidated financial statements, and the section entitled “ Management’s Discussion and Analysis of Financial Condition and Results of Operations – Debt and Credit Facilities ” within the 2022 Annual Report, and Note 14, Subsequent Events |
Related-Party Transactions
Related-Party Transactions | 9 Months Ended |
Sep. 30, 2023 | |
Related Party Transactions [Abstract] | |
Related-Party Transactions | Related-Party Transactions Resource Holdings Associates (“Resource Holdings”) provides AWAC and Air Wisconsin with financial advisory and management services pursuant to an agreement entered into in January 2012. AWAC paid a total of $60 and $180 to Resource Holdings for the three and nine months ended September 30, 2023 and September 30, 2022, respectively, plus the reimbursement of certain out-of-pocket expenses. In June 2021, the board of directors agreed to require Harbor to pay Resource Holdings an annual fee of $150, payable monthly, which amount is in addition to the amount paid to Resource Holdings by AWAC. Harbor paid an aggregate of $38 and $113 to Resource Holdings for the three and nine months ended September 30, 2023 and September 30, 2022, respectively. For additional information, refer to the section entitled “ Certain Relationships and Related Transactions, and Director Independence |
Earnings Per Share and Equity
Earnings Per Share and Equity | 9 Months Ended |
Sep. 30, 2023 | |
Earnings Per Share [Abstract] | |
Earnings Per Share and Equity | Earnings Per Share and Equity Calculations of net (loss) income per common share for the periods presented were as follows: Three Months Ended Nine Months Ended 2023 2022 2023 2022 Net (loss) income $ (3,688) $ 8,022 $ (11,975) $ 32,366 Preferred stock dividends 358 198 915 594 Net (loss) income applicable to common stockholders $ (4,046) $ 7,824 $ (12,890) $ 31,772 Weighted average common shares outstanding Shares used in calculating basic earnings per share 43,654 45,776 44,299 46,637 Stock option — — — 131 Series C Preferred — 16,500 — 16,500 Shares used in calculating diluted earnings per share 43,654 62,276 44,299 63,268 (Loss) earnings allocated to common stockholders per common share Basic $ (0.09) $ 0.17 $ (0.29) $ 0.68 Diluted $ (0.09) $ 0.13 $ (0.29) $ 0.50 Basic earnings per share of common stock is computed by dividing the net loss or income applicable to common stockholders by the weighted average number of shares of common stock outstanding during the period. Diluted earnings per share is computed by dividing loss or income by the weighted average number of shares outstanding assuming the conversion of the Series C Preferred into an aggregate of 16,500 shares of common stock under the if-converted method, and the exercise of a stock option granted in 2015 (2015 Option) into 198 shares of common stock under the treasury stock method for the nine months ended September 30, 2022. In March 2022, Harbor entered into an agreement with the holder to cancel the 2015 Option in exchange for $969. The shares underlying the 2015 Option are included in computing diluted earnings per share under the treasury stock method for the portion of the reporting period during which it was outstanding. Further, during loss periods, the conversion of shares under the Series C Preferred or the 2015 Option (for the period it was outstanding) would be anti-dilutive and thus is not assumed for purposes of computing diluted earnings per share. Series C Convertible Redeemable Preferred Stock In January 2020, Harbor issued 4,000 shares of the Series C Preferred. The rights, preferences, privileges, qualifications, restrictions and limitations relating to the Series C Preferred are set forth in the Certificate of Designations, Preferences and Rights of Series C Convertible Redeemable Preferred Stock (“Certificate of Designations”), which Harbor filed with the Secretary of State of the State of Delaware. The Series C Preferred accrues cumulative quarterly dividends at the rate per share of 6.0% of the Series C Issue Price per annum, which are cumulative and compound quarterly to the extent dividends have not been declared by the board of directors (“Preferential Dividends”). From and after December 31, 2023, upon the election of holders of a majority of the outstanding Series C Preferred, the rate of the Preferential Dividends shall be increased by an additional 1.0% per annum per share for each and every six-month period following such election (“Dividend Ratchet”). At the option of the board of directors, in lieu of paying the Preferential Dividends and the Conversion Cap Excess Dividends (as defined below) in cash, all or some of such dividends may be paid in additional shares of Series C Preferred (“PIK Dividends”). Each share of Series C Preferred was initially convertible at the election of the holders, at any time after issuance, into that number of shares of common stock determined by dividing the then applicable Series C Liquidation Amount (as defined below) by $0.80, subject to certain adjustments set forth in the Certificate of Designations (“Conversion Price”). The Conversion Price as of the date of this filing is $0.15091. The Conversion Price may be subject to further adjustment as described in the Certificate of Designations. The conversion of Series C Preferred is subject to a limitation on the number of shares of the common stock that may be issued upon conversion of Series C Preferred equal to the sum of (a) 16,500, plus (b) the quotient of (i) the aggregate amount of all accrued and unpaid Preferential Dividends divided by (ii) $0.80, plus (c) the quotient of (i) the number of shares of Series C Preferred issued as PIK Dividends multiplied by the Series C Issue Price, divided by (ii) $0.80. Any outstanding shares of Series C Preferred that may not be converted into common stock pursuant to the limitation described herein (“Conversion Cap Excess Shares”), from and after December 31, 2022, in addition to the Preferential Dividends, shall accrue cumulative quarterly dividends in an amount per share equal to 0.5% of the Series C Liquidation Amount of each outstanding Conversion Cap Excess Share in the first quarter after December 31, 2022, and increasing an additional 0.5% of the Series C Liquidation Amount in each subsequent quarter (“Conversion Cap Excess Dividends”). As of September 30, 2023, 755 shares of the Series C Preferred were immediately convertible into 16,500 shares of common stock (representing 27.5% of the fully diluted shares of capital stock of Harbor), and the remaining 3,245 shares of the Series C Preferred are deemed Conversion Cap Excess Shares. Harbor may redeem all, but not less than all, of the Conversion Cap Excess Shares at any time upon notice to the holders for a cash payment in an amount equal to the Series C Liquidation Amount per share. In the event of any liquidation, dissolution or winding up of Harbor or a sale of Harbor, the Series C Preferred shall be entitled to receive, prior and in preference to any distribution of any assets of Harbor to the common stock or other junior capital stock, an amount equal to the Series C Issue Price, plus an amount equal to all accrued but unpaid Preferential Dividends, Conversion Cap Excess Dividends and any other accrued but unpaid dividends (“Series C Liquidation Amount”). On March 31, 2023, June 30, 2023, and September 27, 2023, the board of directors declared a Preferential Dividend of $198 and a Conversion Cap Excess Dividend of $54, $107, and $160, respectively, on the Series C Preferred, which were paid on March 31, 2023, June 30, 2023, and September 29, 2023, respectively. On March 30, 2022, June 30, 2022, and September 30, 2022, the board of directors declared a dividend of $198 on the Series C Preferred, which was paid on March 31, 2022, June 30, 2022, and September 30, 2022, respectively. Based on the applicable accounting guidance, Harbor is required to apply the “if-converted” method to the Series C Preferred to determine the weighted average number of shares outstanding for purposes of calculating the net income (loss) per share of common stock. However, conversion is not assumed for purposes of computing diluted earnings per share if the effect would be anti-dilutive. Harbor accounts for its Series C Preferred in accordance with the guidance in ASC Topic 480, Distinguishing Liabilities from Equity |
Supplemental Cash Flow Informat
Supplemental Cash Flow Information | 9 Months Ended |
Sep. 30, 2023 | |
Supplemental Cash Flow Elements [Abstract] | |
Supplemental Cash Flow Information | Supplemental Cash Flow Information Cash payments for interest for the nine months ended September 30, 2023 and September 30, 2022 were $1,598 and $1,784, respectively. Cash payments for income taxes for the nine months ended September 30, 2023 and September 30, 2022 were $46 and $3,348, respectively. Cash payments included in the measurement of lease liabilities related to operating leases were $4,285 and $4,484 for the nine months ended September 30, 2023 and September 30, 2022, respectively. The following table provides a reconciliation of all cash and cash equivalents and restricted cash reported on the condensed consolidated balance sheets that sum to the total of those same amounts shown on the condensed consolidated statements of cash flows: September 30, 2023 December 31, 2022 Cash and cash equivalents $ 15,839 $ 33,333 Restricted cash 707 849 Total cash, cash equivalents, and restricted cash $ 16,546 $ 34,182 |
Intangible Assets
Intangible Assets | 9 Months Ended |
Sep. 30, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible Assets | Intangible Assets Intangible assets consist of the following indefinite-lived assets as of the dates presented: September 30, 2023 December 31, 2022 Gross Carrying Amount Gross Carrying Amount Trade names and air carrier certificate $ 5,300 $ 5,300 Total $ 5,300 $ 5,300 |
Stock Repurchase Program
Stock Repurchase Program | 9 Months Ended |
Sep. 30, 2023 | |
Stock Repurchase Program [Abstract] | |
Stock Repurchase Program | Stock Repurchase Program On March 30, 2021, the board of directors adopted a stock repurchase program pursuant to which Harbor was initially authorized to repurchase up to $1,000 of shares of its common stock during the first calendar month of the program, subject to an automatic increase of $1,000 per calendar month thereafter. Harbor is not obligated under the program to acquire any particular number or value of shares and can suspend or terminate the program at any time. In January 2023, a federal corporate stock repurchase excise tax of 1% took effect once share repurchases exceed $1,000. Harbor accrued an excise tax liability of $8 and $38 during the three and nine months ended September 30, 2023,respectively, which is included in the cost of Treasury stock on the condensed consolidated statements of stockholders’ equity. Harbor acquired a total of 374 and 1,764 shares of its common stock pursuant to the stock repurchase program in the three and nine months ended September 30, 2023, respectively, compared to 364 and 7,664 in the three and nine months ended September 30, 2022, respectively. As of September 30, 2023 and December 31, 2022, total cash of $329 and $475, respectively, was held for the repurchase of shares under Harbor’s stock repurchase program. This amount is included in restricted cash. For additional information, refer to Part II, Item 2, “ Purchases of Equity Securities by the Issuer and Affiliated Purchasers |
Subsequent Events
Subsequent Events | 9 Months Ended |
Sep. 30, 2023 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events The Company evaluated its condensed consolidated financial statements included in this Quarterly Report for subsequent events through November 14, 2023, the date the condensed consolidated financial statements were available to be issued and determined that there were none, other than those discussed below. On October 11, 2023, Air Wisconsin and its pilot group, as represented by the Air Line Pilots Association, executed a new collective bargaining agreement that includes pay rate increases and quality of life improvements for Air Wisconsin pilots. The new agreement expires October 10, 2026, with the agreement becoming amendable on October 10, 2025. On November 10, 2023, Air Wisconsin and American entered into Amendment No. 3, effective as of November 10, 2023, to the American capacity purchase agreement. Amendment No. 3, among other things, amended (i) the schedule of certain pass-through costs; (ii) the calculation and timing of certain compensation-related payments; (iii) the compensation rates and bonus and rebate reconciliation; and (iv) the period and payment of a fixed amount from American to Air Wisconsin for pilot compensation and retention. The foregoing description of Amendment No. 3 does not purport to be complete and is qualified in its entirety by reference to Amendment No. 3, a redacted copy of which will be filed as an exhibit to the Company’s Annual Report on Form 10-K for the fiscal year ending December 31, 2023. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2023 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying condensed consolidated financial statements (the "condensed consolidated financial statements") have been prepared, without audit, in conformity with accounting principles generally accepted in the United States of America (“GAAP”) and include the accounts of Harbor Diversified, Inc. (“Harbor”) and its subsidiaries (collectively, the “Company”). Harbor is a non-operating holding company that is the parent of a consolidated group of subsidiaries, including AWAC Aviation, Inc. (“AWAC”), which is the sole member of Air Wisconsin Airlines LLC (“Air Wisconsin”), which is a regional air carrier. Harbor is also the direct parent of three other subsidiaries: (1) Lotus Aviation Leasing, LLC (“Lotus”), which leases flight equipment to Air Wisconsin, (2) Air Wisconsin Funding LLC, which provides flight equipment financing to Air Wisconsin, and (3) Harbor Therapeutics, Inc., which is a non-operating entity with no material assets. The condensed consolidated financial statements have been prepared, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). Certain information and disclosures normally included in the financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations, although the Company believes that the following disclosures are adequate to make the information presented not misleading. The condensed consolidated financial statements reflect all adjustments that, in the opinion of management, are necessary to present fairly in all material respects the financial condition and results of operations for the interim periods presented. All adjustments are of a normal recurring nature, unless otherwise disclosed. All of the dollar and share amounts set forth in these condensed notes to condensed consolidated financial statements are presented in thousands except per share and par value amounts. These condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and the notes thereto included in Harbor’s Annual Report on Form 10-K for the year ended December 31, 2022, which was filed with the SEC on April 3, 2023 (“2022 Annual Report”). As a result of numerous factors, including those discussed throughout this Quarterly Report, the results of operations for the three and nine months ended September 30, 2023 are not necessarily indicative of the results that may be expected for any other reporting period. |
Description of Operations | Description of Operations The Company has principal lines of business focused on (1) providing regional air services through Air Wisconsin (airline business), (2) acquiring flight equipment for the purpose of leasing the equipment to Air Wisconsin, and (3) providing flight equipment financing to Air Wisconsin. Additionally, Air Wisconsin is continuing to explore aircraft leasing opportunities. The airline business is operated entirely through Air Wisconsin, which is an independent regional air carrier. For the three months ended September 30, 2023, Air Wisconsin was engaged in the business of providing scheduled passenger service for American Airlines, Inc. ("American") under a capacity purchase agreement ("American capacity purchase agreement") which was entered into in August 2022. Prior to early June 2023, Air Wisconsin was also engaged in the business of providing scheduled passenger service for United Airlines, Inc. (“United”) under a capacity purchase agreement (“United capacity purchase agreement”) which was entered into in February 2017 and which terminated in early June 2023. Air Wisconsin has provided scheduled passenger service for American since March 1, 2023. Pursuant to the American capacity purchase agreement, Air Wisconsin agreed to provide up to 60 CRJ-200 regional jet aircraft for regional airline services for American. The American capacity purchase agreement also provides that the parties may discuss the possibility of adding CRJ-700 regional jets to Air Wisconsin’s fleet for the purpose of providing regional airline services under the agreement, but neither party is currently under any obligation with respect to these aircraft. American became Air Wisconsin’s sole airline partner when all its aircraft were removed from United’s flying operations in early June 2023. As of September 30, 2023, Air Wisconsin had 45 aircraft in service for American under the American capacity purchase agreement. For additional information, refer to Note 3, Capacity Purchase Agreements with United and American |
Contract Revenues | Contract Revenues For the three and nine months ended September 30, 2023, approximately 0.1% and 50.1%, respectively, of the Company’s operating revenues were derived from operations associated with the United capacity purchase agreement and approximately 99.7% and 49.7%, respectively, of the Company’s operating revenues were derived from operations associated with the American capacity purchase agreement. In performing an analysis of the United capacity purchase agreement and the American capacity purchase agreement within the framework of Accounting Standards Update (“ASU”) No. 2016-02, Leases (“Topic 842”) and Financial Accounting Standards Board (“FASB”) ASU No. 606, Revenue from Contracts with Customers (“Topic 606”) , the Company determined that a portion of the payments it receives under the capacity purchase agreements that is designed to reimburse Air Wisconsin for use of a certain number of aircraft, which is referred to as “right of use,” is considered lease revenue. All other revenue received by Air Wisconsin under the capacity purchase agreements is considered non-lease revenue. After consideration of the lease and non-lease components, within the context of Topic 842, the Company determined the non-lease component to be the predominant component of each capacity purchase agreement and elected a practical expedient to not separate the lease and non-lease components. Therefore, all compensation received by Air Wisconsin pursuant to the United capacity purchase agreement and the American capacity purchase agreement has been accounted for under Topic 606. The Company has recognized revenue under each capacity purchase agreement over time as services are provided. Under each agreement, Air Wisconsin is entitled to receive a fixed rate for each departure and block hour (measured from takeoff to landing, including taxi time), and a fixed amount per covered aircraft per day (subject to Air Wisconsin’s ability to meet certain block hour utilization thresholds), in each case subject to annual increases during the term of the agreement. Air Wisconsin’s performance obligation is met and revenue is recognized over time, which is then reflected in contract revenues. Each agreement also provides for the reimbursement to Air Wisconsin of certain direct operating expenses, such as certain insurance premiums and property taxes. Prior to the termination of the United capacity purchase agreement in early June 2023, United made provisional cash payments to Air Wisconsin during each month of service based on projected flight schedules. These provisional cash payments were then subsequently reconciled with United based on actual completed flight activity. As of the date of this filing, these payments were reconciled through June 2023, the last month of United operations. As of September 30, 2023, Air Wisconsin believes, but United disputes, that United owes Air Wisconsin $30,149, of which $29,509 is recorded in receivables, net on the condensed consolidated balance sheets. For additional information, refer to Note 3, Capacity Purchase Agreements with United and American and Note 8, Commitments and Contingencies . American makes provisional cash payments to Air Wisconsin during each month of service based on projected flight schedules. These provisional cash payments are subsequently reconciled with American based on actual completed flight activity. As of the date of this filing, payments through September 2023 have been reconciled. As of September 30, 2023, American owed Air Wisconsin approximately $608, which is recorded in receivables, net, on the condensed consolidated balance sheets. Prior to the termination of the United capacity purchase agreement in early June 2023, Air Wisconsin was eligible to receive incentive payments, or was required to pay penalties, upon the achievement of, or failure to achieve, certain performance criteria primarily based on flight completion, on-time performance, and customer satisfaction ratings. The incentives were defined in the agreement, and performance was measured on a monthly basis. At the end of each month during the term of the agreement, Air Wisconsin calculated the incentives achieved, or penalties payable, during that period and recognized revenue accordingly, subject to the variable constraint guidance under Topic 606. Final reconciliations have been completed with United through June 2023. Air Wisconsin has received net payments of $(6) and $1,236 for the three and nine months ended September 30, 2023, respectively, as compared to $2,137 and $5,443 for the three and nine months ended September 30, 2022, respectively. As of September 30, 2023, Air Wisconsin had no amount recorded as part of receivables, net, on the condensed consolidated balance sheets related to net incentive amounts. As of December 31, 2022, Air Wisconsin recorded $2,307 as part of receivables, net, in the condensed consolidated balance sheets related to net incentive amounts. Commencing in September 2023, Air Wisconsin became eligible under the American capacity purchase agreement to receive bonus payments, and may be required to pay rebates, upon the achievement of, or failure to achieve, certain performance criteria primarily based on flight completion, on-time performance, and customer satisfaction ratings. The bonus and rebate amounts are defined in the agreement, and performance will be measured on a monthly or quarterly basis. At the end of each month or quarter, Air Wisconsin will calculate the bonus amounts achieved, or rebates payable, during that period and recognize revenue accordingly, subject to the variable constraint guidance under Topic 606. As of September 30, 2023, Air Wisconsin had not recorded any bonus or rebate amounts under the American capacity purchase agreement. Under the United capacity purchase agreement, Air Wisconsin was entitled to receive a fixed amount per aircraft per day for each month during the term of the agreement. In accordance with GAAP, the Company recognized revenue related to the fixed payments on a proportional basis taking into account the number of flights actually completed in that period relative to the number of flights expected to be completed in subsequent periods during the remaining term of the agreement. Air Wisconsin deferred fixed revenues between April 2020 and June 2021 due to the significant decrease in its completed flights as a result of the COVID-19 pandemic. Beginning in July 2021, due to an increase in completed flights and based on projected future completed flight activity, Air Wisconsin began reversing this deferral of fixed revenues, and it continued to do so until the termination of the agreement in early June 2023. Accordingly, during the three and nine months ended September 30, 2023, Air Wisconsin recognized $0 and $16,561 of fixed revenues that were previously deferred, respectively, compared to a recognition of $5,180 and $22,548 of fixed revenues in the three and nine months ended September 30, 2022, respectively. As of September 30, 2023 and December 31, 2022, deferred fixed revenues in the amount of $0 and $16,561, respectively, were recorded as part of deferred revenues on the condensed consolidated balance sheets. Under the United capacity purchase agreement, Air Wisconsin also recognized decreased non-refundable upfront fee revenues and increased fulfillment costs, both of which were amortized over the remaining term of the United capacity purchase agreement in proportion to the number of flights completed in the period relative to the number of flights expected to be completed in subsequent periods. During the three and nine months ended September 30, 2023, Air Wisconsin recorded $0 and $1,335 of revenue from upfront fees, respectively, and $0 and $143 of fulfillment costs, respectively, compared to $932 and $3,314 in revenue from upfront fees, respectively, and $100 and $355 of fulfillment costs for the three and nine months ended September 30, 2022, respectively. As of September 30, 2023 and December 31, 2022, deferred upfront fee revenue in the amount of $0 and $1,335, respectively, is recorded as part of contract liabilities on the condensed consolidated balance sheets. Under the American capacity purchase agreement, Air Wisconsin is entitled to receive a fixed amount per aircraft per day for each month during the term of the agreement based on a formula which takes into account pilot availability for any given month. Air Wisconsin will recognize this revenue related to the specific flight activity for the month in which the flights occur. Under the American capacity purchase agreement, Air Wisconsin is also entitled to be reimbursed for certain startup costs ("non-refundable upfront fee revenue"), such as livery changes to the aircraft, to prepare the aircraft for American flight services. Through September 30, 2023, Air Wisconsin had incurred $3,998 in reimbursable costs, and it estimates that it will incur an additional $602 in reimbursable costs over the term of the American capacity purchase agreement. In accordance with GAAP, the Company will recognize revenue related to the total estimated non-refundable upfront fee revenue of $4,600 on a proportional basis taking into account the number of flights actually completed in the period relative to the number of flights expected to be completed in subsequent periods during the remaining term of the agreement. Accordingly, during the three and nine months ended September 30, 2023, Air Wisconsin recognized $193 and $319 of non-refundable upfront fee revenues, respectively, compared to a recognition of $0 of non-refundable upfront fee revenues in the three and nine months ended September 30, 2022. As of September 30, 2023 and December 31, 2022, Air Wisconsin deferred $3,680, and $0, respectively, in non-refundable upfront fee revenues under the American capacity purchase agreement. Air Wisconsin’s deferred revenues related to the non-refundable upfront fee revenues under the American capacity purchase agreement will adjust over the remaining contract term, based on the actual expenses incurred that will be reimbursed and recognized based on the number of flights actually completed in the period relative to the number of flights expected to be completed in subsequent periods during the remaining term of the agreement. As of September 30, 2023 and December 31, 2022, deferred non-refundable upfront fee revenues in the amount of $641 and $0, respectively, were netted as part of short-term contract assets, and $3,039 and $0, respectively, were recorded as part of long-term contract liabilities on the condensed consolidated balance sheets. As noted above, Air Wisconsin incurred certain startup costs ("fulfillment costs") prior to the start of flying operations for American on March 1, 2023. These costs included changes to the livery, fuel costs, and certain training expenses. The total fulfillment costs incurred were $774. These costs will be amortized on a proportional basis taking into account the number of flights actually completed in the period relative to the number of flights expected to be completed in subsequent periods during the remaining term of the agreement. For the three and nine months ended September 30, 2023, Air Wisconsin recorded $33 and $54, respectively, and $0 for the three and nine months ended September 30, 2022 for amortization expense related to fulfillment costs. As of September 30, 2023 and December 31, 2022, fulfillment costs of $108 and $0, respectively, are recorded as part of short-term contract costs, and $613 and $0, respectively, are recorded as part of long-term contract costs on the condensed consolidated balance sheets. Under the American capacity purchase agreement, Air Wisconsin will also receive a monthly support fee and be reimbursed for heavy maintenance expenses based on the fixed covered per aircraft per day rate over the term of the agreement. In addition, amendments to the American capacity purchase agreement entered into by Air Wisconsin and American in February 2023 and November 2023 ("Amendment No. 1" and "Amendment No. 3", respectively) provided for a one-time payment to assist with increased costs related to pilot compensation and revised compensation rates assessed under the agreement from 2023 to 2028 to assist Air Wisconsin with pilot compensation and retention.. In accordance with GAAP, the Company recognizes revenue related to the monthly support fee, heavy maintenance revenue, and one-time pilot compensation assistance payment on a proportional basis taking into account the number of flights actually completed in the period relative to the number of flights expected to be completed in subsequent periods during the remaining term of the agreement. Accordingly, during the three and nine months ended September 30, 2023, Air Wisconsin recognized $1,946 and $3,206, respectively, of revenue related to the one-time assistance payment, the estimated monthly support fee and the heavy maintenance revenues, compared to $0 for the three and nine months ended September 30, 2022. As of September 30, 2023 and December 31, 2022, revenues related to the monthly support fee and anticipated heavy maintenance reimbursements in the amounts of $2,259 and $0, respectively, were recorded as part of short-term contract assets, and $247 and $0, respectively, were netted in long-term contract liabilities on the condensed consolidated balance sheets. Air Wisconsin’s contract liabilities related to the one-time assistance payment and estimated monthly support fee and heavy maintenance revenues under the American capacity purchase agreement will adjust over the remaining contract term, based on the actual reimbursement of the monthly support fee and heavy maintenance revenues and on the number of flights actually completed in each reporting period relative to the number of flights expected to be completed in subsequent periods during the remaining term of the agreement. For additional information regarding Amendment No. 3, refer to Note 14, Subsequent Events , and Part II, Item 5, Other Information , in this Quarterly Report. As part of an October 2020 amendment to the United capacity purchase agreement (“CPA Amendment”), United made a cash settlement payment of $670 and issued a note receivable to Air Wisconsin in the amount of $11,048, of which $4,410 was deferred as of December 31, 2020, with the remaining portion recognized in proportion to the number of flights completed in subsequent periods through the end of the wind-down period. In October 2021, in accordance with the CPA Amendment, Air Wisconsin received $294 from United for the opening of a crew base, of which $73 was deferred as of December 31, 2021, with the remaining portion recognized in proportion to the number of flights completed in subsequent periods through the end of the wind-down period. For the three and nine months ended September 30, 2023, Air Wisconsin recorded $0 and $649 of revenue related to these items, respectively, compared to $453 and $1,611 of revenue related to these items for the three and nine months ended September 30, 2022, respectively. As of September 30, 2023, there was no deferred CPA Amendment revenue recorded as part of contract liabilities on the condensed consolidated balance sheets. The timing of the recognition under the American capacity purchase agreement of non-refundable upfront fee revenue, fulfillment costs, monthly support fee revenues, heavy check maintenance revenues and one-time support fee revenues in future periods is subject to considerable uncertainty due to a number of factors, including the estimated revenue amounts to be received and the number of flights actually completed in the period relative to the number of flights expected to be completed in subsequent periods during the remaining term of the agreement. The amount of revenues recognized for the three and nine months ended September 30, 2023, that were related to the United capacity purchase agreement and previously recorded as contract liabilities was $0 and $1,985, respectively. During the three and nine months ended September 30, 2023, there were no revenues recognized that were previously recorded as contract liabilities related to the American capacity purchase agreement. The CPA Amendment provided, among other things, for the payment or accrual of certain amounts by United to Air Wisconsin based on certain scheduling benchmarks. In conjunction with the significant reduction in departures and block hours resulting from the COVID-19 pandemic in 2020, and consistent with the terms of the CPA Amendment, management determined that, from an accounting perspective, a new performance obligation was created by United, requiring Air Wisconsin to stand ready to deliver flight services. Air Wisconsin determined, using the expected cost plus a margin method, that the United “stand ready” rate represented the relative stand-alone selling price of the performance obligation. The stand ready performance obligation was recognized over time on a straight-line basis based on the number of unscheduled block hours below a minimum threshold at the stand ready rate as determined in a manner consistent with the CPA Amendment. For the three and nine months ended September 30, 2023, Air Wisconsin recorded $0 and $1,641, respectively, in revenue related to this performance obligation compared to $5,138 and $12,746 for the three and nine months ended September 30, 2022, respectively. Under the CPA Amendment, United was required to accrue this amount and, upon request by Air Wisconsin, deliver a note evidencing this amount each quarter. Therefore, this amount is recorded in notes receivable on the condensed consolidated balance sheets. The notes receivable contain a significant financing component and any interest income is separately reported on the condensed consolidated statements of operations. United has disputed that it owes these amounts in respect of certain quarters and has refused to deliver notes for those quarters. On November 4, 2022, United prepaid to Air Wisconsin $50,126 to satisfy all of the outstanding, undisputed notes receivable, including all accrued interest, pursuant to the CPA Amendment in respect of the period from the second quarter of 2020 through the third quarter of 2021 and the $11,048 note receivable described above. The unpaid disputed notes came due on February 28, 2023. As of September 30, 2023, the principal amount of the unpaid disputed notes totaled $21,093. Prior to February 28, 2023, the unpaid disputed notes bore interest at the rate of 4.5% per annum. After February 28, 2023, the notes bear interest at the default interest rate of 12% per annum. As of September 30, 2023, interest receivable on the disputed notes, calculated at the pre-default contractual rate without any default interest, totaled $1,034 and is recorded in receivables, net, on the condensed consolidated balance sheets. For additional information, refer to Note 8, Commitments and Contingencies |
Other Revenues | Other Revenues Other revenues primarily consist of the sales of parts to other airlines and aircraft lease payments. These other revenues are immaterial in all periods presented. The transaction price for these other revenues generally is fair market value. |
Cash and Cash Equivalents | Cash and Cash Equivalents Money market funds and investments and deposits with an original maturity of three months or less when acquired are considered cash and cash equivalents. |
Restricted Cash | Restricted Cash As of September 30, 2023 and December 31, 2022, the Company had a restricted cash balance of $707 and $849, respectively. A portion of the balance secures a credit facility for the issuance of letters of credit guaranteeing the performance of Air Wisconsin’s obligations under certain lease agreements, airport agreements and insurance policies. The remaining portion is cash held for the repurchase of shares under Harbor’s stock repurchase program. For additional information, refer to Note 8, Commitments and Contingencies and Note 13, Stock Repurchase Program |
Marketable Securities | Marketable Securities The Company’s equity security investments, consisting of exchange-traded funds and mutual funds, are recorded at fair value based on quoted market prices (Level 1) in marketable securities on the condensed consolidated balance sheets, in accordance with the guidance in ASC Topic 321 , Investments-Equity Securities , |
Property and Equipment | Property and Equipment Property and equipment are stated at cost and depreciated over their useful lives to their estimated residual values using the straight-line method as follows: Assets Depreciable Life Current Residual Value Aircraft 7 years $ 50 Spare engines 7 years $ 25 Rotable parts 7 years 10 % Ground equipment up to 10 years 0 % Office equipment up to 10 years 0 % Leasehold improvements Shorter of asset or lease life 0 % The table below sets forth the original cost of the Company’s fixed assets and accumulated depreciation or amortization as of the dates presented: September 30, 2023 December 31, 2022 Assets Original Accumulated Original Cost Accumulated Aircraft $ 70,779 $ 47,655 $ 70,089 $ 40,544 Spare engines 164,706 117,372 163,708 103,834 Rotable parts 27,412 18,406 27,936 18,655 Ground equipment 2,850 2,217 2,718 2,063 Office equipment 4,692 4,331 4,519 4,218 Leasehold improvements 1,052 625 818 452 Total $ 271,491 $ 190,606 $ 269,788 $ 169,766 The amounts in the table exclude construction in process of $2,741 and $2,237 at September 30, 2023 and December 31, 2022, respectively. Construction in process primarily relates to the cost of parts that are not capitalized until the parts are placed into service. Air Wisconsin’s capitalized engine maintenance costs are amortized over their estimated useful life measured in remaining engine cycles to the next scheduled shop visit. Lotus’ engine maintenance costs are expensed. |
Impairment of Long-Lived Assets and Indefinite-Lived Intangible Assets | Impairment of Long-Lived Assets and Indefinite-Lived Intangible Assets The Company evaluates long-lived assets and indefinite-lived intangible assets for potential impairment and records impairment losses when events and circumstances indicate the assets might be impaired and the undiscounted cash flows estimated to be generated by those assets are less than their carrying amounts. Impairment losses are measured by comparing the fair value of the assets to their carrying amounts. In determining the need to record impairment charges, the Company is required to make certain estimates and assumptions regarding such things as the current fair market value of the assets and future net cash flows to be generated by the assets. |
Income Taxes | Income Taxes The Company utilizes the asset and liability method for accounting for income taxes. Under this method, deferred tax assets and liabilities are determined based upon the estimated future tax effects of differences between the financial statement and tax basis of assets and liabilities, as measured by the current applicable tax rates. Deferred tax expense represents the result of changes in deferred tax assets and liabilities. As required by the uncertain tax position guidance, the Company recognizes the financial statement benefit of a tax position only after determining that the relevant tax authority would more-likely-than-not sustain the position following an audit. For tax positions meeting the more-likely-than-not threshold, the amount recognized in the condensed consolidated financial statements is the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement with the relevant tax authority. The Company has applied the uncertain tax position guidance to all tax positions for which the statute of limitations remains open. The Company is subject to federal, state and local income taxes in the United States. Tax regulations within each jurisdiction are subject to the interpretation of the related tax laws and regulations and require the application of significant |
Concentration of Credit Risk and Customer Risk | Concentration of Credit Risk and Customer Risk Financial instruments that potentially expose the Company to a concentration of credit risk consist principally of cash and cash equivalents that are held by financial institutions in the United States and accounts receivable. The Company at times has had bank deposits in excess of the Federal Deposit Insurance Corporation insurance limit. The Company maintains its cash accounts with high credit quality financial institutions and, accordingly, the Company believes it has minimal credit risk with respect to these financial institutions. As of September 30, 2023, in addition to cash and cash equivalents of $15,839, the Company had $707 in restricted cash, which relates to a credit facility used for the issuance of cash collateralized letters of credit supporting Air Wisconsin’s obligations under certain lease agreements, airport agreements and insurance policies, as well as cash held for the repurchase of shares under Harbor’s stock repurchase program. Restricted cash includes amounts escrowed in an interest-bearing account that secures the credit facility. Since a significant portion of Air Wisconsin’s revenues has been derived from United and American, a significant portion of the receivables, net balance has been derived from United and American as well. For the three and nine months ended September 30, 2023, United and American made up $30,543 and $608 of the receivables, net balance of $40,391, respectively. As of December 31, 2022, United made up $29,770 of the receivables, net balance of $40,341. Significant customers are those which represent more than 10% of the Company’s total revenue or receivables, net balance at each respective balance sheet date. Approximately 0.1% and 50.1% of the Company’s consolidated revenues for the three and nine months ended September 30, 2023, respectively, and 99.9% for both the three and nine months ended September 30, 2022, and a substantial portion of receivables, net and notes receivable at the end of the three and nine months ended September 30, 2022 were derived from the United capacity purchase agreement. Air Wisconsin entered into the American capacity purchase agreement in August 2022 and commenced flying operations for American in March 2023. Approximately 99.7% and 49.7% of the Company’s consolidated revenues for the three and nine months ended September 30, 2023, respectively were from the American capacity purchase agreement. American became Air Wisconsin’s sole airline partner when all of Air Wisconsin’s aircraft were removed from United’s flying operations in early June 2023. After this time, substantially all of the Company’s revenues and receivables, net will be derived from the American capacity purchase agreement. Neither United’s nor American’s obligations to pay Air Wisconsin the amounts required to be paid under the applicable capacity purchase agreement are collateralized. For additional information, refer to Note 3, Capacity Purchase Agreements with United and American |
Estimates and Assumptions | Estimates and Assumptions The preparation of the condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ materially from those estimates. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments The Company’s financial instruments include cash and cash equivalents, restricted cash, marketable securities, receivables, net, long-term investments, accounts payable, and long-term debt. The Company believes the carrying amounts of these financial instruments, with the exception of marketable securities, are a reasonable estimate of their fair value because of the short-term nature of such instruments, or, in the case of long-term debt, because of fixed interest rates on such debt. Marketable securities are reported at fair value based on quoted market prices. Long-term investments are held-to-maturity debt securities and are reported at amortized cost. Fair value is defined as the price that would be received to sell an asset, or paid to transfer a liability, in an orderly transaction between market participants at the measurement date (that is, an exit price). Fair Value Measurement (“Topic 820”) establishes a three-tier fair value hierarchy, which prioritizes inputs used in fair value. The tiers are as follows: Level 1 - Quoted market prices in active markets for identical assets or liabilities. Level 2 - Inputs other than Level 1 inputs that are either directly or indirectly observable. Level 3 - Unobservable inputs developed using the Company’s estimates and assumptions, which reflect those that market participants would use. |
Recently Adopted Accounting Pronouncement | Recently Adopted Accounting Pronouncement On January 1, 2023 the Company adopted ASU No. 2016-13, Financial Instruments-Credit Losses (“Topic 326”): Measurement of Credit Losses on Financial Instruments |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Accounting Policies [Abstract] | |
Summary of Receivables, Net | The table below sets forth the major categories that make up the balances: September 30, 2023 December 31, 2022 Trade receivables 31,151 30,019 Insurance and warranty claim receivables 3,385 2,710 Federal and state tax receivables 3,022 3,901 Other industry related receivables 2,843 3,729 Allowance for expected credit losses (10) (18) Receivables, net 40,391 40,341 |
Summary of Net Unrealized Gains and Losses That Relate To Marketable Securities | The calculation of net unrealized gains and losses that relate to marketable securities held as of September 30, 2023 is as follows: Three Months Ended Nine Months Ended Unrealized (losses) gains recognized during the period on equity securities held as of the end of the period $ (925) $ 102 Plus: Net losses recognized during the period on equity securities sold during the period (30) (112) Net losses recognized during the period on equity securities $ (955) $ (10) The calculation of net unrealized gains and losses that relate to marketable securities held as of September 30, 2022 is as follows: Three Months Ended Nine Months Ended Unrealized losses recognized during the period on equity securities held as of the end of the period $ (3,749) $ (9,774) Plus: Net gains (losses) recognized during the period on equity securities sold during the period — — Net losses recognized during the period on equity securities $ (3,749) $ (9,774) |
Schedule of Property and Equipment Useful Lives | Property and equipment are stated at cost and depreciated over their useful lives to their estimated residual values using the straight-line method as follows: Assets Depreciable Life Current Residual Value Aircraft 7 years $ 50 Spare engines 7 years $ 25 Rotable parts 7 years 10 % Ground equipment up to 10 years 0 % Office equipment up to 10 years 0 % Leasehold improvements Shorter of asset or lease life 0 % |
Summary of Original Cost of Company's Fixed Assets and Accumulated Depreciation or Amortization | The table below sets forth the original cost of the Company’s fixed assets and accumulated depreciation or amortization as of the dates presented: September 30, 2023 December 31, 2022 Assets Original Accumulated Original Cost Accumulated Aircraft $ 70,779 $ 47,655 $ 70,089 $ 40,544 Spare engines 164,706 117,372 163,708 103,834 Rotable parts 27,412 18,406 27,936 18,655 Ground equipment 2,850 2,217 2,718 2,063 Office equipment 4,692 4,331 4,519 4,218 Leasehold improvements 1,052 625 818 452 Total $ 271,491 $ 190,606 $ 269,788 $ 169,766 |
Summary of Classification of Marketable Securities And Long Term Investments | The tables below set forth the Company’s classification of marketable securities and long-term investments as of the dates presented: September 30, 2023 Total Level 1 Level 2 Level 3 Marketable securities – exchange-traded funds $ 110,992 $ 110,992 $ — $ — Marketable securities – mutual funds 25,570 25,570 — — Long-term investments – bonds (see Note 6) 4,275 — 4,275 — Total $ 140,837 $ 136,562 $ 4,275 $ — December 31, 2022 Total Level 1 Level 2 Level 3 Marketable securities – exchange-traded funds $ 109,178 $ 109,178 $ — $ — Marketable securities – mutual funds 44,649 44,649 — — Long-term investments – bonds (see Note 6) 4,275 — 4,275 — Total $ 158,102 $ 153,827 $ 4,275 $ — |
Debt (Tables)
Debt (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Debt Disclosure [Abstract] | |
Long-Term Debt | Debt consists of the following (with interest rates, as of the dates presented): September 30, December 31, Aircraft Notes, due December 31, 2025 (4.0%) $ 52,554 $ 61,222 Less: current maturities 52,554 9,154 Long-term debt $ — $ 52,068 |
Maturities of Long-Term Debt | Maturities of debt for the periods subsequent to September 30, 2023, are as follows: Fiscal Year Amount October 2023 through December 2023 $ 486 2024 52,068 2025 — Total $ 52,554 |
Lease Obligations (Tables)
Lease Obligations (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Leases [Abstract] | |
Summary of Operating Lease Related Terms and Discount Rates | The table below presents operating lease related terms and discount rates as of: September 30, Weighted-average remaining lease term 2.62 years Weighted-average discount rate 6.15 % |
Schedule of Components of Lease Costs | Components of lease costs were as follows for the periods presented: Three Months Ended Nine Months Ended 2023 2022 2023 2022 Operating lease costs $ 1,467 $ 1,477 $ 4,425 $ 4,423 Short-term lease costs 81 77 207 306 Variable lease costs (89) 63 (105) 158 Total Lease Costs $ 1,459 $ 1,617 $ 4,527 $ 4,887 |
Schedule of Future Minimum Lease Payments Under Non-Cancelable Operating Leases | The following table summarizes the future minimum rental payments required under operating leases that had initial or remaining non-cancelable lease terms greater than 12 months as of September 30, 2023: Fiscal Year Amount October 2023 through December 2023 $ 1,369 2024 3,328 2025 2,596 2026 202 2027 75 Thereafter 358 Total lease payments 7,928 Less imputed interest 620 Total Lease Liabilities $ 7,308 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
Cash Obligations | The following table sets forth the Company’s cash obligations for the periods presented: Payment Due for Year Ending Total 2023 (October 2024 2025 2026 2027 Thereafter Aircraft Notes Principal $ 48,600 $ — $ 48,600 $ — $ — $ — $ — Aircraft Notes Interest 3,954 486 3,468 — — — — Operating Lease Obligations 7,928 1,369 3,328 2,596 202 75 358 Total $ 60,482 $ 1,855 $ 55,396 $ 2,596 $ 202 $ 75 $ 358 |
Earnings Per Share and Equity (
Earnings Per Share and Equity (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Earnings Per Share [Abstract] | |
Schedule of Calculations of Net (Loss) Income Per Common Share | Calculations of net (loss) income per common share for the periods presented were as follows: Three Months Ended Nine Months Ended 2023 2022 2023 2022 Net (loss) income $ (3,688) $ 8,022 $ (11,975) $ 32,366 Preferred stock dividends 358 198 915 594 Net (loss) income applicable to common stockholders $ (4,046) $ 7,824 $ (12,890) $ 31,772 Weighted average common shares outstanding Shares used in calculating basic earnings per share 43,654 45,776 44,299 46,637 Stock option — — — 131 Series C Preferred — 16,500 — 16,500 Shares used in calculating diluted earnings per share 43,654 62,276 44,299 63,268 (Loss) earnings allocated to common stockholders per common share Basic $ (0.09) $ 0.17 $ (0.29) $ 0.68 Diluted $ (0.09) $ 0.13 $ (0.29) $ 0.50 |
Supplemental Cash Flow Inform_2
Supplemental Cash Flow Information (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Supplemental Cash Flow Elements [Abstract] | |
Summary of Cash and Cash Equivalents | The following table provides a reconciliation of all cash and cash equivalents and restricted cash reported on the condensed consolidated balance sheets that sum to the total of those same amounts shown on the condensed consolidated statements of cash flows: September 30, 2023 December 31, 2022 Cash and cash equivalents $ 15,839 $ 33,333 Restricted cash 707 849 Total cash, cash equivalents, and restricted cash $ 16,546 $ 34,182 |
Intangible Assets (Tables)
Intangible Assets (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Intangible Assets | Intangible assets consist of the following indefinite-lived assets as of the dates presented: September 30, 2023 December 31, 2022 Gross Carrying Amount Gross Carrying Amount Trade names and air carrier certificate $ 5,300 $ 5,300 Total $ 5,300 $ 5,300 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Additional Information (Detail) $ in Thousands | 1 Months Ended | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||||||
Mar. 01, 2023 USD ($) | Oct. 31, 2020 USD ($) | Sep. 30, 2023 USD ($) | Sep. 30, 2022 USD ($) | Sep. 30, 2023 USD ($) aircraft | Sep. 30, 2022 USD ($) | Dec. 31, 2022 USD ($) | Feb. 28, 2023 | Feb. 27, 2023 | Nov. 04, 2022 USD ($) | Oct. 31, 2021 USD ($) | Dec. 31, 2020 USD ($) | |
Summary of Significant Accounting Policies [Line Items] | ||||||||||||
Concentration risk | 10% | |||||||||||
Revenue from contract with customers amount of consideration receivable due for settlement | $ 30,149 | $ 30,149 | ||||||||||
Receivables, net | 40,391 | 40,391 | $ 40,341 | |||||||||
Payments for proceeds from incentives and penalties | (6) | $ 2,137 | 1,236 | $ 5,443 | ||||||||
Contract liabilities | 0 | 0 | 1,985 | |||||||||
Deferred fixed revenue | 0 | 0 | 16,561 | |||||||||
Fulfillment costs | $ 774 | |||||||||||
Reimbursable costs | 6,537 | 3,310 | 18,511 | 10,589 | ||||||||
Amortization expense related to fulfillment costs | 33 | 0 | 54 | 0 | ||||||||
Short-term contract assets | 1,618 | 1,618 | 0 | |||||||||
Cash settlement payment | $ 670 | |||||||||||
Note receivable | $ 11,048 | 11,048 | 11,048 | |||||||||
Cash received for opening of a crew base | $ 294 | |||||||||||
Revenue related to performance obligation | 0 | 5,138 | 1,641 | 12,746 | ||||||||
Undisputed notes receivables | $ 50,126 | |||||||||||
Interest rate | 12% | 4.50% | ||||||||||
Interest receivable | 1,034 | 1,034 | ||||||||||
Restricted cash | 707 | 707 | 849 | |||||||||
Marketable securities | 136,562 | 136,562 | 153,827 | |||||||||
Construction in process | 2,741 | 2,741 | 2,237 | |||||||||
Depreciation expense | 6,365 | 6,224 | 18,928 | 18,656 | ||||||||
Cash and cash equivalents | 15,839 | 15,839 | 33,333 | |||||||||
Operating expenses | 55,128 | 55,910 | 180,159 | 164,994 | ||||||||
Allowance for expected credit losses | 10 | 10 | 18 | |||||||||
Air Wisconsin | ||||||||||||
Summary of Significant Accounting Policies [Line Items] | ||||||||||||
Deferred upfront fee revenue | 0 | |||||||||||
Customer Concentration Risk | ||||||||||||
Summary of Significant Accounting Policies [Line Items] | ||||||||||||
Receivables, net | 40,391 | 40,391 | ||||||||||
United Airlines | ||||||||||||
Summary of Significant Accounting Policies [Line Items] | ||||||||||||
Receivables, net | 30,543 | 30,543 | 29,770 | |||||||||
American Airlines | ||||||||||||
Summary of Significant Accounting Policies [Line Items] | ||||||||||||
Receivables, net | 608 | 608 | ||||||||||
October 2020 Amendment | ||||||||||||
Summary of Significant Accounting Policies [Line Items] | ||||||||||||
Fixed revenues previously deferred | 0 | 453 | 649 | 1,611 | ||||||||
Deferred upfront fee revenue | 0 | 0 | 1,335 | |||||||||
Deferred payment | $ 4,410 | |||||||||||
Deferred revenue | $ 73 | |||||||||||
Related Party | ||||||||||||
Summary of Significant Accounting Policies [Line Items] | ||||||||||||
Notes receivable | 21,093 | 21,093 | ||||||||||
Related Party | Air Wisconsin | ||||||||||||
Summary of Significant Accounting Policies [Line Items] | ||||||||||||
Receivables, net | 29,509 | 29,509 | ||||||||||
Contract liabilities | 0 | 0 | 2,307 | |||||||||
Fixed revenues previously deferred | 0 | 5,180 | 16,561 | 22,548 | ||||||||
Upfront fee | 0 | 932 | 1,335 | 3,314 | ||||||||
Fulfillment costs | 0 | 100 | 143 | 355 | ||||||||
Deferred upfront fee revenue | 3,680 | 3,680 | ||||||||||
Reimbursable costs | 602 | |||||||||||
Estimated non-refundable upfront fee revenue | 4,600 | |||||||||||
Non-refundable upfront fee revenues | 193 | 0 | 319 | 0 | ||||||||
Revenue related to one-time assistance payment, estimated monthly support fee and heavy maintenance revenues | $ 1,946 | $ 0 | $ 3,206 | $ 0 | ||||||||
Revenue Benchmark | ||||||||||||
Summary of Significant Accounting Policies [Line Items] | ||||||||||||
Concentration risk | 0.10% | 99.90% | 50.10% | 99.90% | ||||||||
Revision of prior period, reclassification, adjustment | ||||||||||||
Summary of Significant Accounting Policies [Line Items] | ||||||||||||
Operating expenses | $ 892 | $ 1,796 | ||||||||||
American Capacity Purchase Agreement | ||||||||||||
Summary of Significant Accounting Policies [Line Items] | ||||||||||||
Contract with customers liability revenue recognized | $ 0 | $ 0 | ||||||||||
American Capacity Purchase Agreement | Monthly Support Fee And Anticipated Heavy Maintenance Reimbursements | ||||||||||||
Summary of Significant Accounting Policies [Line Items] | ||||||||||||
Short-term contract assets | 2,259 | 2,259 | 0 | |||||||||
Accounts receivable set off against contract with customers liability non current | 247 | 247 | 0 | |||||||||
American Capacity Purchase Agreement | Related Party | Air Wisconsin | ||||||||||||
Summary of Significant Accounting Policies [Line Items] | ||||||||||||
Receivables, net | $ 608 | 608 | ||||||||||
Reimbursable costs | $ 3,998 | |||||||||||
American Capacity Purchase Agreement | Revenue Benchmark | ||||||||||||
Summary of Significant Accounting Policies [Line Items] | ||||||||||||
Concentration risk | 99.70% | 49.70% | ||||||||||
American Capacity Purchase Agreement | Revenue Benchmark | Customer Concentration Risk | ||||||||||||
Summary of Significant Accounting Policies [Line Items] | ||||||||||||
Concentration risk percentage | 99.70% | 49.70% | ||||||||||
American Capacity Purchase Agreement | American Airlines | Related Party | Air Wisconsin | ||||||||||||
Summary of Significant Accounting Policies [Line Items] | ||||||||||||
Number of aircrafts operated | aircraft | 45 | |||||||||||
United Capacity Purchase Agreement | ||||||||||||
Summary of Significant Accounting Policies [Line Items] | ||||||||||||
Contract with customers liability revenue recognized | $ 0 | $ 1,985 | ||||||||||
United Capacity Purchase Agreement | Revenue Benchmark | ||||||||||||
Summary of Significant Accounting Policies [Line Items] | ||||||||||||
Concentration risk | 0.10% | 50.10% | ||||||||||
Short-Term Contract with Customer | ||||||||||||
Summary of Significant Accounting Policies [Line Items] | ||||||||||||
Fulfillment costs | $ 108 | 0 | ||||||||||
Deferred upfront fee revenue | $ 641 | 641 | 0 | |||||||||
Long-Term Contract with Customer | ||||||||||||
Summary of Significant Accounting Policies [Line Items] | ||||||||||||
Fulfillment costs | 613 | 0 | ||||||||||
Deferred non-refundable upfront fee revenue | $ 3,039 | $ 3,039 | $ 0 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Summary of Receivables, Net (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Accounting Policies [Abstract] | ||
Trade receivables | $ 31,151 | $ 30,019 |
Insurance and warranty claim receivables | 3,385 | 2,710 |
Federal and state tax receivables | 3,022 | 3,901 |
Other industry related receivables | 2,843 | 3,729 |
Allowance for expected credit losses | (10) | (18) |
Receivables, net | $ 40,391 | $ 40,341 |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies- Summary of Net Unrealized Gains and Losses That Relate To Marketable Securities (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Accounting Policies [Abstract] | ||||
Unrealized (losses) gains recognized during the period on equity securities held as of the end of the period | $ (925) | $ (3,749) | $ 102 | $ (9,774) |
Plus: Net gains (losses) recognized during the period on equity securities sold during the period | (30) | 0 | (112) | 0 |
Net losses recognized during the period on equity securities | $ (955) | $ (3,749) | $ (10) | $ (9,774) |
Summary of Significant Accoun_7
Summary of Significant Accounting Policies - Schedule of Property and Equipment Useful Lives (Detail) $ in Thousands | 9 Months Ended |
Sep. 30, 2023 USD ($) | |
Aircraft | |
Property, Plant and Equipment [Line Items] | |
Depreciable Life (in years) | 7 years |
Current Residual Value | $ 50 |
Spare engines | |
Property, Plant and Equipment [Line Items] | |
Depreciable Life (in years) | 7 years |
Current Residual Value | $ 25 |
Rotable parts | |
Property, Plant and Equipment [Line Items] | |
Depreciable Life (in years) | 7 years |
Current Residual Value | 10% |
Ground equipment | |
Property, Plant and Equipment [Line Items] | |
Depreciable Life (in years) | 10 years |
Current Residual Value | 0% |
Office equipment | |
Property, Plant and Equipment [Line Items] | |
Depreciable Life (in years) | 10 years |
Current Residual Value | 0% |
Leasehold improvements | |
Property, Plant and Equipment [Line Items] | |
Current Residual Value | 0% |
Summary of Significant Accoun_8
Summary of Significant Accounting Policies - Summary of Original Cost of Company's Fixed Assets and Accumulated Depreciation or Amortization (Detail) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Property, Plant and Equipment [Line Items] | ||
Original Cost | $ 271,491 | $ 269,788 |
Accumulated Depreciation/ Amortization | 190,606 | 169,766 |
Aircraft | ||
Property, Plant and Equipment [Line Items] | ||
Original Cost | 70,779 | 70,089 |
Accumulated Depreciation/ Amortization | 47,655 | 40,544 |
Spare engines | ||
Property, Plant and Equipment [Line Items] | ||
Original Cost | 164,706 | 163,708 |
Accumulated Depreciation/ Amortization | 117,372 | 103,834 |
Rotable parts | ||
Property, Plant and Equipment [Line Items] | ||
Original Cost | 27,412 | 27,936 |
Accumulated Depreciation/ Amortization | 18,406 | 18,655 |
Ground equipment | ||
Property, Plant and Equipment [Line Items] | ||
Original Cost | 2,850 | 2,718 |
Accumulated Depreciation/ Amortization | 2,217 | 2,063 |
Office equipment | ||
Property, Plant and Equipment [Line Items] | ||
Original Cost | 4,692 | 4,519 |
Accumulated Depreciation/ Amortization | 4,331 | 4,218 |
Leasehold improvements | ||
Property, Plant and Equipment [Line Items] | ||
Original Cost | 1,052 | 818 |
Accumulated Depreciation/ Amortization | $ 625 | $ 452 |
Summary of Significant Accoun_9
Summary of Significant Accounting Policies- Summary of Classification of Marketable Securities And Long Term Investments (Detail) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total | $ 140,837 | $ 158,102 |
Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total | 136,562 | 153,827 |
Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total | 4,275 | 4,275 |
Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total | 0 | 0 |
Marketable securities – exchange-traded funds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total | 110,992 | 109,178 |
Marketable securities – exchange-traded funds | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total | 110,992 | 109,178 |
Marketable securities – exchange-traded funds | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total | 0 | 0 |
Marketable securities – exchange-traded funds | Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total | 0 | 0 |
Marketable securities – mutual funds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total | 25,570 | 44,649 |
Marketable securities – mutual funds | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total | 25,570 | 44,649 |
Marketable securities – mutual funds | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total | 0 | 0 |
Marketable securities – mutual funds | Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total | 0 | 0 |
Long-term investments – bonds (see Note 6) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total | 4,275 | 4,275 |
Long-term investments – bonds (see Note 6) | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total | 0 | 0 |
Long-term investments – bonds (see Note 6) | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total | 4,275 | 4,275 |
Long-term investments – bonds (see Note 6) | Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total | $ 0 | $ 0 |
Liquidity (Detail)
Liquidity (Detail) | 9 Months Ended |
Sep. 30, 2023 aircraft | |
Related Party | American Airlines | American Capacity Purchase Agreement | Air Wisconsin | |
Liquidity Uncertainty And Going Concern [Line Items] | |
Number of aircrafts operated | 45 |
Capacity Purchase Agreements _2
Capacity Purchase Agreements with United and American (Detail) | 1 Months Ended | |
Jul. 31, 2023 arbitrator | Aug. 31, 2022 aircraft | |
Pending Litigation | Air Wisconsin v. United | ||
Types Of Commercial Aircraft [Line Items] | ||
Number of arbitrators | arbitrator | 3 | |
CRJ-200 | Maximum | American Airlines | ||
Types Of Commercial Aircraft [Line Items] | ||
Number of aircrafts operated | aircraft | 60 |
Property and Equipment (Detail)
Property and Equipment (Detail) | 9 Months Ended |
Sep. 30, 2023 aircraft | |
CRJ-200 | |
Property, Plant and Equipment [Line Items] | |
Number of aircraft acquired | 64 |
Income Taxes (Detail)
Income Taxes (Detail) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Income Tax Disclosure [Abstract] | ||||
Effective tax rate | 17.80% | 23.80% | 22.90% | 23.80% |
Federal statutory rate | 21% | 21% | 21% | 21% |
Debt - Long-Term Debt (Detail)
Debt - Long-Term Debt (Detail) - USD ($) $ in Thousands | Sep. 30, 2023 | Feb. 28, 2023 | Feb. 27, 2023 | Dec. 31, 2022 |
Debt Instrument [Line Items] | ||||
Interest rate | 12% | 4.50% | ||
Total | $ 52,554 | |||
Less: current maturities | 52,554 | $ 9,154 | ||
Long-term debt | $ 0 | 52,068 | ||
Aircraft Notes Due December 31, 2025 | ||||
Debt Instrument [Line Items] | ||||
Interest rate | 4% | |||
Total | $ 52,554 | $ 61,222 |
Debt - Additional information (
Debt - Additional information (Detail) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | 9 Months Ended | |||||
Jun. 30, 2023 | Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Aug. 04, 2023 | Dec. 31, 2022 | Jul. 31, 2003 | |
Extinguishment of Debt [Line Items] | ||||||||
Total outstanding balance | $ 52,554 | $ 52,554 | ||||||
Gain on extinguishment of debt | 0 | $ 53 | 70 | $ 53 | ||||
Operating lease right-of-use asset | 9,708 | 9,708 | $ 13,480 | |||||
Hangar | ||||||||
Extinguishment of Debt [Line Items] | ||||||||
Operating lease right-of-use asset | 2,373 | 2,373 | 2,547 | |||||
Aircraft Notes Principal | ||||||||
Extinguishment of Debt [Line Items] | ||||||||
Total outstanding balance | 48,600 | 48,600 | $ 48,600 | |||||
Aircraft Notes Due December 31, 2025 | ||||||||
Extinguishment of Debt [Line Items] | ||||||||
Total outstanding balance | $ 52,554 | $ 52,554 | $ 61,222 | |||||
Extinguishment of debt principal amount | $ 3,500 | |||||||
Gain on extinguishment of debt | $ 70 | |||||||
City of Milwaukee, Wisconsin variable rate Industrial Development Bonds | ||||||||
Extinguishment of Debt [Line Items] | ||||||||
Aggregate principal amount | $ 4,275 |
Debt - Maturities of Long-Term
Debt - Maturities of Long-Term Debt (Detail) $ in Thousands | Sep. 30, 2023 USD ($) |
Debt Disclosure [Abstract] | |
October 2023 through December 2023 | $ 486 |
2024 | 52,068 |
2025 | 0 |
Total | $ 52,554 |
Lease Obligations - Additional
Lease Obligations - Additional Information (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Dec. 31, 2022 | |
Lessee, Lease, Description [Line Items] | |||||
Operating lease right-of-use asset | $ 9,708 | $ 9,708 | $ 13,480 | ||
Current portion of operating lease liability | 3,649 | 3,649 | 5,091 | ||
Long-term operating lease liability | 3,659 | 3,659 | $ 5,849 | ||
Cash payments included in the measurement of lease liabilities related to operating leases | 4,285 | $ 4,484 | |||
Operating lease rent expense | $ 1,459 | $ 1,617 | $ 4,527 | $ 4,887 | |
Minimum | |||||
Lessee, Lease, Description [Line Items] | |||||
Remaining lease terms | 3 months | 3 months | |||
Maximum | |||||
Lessee, Lease, Description [Line Items] | |||||
Remaining lease terms | 10 years 3 months 18 days | 10 years 3 months 18 days |
Lease Obligations - Summary of
Lease Obligations - Summary of Operating Lease Related Terms and Discount Rates (Detail) | Sep. 30, 2023 |
Leases [Abstract] | |
Weighted-average remaining lease term | 2 years 7 months 13 days |
Weighted-average discount rate | 6.15% |
Lease Obligations - Schedule of
Lease Obligations - Schedule of Components of Lease Costs (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Leases [Abstract] | ||||
Operating lease costs | $ 1,467 | $ 1,477 | $ 4,425 | $ 4,423 |
Short-term lease costs | 81 | 77 | 207 | 306 |
Variable lease costs | (89) | 63 | (105) | 158 |
Total Lease Costs | $ 1,459 | $ 1,617 | $ 4,527 | $ 4,887 |
Lease Obligations - Schedule _2
Lease Obligations - Schedule of Future Minimum Lease Payments Under Non-Cancelable Operating Leases (Detail) $ in Thousands | Sep. 30, 2023 USD ($) |
Leases [Abstract] | |
October 2023 through December 2023 | $ 1,369 |
2024 | 3,328 |
2025 | 2,596 |
2026 | 202 |
2027 | 75 |
Thereafter | 358 |
Total lease payments | 7,928 |
Less imputed interest | 620 |
Total Lease Liabilities | $ 7,308 |
Commitments and Contingencies -
Commitments and Contingencies - Additional Information (Detail) $ in Thousands | 1 Months Ended | |||
Jul. 31, 2023 arbitrator | Apr. 30, 2020 USD ($) | Sep. 30, 2023 USD ($) letter_of_credit | Aug. 04, 2023 USD ($) | |
Other Commitments [Line Items] | ||||
Number of outstanding letters of credit | letter_of_credit | 6 | |||
Total outstanding balance | $ 52,554 | |||
Air Wisconsin v. United | Pending Litigation | ||||
Other Commitments [Line Items] | ||||
Number of arbitrators | arbitrator | 3 | |||
Treasury Payroll And Support Programme | ||||
Other Commitments [Line Items] | ||||
Proceeds from other long term debt | $ 42,185 | |||
Accounts And Notes Receivable | United Capacity Purchase Agreement | ||||
Other Commitments [Line Items] | ||||
Loss contingency receivable | 52,276 | |||
Related Party | Air Wisconsin | ||||
Other Commitments [Line Items] | ||||
Outstanding credit facility | 377 | |||
Aircraft Notes Principal | ||||
Other Commitments [Line Items] | ||||
Semi-annual installments | 3,500 | |||
Total outstanding balance | 48,600 | $ 48,600 | ||
Letter of Credit | ||||
Other Commitments [Line Items] | ||||
Outstanding credit facility | $ 372 |
Commitments and Contingencies_2
Commitments and Contingencies - Cash Obligations (Detail) - USD ($) $ in Thousands | Sep. 30, 2023 | Aug. 04, 2023 |
Contractual Obligation Fiscal Year Maturity [Line Items] | ||
Total | $ 52,554 | |
2023 (October through December) | 486 | |
2024 | 52,068 | |
2025 | 0 | |
Total lease payments | 7,928 | |
2023 (October through December) | 1,369 | |
2024 | 3,328 | |
2025 | 2,596 | |
2026 | 202 | |
2027 | 75 | |
Thereafter | 358 | |
Total cash obligations | 60,482 | |
2023 (October through December) | 1,855 | |
2024 | 55,396 | |
2025 | 2,596 | |
2026 | 202 | |
2027 | 75 | |
Thereafter | 358 | |
Aircraft Notes Principal | ||
Contractual Obligation Fiscal Year Maturity [Line Items] | ||
Total | 48,600 | $ 48,600 |
2023 (October through December) | 0 | |
2024 | 48,600 | |
2025 | 0 | |
2026 | 0 | |
2027 | 0 | |
Thereafter | 0 | |
Aircraft Notes Interest | ||
Contractual Obligation Fiscal Year Maturity [Line Items] | ||
Total | 3,954 | |
2023 (October through December) | 486 | |
2024 | 3,468 | |
2025 | 0 | |
2026 | 0 | |
2027 | 0 | |
Thereafter | $ 0 |
Related-Party Transactions (Det
Related-Party Transactions (Detail) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | 9 Months Ended | ||
Jun. 30, 2021 | Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Related Party Transaction [Line Items] | |||||
Financial advisory and management services payments | $ 38 | $ 38 | $ 113 | $ 113 | |
Annual recurring fee payable monthly | $ 150 | ||||
Related Party | Financial Advisory And Management Services | AWAC Aviation Inc | |||||
Related Party Transaction [Line Items] | |||||
Financial advisory and management services payments | $ 60 | $ 60 | $ 180 | $ 180 |
Earnings Per Share and Equity -
Earnings Per Share and Equity - Schedule of Calculations of Net (Loss) Income Per Common Share (Detail) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Earnings Per Share [Abstract] | ||||
Net (loss) income | $ (3,688) | $ 8,022 | $ (11,975) | $ 32,366 |
Preferred stock dividends | 358 | 198 | 915 | 594 |
Net (loss) income available to common stockholders | $ (4,046) | $ 7,824 | $ (12,890) | $ 31,772 |
Weighted average common shares outstanding | ||||
Shares used in calculating basic earnings per share (in shares) | 43,654 | 45,776 | 44,299 | 46,637 |
Stock option (in shares) | 0 | 0 | 0 | 131 |
Series C Preferred (in shares) | 0 | 16,500 | 0 | 16,500 |
Shares used in calculating diluted earnings per share (in shares) | 43,654 | 62,276 | 44,299 | 63,268 |
(Loss) earnings allocated to common stockholders per common share | ||||
Basic (in dollars per share) | $ (0.09) | $ 0.17 | $ (0.29) | $ 0.68 |
Diluted (in dollars per share) | $ (0.09) | $ 0.13 | $ (0.29) | $ 0.50 |
Earnings Per Share and Equity_2
Earnings Per Share and Equity - Additional Information (Detail) - USD ($) $ / shares in Units, $ in Thousands | 1 Months Ended | 3 Months Ended | 9 Months Ended | ||||||||||
Sep. 27, 2023 | Jun. 30, 2023 | Mar. 31, 2023 | Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Mar. 30, 2022 | Jan. 31, 2020 | Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Dec. 31, 2022 | |
Class of Stock [Line Items] | |||||||||||||
Stock option (in shares) | 0 | 0 | 0 | 131,000 | |||||||||
Preferred stock, liquidation preference (in dollars per share) | $ 0.80 | $ 0.80 | |||||||||||
Common stock, convertible, conversion price (in dollars per share) | $ 0.15091 | ||||||||||||
Percentage of the diluted capital stock | 27.50% | ||||||||||||
Dividend declared | $ 358 | $ 915 | |||||||||||
Treasury Stock | |||||||||||||
Class of Stock [Line Items] | |||||||||||||
Cash received for cancellations of options | $ 969 | ||||||||||||
Mezzanine Equity Series C Convertible Redeemable Preferred Stock | |||||||||||||
Class of Stock [Line Items] | |||||||||||||
Common stock converted (in shares) | 16,500,000 | ||||||||||||
Issuance of stock (in shares) | 4,000,000 | ||||||||||||
Cumulative quarterly preferred stock dividend rate percentage | 6% | ||||||||||||
Increase or decrease in rate of preferential dividends | 1% | ||||||||||||
Period of increase in rate of preferential dividends (in months) | 6 months | ||||||||||||
Series C Preferred Stock, outstanding (in shares) | 4,000,000 | 4,000,000 | 4,000,000 | ||||||||||
Dividend declared | $ 198 | $ 198 | $ 198 | $ 198 | $ 198 | $ 198 | |||||||
Temporary equity conversion cap excess dividend | $ 160 | $ 107 | $ 54 | ||||||||||
Series C Preferred Stock | |||||||||||||
Class of Stock [Line Items] | |||||||||||||
Issuance of stock (in shares) | 3,245,000 | ||||||||||||
Cumulative quarterly preferred stock dividend rate percentage | 0.50% | ||||||||||||
Series C Preferred Stock, outstanding (in shares) | 755,000 | 755,000 |
Supplemental Cash Flow Inform_3
Supplemental Cash Flow Information - Additional Information (Detail) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
Supplemental Cash Flow Elements [Abstract] | ||
Cash payments for interest | $ 1,598 | $ 1,784 |
Cash payments for income taxes | 46 | 3,348 |
Cash payments included in the measurement of lease liabilities related to operating leases | $ 4,285 | $ 4,484 |
Supplemental Cash Flow Inform_4
Supplemental Cash Flow Information - Summary of Cash and Cash Equivalents (Detail) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Supplemental Cash Flow Elements [Abstract] | ||
Cash and cash equivalents | $ 15,839 | $ 33,333 |
Restricted cash | 707 | 849 |
Total cash, cash equivalents, and restricted cash | $ 16,546 | $ 34,182 |
Intangible Assets (Detail)
Intangible Assets (Detail) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Trade names and air carrier certificate | $ 5,300 | $ 5,300 |
Total | $ 5,300 | $ 5,300 |
Stock Repurchase Program (Detai
Stock Repurchase Program (Detail) - Common Stock - Stock Repurchase Program - USD ($) shares in Thousands, $ in Thousands | 1 Months Ended | 3 Months Ended | 9 Months Ended | ||||
Jan. 31, 2023 | Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Dec. 31, 2022 | Mar. 30, 2021 | |
Equity, Class of Treasury Stock [Line Items] | |||||||
Authorized amount of repurchase, up to | $ 1,000 | ||||||
Automatic increase per calendar month | $ 1,000 | ||||||
Federal corporate excise tax repurchase percentage | 1% | ||||||
Share repurchase value minimum threshold exempt from tax | $ 1,000 | ||||||
Stock repurchased (in shares) | 374 | 364 | 1,764 | 7,664 | |||
Treasury Stock | |||||||
Equity, Class of Treasury Stock [Line Items] | |||||||
Excise tax liabilities incurred during the period and capitalized | $ 8 | $ 38 | |||||
Restricted Cash | |||||||
Equity, Class of Treasury Stock [Line Items] | |||||||
Total cash | $ 329 | $ 329 | $ 475 |