3. 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, 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 (or life of lease, if shorter)

Rotable Parts Average remaining life of aircraft fleet, currently estimated to be 48 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 months ended March 31, 2026 and 2025, depreciation of property and equipment was $4.7 million and $2.3 million, respectively.