QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Or | |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |
, | ||||||
(Address of principal executive offices) | (Zip Code) |
Title of each class | Name of each exchange on which registered | Trading Symbol | ||
þ | Accelerated Filer | o | Non-accelerated Filer | o | |
Smaller Reporting Company | Emerging Growth Company |
Table of Contents | |
Page | |
/s/ Ernst & Young LLP | |
Atlanta, Georgia | |
July 11, 2019 |
(in millions, except share data) | June 30, 2019 | December 31, 2018 | |||||
ASSETS | |||||||
Current Assets: | |||||||
Cash and cash equivalents | $ | $ | |||||
Accounts receivable, net of an allowance for uncollectible accounts of $14 and $12 at June 30, 2019 and December 31, 2018, respectively | |||||||
Fuel inventory | |||||||
Expendable parts and supplies inventories, net of an allowance for obsolescence of $96 and $102 at June 30, 2019 and December 31, 2018, respectively | |||||||
Prepaid expenses and other | |||||||
Total current assets | |||||||
Noncurrent Assets: | |||||||
Property and equipment, net of accumulated depreciation and amortization of $17,005 and $15,823 at June 30, 2019 and December 31, 2018, respectively | |||||||
Operating lease right-of-use assets | |||||||
Goodwill | |||||||
Identifiable intangibles, net of accumulated amortization of $868 and $862 at June 30, 2019 and December 31, 2018, respectively | |||||||
Cash restricted for airport construction | |||||||
Other noncurrent assets | |||||||
Total noncurrent assets | |||||||
Total assets | $ | $ | |||||
LIABILITIES AND STOCKHOLDERS' EQUITY | |||||||
Current Liabilities: | |||||||
Current maturities of long-term debt and finance leases | $ | $ | |||||
Current maturities of operating leases | |||||||
Air traffic liability | |||||||
Accounts payable | |||||||
Accrued salaries and related benefits | |||||||
Loyalty program deferred revenue | |||||||
Fuel card obligation | |||||||
Other accrued liabilities | |||||||
Total current liabilities | |||||||
Noncurrent Liabilities: | |||||||
Long-term debt and finance leases | |||||||
Pension, postretirement and related benefits | |||||||
Loyalty program deferred revenue | |||||||
Noncurrent operating leases | |||||||
Other noncurrent liabilities | |||||||
Total noncurrent liabilities | |||||||
Commitments and Contingencies | |||||||
Stockholders' Equity: | |||||||
Common stock at $0.0001 par value; 1,500,000,000 shares authorized, 659,145,280 and 688,136,306 shares issued at June 30, 2019 and December 31, 2018, respectively | |||||||
Additional paid-in capital | |||||||
Retained earnings | |||||||
Accumulated other comprehensive loss | ( | ) | ( | ) | |||
Treasury stock, at cost, 8,944,663 and 8,191,831 shares at June 30, 2019 and December 31, 2018, respectively | ( | ) | ( | ) | |||
Total stockholders' equity | |||||||
Total liabilities and stockholders' equity | $ | $ | |||||
The accompanying notes are an integral part of these Condensed Consolidated Financial Statements. |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
(in millions, except per share data) | 2019 | 2018 | 2019 | 2018 | |||||||||||
Operating Revenue: | |||||||||||||||
Passenger | $ | $ | $ | $ | |||||||||||
Cargo | |||||||||||||||
Other | |||||||||||||||
Total operating revenue | |||||||||||||||
Operating Expense: | |||||||||||||||
Salaries and related costs | |||||||||||||||
Aircraft fuel and related taxes | |||||||||||||||
Regional carriers expense, excluding fuel | |||||||||||||||
Depreciation and amortization | |||||||||||||||
Contracted services | |||||||||||||||
Passenger commissions and other selling expenses | |||||||||||||||
Aircraft maintenance materials and outside repairs | |||||||||||||||
Landing fees and other rents | |||||||||||||||
Profit sharing | |||||||||||||||
Ancillary businesses and refinery | |||||||||||||||
Passenger service | |||||||||||||||
Aircraft rent | |||||||||||||||
Other | |||||||||||||||
Total operating expense | |||||||||||||||
Operating Income | |||||||||||||||
Non-Operating Expense: | |||||||||||||||
Interest expense, net | ( | ) | ( | ) | ( | ) | ( | ) | |||||||
Unrealized gain/(loss) on investments, net | ( | ) | ( | ) | ( | ) | |||||||||
Miscellaneous, net | ( | ) | ( | ) | ( | ) | |||||||||
Total non-operating expense, net | ( | ) | ( | ) | ( | ) | ( | ) | |||||||
Income Before Income Taxes | |||||||||||||||
Income Tax Provision | ( | ) | ( | ) | ( | ) | ( | ) | |||||||
Net Income | $ | $ | $ | $ | |||||||||||
Basic Earnings Per Share | $ | $ | $ | $ | |||||||||||
Diluted Earnings Per Share | $ | $ | $ | $ | |||||||||||
Cash Dividends Declared Per Share | $ | $ | $ | $ | |||||||||||
Comprehensive Income | $ | $ | $ | $ | |||||||||||
The accompanying notes are an integral part of these Condensed Consolidated Financial Statements. |
Six Months Ended June 30, | |||||||
(in millions) | 2019 | 2018 | |||||
Net Cash Provided by Operating Activities | $ | $ | |||||
Cash Flows from Investing Activities: | |||||||
Property and equipment additions: | |||||||
Flight equipment, including advance payments | ( | ) | ( | ) | |||
Ground property and equipment, including technology | ( | ) | ( | ) | |||
Purchase of short-term investments | ( | ) | |||||
Redemption of short-term investments | |||||||
Purchase of equity investments | ( | ) | |||||
Other, net | |||||||
Net cash used in investing activities | ( | ) | ( | ) | |||
Cash Flows from Financing Activities: | |||||||
Payments on long-term debt and finance lease obligations | ( | ) | ( | ) | |||
Repurchase of common stock | ( | ) | ( | ) | |||
Cash dividends | ( | ) | ( | ) | |||
Proceeds from short-term obligations | |||||||
Proceeds from long-term obligations | |||||||
Other, net | ( | ) | ( | ) | |||
Net cash used in financing activities | ( | ) | ( | ) | |||
Net Increase in Cash, Cash Equivalents and Restricted Cash Equivalents | |||||||
Cash, cash equivalents and restricted cash equivalents at beginning of period | |||||||
Cash, cash equivalents and restricted cash equivalents at end of period | $ | $ | |||||
Non-Cash Transactions: | |||||||
Right-of-use assets acquired under operating leases | $ | $ | |||||
Operating leases converted to finance leases | |||||||
Flight and ground equipment acquired under finance leases | |||||||
The following table provides a reconciliation of cash, cash equivalents and restricted cash equivalents reported within the Consolidated Balance Sheets to the total of the same such amounts shown above: | |||||||
June 30, | |||||||
(in millions) | 2019 | 2018 | |||||
Current assets: | |||||||
Cash and cash equivalents | $ | $ | |||||
Restricted cash included in prepaid expenses and other | |||||||
Noncurrent assets: | |||||||
Cash restricted for airport construction | |||||||
Total cash, cash equivalents and restricted cash equivalents | $ | $ | |||||
The accompanying notes are an integral part of these Condensed Consolidated Financial Statements. |
Common Stock | Additional Paid-In Capital | Retained Earnings | Accumulated Other Comprehensive Loss | Treasury Stock | ||||||||||||||||||
(in millions, except per share data) | Shares | Amount | Shares | Amount | Total | |||||||||||||||||
Balance at December 31, 2018 | $ | $ | $ | $ | ( | ) | $ | ( | ) | $ | ||||||||||||
Net income | — | — | — | — | — | — | ||||||||||||||||
Dividends declared | — | — | — | ( | ) | — | — | — | ( | ) | ||||||||||||
Other comprehensive income | — | — | — | — | — | — | ||||||||||||||||
Shares of common stock issued and compensation expense associated with equity awards (Treasury shares withheld for payment of taxes, $49.75(1) per share) | — | — | — | ( | ) | ( | ) | |||||||||||||||
Stock options exercised | — | — | — | — | — | |||||||||||||||||
Stock purchased and retired | ( | ) | — | ( | ) | ( | ) | — | — | — | ( | ) | ||||||||||
Balance at March 31, 2019 | ( | ) | ( | ) | ||||||||||||||||||
Net income | — | — | — | — | — | — | ||||||||||||||||
Dividends declared | — | — | — | ( | ) | — | — | — | ( | ) | ||||||||||||
Other comprehensive income | — | — | — | — | — | — | ||||||||||||||||
Shares of common stock issued and compensation expense associated with equity awards (Treasury shares withheld for payment of taxes, $55.06(1) per share) | — | — | — | ( | ) | |||||||||||||||||
Stock options exercised | — | — | — | — | — | |||||||||||||||||
Stock purchased and retired | ( | ) | — | ( | ) | ( | ) | — | — | — | ( | ) | ||||||||||
Balance at June 30, 2019 | $ | $ | $ | $ | ( | ) | $ | ( | ) | $ |
(1) | Weighted average price per share. |
Common Stock | Additional Paid-In Capital | Retained Earnings | Accumulated Other Comprehensive Loss | Treasury Stock | ||||||||||||||||||
(in millions, except per share data) | Shares | Amount | Shares | Amount | Total | |||||||||||||||||
Balance at December 31, 2017 | $ | $ | $ | $ | ( | ) | $ | ( | ) | $ | ||||||||||||
Net income | — | — | — | — | — | — | ||||||||||||||||
Change in accounting principle and other | — | — | — | ( | ) | ( | ) | — | — | ( | ) | |||||||||||
Dividends declared | — | — | — | ( | ) | — | — | — | ( | ) | ||||||||||||
Other comprehensive income | — | — | — | — | — | — | ||||||||||||||||
Shares of common stock issued and compensation expense associated with equity awards (Treasury shares withheld for payment of taxes, $55.08(1) per share) | — | — | — | ( | ) | ( | ) | |||||||||||||||
Stock options exercised | — | — | — | — | — | |||||||||||||||||
Stock purchased and retired | ( | ) | — | ( | ) | ( | ) | — | — | — | ( | ) | ||||||||||
Balance at March 31, 2018 | ( | ) | ( | ) | ||||||||||||||||||
Net income | — | — | — | — | — | — | ||||||||||||||||
Change in accounting principle and other | — | — | — | ( | ) | — | — | — | ( | ) | ||||||||||||
Dividends declared | — | — | — | ( | ) | — | — | — | ( | ) | ||||||||||||
Other comprehensive income | — | — | — | — | — | — | ||||||||||||||||
Shares of common stock issued and compensation expense associated with equity awards (Treasury shares withheld for payment of taxes, $52.99(1) per share) | — | — | — | ( | ) | |||||||||||||||||
Stock options exercised | — | — | — | — | — | |||||||||||||||||
Stock purchased and retired | ( | ) | — | ( | ) | ( | ) | — | — | — | ( | ) | ||||||||||
Balance at June 30, 2018 | $ | $ | $ | $ | ( | ) | $ | ( | ) | $ |
(1) | Weighted average price per share. |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||
(in millions) | 2019 | 2018 | 2019 | 2018 | |||||||||
Ticket | $ | $ | $ | $ | |||||||||
Loyalty travel awards | |||||||||||||
Travel-related services | |||||||||||||
Total passenger revenue | $ | $ | $ | $ |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||
(in millions) | 2019 | 2018 | 2019 | 2018 | |||||||||
Loyalty program | $ | $ | $ | $ | |||||||||
Ancillary businesses and refinery | |||||||||||||
Miscellaneous | |||||||||||||
Total other revenue | $ | $ | $ | $ |
(in millions) | 2019 | 2018 | ||||||
Balance at January 1 | $ | $ | ||||||
Mileage credits earned | ||||||||
Travel mileage credits redeemed | ( | ) | ( | ) | ||||
Non-travel mileage credits redeemed | ( | ) | ( | ) | ||||
Balance at June 30 | $ | $ |
Passenger Revenue | |||||||||||||
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||
(in millions) | 2019 | 2018 | 2019 | 2018 | |||||||||
Domestic | $ | $ | $ | $ | |||||||||
Atlantic | |||||||||||||
Latin America | |||||||||||||
Pacific | |||||||||||||
Total | $ | $ | $ | $ |
Operating Revenue | |||||||||||||
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||
(in millions) | 2019 | 2018 | 2019 | 2018 | |||||||||
Domestic | $ | $ | $ | $ | |||||||||
Atlantic | |||||||||||||
Latin America | |||||||||||||
Pacific | |||||||||||||
Total | $ | $ | $ | $ |
(in millions) | June 30, 2019 | Level 1 | Level 2 | ||||||
Cash equivalents | $ | $ | $ | ||||||
Restricted cash equivalents | |||||||||
Long-term investments | |||||||||
Hedge derivatives, net | |||||||||
Fuel hedge contracts | ( | ) | ( | ) | |||||
Interest rate contracts | |||||||||
Foreign currency exchange contracts |
(in millions) | December 31, 2018 | Level 1 | Level 2 | ||||||
Cash equivalents | $ | $ | $ | ||||||
Restricted cash equivalents | |||||||||
Short-term investments | |||||||||
U.S. government and agency securities | |||||||||
Asset- and mortgage-backed securities | |||||||||
Corporate obligations | |||||||||
Other fixed income securities | |||||||||
Long-term investments | |||||||||
Hedge derivatives, net | |||||||||
Fuel hedge contracts | ( | ) | |||||||
Interest rate contracts | |||||||||
Foreign currency exchange contracts | ( | ) | ( | ) |
• | Fuel Contracts. Our fuel hedge portfolio consists of options, swaps and futures. Option and swap contracts are valued under income approaches using option pricing models and discounted cash flow models, respectively, based on data either readily observable in public markets, derived from public markets or provided by counterparties who regularly trade in public markets. Futures contracts and options on futures contracts are traded on a public exchange and valued based on quoted market prices. |
• | Interest Rate Contracts. Our interest rate derivatives are swap contracts, which are valued based on data readily observable in public markets. |
• | Foreign Currency Exchange Contracts. Our foreign currency derivatives consist of forward contracts and are valued based on data readily observable in public markets. |
• | Aeroméxico. Our non-controlling investment in Grupo Aeroméxico, the parent company of Aeroméxico, is accounted for under the equity method because Grupo Aeroméxico's corporate bylaws (as authorized by the Mexican Foreign Investment Commission) limit our voting interest to |
• | Virgin Atlantic. We have a non-controlling |
• | AirCo. We have a non-controlling |
• | Air France-KLM. We own |
• | GOL. We own |
• | China Eastern. We own a |
• | Korean. During the June 2019 quarter, we acquired |
• | Alclear Holdings, LLC ("CLEAR"). We own a |
• | Republic Airways. We own a |
(in millions) | Volume | Final Maturity Date | Prepaid Expenses and Other | Other Noncurrent Assets | Other Accrued Liabilities | Other Noncurrent Liabilities | Hedge Derivatives, net | ||||||||||||
Designated as hedges | |||||||||||||||||||
Interest rate contracts (fair value hedges) | U.S. dollars | April 2028 | $ | $ | $ | ( | ) | $ | $ | ||||||||||
Not designated as hedges | |||||||||||||||||||
Foreign currency exchange contracts | Euros | December 2020 | ( | ) | |||||||||||||||
Fuel hedge contracts | gallons - crude oil and refined products | December 2019 | ( | ) | ( | ) | |||||||||||||
Total derivative contracts | $ | $ | $ | ( | ) | $ | ( | ) | $ |
(in millions) | Volume | Final Maturity Date | Prepaid Expenses and Other | Other Noncurrent Assets | Other Accrued Liabilities | Other Noncurrent Liabilities | Hedge Derivatives, net | ||||||||||||
Designated as hedges | |||||||||||||||||||
Interest rate contracts (fair value hedges) | U.S. dollars | April 2028 | $ | $ | $ | ( | ) | $ | $ | ||||||||||
Foreign currency exchange contracts | Japanese yen | November 2019 | |||||||||||||||||
Not designated as hedges | |||||||||||||||||||
Foreign currency exchange contracts | Euros | December 2020 | ( | ) | ( | ) | |||||||||||||
Fuel hedge contracts | gallons - crude oil and refined products | December 2019 | ( | ) | |||||||||||||||
Total derivative contracts | $ | $ | $ | ( | ) | $ | ( | ) | $ |
Carrying Amount of Hedge Instruments | Cumulative Amount of Fair Value Hedge Adjustments | ||||||||||||
(in millions) | June 30, 2019 | December 31, 2018 | June 30, 2019 | December 31, 2018 | |||||||||
Current maturities of long-term debt and finance leases | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | |||
Long-term debt and finance leases | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) |
(in millions) | Prepaid Expenses and Other | Other Noncurrent Assets | Other Accrued Liabilities | Other Noncurrent Liabilities | Hedge Derivatives, net | ||||||||||
June 30, 2019 | |||||||||||||||
Net derivative contracts | $ | $ | $ | ( | ) | $ | ( | ) | $ | ||||||
December 31, 2018 | |||||||||||||||
Net derivative contracts | $ | $ | $ | ( | ) | $ | ( | ) | $ |
Gain (Loss) Reclassified from AOCI to Earnings(1) | Gain (Loss) Recognized in Other Comprehensive Income | ||||||||||||
(in millions) | 2019 | 2018 | 2019 | 2018 | |||||||||
Three Months Ended June 30, | |||||||||||||
Foreign currency exchange contracts | $ | $ | ( | ) | $ | ( | ) | $ | |||||
Six Months Ended June 30, | |||||||||||||
Foreign currency exchange contracts | $ | $ | $ | $ |
(1) | Earnings on our designated foreign currency exchange contracts are recorded in passenger revenue in the income statement. |
Location of Gain (Loss) Recognized in Income | Amount of Gain (Loss) Recognized in Income | ||||||||
(in millions) | 2019 | 2018 | |||||||
Three Months Ended June 30, | |||||||||
Foreign currency exchange contracts | Unrealized gain/(loss) on investments, net | $ | ( | ) | $ | ||||
Fuel hedge contracts | Aircraft fuel and related taxes | ( | ) | ||||||
Total | $ | $ | ( | ) | |||||
Six Months Ended June 30, | |||||||||
Foreign currency exchange contracts | Unrealized gain/(loss) on investments, net | $ | $ | ||||||
Fuel hedge contracts | Aircraft fuel and related taxes | ( | ) | ( | ) | ||||
Total | $ | ( | ) | $ | ( | ) |
Maturity | Interest Rate(s)(1) Per Annum at | June 30, | December 31, | |||||||||
(in millions) | Dates | June 30, 2019 | 2019 | 2018 | ||||||||
Unsecured notes | 2020 | to | 2028 | to | $ | $ | ||||||
Financing arrangements secured by aircraft: | ||||||||||||
Certificates(2) | 2019 | to | 2027 | to | ||||||||
Notes(2) | 2019 | to | 2025 | to | ||||||||
NYTDC Special Facilities Revenue Bonds, Series 2018(2) | 2022 | to | 2036 | to | ||||||||
Other financings(2)(3) | 2019 | to | 2030 | to | ||||||||
2018 Unsecured Revolving Credit Facility | 2021 | to | 2023 | undrawn | variable | |||||||
Other revolving credit facilities | 2020 | to | 2021 | undrawn | variable | |||||||
Total secured and unsecured debt | ||||||||||||
Unamortized premium and debt issue cost, net and other | ||||||||||||
Total debt | ||||||||||||
Less: current maturities | ( | ) | ( | ) | ||||||||
Total long-term debt | $ | $ |
(1) | Certain aircraft and other financings are comprised of variable rate debt. All variable rates are equal to LIBOR (generally subject to a floor) or another index rate, in each case plus a specified margin. |
(2) | Due in installments. |
(3) | Primarily includes unsecured bonds and debt secured by certain accounts receivable and real estate. |
(in millions) | Total Principal | Fixed Interest Rate | Issuance Date | Final Maturity Date | ||
2019-1 Class AA Certificates | $ | March 2019 | April 2024 | |||
2019-1 Class A Certificates | March 2019 | April 2024 | ||||
Total | $ |
(in millions) | |||
2018 Unsecured Revolving Credit Facility | $ | ||
Other revolving credit facilities | |||
Total availability under revolving credit facilities | $ |
(in millions) | June 30, 2019 | December 31, 2018 | ||||
Total debt at par value | $ | $ | ||||
Unamortized premium and debt issue cost, net and other | ||||||
Net carrying amount | $ | $ | ||||
Fair value | $ | $ |
Pension Benefits | Other Postretirement and Postemployment Benefits | ||||||||||||
(in millions) | 2019 | 2018 | 2019 | 2018 | |||||||||
Three Months Ended June 30, | |||||||||||||
Service cost | $ | $ | $ | $ | |||||||||
Interest cost | |||||||||||||
Expected return on plan assets | ( | ) | ( | ) | ( | ) | ( | ) | |||||
Amortization of prior service credit | ( | ) | ( | ) | |||||||||
Recognized net actuarial loss | |||||||||||||
Settlements | |||||||||||||
Net periodic (benefit) cost | $ | ( | ) | $ | ( | ) | $ | $ | |||||
Six Months Ended June 30, | |||||||||||||
Service cost | $ | $ | $ | $ | |||||||||
Interest cost | |||||||||||||
Expected return on plan assets | ( | ) | ( | ) | ( | ) | ( | ) | |||||
Amortization of prior service credit | ( | ) | ( | ) | |||||||||
Recognized net actuarial loss | |||||||||||||
Settlements | |||||||||||||
Net periodic (benefit) cost | $ | ( | ) | $ | ( | ) | $ | $ |
(in millions) | Total | ||
Six months ending December 31, 2019 | $ | ||
2020 | |||
2021 | |||
2022 | |||
2023 | |||
Thereafter | |||
Total | $ |
Aircraft Type | Purchase Commitments | |
A220-100 | ||
A220-300 | ||
A321-200 | ||
A321-200neo | ||
A330-900neo | ||
A350-900 | ||
CRJ-900 | ||
Total |
(in millions) | Pension and Other Benefit Liabilities(3) | Derivative Contracts and Other | Available-for-Sale Investments | Total | ||||||||
Balance at January 1, 2019 (net of tax effect of $1,492) | $ | ( | ) | $ | $ | $ | ( | ) | ||||
Changes in value (net of tax effect of $2) | ||||||||||||
Reclassifications into earnings (net of tax effect of $38)(1) | ||||||||||||
Balance at June 30, 2019 (net of tax effect of $1,452) | $ | ( | ) | $ | $ | $ | ( | ) |
Balance at January 1, 2018 (net of tax effect of $1,400) | $ | ( | ) | $ | $ | $ | ( | ) | ||||
Changes in value (net of tax effect of $1) | ||||||||||||
Reclassifications into retained earnings (net of tax effect of $61)(2) | ( | ) | ( | ) | ||||||||
Reclassifications into earnings (net of tax effect of $35)(1) | ||||||||||||
Balance at June 30, 2018 (net of tax effect of $1,426) | $ | ( | ) | $ | $ | $ | ( | ) |
(1) | Amounts reclassified from AOCI for pension and other benefit liabilities and for derivative contracts designated as foreign currency cash flow hedges are recorded in miscellaneous and in passenger revenue, respectively, in the income statement. |
(2) | The reclassification into retained earnings relates to our investments in GOL, China Eastern and other previously designated available-for-sale investments, and the related conversion to accounting for changes in fair value of these investments from AOCI to the income statement. |
(3) | Includes $ |
(in millions) | Airline | Refinery | Intersegment Sales/Other | Consolidated | ||||||||||
Three Months Ended June 30, 2019 | ||||||||||||||
Operating revenue: | $ | $ | $ | |||||||||||
Sales to airline segment | $ | ( | ) | (1) | ||||||||||
Exchanged products | ( | ) | (2) | |||||||||||
Sales of refined products | ( | ) | (3) | |||||||||||
Operating income | ||||||||||||||
Interest expense (income), net | ( | ) | ||||||||||||
Depreciation and amortization | ||||||||||||||
Total assets, end of period | ||||||||||||||
Capital expenditures | ||||||||||||||
Three Months Ended June 30, 2018 | ||||||||||||||
Operating revenue: | $ | $ | $ | |||||||||||
Sales to airline segment | $ | ( | ) | (1) | ||||||||||
Exchanged products | ( | ) | (2) | |||||||||||
Sales of refined products | ( | ) | (3) | |||||||||||
Operating income | ||||||||||||||
Interest expense (income), net | ( | ) | ||||||||||||
Depreciation and amortization | ||||||||||||||
Total assets, end of period | ||||||||||||||
Capital expenditures |
(1) | Represents transfers, valued on a market price basis, from the refinery to the airline segment for use in airline operations. We determine market price by reference to the market index for the primary delivery location, which is New York Harbor, for jet fuel from the refinery. |
(2) | Represents value of products delivered under our exchange agreements, as discussed above, determined on a market price basis. |
(3) | These sales were at or near cost; accordingly, the margin on these sales is de minimis. |
(in millions) | Airline | Refinery | Intersegment Sales/Other | Consolidated | ||||||||||
Six Months Ended June 30, 2019 | ||||||||||||||
Operating revenue: | $ | $ | $ | |||||||||||
Sales to airline segment | $ | ( | ) | (1) | ||||||||||
Exchanged products | ( | ) | (2) | |||||||||||
Sales of refined products | ( | ) | (3) | |||||||||||
Operating income | ||||||||||||||
Interest expense (income), net | ( | ) | ||||||||||||
Depreciation and amortization | ||||||||||||||
Capital expenditures | ||||||||||||||
Six Months Ended June 30, 2018 | ||||||||||||||
Operating revenue: | $ | $ | $ | |||||||||||
Sales to airline segment | $ | ( | ) | (1) | ||||||||||
Exchanged products | ( | ) | (2) | |||||||||||
Sales of refined products | ( | ) | (3) | |||||||||||
Operating income | ||||||||||||||
Interest expense (income), net | ( | ) | ||||||||||||
Depreciation and amortization | ||||||||||||||
Capital expenditures |
(1) | Represents transfers, valued on a market price basis, from the refinery to the airline segment for use in airline operations. We determine market price by reference to the market index for the primary delivery location, which is New York Harbor, for jet fuel from the refinery. |
(2) | Represents value of products delivered under our exchange agreements, as discussed above, determined on a market price basis. |
(3) | These sales were at or near cost; accordingly, the margin on these sales is de minimis. |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||
(in millions, except per share data) | 2019 | 2018 | 2019 | 2018 | |||||||||
Net income | $ | $ | $ | $ | |||||||||
Basic weighted average shares outstanding | |||||||||||||
Dilutive effect of share-based awards | |||||||||||||
Diluted weighted average shares outstanding | |||||||||||||
Basic earnings per share | $ | $ | $ | $ | |||||||||
Diluted earnings per share | $ | $ | $ | $ |
Three Months Ended June 30, | Increase (Decrease) | % Increase (Decrease) | |||||||||
(in millions) | 2019 | 2018 | |||||||||
Ticket - Main cabin | $ | 5,938 | $ | 5,644 | $ | 294 | 5.2 | % | |||
Ticket - Business cabin and premium products | 4,031 | 3,664 | 367 | 10.0 | % | ||||||
Loyalty travel awards | 751 | 680 | 71 | 10.4 | % | ||||||
Travel-related services | 648 | 558 | 90 | 16.1 | % | ||||||
Total passenger revenue | $ | 11,368 | $ | 10,546 | $ | 822 | 7.8 | % | |||
Cargo | 186 | 223 | (37 | ) | (16.7 | )% | |||||
Other | 982 | 1,006 | (24 | ) | (2.4 | )% | |||||
Total operating revenue | $ | 12,536 | $ | 11,775 | $ | 761 | 6.5 | % | |||
TRASM (cents) | 17.47 | ¢ | 17.19 | ¢ | 0.28 | ¢ | 1.6 | % | |||
Third-party refinery sales(1) | (0.06 | ) | (0.32 | ) | 0.26 | NM | |||||
DGS sale adjustment(1) | — | (0.09 | ) | 0.09 | NM | ||||||
TRASM, adjusted (cents) | 17.42 | ¢ | 16.78 | ¢ | 0.63 | ¢ | 3.8 | % |
(1) | For additional information on adjustments to TRASM, see "Supplemental Information" below. |
Increase (Decrease) vs. Three Months Ended June 30, 2018 | ||||||||||||||||
(in millions) | Three Months Ended June 30, 2019 | Passenger Revenue | RPMs (Traffic) | ASMs (Capacity) | Passenger Mile Yield | PRASM | Load Factor | |||||||||
Domestic | $ | 8,071 | 8.8 | % | 7.8 | % | 5.1 | % | 0.9 | % | 3.6 | % | 2.3 | pts | ||
Atlantic | 1,880 | 6.1 | % | 4.2 | % | 4.6 | % | 1.9 | % | 1.5 | % | (0.4 | ) | pts | ||
Latin America | 760 | 5.2 | % | (0.4 | )% | (2.4 | )% | 5.6 | % | 7.8 | % | 1.7 | pts | |||
Pacific | 657 | 3.2 | % | 7.4 | % | 9.7 | % | (3.9 | )% | (5.9 | )% | (1.8 | ) | pts | ||
Total | $ | 11,368 | 7.8 | % | 6.3 | % | 4.7 | % | 1.4 | % | 2.9 | % | 1.3 | pts |
Three Months Ended June 30, | Increase (Decrease) | % Increase (Decrease) | |||||||||
(in millions) | 2019 | 2018 | |||||||||
Loyalty program | $ | 484 | $ | 358 | $ | 126 | 35.2 | % | |||
Ancillary businesses and refinery | 330 | 522 | (192 | ) | (36.8 | )% | |||||
Miscellaneous | 168 | 126 | 42 | 33.3 | % | ||||||
Total other revenue | $ | 982 | $ | 1,006 | $ | (24 | ) | (2.4 | )% |
Three Months Ended June 30, | Increase (Decrease) | % Increase (Decrease) | |||||||||
(in millions) | 2019 | 2018 | |||||||||
Salaries and related costs | $ | 2,752 | $ | 2,668 | $ | 84 | 3.1 | % | |||
Aircraft fuel and related taxes | 2,291 | 2,341 | (50 | ) | (2.1 | )% | |||||
Regional carriers expense, excluding fuel | 905 | 863 | 42 | 4.9 | % | ||||||
Depreciation and amortization | 713 | 583 | 130 | 22.3 | % | ||||||
Contracted services | 657 | 540 | 117 | 21.7 | % | ||||||
Passenger commissions and other selling expenses | 538 | 511 | 27 | 5.3 | % | ||||||
Aircraft maintenance materials and outside repairs | 434 | 427 | 7 | 1.6 | % | ||||||
Landing fees and other rents | 442 | 425 | 17 | 4.0 | % | ||||||
Profit sharing | 518 | 404 | 114 | 28.2 | % | ||||||
Ancillary businesses and refinery | 316 | 494 | (178 | ) | (36.0 | )% | |||||
Passenger service | 322 | 300 | 22 | 7.3 | % | ||||||
Aircraft rent | 107 | 97 | 10 | 10.3 | % | ||||||
Other | 413 | 438 | (25 | ) | (5.7 | )% | |||||
Total operating expense | $ | 10,408 | $ | 10,091 | $ | 317 | 3.1 | % |
Average Price Per Gallon | ||||||||||||||||||
Three Months Ended June 30, | Change | Three Months Ended June 30, | Change | |||||||||||||||
(in millions, except per gallon data) (1) | 2019 | 2018 | 2019 | 2018 | ||||||||||||||
Fuel purchase cost(2) | $ | 2,318 | $ | 2,361 | $ | (43 | ) | $ | 2.11 | $ | 2.21 | $ | (0.10 | ) | ||||
Fuel hedge impact | 10 | 25 | (15 | ) | — | 0.02 | (0.02 | ) | ||||||||||
Refinery segment impact | (37 | ) | (45 | ) | 8 | (0.03 | ) | (0.04 | ) | 0.01 | ||||||||
Total fuel expense | $ | 2,291 | $ | 2,341 | $ | (50 | ) | $ | 2.08 | $ | 2.19 | $ | (0.11 | ) | ||||
MTM adjustments and settlements(3) | (10 | ) | (24 | ) | 14 | — | (0.02 | ) | 0.02 | |||||||||
Total fuel expense, adjusted | $ | 2,282 | $ | 2,317 | $ | (35 | ) | $ | 2.08 | $ | 2.17 | $ | (0.10 | ) |
(1) | The reconciliation above may not calculate exactly due to rounding. |
(2) | Market price for jet fuel at airport locations, including related taxes and transportation costs. |
(3) | Mark-to-market ("MTM") adjustments and settlements include the effects of the derivative transactions disclosed in Note 5 of the Notes to the Condensed Consolidated Financial Statements. For the reason fuel expense is adjusted for MTM adjustments and settlements, see "Supplemental Information" below. |
Six Months Ended June 30, | Increase (Decrease) | % Increase (Decrease) | |||||||||
(in millions) | 2019 | 2018 | |||||||||
Ticket - Main cabin | $ | 10,659 | $ | 10,267 | $ | 392 | 3.8 | % | |||
Ticket - Business cabin and premium products | 7,298 | 6,694 | 604 | 9.0 | % | ||||||
Loyalty travel awards | 1,442 | 1,298 | 144 | 11.1 | % | ||||||
Travel-related services | 1,223 | 1,052 | 171 | 16.3 | % | ||||||
Total passenger revenue | $ | 20,622 | $ | 19,311 | $ | 1,311 | 6.8 | % | |||
Cargo | 378 | 425 | (47 | ) | (11.1 | )% | |||||
Other | 2,008 | 2,007 | 1 | — | % | ||||||
Total operating revenue | $ | 23,008 | $ | 21,743 | $ | 1,265 | 5.8 | % | |||
TRASM (cents) | 17.15 | ¢ | 16.99 | ¢ | 0.16 | ¢ | 0.9 | % | |||
Third-party refinery sales(1) | (0.07 | ) | (0.33 | ) | 0.26 | NM | |||||
DGS sale adjustment(1) | — | (0.09 | ) | 0.09 | NM | ||||||
TRASM, adjusted (cents) | 17.08 | ¢ | 16.57 | ¢ | 0.51 | ¢ | 3.1 | % |
(1) | For additional information on adjustments to TRASM, see "Supplemental Information" below. |
Increase (Decrease) vs. Six Months Ended June 30, 2018 | ||||||||||||||||
(in millions) | Six Months Ended June 30, 2019 | Passenger Revenue | RPMs (Traffic) | ASMs (Capacity) | Passenger Mile Yield | PRASM | Load Factor | |||||||||
Domestic | $ | 14,784 | 7.9 | % | 7.0 | % | 5.5 | % | 0.9 | % | 2.3 | % | 1.2 | pts | ||
Atlantic | 2,983 | 5.0 | % | 4.7 | % | 5.0 | % | 0.3 | % | — | % | (0.3 | ) | pts | ||
Latin America | 1,615 | 4.0 | % | (0.2 | )% | (0.8 | )% | 4.2 | % | 4.9 | % | 0.5 | pts | |||
Pacific | 1,240 | 1.7 | % | 4.6 | % | 6.4 | % | (2.8 | )% | (4.4 | )% | (1.5 | ) | pts | ||
Total | $ | 20,622 | 6.8 | % | 5.6 | % | 4.8 | % | 1.1 | % | 1.8 | % | 0.6 | pts |
Six Months Ended June 30, | Increase (Decrease) | % Increase (Decrease) | |||||||||
(in millions) | 2019 | 2018 | |||||||||
Loyalty program | $ | 958 | $ | 705 | $ | 253 | 35.9 | % | |||
Ancillary businesses and refinery | 699 | 1,042 | (343 | ) | (32.9 | )% | |||||
Miscellaneous | 351 | 260 | 91 | 35.0 | % | ||||||
Total other revenue | $ | 2,008 | $ | 2,007 | $ | 1 | — | % |
Six Months Ended June 30, | Increase (Decrease) | % Increase (Decrease) | |||||||||
(in millions) | 2019 | 2018 | |||||||||
Salaries and related costs | $ | 5,391 | $ | 5,252 | $ | 139 | 2.6 | % | |||
Aircraft fuel and related taxes | 4,269 | 4,195 | 74 | 1.8 | % | ||||||
Regional carriers expense, excluding fuel | 1,798 | 1,701 | 97 | 5.7 | % | ||||||
Depreciation and amortization | 1,328 | 1,186 | 142 | 12.0 | % | ||||||
Contracted services | 1,288 | 1,084 | 204 | 18.8 | % | ||||||
Passenger commissions and other selling expenses | 965 | 938 | 27 | 2.9 | % | ||||||
Aircraft maintenance materials and outside repairs | 910 | 862 | 48 | 5.6 | % | ||||||
Landing fees and other rents | 861 | 814 | 47 | 5.8 | % | ||||||
Profit sharing | 739 | 592 | 147 | 24.8 | % | ||||||
Ancillary businesses and refinery | 667 | 987 | (320 | ) | (32.4 | )% | |||||
Passenger service | 593 | 563 | 30 | 5.3 | % | ||||||
Aircraft rent | 209 | 191 | 18 | 9.4 | % | ||||||
Other | 842 | 850 | (8 | ) | (0.9 | )% | |||||
Total operating expense | $ | 19,860 | $ | 19,215 | $ | 645 | 3.4 | % |
Average Price Per Gallon | ||||||||||||||||||
Six Months Ended June 30, | Change | Six Months Ended June 30, | Change | |||||||||||||||
(in millions, except per gallon data) (1) | 2019 | 2018 | 2019 | 2018 | ||||||||||||||
Fuel purchase cost(2) | $ | 4,255 | $ | 4,289 | $ | (34 | ) | $ | 2.06 | $ | 2.14 | $ | (0.08 | ) | ||||
Fuel hedge impact | 17 | (5 | ) | 22 | 0.01 | — | 0.01 | |||||||||||
Refinery segment impact | (3 | ) | (89 | ) | 86 | — | (0.04 | ) | 0.04 | |||||||||
Total fuel expense | $ | 4,269 | $ | 4,195 | $ | 74 | $ | 2.07 | $ | 2.10 | $ | (0.03 | ) | |||||
MTM adjustments and settlements(3) | (17 | ) | 4 | (21 | ) | (0.01 | ) | — | (0.01 | ) | ||||||||
Total fuel expense, adjusted | $ | 4,252 | $ | 4,199 | $ | 52 | $ | 2.06 | $ | 2.10 | $ | (0.03 | ) |
(1) | The reconciliation above may not calculate exactly due to rounding. |
(2) | Market price for jet fuel at airport locations, including related taxes and transportation costs. |
(3) | MTM adjustments and settlements include the effects of the derivative transactions disclosed in Note 5 of the Notes to the Condensed Consolidated Financial Statements. For additional information and the reason for adjusting fuel expense, see "Supplemental Information" below. |
Non-Operating Results | Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||
(in millions) | 2019 | 2018 | Favorable (Unfavorable) | 2019 | 2018 | Favorable (Unfavorable) | ||||||||||||
Interest expense, net | $ | (75 | ) | $ | (79 | ) | $ | 4 | $ | (158 | ) | $ | (170 | ) | $ | 12 | ||
Unrealized gain/(loss) on investments, net | (82 | ) | (238 | ) | 156 | 18 | (220 | ) | 238 | |||||||||
Miscellaneous, net | (64 | ) | 19 | (83 | ) | (155 | ) | (19 | ) | (136 | ) | |||||||
Total non-operating expense, net | $ | (221 | ) | $ | (298 | ) | $ | 77 | $ | (295 | ) | $ | (409 | ) | $ | 114 |
Three Months Ended June 30, | % Increase (Decrease) | Six Months Ended June 30, | % Increase (Decrease) | |||||||||||||||
Consolidated(1) | 2019 | 2018 | 2019 | 2018 | ||||||||||||||
Revenue passenger miles (in millions) | 63,173 | 59,406 | 6.3 | % | 114,790 | 108,682 | 5.6 | % | ||||||||||
Available seat miles (in millions) | 71,754 | 68,514 | 4.7 | % | 134,169 | 127,967 | 4.8 | % | ||||||||||
Passenger mile yield | 18.00 | ¢ | 17.75 | ¢ | 1.4 | % | 17.96 | ¢ | 17.77 | ¢ | 1.1 | % | ||||||
PRASM | 15.84 | ¢ | 15.39 | ¢ | 2.9 | % | 15.37 | ¢ | 15.09 | ¢ | 1.8 | % | ||||||
TRASM | 17.47 | ¢ | 17.19 | ¢ | 1.6 | % | 17.15 | ¢ | 16.99 | ¢ | 0.9 | % | ||||||
TRASM, adjusted(2) | 17.42 | ¢ | 16.78 | ¢ | 3.8 | % | 17.08 | ¢ | 16.57 | ¢ | 3.1 | % | ||||||
CASM | 14.51 | ¢ | 14.73 | ¢ | (1.5 | ) | % | 14.80 | ¢ | 15.02 | ¢ | (1.5 | ) | % | ||||
CASM-Ex(2) | 10.15 | ¢ | 10.00 | ¢ | 1.4 | % | 10.57 | ¢ | 10.50 | ¢ | 0.6 | % | ||||||
Passenger load factor | 88.0 | % | 86.7 | % | 1.3 | pts | 85.6 | % | 84.9 | % | 0.6 | pts | ||||||
Fuel gallons consumed (in millions) | 1,099 | 1,067 | 3.0 | % | 2,061 | 2,003 | 2.9 | % | ||||||||||
Average price per fuel gallon(3) | $ | 2.08 | $ | 2.19 | (5.0 | ) | % | $ | 2.07 | $ | 2.10 | (1.4 | ) | % | ||||
Average price per fuel gallon, adjusted(3)(4) | $ | 2.08 | $ | 2.17 | (4.4 | ) | % | $ | 2.06 | $ | 2.10 | (1.6 | ) | % |
(1) | Includes the operations of our regional carriers under capacity purchase agreements. |
(2) | Non-GAAP financial measure defined and reconciled to TRASM and CASM, respectively, in "Supplemental Information" below. |
(3) | Includes the impact of fuel hedge activity and refinery segment results. |
(4) | Non-GAAP financial measure defined and reconciled to average fuel price per gallon in "Results of Operations" for the three and six months ended June 30, 2019 and 2018. |
Current Fleet(1) | Commitments | ||||||||||||
Aircraft Type | Owned | Finance Lease | Operating Lease | Total | Average Age | Purchase | Options | ||||||
B-717-200 | 3 | 16 | 72 | 91 | 17.8 | — | — | ||||||
B-737-700 | 10 | — | — | 10 | 10.4 | — | — | ||||||
B-737-800 | 73 | 4 | — | 77 | 17.8 | — | — | ||||||
B-737-900ER | 88 | — | 42 | 130 | 2.8 | — | — | ||||||
B-757-200 | 91 | 7 | 2 | 100 | 21.9 | — | — | ||||||
B-757-300 | 16 | — | — | 16 | 16.4 | — | — | ||||||
B-767-300ER | 56 | — | — | 56 | 23.1 | — | — | ||||||
B-767-400ER | 21 | — | — | 21 | 18.5 | — | — | ||||||
B-777-200ER | 8 | — | — | 8 | 19.6 | — | — | ||||||
B-777-200LR | 10 | — | — | 10 | 10.3 | — | — | ||||||
A220-100 | 17 | 1 | — | 18 | 0.3 | 27 | — | ||||||
A220-300 | — | — | — | — | — | 50 | 50 | ||||||
A319-100 | 55 | — | 2 | 57 | 17.3 | — | — | ||||||
A320-200 | 55 | 3 | 4 | 62 | 23.9 | — | — | ||||||
A321-200 | 49 | 3 | 31 | 83 | 1.4 | 44 | — | ||||||
A321-200neo | — | — | — | — | — | 100 | 100 | ||||||
A330-200 | 11 | — | — | 11 | 14.3 | — | — | ||||||
A330-300 | 28 | — | 3 | 31 | 10.5 | — | — | ||||||
A330-900neo | 2 | — | — | 2 | 0.1 | 33 | — | ||||||
A350-900 | 13 | — | — | 13 | 1.3 | 12 | — | ||||||
MD-88 | 63 | 11 | — | 74 | 28.6 | — | — | ||||||
MD-90 | 34 | — | — | 34 | 22.2 | — | — | ||||||
Total | 703 | 45 | 156 | 904 | 15.3 | 266 | 150 |
(1) | Excludes certain aircraft we own, lease or have committed to purchase (including 9 CRJ-900 aircraft) that are operated by regional carriers on our behalf shown in the table below. |
Fleet Type | ||||||||||||
Carrier | CRJ-200 | CRJ-700 | CRJ-900 | Embraer 170 | Embraer 175 | Total | ||||||
Endeavor Air, Inc.(1) | 42 | 5 | 109 | — | — | 156 | ||||||
SkyWest Airlines, Inc. | 77 | 17 | 42 | — | 54 | 190 | ||||||
Compass Airlines, Inc. | — | — | — | — | 36 | 36 | ||||||
Republic Airways, Inc. | — | — | — | 22 | 16 | 38 | ||||||
GoJet Airlines, LLC | — | 20 | 7 | — | — | 27 | ||||||
Total | 119 | 42 | 158 | 22 | 106 | 447 |
(1) | Endeavor Air, Inc. is a wholly owned subsidiary of Delta. |
• | MTM adjustments and settlements. MTM adjustments are defined as fair value changes recorded in periods other than the settlement period. Such fair value changes are not necessarily indicative of the actual settlement value of the underlying hedge in the contract settlement period. Settlements represent cash received or paid on hedge contracts settled during the period. |
• | Equity investment MTM adjustments. We record our proportionate share of earnings/loss from our equity investments in Virgin Atlantic and Aeroméxico in non-operating expense. We adjust for our equity method investees' hedge portfolio MTM adjustments to allow investors to better understand and analyze our core operational performance in the periods shown. |
• | Unrealized gain/loss on investments. We record the unrealized gains/losses on our equity investments in GOL, China Eastern, Air France-KLM and Korean, which are accounted for at fair value in non-operating expense. Adjusting for these gains/losses allows investors to better understand and analyze our core operational performance in the periods shown. |
• | DGS sale adjustment. Because we sold DGS in December 2018, we have excluded the impact of DGS from 2018 results for better comparability. |
Three Months Ended June 30, | ||||||
(in millions) | 2019 | 2018 | ||||
Pre-tax income | $ | 1,907 | $ | 1,386 | ||
Adjusted for: | ||||||
MTM adjustments and settlements | 10 | 24 | ||||
Equity investment MTM adjustments | (2 | ) | (22 | ) | ||
Unrealized gain/loss on investments | 82 | 238 | ||||
DGS sale adjustment | — | (9 | ) | |||
Pre-tax income, adjusted | $ | 1,997 | $ | 1,617 |
• | Third-party refinery sales. We adjust TRASM for refinery sales to third parties to determine TRASM, adjusted because these revenues are not related to our airline segment. TRASM, adjusted therefore provides a more meaningful comparison of revenue from our airline operations to the rest of the airline industry. |
• | DGS sale adjustment. We adjust for the DGS sale for the same reason described above under the heading pre-tax income, adjusted. |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||
TRASM | 17.47 | ¢ | 17.19 | ¢ | 17.15 | ¢ | 16.99 | ¢ | |||||
Adjusted for: | |||||||||||||
Third-party refinery sales | (0.06 | ) | (0.32 | ) | (0.07 | ) | (0.33 | ) | |||||
DGS sale adjustment | — | (0.09 | ) | — | (0.09 | ) | |||||||
TRASM, adjusted | 17.42 | ¢ | 16.78 | ¢ | 17.08 | ¢ | 16.57 | ¢ |
• | Aircraft fuel and related taxes. The volatility in fuel prices impacts the comparability of year-over-year financial performance. The adjustment for aircraft fuel and related taxes allows investors to better understand and analyze our non-fuel costs and year-over-year financial performance. |
• | Ancillary businesses and refinery. We adjust for expenses related to aircraft maintenance we provide to third parties, our vacation wholesale operations, our private jet operations as well as refinery cost of sales to third parties. 2018 results also include staffing services performed by DGS. Because these businesses are not related to the generation of a seat mile, we adjust for the costs related to these areas to provide a more meaningful comparison of the costs of our airline operations to the rest of the airline industry. |
• | Profit sharing. We adjust for profit sharing because this adjustment allows investors to better understand and analyze our recurring cost performance and provides a more meaningful comparison of our core operating costs to the airline industry. |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||
CASM | 14.51 | ¢ | 14.73 | ¢ | 14.80 | ¢ | 15.02 | ¢ | |||||
Adjusted for: | |||||||||||||
Aircraft fuel and related taxes | (3.19 | ) | (3.42 | ) | (3.18 | ) | (3.28 | ) | |||||
Ancillary businesses and refinery | (0.44 | ) | (0.72 | ) | (0.50 | ) | (0.77 | ) | |||||
Profit sharing | (0.72 | ) | (0.59 | ) | (0.55 | ) | (0.46 | ) | |||||
CASM-Ex | 10.15 | ¢ | 10.00 | ¢ | 10.57 | ¢ | 10.50 | ¢ |
• | Net redemptions of short-term investments. Net redemptions of short-term investments represent the net purchase and sale activity of investments and marketable securities in the period, including gains and losses. We adjust for this activity to provide investors a better understanding of the company's free cash flow generated by our operations. |
• | Net cash flows related to certain airport construction projects and other. Cash flows related to certain airport construction projects are included in our GAAP operating activities and capital expenditures. We have adjusted for these items, which were primarily funded by cash restricted for airport construction, to provide investors a better understanding of the company's free cash flow and capital expenditures that are core to our operational performance in the periods shown. |
Three Months Ended June 30, | ||||||
(in millions) | 2019 | 2018 | ||||
Net cash provided by operating activities | $ | 3,273 | $ | 2,898 | ||
Net cash used in investing activities | (1,567 | ) | (1,545 | ) | ||
Adjustments: | ||||||
Net redemptions of short-term investments | — | (4 | ) | |||
Net cash flows related to certain airport construction projects and other | 65 | 43 | ||||
Total free cash flow | $ | 1,771 | $ | 1,392 |
Period | Total Number of Shares Purchased | Average Price Paid Per Share | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs | Approximate Dollar Value (in millions) of Shares That May Yet be Purchased Under the Plan or Programs | |||||||
April 2019 | 693,312 | $ | 56.67 | 693,312 | $ | 1,735 | |||||
May 2019 | 779,003 | $ | 55.67 | 779,003 | $ | 1,690 | |||||
June 2019 | 3,467,360 | $ | 54.25 | 3,467,360 | $ | 1,500 | |||||
Total | 4,939,675 | 4,939,675 |
10.1 |
15 |
31.1 |
31.2 |
32 |
101.INS | XBRL Instance Document - The instance document does not appear in the interactive data file because its XBRL tags are embedded within the inline XBRL document. |
101.SCH | XBRL Taxonomy Extension Schema Document |
101.CAL | XBRL Taxonomy Extension Calculation Linkbase Document |
101.DEF | XBRL Taxonomy Extension Definition Linkbase Document |
101.LAB | XBRL Taxonomy Extension Labels Linkbase Document |
101.PRE | XBRL Taxonomy Extension Presentation Linkbase Document |
Delta Air Lines, Inc. | |
(Registrant) | |
/s/ William C. Carroll | |
William C. Carroll | |
Senior Vice President - Finance and Controller | |
(Principal Accounting Officer) | |
July 11, 2019 |
Participants: | All members of Delta’s Board of Directors (the “Board”) who are not employees of Delta (“Non-Employee Directors”), which includes the Chairman of the Board (the “Chairman”). These directors are: |
Francis S. Blake (Chairman) | Michael P. Huerta |
Daniel A. Carp | Jeanne P. Jackson |
Ashton B. Carter | George N. Mattson |
David G. DeWalt | Sergio A. L. Rial |
William H. Easter III | Kathy N. Waller |
Type of Award: | Restricted Stock, as defined and granted under the Delta Air Lines, Inc. Performance Compensation Plan (the “Performance Compensation Plan”). |
Grant Date: | June 20, 2019 |
Shares: | The number of shares of Restricted Stock granted to each Non-Employee Director other than the Chairman equals the result of the following formula: $175,000 divided by Y, where |
Partial Shares: | Any partial shares resulting from the above formula will be ignored and the aggregate shares of Restricted Stock for each Non-Employee Director will be rounded up to the nearest whole ten shares. |
Vesting: | Each grant awarded to a Non-Employee Director under the terms of this Attachment A (a “2019 Grant”) will vest (the “Vesting Date”) on the earlier of (1) June 20, 2020 and (2) the date of Delta’s 2020 Annual Meeting of Stockholders, subject to such Non-Employee Director’s continued service as a member of the Board on the Vesting Date. |
Vesting: | Notwithstanding the foregoing, accelerated vesting will occur prior to the Vesting Date as follows: individual 2019 Grants will immediately vest on the date such Non-Employee Director ceases to be a member of the Board due to death, Disability or Retirement. For purposes of the 2019 Grant, (1) “Disability” means the Non-Employee Director’s inability to perform his or her duties as a member of the Board for a period of 180 or more days as a result of a demonstrable injury or disease and (2) “Retirement” means retiring from the Board (i) at or after age 52 with at least ten years of service as a director; (ii) at or after age 68 with at least five years of service as a director; or (iii) at the Non-Employee Director’s mandatory retirement date. |
Forfeiture: | Except as expressly set forth above, a Non-Employee Director will immediately forfeit any unvested Restricted Stock on the date such Non-Employee Director ceases to be a member of the Board for any reason, other than due to death, Disability or Retirement. |
Dividends: | In the event a cash dividend is paid with respect to shares of Delta Common Stock at a time during which the 2019 Grant is unvested, the Non-Employee Director will be eligible to receive the dividend when the 2019 Grant vests. |
1. | I have reviewed this quarterly report on Form 10-Q of Delta Air Lines, Inc. ("Delta") for the quarterly period ended June 30, 2019; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of Delta as of, and for, the periods presented in this report; |
4. | Delta's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for Delta and have: |
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to Delta, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
(b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
(c) | Evaluated the effectiveness of Delta's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
(d) | Disclosed in this report any change in Delta's internal control over financial reporting that occurred during Delta's most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, Delta's internal control over financial reporting; and |
5. | Delta's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to Delta's auditors and the Audit Committee of Delta's Board of Directors (or persons performing the equivalent functions): |
(a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect Delta's ability to record, process, summarize and report financial information; and |
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in Delta's internal control over financial reporting. |
July 11, 2019 | /s/ Edward H. Bastian |
Edward H. Bastian | |
Chief Executive Officer |
1. | I have reviewed this quarterly report on Form 10-Q of Delta Air Lines, Inc. ("Delta") for the quarterly period ended June 30, 2019; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of Delta as of, and for, the periods presented in this report; |
4. | Delta's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for Delta and have: |
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to Delta, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
(b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
(c) | Evaluated the effectiveness of Delta's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
(d) | Disclosed in this report any change in Delta's internal control over financial reporting that occurred during Delta's most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, Delta's internal control over financial reporting; and |
5. | Delta's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to Delta's auditors and the Audit Committee of Delta's Board of Directors (or persons performing the equivalent functions): |
(a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect Delta's ability to record, process, summarize and report financial information; and |
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in Delta's internal control over financial reporting. |
July 11, 2019 | /s/ Paul A. Jacobson |
Paul A. Jacobson | |
Executive Vice President and Chief Financial Officer |
1. | such Report fully complies with the requirements of Section 13(a) of the Securities Exchange Act of 1934; and |
2. | the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of Delta. |
/s/ Edward H. Bastian | |
Edward H. Bastian | |
Chief Executive Officer | |
/s/ Paul A. Jacobson | |
Paul A. Jacobson | |
Executive Vice President and Chief Financial Officer | |
Consolidated Balance Sheets (Unaudited) (Parentheticals) - USD ($) $ in Millions |
Jun. 30, 2019 |
Dec. 31, 2018 |
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Current Assets: | ||
Allowance for uncollectible accounts | $ 14 | $ 12 |
Allowance for obsolescence | 96 | 102 |
Noncurrent Assets: | ||
Accumulated depreciation and amortization | 17,005 | 15,823 |
Accumulated amortization | $ 868 | $ 862 |
Stockholders' Equity: | ||
Common stock, par value (USD per share) | $ 0.0001 | $ 0.0001 |
Common stock, authorized (shares) | 1,500,000,000 | 1,500,000,000 |
Common stock, issued (shares) | 659,145,280 | 688,136,306 |
Treasury stock, at cost (shares) | 8,944,663 | 8,191,831 |
Condensed Consolidated Statements of Cash Flows (Unaudited) - Reconciliation of Cash, Cash Equivalents, and Restricted Cash - USD ($) $ in Millions |
Jun. 30, 2019 |
Jun. 30, 2018 |
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Current Assets: | ||
Cash and cash equivalents | $ 2,009 | $ 1,886 |
Restricted cash included in prepaid expenses and other | 127 | 48 |
Noncurrent Assets: | ||
Cash restricted for airport construction | 893 | 1,326 |
Total cash, cash equivalents and restricted cash equivalents | $ 3,029 | $ 3,260 |
Consolidated Statements of Stockholders' Equity (Unaudited) (Parentheticals) - $ / shares |
3 Months Ended | |||
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Jun. 30, 2019 |
Mar. 31, 2019 |
Jun. 30, 2018 |
Mar. 31, 2018 |
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Statement of Stockholders' Equity [Abstract] | ||||
Treasury shares withheld for payment of taxes, weighted average price per share (USD per share) | $ 55.06 | $ 49.75 | $ 52.99 | $ 55.08 |
Summary of Significant Accounting Policies |
6 Months Ended |
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Jun. 30, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Summary of Significant Accounting Policies | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation The accompanying unaudited Condensed Consolidated Financial Statements include the accounts of Delta Air Lines, Inc. and our wholly owned subsidiaries and have been prepared in accordance with accounting principles generally accepted in the United States ("GAAP") for interim financial information. Consistent with these requirements, this Form 10-Q does not include all the information required by GAAP for complete financial statements. As a result, this Form 10-Q should be read in conjunction with the Consolidated Financial Statements and accompanying Notes in our Form 10-K for the year ended December 31, 2018. Management believes the accompanying unaudited Condensed Consolidated Financial Statements reflect all adjustments, including normal recurring items, considered necessary for a fair statement of results for the interim periods presented. Due to seasonal variations in the demand for air travel, the volatility of aircraft fuel prices and other factors, operating results for the three and six months ended June 30, 2019 are not necessarily indicative of operating results for the entire year. We reclassified certain prior period amounts to conform to the current period presentation. Unless otherwise noted, all amounts disclosed are stated before consideration of income taxes. Recent Accounting Standards |
Revenue Recognition |
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Revenue from Contract with Customer [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenue Recognition | REVENUE RECOGNITION Passenger Revenue Passenger revenue is primarily composed of passenger ticket sales, loyalty travel awards and travel-related services performed in conjunction with a passenger’s flight.
We recognized approximately $3.4 billion in passenger revenue during the six months ended June 30, 2019 that was recorded in our air traffic liability balance at December 31, 2018. We expect the remaining balance of the December 31, 2018 liability to be recognized by the end of 2019. Other Revenue
Loyalty Program Our SkyMiles loyalty program generates customer loyalty by rewarding customers with incentives to travel on Delta. This program allows customers to earn mileage credits by flying on Delta, Delta Connection and other airlines that participate in the loyalty program. When traveling, customers earn redeemable mileage credits based on the passenger's loyalty program status and ticket price. Customers can also earn mileage credits through participating companies such as credit card companies, hotels, car rental agencies and ridesharing companies. To facilitate transactions with participating companies, we sell mileage credits to non-airline businesses, customers and other airlines. Mileage credits are redeemable by customers in future periods for air travel on Delta and other participating airlines, membership in our Sky Club and other program awards. During the six months ended June 30, 2019 and 2018, total cash sales from marketing agreements related to our loyalty program were $2.0 billion and $1.7 billion, respectively, which are allocated to travel and other performance obligations. Our most significant contract to sell mileage credits relates to our co-brand credit card relationship with American Express. Our agreements with American Express provide for joint marketing, grant certain benefits to Delta-American Express co-branded credit card holders ("cardholders") and American Express Membership Rewards program participants, and allow American Express to market its services or products using our customer database. Cardholders earn mileage credits for making purchases using co-branded cards, and certain cardholders may also check their first bag for free, are granted discounted access to Delta Sky Club lounges and receive priority boarding and other benefits while traveling on Delta. Additionally, participants in the American Express Membership Rewards program may exchange their points for mileage credits under the loyalty program. We sell mileage credits at agreed-upon rates to American Express which are then provided to their customers under the co-brand credit card program and the Membership Rewards program. We account for marketing agreements, including those with American Express, consistent with the accounting method that allocates the consideration received to the individual products and services delivered. We allocate the value based on the relative selling prices of those products and services, which generally consist of award travel, priority boarding, baggage fee waivers, lounge access and the use of our brand. We determine our best estimate of the selling prices by considering a discounted cash flow analysis using multiple inputs and assumptions, including: (1) the expected number of miles awarded and number of miles redeemed, (2) equivalent ticket value ("ETV") for the award travel obligation, (3) published rates on our website for baggage fees, discounted access to Delta Sky Club lounges and other benefits while traveling on Delta and (4) brand value. Effective January 1, 2019, we amended our co-brand agreement with American Express, and we also amended other agreements with American Express during the current year. The new agreements increase the value we receive and extend the terms to 2029. The products and services delivered are consistent with previous agreements, and we continue to use the accounting method that allocates the consideration received based on the relative selling prices of those products and services. We defer the amount for award travel obligation as part of loyalty program deferred revenue and recognize loyalty travel awards in passenger revenue as the mileage credits are used for travel. Revenue allocated to services performed in conjunction with a passenger’s flight, such as baggage fee waivers, is recognized as travel-related services in passenger revenue when the related service is performed. Revenue allocated to access Delta Sky Club lounges is recognized as miscellaneous in other revenue as access is provided. Revenue allocated to the remaining performance obligations, primarily brand value, is recorded as loyalty program in other revenue over time as miles are delivered. Current Activity of the Loyalty Program. Mileage credits are combined in one homogeneous pool and are not separately identifiable. As such, the revenue is comprised of miles that were part of the loyalty deferred revenue balance at the beginning of the period as well as miles that were issued during the period. The table below presents the activity of the current and noncurrent loyalty liability and includes miles earned through travel and miles sold to participating companies, which are primarily through marketing agreements.
The timing of mileage redemptions can vary widely; however, the majority of new miles are redeemed within two years. Revenue by Geographic Region Operating revenue for the airline segment is recognized in a specific geographic region based on the origin, flight path and destination of each flight segment. The majority of the revenues of the refinery, consisting of fuel sales to the airline, have been eliminated in the Condensed Consolidated Financial Statements. The remaining operating revenue for the refinery segment is included in the domestic region. Our passenger and operating revenue by geographic region (as defined by the U.S. Department of Transportation) is summarized in the following tables:
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Fair Value Measurements |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Measurements | FAIR VALUE MEASUREMENTS Assets (Liabilities) Measured at Fair Value on a Recurring Basis
Cash Equivalents and Restricted Cash Equivalents. Cash equivalents generally consist of money market funds. Restricted cash equivalents generally consist of money market funds, time deposits, commercial paper and negotiable certificates of deposit, which primarily relate to proceeds from debt issued to finance a portion of the construction costs for the new terminal facilities at the LaGuardia Airport. The fair value of these cash equivalents is based on a market approach using prices generated by market transactions involving identical or comparable assets. Short-Term Investments. The fair values of our short-term investments were based on a market approach using industry standard valuation techniques that incorporated observable inputs such as quoted market prices, interest rates, benchmark curves, credit ratings of the security or other observable information and were recorded in prepaid expenses and other on the Consolidated Balance Sheet ("balance sheet"). Long-Term Investments. Our long-term investments that are measured at fair value primarily consist of equity investments, which are valued based on market prices or other observable transactions and are recorded in other noncurrent assets on our balance sheet. See Note 4, "Investments," for further information on our equity investments. Hedge Derivatives. A portion of our derivative contracts are negotiated over-the-counter with counterparties without going through a public exchange. Accordingly, our fair value assessments give consideration to the risk of counterparty default (as well as our own credit risk). Such contracts are classified as Level 2 within the fair value hierarchy. The remainder of our hedge contracts are comprised of futures contracts, which are traded on a public exchange. These contracts are classified within Level 1 of the fair value hierarchy.
• Foreign Currency Exchange Contracts. Our foreign currency derivatives consist of forward contracts and are valued based on data readily observable in public markets.
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Investments |
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Investments, Debt and Equity Securities [Abstract] | |||||||||||||||||||||||||||||||||
Investments | INVESTMENTS Long-Term Investments We have developed strategic relationships with a number of airlines and airline services companies through equity investments and other forms of cooperation and support. Our equity investments reinforce our commitment to strategic relationships, which improve our coordination with these companies and enable our customers to seamlessly connect to more destinations while enjoying a consistent, high-quality travel experience. Equity Method Investments We account for our investments in Aeroméxico, Virgin Atlantic and AirCo Aviation Services, LLC ("AirCo"), the parent company of DAL Global Services, LLC ("DGS"), under the equity method of accounting. Our portion of Aeroméxico's and Virgin Atlantic's financial results are recorded in miscellaneous, net in our Condensed Consolidated Statements of Operations and Comprehensive Income ("income statement") under non-operating expense, and our share of AirCo's financial results is recorded in contracted services in our income statement as this entity is integral to the operations of our business. If an equity method investment experiences a loss in fair value that is determined to be other than temporary, we will reduce our basis in the investment to fair value and record the loss in unrealized gain/(loss) on investments.
Fair Value Investments We account for the following investments at fair value with adjustments to fair value recognized in unrealized gain/(loss) on investments within non-operating expense in our income statement. During the three and six months ended June 30, 2019, we recorded a loss of $82 million and a gain of $18 million, respectively, on our fair value investments. These results were driven by changes in stock prices and foreign currency fluctuations.
Additionally, GOL has a $300 million five-year term loan facility with third parties, which we have guaranteed. Our guaranty is secured by GOL's ownership interest in Smiles, GOL's publicly traded loyalty program. Because GOL remains in compliance with the terms of its loan facility, we have not recorded a liability on our balance sheet as of June 30, 2019.
• Republic Airways. We own a 17% equity interest in Republic Airways Holdings Inc.
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Derivatives and Risk Management |
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Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivatives and Risk Management | DERIVATIVES AND RISK MANAGEMENT Changes in fuel prices, interest rates and foreign currency exchange rates impact our results of operations. In an effort to manage our exposure to these risks, we enter into derivative contracts and adjust our derivative portfolio as market conditions change. We recognize derivative contracts at fair value on our balance sheet. Fuel Price Risk Our derivative contracts to hedge the financial risk from changing fuel prices are primarily related to Monroe’s refining margins. Interest Rate Risk Our exposure to market risk from adverse changes in interest rates is primarily associated with our long-term debt obligations. Market risk associated with our fixed and variable rate long-term debt relates to the potential reduction in fair value and negative impact to future earnings, respectively, from an increase in interest rates. Foreign Currency Exchange Risk We are subject to foreign currency exchange rate risk because we have revenue and expense denominated in foreign currencies. To manage exchange rate risk, we execute both our international revenue and expense transactions in the same foreign currency to the extent practicable. From time to time, we may also enter into foreign currency option and forward contracts. Hedge Position as of June 30, 2019
Hedge Position as of December 31, 2018
Balance Sheet Location of Hedged Item in Fair Value Hedges
Offsetting Assets and Liabilities We have master netting arrangements with our counterparties giving us the right to offset hedge assets and liabilities. However, we have elected not to offset the fair value positions recorded on our balance sheets. The following table shows the net fair value positions by counterparty had we elected to offset.
Designated Hedge Gains (Losses) Gains (losses) related to our foreign currency exchange contracts designated as hedges are as follows:
Not Designated Hedge Gains (Losses) Gains (losses) related to our foreign currency exchange and fuel contracts are as follows:
Credit Risk To manage credit risk associated with our fuel price, interest rate and foreign currency hedging programs, we evaluate counterparties based on several criteria including their credit ratings.
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Debt |
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Debt Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt | DEBT The following table summarizes our debt:
2019 Unsecured Term Loan In February 2019, we entered into a $1 billion term loan issued by two lenders, which was subsequently repaid by the end of the June 2019 quarter. We used the net proceeds of the term loan to accelerate planned 2019 repurchases under our share repurchase program. 2019-1 EETC During 2019, we completed a $500 million offering of Pass Through Certificates, Series 2019-1 ("2019-1 EETC") utilizing a pass through trust. This amount is included in Certificates in the table above. The details of the 2019-1 EETC, which is secured by 14 aircraft, are shown in the table below:
Availability Under Revolving Credit Facilities The table below shows availability under revolving credit facilities, all of which were undrawn, as of June 30, 2019:
Fair Value of Debt Market risk associated with our fixed- and variable-rate long-term debt relates to the potential reduction in fair value and negative impact to future earnings, respectively, from an increase in interest rates. The fair value of debt, shown below, is principally based on reported market values, recently completed market transactions and estimates based on interest rates, maturities, credit risk and underlying collateral. Long-term debt is primarily classified as Level 2 within the fair value hierarchy.
Covenants |
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Retirement Benefits [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Employee Benefit Plans | EMPLOYEE BENEFIT PLANS The following table shows the components of net periodic (benefit) cost:
Service cost is recorded in salaries and related costs in the income statement while all other components are recorded within miscellaneous under non-operating expense.
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Commitments and Contingencies |
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Commitments and Contingencies Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commitments and Contingencies | COMMITMENTS AND CONTINGENCIES Aircraft Purchase Commitments Our future aircraft purchase commitments, which enable our fleet transformation, totaled $14.1 billion at June 30, 2019:
Our future aircraft purchase commitments included the following aircraft at June 30, 2019:
MD-90 Fleet Retirement As part of our ongoing fleet transformation, during the June 2019 quarter we committed to accelerating the retirement of our MD-90 fleet. This fleet will now be retired by the end of 2022, which is approximately two years earlier than previously planned. The decision to permanently retire 31 aircraft resulted in accelerated depreciation of $91 million during the June 2019 quarter, which is recorded in depreciation and amortization in our income statement. Legal Contingencies We are involved in various legal proceedings related to employment practices, environmental issues, antitrust and other matters concerning our business. We record liabilities for losses from legal proceedings when we determine that it is probable that the outcome in a legal proceeding will be unfavorable and the amount of loss can be reasonably estimated. Although the outcome of the legal proceedings in which we are involved cannot be predicted with certainty, we believe that the resolution of current matters will not have a material adverse effect on our Condensed Consolidated Financial Statements. Other Contingencies General Indemnifications We are the lessee under many commercial real estate leases. It is common in these transactions for us, as the lessee, to agree to indemnify the lessor and the lessor's related parties for tort, environmental and other liabilities that arise out of or relate to our use or occupancy of the leased premises. This type of indemnity would typically make us responsible to indemnified parties for liabilities arising out of the conduct of, among others, contractors, licensees and invitees at, or in connection with, the use or occupancy of the leased premises. This indemnity often extends to related liabilities arising from the negligence of the indemnified parties but usually excludes any liabilities caused by either their sole or gross negligence or their willful misconduct. Our aircraft and other equipment lease and financing agreements typically contain provisions requiring us, as the lessee or obligor, 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 other equipment. We believe that our insurance would cover most of our exposure to liabilities and related indemnities associated with the commercial real estate leases and aircraft and other equipment lease and financing agreements described above. While our insurance does not typically cover environmental liabilities, we have insurance policies in place as required by applicable environmental laws. Some of our aircraft and other financing transactions include provisions that require us to make payments to preserve an expected economic return to the lenders if that economic return is diminished due to specified changes in law or regulations. In some of these financing transactions, we also bear the risk of changes in tax laws that would subject payments to non-U.S. lenders to withholding taxes. We cannot reasonably estimate our potential future payments under the indemnities and related provisions described above because we cannot predict (1) when and under what circumstances these provisions may be triggered and (2) the amount that would be payable if the provisions were triggered because the amounts would be based on facts and circumstances existing at such time. Other We have certain contracts for goods and services that require us to pay a penalty, acquire inventory specific to us or purchase contract-specific equipment, as defined by each respective contract, if we terminate the contract without cause prior to its expiration date. Because these obligations are contingent on our termination of the contract without cause prior to its expiration date, no obligation would exist unless such a termination occurs.
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Accumulated Other Comprehensive Loss |
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Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accumulated Other Comprehensive Loss | ACCUMULATED OTHER COMPREHENSIVE LOSS The following tables show the components of accumulated other comprehensive loss:
(3) Includes $688 million of deferred income tax expense primarily related to pension and other benefit obligations that will not be recognized in net income until these obligations are fully extinguished. We consider all income sources, including other comprehensive income, in determining the amount of tax benefit allocated to continuing operations.
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segments | SEGMENTS Refinery Operations Our refinery segment operates for the benefit of the airline segment by providing jet fuel to the airline segment from its own production and through jet fuel obtained through agreements with third parties. The refinery's production consists of jet fuel, as well as non-jet fuel products. We use several counterparties to exchange the non-jet fuel products produced by the refinery for jet fuel consumed in our airline operations. The gross fair value of the products exchanged under these agreements during the three and six months ended June 30, 2019 was $1.1 billion and $1.8 billion, respectively, compared to $1.1 billion and $2.0 billion, respectively for the three and six months ended June 30, 2018. Segment Reporting Segment results are prepared based on our internal accounting methods described below, with reconciliations to consolidated amounts in accordance with GAAP. Our segments are not designed to measure operating income or loss directly related to the products and services included in each segment on a stand-alone basis.
(3) These sales were at or near cost; accordingly, the margin on these sales is de minimis.
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Earnings Per Share |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share | EARNINGS PER SHARE We calculate basic earnings per share by dividing net income by the weighted average number of common shares outstanding, excluding restricted shares. We calculate diluted earnings per share by dividing net income by the weighted average number of common shares outstanding plus the dilutive effect of outstanding share-based awards, including stock options and restricted stock awards. Antidilutive common stock equivalents excluded from the diluted earnings per share calculation are not material. The following table shows the computation of basic and diluted earnings per share:
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Summary of Significant Accounting Policies (Policies) |
6 Months Ended |
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Jun. 30, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying unaudited Condensed Consolidated Financial Statements include the accounts of Delta Air Lines, Inc. and our wholly owned subsidiaries and have been prepared in accordance with accounting principles generally accepted in the United States ("GAAP") for interim financial information. Consistent with these requirements, this Form 10-Q does not include all the information required by GAAP for complete financial statements. As a result, this Form 10-Q should be read in conjunction with the Consolidated Financial Statements and accompanying Notes in our Form 10-K for the year ended December 31, 2018. Management believes the accompanying unaudited Condensed Consolidated Financial Statements reflect all adjustments, including normal recurring items, considered necessary for a fair statement of results for the interim periods presented. Due to seasonal variations in the demand for air travel, the volatility of aircraft fuel prices and other factors, operating results for the three and six months ended June 30, 2019 are not necessarily indicative of operating results for the entire year. We reclassified certain prior period amounts to conform to the current period presentation. Unless otherwise noted, all amounts disclosed are stated before consideration of income taxes.
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Recent Accounting Standards | Recent Accounting Standards Comprehensive Income. In February 2018, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2018-02, "Income Statement—Reporting Comprehensive Income (Topic 220)." This standard provides an option to reclassify stranded tax effects within accumulated other comprehensive income/(loss) ("AOCI") to retained earnings due to the U.S. federal corporate income tax rate change in the Tax Cuts and Jobs Act of 2017. This standard is effective for interim and annual reporting periods beginning after December 15, 2018. We adopted this standard effective January 1, 2019 with the election not to reclassify $1.2 billion of stranded tax effects, primarily related to our pension plans, from AOCI to retained earnings. |
Revenue Recognition (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenue from Contract with Customer [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of disaggregation of revenue | Passenger Revenue Passenger revenue is primarily composed of passenger ticket sales, loyalty travel awards and travel-related services performed in conjunction with a passenger’s flight.
Other Revenue
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Schedule of activity in loyalty liability | The table below presents the activity of the current and noncurrent loyalty liability and includes miles earned through travel and miles sold to participating companies, which are primarily through marketing agreements.
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Schedule of revenue by geographic region | Our passenger and operating revenue by geographic region (as defined by the U.S. Department of Transportation) is summarized in the following tables:
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Fair Value Measurements (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of assets (liabilities) measured at fair value on a recurring basis | Assets (Liabilities) Measured at Fair Value on a Recurring Basis
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Derivatives and Risk Management (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of hedge positions | Hedge Position as of June 30, 2019
Hedge Position as of December 31, 2018
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Schedule of balance sheet location of hedged item in fair value hedges | Balance Sheet Location of Hedged Item in Fair Value Hedges
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Schedule of offsetting assets | The following table shows the net fair value positions by counterparty had we elected to offset.
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Schedule of offsetting liabilities | The following table shows the net fair value positions by counterparty had we elected to offset.
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Schedule of derivative gains (losses) | Designated Hedge Gains (Losses) Gains (losses) related to our foreign currency exchange contracts designated as hedges are as follows:
Not Designated Hedge Gains (Losses) Gains (losses) related to our foreign currency exchange and fuel contracts are as follows:
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Debt (Tables) |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2019 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of debt | The following table summarizes our debt:
(3) Primarily includes unsecured bonds and debt secured by certain accounts receivable and real estate.
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Schedule of pass through certificates | The details of the 2019-1 EETC, which is secured by 14 aircraft, are shown in the table below:
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Schedule of line of credit facilities | The table below shows availability under revolving credit facilities, all of which were undrawn, as of June 30, 2019:
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Schedule of estimated fair value of debt instruments | The fair value of debt, shown below, is principally based on reported market values, recently completed market transactions and estimates based on interest rates, maturities, credit risk and underlying collateral. Long-term debt is primarily classified as Level 2 within the fair value hierarchy.
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Employee Benefit Plans (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Retirement Benefits [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of components net periodic (benefit) cost | The following table shows the components of net periodic (benefit) cost:
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Commitments and Contingencies (Tables) |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2019 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commitments and Contingencies Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of future aircraft purchase commitments | Our future aircraft purchase commitments, which enable our fleet transformation, totaled $14.1 billion at June 30, 2019:
Our future aircraft purchase commitments included the following aircraft at June 30, 2019:
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Accumulated Other Comprehensive Loss (Tables) |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2019 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of components of accumulated other comprehensive loss | The following tables show the components of accumulated other comprehensive loss:
(3) Includes $688 million of deferred income tax expense primarily related to pension and other benefit obligations that will not be recognized in net income until these obligations are fully extinguished. We consider all income sources, including other comprehensive income, in determining the amount of tax benefit allocated to continuing operations.
|
Segments (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of segment reporting information | Segment results are prepared based on our internal accounting methods described below, with reconciliations to consolidated amounts in accordance with GAAP. Our segments are not designed to measure operating income or loss directly related to the products and services included in each segment on a stand-alone basis.
(3) These sales were at or near cost; accordingly, the margin on these sales is de minimis.
|
Earnings Per Share (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of computation of basic and diluted earnings per share | The following table shows the computation of basic and diluted earnings per share:
|
Summary of Significant Accounting Policies - Narrative (Details) $ in Billions |
Jan. 01, 2019
USD ($)
|
---|---|
ASU No. 2018-02 | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |
Stranded tax effects in AOCI elected not to reclassify | $ 1.2 |
Revenue Recognition - Passenger Revenue (Details) - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2019 |
Jun. 30, 2018 |
Jun. 30, 2019 |
Jun. 30, 2018 |
|
Disaggregation of Revenue [Line Items] | ||||
Operating revenue | $ 12,536 | $ 11,775 | $ 23,008 | $ 21,743 |
Passenger | ||||
Disaggregation of Revenue [Line Items] | ||||
Operating revenue | 11,368 | 10,546 | 20,622 | 19,311 |
Ticket | ||||
Disaggregation of Revenue [Line Items] | ||||
Operating revenue | 9,969 | 9,308 | 17,957 | 16,961 |
Loyalty travel awards | ||||
Disaggregation of Revenue [Line Items] | ||||
Operating revenue | 751 | 680 | 1,442 | 1,298 |
Travel-related services | ||||
Disaggregation of Revenue [Line Items] | ||||
Operating revenue | $ 648 | $ 558 | $ 1,223 | $ 1,052 |
Revenue Recognition - Narrative (Details) - USD ($) $ in Billions |
6 Months Ended | |
---|---|---|
Jun. 30, 2019 |
Jun. 30, 2018 |
|
Disaggregation of Revenue [Line Items] | ||
Cash sales of mileage credits | $ 2.0 | $ 1.7 |
Majority of new miles redemption period (in years) | 2 years | |
Air Traffic | ||
Disaggregation of Revenue [Line Items] | ||
Revenue recognized that was previously deferred | $ 3.4 |
Revenue Recognition - Other Revenue (Details) - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2019 |
Jun. 30, 2018 |
Jun. 30, 2019 |
Jun. 30, 2018 |
|
Disaggregation of Revenue [Line Items] | ||||
Operating revenue | $ 12,536 | $ 11,775 | $ 23,008 | $ 21,743 |
Other | ||||
Disaggregation of Revenue [Line Items] | ||||
Operating revenue | 982 | 1,006 | 2,008 | 2,007 |
Loyalty program | ||||
Disaggregation of Revenue [Line Items] | ||||
Operating revenue | 484 | 358 | 958 | 705 |
Ancillary businesses and refinery | ||||
Disaggregation of Revenue [Line Items] | ||||
Operating revenue | 330 | 522 | 699 | 1,042 |
Miscellaneous | ||||
Disaggregation of Revenue [Line Items] | ||||
Operating revenue | $ 168 | $ 126 | $ 351 | $ 260 |
Revenue Recognition - Loyalty Program Liability (Details) - USD ($) $ in Millions |
6 Months Ended | |
---|---|---|
Jun. 30, 2019 |
Jun. 30, 2018 |
|
Frequent Flyer Liability Activity [Roll Forward] | ||
Mileage credits earned | $ 1,542 | $ 1,550 |
Travel mileage credits redeemed | (1,443) | (1,298) |
Non-travel mileage credits redeemed | (86) | (82) |
Loyalty program | ||
Frequent Flyer Liability Activity [Roll Forward] | ||
Deferred revenue (current and noncurrent), beginning | 6,641 | 6,321 |
Deferred revenue (current and noncurrent), ending | $ 6,654 | $ 6,491 |
Revenue Recognition - Revenue by Geographic Region (Details) - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2019 |
Jun. 30, 2018 |
Jun. 30, 2019 |
Jun. 30, 2018 |
|
Disaggregation of Revenue [Line Items] | ||||
Operating revenue | $ 12,536 | $ 11,775 | $ 23,008 | $ 21,743 |
Domestic | ||||
Disaggregation of Revenue [Line Items] | ||||
Operating revenue | 8,787 | 8,244 | 16,274 | 15,355 |
Atlantic | ||||
Disaggregation of Revenue [Line Items] | ||||
Operating revenue | 2,136 | 1,997 | 3,452 | 3,250 |
Latin America | ||||
Disaggregation of Revenue [Line Items] | ||||
Operating revenue | 838 | 791 | 1,802 | 1,708 |
Pacific | ||||
Disaggregation of Revenue [Line Items] | ||||
Operating revenue | 775 | 743 | 1,480 | 1,430 |
Passenger | ||||
Disaggregation of Revenue [Line Items] | ||||
Operating revenue | 11,368 | 10,546 | 20,622 | 19,311 |
Passenger | Domestic | ||||
Disaggregation of Revenue [Line Items] | ||||
Operating revenue | 8,071 | 7,416 | 14,784 | 13,697 |
Passenger | Atlantic | ||||
Disaggregation of Revenue [Line Items] | ||||
Operating revenue | 1,880 | 1,771 | 2,983 | 2,841 |
Passenger | Latin America | ||||
Disaggregation of Revenue [Line Items] | ||||
Operating revenue | 760 | 722 | 1,615 | 1,553 |
Passenger | Pacific | ||||
Disaggregation of Revenue [Line Items] | ||||
Operating revenue | $ 657 | $ 637 | $ 1,240 | $ 1,220 |
Fair Value Measurements - Schedule of Fair Value Measurements on a Recurring Basis (Details) - Recurring - USD ($) $ in Millions |
Jun. 30, 2019 |
Dec. 31, 2018 |
---|---|---|
Fair Value, Net Asset (Liability) | ||
Cash equivalents | $ 1,648 | $ 1,222 |
Restricted cash equivalents | 1,020 | 1,183 |
Long-term investments | 1,185 | 1,084 |
U.S. government and agency securities | ||
Fair Value, Net Asset (Liability) | ||
Short-term investments | 50 | |
Asset- and mortgage-backed securities | ||
Fair Value, Net Asset (Liability) | ||
Short-term investments | 36 | |
Corporate obligations | ||
Fair Value, Net Asset (Liability) | ||
Short-term investments | 90 | |
Other fixed income securities | ||
Fair Value, Net Asset (Liability) | ||
Short-term investments | 27 | |
Fuel hedge contracts | ||
Fair Value, Net Asset (Liability) | ||
Hedge derivatives, net | (4) | 15 |
Interest rate contracts | ||
Fair Value, Net Asset (Liability) | ||
Hedge derivatives, net | 62 | 1 |
Foreign currency exchange contracts | ||
Fair Value, Net Asset (Liability) | ||
Hedge derivatives, net | 3 | (3) |
Level 1 | ||
Fair Value, Net Asset (Liability) | ||
Cash equivalents | 1,648 | 1,222 |
Restricted cash equivalents | 1,020 | 1,183 |
Long-term investments | 980 | 880 |
Level 1 | U.S. government and agency securities | ||
Fair Value, Net Asset (Liability) | ||
Short-term investments | 45 | |
Level 1 | Asset- and mortgage-backed securities | ||
Fair Value, Net Asset (Liability) | ||
Short-term investments | 0 | |
Level 1 | Corporate obligations | ||
Fair Value, Net Asset (Liability) | ||
Short-term investments | 0 | |
Level 1 | Other fixed income securities | ||
Fair Value, Net Asset (Liability) | ||
Short-term investments | 0 | |
Level 1 | Fuel hedge contracts | ||
Fair Value, Net Asset (Liability) | ||
Hedge derivatives, net | (18) | 20 |
Level 1 | Interest rate contracts | ||
Fair Value, Net Asset (Liability) | ||
Hedge derivatives, net | 0 | 0 |
Level 1 | Foreign currency exchange contracts | ||
Fair Value, Net Asset (Liability) | ||
Hedge derivatives, net | 0 | 0 |
Level 2 | ||
Fair Value, Net Asset (Liability) | ||
Cash equivalents | 0 | 0 |
Restricted cash equivalents | 0 | 0 |
Long-term investments | 205 | 204 |
Level 2 | U.S. government and agency securities | ||
Fair Value, Net Asset (Liability) | ||
Short-term investments | 5 | |
Level 2 | Asset- and mortgage-backed securities | ||
Fair Value, Net Asset (Liability) | ||
Short-term investments | 36 | |
Level 2 | Corporate obligations | ||
Fair Value, Net Asset (Liability) | ||
Short-term investments | 90 | |
Level 2 | Other fixed income securities | ||
Fair Value, Net Asset (Liability) | ||
Short-term investments | 27 | |
Level 2 | Fuel hedge contracts | ||
Fair Value, Net Asset (Liability) | ||
Hedge derivatives, net | 14 | (5) |
Level 2 | Interest rate contracts | ||
Fair Value, Net Asset (Liability) | ||
Hedge derivatives, net | 62 | 1 |
Level 2 | Foreign currency exchange contracts | ||
Fair Value, Net Asset (Liability) | ||
Hedge derivatives, net | $ 3 | $ (3) |
Investments - Narrative (Details) - USD ($) |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2019 |
Jun. 30, 2018 |
Jun. 30, 2019 |
Jun. 30, 2018 |
|
Schedule of Equity Method Investments [Line Items] | ||||
Unrealized gain/(loss) on investments, net | $ (82,000,000) | $ (238,000,000) | $ 18,000,000 | $ (220,000,000) |
Grupo Aeromexico | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Voting interest limit per bylaws (percent) | 49.00% | 49.00% | ||
Equity method investment, ownership percentage | 51.00% | 51.00% | ||
Equity method investment | $ 841,000,000 | $ 841,000,000 | ||
Virgin Atlantic | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Equity method investment, ownership percentage | 49.00% | 49.00% | ||
Equity method investment | $ 365,000,000 | $ 365,000,000 | ||
AirCo | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Equity method investment, ownership percentage | 49.00% | 49.00% | ||
Equity method investment | $ 111,000,000 | $ 111,000,000 | ||
Air France-KLM | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Equity interests, ownership percentage | 9.00% | 9.00% | ||
Air France-KLM | Common stock | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Equity interests | $ 361,000,000 | $ 361,000,000 | ||
GOL | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Equity interests, ownership percentage | 9.00% | 9.00% | ||
GOL | Preferred stock | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Equity interests | $ 279,000,000 | $ 279,000,000 | ||
China Eastern | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Equity interests, ownership percentage | 3.00% | 3.00% | ||
Equity interests | $ 275,000,000 | $ 275,000,000 | ||
Korean | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Equity interests, ownership percentage | 4.00% | 4.00% | ||
Korean | Common stock | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Equity interests | $ 66,000,000 | $ 66,000,000 | ||
CLEAR | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Equity interests, ownership percentage | 7.00% | 7.00% | ||
Republic Airways | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Equity interests, ownership percentage | 17.00% | 17.00% | ||
Financial Guarantee | Term loan facility | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Guarantee borrowings on third party debt | $ 300,000,000 | |||
Guarantee borrowings on third party debt, term (in years) | 5 years |
Derivatives and Risk Management - Hedge Position (Details) € in Millions, ¥ in Millions, gal in Millions, $ in Millions |
Jun. 30, 2019
EUR (€)
gal
|
Jun. 30, 2019
USD ($)
gal
|
Dec. 31, 2018
EUR (€)
gal
|
Dec. 31, 2018
JPY (¥)
gal
|
Dec. 31, 2018
USD ($)
gal
|
---|---|---|---|---|---|
Derivatives, Fair Value | |||||
Total derivative contracts, net | $ 61 | $ 13 | |||
Prepaid Expenses and Other | |||||
Derivatives, Fair Value | |||||
Total derivative contracts, assets | 67 | 44 | |||
Other Noncurrent Assets | |||||
Derivatives, Fair Value | |||||
Total derivative contracts, assets | 59 | 8 | |||
Other Accrued Liabilities | |||||
Derivatives, Fair Value | |||||
Total derivative contracts, liabilities | (55) | (22) | |||
Other Noncurrent Liabilities | |||||
Derivatives, Fair Value | |||||
Total derivative contracts, liabilities | (10) | (17) | |||
Interest rate contracts | Designated as hedging instrument | |||||
Derivatives, Fair Value | |||||
Interest rate contract, net | 62 | 1 | |||
Interest rate contracts | Designated as hedging instrument | Prepaid Expenses and Other | |||||
Derivatives, Fair Value | |||||
Interest rate contract, assets | 8 | 0 | |||
Interest rate contracts | Designated as hedging instrument | Other Noncurrent Assets | |||||
Derivatives, Fair Value | |||||
Interest rate contract, assets | 59 | 8 | |||
Interest rate contracts | Designated as hedging instrument | Other Accrued Liabilities | |||||
Derivatives, Fair Value | |||||
Interest rate contract, liabilities | (5) | (7) | |||
Interest rate contracts | Designated as hedging instrument | Other Noncurrent Liabilities | |||||
Derivatives, Fair Value | |||||
Interest rate contract, liabilities | 0 | 0 | |||
Foreign currency exchange contracts | Designated as hedging instrument | |||||
Derivatives, Fair Value | |||||
Foreign currency exchange contracts, net | 1 | ||||
Foreign currency exchange contracts | Designated as hedging instrument | Prepaid Expenses and Other | |||||
Derivatives, Fair Value | |||||
Foreign currency exchange contracts, assets | 1 | ||||
Foreign currency exchange contracts | Designated as hedging instrument | Other Noncurrent Assets | |||||
Derivatives, Fair Value | |||||
Foreign currency exchange contracts, assets | 0 | ||||
Foreign currency exchange contracts | Designated as hedging instrument | Other Accrued Liabilities | |||||
Derivatives, Fair Value | |||||
Foreign currency exchange contracts, liabilities | 0 | ||||
Foreign currency exchange contracts | Designated as hedging instrument | Other Noncurrent Liabilities | |||||
Derivatives, Fair Value | |||||
Foreign currency exchange contracts, liabilities | 0 | ||||
Foreign currency exchange contracts | Not designated as hedging instrument | |||||
Derivatives, Fair Value | |||||
Derivative, notional amount | € | € 397 | € 397 | |||
Foreign currency exchange contracts, net | 3 | (4) | |||
Foreign currency exchange contracts | Not designated as hedging instrument | Prepaid Expenses and Other | |||||
Derivatives, Fair Value | |||||
Foreign currency exchange contracts, assets | 13 | 13 | |||
Foreign currency exchange contracts | Not designated as hedging instrument | Other Noncurrent Assets | |||||
Derivatives, Fair Value | |||||
Foreign currency exchange contracts, assets | 0 | 0 | |||
Foreign currency exchange contracts | Not designated as hedging instrument | Other Accrued Liabilities | |||||
Derivatives, Fair Value | |||||
Foreign currency exchange contracts, liabilities | 0 | 0 | |||
Foreign currency exchange contracts | Not designated as hedging instrument | Other Noncurrent Liabilities | |||||
Derivatives, Fair Value | |||||
Foreign currency exchange contracts, liabilities | $ (10) | $ (17) | |||
Fuel hedge contracts | Not designated as hedging instrument | |||||
Derivatives, Fair Value | |||||
Derivative, nonmonetary notional amount | gal | 180 | 180 | 219 | 219 | 219 |
Fuel hedge contracts, net | $ (4) | $ 15 | |||
Fuel hedge contracts | Not designated as hedging instrument | Prepaid Expenses and Other | |||||
Derivatives, Fair Value | |||||
Fuel hedge contracts, assets | 46 | 30 | |||
Fuel hedge contracts | Not designated as hedging instrument | Other Noncurrent Assets | |||||
Derivatives, Fair Value | |||||
Fuel hedge contracts, assets | 0 | 0 | |||
Fuel hedge contracts | Not designated as hedging instrument | Other Accrued Liabilities | |||||
Derivatives, Fair Value | |||||
Fuel hedge contracts, liabilities | (50) | (15) | |||
Fuel hedge contracts | Not designated as hedging instrument | Other Noncurrent Liabilities | |||||
Derivatives, Fair Value | |||||
Fuel hedge contracts, liabilities | 0 | 0 | |||
Interest rate contracts | Interest rate contracts | Designated as hedging instrument | |||||
Derivatives, Fair Value | |||||
Derivative, notional amount | $ 1,883 | $ 1,893 | |||
Foreign currency exchange contracts | Foreign currency exchange contracts | Designated as hedging instrument | |||||
Derivatives, Fair Value | |||||
Derivative, notional amount | ¥ | ¥ 6,934 |
Derivatives and Risk Management - Balance Sheet Location of Hedged Item (Details) - USD ($) $ in Millions |
Jun. 30, 2019 |
Dec. 31, 2018 |
---|---|---|
Current maturities of long-term debt and finance leases | ||
Derivative [Line Items] | ||
Carrying amount of hedge instruments | $ (21) | $ (11) |
Cumulative amount of fair value hedge adjustments | (4) | 7 |
Long-term debt and finance leases | ||
Derivative [Line Items] | ||
Carrying amount of hedge instruments | (1,912) | (1,870) |
Cumulative amount of fair value hedge adjustments | $ (59) | $ (8) |
Derivatives and Risk Management - Offsetting Assets and Liabilities (Details) - USD ($) $ in Millions |
Jun. 30, 2019 |
Dec. 31, 2018 |
---|---|---|
Derivative | ||
Total derivative contracts, net | $ 61 | $ 13 |
Prepaid Expenses and Other | ||
Derivative | ||
Net derivative contracts, assets | 34 | 35 |
Other Noncurrent Assets | ||
Derivative | ||
Net derivative contracts, assets | 59 | 0 |
Other Accrued Liabilities | ||
Derivative | ||
Net derivative contracts, liabilities | (22) | (13) |
Other Noncurrent Liabilities | ||
Derivative | ||
Net derivative contracts, liabilities | $ (10) | $ (9) |
Derivatives and Risk Management - Hedge Gains (Losses) (Details) - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2019 |
Jun. 30, 2018 |
Jun. 30, 2019 |
Jun. 30, 2018 |
|
Not designated as hedging instrument | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Gain (loss) on derivatives recognized | $ 16 | $ (72) | $ (29) | $ (86) |
Foreign currency exchange contracts | Designated as hedging instrument | Other comprehensive income | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Gain (loss) on derivatives recognized | (1) | 9 | 0 | 0 |
Foreign currency exchange contracts | Designated as hedging instrument | Passenger | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Gain (loss) reclassified from AOCI to Earnings | 0 | (2) | 1 | 3 |
Foreign currency exchange contracts | Not designated as hedging instrument | Unrealized gain/(loss) on investments, net | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Gain (loss) on derivatives recognized | (3) | 22 | 7 | 6 |
Fuel hedge contracts | Not designated as hedging instrument | Aircraft fuel and related taxes | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Gain (loss) on derivatives recognized | $ 19 | $ (94) | $ (36) | $ (92) |
Debt - Summary of Long-Term Debt (Details) - USD ($) $ in Millions |
6 Months Ended | |
---|---|---|
Jun. 30, 2019 |
Dec. 31, 2018 |
|
Debt Instrument [Line Items] | ||
Debt, gross | $ 9,171 | $ 9,308 |
Unamortized premium and debt issue cost, net and other | 125 | 60 |
Total debt | 9,296 | 9,368 |
Less: current maturities | (2,087) | (1,409) |
Total long-term debt | $ 7,209 | 7,959 |
Unsecured notes | Unsecured Debt | ||
Debt Instrument [Line Items] | ||
Maturity dates range, start | Jan. 01, 2020 | |
Maturity dates range, end | Dec. 31, 2028 | |
Debt, gross | $ 4,050 | 4,050 |
Unsecured notes | Unsecured Debt | Minimum | ||
Debt Instrument [Line Items] | ||
Interest rate per annum (percent) | 2.60% | |
Unsecured notes | Unsecured Debt | Maximum | ||
Debt Instrument [Line Items] | ||
Interest rate per annum (percent) | 4.38% | |
Certificates | Secured Debt | ||
Debt Instrument [Line Items] | ||
Maturity dates range, start | Jan. 01, 2019 | |
Maturity dates range, end | Dec. 31, 2027 | |
Debt, gross | $ 2,031 | 1,837 |
Certificates | Secured Debt | Minimum | ||
Debt Instrument [Line Items] | ||
Interest rate per annum (percent) | 3.20% | |
Certificates | Secured Debt | Maximum | ||
Debt Instrument [Line Items] | ||
Interest rate per annum (percent) | 8.02% | |
Notes | Secured Debt | ||
Debt Instrument [Line Items] | ||
Maturity dates range, start | Jan. 01, 2019 | |
Maturity dates range, end | Dec. 31, 2025 | |
Debt, gross | $ 1,507 | 1,787 |
Notes | Secured Debt | Minimum | ||
Debt Instrument [Line Items] | ||
Interest rate per annum (percent) | 2.62% | |
Notes | Secured Debt | Maximum | ||
Debt Instrument [Line Items] | ||
Interest rate per annum (percent) | 6.37% | |
NYTDC Special Facilities Revenue Bonds, Series 2018 | Bonds | ||
Debt Instrument [Line Items] | ||
Maturity dates range, start | Jan. 01, 2022 | |
Maturity dates range, end | Dec. 31, 2036 | |
Debt, gross | $ 1,383 | 1,383 |
NYTDC Special Facilities Revenue Bonds, Series 2018 | Bonds | Minimum | ||
Debt Instrument [Line Items] | ||
Interest rate per annum (percent) | 4.00% | |
NYTDC Special Facilities Revenue Bonds, Series 2018 | Bonds | Maximum | ||
Debt Instrument [Line Items] | ||
Interest rate per annum (percent) | 5.00% | |
Other financings | Secured and Unsecured Debt | ||
Debt Instrument [Line Items] | ||
Maturity dates range, start | Jan. 01, 2019 | |
Maturity dates range, end | Dec. 31, 2030 | |
Debt, gross | $ 200 | 251 |
Other financings | Secured and Unsecured Debt | Minimum | ||
Debt Instrument [Line Items] | ||
Interest rate per annum (percent) | 3.40% | |
Other financings | Secured and Unsecured Debt | Maximum | ||
Debt Instrument [Line Items] | ||
Interest rate per annum (percent) | 8.75% | |
2018 Unsecured Revolving Credit Facility | Revolving Credit Facility | ||
Debt Instrument [Line Items] | ||
Maturity dates range, start | Jan. 01, 2021 | |
Maturity dates range, end | Dec. 31, 2023 | |
Debt, gross | $ 0 | 0 |
Other revolving credit facilities | Revolving Credit Facility | ||
Debt Instrument [Line Items] | ||
Maturity dates range, start | Jan. 01, 2020 | |
Maturity dates range, end | Dec. 31, 2021 | |
Debt, gross | $ 0 | $ 0 |
Debt - Narrative (Details) - 2019 Unsecured Term Loan - Term Loan |
1 Months Ended | 5 Months Ended |
---|---|---|
Feb. 28, 2019
USD ($)
lender
|
Jun. 30, 2019
USD ($)
|
|
Debt Instrument [Line Items] | ||
Debt instrument face amount | $ 1,000,000,000 | |
Number of lenders | lender | 2 | |
Repayment of debt | $ 1,000,000,000 |
Debt - 2019-1 EETC (Details) - Secured Debt |
6 Months Ended |
---|---|
Jun. 30, 2019
USD ($)
aircraft
| |
Pass Through Certificates Series 2019-1 | |
Debt Instrument [Line Items] | |
Debt instrument face amount | $ 500,000,000 |
Number of aircraft to secure debt | aircraft | 14 |
2019-1 Class AA Certificates | |
Debt Instrument [Line Items] | |
Debt instrument face amount | $ 425,000,000 |
Fixed interest rate (percent) | 3.204% |
Final maturity date | Apr. 30, 2024 |
2019-1 Class A Certificates | |
Debt Instrument [Line Items] | |
Debt instrument face amount | $ 75,000,000 |
Fixed interest rate (percent) | 3.404% |
Final maturity date | Apr. 30, 2024 |
Debt - Availability Under Revolving Credit Facilities (Details) $ in Millions |
Jun. 30, 2019
USD ($)
|
---|---|
Line of Credit Facility [Line Items] | |
Availability under revolving credit facilities | $ 3,100 |
2018 Unsecured Revolving Credit Facility | |
Line of Credit Facility [Line Items] | |
Availability under revolving credit facilities | 2,650 |
Other revolving credit facilities | |
Line of Credit Facility [Line Items] | |
Availability under revolving credit facilities | $ 450 |
Debt - Fair Value of Debt (Details) - USD ($) $ in Millions |
Jun. 30, 2019 |
Dec. 31, 2018 |
---|---|---|
Debt | ||
Total debt at par value | $ 9,171 | $ 9,308 |
Unamortized premium and debt issue cost, net and other | 125 | 60 |
Total debt | 9,296 | 9,368 |
Fair value | $ 9,600 | $ 9,400 |
Employee Benefit Plans - Components of Net (Benefit) Cost (Details) - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2019 |
Jun. 30, 2018 |
Jun. 30, 2019 |
Jun. 30, 2018 |
|
Pension Benefits | ||||
Defined Benefit Plan Disclosure | ||||
Service cost | $ 0 | $ 0 | $ 0 | $ 0 |
Interest cost | 208 | 195 | 417 | 390 |
Expected return on plan assets | (296) | (329) | (593) | (659) |
Amortization of prior service credit | 0 | 0 | 0 | 0 |
Recognized net actuarial loss | 72 | 66 | 145 | 134 |
Settlements | 2 | 4 | 2 | 4 |
Net periodic (benefit) cost | (14) | (64) | (29) | (131) |
Other Postretirement and Postemployment Benefits | ||||
Defined Benefit Plan Disclosure | ||||
Service cost | 21 | 21 | 42 | 43 |
Interest cost | 34 | 32 | 68 | 63 |
Expected return on plan assets | (12) | (17) | (24) | (34) |
Amortization of prior service credit | (2) | (7) | (5) | (13) |
Recognized net actuarial loss | 9 | 10 | 20 | 18 |
Settlements | 0 | 0 | 0 | 0 |
Net periodic (benefit) cost | $ 50 | $ 39 | $ 101 | $ 77 |
Commitments and Contingencies - Aircraft Purchase Commitments By Period (Details) - Future aircraft purchase commitments $ in Millions |
Jun. 30, 2019
USD ($)
|
---|---|
Unrecorded Unconditional Purchase Obligation, Fiscal Year Maturity | |
Six months ending December 31, 2019 | $ 1,030 |
2020 | 3,250 |
2021 | 3,250 |
2022 | 2,800 |
2023 | 1,860 |
Thereafter | 1,930 |
Total | $ 14,120 |
Commitments and Contingencies - Aircraft Purchase Commitments By Aircraft (Details) - Future aircraft purchase commitments |
Jun. 30, 2019
aircraft
|
---|---|
Unrecorded Unconditional Purchase Obligation | |
Aircraft purchase commitments, minimum quantity required | 275 |
A220-100 | |
Unrecorded Unconditional Purchase Obligation | |
Aircraft purchase commitments, minimum quantity required | 27 |
A220-300 | |
Unrecorded Unconditional Purchase Obligation | |
Aircraft purchase commitments, minimum quantity required | 50 |
A321-200 | |
Unrecorded Unconditional Purchase Obligation | |
Aircraft purchase commitments, minimum quantity required | 44 |
A321-200neo | |
Unrecorded Unconditional Purchase Obligation | |
Aircraft purchase commitments, minimum quantity required | 100 |
A330-900neo | |
Unrecorded Unconditional Purchase Obligation | |
Aircraft purchase commitments, minimum quantity required | 33 |
A350-900 | |
Unrecorded Unconditional Purchase Obligation | |
Aircraft purchase commitments, minimum quantity required | 12 |
CRJ-900 | |
Unrecorded Unconditional Purchase Obligation | |
Aircraft purchase commitments, minimum quantity required | 9 |
Commitments and Contingencies - MD-90 Fleet Retirement (Details) $ in Millions |
3 Months Ended |
---|---|
Jun. 30, 2019
USD ($)
aircraft
| |
MD-90 Fleet Retirement | |
Loss Contingencies [Line Items] | |
Accelerated depreciation related to permanent fleet retirement | $ | $ 91 |
MD-90 | |
Loss Contingencies [Line Items] | |
Time ahead of plan for fleet retirement | 2 years |
Number of aircraft permanently retired | aircraft | 31 |
Accumulated Other Comprehensive Loss - Schedule of AOCI Components (Details) - USD ($) $ in Millions |
6 Months Ended | |
---|---|---|
Jun. 30, 2019 |
Jun. 30, 2018 |
|
Components of accumulated other comprehensive loss | ||
Beginning balance | $ 13,687 | $ 12,530 |
Ending balance | 13,958 | 12,634 |
AOCI beginning balance, tax effect | (1,492) | (1,400) |
Changes in value, tax effect | 2 | 1 |
Reclassifications into retained earnings, tax effect | (61) | |
Reclassifications into earnings, tax effect | 38 | 35 |
AOCI ending balance, tax effect | (1,452) | (1,426) |
Accumulated Other Comprehensive Income | ||
Components of accumulated other comprehensive loss | ||
Beginning balance | (7,825) | (7,621) |
Changes in value (net of tax effect) | 7 | 4 |
Reclassifications into retained earnings (net of tax effect) | (106) | |
Reclassifications into earnings (net of tax effect) | 124 | 117 |
Ending balance | (7,694) | (7,606) |
Pension and Other Benefit Liabilities | ||
Components of accumulated other comprehensive loss | ||
Beginning balance | (7,925) | (7,812) |
Changes in value (net of tax effect) | 6 | 0 |
Reclassifications into retained earnings (net of tax effect) | 0 | |
Reclassifications into earnings (net of tax effect) | 124 | 111 |
Ending balance | (7,795) | (7,701) |
Deferred income taxes related to pension obligation | 688 | 688 |
Derivative Contracts and Other | ||
Components of accumulated other comprehensive loss | ||
Beginning balance | 100 | |
Changes in value (net of tax effect) | 1 | |
Reclassifications into earnings (net of tax effect) | 0 | |
Ending balance | 101 | |
Derivative Contracts and Other | ||
Components of accumulated other comprehensive loss | ||
Beginning balance | 85 | |
Changes in value (net of tax effect) | 4 | |
Reclassifications into retained earnings (net of tax effect) | 0 | |
Reclassifications into earnings (net of tax effect) | 6 | |
Ending balance | 95 | |
Available-for-Sale Investments | ||
Components of accumulated other comprehensive loss | ||
Beginning balance | 0 | 106 |
Changes in value (net of tax effect) | 0 | 0 |
Reclassifications into retained earnings (net of tax effect) | (106) | |
Reclassifications into earnings (net of tax effect) | 0 | 0 |
Ending balance | $ 0 | $ 0 |
Segments - Narrative (Details) - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2019 |
Jun. 30, 2018 |
Jun. 30, 2019 |
Jun. 30, 2018 |
|
Segment Reporting Information, Profit (Loss) | ||||
Operating revenue | $ 12,536 | $ 11,775 | $ 23,008 | $ 21,743 |
Intersegment Sales/Other | Exchanged products | ||||
Segment Reporting Information, Profit (Loss) | ||||
Operating revenue | $ (1,078) | $ (1,096) | $ (1,811) | $ (1,972) |
Segments - Schedule of Segment Reporting (Details) - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | |||
---|---|---|---|---|---|
Jun. 30, 2019 |
Jun. 30, 2018 |
Jun. 30, 2019 |
Jun. 30, 2018 |
Dec. 31, 2018 |
|
Segment Reporting Information, Profit (Loss) | |||||
Operating revenue | $ 12,536 | $ 11,775 | $ 23,008 | $ 21,743 | |
Operating income | 2,128 | 1,684 | 3,148 | 2,528 | |
Interest expense (income), net | 75 | 79 | 158 | 170 | |
Depreciation and amortization | 713 | 583 | 1,328 | 1,186 | |
Total assets, end of period | 62,518 | 60,665 | 62,518 | 60,665 | $ 60,266 |
Capital expenditures | 1,560 | 1,580 | 2,920 | 2,843 | |
Operating Segments | Airline | |||||
Segment Reporting Information, Profit (Loss) | |||||
Operating revenue | 12,496 | 11,559 | 22,920 | 21,314 | |
Operating income | 2,091 | 1,639 | 3,145 | 2,439 | |
Interest expense (income), net | 84 | 87 | 177 | 182 | |
Depreciation and amortization | 688 | 567 | 1,280 | 1,154 | |
Total assets, end of period | 60,685 | 58,137 | 60,685 | 58,137 | |
Capital expenditures | 1,552 | 1,567 | 2,902 | 2,815 | |
Operating Segments | Refinery | |||||
Segment Reporting Information, Profit (Loss) | |||||
Operating revenue | 1,501 | 1,667 | 2,785 | 3,158 | |
Operating income | 37 | 45 | 3 | 89 | |
Interest expense (income), net | (9) | (8) | (19) | (12) | |
Depreciation and amortization | 25 | 16 | 48 | 32 | |
Total assets, end of period | 1,833 | 2,528 | 1,833 | 2,528 | |
Capital expenditures | 8 | 13 | 18 | 28 | |
Intersegment Sales/Other | |||||
Segment Reporting Information, Profit (Loss) | |||||
Operating income | 0 | 0 | 0 | 0 | |
Interest expense (income), net | 0 | 0 | 0 | 0 | |
Depreciation and amortization | 0 | 0 | 0 | 0 | |
Total assets, end of period | 0 | 0 | 0 | 0 | |
Capital expenditures | 0 | 0 | 0 | 0 | |
Intersegment Sales/Other | Sales to airline segment | |||||
Segment Reporting Information, Profit (Loss) | |||||
Operating revenue | (307) | (275) | (578) | (537) | |
Intersegment Sales/Other | Exchanged products | |||||
Segment Reporting Information, Profit (Loss) | |||||
Operating revenue | (1,078) | (1,096) | (1,811) | (1,972) | |
Intersegment Sales/Other | Sales of refined products | |||||
Segment Reporting Information, Profit (Loss) | |||||
Operating revenue | $ (76) | $ (80) | $ (308) | $ (220) |
Earnings Per Share - Schedule of Computation for Earnings Per Share Types (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions |
3 Months Ended | 6 Months Ended | ||||
---|---|---|---|---|---|---|
Jun. 30, 2019 |
Mar. 31, 2019 |
Jun. 30, 2018 |
Mar. 31, 2018 |
Jun. 30, 2019 |
Jun. 30, 2018 |
|
Earnings Per Share [Abstract] | ||||||
Net income | $ 1,443 | $ 730 | $ 1,036 | $ 557 | $ 2,173 | $ 1,594 |
Basic weighted average shares outstanding (shares) | 650 | 695 | 658 | 699 | ||
Dilutive effect of share-based awards (shares) | 2 | 2 | 2 | 2 | ||
Diluted weighted average shares outstanding (shares) | 652 | 697 | 660 | 701 | ||
Basic earnings per share (USD per share) | $ 2.22 | $ 1.49 | $ 3.30 | $ 2.28 | ||
Diluted earnings per share (USD per share) | $ 2.21 | $ 1.49 | $ 3.29 | $ 2.27 |
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