Right-of-Use Asset and Operating Lease Liability |
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| Leases [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Right-of-Use Asset and Operating Lease Liability | Right-of-Use Asset and Operating Lease Liability
Blade’s operating leases consist of airport and heliport terminals, offices and aircraft leases that are embedded within certain capacity purchase agreements (“CPAs”). Upon meeting certain criteria as stated in ASC 842 Leases, the lease component of a capacity purchase agreement would be accounted for as an embedded lease, with a corresponding balance included in the operating right-of-use (“ROU”) asset and lease liability.
As of June 30, 2022, the Company have two significant leases and are as follows: an operating lease for office space located at 55 Hudson Yards in New York, New York for an initial term of 2.5 years, signed in May 2022; and aircraft leases that are embedded within one of its capacity purchase agreements, signed in April 2022. The Company allocated the consideration in the capacity purchase agreement to the lease and nonlease components based on their relative standalone value. The lease components of this agreement consist of a lease of up to 6 aircraft for a three-year term, and the nonlease components primarily consist of the costs associated with flight operations. Blade has the right to terminate this agreement without cause upon 60 days written notice, upon such termination the guarantee will be pro-rated to the date of the termination and the operator will be entitled to retain any unapplied deposit paid by Blade at the time of such termination, in addition, Blade has the right for immediate termination with no penalty if a government authority enacts travel restrictions. The Company determined its best estimate of the standalone value of the individual components by
considering observable information from publicly available market rates. 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:
As of June 30, 2022, included in the table above is $2,510, $824 and $1,687 of operating right-of-use asset, current operating lease liability, and long-term operating lease liability, respectively, under aircraft leases that are embedded within a capacity purchase agreement. As of December 31, 2021 there were no aircraft leases embedded within a capacity purchase agreement. As of June 30, 2022, included in the table above is $2,654, $1,064 and $1,690 of operating right-of-use asset, current operating lease liability, and long-term operating lease liability, respectively, under the new office space located at 55 Hudson Yards in New York, New York.
The following provides details of the Company’s lease expense:
Operating lease costs related to aircraft leases that are embedded within a capacity purchase agreements are reported as part of Cost of Revenue.
Other information related to leases is presented below:
As of June 30, 2022, the expected annual minimum lease payments of the Company’s operating lease liabilities and other short-term leases were as follows:
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