Commitments and Contingencies

12 Months Ended

Dec. 31, 2012

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

Commitments and Contingencies

Aircraft-Related Commitments and Financing Arrangements

The Company’s contractual purchase commitments consist primarily of aircraft and engine acquisitions through manufacturers and aircraft leasing companies. As of December 31, 2012, firm aircraft orders with Airbus and a third party consisted of 106 A320 family aircraft (two used A319 aircraft, 54 of the existing A320 aircraft model and 50 A320 NEOs) and engine orders with International Aero Engines consisted of three spare V2500 IAE International Aero Engines AG engines. Aircraft are scheduled for delivery from 2013 through 2021, and spare engines are scheduled for delivery from 2013 through 2015. Committed expenditures for these aircraft and related flight equipment, including estimated amounts for contractual price escalations and pre-delivery payments, will be approximately $323 million in 2013, $354 million in 2014, $523 million in 2015, $505 million in 2016, $613 million in 2017 and $2,339 million in 2018 and beyond.

Litigation

The Company is subject to commercial litigation claims and to administrative and regulatory proceedings and reviews that may be asserted or maintained from time to time. The Company believes the ultimate outcome of such lawsuits, proceedings and reviews will not, individually or in the aggregate, have a material adverse effect on its financial position, liquidity or results of operations.

Employees

The Company has three union-represented employee groups that together represent approximately 54% of all employees at December 31, 2012 and 52% of all employees at December 31, 2011. The table below sets forth the Company's employee groups and status of the collective bargaining agreements.

Employee Groups	Representative	Amendable Date
Pilots	Air Line Pilots Association, International (ALPA)	August 2015
Flight Attendants	Association of Flight Attendants (AFA-CWA)	August 2007
Dispatchers	Transport Workers Union (TWU)	July 2012

The collective bargaining agreement between the Company and the Company’s pilots represents 22% of the Company’s employees as of December 31, 2012.

The collective bargaining agreement between the Company and the Company’s flight attendants represents approximately 31% of the Company’s employees as of December 31, 2012. The Company and the AFA-CWA are currently in negotiations to reach a new collective bargaining agreement.

The collective bargaining agreement between the Company and its dispatchers represents approximately 1% of the Company’s employees as of December 31, 2012.

The Company is self-insured for health care claims for eligible participating employees and qualified dependent medical claims, subject to deductibles and limitations. The Company’s liabilities for claims incurred but not reported are determined based on an estimate of the ultimate aggregate liability for claims incurred. The estimate is calculated from actual claim rates and adjusted periodically as necessary. The Company has accrued $1.9 million, $2.0 million, and $2.1 million for health care claims as of December 31, 2012, 2011 and 2010, respectively.

Other

The Company is contractually obligated to pay the following minimum guaranteed payments to the provider of its reservation system as of December 31, 2012: $3.1 million in 2013, $3.7 million in 2014, $3.7 million in 2015, $3.7 million in 2016, $3.7 million in 2017 and $2.5 million in 2018 and thereafter.

The Company entered into a Tax Receivable Agreement (“TRA”) with the Company's Pre-IPO Stockholders (as defined in the TRA) that became effective immediately prior to the consummation of the IPO. In accordance with the TRA, the Company paid $27.2 million, including $0.3 million of applicable interest, in the second quarter of 2012. See Note 18.