(State of Incorporation) | (I.R.S. Employer Identification No.) |
Telephone: |
Securities registered pursuant to Section 12(b) of the Act: | ||||||||
Title of each class | Ticker Symbol | Name of each exchange on which registered | ||||||
☒ | Accelerated filer | ☐ | Non-accelerated filer (Do not check if a smaller reporting company) | ☐ | Smaller reporting company | Emerging growth company |
ITEM 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS |
(in millions) | June 30, 2020 | December 31, 2019 | |||||||||
ASSETS | |||||||||||
Current Assets | |||||||||||
Cash and cash equivalents | $ | $ | |||||||||
Marketable securities | |||||||||||
Total cash and marketable securities | |||||||||||
Receivables - net | |||||||||||
Inventories and supplies - net | |||||||||||
Prepaid expenses and other current assets | |||||||||||
Total Current Assets | |||||||||||
Property and Equipment | |||||||||||
Aircraft and other flight equipment | |||||||||||
Other property and equipment | |||||||||||
Deposits for future flight equipment | |||||||||||
Less accumulated depreciation and amortization | |||||||||||
Total Property and Equipment - Net | |||||||||||
Operating lease assets | |||||||||||
Goodwill | |||||||||||
Intangible assets - net | |||||||||||
Other noncurrent assets | |||||||||||
Other Assets | |||||||||||
Total Assets | $ | $ |
(in millions, except share amounts) | June 30, 2020 | December 31, 2019 | |||||||||
LIABILITIES AND SHAREHOLDERS' EQUITY | |||||||||||
Current Liabilities | |||||||||||
Accounts payable | $ | $ | |||||||||
Accrued wages, vacation and payroll taxes | |||||||||||
Air traffic liability | |||||||||||
Deferred payroll support program grant | |||||||||||
Other accrued liabilities | |||||||||||
Deferred revenue | |||||||||||
Current portion of operating lease liabilities | |||||||||||
Current portion of long-term debt | |||||||||||
Total Current Liabilities | |||||||||||
Long-Term Debt, Net of Current Portion | |||||||||||
Noncurrent Liabilities | |||||||||||
Long-term operating lease liabilities, net of current portion | |||||||||||
Deferred income taxes | |||||||||||
Deferred revenue | |||||||||||
Obligation for pension and postretirement medical benefits | |||||||||||
Other liabilities | |||||||||||
Commitments and Contingencies | |||||||||||
Shareholders' Equity | |||||||||||
Preferred stock, $ | |||||||||||
Common stock, $ | |||||||||||
Capital in excess of par value | |||||||||||
Treasury stock (common), at cost: 2020 - | ( | ( | |||||||||
Accumulated other comprehensive loss | ( | ( | |||||||||
Retained earnings | |||||||||||
Total Liabilities and Shareholders' Equity | $ | $ |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
(in millions, except per share amounts) | 2020 | 2019 | 2020 | 2019 | |||||||||||||||||||
Operating Revenues | |||||||||||||||||||||||
Passenger revenue | $ | $ | |||||||||||||||||||||
Mileage Plan other revenue | |||||||||||||||||||||||
Cargo and other | |||||||||||||||||||||||
Total Operating Revenues | |||||||||||||||||||||||
Operating Expenses | |||||||||||||||||||||||
Wages and benefits | |||||||||||||||||||||||
Variable incentive pay | |||||||||||||||||||||||
Payroll support program grant wage offset | ( | ( | |||||||||||||||||||||
Aircraft fuel, including hedging gains and losses | |||||||||||||||||||||||
Aircraft maintenance | |||||||||||||||||||||||
Aircraft rent | |||||||||||||||||||||||
Landing fees and other rentals | |||||||||||||||||||||||
Contracted services | |||||||||||||||||||||||
Selling expenses | |||||||||||||||||||||||
Depreciation and amortization | |||||||||||||||||||||||
Food and beverage service | |||||||||||||||||||||||
Third-party regional carrier expense | |||||||||||||||||||||||
Other | |||||||||||||||||||||||
Special items - merger-related costs | |||||||||||||||||||||||
Special items - impairment charges and other | |||||||||||||||||||||||
Total Operating Expenses | |||||||||||||||||||||||
Operating Income (Loss) | ( | ( | |||||||||||||||||||||
Nonoperating Income (Expense) | |||||||||||||||||||||||
Interest income | |||||||||||||||||||||||
Interest expense | ( | ( | ( | ( | |||||||||||||||||||
Interest capitalized | |||||||||||||||||||||||
Other—net | ( | ( | |||||||||||||||||||||
Total Nonoperating Income (Expense) | ( | ( | ( | ||||||||||||||||||||
Income (Loss) Before Income Tax | ( | ( | |||||||||||||||||||||
Income tax (benefit) expense | ( | ( | |||||||||||||||||||||
Net Income (Loss) | $ | ( | $ | $ | ( | $ | |||||||||||||||||
Basic Earnings (Loss) Per Share: | $ | ( | $ | $ | ( | $ | |||||||||||||||||
Diluted Earnings (Loss) Per Share: | $ | ( | $ | $ | ( | $ | |||||||||||||||||
Shares used for computation: | |||||||||||||||||||||||
Basic | |||||||||||||||||||||||
Diluted |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
(in millions) | 2020 | 2019 | 2020 | 2019 | |||||||||||||||||||
Net Income (Loss) | $ | ( | $ | $ | ( | $ | |||||||||||||||||
Other Comprehensive Income (Loss): | |||||||||||||||||||||||
Related to marketable securities: | |||||||||||||||||||||||
Unrealized holding gain (loss) arising during the period | |||||||||||||||||||||||
Reclassification of (gain) loss into Other - net nonoperating income (expense) | ( | ( | |||||||||||||||||||||
Income tax effect | ( | ( | ( | ( | |||||||||||||||||||
Total | |||||||||||||||||||||||
Related to employee benefit plans: | |||||||||||||||||||||||
Reclassification of net pension expense into Wages and benefits and Other - net nonoperating income (expense) | |||||||||||||||||||||||
Income tax effect | ( | ( | ( | ( | |||||||||||||||||||
Total | |||||||||||||||||||||||
Related to interest rate derivative instruments: | |||||||||||||||||||||||
Unrealized holding gain (loss) arising during the period | ( | ( | ( | ( | |||||||||||||||||||
Reclassification of loss into Aircraft rent | |||||||||||||||||||||||
Income tax effect | |||||||||||||||||||||||
Total | ( | ( | ( | ( | |||||||||||||||||||
Other Comprehensive Income (Loss) | |||||||||||||||||||||||
Comprehensive Income (Loss) | $ | ( | $ | $ | ( | $ |
(in millions) | Common Stock Outstanding | Common Stock | Capital in Excess of Par Value | Treasury Stock | Accumulated Other Comprehensive Income (Loss) | Retained Earnings | Total | ||||||||||||||||||||||||||||||||||
Balances at December 31, 2019 | $ | $ | $ | ( | $ | ( | $ | $ | |||||||||||||||||||||||||||||||||
Net loss | — | — | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||||
Other comprehensive income (loss) | — | — | — | — | ( | — | ( | ||||||||||||||||||||||||||||||||||
Common stock repurchase | ( | — | ( | — | — | ( | |||||||||||||||||||||||||||||||||||
Stock-based compensation | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
Cash dividend declared ($ | — | — | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||||
Stock issued under stock plans | — | — | — | — | |||||||||||||||||||||||||||||||||||||
Balances at March 31, 2020 | $ | $ | $ | ( | $ | ( | $ | $ | |||||||||||||||||||||||||||||||||
Net loss | — | — | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||||
Other comprehensive income (loss) | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
Stock-based compensation | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
CARES Act warrant issuance | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
Stock issued for employee stock purchase plan | — | — | — | — | 27 | ||||||||||||||||||||||||||||||||||||
Stock issued under stock plans | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
Balances at June 30, 2020 | $ | $ | $ | ( | $ | ( | $ | $ | |||||||||||||||||||||||||||||||||
(in millions) | Common Stock Outstanding | Common Stock | Capital in Excess of Par Value | Treasury Stock | Accumulated Other Comprehensive Income (Loss) | Retained Earnings | Total | ||||||||||||||||||||||||||||||||||
Balances at December 31, 2018 | $ | $ | $ | ( | $ | ( | $ | $ | |||||||||||||||||||||||||||||||||
Cumulative effect of accounting changes(a) | — | — | — | — | |||||||||||||||||||||||||||||||||||||
Net income | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
Other comprehensive income (loss) | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
Common stock repurchase | ( | — | ( | — | — | ( | |||||||||||||||||||||||||||||||||||
Stock-based compensation | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
Cash dividend declared ($0.35 per share) | — | — | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||||
Stock issued for employee stock purchase plan | — | — | — | — | |||||||||||||||||||||||||||||||||||||
Stock issued under stock plans | — | ( | — | — | — | ( | |||||||||||||||||||||||||||||||||||
Balances at March 31, 2019 | $ | $ | $ | ( | $ | ( | $ | $ | |||||||||||||||||||||||||||||||||
Net income | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
Other comprehensive income (loss) | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
Common stock repurchase | ( | — | — | ( | — | — | ( | ||||||||||||||||||||||||||||||||||
Stock-based compensation | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
Cash dividend declared ($ | — | — | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||||
Stock issued under stock plans | — | — | — | — | |||||||||||||||||||||||||||||||||||||
Balances at June 30, 2019 | $ | $ | $ | ( | $ | ( | $ | $ |
Six Months Ended June 30, | |||||||||||
(in millions) | 2020 | 2019 | |||||||||
Cash flows from operating activities: | |||||||||||
Net income (Loss) | $ | ( | $ | ||||||||
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | |||||||||||
Depreciation and amortization | |||||||||||
Stock-based compensation and other | |||||||||||
Special items - impairment charges and other | |||||||||||
Payroll support program grant wage offset | ( | ||||||||||
Changes in certain assets and liabilities: | |||||||||||
Payroll support program grant funding | |||||||||||
Changes in deferred tax provision | ( | ||||||||||
Increase in air traffic liability | |||||||||||
Increase in deferred revenue | |||||||||||
Other - net | ( | ||||||||||
Net cash provided by operating activities | |||||||||||
Cash flows used in investing activities: | |||||||||||
Property and equipment additions: | |||||||||||
Aircraft and aircraft purchase deposits | ( | ( | |||||||||
Other flight equipment | ( | ( | |||||||||
Other property and equipment | ( | ( | |||||||||
Total property and equipment additions, including capitalized interest | ( | ( | |||||||||
Purchases of marketable securities | ( | ( | |||||||||
Sales and maturities of marketable securities | |||||||||||
Other investing activities | |||||||||||
Net cash used in investing activities | ( | ( | |||||||||
Cash flows from financing activities: | |||||||||||
Proceeds from issuance of debt | |||||||||||
Common stock repurchases | ( | ( | |||||||||
Dividends paid | ( | ( | |||||||||
Long-term debt payments | ( | ( | |||||||||
Other financing activities | |||||||||||
Net cash provided by (used in) financing activities | ( | ||||||||||
Net increase in cash, cash equivalents, and restricted cash | |||||||||||
Cash, cash equivalents, and restricted cash at beginning of year | |||||||||||
Cash, cash equivalents, and restricted cash at end of the period | $ | $ | |||||||||
Cash paid during the period for: | |||||||||||
Interest (net of amount capitalized) | $ | $ | |||||||||
Income taxes | |||||||||||
Reconciliation of cash, cash equivalents, and restricted cash at end of the period | |||||||||||
Cash and cash equivalents | $ | $ | |||||||||
Restricted cash included in Prepaid expenses and other current assets | |||||||||||
Total cash, cash equivalents, and restricted cash at end of the period | $ | $ |
Airbus Aircraft | Q400 Aircraft | Total Impairment | ||||||||||||||||||
Aircraft and other flight equipment, net | $ | $ | $ | |||||||||||||||||
Operating lease assets | ||||||||||||||||||||
Inventory and supplies - net | ||||||||||||||||||||
Prepaid expenses and other current assets | ||||||||||||||||||||
Other accrued liabilities | ||||||||||||||||||||
Total impairment charges - Long-lived assets | $ | $ | $ |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||
Passenger ticket revenue, including ticket breakage and net of taxes and fees | $ | $ | $ | $ | |||||||||||||||||||
Passenger ancillary revenue | |||||||||||||||||||||||
Mileage Plan passenger revenue | |||||||||||||||||||||||
Total Passenger revenue | $ | $ | $ | $ |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||
Passenger revenue | $ | $ | $ | $ | |||||||||||||||||||
Mileage Plan other revenue | |||||||||||||||||||||||
Total Mileage Plan revenue | $ | $ | $ | $ |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||
Cargo revenue | $ | $ | $ | $ | |||||||||||||||||||
Other revenue | |||||||||||||||||||||||
Total Cargo and other revenue | $ | $ | $ | $ |
Six Months Ended June 30, | ||||||||||||||
2020 | 2019 | |||||||||||||
Total Deferred Revenue balance at January 1 | $ | $ | ||||||||||||
Travel miles and companion certificate redemption - Passenger revenue | ( | ( | ||||||||||||
Miles redeemed on partner airlines - Other revenue | ( | ( | ||||||||||||
Increase in liability for mileage credits issued | ||||||||||||||
Total Deferred Revenue balance at June 30 | $ | $ |
June 30, 2020 | December 31, 2019 | ||||||||||||||||||||||||||||||||||
Level 1 | Level 2 | Total | Level 1 | Level 2 | Total | ||||||||||||||||||||||||||||||
Assets | |||||||||||||||||||||||||||||||||||
Marketable securities | |||||||||||||||||||||||||||||||||||
U.S. government and agency securities | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
Equity mutual funds | |||||||||||||||||||||||||||||||||||
Foreign government bonds | |||||||||||||||||||||||||||||||||||
Asset-backed securities | |||||||||||||||||||||||||||||||||||
Mortgage-backed securities | |||||||||||||||||||||||||||||||||||
Corporate notes and bonds | |||||||||||||||||||||||||||||||||||
Municipal securities | |||||||||||||||||||||||||||||||||||
Total Marketable securities | |||||||||||||||||||||||||||||||||||
Derivative instruments | |||||||||||||||||||||||||||||||||||
Fuel hedge—call options | |||||||||||||||||||||||||||||||||||
Interest rate swap agreements | |||||||||||||||||||||||||||||||||||
Total Assets | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
Liabilities | |||||||||||||||||||||||||||||||||||
Derivative instruments | |||||||||||||||||||||||||||||||||||
Interest rate swap agreements | ( | ( | ( | ( | |||||||||||||||||||||||||||||||
Total Liabilities | $ | $ | ( | $ | ( | $ | $ | ( | $ | ( |
June 30, 2020 | Cost Basis | Fair Value | |||||||||
Due in one year or less | $ | $ | |||||||||
Due after one year through five years | |||||||||||
Due after five years through 10 years | |||||||||||
Total | $ | $ |
June 30, 2020 | December 31, 2019 | ||||||||||
Fixed-rate debt at cost | $ | $ | |||||||||
Non-recurring purchase price accounting fair value adjustment | |||||||||||
Total fixed-rate debt | $ | $ | |||||||||
Estimated fair value | $ | $ |
June 30, 2020 | December 31, 2019 | ||||||||||
Fixed-rate notes payable due through 2029 | $ | $ | |||||||||
Fixed-rate PSP notes payable due through 2030 | |||||||||||
Variable-rate notes payable due through 2029 | |||||||||||
Less debt issuance costs | ( | ( | |||||||||
Total debt | |||||||||||
Less current portion | |||||||||||
Long-term debt, less current portion | $ | $ | |||||||||
Weighted-average fixed-interest rate | % | % | |||||||||
Weighted-average variable-interest rate | % | % |
Total | |||||
Remainder of 2020 | $ | ||||
2021 | |||||
2022 | |||||
2023 | |||||
2024 | |||||
Thereafter | |||||
Total | $ |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||
Service cost | $ | $ | $ | $ | |||||||||||||||||||
Pension expense included in Wages and benefits | |||||||||||||||||||||||
Interest cost | |||||||||||||||||||||||
Expected return on assets | ( | ( | ( | ( | |||||||||||||||||||
Recognized actuarial loss | |||||||||||||||||||||||
Pension expense included in Nonoperating Income (Expense) | $ | $ | $ | $ |
Aircraft Commitments(a) | Capacity Purchase Agreements (b) | Aircraft Maintenance Deposits | ||||||||||||||||||
Remainder of 2020 | $ | $ | $ | |||||||||||||||||
2021 | ||||||||||||||||||||
2022 | ||||||||||||||||||||
2023 | ||||||||||||||||||||
2024 | ||||||||||||||||||||
Thereafter | ||||||||||||||||||||
Total | $ | $ | $ |
June 30, 2020 | December 31, 2019 | ||||||||||
Related to marketable securities | $ | $ | |||||||||
Related to employee benefit plans | ( | ( | |||||||||
Related to interest rate derivatives | ( | ( | |||||||||
Total | $ | ( | $ | ( |
Three Months Ended June 30, 2020 | |||||||||||||||||||||||||||||||||||||||||
Mainline | Regional | Horizon | Consolidating & Other(a) | Air Group Adjusted(b) | Special Items(c) | Consolidated | |||||||||||||||||||||||||||||||||||
Operating Revenues | |||||||||||||||||||||||||||||||||||||||||
Passenger revenues | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||
CPA revenues | ( | ||||||||||||||||||||||||||||||||||||||||
Mileage Plan other revenue | |||||||||||||||||||||||||||||||||||||||||
Cargo and other | |||||||||||||||||||||||||||||||||||||||||
Total Operating Revenues | ( | ||||||||||||||||||||||||||||||||||||||||
Operating Expenses | |||||||||||||||||||||||||||||||||||||||||
Operating expenses, excluding fuel | ( | ( | |||||||||||||||||||||||||||||||||||||||
Economic fuel | ( | ||||||||||||||||||||||||||||||||||||||||
Total Operating Expenses | ( | ( | |||||||||||||||||||||||||||||||||||||||
Nonoperating Income (Expense) | |||||||||||||||||||||||||||||||||||||||||
Interest income | ( | ||||||||||||||||||||||||||||||||||||||||
Interest expense | ( | ( | ( | ( | |||||||||||||||||||||||||||||||||||||
Interest capitalized | |||||||||||||||||||||||||||||||||||||||||
Other - net | |||||||||||||||||||||||||||||||||||||||||
Total Nonoperating Income (Expense) | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||
Income (Loss) Before Income Tax | $ | ( | $ | ( | $ | $ | $ | ( | $ | $ | ( | ||||||||||||||||||||||||||||||
Three Months Ended June 30, 2019 | |||||||||||||||||||||||||||||||||||||||||
Mainline | Regional | Horizon | Consolidating & Other(a) | Air Group Adjusted(b) | Special Items(c) | Consolidated | |||||||||||||||||||||||||||||||||||
Operating Revenues | |||||||||||||||||||||||||||||||||||||||||
Passenger revenues | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||
CPA revenues | ( | ||||||||||||||||||||||||||||||||||||||||
Mileage Plan other revenue | |||||||||||||||||||||||||||||||||||||||||
Cargo and other | |||||||||||||||||||||||||||||||||||||||||
Total Operating Revenues | ( | ||||||||||||||||||||||||||||||||||||||||
Operating Expenses | |||||||||||||||||||||||||||||||||||||||||
Operating expenses, excluding fuel | ( | ||||||||||||||||||||||||||||||||||||||||
Economic fuel | |||||||||||||||||||||||||||||||||||||||||
Total Operating Expenses | ( | ||||||||||||||||||||||||||||||||||||||||
Nonoperating Income (Expense) | |||||||||||||||||||||||||||||||||||||||||
Interest income | ( | ||||||||||||||||||||||||||||||||||||||||
Interest expense | ( | ( | ( | ( | |||||||||||||||||||||||||||||||||||||
Interest capitalized | |||||||||||||||||||||||||||||||||||||||||
Other - net | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||
Total Nonoperating Income (Expense) | ( | ( | ( | ( | |||||||||||||||||||||||||||||||||||||
Income (Loss) Before Income Tax | $ | $ | $ | $ | $ | $ | ( | $ |
Six Months Ended June 30, 2020 | |||||||||||||||||||||||||||||||||||||||||
Mainline | Regional | Horizon | Consolidating & Other(a) | Air Group Adjusted(b) | Special Items(c) | Consolidated | |||||||||||||||||||||||||||||||||||
Operating Revenues | |||||||||||||||||||||||||||||||||||||||||
Passenger revenues | |||||||||||||||||||||||||||||||||||||||||
CPA revenues | ( | ||||||||||||||||||||||||||||||||||||||||
Mileage Plan other revenue | |||||||||||||||||||||||||||||||||||||||||
Cargo and other | |||||||||||||||||||||||||||||||||||||||||
Total Operating Revenues | ( | ||||||||||||||||||||||||||||||||||||||||
Operating Expenses | |||||||||||||||||||||||||||||||||||||||||
Operating expenses, excluding fuel | ( | ( | |||||||||||||||||||||||||||||||||||||||
Economic fuel | |||||||||||||||||||||||||||||||||||||||||
Total Operating Expenses | ( | ( | |||||||||||||||||||||||||||||||||||||||
Nonoperating Income (Expense) | |||||||||||||||||||||||||||||||||||||||||
Interest income | ( | ||||||||||||||||||||||||||||||||||||||||
Interest expense | ( | ( | ( | ( | |||||||||||||||||||||||||||||||||||||
Interest capitalized | |||||||||||||||||||||||||||||||||||||||||
Other - net | ( | ||||||||||||||||||||||||||||||||||||||||
Total Nonoperating Income (Expense) | ( | ||||||||||||||||||||||||||||||||||||||||
Income (Loss) Before Income Tax | ( | ( | ( | ( | |||||||||||||||||||||||||||||||||||||
Six Months Ended June 30, 2019 | |||||||||||||||||||||||||||||||||||||||||
Mainline | Regional | Horizon | Consolidating & Other(a) | Air Group Adjusted(b) | Special Items(c) | Consolidated | |||||||||||||||||||||||||||||||||||
Operating Revenues | |||||||||||||||||||||||||||||||||||||||||
Passenger revenues | |||||||||||||||||||||||||||||||||||||||||
CPA revenues | ( | ||||||||||||||||||||||||||||||||||||||||
Mileage Plan other revenue | |||||||||||||||||||||||||||||||||||||||||
Cargo and other | |||||||||||||||||||||||||||||||||||||||||
Total Operating Revenues | ( | ||||||||||||||||||||||||||||||||||||||||
Operating Expenses | |||||||||||||||||||||||||||||||||||||||||
Operating expenses, excluding fuel | ( | ||||||||||||||||||||||||||||||||||||||||
Economic fuel | ( | ||||||||||||||||||||||||||||||||||||||||
Total Operating Expenses | ( | ||||||||||||||||||||||||||||||||||||||||
Nonoperating Income (Expense) | |||||||||||||||||||||||||||||||||||||||||
Interest income | ( | ||||||||||||||||||||||||||||||||||||||||
Interest expense | ( | ( | ( | ( | |||||||||||||||||||||||||||||||||||||
Interest capitalized | |||||||||||||||||||||||||||||||||||||||||
Other - net | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||
Total Nonoperating Income (Expense) | ( | ( | ( | ( | |||||||||||||||||||||||||||||||||||||
Income (Loss) Before Income Tax | ( | ( | |||||||||||||||||||||||||||||||||||||||
June 30, 2020 | December 31, 2019 | ||||||||||
Mainline | $ | $ | |||||||||
Horizon | |||||||||||
Consolidating & Other | ( | ( | |||||||||
Consolidated | $ | $ |
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||||||||||||||
2020 | 2019 | Change | 2020 | 2019 | Change | ||||||||||||||||||||||||||||||
Consolidated Operating Statistics:(a) | |||||||||||||||||||||||||||||||||||
Revenue passengers (000) | 1,485 | 12,026 | (87.7)% | 10,417 | 22,442 | (53.6)% | |||||||||||||||||||||||||||||
RPMs (000,000) "traffic" | 1,654 | 14,638 | (88.7)% | 12,310 | 27,087 | (54.6)% | |||||||||||||||||||||||||||||
ASMs (000,000) "capacity" | 4,307 | 16,980 | (74.6)% | 19,612 | 32,487 | (39.6)% | |||||||||||||||||||||||||||||
Load factor | 38.4% | 86.2% | (47.8) pts | 62.8% | 83.4% | (20.6) pts | |||||||||||||||||||||||||||||
Yield | 18.68¢ | 14.43¢ | 29.5% | 14.54¢ | 14.13¢ | 2.9% | |||||||||||||||||||||||||||||
RASM | 9.77¢ | 13.48¢ | (27.5)% | 10.49¢ | 12.82¢ | (18.2)% | |||||||||||||||||||||||||||||
CASM excluding fuel and special items(b) | 21.87¢ | 8.33¢ | 162.5% | 12.00¢ | 8.68¢ | 38.2% | |||||||||||||||||||||||||||||
Economic fuel cost per gallon(b) | $1.20 | $2.27 | (47.1)% | $1.77 | $2.20 | (19.5)% | |||||||||||||||||||||||||||||
Fuel gallons (000,000) | 54 | 220 | (75.5)% | 248 | 419 | (40.8)% | |||||||||||||||||||||||||||||
ASMs per fuel gallon | 79.8 | 77.2 | 3.4% | 79.1 | 77.5 | 2.1% | |||||||||||||||||||||||||||||
Average full-time equivalent employees (FTEs) | 15,836 | 21,921 | (27.8)% | 19,155 | 21,876 | (12.4)% | |||||||||||||||||||||||||||||
Mainline Operating Statistics: | |||||||||||||||||||||||||||||||||||
Revenue passengers (000) | 905 | 9,206 | (90.2)% | 7,580 | 17,070 | (55.6)% | |||||||||||||||||||||||||||||
RPMs (000,000) "traffic" | 1,276 | 13,207 | (90.3)% | 10,858 | 24,379 | (55.5)% | |||||||||||||||||||||||||||||
ASMs (000,000) "capacity" | 3,363 | 15,241 | (77.9)% | 17,060 | 29,114 | (41.4)% | |||||||||||||||||||||||||||||
Load factor | 37.9% | 86.7% | (48.8) pts | 63.6% | 83.7% | (20.1) pts | |||||||||||||||||||||||||||||
Yield | 17.63¢ | 13.38¢ | 31.8% | 13.44¢ | 13.08¢ | 2.8% | |||||||||||||||||||||||||||||
RASM | 9.52¢ | 12.66¢ | (24.8)% | 9.94¢ | 12.02¢ | (17.3)% | |||||||||||||||||||||||||||||
CASM excluding fuel and special items(b) | 22.19¢ | 7.65¢ | 190.1% | 11.17¢ | 7.96¢ | 40.3% | |||||||||||||||||||||||||||||
Economic fuel cost per gallon(b) | $1.20 | $2.26 | (46.9)% | $1.78 | $2.19 | (18.7)% | |||||||||||||||||||||||||||||
Fuel gallons (000,000) | 38 | 187 | (79.7)% | 201 | 356 | (43.5)% | |||||||||||||||||||||||||||||
ASMs per fuel gallon | 88.5 | 81.5 | 8.6% | 84.9 | 81.8 | 3.8% | |||||||||||||||||||||||||||||
Average FTEs | 12,340 | 16,551 | (25.4)% | 14,579 | 16,504 | (11.7)% | |||||||||||||||||||||||||||||
Aircraft utilization | 5.6 | 11.1 | (49.5)% | 8.8 | 10.7 | (17.8)% | |||||||||||||||||||||||||||||
Average aircraft stage length | 1,144 | 1,311 | (12.7)% | 1,270 | 1,308 | (2.9)% | |||||||||||||||||||||||||||||
Operating fleet(d) | 225 | 238 | (13) a/c | 225 | 238 | (13) a/c | |||||||||||||||||||||||||||||
Regional Operating Statistics:(c) | |||||||||||||||||||||||||||||||||||
Revenue passengers (000) | 580 | 2,820 | (79.4)% | 2,837 | 5,372 | (47.2)% | |||||||||||||||||||||||||||||
RPMs (000,000) "traffic" | 378 | 1,431 | (73.6)% | 1,452 | 2,708 | (46.4)% | |||||||||||||||||||||||||||||
ASMs (000,000) "capacity" | 945 | 1,739 | (45.7)% | 2,552 | 3,373 | (24.3)% | |||||||||||||||||||||||||||||
Load factor | 40.0% | 82.3% | (42.3 pts) | 56.9% | 80.3% | (23.4 pts) | |||||||||||||||||||||||||||||
Yield | 22.12¢ | 24.06¢ | (8.1)% | 22.80¢ | 23.57¢ | (3.3)% | |||||||||||||||||||||||||||||
RASM | 10.63¢ | 20.51¢ | (48.2)% | 14.07¢ | 19.62¢ | (28.3)% | |||||||||||||||||||||||||||||
Operating fleet | 94 | 94 | — a/c | 94 | 94 | — a/c |
Three Months Ended June 30, | |||||||||||||||||||||||
2020 | 2019 | ||||||||||||||||||||||
(in millions, except per share amounts) | Dollars | Diluted EPS | Dollars | Diluted EPS | |||||||||||||||||||
GAAP net income (loss) and diluted EPS | $ | (214) | $ | (1.73) | $ | 262 | $ | 2.11 | |||||||||||||||
Payroll support program grant wage offset | (362) | (2.92) | — | — | |||||||||||||||||||
Mark-to-market fuel hedge adjustments | (6) | (0.05) | 3 | 0.02 | |||||||||||||||||||
Special items - impairment charges and other | 69 | 0.56 | — | — | |||||||||||||||||||
Special items - merger-related costs | 1 | 0.01 | 8 | 0.06 | |||||||||||||||||||
Income tax effect of reconciling items above | 73 | 0.59 | (3) | (0.02) | |||||||||||||||||||
Non-GAAP adjusted net income (loss) and diluted EPS | $ | (439) | $ | (3.54) | $ | 270 | $ | 2.17 |
Three Months Ended June 30, | |||||||||||||||||
(in cents) | 2020 | 2019 | % Change | ||||||||||||||
Consolidated: | |||||||||||||||||
CASM | 16.46 | ¢ | 11.33 | ¢ | 45 | % | |||||||||||
Less the following components: | |||||||||||||||||
Payroll support program grant wage offset | (8.40) | — | NM | ||||||||||||||
Aircraft fuel, including hedging gains and losses | 1.37 | 2.96 | (54) | % | |||||||||||||
Special items - merger-related costs | 0.02 | 0.04 | (50) | % | |||||||||||||
Special items - impairment charges and other | 1.60 | — | NM | ||||||||||||||
CASM excluding fuel and special items | 21.87 | ¢ | 8.33 | ¢ | 163 | % | |||||||||||
Mainline: | |||||||||||||||||
CASM | 15.79 | ¢ | 10.50 | ¢ | 50 | % | |||||||||||
Less the following components: | |||||||||||||||||
Payroll support program grant wage offset | (9.69) | — | NM | ||||||||||||||
Aircraft fuel, including hedging gains and losses | 1.16 | 2.79 | (58) | % | |||||||||||||
Special items - merger-related costs | 0.02 | 0.06 | (67) | % | |||||||||||||
Special items - impairment charges and other | 2.11 | — | NM | ||||||||||||||
CASM excluding fuel and special items | 22.19 | ¢ | 7.65 | ¢ | 190 | % |
Three Months Ended June 30, | |||||||||||||||||
(in millions) | 2020 | 2019 | % Change | ||||||||||||||
Passenger revenue | $ | 309 | $ | 2,111 | (85) | % | |||||||||||
Mileage Plan other revenue | 73 | 118 | (38) | % | |||||||||||||
Cargo and other | 39 | 59 | (34) | % | |||||||||||||
Total operating revenues | $ | 421 | $ | 2,288 | (82) | % |
Three Months Ended June 30, | |||||||||||||||||
(in millions) | 2020 | 2019 | % Change | ||||||||||||||
Fuel expense | $ | 59 | $ | 502 | (88) | % | |||||||||||
Non-fuel operating expenses, excluding special items | 942 | 1,414 | (33) | % | |||||||||||||
Payroll support program grant wage offset | (362) | — | NM | ||||||||||||||
Special items - merger-related costs | 1 | 8 | (88) | % | |||||||||||||
Special items - impairment charges and other | 69 | — | NM | ||||||||||||||
Total operating expenses | $ | 709 | $ | 1,924 | (63) | % |
Three Months Ended June 30, | |||||||||||||||||||||||
2020 | 2019 | ||||||||||||||||||||||
(in millions, except for per gallon amounts) | Dollars | Cost/Gal | Dollars | Cost/Gal | |||||||||||||||||||
Raw or "into-plane" fuel cost | $ | 60 | $ | 1.11 | $ | 495 | $ | 2.25 | |||||||||||||||
Losses on settled hedges | 5 | 0.09 | 4 | 0.02 | |||||||||||||||||||
Consolidated economic fuel expense | 65 | 1.20 | $ | 499 | $ | 2.27 | |||||||||||||||||
Mark-to-market fuel hedge adjustments | (6) | (0.11) | 3 | 0.01 | |||||||||||||||||||
GAAP fuel expense | $ | 59 | $ | 1.09 | $ | 502 | $ | 2.28 | |||||||||||||||
Fuel gallons | 54 | 220 |
Three Months Ended June 30, | |||||||||||||||||
(in millions) | 2020 | 2019 | % Change | ||||||||||||||
Wages and benefits | $ | 472 | $ | 567 | (17) | % | |||||||||||
Variable incentive pay | 16 | 44 | (64) | % | |||||||||||||
Aircraft maintenance | 45 | 115 | (61) | % | |||||||||||||
Aircraft rent | 74 | 82 | (10) | % | |||||||||||||
Landing fees and other rentals | 83 | 113 | (27) | % | |||||||||||||
Contracted services | 30 | 70 | (57) | % | |||||||||||||
Selling expenses | 4 | 87 | (95) | % | |||||||||||||
Depreciation and amortization | 107 | 105 | 2 | % | |||||||||||||
Food and beverage service | 7 | 53 | (87) | % | |||||||||||||
Third-party regional carrier expense | 26 | 42 | (38) | % | |||||||||||||
Other | 78 | 136 | (43) | % | |||||||||||||
Total non-fuel operating expenses, excluding special items | $ | 942 | $ | 1,414 | (33) | % |
Three Months Ended June 30, | |||||||||||||||||
(in millions) | 2020 | 2019 | % Change | ||||||||||||||
Wages | $ | 350 | $ | 421 | (17) | % | |||||||||||
Pension - Defined benefit plans service cost | 13 | 11 | 18 | % | |||||||||||||
Defined contribution plans | 30 | 35 | (14) | % | |||||||||||||
Medical and other benefits | 54 | 69 | (22) | % | |||||||||||||
Payroll taxes | 25 | 31 | (19) | % | |||||||||||||
Total wages and benefits | $ | 472 | $ | 567 | (17) | % |
Six Months Ended June 30, | |||||||||||||||||||||||
2020 | 2019 | ||||||||||||||||||||||
(in millions, except per share amounts) | Dollars | Diluted EPS | Dollars | Diluted EPS | |||||||||||||||||||
Reported GAAP net income (loss) and diluted EPS | $ | (446) | $ | (3.60) | $ | 266 | $ | 2.14 | |||||||||||||||
Payroll support program grant wage offset | (362) | (2.93) | — | — | |||||||||||||||||||
Mark-to-market fuel hedge adjustments | 3 | 0.03 | (1) | (0.01) | |||||||||||||||||||
Special items - merger-related costs | 4 | 0.03 | 34 | 0.27 | |||||||||||||||||||
Special items - impairment charges and other | 229 | 1.85 | — | — | |||||||||||||||||||
Income tax effect of reconciling items above | 31 | 0.25 | (8) | (0.06) | |||||||||||||||||||
Non-GAAP adjusted net income (loss) and diluted EPS | $ | (541) | $ | (4.37) | $ | 291 | $ | 2.34 |
Six Months Ended June 30, | |||||||||||||||||
(in cents) | 2020 | 2019 | % Change | ||||||||||||||
Consolidated: | |||||||||||||||||
CASM | 13.59 | ¢ | 11.62 | ¢ | 17 | % | |||||||||||
Less the following components: | |||||||||||||||||
Payroll support program grant wage offset | (1.85) | — | NM | ||||||||||||||
Aircraft fuel, including hedging gains and losses | 2.26 | 2.84 | (20) | % | |||||||||||||
Special items - merger-related costs | 0.01 | 0.10 | (90) | % | |||||||||||||
Special items - impairment charges and other | 1.17 | — | NM | ||||||||||||||
CASM excluding fuel and special items | 12.00 | ¢ | 8.68 | ¢ | 38 | % | |||||||||||
Mainline: | |||||||||||||||||
CASM | 12.39 | ¢ | 10.76 | ¢ | 15 | % | |||||||||||
Less the following components: | |||||||||||||||||
Payroll support program grant wage offset | (1.91) | — | NM | ||||||||||||||
Aircraft fuel, including hedging gains and losses | 2.12 | 2.68 | (21) | % | |||||||||||||
Special items - merger-related costs | 0.02 | 0.12 | (83) | % | |||||||||||||
Special items - impairment charges and other | 0.99 | — | NM | ||||||||||||||
CASM excluding fuel and special items | 11.17 | ¢ | 7.96 | ¢ | 40 | % |
Six Months Ended June 30, | |||||||||||||||||
(in millions) | 2020 | 2019 | % Change | ||||||||||||||
Passenger revenue | $ | 1,790 | $ | 3,827 | (53) | % | |||||||||||
Mileage Plan other revenue | 182 | 228 | (20) | % | |||||||||||||
Cargo and other | 85 | 109 | (22) | % | |||||||||||||
Total operating revenues | $ | 2,057 | $ | 4,164 | (51) | % |
Six Months Ended June 30, | |||||||||||||||||
(in millions) | 2020 | 2019 | % Change | ||||||||||||||
Fuel expense | $ | 443 | $ | 922 | (52) | % | |||||||||||
Non-fuel operating expenses, excluding special items | 2,352 | 2,819 | (17) | % | |||||||||||||
Payroll support program grant wage offset | (362) | — | NM | ||||||||||||||
Special items - merger-related costs | 4 | 34 | (88) | % | |||||||||||||
Special items - impairment charges and other | 229 | — | NM | ||||||||||||||
Total operating expenses | $ | 2,666 | $ | 3,775 | (29) | % |
Six Months Ended June 30, | |||||||||||||||||||||||
2020 | 2019 | ||||||||||||||||||||||
(in millions, except for per gallon amounts) | Dollars | Cost/Gal | Dollars | Cost/Gal | |||||||||||||||||||
Raw or "into-plane" fuel cost | $ | 430 | $ | 1.73 | $ | 916 | $ | 2.18 | |||||||||||||||
Losses on settled hedges | 10 | 0.04 | 7 | 0.02 | |||||||||||||||||||
Consolidated economic fuel expense | 440 | 1.77 | $ | 923 | $ | 2.20 | |||||||||||||||||
Mark-to-market fuel hedge adjustments | 3 | 0.01 | (1) | — | |||||||||||||||||||
GAAP fuel expense | $ | 443 | $ | 1.78 | $ | 922 | $ | 2.20 | |||||||||||||||
Fuel gallons | 248 | 419 |
Six Months Ended June 30, | |||||||||||||||||
(in millions) | 2020 | 2019 | % Change | ||||||||||||||
Wages and benefits | $ | 1,084 | $ | 1,124 | (4) | % | |||||||||||
Variable incentive pay | 23 | 79 | (71) | % | |||||||||||||
Aircraft maintenance | 160 | 235 | (32) | % | |||||||||||||
Aircraft rent | 155 | 165 | (6) | % | |||||||||||||
Landing fees and other rentals | 214 | 245 | (13) | % | |||||||||||||
Contracted services | 102 | 142 | (28) | % | |||||||||||||
Selling expenses | 59 | 159 | (63) | % | |||||||||||||
Depreciation and amortization | 215 | 211 | 2 | % | |||||||||||||
Food and beverage service | 56 | 102 | (45) | % | |||||||||||||
Third-party regional carrier expense | 63 | 83 | (24) | % | |||||||||||||
Other | 221 | 274 | (19) | % | |||||||||||||
Total non-fuel operating expenses, excluding special items | $ | 2,352 | $ | 2,819 | (17) | % |
Six Months Ended June 30, | |||||||||||||||||
(in millions) | 2020 | 2019 | % Change | ||||||||||||||
Wages | $ | 803 | $ | 845 | (5) | % | |||||||||||
Pension—Defined benefit plans service cost | 26 | 21 | 24 | % | |||||||||||||
Defined contribution plans | 68 | 66 | 3 | % | |||||||||||||
Medical and other benefits | 130 | 132 | (2) | % | |||||||||||||
Payroll taxes | 57 | 60 | (5) | % | |||||||||||||
Total wages and benefits | $ | 1,084 | $ | 1,124 | (4) | % |
(in millions) | Six Months Ended June 30, 2020 | Three Months Ended March 31, 2020(a) | Three Months Ended June 30, 2020(b) | ||||||||||||||
Net cash provided by operating activities | $ | 321 | $ | 33 | $ | 288 | |||||||||||
Net cash provided by (used in) investing activities | (124) | (127) | 3 | ||||||||||||||
Net cash provided by financing activities | 1,091 | $ | 684 | 407 | |||||||||||||
Net increase in cash, cash equivalents and restricted cash | 1,288 | 590 | 698 | ||||||||||||||
Adjusted to remove: | |||||||||||||||||
Payroll support program grant | 723 | — | 723 | ||||||||||||||
Payroll support program note and equity | 284 | — | 284 | ||||||||||||||
Secured debt issuances | 589 | 425 | 164 | ||||||||||||||
Credit facility draws | 400 | 400 | — | ||||||||||||||
Net marketable security activity | (5) | (24) | 19 | ||||||||||||||
Total adjustments | 1,991 | 801 | 1,190 | ||||||||||||||
Adjusted cash burn | $ | (703) | $ | (211) | $ | (492) | |||||||||||
Days in the period | 182 | 91 | 91 | ||||||||||||||
Average daily cash burn | $ | (4) | $ | (2) | $ | (5) |
(in millions) | June 30, 2020 | December 31, 2019 | Change | ||||||||||||||
Cash and marketable securities | $ | 2,803 | $ | 1,521 | 84 % | ||||||||||||
Cash, marketable securities, and unused lines of credit as a percentage of trailing twelve months' revenue | 42 | % | 17 | % | 25 pts | ||||||||||||
Total debt | 2,636 | 1,499 | 76 % | ||||||||||||||
Shareholders’ equity | $ | 3,861 | $ | 4,331 | (11)% |
Debt-to-capitalization, adjusted for operating leases | |||||||||||||||||
(in millions) | June 30, 2020 | December 31, 2019 | Change | ||||||||||||||
Long-term debt, net of current portion | $ | 1,549 | $ | 1,264 | 23% | ||||||||||||
Capitalized operating leases | 1,649 | 1,708 | (4)% | ||||||||||||||
COVID-19 related borrowings(a) | 818 | — | NM | ||||||||||||||
Adjusted debt | $ | 4,016 | $ | 2,972 | 35% | ||||||||||||
Shareholders' equity | 3,861 | 4,331 | (11)% | ||||||||||||||
Total invested capital | $ | 7,877 | $ | 7,303 | 8% | ||||||||||||
Debt-to-capitalization, including operating leases | 51 | % | 41 | % | 10 pts |
Net adjusted debt to earnings before interest, taxes, depreciation, amortization, special items and rent | |||||
(in millions) | June 30, 2020 | ||||
Adjusted debt | $ | 4,016 | |||
Current portion of long-term debt, net of COVID-19 related borrowings | 269 | ||||
Total adjusted debt | 4,285 | ||||
Less: Cash and marketable securities | (2,803) | ||||
Net adjusted debt | $ | 1,482 | |||
(in millions) | Last Twelve Months Ended June 30, 2020 | ||||
GAAP Operating Income(a) | $ | 65 | |||
Adjusted for: | |||||
Special items | (119) | ||||
Mark-to-market fuel hedge adjustments | (2) | ||||
Depreciation and amortization | 427 | ||||
Aircraft rent | 321 | ||||
EBITDAR | $ | 692 | |||
Net adjusted debt to EBITDAR | 2.1x |
Actual Fleet | Anticipated Fleet Activity | ||||||||||||||||||||||||||||||||||
Aircraft | June 30, 2020 | 2020 Additions | 2020 Removals | December 31, 2020 | 2021 Changes | December 31, 2021 | |||||||||||||||||||||||||||||
B737 Freighters | 3 | — | — | 3 | — | 3 | |||||||||||||||||||||||||||||
B737-700 | 11 | — | — | 11 | — | 11 | |||||||||||||||||||||||||||||
B737-800 | 61 | — | — | 61 | — | 61 | |||||||||||||||||||||||||||||
B737-900 | 12 | — | — | 12 | — | 12 | |||||||||||||||||||||||||||||
B737-900ER | 79 | — | — | 79 | — | 79 | |||||||||||||||||||||||||||||
B737 MAX9(a) | — | 3 | — | 3 | 15 | 18 | |||||||||||||||||||||||||||||
A320(b) | 49 | — | — | 49 | (7) | 42 | |||||||||||||||||||||||||||||
A321neo | 10 | — | — | 10 | — | 10 | |||||||||||||||||||||||||||||
Total Mainline Fleet | 225 | 3 | — | 228 | 8 | 236 | |||||||||||||||||||||||||||||
Q400 operated by Horizon | 32 | — | — | 32 | — | 32 | |||||||||||||||||||||||||||||
E175 operated by Horizon | 30 | — | — | 30 | — | 30 | |||||||||||||||||||||||||||||
E175 operated by third party | 32 | — | — | 32 | — | 32 | |||||||||||||||||||||||||||||
Total Regional Fleet | 94 | — | — | 94 | — | 94 | |||||||||||||||||||||||||||||
Total | 319 | 3 | — | 322 | 8 | 330 |
Approximate Gallons Hedged (in millions) | Weighted-Average Crude Oil Price per Barrel | Average Premium Cost per Barrel | |||||||||||||||
Third Quarter 2020 | 115 | $66 | $2 | ||||||||||||||
Fourth Quarter 2020 | 85 | $64 | $2 | ||||||||||||||
Full Year 2020 | 200 | $65 | $2 | ||||||||||||||
First Quarter 2021 | 60 | $62 | $2 | ||||||||||||||
Second Quarter 2021 | 45 | $63 | $2 | ||||||||||||||
Third Quarter 2021 | 40 | $57 | $2 | ||||||||||||||
Fourth Quarter 2021 | 20 | $49 | $4 | ||||||||||||||
Total 2021 | 165 | $60 | $2 |
(in millions) | Remainder of 2020 | 2021 | 2022 | 2023 | 2024 | Beyond 2024 | Total | ||||||||||||||||||||||||||||||||||
Current and long-term debt obligations | $ | 529 | $ | 742 | $ | 281 | $ | 245 | $ | 153 | $ | 695 | $ | 2,645 | |||||||||||||||||||||||||||
Aircraft lease commitments | 162 | 300 | 274 | 217 | 166 | 677 | 1,796 | ||||||||||||||||||||||||||||||||||
Facility lease commitments | 5 | 9 | 8 | 7 | 7 | 84 | 120 | ||||||||||||||||||||||||||||||||||
Aircraft maintenance deposits | 12 | 53 | 45 | 24 | 6 | 2 | 142 | ||||||||||||||||||||||||||||||||||
Aircraft purchase commitments (a) | 335 | 554 | 337 | 186 | 18 | 25 | 1,455 | ||||||||||||||||||||||||||||||||||
Interest obligations (b) | 32 | 42 | 30 | 23 | 17 | 61 | 205 | ||||||||||||||||||||||||||||||||||
Other obligations (c) | 41 | 179 | 185 | 190 | 197 | 910 | 1,702 | ||||||||||||||||||||||||||||||||||
Total | $ | 1,116 | $ | 1,879 | $ | 1,160 | $ | 892 | $ | 564 | $ | 2,454 | $ | 8,065 |
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK |
ITEM 4. CONTROLS AND PROCEDURES |
ITEM 1. LEGAL PROCEEDINGS |
ITEM 1A. RISK FACTORS |
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS |
Total Number of Shares Purchased | Average Price Paid per Share | Maximum remaining dollar value of shares that can be purchased under the plan (in millions) | |||||||||||||||
April 1, 2020 - April 30, 2020 | — | $ | — | ||||||||||||||
May 1, 2020 - May 31, 2020 | — | — | |||||||||||||||
June 1, 2020 - June 30, 2020 | — | — | |||||||||||||||
Total | — | $ | — | $ | 456 |
ITEM 3. DEFAULTS UPON SENIOR SECURITIES |
ITEM 4. MINE SAFETY DISCLOSURES |
ITEM 5. OTHER INFORMATION |
ITEM 6. EXHIBITS |
ALASKA AIR GROUP, INC. | |||||
/s/ CHRISTOPHER M. BERRY | |||||
Christopher M. Berry | |||||
Vice President Finance and Controller | |||||
August 4, 2020 |
Exhibit Number | Exhibit Description | Form | Date of First Filing | Exhibit Number | ||||||||||
3.1 | 10-Q | August 3, 2017 | 3.1 | |||||||||||
10.1† | 10-Q | |||||||||||||
31.1† | 10-Q | |||||||||||||
31.2† | 10-Q | |||||||||||||
32.1† | 10-Q | |||||||||||||
32.2† | 10-Q | |||||||||||||
101.INS† | XBRL Instance Document - The instance document does not appear in the interactive data file because 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 Label Linkbase Document | |||||||||||||
101.PRE† | XBRL Taxonomy Extension Presentation Linkbase Document | |||||||||||||
† | Filed herewith | |||||||||||||
* | Indicates management contract or compensatory plan arrangement |
Pay Group/Position | Participation Rate | ||||
ALASKA CHIEF EXECUTIVE OFFICER | 140% | ||||
ALASKA PRESIDENT | 110% | ||||
ALASKA EXECUTIVE VICE PRESIDENT FINANCE AND CFO, EXECUTIVE VICE PRESIDENT AND CCO AND EXECUTIVE VICE PRESIDENT AND COO | 85% | ||||
HORIZON PRESIDENT | 75% | ||||
ALASKA VICE PRESIDENTS SERVING ON MANAGEMENT’S EXECUTIVE COMMITTEE | 65% | ||||
ALASKA SENIOR VICE PRESIDENTS | 65% | ||||
ALASKA AND HORIZON VICE PRESIDENTS | 50% | ||||
ALASKA AND HORIZON MANAGING DIRECTORS | 35% | ||||
ALASKA AND HORIZON PARTICIPANTS AT CAREER STEPS AND STAGES AP3 AND SL1 | 15% | ||||
ALASKA AND HORIZON PARTICIPANTS AT CAREER STEPS AND STAGES AP2 AND L3 | 12% | ||||
ALASKA AND HORIZON PARTICIPANTS AT CAREER STEPS AND STAGES AP1 AND L2 | 10% | ||||
ALASKA AND HORIZON PARTICIPANTS AT CAREER STEPS AND STAGES P3 AND L1 | 7.5% | ||||
OTHER ALASKA AND HORIZON PARTICIPANTS AT CAREER STEP AND STAGE P2 OR BELOW | 5% |
By | /s/ BRADLEY D. TILDEN | ||||
Bradley D. Tilden | |||||
Chairman, President and Chief Executive Officer |
By | /s/ SHANE R. TACKETT | ||||
Shane R. Tackett | |||||
Executive Vice President/Finance and Chief Financial Officer |
By | /s/ BRADLEY D. TILDEN | ||||
Bradley D. Tilden | |||||
Chairman, President and Chief Executive Officer |
By | /s/ SHANE R. TACKETT | ||||
Shane R. Tackett | |||||
Executive Vice President/Finance and Chief Financial Officer |
CONDENSED CONSOLIDATED BALANCE SHEETS (PARENTHETICALS) - $ / shares |
Jun. 30, 2020 |
Dec. 31, 2019 |
---|---|---|
Stockholders' Equity: | ||
Preferred Stock, par value (usd per share) | $ 0.01 | |
Preferred stock, shares authorized (shares) | 5,000,000 | |
Preferred stock, shares issued (shares) | 0 | |
Common stock, par value (usd per share) | $ 0.01 | |
Common stock, shares authorized (shares) | 400,000,000 | |
Common stock, shares issued (shares) | 132,989,258 | 131,812,173 |
Common stock, shares outstanding (shares) | 123,639,314 | 123,000,307 |
Treasury Stock, Shares (shares) | 9,349,944 | 8,811,866 |
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Parenthetical) - USD ($) $ in Millions |
Jun. 30, 2020 |
Dec. 31, 2019 |
Jun. 30, 2019 |
Dec. 31, 2018 |
---|---|---|---|---|
Statement of Cash Flows [Abstract] | ||||
Cash and cash equivalents | $ 1,509 | $ 221 | $ 244 | |
Restricted cash included in Prepaid expenses and other current assets | 11 | 10 | ||
Total cash, cash equivalents, and restricted cash at end of the period | $ 1,520 | $ 232 | $ 254 | $ 114 |
GENERAL AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES |
6 Months Ended |
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Jun. 30, 2020 | |
Accounting Policies [Abstract] | |
GENERAL AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | GENERAL AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Organization and Basis of Presentation The condensed consolidated financial statements include the accounts of Air Group, or the Company, and its primary subsidiaries, Alaska and Horizon. The condensed consolidated financial statements also include McGee Air Services (McGee), a ground services subsidiary of Alaska. The Company conducts substantially all of its operations through these subsidiaries. All significant intercompany balances and transactions have been eliminated. These financial statements 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. It should be read in conjunction with the consolidated financial statements and accompanying notes in the Form 10-K for the year ended December 31, 2019. In the opinion of management, all adjustments have been made that are necessary to fairly present the Company’s financial position as of June 30, 2020 and the results of operations for the three and six months ended June 30, 2020 and 2019. Such adjustments were of a normal recurring nature. In preparing these statements, the Company is required to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent liabilities, as well as the reported amounts of revenues and expenses, including impairment charges. Due to the impacts of the COVID-19 pandemic on the Company's business, these estimates and assumptions require more judgment than they would be otherwise given the uncertainty of the future demand for air travel, among other considerations. Further, due to seasonal variations in the demand for air travel, the volatility of aircraft fuel prices, changes in global economic conditions, changes in the competitive environment and other factors, operating results for the three and six months ended June 30, 2020 are not necessarily indicative of operating results for the entire year. Recently Adopted Accounting Pronouncement In June 2016, the Financial Accounting Standards Board issued ASU 2016-13, "Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments." The ASU requires the use of an "expected credit loss model" on certain financial instruments. The ASU also amends the impairment model for available-for-sale debt securities, and requires the estimation of credit losses to be recorded as allowances instead of reductions to amortized cost. The ASU was effective for the Company beginning January 1, 2020, and was adopted prospectively, but it did not have a significant impact on the Company's financial statements and disclosures.
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COVID-19 Pandemic |
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Risks and Uncertainties [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Impacts of COVID-19 | COVID-19 PANDEMIC The public health and economic crises resulting from the outbreak of the novel coronavirus (COVID-19) beginning in the first quarter of 2020 has had an unprecedented impact on the Company. Travel restrictions, event cancellations and social distancing guidelines implemented throughout the country drove significant declines in demand beginning in February, and adversely impacted revenues beginning in March. Consistent with expectations, the financial impact to the second quarter was more significant than the first quarter. There continue to be travel restrictions in place throughout the United States, and the resurgence in COVID-19 cases threatens to halt or reverse progress towards reopening in many states and cities. It is uncertain when these restrictions may lift and when demand may return. In response to the COVID-19 pandemic, the Company implemented a "Peace-of-Mind" waiver, which allows travelers to book tickets for travel for a specified period of time that can be changed or canceled without incurring change fees. In the second quarter, the waiver has been extended to cover all ticketed travel purchased through September 8, 2020. Cancellations and postponement of travel exceeded new bookings in March and April, and had a material impact on second quarter passenger revenues, air traffic liability, and cash position. Refer to Note 3 for further discussion. The Company has taken decisive action to reduce costs and preserve cash and liquidity. In the first quarter, the Company implemented a company-wide hiring freeze, reduced salaries of senior management and hours for management employees, suspended annual pay increases and solicited voluntary leaves of absence. In addition to these payroll saving measures, the Company has actively negotiated with vendor partners to reduce contractual minimums and spending in line with the reduction in demand. With demand dramatically depressed, the Company has significantly reduced its planned flying capacity. As a result, many aircraft have been parked or removed from service. As of June 30, 2020, 101 mainline aircraft were temporarily grounded. The Company made the decision in the first quarter of 2020 to permanently remove 12 Airbus aircraft from the operating fleet. As of June 30, 2020, all operating regional aircraft were in service. Valuation of long-lived assets The Company reviews its long-lived assets for impairment whenever events or changes indicate that the total carrying amount of an asset or asset group may not be recoverable. To determine if impairment exists, a recoverability test is performed comparing the sum of estimated undiscounted future cash flows expected to be directly generated by the assets to the asset carrying value. Assets are grouped at the individual fleet level, which is the lowest level for which identifiable cash flows are available. The Company developed estimates of future cash flows utilizing historical results, adjusted for the current operating environment, including the impact of parked aircraft. Given the temporary and permanent parking of certain aircraft described above, the Company performed impairment tests on certain long-lived assets as of March 31, 2020 and again as of June 30, 2020. All individual fleets passed the recoverability test, except for the Q400 fleet and the permanently parked Airbus aircraft, which did not pass in the first quarter of 2020. In the first quarter, the Company recorded an impairment charge of $83 million for the 12 permanently parked Airbus aircraft, which was comprised of operating lease right of use assets, estimable return costs, and related leasehold improvements. In the second quarter, the Company identified additional estimable return costs relating to those permanently parked aircraft, and recorded an additional $70 million charge. Also in the first quarter, the Company recorded an impairment charge of $58 million reflecting the amount for which carrying value exceeded fair value of the Q400 fleet. The Company also recorded additional impairment charges relating to two non-operating Q400 aircraft, which remain parked and held-for-sale, in the first quarter of 2020. A summary of the impairment charges recorded for aircraft and other flight equipment in the condensed consolidated statement of operations for the six months ended June 30, 2020 is as follows (in millions):
The Company will continue to evaluate the need for further impairment of long-lived assets as expectations of future demand, market conditions and fleet decisions evolve. Valuation of intangible assets and goodwill The Company reviews definite- and indefinite-lived intangible assets and goodwill for impairment on an annual basis in the fourth quarter, or more frequently should events or circumstances indicate that an impairment may exist. Given strain in the general economic environment and a significant decline in Alaska Air Group market capitalization, the Company performed impairment tests on all three asset types as of March 31, 2020 and again as of June 30, 2020. As a result of these analyses, indefinite-lived intangible assets and goodwill were deemed recoverable, and no impairment charges were recorded. Of the company’s definite-lived intangibles, leased gates at Dallas-Love Field (DAL Gates) were deemed not recoverable and an impairment charge of $10 million was recorded in the first quarter. No additional impairment charges were identified for definite-lived intangibles as a result of the June 30, 2020 impairment test. Other considerations The Company also evaluated outstanding receivable balances for risk of non-payment. The Company identified a $5 million receivable from a vendor that filed for bankruptcy during the first quarter. The Company fully expects to file a bankruptcy claim but, as the note is unsecured, management determined that collectability is not probable. Therefore, the full $5 million was reserved and charged to Special charges - impairment charges and other in the condensed consolidated statement of operations in the first quarter. For the three and six months ended June 30, 2020, the Company concluded that the use of a year-to-date effective tax rate estimate was more appropriate than the annual effective tax rate method as estimates of the Company's full-year loss is not reliable at this time given the uncertainty of the travel demand environment. Although it is not certain when the impacts of COVID-19 will subside and demand for air travel will return, the Company has implemented meaningful plans to reduce expenses, build liquidity and preserve cash. At June 30, 2020, given the balance of cash, cash equivalents and marketable securities, as well as anticipated access to liquidity and cash flows from future operations, the Company expects it will meet all cash obligations, as well as remain in compliance with the financial debt covenants in its existing financing arrangements, for the next 12 months. Refer to Note 5. Long-Term Debt for further information regarding liquidity obtained in response to the COVID-19 crisis. CARES Act Funding During the second quarter, Alaska, Horizon, and McGee finalized agreements with the U.S. Department of the Treasury through the payroll support program (PSP) under the Coronavirus Aid, Relief and Economic Security (CARES) Act. Under the PSP and associated agreements, Alaska and Horizon received $992 million in the second quarter. Similarly, McGee entered into an agreement to receive a total of $30 million, of which $15 million was received in the second quarter, with the remainder expected to be received in two installments in the third quarter. The funds are to be used exclusively toward continuing to pay employee salaries, wages and benefits. Upon receipt of the funds, the Company is subject to various conditions, including, but not limited to, refraining from conducting involuntary furloughs or reducing employee rates of pay through September 30, 2020 and placing limits on executive compensation. Other conditions also prohibit the Company from repurchasing common stock and from paying dividends until September 30, 2021, and require the Company to continue to maintain essential air service as directed by the U.S. Department of Transportation. The funds received took the form of debt, warrants and a grant. The secured debt portion of $276 million was recorded at par. An additional $5 million of debt is expected to be issued in the third quarter as the remaining $15 million in funding is received by McGee. See Note 5 for further discussion. Warrants of $7 million were recorded on the condensed consolidated balance sheet at fair value determined using the Black-Scholes model. The residual amount of $723 million was recorded as grant proceeds on the condensed consolidated balance sheet as a deferred wage offset. The grant will be recognized into earnings as eligible wages, salaries and benefits are incurred. During the three months ended June 30, 2020, the Company recognized $362 million of the PSP grant proceeds as a wage offset.
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REVENUE FROM CONTRACTS WITH CUSTOMERS |
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Revenue Recognition [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
REVENUE FROM CONTRACTS WITH CUSTOMERS | REVENUE Ticket revenue is recorded as Passenger revenue, and represents the primary source of the Company's revenue. Also included in Passenger revenue are passenger ancillary revenues, such as bag fees, on-board food and beverage, ticket change fees, and certain revenue from the frequent flyer program. Mileage Plan other revenue includes brand and marketing revenue from the Company's co-branded credit card and other partners and certain interline frequent flyer revenue, net of commissions. Cargo and other revenue includes freight and mail revenue, and to a lesser extent, other ancillary revenue products such as lounge membership and certain commissions. The Company disaggregates revenue by segment in Note 9. The details within the Company’s statements of operations, segment disclosures, and in this footnote depict the nature, amount, timing and uncertainty of revenue and how cash flows are affected by economic and other factors. Passenger Ticket and Ancillary Services Revenue Passenger revenue recognized in the condensed consolidated statements of operations (in millions):
Mileage Plan™ Loyalty Program Mileage Plan™ revenue included in the condensed consolidated statements of operations (in millions):
Cargo and Other Cargo and other revenue included in the condensed consolidated statements of operations (in millions):
Air Traffic Liability and Deferred Revenue Passenger ticket and ancillary services liabilities The Company recognized Passenger revenue of $484 million and $563 million from the prior year-end air traffic liability balance for the six months ended June 30, 2020 and 2019. Given the ongoing reduction in demand for air travel stemming from the COVID-19 pandemic, the Company has observed unprecedented declines in advance bookings and associated cash receipts. The Company also saw significant cancellations beginning in March 2020, which has led to cash refunds or the issuance of credits for future travel. Since the onset of the pandemic, the Company has issued cash refunds of $363 million and credits for future travel of $695 million. At June 30, 2020, such credits, which are included in the air traffic liability balance, totaled $568 million, net of breakage. In April 2020, the Company announced updated expiration terms for these credits, extending to July 2021. At this time, the Company is unable to estimate how and when the air traffic liability will be recognized in earnings given ongoing uncertainty around the return in demand for air travel. Mileage PlanTM assets and liabilities The Company records a receivable for amounts due from the bank partner and from other partners as mileage credits are sold until the payments are collected. The Company had $42 million of such receivables as of June 30, 2020 and $105 million as of December 31, 2019. Consistent with the significant cancellation activity outlined above, the Company saw a substantial number of redeposits in the second quarter. Given the uncertainty around the return in demand for air travel, the Company is unable to determine how and when mileage credits will be recognized in earnings. The table below presents a roll forward of the total frequent flyer liability (in millions):
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FAIR VALUE MEASUREMENTS |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
FAIR VALUE MEASUREMENTS | FAIR VALUE MEASUREMENTS In determining fair value, there is a three-level hierarchy based on the reliability of the inputs used. Level 1 refers to fair values based on quoted prices in active markets for identical assets or liabilities. Level 2 refers to fair values estimated using significant other observable inputs and Level 3 refers to fair values estimated using significant unobservable inputs. Fair Value of Financial Instruments on a Recurring Basis As of June 30, 2020, total cost basis for all marketable securities was $1.3 billion. There were no significant differences between the cost basis and fair value of any individual class of marketable securities. Fair values of financial instruments on the consolidated balance sheet (in millions):
The Company uses both the market and income approach to determine the fair value of marketable securities. U.S. government securities and equity mutual funds are Level 1 as the fair value is based on quoted prices in active markets. Foreign government bonds, asset-backed securities, mortgage-backed securities, corporate notes and bonds, and municipal securities are Level 2 as the fair value is based on standard valuation models that are calculated based on observable inputs such as quoted interest rates, yield curves, credit ratings of the security and other observable market information. The Company uses the market approach and the income approach to determine the fair value of derivative instruments. The fair value for fuel hedge call options is determined utilizing an option pricing model based on inputs that are readily available in active markets or can be derived from information available in active markets. In addition, the fair value considers the exposure to credit losses in the event of non-performance by counterparties. Interest rate swap agreements are Level 2 as the fair value of these contracts is determined based on the difference between the fixed interest rate in the agreements and the observable LIBOR-based interest forward rates at period end multiplied by the total notional value. Activity and Maturities for Marketable Securities Unrealized losses from marketable securities are primarily attributable to changes in interest rates. Management does not believe any unrealized losses are the result of expected credit losses based on its evaluation of available information as of June 30, 2020. Maturities for marketable securities (in millions):
Fair Value of Other Financial Instruments The Company uses the following methods and assumptions to determine the fair value of financial instruments that are not recognized at fair value as described below. Cash, Cash Equivalents and Restricted Cash: Cash equivalents consist of highly liquid investments with original maturities of three months or less, such as money market funds, commercial paper and certificates of deposit. They are carried at cost, which approximates fair value. The Company's restricted cash balances are primarily used to guarantee various letters of credit, self-insurance programs or other contractual rights. Restricted cash consists of highly liquid securities with original maturities of three months or less. They are carried at cost, which approximates fair value. Debt: Debt assumed in the acquisition of Virgin America was subject to a non-recurring fair valuation adjustment as part of purchase price accounting. The adjustment is amortized over the life of the associated debt. All other fixed-rate debt is carried at cost. To estimate the fair value of all fixed-rate debt as of June 30, 2020, the Company uses the income approach by discounting cash flows using borrowing rates for comparable debt over the remaining life of the outstanding debt. The estimated fair value of the fixed-rate debt is Level 3 as certain inputs used are unobservable. Fixed-rate debt on the consolidated balance sheet and the estimated fair value of long-term fixed-rate debt is as follows (in millions):
Assets and Liabilities Measured at Fair Value on Nonrecurring Basis Certain assets and liabilities are recognized or disclosed at fair value on a nonrecurring basis, including property, plant and equipment, operating lease assets, goodwill, and intangible assets. These assets are subject to fair valuation when there is evidence of impairment. Refer to Note 2 for discussion regarding impairment charges recorded during the three and six months ended June 30, 2020. No material impairment charges were recorded during the three and six months ended June 30, 2019.
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LONG-TERM DEBT |
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
LONG-TERM DEBT | LONG-TERM DEBT Long-term debt obligations on the condensed consolidated balance sheet (in millions):
Approximately $666 million of the Company's total variable-rate notes payable are effectively fixed via interest rate swaps at June 30, 2020. During the six months ended June 30, 2020, the Company obtained additional secured debt financing of $589 million from multiple lenders. The new debt is secured by a total of 32 aircraft. The Company also made scheduled debt payments of $125 million during the six months ended June 30, 2020. The $276 million PSP note is an unsecured senior term loan with a 10-year term, bearing an interest rate of 1% in years 1 through 5, and an interest rate equal to the Secured Overnight Financing Rate (SOFR) plus 2% in years 6 through 10. The loan is prepayable at par at any time. Alaska and Horizon PSP proceeds were deposited into an account which will be drawn down over time for payroll expenses. That account and the balance of the proceeds will serve as the only collateral for the loan. At June 30, 2020 long-term debt principal payments for the next five years and thereafter are as follows (in millions):
Subsequent to quarter end, the Company obtained $1.2 billion in private funding through the issuance of Enhanced Equipment Trust Certificates (EETC). The EETCs are collateralized by 42 Boeing 737 aircraft and 19 Embraer E175 aircraft. Bank Lines of Credit The Company has three credit facilities with capacity totaling $516 million, and availability of $509 million, as of June 30, 2020. All three facilities have variable interest rates based on LIBOR plus a specified margin. One credit facility for $250 million expires in June 2021 and is secured by aircraft. A second credit facility with capacity of $150 million and availability of $143 million expires in March 2022 and is secured by certain accounts receivable, spare engines, spare parts and ground service equipment. The third credit facility for $116 million expires in July 2020, with a mechanism for annual renewal, and is secured by aircraft. During the six months ended June 30, 2020, the Company drew $400 million on the first two existing facilities. In the second quarter, the Company repaid $7 million on the second credit facility. The Company has drawn the full availability of both facilities, and the outstanding balance is classified as short-term on the condensed consolidated balance sheet. The Company also has secured letters of credit against the $116 million facility. All three credit facilities have a requirement to maintain a minimum unrestricted cash and marketable securities balance of $500 million. The Company was in compliance with this covenant at June 30, 2020.
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EMPLOYEE BENEFIT PLANS |
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Retirement Benefits [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
EMPLOYEE BENEFIT PLANS | EMPLOYEE BENEFIT PLANS Net periodic benefit costs for qualified defined-benefit plans include the following (in millions):
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COMMITMENTS |
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Commitments and Contingencies Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
COMMITMENTS | COMMITMENTS AND CONTINGENCIES Future minimum payments for commitments as of June 30, 2020 (in millions):
(a)Includes non-cancelable contractual commitments for aircraft and engines, aircraft maintenance and parts management. (b)Includes all non-aircraft lease costs associated with capacity purchase agreements. In the second quarter, Alaska entered into an agreement with SkyWest to defer a portion of 2020 payments and eliminate contractual minimums through September 30, 2020. In the second quarter, the Company renegotiated scheduled payments with certain lessors and vendor partners, including the reduction of minimum obligations and rates. The impact of those negotiations on our leases was not material to the operating lease liability. The Company has also deferred the payment of remaining 2020 contractual aircraft commitments, including those related to the B737 MAX9, to periods beyond 2020. Aircraft Commitments Aircraft purchase commitments include non-cancelable contractual commitments for aircraft and engines. As of June 30, 2020, Alaska had commitments to purchase 32 B737 MAX9 aircraft, with contracted deliveries between 2020 and 2023. As a result of the grounding order mandated by the FAA on March 13, 2019, the delivery schedule for these MAX aircraft is subject to change. Future minimum contractual payments for these aircraft have been updated to reflect the possible delivery timing, but are also subject to change. Horizon also has commitments to purchase three E175 aircraft with deliveries in 2023. Alaska has cancelable purchase commitments for 30 Airbus A320neo aircraft with deliveries from 2024 through 2026. In addition, Alaska has options to purchase 37 B737 MAX aircraft, and Horizon has options to purchase 30 E175 aircraft. Alaska also has the option to increase capacity flown by SkyWest with eight additional E175 aircraft with deliveries in 2022. The cancelable purchase commitments and option payments are not reflected in the table above. Given the current COVID-19 pandemic, the Company is in discussion with aircraft manufacturers regarding these purchase commitments and delivery timelines. Contingencies The Company is a party to routine litigation matters incidental to its business and with respect to which no material liability is expected. Liabilities for litigation related contingencies are recorded when a loss is determined to be probable and estimable. In 2015, three flight attendants filed a class action lawsuit seeking to represent all Virgin America flight attendants for damages based on alleged violations of California and City of San Francisco wage and hour laws. The court certified a class of approximately 1,800 flight attendants in November 2016. The Company believes the claims in this case are without factual and legal merit. In July 2018, the Court granted in part Plaintiffs' motion for summary judgment, finding Virgin America, and Alaska Airlines, as a successor-in-interest to Virgin America, responsible for various damages and penalties sought by the class members. On February 4, 2019, the Court entered final judgment against Virgin America and Alaska Airlines in the amount of approximately $78 million. It did not award injunctive relief against Alaska Airlines. The Company is seeking an appellate court ruling that the California laws on which the judgment is based are invalid as applied to national airlines pursuant to the U.S. Constitution and federal law and for other employment law and improper class certification reasons. The Company remains confident that a higher court will respect the federal preemption principles that were enacted to shield inter-state common carriers from a patchwork of state and local wage and hour regulations such as those at issue in this case and agree with the Company's other bases for appeal. For these reasons, no loss has been accrued. The Company is involved in other litigation around the application of state and local employment laws, like many air carriers. Our defenses are similar to those identified above, including that the state and local laws are preempted by federal law and are unconstitutional because they impede interstate commerce. None of these additional disputes are material. This forward-looking statement is based on management's current understanding of the relevant law and facts, and it is subject to various contingencies, including the potential costs and risks associated with litigation and the actions of judges and juries.
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SHAREHOLDERS' EQUITY |
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Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
SHAREHOLDERS' EQUITY | SHAREHOLDERS' EQUITY Common Stock Repurchase In August 2015, the Board of Directors authorized a $1 billion share repurchase program. As of June 30, 2020, the Company has repurchased 7.6 million shares for $544 million under this program. In March 2020, the Company suspended the share repurchase program indefinitely. CARES Act Warrant Issuance As additional taxpayer protection required under the PSP, the Company granted the Treasury Department 874,344 warrants to purchase Alaska Air Group (ALK) common stock at a strike price of $31.61, based on the closing price on April 9, 2020. The warrants are non-voting, freely transferable, may be settled as net shares or in cash at Alaska's option, and have a five year term. Additional warrants to purchase 14,327 shares of Air Group common stock will be issued to Treasury in connection with McGee's receipt of the remaining second and third installments of PSP funds in the third quarter. Accumulated Other Comprehensive Loss Components of accumulated other comprehensive loss, net of tax (in millions):
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OPERATING SEGMENT INFORMATION |
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Jun. 30, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
OPERATING SEGMENT INFORMATION | OPERATING SEGMENT INFORMATION Alaska Air Group has two operating airlines—Alaska and Horizon. Each is regulated by the U.S. Department of Transportation’s Federal Aviation Administration. Alaska has CPAs for regional capacity with Horizon, as well as with third-party carriers, under which Alaska receives all passenger revenues. Under U.S. GAAP, operating segments are defined as components of a business for which there is discrete financial information that is regularly assessed by the Chief Operating Decision Maker (CODM) in making resource allocation decisions. Financial performance for the operating airlines and CPAs is managed and reviewed by the Company's CODM as part of three reportable operating segments: •Mainline - includes scheduled air transportation on Alaska's Boeing or Airbus jet aircraft for passengers and cargo throughout the U.S., and in parts of Canada, Mexico, and Costa Rica. •Regional - includes Horizon's and other third-party carriers’ scheduled air transportation for passengers across a shorter distance network within the U.S. under a CPA. This segment includes the actual revenues and expenses associated with regional flying, as well as an allocation of corporate overhead incurred by Air Group on behalf of the regional operations. •Horizon - includes the capacity sold to Alaska under CPA. Expenses include those typically borne by regional airlines such as crew costs, ownership costs and maintenance costs. The CODM makes resource allocation decisions for these reporting segments based on flight profitability data, aircraft type, route economics and other financial information. The "Consolidating and Other" column reflects Air Group parent company activity, McGee Air Services, consolidating entries and other immaterial business units of the company. The “Air Group Adjusted” column represents a non-GAAP measure that is used by the Company's CODM to evaluate performance and allocate resources. Adjustments are further explained below in reconciling to consolidated GAAP results. Operating segment information is as follows (in millions):
(a)Includes consolidating entries, Air Group parent company, McGee Air Services, and other immaterial business units. (b)The Air Group Adjusted column represents the financial information that is reviewed by management to assess performance of operations and determine capital allocations and excludes certain income and charges. (c)Includes payroll support program grant wage offsets, special items and mark-to-market fuel hedge accounting adjustments. Total assets were as follows (in millions):
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GENERAL AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) |
6 Months Ended |
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Jun. 30, 2020 | |
Accounting Policies [Abstract] | |
Organization and Basis of Presentation | Organization and Basis of Presentation The condensed consolidated financial statements include the accounts of Air Group, or the Company, and its primary subsidiaries, Alaska and Horizon. The condensed consolidated financial statements also include McGee Air Services (McGee), a ground services subsidiary of Alaska. The Company conducts substantially all of its operations through these subsidiaries. All significant intercompany balances and transactions have been eliminated. These financial statements 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. It should be read in conjunction with the consolidated financial statements and accompanying notes in the Form 10-K for the year ended December 31, 2019. In the opinion of management, all adjustments have been made that are necessary to fairly present the Company’s financial position as of June 30, 2020 and the results of operations for the three and six months ended June 30, 2020 and 2019. Such adjustments were of a normal recurring nature. In preparing these statements, the Company is required to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent liabilities, as well as the reported amounts of revenues and expenses, including impairment charges. Due to the impacts of the COVID-19 pandemic on the Company's business, these estimates and assumptions require more judgment than they would be otherwise given the uncertainty of the future demand for air travel, among other considerations. Further, due to seasonal variations in the demand for air travel, the volatility of aircraft fuel prices, changes in global economic conditions, changes in the competitive environment and other factors, operating results for the three and six months ended June 30, 2020 are not necessarily indicative of operating results for the entire year.
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COVID-19 PANDEMIC (Tables) |
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Risks and Uncertainties [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Details of Impairment of Long-Lived Assets by Asset [Table Text Block] | A summary of the impairment charges recorded for aircraft and other flight equipment in the condensed consolidated statement of operations for the six months ended June 30, 2020 is as follows (in millions):
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REVENUE FROM CONTRACTS WITH CUSTOMERS (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Revenue Recognition [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Disaggregation of Revenue | Passenger revenue recognized in the condensed consolidated statements of operations (in millions):
Mileage Plan™ revenue included in the condensed consolidated statements of operations (in millions):
Cargo and other revenue included in the condensed consolidated statements of operations (in millions):
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Contract with Customer Liabilities | The table below presents a roll forward of the total frequent flyer liability (in millions):
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FAIR VALUE MEASUREMENTS (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Investments Classified by Contractual Maturity Date | Maturities for marketable securities (in millions):
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Fair Value, by Balance Sheet Grouping | Fair values of financial instruments on the consolidated balance sheet (in millions):
Fixed-rate debt on the consolidated balance sheet and the estimated fair value of long-term fixed-rate debt is as follows (in millions):
|
LONG-TERM DEBT (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Long-term Debt Instruments | Long-term debt obligations on the condensed consolidated balance sheet (in millions):
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Schedule of Maturities of Long-term Debt | At June 30, 2020 long-term debt principal payments for the next five years and thereafter are as follows (in millions):
|
EMPLOYEE BENEFIT PLANS (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Retirement Benefits [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Net Benefit Costs | Net periodic benefit costs for qualified defined-benefit plans include the following (in millions):
|
COMMITMENTS (Tables) |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2020 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commitments and Contingencies Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Future Minimum Rental Payments for Operating Leases and Unrecorded Unconditional Purchase Obligtaions | Future minimum payments for commitments as of June 30, 2020 (in millions):
(a)Includes non-cancelable contractual commitments for aircraft and engines, aircraft maintenance and parts management. (b)Includes all non-aircraft lease costs associated with capacity purchase agreements. In the second quarter, Alaska entered into an agreement with SkyWest to defer a portion of 2020 payments and eliminate contractual minimums through September 30, 2020.
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SHAREHOLDERS' EQUITY (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Accumulated Other Comprehensive Income (Loss) | Components of accumulated other comprehensive loss, net of tax (in millions):
|
OPERATING SEGMENT INFORMATION (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Segment Reporting Information, by Segment | Operating segment information is as follows (in millions):
(a)Includes consolidating entries, Air Group parent company, McGee Air Services, and other immaterial business units. (b)The Air Group Adjusted column represents the financial information that is reviewed by management to assess performance of operations and determine capital allocations and excludes certain income and charges. (c)Includes payroll support program grant wage offsets, special items and mark-to-market fuel hedge accounting adjustments. Total assets were as follows (in millions):
|
REVENUE FROM CONTRACTS WITH CUSTOMERS - Narrative (Details) - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | |||
---|---|---|---|---|---|
Jun. 30, 2020 |
Jun. 30, 2019 |
Jun. 30, 2020 |
Jun. 30, 2019 |
Dec. 31, 2019 |
|
Deferred Revenue Arrangement [Line Items] | |||||
Receivable | $ 280.0 | $ 280.0 | $ 323.0 | ||
Costs and Expenses | 709.0 | $ 1,924.0 | 2,666.0 | $ 3,775.0 | |
COVID-19 Related Credits Issued | 695.0 | ||||
COVID-19 Credits Issued, Balance | 568.0 | 568.0 | |||
Deferred Revenue, Refund Payments | 363.0 | ||||
Mileage Plan Revenue [Member] | |||||
Deferred Revenue Arrangement [Line Items] | |||||
Receivable | $ 42.0 | 42.0 | $ 105.0 | ||
Mileage Plan Revenue [Member] | Mileage plan other revenue [Member] | |||||
Deferred Revenue Arrangement [Line Items] | |||||
Contract liability revenue recognized | (21.0) | (51.0) | |||
Passenger Revenue [Member] | |||||
Deferred Revenue Arrangement [Line Items] | |||||
Contract liability revenue recognized | $ 484.0 | $ 563.0 |
REVENUE FROM CONTRACTS WITH CUSTOMERS - Contract Liabilities Activity (Details) - Mileage Plan Revenue [Member] - USD ($) $ in Millions |
6 Months Ended | |
---|---|---|
Jun. 30, 2020 |
Jun. 30, 2019 |
|
Change in Contract with Customer, Liability [Roll Forward] | ||
Total Deferred Revenue balance at January 1 | $ 1,990 | $ 1,874 |
Increase in liability for mileage credits issued | 313 | 451 |
Total Deferred Revenue balance at June 30 | 2,074 | 1,949 |
Passenger revenue [Member] | ||
Change in Contract with Customer, Liability [Roll Forward] | ||
Revenue recognized | (208) | (325) |
Mileage plan other revenue [Member] | ||
Change in Contract with Customer, Liability [Roll Forward] | ||
Revenue recognized | $ (21) | $ (51) |
FAIR VALUE MEASUREMENTS - MATURITIES FOR MARKETABLE SECURITIES (Details) $ in Millions |
Jun. 30, 2020
USD ($)
|
---|---|
Cost Basis | |
Due in one year or less | $ 133 |
Due after one year through five years | 1,063 |
Due after five years through 10 years | 60 |
Total | 1,256 |
Fair Value | |
Due in one year or less | 134 |
Due after one year through five years | 1,094 |
Due after five years through 10 years | 61 |
Total | $ 1,289 |
FAIR VALUE MEASUREMENTS - LONG-TERM DEBT (Details) - USD ($) $ in Millions |
Jun. 30, 2020 |
Dec. 31, 2019 |
---|---|---|
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Non-recurring purchase price accounting fair value adjustment | $ 2 | $ 2 |
Carrying amount [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fixed rate debt at cost | 444 | 473 |
Long-term debt | 446 | 475 |
Fair value [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Long-term debt | $ 463 | $ 483 |
LONG-TERM DEBT - SCHEDULE OF LONG-TERM DEBT (Details) |
6 Months Ended | 60 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jul. 02, 2020
USD ($)
|
Jun. 30, 2020
USD ($)
credit_facility
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Jun. 30, 2019
USD ($)
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Apr. 22, 2030 |
Apr. 23, 2020 |
Dec. 31, 2019
USD ($)
|
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Debt Instrument [Line Items] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Issuance Costs, Net | $ (11,000,000) | $ (8,000,000) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total | $ 2,636,000,000 | $ 1,499,000,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Weighted-average fixed-interest rate | 2.40% | 3.30% | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Weighted-average variable-interest rate | 2.00% | 2.90% | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Long-term debt payments | $ 125,000,000 | $ 532,000,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Proceeds from Issuance of Debt | 589,000,000 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Proceeds from Lines of Credit | $ 400,000,000 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Line of Credit Facility, Number Drawn in Current Period | credit_facility | 2 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Long-term Debt and Lease Obligation, Current | $ 1,087,000,000 | $ 235,000,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Long-term Debt and Lease Obligation | 1,549,000,000 | 1,264,000,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Unsecured Term Loan through PSP of CARES Act | 276,000,000 | 0 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Line of Credit Facility, Current Borrowing Capacity | $ 509,000,000 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
LONG-TERM DEBT | LONG-TERM DEBT Long-term debt obligations on the condensed consolidated balance sheet (in millions):
Approximately $666 million of the Company's total variable-rate notes payable are effectively fixed via interest rate swaps at June 30, 2020. During the six months ended June 30, 2020, the Company obtained additional secured debt financing of $589 million from multiple lenders. The new debt is secured by a total of 32 aircraft. The Company also made scheduled debt payments of $125 million during the six months ended June 30, 2020. The $276 million PSP note is an unsecured senior term loan with a 10-year term, bearing an interest rate of 1% in years 1 through 5, and an interest rate equal to the Secured Overnight Financing Rate (SOFR) plus 2% in years 6 through 10. The loan is prepayable at par at any time. Alaska and Horizon PSP proceeds were deposited into an account which will be drawn down over time for payroll expenses. That account and the balance of the proceeds will serve as the only collateral for the loan. At June 30, 2020 long-term debt principal payments for the next five years and thereafter are as follows (in millions):
Subsequent to quarter end, the Company obtained $1.2 billion in private funding through the issuance of Enhanced Equipment Trust Certificates (EETC). The EETCs are collateralized by 42 Boeing 737 aircraft and 19 Embraer E175 aircraft. Bank Lines of Credit The Company has three credit facilities with capacity totaling $516 million, and availability of $509 million, as of June 30, 2020. All three facilities have variable interest rates based on LIBOR plus a specified margin. One credit facility for $250 million expires in June 2021 and is secured by aircraft. A second credit facility with capacity of $150 million and availability of $143 million expires in March 2022 and is secured by certain accounts receivable, spare engines, spare parts and ground service equipment. The third credit facility for $116 million expires in July 2020, with a mechanism for annual renewal, and is secured by aircraft. During the six months ended June 30, 2020, the Company drew $400 million on the first two existing facilities. In the second quarter, the Company repaid $7 million on the second credit facility. The Company has drawn the full availability of both facilities, and the outstanding balance is classified as short-term on the condensed consolidated balance sheet. The Company also has secured letters of credit against the $116 million facility. All three credit facilities have a requirement to maintain a minimum unrestricted cash and marketable securities balance of $500 million. The Company was in compliance with this covenant at June 30, 2020.
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Line of Credit Facility, Current Borrowing Capacity | $ 509,000,000 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Subsequent Event [Member] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Proceeds from Issuance of Debt | $ 1,200,000,000 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Aircraft Type [Domain] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Instrument, Collateral | 32 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fixed rate notes payable due through 2029 [Member] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total | $ 446,000,000 | 475,000,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Variable rate notes payable due through 2029 [Member] [Member] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total | 1,925,000,000 | $ 1,032,000,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
CARES Act Unsecured Interest Rate Years 1 to 5 [Member] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Instrument, Interest Rate, Stated Percentage | 1.00% | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Instrument, Basis Spread on Variable Rate | 2.00% | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Instrument, Interest Rate, Stated Percentage | 1.00% | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Instrument, Basis Spread on Variable Rate | 2.00% | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Credit Facility 3 [Member] | Secured by certain accounts receivable, spare engines, spare parts and ground service equipment [Member] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Line of Credit Facility, Current Borrowing Capacity | 143,000,000 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Line of Credit Facility, Current Borrowing Capacity | 143,000,000 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Variable Rate debt with interest rate swap [Member] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total | $ 666,000,000 |
LONG-TERM DEBT LONG-TERM DEBT - FUTURE PAYMENTS (Details) $ in Millions |
Jun. 30, 2020
USD ($)
|
---|---|
Long-term Debt, Fiscal Year Maturity [Abstract] | |
Remainder of 2019 | $ 529 |
2020 | 742 |
2021 | 281 |
2022 | 245 |
2023 | 153 |
Thereafter | 695 |
Total | $ 2,645 |
LONG-TERM DEBT - LINE OF CREDIT (Details) |
6 Months Ended | |
---|---|---|
Jun. 30, 2020
USD ($)
credit_facility
|
Jun. 30, 2019
USD ($)
|
|
Line of Credit Facility [Line Items] | ||
Proceeds from Issuance of Secured Debt | $ 1,265,000,000 | $ 254,000,000 |
Line of Credit Facility, Number of Credit Facilities | credit_facility | 3 | |
Line of Credit Facility, Maximum Borrowing Capacity | $ 516,000,000 | |
Line of Credit Facility, Asset Restrictions | 500,000,000 | |
Credit Facility 1 [Member] | Secured by aircraft [Member] | ||
Line of Credit Facility [Line Items] | ||
Line of Credit Facility, Maximum Borrowing Capacity | 250,000,000 | |
Credit Facility 2 [Member] | Secured by aircraft [Member] | ||
Line of Credit Facility [Line Items] | ||
Line of Credit Facility, Maximum Borrowing Capacity | 116,000,000 | |
Credit Facility 3 [Member] | Secured by certain accounts receivable, spare engines, spare parts and ground service equipment [Member] | ||
Line of Credit Facility [Line Items] | ||
Line of Credit Facility, Maximum Borrowing Capacity | $ 150,000,000 |
EMPLOYEE BENEFIT PLANS - NET PENSION EXPENSE (Details) - Qualified Defined Benefit [Member] - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2020 |
Jun. 30, 2019 |
Jun. 30, 2020 |
Jun. 30, 2019 |
|
Defined Benefit Plan, Net Periodic Benefit Cost (Credit) [Abstract] | ||||
Service cost | $ 13 | $ 10 | $ 26 | $ 21 |
Interest cost | 19 | 22 | 38 | 44 |
Expected return on assets | (27) | (23) | (55) | (47) |
Recognized actuarial loss (gain) | 8 | 9 | 17 | 18 |
Wages and Benefits [Member] | ||||
Defined Benefit Plan, Net Periodic Benefit Cost (Credit) [Abstract] | ||||
Net pension expense | 13 | 10 | 26 | 21 |
Nonoperating Income (Expense) [Member] | ||||
Defined Benefit Plan, Net Periodic Benefit Cost (Credit) [Abstract] | ||||
Net pension expense | $ 0 | $ 8 | $ 0 | $ 15 |
SHAREHOLDERS' EQUITY, CASH DIVIDEND (Details) - USD ($) $ / shares in Units, $ in Millions |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2020 |
Jun. 30, 2019 |
Jun. 30, 2020 |
Jun. 30, 2019 |
|
Equity [Abstract] | ||||
Cash dividend declared per share (usd per share) | $ 0.375 | $ 0.35 | ||
Payments of Dividends | $ 45 | $ 86 |
SHAREHOLDERS' EQUITY, COMMON STOCK REPURCHASE (Details) - USD ($) $ in Millions |
3 Months Ended | 49 Months Ended | |||
---|---|---|---|---|---|
Mar. 31, 2020 |
Jun. 30, 2019 |
Mar. 31, 2019 |
Sep. 30, 2019 |
Aug. 31, 2015 |
|
Class of Stock [Line Items] | |||||
Stock Repurchased During Period, Value | $ 31 | $ 12 | $ 13 | ||
2015 1 Billion Repurchase Program [Member] | |||||
Class of Stock [Line Items] | |||||
Stock repurchase program, authorized amount | $ 1,000 | ||||
Stock repurchased during period (shares) | 7,600,000 | ||||
Stock Repurchased During Period, Value | $ 544 |
SHAREHOLDERS' EQUITY, ACCUMULATED OTHER COMPREHENSIVE LOSS (Details) - USD ($) $ in Millions |
Jun. 30, 2020 |
Dec. 31, 2019 |
---|---|---|
Equity [Abstract] | ||
Related to marketable securities | $ 25 | $ 9 |
Related to employee benefit plans | (458) | (469) |
Related to interest rate derivatives | (25) | (5) |
Total | $ (458) | $ (465) |
SHAREHOLDERS' EQUITY (Details) - ALK Common Stock Warrant [Member] |
Apr. 23, 2020
$ / shares
shares
|
---|---|
Class of Warrant or Right [Line Items] | |
Class of Warrant or Right, Number of Securities Called by Each Warrant or Right | shares | 874,344 |
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ / shares | $ 31.61 |
OPERATING SEGMENT INFORMATION, ASSETS (Details) - USD ($) $ in Millions |
Jun. 30, 2020 |
Dec. 31, 2019 |
---|---|---|
Total assets | $ 13,998 | $ 12,993 |
Alaska Airlines [Member] | ||
Total assets | 20,261 | 19,207 |
Horizon [Member] | ||
Total assets | 1,199 | 1,266 |
Parent [Member] | ||
Total assets | $ (7,462) | $ (7,480) |
SUBSEQUENT EVENT (Details) |
Sep. 30, 2020
shares
|
---|---|
Subsequent Event [Member] | ALK Common Stock Warrant [Member] | |
Subsequent Event [Line Items] | |
Class of Warrant or Right, Number of Securities Called by Warrants or Rights | 14,327 |
Label | Element | Value |
---|---|---|
Tax Cuts and Jobs Act, Reclassification from AOCI to Retained Earnings, Tax Effect | alk_TaxCutsandJobsActReclassificationfromAOCItoRetainedEarningsTaxEffect | $ 3,000,000 |
AOCI Attributable to Parent [Member] | ||
Tax Cuts and Jobs Act, Reclassification from AOCI to Retained Earnings, Tax Effect | alk_TaxCutsandJobsActReclassificationfromAOCItoRetainedEarningsTaxEffect | 0 |
Retained Earnings [Member] | ||
Tax Cuts and Jobs Act, Reclassification from AOCI to Retained Earnings, Tax Effect | alk_TaxCutsandJobsActReclassificationfromAOCItoRetainedEarningsTaxEffect | $ 3,000,000 |
B-737 [Member] | Aircraft [Domain] | Subsequent Event [Member] | ||
Debt Instrument, Collateral | us-gaap_DebtInstrumentCollateral | 42 |
E175 [Member] | Aircraft [Domain] | Subsequent Event [Member] | ||
Debt Instrument, Collateral | us-gaap_DebtInstrumentCollateral | 19 |
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