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FAIR VALUE MEASUREMENTS
 12 Months Ended
Dec. 31, 2024
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 for identical instruments in active markets.

Level 2 refers to fair values estimated using significant other observable inputs such as similar instruments in active markets or quoted prices for identical or similar instrument in markets that are not active. Fair values for Level 2 instruments are determined using standard valuation models that incorporate inputs such as quoted prices for similar assets, interest rates, benchmark curves, credit ratings, and other observable inputs or market data.

Level 3 refers to fair values estimated using significant unobservable inputs for which there is little or no market data and that are significant to the fair value of the assets. Fair values for Level 3 instruments are determined using future cash flows and discount rates, which include information obtained from third-party valuation sources and other market sources, including recent offers from potential buyers.

Fair value of financial instruments on a recurring basis
As of December 31, 2024, cost basis and fair value for marketable securities was $1.3 billion. Differences in cost basis and fair value of marketable securities are primarily a result of changes in interest rates and general market conditions. The Company does not believe any unrealized losses are the result of credit quality based on its evaluation and duration exposure, credit ratings of the securities, liquidity profiles, and other observable information as of December 31, 2024.
Fair values of financial instruments on the consolidated balance sheet:
December 31, 2024
(in millions)
Level 1Level 2
Level 3
Total
Assets
Marketable securities
U.S. government and agency securities$292 $— $— $292 
Equity mutual funds7 — — 7 
Asset-backed securities— 127 7 134 
Mortgage-backed securities— 112 — 112 
Corporate notes and bonds— 696 2 698 
Municipal securities and other
— 31 — 31 
Total Marketable securities299 966 9 1,274 
Derivative instruments
Interest rate swap agreements— 9 — 9 
Total Assets$299 $975 $9 $1,283 

December 31, 2023
(in millions)
Level 1Level 2
Level 3
Total
Assets
Marketable securities
U.S. government and agency securities$387 $— $— $387 
Equity mutual funds5 — — 5 
Foreign government bonds— 10 — 10 
Asset-backed securities— 192 — 192 
Mortgage-backed securities— 115 — 115 
Corporate notes and bonds— 763 — 763 
Municipal securities and other
— 38 — 38 
Total Marketable securities392 1,118 — 1,510
Derivative instruments
Fuel hedge contracts - call options— 11 — 11 
Interest rate swap agreements— 8 — 8 
Total Assets$392 $1,137 $— $1,529 

Activity and maturities for marketable securities

Maturities for marketable securities:
December 31, 2024 (in millions)
Cost BasisFair Value
Due in one year or less$461 $460 
Due after one year through five years720 705 
Due after five years through ten years95 92 
Due after ten years10 9 
No maturity date5 8 
Total$1,291 $1,274 

Proceeds from sales and maturities of marketable securities were $1.8 billion, $1.2 billion, and $2.3 billion in 2024, 2023, and 2022.
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.

Debt: The estimated fair value of fixed-rate Enhanced Equipment Trust Certificate (EETC) debt and certain variable rate debt is Level 2, while the estimated fair value of $876 million of certain variable-rate and fixed-rate debt, including PSP notes payable and Japanese Yen denominated debt, is classified as Level 3.

Fixed-rate debt on the consolidated balance sheet and the estimated fair value of long-term fixed-rate debt:
(in millions)
December 31, 2024December 31, 2023
Fixed-rate debt$2,946 $1,515 
Estimated fair value$2,844 $1,382 

Fuel hedge contracts: Alaska has open crude oil call option positions covering 20 million gallons that will settle through March 2025. Hawaiian has open crude oil call option positions covering 47 million gallons that will settle through September 2025. The estimated fair value of fuel hedge contracts on the consolidated balance sheets was not material as of December 31, 2024 compared to $11 million as of December 31, 2023. Losses recognized in aircraft fuel expense were $10 million, compared to losses of $62 million in 2023 and gains of $93 million in 2022. Net cash proceeds for fuel hedge positions were not material in 2024, compared to net cash paid of $29 million in 2023 and net cash received of $130 million in 2022.

Interest rate swap agreements: The Company had interest rate swap agreements with third parties on $567 million of debt, inclusive of $375 million in swaps executed in 2024. The estimated fair value of interest rate swap agreements on the consolidated balance sheets was $9 million as of December 31, 2024 compared to $8 million as of December 31, 2023. Fair value adjustments recognized in other comprehensive income were not material in 2024, compared to losses of $7 million in 2023, and gains of $23 million in 2022. Gains recognized in interest expense were $7 million in 2024, compared to gains of $8 million in 2023, and losses of $2 million in 2022. The Company expects to reclassify $5 million from other comprehensive income into interest income within the next twelve months.


Assets and liabilities measured at fair value on a 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. No material impairments were recorded in 2024.