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ACQUISITION OF HAWAIIAN HOLDINGS, INC.
 9 Months Ended
Sep. 30, 2025
Business Combination, Asset Acquisition, Transaction between Entities under Common Control, and Joint Venture Formation [Abstract]  
ACQUISITION OF HAWAIIAN HOLDINGS, INC.
NOTE 2. ACQUISITION OF HAWAIIAN HOLDINGS, INC.

On September 18, 2024, the Company completed its acquisition of Hawaiian Holdings, Inc. The Company paid shareholders $18.00 per share, or approximately $936 million in cash for 52 million outstanding voting shares of Hawaiian. An additional $41 million was paid in cash for change in control payments and settlement of accelerated and vested awards, resulting in total consideration of $977 million. The combination brings together two complementary networks and expands consumer choice across Hawai'i, the West Coast, and international destinations. Along with enhanced network utility, the combined carriers' diversified product offerings and focus on high quality service and operational performance enhance Air Group's competitive position.

Fair values of the assets acquired and the liabilities assumed

The transaction has been accounted for as a business combination using the acquisition method of accounting, which requires, among other things, that assets acquired and liabilities assumed be recognized on the balance sheet at their fair values as of the acquisition date. The fair values of the assets acquired and liabilities assumed were determined using a market basis, relief from royalty, or multi-period excess earnings approach. There were no material fair value adjustments made in the three and nine months ended September 30, 2025.
Fair values of the assets acquired and the liabilities assumed as of the acquisition date, September 18, 2024, and finalized as of September 30, 2025, are as follows:
 (in millions)
September 30, 2025
Cash and cash equivalents$286 
Restricted cash27 
Marketable securities674 
Receivables110 
Inventories and supplies75 
Prepaid expenses and other77 
Property and equipment1,947 
Operating lease assets228 
Intangible assets799 
Goodwill780 
Other noncurrent assets97 
Total assets5,100 
Accounts payable57 
Air traffic liability513 
Other accrued liabilities331 
Deferred revenue - current229 
Current portion of operating lease liabilities65 
Current portion of long-term debt and finance leases144 
Long-Term Debt, net of current portion1,932 
Long-term operating lease liabilities, net of current portion234 
Deferred income taxes89 
Deferred revenue - noncurrent308 
Obligations for pension and post-retirement medical benefits153 
Other liabilities68 
Total liabilities4,123 
Total purchase price$977 

Merger-related costs

The Company incurred pretax merger-related costs of $61 million and $90 million for the three months ended September 30, 2025 and 2024, respectively, and $154 million and $128 million, for the nine months ended September 30, 2025 and 2024, respectively. These costs are presented within Special items - operating within the unaudited condensed consolidated statements of operations. Refer to Note 12 for further information on special items. The Company expects to incur additional merger-related costs in 2025.

Pro forma impact of the acquisition

The unaudited pro forma financial information presented in the table below represents a summary of the consolidated results of operations for the Company and Hawaiian as if the acquisition of Hawaiian had been consummated as of January 1, 2023. The pro forma results do not include any anticipated synergies, or other expected benefits of the acquisition. Accordingly, the unaudited pro forma financial information below is not necessarily indicative of either future results of operations or results that might have been achieved had the acquisition been consummated as of January 1, 2023.
The pro forma information includes adjustments for merger-related costs of $381 million assumed to have been incurred on January 1, 2023.
Three Months Ended September 30,Nine Months Ended September 30,
(in millions)2025 Pro Forma2024 Pro Forma2025 Pro Forma2024 Pro Forma
Revenue$3,766 $3,739 $10,607 $10,245 
Net income 116 234 188 137