Credit Card Processing Arrangements

12 Months Ended

Dec. 31, 2025

Credit Card Processing Arrangements [Abstract]

Credit Card Processing Arrangements

Credit Card Processing Arrangements

The Company has agreements with organizations that process credit card transactions arising from the purchase of air travel, baggage charges and other ancillary services by customers. As is standard in the airline industry, the Company's contractual arrangements with credit card processors permit them, under certain circumstances, to retain a holdback or other collateral, when future air travel and other future services are purchased via credit card transactions. The required holdback is the portion of the Company's overall credit card sales that its credit card processors hold to cover refunds to customers if the Company fails to fulfill its flight obligations.

On July 2, 2024, the Company entered into a letter agreement that modified its existing primary credit card processing agreement. Based on the terms of the agreement, in July 2024, the Company deposited $200.0 million into a deposit account, included in cash and cash equivalents within the Company's consolidated balance sheets, as it was considered a compensating balance arrangement that does not legally restrict the Company's use of this cash, and deposited $50.0 million into a restricted account included in restricted cash within the Company's consolidated balance sheets.

Subsequently, effective August 15, 2025 and August 20, 2025, the Company entered into two amendments (together, the “Amendments”) that further modified the terms of this agreement. The first amendment required an additional $50.0 million transfer to the restricted account, resulting in a total restricted cash balance of $100.0 million, included in restricted cash within the Company’s consolidated balance sheets as of December 31, 2025.

The second amendment authorized the Company's primary credit card processor to hold back up to $3.0 million per day until its exposure is fully collateralized and to maintain full collateralization as such exposure fluctuates over time. Accordingly, increases in the collateralized holdback balance reduce the amount required in the deposit account on a dollar-for-dollar basis. As of December 31, 2025, the processor had a holdback of $158.1 million, recorded in other long-term assets on the Company’s consolidated balance sheets and there was no amount required in the deposit account.

In addition, the second amendment extended the term of the Card Processing Agreement from the current December 31, 2025 expiration date to December 31, 2027, with two automatic one-year extensions unless either party provides a notice of non-renewal not less than 90 days prior to the end of the then-effective term, and (ii) to remove the existing minimum liquidity trigger for holdbacks under the previous Card Processing Agreement.

Pursuant to the Amendments, the filing of the Chapter 11 Cases on August 29, 2025 constitutes a breach of contract, subject to the automatic stay resulting from the Chapter 11 Cases. For additional information on the Company's bankruptcy proceedings and its related automatic stay and other protections, refer to Note 3, 2025 Chapter 11 Bankruptcy Proceedings.

Additionally, the Company provided a $25.0 million deposit to a credit card processor recorded within deposits and other current assets in its consolidated balance sheets.