4. PROPERTY AND EQUIPMENT, NET

Property and equipment are recorded at cost at the acquisition date of such property or equipment and depreciated on a straight-line basis to an estimated residual value over their estimated useful lives or lease term for leasehold improvements on operating leases, whichever is shorter, as follows:

Leasehold Improvements, Aircraft, other 1-10 years (or life of lease, if shorter)

Office and Ground Equipment 5 years

Computer Hardware and Software 3-5 years

Property and Equipment under Finance Leases 5-30 years

Rotable Parts Average remaining life of aircraft fleet, currently estimated to be 43 months

Airframe 6 years (lesser of 25 years or date until next 12-Y check)

Engines Average remaining life of aircraft fleet associated to the engines, currently estimated to be 40 months

Modifications that enhance the operating performance or extend the useful lives of leased airframes are considered leasehold improvements and are capitalized and depreciated over the economic life of the asset or the term of the lease, whichever is shorter.

The Airframe and Engines of the Company have an estimated salvage and residual value of $2.8 million and $11.0 million, respectively. Such amounts were determined in conjunction with third-party appraisers.

During the three and six months ended June 30, 2026, depreciation of property and equipment was $1.0 million and $2.1 million, respectively.

During the three and six months ended June 30, 2025, depreciation of property and equipment was $0.6 million and $1.2 million, respectively.

Deferred Maintenance

The Company capitalizes costs associated with certain major maintenance events, including engine overhauls and heavy airframe checks, and amortizes those costs on a straight-line basis over the estimated period benefited, generally through the date of the next scheduled major maintenance event. Amortization of deferred maintenance is included within "Depreciation and amortization" in the accompanying condensed consolidated statements of operations and within "Depreciation expense and amortization" in the accompanying condensed consolidated statements of cash flows.

During the three and six months ended June 30, 2026, amortization of deferred maintenance was $1.0 million and $1.6 million, respectively.

During the three and six months ended June 30, 2025, amortization of deferred maintenance was $0.4 million and $0.7 million, respectively.