Leases

12 Months Ended

Dec. 31, 2022

Lessee, Lease, Description [Line Items]

Leases

Leases

We lease certain aircraft and engines, including aircraft under capacity purchase agreements. As of December 31, 2022, we operated 722 leased aircraft, with remaining terms ranging from less than one year to 11 years.

At each airport where we conduct flight operations, we have agreements, generally with a governmental unit or authority, for the use of passenger, operations and baggage handling space as well as runways and taxiways. These agreements, particularly in the U.S., often contain provisions for periodic adjustments to rates and charges applicable under such agreements. These rates and charges also vary with our level of operations and the operations of the airport. Because of the variable nature of these rates, these leases are not recorded on our consolidated balance sheets as a ROU asset or a lease liability. Additionally, at our hub locations and in certain other cities we serve, we lease administrative offices, catering, cargo, training, maintenance and other facilities.

The components of lease expense were as follows (in millions):

	Year Ended December 31,
	2022		2021		2020
Operating lease cost	$	2,007	$	2,012	$	1,957
Finance lease cost:
Amortization of assets	143		107		92
Interest on lease liabilities	47		44		38
Variable lease cost	2,580		2,471		1,801
Total net lease cost	$	4,777	$	4,634	$	3,888

Included in the table above is $242 million, $190 million and $172 million of operating lease cost under our capacity purchase agreement with Republic for the years ended December 31, 2022, 2021 and 2020, respectively. We hold a 25% equity interest in Republic Holdings, the parent company of Republic.

Additionally, not included in the table above, we recognized $109 million in cash special charges in 2020 related to the impairment of ROU assets and lease return costs resulting from our decision to retire certain leased aircraft earlier than planned driven by the severe decline in air travel due to the COVID-19 pandemic.

Supplemental balance sheet information related to leases was as follows (in millions, except lease term and discount rate):

	December 31,
	2022			2021
Operating leases:
Operating lease ROU assets	$	8,094		$	7,850
Current operating lease liabilities	$	1,465		$	1,507
Noncurrent operating lease liabilities	6,559			6,610
Total operating lease liabilities	$	8,024		$	8,117
Finance leases:
Property and equipment, at cost	$	1,364		$	1,201
Accumulated amortization	(779)			(653)
Property and equipment, net	$	585		$	548
Current finance lease liabilities	$	216		$	174
Noncurrent finance lease liabilities	545			563
Total finance lease liabilities	$	761		$	737
Weighted average remaining lease term (in years):
Operating leases	8.3			7.6
Finance leases	5.1			4.6
Weighted average discount rate:
Operating leases	7.4		%	6.3		%
Finance leases	7.2		%	6.1		%

Supplemental cash flow and other information related to leases was as follows (in millions):

	Year Ended December 31,
	2022		2021		2020
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	1,990	$	2,053	$	2,028
Operating cash flows from finance leases	47		37		39
Financing cash flows from finance leases	190		126		114
Non-cash transactions:
ROU assets acquired through operating leases	1,483		1,386		917
Property and equipment acquired through finance leases	46		180		11
Operating lease conversion to finance lease	107		102		5
Finance lease conversion to operating lease	3		—		—
Gain on sale leaseback transactions, net	2		25		107

Maturities of lease liabilities were as follows (in millions):

	December 31, 2022
	Operating Leases		Finance Leases
2023	$	1,954	$	265
2024	1,663		215
2025	1,324		141
2026	1,054		115
2027	862		69
2028 and thereafter	3,918		87
Total lease payments	10,775		892
Less: Imputed interest	(2,751)		(131)
Total lease obligations	8,024		761
Less: Current obligations	(1,465)		(216)
Long-term lease obligations	$	6,559	$	545

As of December 31, 2022, we had additional operating lease commitments that have not yet commenced of approximately $1.1 billion for nine Boeing 787 Family aircraft scheduled to be delivered in 2023 through 2024 with lease terms of 10 years.

Leases

Leases

We lease certain aircraft and engines, including aircraft under capacity purchase agreements. As of December 31, 2022, we operated 722 leased aircraft, with remaining terms ranging from less than one year to 11 years.

At each airport where we conduct flight operations, we have agreements, generally with a governmental unit or authority, for the use of passenger, operations and baggage handling space as well as runways and taxiways. These agreements, particularly in the U.S., often contain provisions for periodic adjustments to rates and charges applicable under such agreements. These rates and charges also vary with our level of operations and the operations of the airport. Because of the variable nature of these rates, these leases are not recorded on our consolidated balance sheets as a ROU asset or a lease liability. Additionally, at our hub locations and in certain other cities we serve, we lease administrative offices, catering, cargo, training, maintenance and other facilities.

The components of lease expense were as follows (in millions):

	Year Ended December 31,
	2022		2021		2020
Operating lease cost	$	2,007	$	2,012	$	1,957
Finance lease cost:
Amortization of assets	143		107		92
Interest on lease liabilities	47		44		38
Variable lease cost	2,580		2,471		1,801
Total net lease cost	$	4,777	$	4,634	$	3,888

Included in the table above is $242 million, $190 million and $172 million of operating lease cost under our capacity purchase agreement with Republic for the years ended December 31, 2022, 2021 and 2020, respectively. We hold a 25% equity interest in Republic Holdings, the parent company of Republic.

Additionally, not included in the table above, we recognized $109 million in cash special charges in 2020 related to the impairment of ROU assets and lease return costs resulting from our decision to retire certain leased aircraft earlier than planned driven by the severe decline in air travel due to the COVID-19 pandemic.

Supplemental balance sheet information related to leases was as follows (in millions, except lease term and discount rate):

	December 31,
	2022			2021
Operating leases:
Operating lease ROU assets	$	8,094		$	7,850
Current operating lease liabilities	$	1,465		$	1,507
Noncurrent operating lease liabilities	6,559			6,610
Total operating lease liabilities	$	8,024		$	8,117
Finance leases:
Property and equipment, at cost	$	1,364		$	1,201
Accumulated amortization	(779)			(653)
Property and equipment, net	$	585		$	548
Current finance lease liabilities	$	216		$	174
Noncurrent finance lease liabilities	545			563
Total finance lease liabilities	$	761		$	737
Weighted average remaining lease term (in years):
Operating leases	8.3			7.6
Finance leases	5.1			4.6
Weighted average discount rate:
Operating leases	7.4		%	6.3		%
Finance leases	7.2		%	6.1		%

Supplemental cash flow and other information related to leases was as follows (in millions):

	Year Ended December 31,
	2022		2021		2020
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	1,990	$	2,053	$	2,028
Operating cash flows from finance leases	47		37		39
Financing cash flows from finance leases	190		126		114
Non-cash transactions:
ROU assets acquired through operating leases	1,483		1,386		917
Property and equipment acquired through finance leases	46		180		11
Operating lease conversion to finance lease	107		102		5
Finance lease conversion to operating lease	3		—		—
Gain on sale leaseback transactions, net	2		25		107

Maturities of lease liabilities were as follows (in millions):

	December 31, 2022
	Operating Leases		Finance Leases
2023	$	1,954	$	265
2024	1,663		215
2025	1,324		141
2026	1,054		115
2027	862		69
2028 and thereafter	3,918		87
Total lease payments	10,775		892
Less: Imputed interest	(2,751)		(131)
Total lease obligations	8,024		761
Less: Current obligations	(1,465)		(216)
Long-term lease obligations	$	6,559	$	545

As of December 31, 2022, we had additional operating lease commitments that have not yet commenced of approximately $1.1 billion for nine Boeing 787 Family aircraft scheduled to be delivered in 2023 through 2024 with lease terms of 10 years.

American Airlines, Inc.

Lessee, Lease, Description [Line Items]

Leases

Leases

American leases certain aircraft and engines, including aircraft under capacity purchase agreements. As of December 31, 2022, American operated 722 leased aircraft, with remaining terms ranging from less than one year to 11 years.

At each airport where American conducts flight operations, American has agreements, generally with a governmental unit or authority, for the use of passenger, operations and baggage handling space as well as runways and taxiways. These agreements, particularly in the U.S., often contain provisions for periodic adjustments to rates and charges applicable under such agreements. These rates and charges also vary with American’s level of operations and the operations of the airport. Because of the variable nature of these rates, these leases are not recorded on American’s consolidated balance sheets as a ROU asset or a lease liability. Additionally, at American’s hub locations and in certain other cities it serves, American leases administrative offices, catering, cargo, training, maintenance and other facilities.

The components of lease expense were as follows (in millions):

	Year Ended December 31,
	2022		2021		2020
Operating lease cost	$	1,987	$	1,998	$	1,943
Finance lease cost:
Amortization of assets	135		107		92
Interest on lease liabilities	46		44		38
Variable lease cost	2,572		2,461		1,786
Total net lease cost	$	4,740	$	4,610	$	3,859

Included in the table above is $242 million, $190 million and $172 million of operating lease cost under American’s capacity purchase agreement with Republic for the years ended December 31, 2022, 2021 and 2020, respectively. American holds a 25% equity interest in Republic Holdings, the parent company of Republic.

Additionally, not included in the table above, American recognized $109 million in cash special charges in 2020 related to the impairment of ROU assets and lease return costs resulting from its decision to retire certain leased aircraft earlier than planned driven by the severe decline in air travel due to the COVID-19 pandemic.

Supplemental balance sheet information related to leases was as follows (in millions, except lease term and discount rate):

	December 31,
	2022			2021
Operating leases:
Operating lease ROU assets	$	8,033		$	7,810
Current operating lease liabilities	$	1,449		$	1,496
Noncurrent operating lease liabilities	6,512			6,578
Total operating lease liabilities	$	7,961		$	8,074
Finance leases:
Property and equipment, at cost	$	1,336		$	1,201
Accumulated amortization	(767)			(653)
Property and equipment, net	$	569		$	548
Current finance lease liabilities	$	209		$	174
Noncurrent finance lease liabilities	535			563
Total finance lease liabilities	$	744		$	737
Weighted average remaining lease term (in years):
Operating leases	8.3			7.6
Finance leases	5.0			4.6
Weighted average discount rate:
Operating leases	7.4		%	6.2		%
Finance leases	7.1		%	6.1		%

Supplemental cash flow and other information related to leases was as follows (in millions):

	Year Ended December 31,
	2022		2021		2020
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	1,968	$	2,040	$	2,015
Operating cash flows from finance leases	46		37		39
Financing cash flows from finance leases	179		126		114
Non-cash transactions:
ROU assets acquired through operating leases	1,448		1,381		898
Property and equipment acquired through finance leases	46		180		11
Operating lease conversion to finance lease	107		102		5
Finance lease conversion to operating lease	3		—		—
Gain on sale leaseback transactions, net	2		25		107

Maturities of lease liabilities were as follows (in millions):

	December 31, 2022
	Operating Leases		Finance Leases
2023	$	1,933	$	257
2024	1,649		204
2025	1,313		141
2026	1,045		115
2027	858		69
2028 and thereafter	3,890		87
Total lease payments	10,688		873
Less: Imputed interest	(2,727)		(129)
Total lease obligations	7,961		744
Less: Current obligations	(1,449)		(209)
Long-term lease obligations	$	6,512	$	535

As of December 31, 2022, American had additional operating lease commitments that have not yet commenced of approximately $1.1 billion for nine Boeing 787 Family aircraft scheduled to be delivered in 2023 through 2024 with lease terms of 10 years.

Leases

Leases

American leases certain aircraft and engines, including aircraft under capacity purchase agreements. As of December 31, 2022, American operated 722 leased aircraft, with remaining terms ranging from less than one year to 11 years.

At each airport where American conducts flight operations, American has agreements, generally with a governmental unit or authority, for the use of passenger, operations and baggage handling space as well as runways and taxiways. These agreements, particularly in the U.S., often contain provisions for periodic adjustments to rates and charges applicable under such agreements. These rates and charges also vary with American’s level of operations and the operations of the airport. Because of the variable nature of these rates, these leases are not recorded on American’s consolidated balance sheets as a ROU asset or a lease liability. Additionally, at American’s hub locations and in certain other cities it serves, American leases administrative offices, catering, cargo, training, maintenance and other facilities.

The components of lease expense were as follows (in millions):

	Year Ended December 31,
	2022		2021		2020
Operating lease cost	$	1,987	$	1,998	$	1,943
Finance lease cost:
Amortization of assets	135		107		92
Interest on lease liabilities	46		44		38
Variable lease cost	2,572		2,461		1,786
Total net lease cost	$	4,740	$	4,610	$	3,859

Included in the table above is $242 million, $190 million and $172 million of operating lease cost under American’s capacity purchase agreement with Republic for the years ended December 31, 2022, 2021 and 2020, respectively. American holds a 25% equity interest in Republic Holdings, the parent company of Republic.

Additionally, not included in the table above, American recognized $109 million in cash special charges in 2020 related to the impairment of ROU assets and lease return costs resulting from its decision to retire certain leased aircraft earlier than planned driven by the severe decline in air travel due to the COVID-19 pandemic.

Supplemental balance sheet information related to leases was as follows (in millions, except lease term and discount rate):

	December 31,
	2022			2021
Operating leases:
Operating lease ROU assets	$	8,033		$	7,810
Current operating lease liabilities	$	1,449		$	1,496
Noncurrent operating lease liabilities	6,512			6,578
Total operating lease liabilities	$	7,961		$	8,074
Finance leases:
Property and equipment, at cost	$	1,336		$	1,201
Accumulated amortization	(767)			(653)
Property and equipment, net	$	569		$	548
Current finance lease liabilities	$	209		$	174
Noncurrent finance lease liabilities	535			563
Total finance lease liabilities	$	744		$	737
Weighted average remaining lease term (in years):
Operating leases	8.3			7.6
Finance leases	5.0			4.6
Weighted average discount rate:
Operating leases	7.4		%	6.2		%
Finance leases	7.1		%	6.1		%

Supplemental cash flow and other information related to leases was as follows (in millions):

	Year Ended December 31,
	2022		2021		2020
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	1,968	$	2,040	$	2,015
Operating cash flows from finance leases	46		37		39
Financing cash flows from finance leases	179		126		114
Non-cash transactions:
ROU assets acquired through operating leases	1,448		1,381		898
Property and equipment acquired through finance leases	46		180		11
Operating lease conversion to finance lease	107		102		5
Finance lease conversion to operating lease	3		—		—
Gain on sale leaseback transactions, net	2		25		107

Maturities of lease liabilities were as follows (in millions):

	December 31, 2022
	Operating Leases		Finance Leases
2023	$	1,933	$	257
2024	1,649		204
2025	1,313		141
2026	1,045		115
2027	858		69
2028 and thereafter	3,890		87
Total lease payments	10,688		873
Less: Imputed interest	(2,727)		(129)
Total lease obligations	7,961		744
Less: Current obligations	(1,449)		(209)
Long-term lease obligations	$	6,512	$	535

As of December 31, 2022, American had additional operating lease commitments that have not yet commenced of approximately $1.1 billion for nine Boeing 787 Family aircraft scheduled to be delivered in 2023 through 2024 with lease terms of 10 years.