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FAIR VALUE MEASUREMENTS
 12 Months Ended
Dec. 31, 2025
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, 2025, cost basis and fair value for marketable securities was $1.5 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, 2025.
Fair values of financial instruments on the consolidated balance sheet:
December 31, 2025
(in millions)
Level 1Level 2
Level 3
Total
Assets
Marketable securities
U.S. government and agency securities$371 $— $— $371 
Equity mutual funds8 — — 8 
Asset-backed securities— 231 — 231 
Mortgage-backed securities— 211 — 211 
Corporate notes and bonds— 663 — 663 
Municipal securities and other
— 12 — 12 
Total Marketable securities$379 $1,117 $— $1,496 

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 securities$299 $966 $9 1,274

The fair value of interest rate swaps on the balance sheet was not material as of December 31, 2025 and December 31, 2024. The amounts recognized in interest expense and in other comprehensive income were not material in 2025, 2024 and 2023.
Activity and maturities for marketable securities

Maturities for marketable securities:
December 31, 2025 (in millions)
Cost BasisFair Value
Due in one year or less$354 $354 
Due after one year through five years974 979 
Due after five years through ten years152 153 
Due after ten years2 2 
No maturity date5 8 
Total$1,487 $1,496 

Proceeds from sales and maturities of marketable securities were $1.3 billion, $1.8 billion, and $1.2 billion in 2025, 2024, and 2023.

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 $732 million of certain variable-rate and fixed-rate debt, including Payroll Support Program (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, 2025December 31, 2024
Fixed-rate debt$2,761 $2,946 
Estimated fair value$2,756 $2,844 


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 2025.

Equity method and other investments

Air Group has made various investments in funds and companies related to innovation and sustainability in the aviation industry. We account for investments under the equity method if we are able to exercise significant influence over the investee. We record our share of our equity method investees’ financial results within the non-operating expense section of the consolidated statements of operations. Investments for which we do not have significant influence over are recorded at fair value or at cost, adjusted for any changes in price or impairments, if the fair value is not readily determinable. As of December 31, 2025 and December 31, 2024, the combined carrying value of these investments included in Other noncurrent assets in the consolidated balance sheets was $74 million and $51 million.