As of December 31, 2023, the Company’s firm aircraft and engine purchase orders consisted of the following:


	A320neo	A321neo	Total Aircraft(a)	Engines
Year Ending
2024	—	23	23	2
2025	17	25	42	4
2026	19	22	41	4
2027	21	21	42	3
2028	10	30	40	2
Thereafter	—	22	22	—
Total	67	143	210	15

(a) While the schedule presented reflects the contractual delivery dates as of December 31, 2023, the Company has recently experienced delays in the deliveries of Airbus aircraft which may persist in future periods.

The Company is party to certain aircraft purchase agreements with Airbus (as amended from time to time, the “Airbus Purchase Agreements”) pursuant to which, as of December 31, 2023, the Company had commitments to purchase an aggregate of 67 A320neo and 143 A321neo aircraft, with deliveries expected through 2029 per the latest delivery schedule. The Company has the option to convert 18 A320neo aircraft to A321XLR aircraft under certain terms and conditions. Since the option has not been exercised, this conversion right is not reflected in the table above.

The Airbus Purchase Agreements also provide for, among other things, varying purchase incentives for each aircraft type (e.g., A320neo versus A321neo), which are allocated proportionally by aircraft type over the remaining aircraft to be delivered so that each aircraft’s capitalized cost upon induction would be equal. Therefore, as cash paid for deliveries is greater than the capitalized cost due to the allocation of these purchase incentives, a deferred purchase incentive is recognized within other assets on the Company’s consolidated balance sheets, which will ultimately be offset by future deliveries of aircraft with lower cash payments than their associated capitalized cost.

As of December 31, 2023, purchase commitments for these aircraft and engines, including estimated amounts for contractual price escalations and PDPs, consisted of the following (in millions):


	Total
Year Ending
2024	$	1,391
2025	2,500
2026	2,358
2027	2,448
2028	2,403
Thereafter	1,356
Total	$	12,456

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. In December 2023, the DOT sent the Company a request for information to assist its investigation into whether the Company cared for its customers as required by law during Winter Storm Elliott, which caused significant operational disruptions and spanned from December 21, 2022 to January 2, 2023, which included providing adequate customer service assistance, prompt flight status notifications, and proper and timely refunds. The Company is fully cooperating with the DOT request.

The Company regularly evaluates the status of such matters to assess whether a loss is probable and reasonably estimable in determining whether an accrual is appropriate. Furthermore, in determining whether disclosure is appropriate, the Company evaluates each matter to assess if there is at least a reasonable possibility that a loss or additional losses may have been incurred and whether an estimate of possible loss or range of loss can be made.

The ultimate outcome of legal actions is unpredictable and can be subject to significant uncertainties, and it is difficult to determine whether any loss is probable or even possible. Additionally, it is also difficult to estimate the amount of loss and there may be matters for which a loss is probable or reasonably possible but not currently estimable. Thus, actual losses may be in excess of any recorded liability or the range of reasonably possible loss. The Company believes the ultimate outcome of any potential lawsuits, proceedings and reviews will likely not, individually or in the aggregate, have a material adverse effect on its consolidated financial position, liquidity or results of operations and that the Company’s current accruals cover matters where loss is deemed probable and can be reasonably estimated.

The Company has seven union-represented employee groups that together represented approximately 86% of all employees as of December 31, 2023. The table below sets forth the Company’s employee groups and status of the collective bargaining agreements as of December 31, 2023:

Percentage of Workforce

Employee Group

Representative

Amendable Date (a)

December 31, 2023

Pilots

Air Line Pilots Association (ALPA)

January 2024(b)

29%

Flight Attendants

Association of Flight Attendants (AFA-CWA)

May 2024(c)

49%

Aircraft Technicians

International Brotherhood of Teamsters (IBT)

May 2025

Aircraft Appearance Agents

IBT

October 2023(d)

Dispatchers

Transport Workers Union (TWU)

August 2028(e)

Material Specialists

IBT

March 2022(d)

<1%

Maintenance Controllers

IBT

October 2023(d)

<1%

(d)The Company’s collective bargaining agreements with its aircraft appearance agents, material specialists, and maintenance controllers, each represented by IBT, were still amendable as of December 31, 2023, and negotiations are ongoing; however, the agreements are operating under their current arrangements until amendments have been reached.

The Company is self-insured for health care claims, subject to a stop-loss policy, for eligible participating employees and qualified dependent medical and dental 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 had accrued $5 million for health care claims estimated to be incurred but not yet paid as of December 31, 2023 and 2022, which are included as a component of other current liabilities on the Company’s consolidated balance sheets.

The Company has various leases with respect to real property as well as various agreements among airlines relating to fuel consortia or fuel farms at airports. Under some of these contracts, the Company is party to joint and several liability regarding environmental damages. Under others, where the Company is a member of an LLC or other entity that contracts directly with the airport operator, liabilities are borne through the fuel consortia structure.

The Company’s aircraft, services, equipment lease and sale and financing agreements typically contain provisions requiring the Company, as the lessee, obligor or recipient of services, to indemnify the other parties to those agreements, including certain of those parties’ related persons, against virtually any liabilities that might arise from the use or operation of the aircraft or such other equipment. The Company believes that its insurance would cover most of its exposure to liabilities and related indemnities associated with the commercial real estate leases and aircraft, services, equipment lease and sale and financing agreements described above.