Quarterly report pursuant to Section 13 or 15(d)

Operating Right-of-Use Asset and Operating Lease Liability

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Operating Right-of-Use Asset and Operating Lease Liability
 6 Months Ended
Jun. 30, 2024
Leases [Abstract]  
Operating Right-of-Use Asset and Operating Lease Liability Operating Right-of-Use Asset and Operating Lease Liability
Blade’s operating leases consist of airport and heliport terminals, offices, vehicles and aircraft leases that are embedded within certain Capacity Purchase Agreements (“CPAs”). Upon meeting certain criteria as stated in ASC 842 Leases (“ASC 842”), the lease component of a CPA would be accounted for as an embedded lease, with a corresponding balance included in the operating right-of-use (“ROU”) asset and lease liability.
During the six months ended June 30, 2024, the Company had the following lease transactions in accordance with ASC 842:

An existing CPA for eight aircraft utilized by our Medical segment, was restated and amended in January 2024 for a four-year term ending November 30, 2027. This agreement was terminated in April 2024 for seven aircraft after Blade’s acquisition of those seven aircraft (see “—Property and Equipment, Net” within Note 1). The CPA for the eighth aircraft remains in effect. Blade has the right to terminate the agreement without cause upon 60 days’ written notice, upon such termination a one-year flight hour guarantee will be pro-rated to the date of the termination, in addition, Blade has the right for immediate termination with no penalty if a government authority enacts travel restrictions.

An existing three aircraft CPA agreement was expanded on May 1, 2024 when a fourth aircraft commenced operations. The four aircraft are utilized primarily by our Passenger segment. In case of early termination by Blade, a one-year purchase guarantee will be pro-rated to the date of the termination. In addition, Blade has the right for immediate termination with no penalty if a government authority enacts travel restrictions.

In addition, during the six months ended June 30, 2024, the Company recognized a right-of-use asset and a lease liability for a new office space lease, located at 35 Hudson Yards in New York, New York with an initial term of approximately 3 years commencing in May 2024.

See Note 9, “Commitments and Contingencies”, for additional information about our capacity purchase agreements.
Balance sheet information related to the Company’s leases is presented below:
June 30,
2024		 December 31, 2023
Operating leases:
Operating right-of-use asset $ 21,123  $ 23,484 
Operating lease liability, current 4,145  4,787 
Operating lease liability, long-term 17,864  19,738 

As of June 30, 2024, included in the table above is $17,176, $2,645 and $15,334 of operating right-of-use asset, operating lease liability, current, and operating lease liability, long-term, respectively, under aircraft leases that are embedded within the capacity purchase agreements. As of December 31, 2023, included in the table above is $21,081, $3,215 and $18,871 of operating right-of-use asset, operating lease liability, current and operating lease liability, long-term, respectively, under aircraft leases that are embedded within the capacity purchase agreements.

The following provides details of the Company’s lease expense:
Three Months Ended June 30, Six Months Ended June 30,
2024 2023 2024 2023
Lease cost:
Short-term lease cost
 $ 317  $ 126  $ 415  $ 220 
Operating lease cost
 392  494  748  961 
Operating lease cost - Cost of revenue
 777  1,150  2,233  2,140 
Total $ 1,486  $ 1,770  $ 3,396  $ 3,321 
Operating lease costs related to aircraft leases that are embedded within CPAs are recorded within Cost of revenue on the Company’s unaudited interim condensed consolidated statements of operations.
Other information related to leases is presented below:
June 30, 2024
Weighted-average discount rate – operating lease
 8.90  %
Weighted-average remaining lease term – operating lease (in years)
 6.3
As of June 30, 2024, the expected annual minimum lease payments of the Company’s operating lease liabilities were as follows:
For the Year Ended December 31
Remainder of 2024 $ 2,937 
2025 5,676 
2026 5,275 
2027 3,296 
2028 2,370 
Thereafter 8,712 
Total future minimum lease payments, undiscounted
 28,266 
Less: Imputed interest for leases in excess of one year
 (6,257)
Present value of future minimum lease payments
 $ 22,009 
Leases Not Yet Commenced
As of June 30, 2024, the Company had an additional operating real estate lease that had not yet commenced of $2,511 and expected to commence during the third quarter of 2024.