Alaska Air (ALK) 10-Q 2 Aug 16 2016 Q2 Quarterly report Financial data

DOCUMENT AND ENTITY INFORMATION

DOCUMENT AND ENTITY INFORMATION - shares	6 Months Ended
	Jun. 30, 2016	Jul. 31, 2016
Document and Entity Information [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Jun. 30, 2016
Document Fiscal Year Focus	2,016
Document Fiscal Period Focus	Q2
Entity Registrant Name	ALASKA AIR GROUP, INC.
Entity Central Index Key	766,421
Current Fiscal Year End Date	--12-31
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding		123,089,982

CONDENSED CONSOLIDATED BALANCE

CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Millions	Jun. 30, 2016	Dec. 31, 2015
Current Assets
Cash and cash equivalents	$ 81	$ 73
Marketable securities	1,526	1,255
Total cash and marketable securities	1,607	1,328
Receivables - net	254	212
Inventories and supplies - net	45	51
Prepaid expenses and other current assets	97	72
Total Current Assets	2,003	1,663
Property and Equipment
Aircraft and other flight equipment	6,198	5,690
Other property and equipment	994	955
Deposits for future flight equipment	551	771
Property and Equipment Total	7,743	7,416
Less accumulated depreciation and amortization	2,784	2,614
Total Property and Equipment - Net	4,959	4,802
Other Assets	73	65
Total Assets	7,035	6,530
Current Liabilities
Accounts payable	78	63
Accrued wages, vacation and payroll taxes	239	298
Air traffic liability	870	669
Other accrued liabilities	757	661
Current portion of long-term debt	117	114
Total Current Liabilities	2,061	1,805
Long-Term Debt, Net of Current Portion	509	569
Other Liabilities and Credits
Deferred income taxes	721	682
Deferred revenue	480	431
Obligation for pension and postretirement medical benefits	271	270
Other liabilities	366	362
Other Liabilities and Credits Totals	1,838	1,745
Commitments and Contingencies
Shareholders' Equity
Preferred stock, $0.01 par value, Authorized: 5,000,000 shares, none issued or outstanding	0	0
Common stock, $0.01 par value, Authorized: 200,000,000 shares, Issued: 2016 - 128,941,102 shares; 2015 - 128,442,099 shares, Outstanding: 2016 - 123,079,519 shares; 2015 - 125,175,325 shares	1	1
Capital in excess of par value	91	73
Treasury stock (common), at cost: 2016 - 5,861,583 shares; 2015 - 3,266,774 shares	(444)	(250)
Accumulated other comprehensive loss	(287)	(303)
Retained earnings	3,266	2,890
Total Shareholders' Equity	2,627	2,411
Total Liabilities and Shareholders' Equity	$ 7,035	$ 6,530

CONDENSED CONSOLIDATED BALANCE3

CONDENSED CONSOLIDATED BALANCE SHEETS (PARENTHETICALS) - $ / shares	Jun. 30, 2016	Dec. 31, 2015
Stockholders' Equity:
Preferred Stock, par value (usd per share)	$ 0.01	$ 0.01
Preferred stock, shares authorized (shares)	5,000,000	5,000,000
Preferred stock, shares issued (shares)	0	0
Preferred stock, shares outstanding (shares)	0	0
Common stock, par value (usd per share)	$ 0.01	$ 0.01
Common stock, shares authorized (shares)	200,000,000	200,000,000
Common stock, shares issued (shares)	128,941,102	128,442,099
Common stock, shares outstanding (shares)	123,079,519	125,175,325
Treasury Stock, Shares (shares)	5,861,583	3,266,774

CONDENSED CONSOLIDATED STATEMEN

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Operating Revenues
Passenger, Mainline	$ 1,036	$ 1,019	$ 1,963	$ 1,920
Passenger, Regional	227	212	433	398
Total passenger revenue	1,263	1,231	2,396	2,318
Freight and mail	27	30	51	53
Other - net	204	176	394	335
Total Operating Revenues	1,494	1,437	2,841	2,706
Operating Expenses
Wages and benefits	332	305	668	611
Variable incentive pay	32	32	64	58
Aircraft fuel, including hedging gains and losses	201	261	368	496
Aircraft maintenance	65	52	133	115
Aircraft rent	26	26	55	52
Landing fees and other rentals	63	66	143	137
Contracted services	60	51	120	102
Selling expenses	55	54	104	107
Depreciation and amortization	92	79	180	155
Food and beverage service	31	28	62	53
Third-party regional carrier expense	24	17	47	33
Other	81	94	175	177
Special items - merger costs	14	0	14	0
Total Operating Expenses	1,076	1,065	2,133	2,096
Operating Income	418	372	708	610
Nonoperating Income (Expense)
Interest income	7	6	13	11
Interest expense	(9)	(11)	(22)	(22)
Interest capitalized	7	8	15	16
Other - net	(3)	1	(2)	1
Nonoperating Income (Expense) Total	2	4	4	6
Income before income tax	420	376	712	616
Income tax expense	160	142	268	233
Net Income	$ 260	$ 234	$ 444	$ 383
Basic Earnings Per Share (usd per share)	$ 2.11	$ 1.80	$ 3.58	$ 2.93
Diluted Earnings Per Share (usd per share)	$ 2.10	$ 1.79	$ 3.56	$ 2.91
Shares used for computation:
Basic shares (shares)	123,250,000	129,236,000	123,900,000	130,173,000
Diluted shares (shares)	123,988,000	130,255,000	124,715,000	131,271,000
Cash dividend declared per share (usd per share)	$ 0.275	$ 0.20	$ 0.55	$ 0.40

CONDENSED CONSOLIDATED STATEME5

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE OPERATIONS - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Statement of Comprehensive Income [Abstract]
Net Income	$ 260	$ 234	$ 444	$ 383
Related to marketable securities:
Unrealized holding gains (losses) arising during the period	7	(5)	19	2
Reclassification of (gains) losses into Other-net nonoperating income (expense)	1	0	1	0
Income tax effect	(2)	2	(6)	(1)
Total	4	(3)	12	1
Related to employee benefit plans:
Reclassification of net pension expense into Wages and benefits	5	5	10	8
Income tax effect	(2)	(2)	(4)	(3)
Total	3	3	6	5
Related to interest rate derivative instruments:
Unrealized holding gains (losses) arising during the period	(2)	1	(7)	(3)
Reclassification of (gains) losses into Aircraft rent	2	1	3	3
Income tax effect	0	(1)	2	0
Total	0	1	(2)	0
Other Comprehensive Income	7	1	16	6
Comprehensive Income	$ 267	$ 235	$ 460	$ 389

CONDENSED CONSOLIDATED STATEME6

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Millions	6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015
Cash flows from operating activities:
Net Income	$ 444	$ 383
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	180	155
Stock-based compensation and other	13	14
Changes in certain assets and liabilities:
Changes in deferred tax provision	41	(44)
Increase (decrease) in air traffic liability	201	209
Increase (decrease) in deferred revenue	48	27
Other - net	(28)	145
Net cash provided by operating activities	899	889
Property and equipment additions:
Aircraft and aircraft purchase deposits	(268)	(490)
Other flight equipment	(31)	(43)
Other property and equipment	(41)	(26)
Total property and equipment additions, including capitalized interest	(340)	(559)
Purchases of marketable securities	(610)	(711)
Sales and maturities of marketable securities	357	676
Proceeds from disposition of assets and changes in restricted deposits	3	0
Net cash used in investing activities	(590)	(594)
Cash flows from financing activities:
Long-term debt payments	(57)	(58)
Common stock repurchases	(193)	(262)
Dividends paid	(68)	(52)
Other financing activities	17	15
Net cash used in financing activities	(301)	(357)
Net increase (decrease) in cash and cash equivalents	8	(62)
Cash and cash equivalents at beginning of year	73	107
Cash and cash equivalents at end of the period	81	45
Cash paid during the period for:
Interest (net of amount capitalized)	8	8
Income taxes paid (received)	$ 182	$ 108

GENERAL AND SUMMARY OF SIGNIFIC

GENERAL AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES	6 Months Ended
	Jun. 30, 2016
Accounting Policies [Abstract]
GENERAL AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES	GENERAL AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Organization and Basis of Presentation The interim condensed consolidated financial statements include the accounts of Alaska Air Group, Inc. (Air Group or the Company) and its primary subsidiaries, Alaska Airlines, Inc. (Alaska) and Horizon Air Industries, Inc. (Horizon), through which the Company conducts substantially all of its operations. All 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. As a result, this Form 10-Q should be read in conjunction with the Consolidated Financial Statements and accompanying Notes in the Form 10-K for the year ended December 31, 2015 . In the opinion of management, all adjustments have been made that are necessary to present fairly the Company’s financial position as of June 30, 2016 , as well as the results of operations for the three and six months ended June 30, 2016 and 2015 . The adjustments made 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. 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, 2016 are not necessarily indicative of operating results for the entire year. Certain reclassifications have been made to prior year financial statements to conform with classifications used in the current year. Recently Issued Accounting Pronouncements In May 2014, the FASB issued Accounting Standards Update 2014-09, "Revenue from Contracts with Customers" (ASU 2014-09), which requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. The ASU will replace most existing revenue recognition guidance in U.S. GAAP when it becomes effective. The new standard is effective for the Company on January 1, 2018. The standard permits the use of either the retrospective or cumulative effect transition method. At this time, the Company believes the most significant impact to the financial statements will be in Mileage Plan revenues and liabilities. The Company currently uses the incremental cost approach for miles earned through travel. This standard eliminates that option and the Company will be required to increase its liability for earned miles through a relative selling price model. The Company has not evaluated the full impact of the standard, although application is expected to result in a material increase to Deferred Revenue. The Company has not yet selected a transition method. In April 2015, the FASB issued ASU 2015-03, "Interest - Imputation of Interest" (Subtopic 835-30), which requires debt issuance costs related to a debt liability be presented as a direct deduction from the carrying value of the debt liability. The amendment was adopted as of January 1, 2016. Prior period debt balances have been adjusted to reflect the adoption of ASU 2015-03. The adoption of the ASU had no impact on the Statements of Operations or retained earnings. In February 2016, the FASB issued ASU 2016-02, "Leases" (Topic 842), which requires lessees to recognize assets and liabilities for leases currently classified as operating leases. Under the new standard a lessee will recognize a liability on the balance sheet representing the lease payments owed, and a right-of-use-asset representing its right to use the underlying asset for the lease term. For leases with a term of 12 months or less, a lessee is permitted to make an accounting policy election not to recognize lease assets and lease liabilities. The new standard is effective for the Company on January 1, 2019. Early adoption of the standard is permitted. The Company is evaluating the effect that ASU 2016-02 will have on its financial statements and related disclosures. The Company has not yet determined whether it will early adopt the standard. In March 2016, the FASB issued ASU 2016-08, "Revenue from Contracts with Customers" (Topic 606), Principal versus Agent Considerations. The proposed standard provides guidance when a revenue transaction involves a third party in providing goods or services to a customer in determining whether the Company is considered the principal or the agent in the transaction. When an entity is engaged to provide the underlying good or service, such entity is classified as the principal in the transaction. When an entity is engaged to arrange for a third party to provide the goods or services, such entity is classified as the agent in the transaction. This ASU has the same effective date as the new revenue standard. Entities are required to adopt this ASU using the same transition method they use to adopt the new revenue accounting standard. The Company is evaluating the effect that ASU 2016-08 will have on its consolidated financial statements and related disclosures. The Company has not yet elected a transition method nor has it determined whether it will early adopt. In March 2016, the FASB issued ASU 2016-09, "Compensation - Stock Compensation" (Topic 718). The proposed standard simplifies several aspects of accounting for employee share-based payment awards, including the accounting for income taxes, forfeitures, and statutory tax withholding requirements, as well as classification in the statement of cash flows. The Company is evaluating the effect of ASU 2016-09 on the consolidated financial statements and related disclosures. The ASU is effective for the Company beginning January 1, 2017. Early adoption is permitted. The Company has not yet elected a transition method.

PROPOSED ACQUISITION OF VIRGIN

PROPOSED ACQUISITION OF VIRGIN AMERICA INC.	6 Months Ended
	Jun. 30, 2016
Business Combinations [Abstract]
PROPOSED ACQUISITION OF VIRGIN AMERICA INC.	PROPOSED ACQUISITION OF VIRGIN AMERICA INC. On April 1, 2016 the Company entered into an agreement to acquire Virgin America. The Company has agreed to pay Virgin America shareholders $57 per share, or approximately $2.6 billion , in cash for the outstanding common stock of Virgin America. In addition, the Company expects to assume Virgin America's debt and lease obligations, other than related party debt, on the date of acquisition. The merger has been approved by Virgin America's shareholders and is subject to final approval by various regulatory bodies. We currently expect the transaction will close in the fourth quarter of 2016. As of June 30, 2016 the Company has incurred merger costs of $14 million . These costs are classified as special items within the Statement of Operations. The Company expects to continue to incur merger costs in the future if the transaction closes.

CASH, CASH EQUIVALENTS AND MARK

CASH, CASH EQUIVALENTS AND MARKETABLE SECURITIES	6 Months Ended
	Jun. 30, 2016
Cash, Cash Equivalents, and Short-term Investments [Abstract]
CASH, CASH EQUIVALENTS AND MARKETABLE SECURITIES	CASH, CASH EQUIVALENTS AND MARKETABLE SECURITIES Components for cash, cash equivalents and marketable securities (in millions): June 30, 2016 Cost Basis Unrealized Gains Unrealized Losses Fair Value Cash $ — $ — $ — $ — Cash equivalents 81 — — 81 Cash and cash equivalents 81 — — 81 U.S. government and agency securities 430 3 — 433 Foreign government bonds 32 — — 32 Asset-backed securities 160 1 — 161 Mortgage-backed securities 112 1 — 113 Corporate notes and bonds 762 9 (1 ) 770 Municipal securities 17 — — 17 Marketable securities 1,513 14 (1 ) 1,526 Total $ 1,594 $ 14 $ (1 ) $ 1,607 December 31, 2015 Cost Basis Unrealized Gains Unrealized Losses Fair Value Cash $ 4 $ — $ — $ 4 Cash equivalents 69 — — 69 Cash and cash equivalents 73 — — 73 U.S. government and agency securities 254 — (1 ) 253 Foreign government bonds 31 — — 31 Asset-backed securities 130 — — 130 Mortgage-backed securities 117 — (1 ) 116 Corporate notes and bonds 711 1 (4 ) 708 Municipal securities 17 — — 17 Marketable securities 1,260 1 (6 ) 1,255 Total $ 1,333 $ 1 $ (6 ) $ 1,328 Unrealized losses from fixed-income securities are primarily attributable to changes in interest rates. Management does not believe any remaining unrealized losses represent other-than-temporary impairments based on our evaluation of available evidence as of June 30, 2016 . Activity for marketable securities (in millions): Three Months Ended June 30, Six Months Ended June 30, 2016 2015 2016 2015 Proceeds from sales and maturities $ 217 $ 417 $ 357 $ 676 Gross realized gains 2 1 2 2 Gross realized losses (1 ) (1 ) (1 ) (2 ) Maturities for marketable securities (in millions): June 30, 2016 Cost Basis Fair Value Due in one year or less $ 363 $ 363 Due after one year through five years 1,134 1,147 Due after five years through 10 years 16 16 Due after 10 years — — Total $ 1,513 $ 1,526

FAIR VALUE MEASUREMENTS

FAIR VALUE MEASUREMENTS	6 Months Ended
	Jun. 30, 2016
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 Fair values of financial instruments on the consolidated balance sheet (in millions): June 30, 2016 Level 1 Level 2 Total Assets Marketable securities U.S. government and agency securities $ 433 $ — $ 433 Foreign government bonds — 32 32 Asset-backed securities — 161 161 Mortgage-backed securities — 113 113 Corporate notes and bonds — 770 770 Municipal securities — 17 17 Total Marketable securities 433 1,093 1,526 Derivative instruments Fuel hedge call options — 19 19 Total Assets 433 1,112 1,545 Liabilities Derivative instruments Interest rate swap agreements — (22 ) (22 ) Total Liabilities — (22 ) (22 ) December 31, 2015 Level 1 Level 2 Total Assets Marketable securities U.S. government and agency securities $ 253 $ — $ 253 Foreign government bonds — 31 31 Asset-backed securities — 130 130 Mortgage-backed securities — 116 116 Corporate notes and bonds — 708 708 Municipal securities — 17 17 Total Marketable securities 253 1,002 1,255 Derivative instruments Fuel hedge call options — 4 4 Total Assets 253 1,006 1,259 Liabilities Derivative instruments Interest rate swap agreements — (18 ) (18 ) Total Liabilities — (18 ) (18 ) The Company uses the market and income approach to determine the fair value of marketable securities. U.S. government securities 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. The Company has no financial assets that are measured at fair value on a nonrecurring basis at June 30, 2016 . Fair Value of Other Financial Instruments The Company used the following methods and assumptions to determine the fair value of financial instruments that are not recognized at fair value as described below. Cash and Cash Equivalents : Carried at amortized cost, which approximates fair value. Debt : The carrying amount of the Company's variable-rate debt approximates fair values. For fixed-rate debt, the Company uses the income approach to determine the estimated fair value, by using discounted cash flows using borrowing rates for comparable debt over the weighted 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 that is not carried at fair value on the consolidated balance sheet and the estimated fair value of long-term fixed-rate debt (in millions) is as follows: June 30, December 31, Carrying amount $ 474 $ 520 Fair value 509 557

MILEAGE PLAN

MILEAGE PLAN	6 Months Ended
	Jun. 30, 2016
MILEAGE PLAN [Abstract]
MILEAGE PLAN	MILEAGE PLAN Alaska's Mileage Plan liabilities and deferrals on the consolidated balance sheets (in millions): June 30, December 31, Current Liabilities: Other accrued liabilities $ 391 $ 368 Other Liabilities and Credits: Deferred revenue 477 427 Other liabilities 19 19 Total $ 887 $ 814 Alaska's Mileage Plan revenue included in the consolidated statements of operations (in millions): Three Months Ended June 30, Six Months Ended June 30, 2016 2015 2016 2015 Passenger revenues $ 73 $ 69 $ 143 $ 134 Other - net revenues 108 82 211 159 Total $ 181 $ 151 $ 354 $ 293

LONG-TERM DEBT

LONG-TERM DEBT	6 Months Ended
	Jun. 30, 2016
Debt Disclosure [Abstract]
LONG-TERM DEBT	LONG-TERM DEBT Long-term debt obligations on the consolidated balance sheet (in millions): June 30, December 31, Fixed-rate notes payable due through 2024 $ 474 $ 520 Variable-rate notes payable due through 2025 155 166 Less debt issuance costs (3 ) (3 ) Total debt 626 683 Less current portion 117 114 Long-term debt, less current portion $ 509 $ 569 Weighted-average fixed-interest rate 5.7 % 5.7 % Weighted-average variable-interest rate 2.1 % 1.8 % During the six months ended June 30, 2016 , the Company made debt payments of $57 million . As discussed in Note 1, the Company adopted ASU 2015-03 which resulted in a reclassification of debt issuance costs as an offset to debt in the consolidated balance sheet. At June 30, 2016 , long-term debt principal payments for the next five years and thereafter are as follows (in millions): Total Remainder of 2016 $ 58 2017 121 2018 151 2019 114 2020 116 Thereafter 69 Total $ 629 Bank Lines of Credit The Company has two $100 million credit facilities and one $52 million credit facility. All three facilities have variable interest rates based on LIBOR plus a specified margin. One of the $100 million facilities, which expires in September 2017 , is secured by aircraft. The other $100 million facility, which expires in March 2017 , is secured by certain accounts receivable, spare engines, spare parts and ground service equipment. The $52 million facility expires in October 2016 with a mechanism for annual renewal and is secured by two 737-800 aircraft. The Company has no immediate plans to borrow using any of these facilities. All three credit facilities have a requirement to maintain a minimum unrestricted cash and marketable securities balance of $500 million . The Company is in compliance with this covenant at June 30, 2016 .

EMPLOYEE BENEFIT PLANS

EMPLOYEE BENEFIT PLANS	6 Months Ended
	Jun. 30, 2016
Compensation and Retirement Disclosure [Abstract]
EMPLOYEE BENEFIT PLANS	EMPLOYEE BENEFIT PLANS The Company has a number of employee benefit plans, including qualified and nonqualified defined-benefit plans, defined-contribution plans, postretirement medical benefits, and long-term disability benefits. In relation to the qualified plans, net periodic benefit costs recognized included the following components for the three and six months ended June 30, 2016 (in millions). Amounts recognized in relation to all other plans were immaterial to the quarter. Qualified Defined - Benefit Plans Three Months Ended June 30, Six Months Ended June 30, 2016 2015 2016 2015 Service cost $ 9 $ 10 $ 18 $ 20 Interest cost 19 21 37 42 Expected return on assets (27 ) (30 ) (54 ) (61 ) Recognized actuarial loss (gain) 6 6 12 13 Total $ 7 $ 7 $ 13 $ 14

COMMITMENTS

COMMITMENTS	6 Months Ended
	Jun. 30, 2016
Commitments and Contingencies Disclosure [Abstract]
COMMITMENTS	COMMITMENTS Future minimum fixed payments for commitments (in millions): June 30, 2016 Aircraft Leases Facility Leases Aircraft Purchase Commitments Capacity Purchase Agreements (a) Remainder of 2016 $ 39 $ 47 $ 305 $ 34 2017 99 90 931 78 2018 90 42 725 81 2019 82 41 648 86 2020 73 40 337 92 Thereafter 400 142 400 745 Total $ 783 $ 402 $ 3,346 $ 1,116 (a) Includes all non-aircraft lease costs associated with CPA arrangements. Lease Commitments At June 30, 2016 , the Company’s fleet includes lease contracts for 21 B737 aircraft and 15 Q400s. Additionally, the fleet includes 15 lease commitments under the CPA with SkyWest, comprising 6 CRJ-700s and 9 E175s. All lease contracts have remaining noncancelable lease terms ranging from 2016 to 2029. The Company has the option to increase capacity flown by SkyWest with 8 additional E175 aircraft with 2017 and 2018 delivery dates. The majority of airport and terminal facilities are also leased. Rent expense for aircraft and facility leases was $63 million and $67 million for the three months ended June 30, 2016 and 2015 , respectively. Rent expense for aircraft and facility leases was $144 million and $140 million for the six months ended June 30, 2016 and 2015 , respectively. Aircraft Purchase Commitments As of June 30, 2016 , the Company is committed to purchasing 56 B737 aircraft ( 19 737-900ER aircraft and 37 737 MAX aircraft), 33 E175 aircraft and 2 Q400 aircraft, with deliveries in 2016 through 2022 . As of June 30, 2016 we do not intend to take delivery of the 2 Q400 aircraft that are currently contracted. In addition, the Company has options to purchase 46 B737 aircraft, 30 E175 aircraft and 5 Q400 aircraft, which are not reflected in the commitments table above. Capacity Purchase Agreements (CPAs) At June 30, 2016 , Alaska had CPAs with three carriers, including the Company's wholly-owned subsidiary, Horizon. Horizon sells 100% of its capacity under a CPA with Alaska. In addition, Alaska has CPAs with SkyWest to fly certain routes and PenAir to fly certain routes in the state of Alaska. Under these agreements, Alaska pays the carriers an amount which is based on a determination of their cost of operating those flights and other factors intended to approximate market rates for those services. Future payments (excluding Horizon) are based on minimum levels of flying by the third-party carriers, which could differ materially due to variable payments based on actual levels of flying and certain costs associated with operating flights such as fuel. Contingencies The Company is a party to routine litigation matters incidental to its business and with respect to which no material liability is expected. Management believes the ultimate disposition of these matters is not likely to materially affect the Company's financial position or results of operations. 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 arbitrators, judges and juries.

SHAREHOLDERS' EQUITY

SHAREHOLDERS' EQUITY	6 Months Ended
	Jun. 30, 2016
Equity [Abstract]
SHAREHOLDERS' EQUITY	SHAREHOLDERS' EQUITY Dividends During the three months ended June 30, 2016, the Company declared and paid cash dividends of $0.275 per share, or $34 million . During the six months ended June 30, 2016 , the Company declared and paid cash dividends of $0.550 per share, or $68 million . Common Stock Repurchase In May 2014, the Board of Directors authorized a $650 million share repurchase program, which was completed in October 2015. In August 2015, the Board of Directors authorized a $1 billion share repurchase program. In the second quarter the Company paused the share repurchase program in advance of the pending acquisition of Virgin America. Share repurchase activity (in millions, except share amounts): Three Months Ended June 30, Six Months Ended June 30, 2016 2015 2016 2015 Shares Amount Shares Amount Shares Amount Shares Amount 2015 Repurchase Program - $1 billion 873,396 $ 67 — $ — 2,594,809 $ 193 — $ — 2014 Repurchase Program - $650 million — $ — 2,480,807 $ 160 — $ — 4,061,554 $ 262 Total 873,396 $ 67 2,480,807 $ 160 2,594,809 $ 193 4,061,554 $ 262 Accumulated Other Comprehensive Loss Components of accumulated other comprehensive income (loss), net of tax (in millions): June 30, December 31, Marketable securities $ 9 $ (3 ) Employee benefit plans (282 ) (288 ) Interest rate derivatives (14 ) (12 ) Total $ (287 ) $ (303 )

OPERATING SEGMENT INFORMATION

OPERATING SEGMENT INFORMATION	6 Months Ended
	Jun. 30, 2016
Segment Reporting [Abstract]
OPERATING SEGMENT INFORMATION	OPERATING SEGMENT INFORMATION Air Group has two operating airlines - Alaska and Horizon. Each is a regulated airline with separate management teams. To manage the two operating airlines and the revenues and expenses associated with the CPAs, management views the business in three operating segments: Alaska Mainline - The Boeing 737 part of Alaska's business. Alaska Regional - Alaska's shorter distance network. In this segment, Alaska Regional records actual on board passenger revenue, less costs such as fuel, distribution costs, and payments made to Horizon, SkyWest and PenAir under CPAs. Additionally, Alaska Regional includes a small allocation of corporate overhead such as IT, finance and other administrative costs incurred by Alaska and on behalf of the regional operations. Horizon - Horizon operates regional aircraft. All of Horizon's capacity is sold to Alaska under a CPA. Expenses include those typically borne by regional airlines such as crew costs, ownership costs, station handling costs, and maintenance costs. Additionally, the following table reports “Air Group adjusted,” which is not a measure determined in accordance with GAAP. The Company's chief operating decision-makers and others in management use this measure to evaluate operational performance and determine resource allocations. Adjustments are further explained below in a reconciliation to consolidated GAAP results. Operating segment information is as follows (in millions): Three Months Ended June 30, 2016 Alaska Mainline Regional Horizon Parent & Consolidating (a) Air Group Adjusted (b) Special Items (c) Consolidated Operating revenues Passenger Mainline $ 1,036 $ — $ — $ — $ 1,036 $ — $ 1,036 Regional — 227 — — 227 — 227 Total passenger revenues 1,036 227 — — 1,263 — 1,263 CPA revenues — — 110 (110 ) — — — Freight and mail 26 1 — — 27 — 27 Other - net 184 19 1 — 204 — 204 Total operating revenues 1,246 247 111 (110 ) 1,494 — 1,494 Operating expenses Operating expenses, excluding fuel 679 192 101 (111 ) 861 14 875 Economic fuel 180 31 — — 211 (10 ) 201 Total operating expenses 859 223 101 (111 ) 1,072 4 1,076 Nonoperating income (expense) Interest income 6 — 1 — 7 — 7 Interest expense (4 ) — (4 ) (1 ) (9 ) — (9 ) Other 3 — — 1 4 — 4 5 — (3 ) — 2 — 2 Income (loss) before income tax $ 392 $ 24 $ 7 $ 1 $ 424 $ (4 ) $ 420 Three Months Ended June 30, 2015 Alaska Mainline Regional Horizon Parent & Consolidating (a) Air Group Adjusted (b) Special Items (c) Consolidated Operating revenues Passenger Mainline $ 1,019 $ — $ — $ — $ 1,019 $ — $ 1,019 Regional — 212 — — 212 — 212 Total passenger revenues 1,019 212 — — 1,231 — 1,231 CPA revenues — — 99 (99 ) — — — Freight and mail 28 2 — — 30 — 30 Other - net 156 19 1 — 176 — 176 Total operating revenues 1,203 233 100 (99 ) 1,437 — 1,437 Operating expenses Operating expenses, excluding fuel 645 169 90 (100 ) 804 — 804 Economic fuel 232 35 — — 267 (6 ) 261 Total operating expenses 877 204 90 (100 ) 1,071 (6 ) 1,065 Nonoperating income (expense) Interest income 5 — — 1 6 — 6 Interest expense (7 ) — (1 ) (3 ) (11 ) — (11 ) Other 7 — (1 ) 3 9 — 9 5 — (2 ) 1 4 — 4 Income (loss) before income tax $ 331 $ 29 $ 8 $ 2 $ 370 $ 6 $ 376 Six Months Ended June 30, 2016 Alaska Mainline Regional Horizon Parent & Consolidating (a) Air Group Adjusted (b) Special Items (c) Consolidated Operating revenues Passenger Mainline 1,963 — $ — $ — $ 1,963 $ — $ 1,963 Regional — 433 — — 433 — 433 Total passenger revenues 1,963 433 — — 2,396 — 2,396 CPA revenues — — 213 (213 ) — — — Freight and mail 49 2 — — 51 — 51 Other - net 356 36 2 — 394 — 394 Total operating revenues 2,368 471 215 (213 ) 2,841 — 2,841 Operating expenses Operating expenses, excluding fuel 1,380 378 206 (213 ) 1,751 14 1,765 Economic fuel 324 56 — — 380 (12 ) 368 Total operating expenses 1,704 434 206 (213 ) 2,131 2 2,133 Nonoperating income (expense) Interest income 12 — 1 — 13 — 13 Interest expense (16 ) — (5 ) (1 ) (22 ) — (22 ) Other 10 — — 3 13 — 13 6 — (4 ) 2 4 — 4 Income (loss) before income tax $ 670 $ 37 $ 5 $ 2 $ 714 $ (2 ) $ 712 Six Months Ended June 30, 2015 Alaska Mainline Regional Horizon Parent & Consolidating (a) Air Group Adjusted (b) Special Items (c) Consolidated Operating revenues Passenger Mainline $ 1,920 $ — $ — $ — $ 1,920 $ — $ 1,920 Regional — 398 — — 398 — 398 Total passenger revenues 1,920 398 — — 2,318 — 2,318 CPA revenues — — 198 (198 ) — — — Freight and mail 50 3 — — 53 — 53 Other - net 298 35 2 — 335 — 335 Total operating revenues 2,268 436 200 (198 ) 2,706 — 2,706 Operating expenses Operating expenses, excluding fuel 1,284 333 181 (198 ) 1,600 — 1,600 Economic fuel 436 66 — — 502 (6 ) 496 Total operating expenses 1,720 399 181 (198 ) 2,102 (6 ) 2,096 Nonoperating income (expense) Interest income 10 — — 1 11 — 11 Interest expense (14 ) — (5 ) (3 ) (22 ) — (22 ) Other 14 — — 3 17 — 17 10 — (5 ) 1 6 — 6 Income (loss) before income tax $ 558 $ 37 $ 14 $ 1 $ 610 $ 6 $ 616 (a) Includes consolidating entries, Parent Company, and other immaterial business units. (b) The adjusted column represents the financial information that is reviewed by management to assess performance of operations and determine capital allocations and does not include certain income and charges. (c) Includes mark-to-market fuel-hedge accounting charges, and other special items described previously. Total assets were as follows (in millions): June 30, December 31, Alaska (a) $ 9,101 $ 8,127 Horizon 729 717 Parent company 5,200 4,734 Elimination of inter-company accounts (7,995 ) (7,048 ) Consolidated $ 7,035 $ 6,530 (a) There are no assets associated with capacity purchase flying at Alaska.

GENERAL AND SUMMARY OF SIGNIF17

GENERAL AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)	6 Months Ended
	Jun. 30, 2016
Accounting Policies [Abstract]
Organization and Basis of Presentation	Organization and Basis of Presentation The interim condensed consolidated financial statements include the accounts of Alaska Air Group, Inc. (Air Group or the Company) and its primary subsidiaries, Alaska Airlines, Inc. (Alaska) and Horizon Air Industries, Inc. (Horizon), through which the Company conducts substantially all of its operations. All 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. As a result, this Form 10-Q should be read in conjunction with the Consolidated Financial Statements and accompanying Notes in the Form 10-K for the year ended December 31, 2015 . In the opinion of management, all adjustments have been made that are necessary to present fairly the Company’s financial position as of June 30, 2016 , as well as the results of operations for the three and six months ended June 30, 2016 and 2015 . The adjustments made 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. 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, 2016 are not necessarily indicative of operating results for the entire year. Certain reclassifications have been made to prior year financial statements to conform with classifications used in the current year.
Recently Issued Accounting Pronouncements	Recently Issued Accounting Pronouncements In May 2014, the FASB issued Accounting Standards Update 2014-09, "Revenue from Contracts with Customers" (ASU 2014-09), which requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. The ASU will replace most existing revenue recognition guidance in U.S. GAAP when it becomes effective. The new standard is effective for the Company on January 1, 2018. The standard permits the use of either the retrospective or cumulative effect transition method. At this time, the Company believes the most significant impact to the financial statements will be in Mileage Plan revenues and liabilities. The Company currently uses the incremental cost approach for miles earned through travel. This standard eliminates that option and the Company will be required to increase its liability for earned miles through a relative selling price model. The Company has not evaluated the full impact of the standard, although application is expected to result in a material increase to Deferred Revenue. The Company has not yet selected a transition method. In April 2015, the FASB issued ASU 2015-03, "Interest - Imputation of Interest" (Subtopic 835-30), which requires debt issuance costs related to a debt liability be presented as a direct deduction from the carrying value of the debt liability. The amendment was adopted as of January 1, 2016. Prior period debt balances have been adjusted to reflect the adoption of ASU 2015-03. The adoption of the ASU had no impact on the Statements of Operations or retained earnings. In February 2016, the FASB issued ASU 2016-02, "Leases" (Topic 842), which requires lessees to recognize assets and liabilities for leases currently classified as operating leases. Under the new standard a lessee will recognize a liability on the balance sheet representing the lease payments owed, and a right-of-use-asset representing its right to use the underlying asset for the lease term. For leases with a term of 12 months or less, a lessee is permitted to make an accounting policy election not to recognize lease assets and lease liabilities. The new standard is effective for the Company on January 1, 2019. Early adoption of the standard is permitted. The Company is evaluating the effect that ASU 2016-02 will have on its financial statements and related disclosures. The Company has not yet determined whether it will early adopt the standard. In March 2016, the FASB issued ASU 2016-08, "Revenue from Contracts with Customers" (Topic 606), Principal versus Agent Considerations. The proposed standard provides guidance when a revenue transaction involves a third party in providing goods or services to a customer in determining whether the Company is considered the principal or the agent in the transaction. When an entity is engaged to provide the underlying good or service, such entity is classified as the principal in the transaction. When an entity is engaged to arrange for a third party to provide the goods or services, such entity is classified as the agent in the transaction. This ASU has the same effective date as the new revenue standard. Entities are required to adopt this ASU using the same transition method they use to adopt the new revenue accounting standard. The Company is evaluating the effect that ASU 2016-08 will have on its consolidated financial statements and related disclosures. The Company has not yet elected a transition method nor has it determined whether it will early adopt. In March 2016, the FASB issued ASU 2016-09, "Compensation - Stock Compensation" (Topic 718). The proposed standard simplifies several aspects of accounting for employee share-based payment awards, including the accounting for income taxes, forfeitures, and statutory tax withholding requirements, as well as classification in the statement of cash flows. The Company is evaluating the effect of ASU 2016-09 on the consolidated financial statements and related disclosures. The ASU is effective for the Company beginning January 1, 2017. Early adoption is permitted. The Company has not yet elected a transition method.

CASH, CASH EQUIVALENTS AND MA18

CASH, CASH EQUIVALENTS AND MARKETABLE SECURITIES (Tables)	6 Months Ended
	Jun. 30, 2016
Cash, Cash Equivalents, and Short-term Investments [Abstract]
Schedule of Cash, Cash Equivalents and Short-term Investments	Components for cash, cash equivalents and marketable securities (in millions): June 30, 2016 Cost Basis Unrealized Gains Unrealized Losses Fair Value Cash $ — $ — $ — $ — Cash equivalents 81 — — 81 Cash and cash equivalents 81 — — 81 U.S. government and agency securities 430 3 — 433 Foreign government bonds 32 — — 32 Asset-backed securities 160 1 — 161 Mortgage-backed securities 112 1 — 113 Corporate notes and bonds 762 9 (1 ) 770 Municipal securities 17 — — 17 Marketable securities 1,513 14 (1 ) 1,526 Total $ 1,594 $ 14 $ (1 ) $ 1,607 December 31, 2015 Cost Basis Unrealized Gains Unrealized Losses Fair Value Cash $ 4 $ — $ — $ 4 Cash equivalents 69 — — 69 Cash and cash equivalents 73 — — 73 U.S. government and agency securities 254 — (1 ) 253 Foreign government bonds 31 — — 31 Asset-backed securities 130 — — 130 Mortgage-backed securities 117 — (1 ) 116 Corporate notes and bonds 711 1 (4 ) 708 Municipal securities 17 — — 17 Marketable securities 1,260 1 (6 ) 1,255 Total $ 1,333 $ 1 $ (6 ) $ 1,328
Schedule of Realized Gain (Loss)	Activity for marketable securities (in millions): Three Months Ended June 30, Six Months Ended June 30, 2016 2015 2016 2015 Proceeds from sales and maturities $ 217 $ 417 $ 357 $ 676 Gross realized gains 2 1 2 2 Gross realized losses (1 ) (1 ) (1 ) (2 )
Schedule of Debt Investment Maturities	Maturities for marketable securities (in millions): June 30, 2016 Cost Basis Fair Value Due in one year or less $ 363 $ 363 Due after one year through five years 1,134 1,147 Due after five years through 10 years 16 16 Due after 10 years — — Total $ 1,513 $ 1,526

FAIR VALUE MEASUREMENTS (Tables

FAIR VALUE MEASUREMENTS (Tables)	6 Months Ended
	Jun. 30, 2016
Fair Value Disclosures [Abstract]
Fair Value, Measurement Inputs, Disclosure	Fair values of financial instruments on the consolidated balance sheet (in millions): June 30, 2016 Level 1 Level 2 Total Assets Marketable securities U.S. government and agency securities $ 433 $ — $ 433 Foreign government bonds — 32 32 Asset-backed securities — 161 161 Mortgage-backed securities — 113 113 Corporate notes and bonds — 770 770 Municipal securities — 17 17 Total Marketable securities 433 1,093 1,526 Derivative instruments Fuel hedge call options — 19 19 Total Assets 433 1,112 1,545 Liabilities Derivative instruments Interest rate swap agreements — (22 ) (22 ) Total Liabilities — (22 ) (22 ) December 31, 2015 Level 1 Level 2 Total Assets Marketable securities U.S. government and agency securities $ 253 $ — $ 253 Foreign government bonds — 31 31 Asset-backed securities — 130 130 Mortgage-backed securities — 116 116 Corporate notes and bonds — 708 708 Municipal securities — 17 17 Total Marketable securities 253 1,002 1,255 Derivative instruments Fuel hedge call options — 4 4 Total Assets 253 1,006 1,259 Liabilities Derivative instruments Interest rate swap agreements — (18 ) (18 ) Total Liabilities — (18 ) (18 )
Fair Value, by Balance Sheet Grouping	Fixed-rate debt that is not carried at fair value on the consolidated balance sheet and the estimated fair value of long-term fixed-rate debt (in millions) is as follows: June 30, December 31, Carrying amount $ 474 $ 520 Fair value 509 557

MILEAGE PLAN MILEAGE PLAN (Tabl

MILEAGE PLAN MILEAGE PLAN (Tables)	6 Months Ended
	Jun. 30, 2016
MILEAGE PLAN [Abstract]
Mileage Plan Liabilities	Alaska's Mileage Plan liabilities and deferrals on the consolidated balance sheets (in millions): June 30, December 31, Current Liabilities: Other accrued liabilities $ 391 $ 368 Other Liabilities and Credits: Deferred revenue 477 427 Other liabilities 19 19 Total $ 887 $ 814
Mileage Plan Revenue	Alaska's Mileage Plan revenue included in the consolidated statements of operations (in millions): Three Months Ended June 30, Six Months Ended June 30, 2016 2015 2016 2015 Passenger revenues $ 73 $ 69 $ 143 $ 134 Other - net revenues 108 82 211 159 Total $ 181 $ 151 $ 354 $ 293

LONG-TERM DEBT (Tables)

LONG-TERM DEBT (Tables)	6 Months Ended
	Jun. 30, 2016
Debt Disclosure [Abstract]
Schedule of Long-term Debt Instruments	Long-term debt obligations on the consolidated balance sheet (in millions): June 30, December 31, Fixed-rate notes payable due through 2024 $ 474 $ 520 Variable-rate notes payable due through 2025 155 166 Less debt issuance costs (3 ) (3 ) Total debt 626 683 Less current portion 117 114 Long-term debt, less current portion $ 509 $ 569 Weighted-average fixed-interest rate 5.7 % 5.7 % Weighted-average variable-interest rate 2.1 % 1.8 %
Schedule of Maturities of Long-term Debt	At June 30, 2016 , long-term debt principal payments for the next five years and thereafter are as follows (in millions): Total Remainder of 2016 $ 58 2017 121 2018 151 2019 114 2020 116 Thereafter 69 Total $ 629

EMPLOYEE BENEFIT PLANS (Tables)

EMPLOYEE BENEFIT PLANS (Tables)	6 Months Ended
	Jun. 30, 2016
Compensation and Retirement Disclosure [Abstract]
Schedule of Net Benefit Costs	et periodic benefit costs recognized included the following components for the three and six months ended June 30, 2016 (in millions). Amounts recognized in relation to all other plans were immaterial to the quarter. Qualified Defined - Benefit Plans Three Months Ended June 30, Six Months Ended June 30, 2016 2015 2016 2015 Service cost $ 9 $ 10 $ 18 $ 20 Interest cost 19 21 37 42 Expected return on assets (27 ) (30 ) (54 ) (61 ) Recognized actuarial loss (gain) 6 6 12 13 Total $ 7 $ 7 $ 13 $ 14

COMMITMENTS (Tables)

COMMITMENTS (Tables)	6 Months Ended
	Jun. 30, 2016
Commitments and Contingencies Disclosure [Abstract]
Schedule of Future Minimum Rental Payments for Operating Leases and Unrecorded Unconditional Purchase Obligtaions	Future minimum fixed payments for commitments (in millions): June 30, 2016 Aircraft Leases Facility Leases Aircraft Purchase Commitments Capacity Purchase Agreements (a) Remainder of 2016 $ 39 $ 47 $ 305 $ 34 2017 99 90 931 78 2018 90 42 725 81 2019 82 41 648 86 2020 73 40 337 92 Thereafter 400 142 400 745 Total $ 783 $ 402 $ 3,346 $ 1,116

SHAREHOLDERS' EQUITY (Tables)

SHAREHOLDERS' EQUITY (Tables)	6 Months Ended
	Jun. 30, 2016
Equity [Abstract]
Schedule of Treasury Stock by Class	Share repurchase activity (in millions, except share amounts): Three Months Ended June 30, Six Months Ended June 30, 2016 2015 2016 2015 Shares Amount Shares Amount Shares Amount Shares Amount 2015 Repurchase Program - $1 billion 873,396 $ 67 — $ — 2,594,809 $ 193 — $ — 2014 Repurchase Program - $650 million — $ — 2,480,807 $ 160 — $ — 4,061,554 $ 262 Total 873,396 $ 67 2,480,807 $ 160 2,594,809 $ 193 4,061,554 $ 262
Schedule of Accumulated Other Comprehensive Income (Loss)	Components of accumulated other comprehensive income (loss), net of tax (in millions): June 30, December 31, Marketable securities $ 9 $ (3 ) Employee benefit plans (282 ) (288 ) Interest rate derivatives (14 ) (12 ) Total $ (287 ) $ (303 )

OPERATING SEGMENT INFORMATION (

OPERATING SEGMENT INFORMATION (Tables)	6 Months Ended
	Jun. 30, 2016
Segment Reporting [Abstract]
Schedule of Segment Reporting Information, by Segment	Operating segment information is as follows (in millions): Three Months Ended June 30, 2016 Alaska Mainline Regional Horizon Parent & Consolidating (a) Air Group Adjusted (b) Special Items (c) Consolidated Operating revenues Passenger Mainline $ 1,036 $ — $ — $ — $ 1,036 $ — $ 1,036 Regional — 227 — — 227 — 227 Total passenger revenues 1,036 227 — — 1,263 — 1,263 CPA revenues — — 110 (110 ) — — — Freight and mail 26 1 — — 27 — 27 Other - net 184 19 1 — 204 — 204 Total operating revenues 1,246 247 111 (110 ) 1,494 — 1,494 Operating expenses Operating expenses, excluding fuel 679 192 101 (111 ) 861 14 875 Economic fuel 180 31 — — 211 (10 ) 201 Total operating expenses 859 223 101 (111 ) 1,072 4 1,076 Nonoperating income (expense) Interest income 6 — 1 — 7 — 7 Interest expense (4 ) — (4 ) (1 ) (9 ) — (9 ) Other 3 — — 1 4 — 4 5 — (3 ) — 2 — 2 Income (loss) before income tax $ 392 $ 24 $ 7 $ 1 $ 424 $ (4 ) $ 420 Three Months Ended June 30, 2015 Alaska Mainline Regional Horizon Parent & Consolidating (a) Air Group Adjusted (b) Special Items (c) Consolidated Operating revenues Passenger Mainline $ 1,019 $ — $ — $ — $ 1,019 $ — $ 1,019 Regional — 212 — — 212 — 212 Total passenger revenues 1,019 212 — — 1,231 — 1,231 CPA revenues — — 99 (99 ) — — — Freight and mail 28 2 — — 30 — 30 Other - net 156 19 1 — 176 — 176 Total operating revenues 1,203 233 100 (99 ) 1,437 — 1,437 Operating expenses Operating expenses, excluding fuel 645 169 90 (100 ) 804 — 804 Economic fuel 232 35 — — 267 (6 ) 261 Total operating expenses 877 204 90 (100 ) 1,071 (6 ) 1,065 Nonoperating income (expense) Interest income 5 — — 1 6 — 6 Interest expense (7 ) — (1 ) (3 ) (11 ) — (11 ) Other 7 — (1 ) 3 9 — 9 5 — (2 ) 1 4 — 4 Income (loss) before income tax $ 331 $ 29 $ 8 $ 2 $ 370 $ 6 $ 376 Six Months Ended June 30, 2016 Alaska Mainline Regional Horizon Parent & Consolidating (a) Air Group Adjusted (b) Special Items (c) Consolidated Operating revenues Passenger Mainline 1,963 — $ — $ — $ 1,963 $ — $ 1,963 Regional — 433 — — 433 — 433 Total passenger revenues 1,963 433 — — 2,396 — 2,396 CPA revenues — — 213 (213 ) — — — Freight and mail 49 2 — — 51 — 51 Other - net 356 36 2 — 394 — 394 Total operating revenues 2,368 471 215 (213 ) 2,841 — 2,841 Operating expenses Operating expenses, excluding fuel 1,380 378 206 (213 ) 1,751 14 1,765 Economic fuel 324 56 — — 380 (12 ) 368 Total operating expenses 1,704 434 206 (213 ) 2,131 2 2,133 Nonoperating income (expense) Interest income 12 — 1 — 13 — 13 Interest expense (16 ) — (5 ) (1 ) (22 ) — (22 ) Other 10 — — 3 13 — 13 6 — (4 ) 2 4 — 4 Income (loss) before income tax $ 670 $ 37 $ 5 $ 2 $ 714 $ (2 ) $ 712 Six Months Ended June 30, 2015 Alaska Mainline Regional Horizon Parent & Consolidating (a) Air Group Adjusted (b) Special Items (c) Consolidated Operating revenues Passenger Mainline $ 1,920 $ — $ — $ — $ 1,920 $ — $ 1,920 Regional — 398 — — 398 — 398 Total passenger revenues 1,920 398 — — 2,318 — 2,318 CPA revenues — — 198 (198 ) — — — Freight and mail 50 3 — — 53 — 53 Other - net 298 35 2 — 335 — 335 Total operating revenues 2,268 436 200 (198 ) 2,706 — 2,706 Operating expenses Operating expenses, excluding fuel 1,284 333 181 (198 ) 1,600 — 1,600 Economic fuel 436 66 — — 502 (6 ) 496 Total operating expenses 1,720 399 181 (198 ) 2,102 (6 ) 2,096 Nonoperating income (expense) Interest income 10 — — 1 11 — 11 Interest expense (14 ) — (5 ) (3 ) (22 ) — (22 ) Other 14 — — 3 17 — 17 10 — (5 ) 1 6 — 6 Income (loss) before income tax $ 558 $ 37 $ 14 $ 1 $ 610 $ 6 $ 616 (a) Includes consolidating entries, Parent Company, and other immaterial business units. (b) The adjusted column represents the financial information that is reviewed by management to assess performance of operations and determine capital allocations and does not include certain income and charges. (c) Includes mark-to-market fuel-hedge accounting charges, and other special items described previously. Total assets were as follows (in millions): June 30, December 31, Alaska (a) $ 9,101 $ 8,127 Horizon 729 717 Parent company 5,200 4,734 Elimination of inter-company accounts (7,995 ) (7,048 ) Consolidated $ 7,035 $ 6,530 (a) There are no assets associated with capacity purchase flying at Alaska.

PROPOSED ACQUISITION OF VIRGI26

PROPOSED ACQUISITION OF VIRGIN AMERICA INC. (Details) - USD ($) $ / shares in Units, $ in Millions	Apr. 01, 2016	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Business Acquisition [Line Items]
Special items - merger costs		$ 14	$ 0	$ 14	$ 0
Virgin America Inc. [Member]
Business Acquisition [Line Items]
Approximate Acquisition purchase price	$ 2,600
Virgin America Inc. [Member] | Common Stock [Member]
Business Acquisition [Line Items]
Acquisition share price	$ 57

CASH, CASH EQUIVALENTS AND MA27

CASH, CASH EQUIVALENTS AND MARKETABLE SECURITIES (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015	Dec. 31, 2015	Dec. 31, 2014
Cash and Cash Equivalents [Abstract]
Cash	$ 0		$ 0		$ 4
Money market funds and other securities	81		81		69
Cash and cash equivalents	81	$ 45	81	$ 45	73	$ 107
Available-for-sale Securities, Current [Abstract]
Marketable securities, Cost Basis	1,513		1,513		1,260
Marketable securities, Unrealized Gains	14		14		1
Marketable securities, Unrealized Losses	(1)		(1)		(6)
Marketable securities, Fair Value	1,526		1,526		1,255
Cash and marketables securities, Cost Basis	1,594		1,594		1,333
Cash and marketable securities, Unrealized Gains	14		14		1
Cash and marketable securities, Unrealized Losses	(1)		(1)		(6)
Total cash and marketable securities	1,607		1,607		1,328
Available-for-sale Securities, Activity [Abstract]
Proceeds from sales and maturities	217	417	357	676
Gross realized gains	2	1	2	2
Gross realized losses	(1)	$ (1)	(1)	$ (2)
U.S. government and agency securities [Member]
Available-for-sale Securities, Current [Abstract]
Marketable securities, Cost Basis	430		430		254
Marketable securities, Unrealized Gains	3		3		0
Marketable securities, Unrealized Losses	0		0		(1)
Marketable securities, Fair Value	433		433		253
Foreign government bonds [Member]
Available-for-sale Securities, Current [Abstract]
Marketable securities, Cost Basis	32		32		31
Marketable securities, Unrealized Gains	0		0		0
Marketable securities, Unrealized Losses	0		0		0
Marketable securities, Fair Value	32		32		31
Asset-backed securities [Member]
Available-for-sale Securities, Current [Abstract]
Marketable securities, Cost Basis	160		160		130
Marketable securities, Unrealized Gains	1		1		0
Marketable securities, Unrealized Losses	0		0		0
Marketable securities, Fair Value	161		161		130
Mortgage-backed securities [Member]
Available-for-sale Securities, Current [Abstract]
Marketable securities, Cost Basis	112		112		117
Marketable securities, Unrealized Gains	1		1		0
Marketable securities, Unrealized Losses	0		0		(1)
Marketable securities, Fair Value	113		113		116
Corporate notes and bonds [Member]
Available-for-sale Securities, Current [Abstract]
Marketable securities, Cost Basis	762		762		711
Marketable securities, Unrealized Gains	9		9		1
Marketable securities, Unrealized Losses	(1)		(1)		(4)
Marketable securities, Fair Value	770		770		708
Municipal securities [Member]
Available-for-sale Securities, Current [Abstract]
Marketable securities, Cost Basis	17		17		17
Marketable securities, Unrealized Gains	0		0		0
Marketable securities, Unrealized Losses	0		0		0
Marketable securities, Fair Value	$ 17		$ 17		$ 17

CASH, CASH EQUIVALENTS AND MA28

CASH, CASH EQUIVALENTS AND MARKETABLE SECURITIES - MATURITIES (Details) - USD ($) $ in Millions	Jun. 30, 2016	Dec. 31, 2015
Cost Basis [Abstract]
Due in one year or less	$ 363
Due after one year through five years	1,134
Due after five years through 10 years	16
Due after 10 years	0
Marketable securities, Cost Basis	1,513	$ 1,260
Fair Value [Abstract]
Due in one year or less	363
Due after one year through five years	1,147
Due after five years through 10 years	16
Due after 10 years	0
Marketable securities, Fair Value	$ 1,526	$ 1,255

FAIR VALUE MEASUREMENTS - FAIR

FAIR VALUE MEASUREMENTS - FAIR VALUE OF ASSETS AND LIABILITIES (Details) - Recurring [Member] - USD ($) $ in Millions	Jun. 30, 2016	Dec. 31, 2015
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Marketable securities	$ 1,526	$ 1,255
Derivative instruments, assets	1,545	1,259
Derivative instruments, liabilities	(22)	(18)
Level 1 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Marketable securities	433	253
Derivative instruments, assets	433	253
Derivative instruments, liabilities	0	0
Level 2 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Marketable securities	1,093	1,002
Derivative instruments, assets	1,112	1,006
Derivative instruments, liabilities	(22)	(18)
Fuel hedge contracts [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative instruments, assets	19	4
Fuel hedge contracts [Member] | Level 1 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative instruments, assets	0	0
Fuel hedge contracts [Member] | Level 2 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative instruments, assets	19	4
Interest rate swaps agreements [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative instruments, liabilities	(22)	(18)
Interest rate swaps agreements [Member] | Level 1 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative instruments, liabilities	0	0
Interest rate swaps agreements [Member] | Level 2 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative instruments, liabilities	(22)	(18)
U.S. government and agency securities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Marketable securities	433	253
U.S. government and agency securities [Member] | Level 1 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Marketable securities	433	253
U.S. government and agency securities [Member] | Level 2 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Marketable securities	0	0
Foreign government bonds [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Marketable securities	32	31
Foreign government bonds [Member] | Level 1 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Marketable securities	0	0
Foreign government bonds [Member] | Level 2 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Marketable securities	32	31
Asset-backed securities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Marketable securities	161	130
Asset-backed securities [Member] | Level 1 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Marketable securities	0	0
Asset-backed securities [Member] | Level 2 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Marketable securities	161	130
Mortgage-backed securities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Marketable securities	113	116
Mortgage-backed securities [Member] | Level 1 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Marketable securities	0	0
Mortgage-backed securities [Member] | Level 2 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Marketable securities	113	116
Corporate notes and bonds [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Marketable securities	770	708
Corporate notes and bonds [Member] | Level 1 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Marketable securities	0	0
Corporate notes and bonds [Member] | Level 2 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Marketable securities	770	708
Municipal securities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Marketable securities	17	17
Municipal securities [Member] | Level 1 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Marketable securities	0	0
Municipal securities [Member] | Level 2 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Marketable securities	$ 17	$ 17

FAIR VALUE MEASUREMENTS - LONG-

FAIR VALUE MEASUREMENTS - LONG-TERM DEBT (Details) - USD ($) $ in Millions	Jun. 30, 2016	Dec. 31, 2015
Carrying Amount [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Long-term debt	$ 474	$ 520
Fair Value [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Long-term debt	$ 509	$ 557

MILEAGE PLAN MILEAGE PLAN (Deta

MILEAGE PLAN MILEAGE PLAN (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015	Dec. 31, 2015
Mileage Plan [Line Items]
Other accrued liabilities	$ 757		$ 757		$ 661
Deferred revenue	480		480		431
Other liabilities	366		366		362
Passenger revenues	1,263	$ 1,231	2,396	$ 2,318
Other - net revenues	204	176	394	335
Liabilities From Mileage Plan [Member]
Mileage Plan [Line Items]
Other accrued liabilities	391		391		368
Deferred revenue	477		477		427
Other liabilities	19		19		19
Total	887		887		$ 814
Revenue From Mileage Plan [Member]
Mileage Plan [Line Items]
Passenger revenues	73	69	143	134
Other - net revenues	108	82	211	159
Total Mileage Plan Revenues	$ 181	$ 151	$ 354	$ 293

LONG-TERM DEBT - SCHEDULE OF LO

LONG-TERM DEBT - SCHEDULE OF LONG-TERM DEBT (Details) - USD ($) $ in Millions	6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Dec. 31, 2015
Debt Instrument [Line Items]
Total	$ 626		$ 683
Less debt issuance costs	(3)		(3)
Less current portion	117		114
Long-term debt, less current portion	$ 509		$ 569
Weighted-average fixed-interest rate	5.70%		5.70%
Weighted-average variable-interest rate	2.10%		1.80%
Repayments of Long-term Debt	$ 57	$ 58
Fixed-rate notes payable due through 2024 [Member]
Debt Instrument [Line Items]
Total	474		$ 520
Variable-rate notes payable due through 2025 [Member]
Debt Instrument [Line Items]
Total	$ 155		$ 166

LONG-TERM DEBT LONG-TERM DEBT -

LONG-TERM DEBT LONG-TERM DEBT - FUTURE PAYMENTS (Details) $ in Millions	Jun. 30, 2016USD ($)
Long-term Debt, Fiscal Year Maturity [Abstract]
Remainder of 2016	$ 58
2,017	121
2,018	151
2,019	114
2,020	116
Thereafter	69
Total	$ 629

LONG-TERM DEBT - LINE OF CREDIT

LONG-TERM DEBT - LINE OF CREDIT (Details)	6 Months Ended
	Jun. 30, 2016USD ($)aircraftcredit_facility
Line of Credit Facility [Line Items]
Line of Credit Facility, Number of Credit Facilities | credit_facility	3
Secured by aircraft [Member]
Line of Credit Facility [Line Items]
Line of Credit Facility, Expiration Date	Sep. 30, 2017
Secured by other [Member]
Line of Credit Facility [Line Items]
Line of Credit Facility, Expiration Date	Mar. 31, 2017
Credit Facilities 1 and 2 [Member]
Line of Credit Facility [Line Items]
Line of Credit Facility, Number of Credit Facilities | credit_facility	2
Credit Facility 1 [Member]
Line of Credit Facility [Line Items]
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, Number of Credit Facilities | credit_facility	1
Line of Credit Facility, Maximum Borrowing Capacity	$ 100,000,000
Credit Facility 2 [Member]
Line of Credit Facility [Line Items]
Line of Credit Facility, Asset Restrictions	500,000,000
Credit Facility 2 [Member] | Secured by other [Member]
Line of Credit Facility [Line Items]
Line of Credit Facility, Maximum Borrowing Capacity	100,000,000
Credit Facility 3 [Member]
Line of Credit Facility [Line Items]
Line of Credit Facility, Asset Restrictions	$ 500,000,000
Credit Facility 3 [Member] | Secured by aircraft [Member]
Line of Credit Facility [Line Items]
Line of Credit Facility, Number of Credit Facilities | credit_facility	1
Line of Credit Facility, Maximum Borrowing Capacity	$ 52,000,000
B-737-800 [Member] | Credit Facility 3 [Member]
Line of Credit Facility [Line Items]
Number of Aircraft Securing Credit Facility | aircraft	2

EMPLOYEE BENEFIT PLANS - NET PE

EMPLOYEE BENEFIT PLANS - NET PENSION EXPENSE (Details) - Qualified Defined Benefit [Member] - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Defined Benefit Plan, Net Periodic Benefit Cost [Abstract]
Service cost	$ 9	$ 10	$ 18	$ 20
Interest cost	19	21	37	42
Expected return on assets	(27)	(30)	(54)	(61)
Recognized actuarial loss (gain)	6	6	12	13
Net pension expense	$ 7	$ 7	$ 13	$ 14

COMMITMENTS (Details)

COMMITMENTS (Details) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2016USD ($)aircraftcarriers	Jun. 30, 2015USD ($)	Jun. 30, 2016USD ($)aircraftcarriers	Jun. 30, 2015USD ($)
Unrecorded Unconditional Purchase Obligation, Fiscal Year Maturity [Abstract]
Rent Expense	$ 63	$ 67	$ 144	$ 140
Capacity purchase arrangements (carriers) | carriers	3		3
Aircraft Commitments [Member]
Unrecorded Unconditional Purchase Obligation, Fiscal Year Maturity [Abstract]
Remainder of 2016	$ 305		$ 305
2,017	931		931
2,018	725		725
2,019	648		648
2,020	337		337
Thereafter	400		400
Total	3,346		3,346
Capacity Purchase Agreements [Member]
Unrecorded Unconditional Purchase Obligation, Fiscal Year Maturity [Abstract]
Remainder of 2016	34		34
2,017	78		78
2,018	81		81
2,019	86		86
2,020	92		92
Thereafter	745		745
Total	1,116		1,116
Aircraft [Member]
Operating Leases, Future Minimum Payments Due, Fiscal Year Maturity [Abstract]
Remainder of 2016	39		39
2,017	99		99
2,018	90		90
2,019	82		82
2,020	73		73
Thereafter	400		400
Total	783		783
Facility Leases [Member]
Operating Leases, Future Minimum Payments Due, Fiscal Year Maturity [Abstract]
Remainder of 2016	47		47
2,017	90		90
2,018	42		42
2,019	41		41
2,020	40		40
Thereafter	142		142
Total	$ 402		$ 402
B-737 [Member]
Unrecorded Unconditional Purchase Obligation [Line Items]
Number of lease contracts (aircraft) | aircraft	21		21
Unrecorded Unconditional Purchase Obligation, Fiscal Year Maturity [Abstract]
Committed to Purchase (in Aircraft) | aircraft	56		56
Options to Purchase Additional (in Aircraft) | aircraft	46		46
B737-900ER [Member]
Unrecorded Unconditional Purchase Obligation, Fiscal Year Maturity [Abstract]
Committed to Purchase (in Aircraft) | aircraft	19		19
B737 MAX [Member]
Unrecorded Unconditional Purchase Obligation, Fiscal Year Maturity [Abstract]
Committed to Purchase (in Aircraft) | aircraft	37		37
Q400 [Member]
Unrecorded Unconditional Purchase Obligation [Line Items]
Number of lease contracts (aircraft) | aircraft	15		15
Unrecorded Unconditional Purchase Obligation, Fiscal Year Maturity [Abstract]
Committed to Purchase (in Aircraft) | aircraft	2		2
Unrecorded Unconditional Purchase Obligation, Not Intended to Take Delivery | aircraft	2		2
Options to Purchase Additional (in Aircraft) | aircraft	5		5
E175 [Member]
Unrecorded Unconditional Purchase Obligation, Fiscal Year Maturity [Abstract]
Committed to Purchase (in Aircraft) | aircraft	33		33
Options to Purchase Additional (in Aircraft) | aircraft	30		30
Horizon [Member]
Unrecorded Unconditional Purchase Obligation, Fiscal Year Maturity [Abstract]
Capacity purchase arrangements	100.00%		100.00%
Capacity Purchase Agreement with SkyWest [Member]
Unrecorded Unconditional Purchase Obligation [Line Items]
Number of lease contracts (aircraft) | aircraft	15		15
Capacity Purchase Agreement with SkyWest [Member] | CRJ-700 [Member]
Unrecorded Unconditional Purchase Obligation [Line Items]
Number of lease contracts (aircraft) | aircraft	6		6
Capacity Purchase Agreement with SkyWest [Member] | E175 [Member]
Unrecorded Unconditional Purchase Obligation [Line Items]
Number of lease contracts (aircraft) | aircraft	9		9
Number of optional additional leases (aircraft) | aircraft	8		8

SHAREHOLDERS' EQUITY, COMMON ST

SHAREHOLDERS' EQUITY, COMMON STOCK REPURCHASE (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015	Aug. 31, 2015	May 31, 2014
Class of Stock [Line Items]
Stock repurchased during period (shares)	873,396	2,480,807	2,594,809	4,061,554
Stock repurchased during period	$ 67	$ 160	$ 193	$ 262
2015 1 Billion Repurchase Program [Member]
Class of Stock [Line Items]
Stock repurchase program, authorized amount (shares)					$ 1,000
Stock repurchased during period (shares)	873,396	0	2,594,809	0
Stock repurchased during period	$ 67	$ 0	$ 193	$ 0
May 2014 Stock Repurchase Program [Member]
Class of Stock [Line Items]
Stock repurchase program, authorized amount (shares)						$ 650
Stock repurchased during period (shares)	0	2,480,807	0	4,061,554
Stock repurchased during period	$ 0	$ 160	$ 0	$ 262

SHAREHOLDERS' EQUITY, ACCUMULAT

SHAREHOLDERS' EQUITY, ACCUMULATED OTHER COMPREHENSIVE LOSS (Details) - USD ($) $ in Millions	Jun. 30, 2016	Dec. 31, 2015
Equity [Abstract]
Marketable securities	$ 9	$ (3)
Employee benefit plans	(282)	(288)
Interest rate derivatives	(14)	(12)
Total	$ (287)	$ (303)

SHAREHOLDERS' EQUITY, CASH DIVI

SHAREHOLDERS' EQUITY, CASH DIVIDEND (Details) - USD ($) $ / shares in Units, $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Equity [Abstract]
Cash dividend declared per share (usd per share)	$ 0.275	$ 0.20	$ 0.55	$ 0.40
Payments of Dividends	$ 34		$ 68	$ 52

OPERATING SEGMENT INFORMATION40

OPERATING SEGMENT INFORMATION (Details) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2016USD ($)	Jun. 30, 2015USD ($)	Jun. 30, 2016USD ($)airline	Jun. 30, 2015USD ($)
Segment Reporting Information [Line Items]
Number of Airlines | airline			2
Number of Operating Segments | airline			3
Operating revenues
Passenger, Mainline	$ 1,036	$ 1,019	$ 1,963	$ 1,920
Passenger, Regional	227	212	433	398
Total passenger revenue	1,263	1,231	2,396	2,318
CPA revenues	0	0	0	0
Freight and mail	27	30	51	53
Other - net revenue	204	176	394	335
Total Operating Revenues	1,494	1,437	2,841	2,706
Operating expenses
Operating expenses, excluding fuel	875	804	1,765	1,600
Economic fuel	201	261	368	496
Total Operating Expenses	1,076	1,065	2,133	2,096
Nonoperating Income (Expense)
Interest income	7	6	13	11
Interest expense	(9)	(11)	(22)	(22)
Other	4	9	13	17
Nonoperating Income (Expense) Total	2	4	4	6
Income before income tax	420	376	$ 712	616
Air Group Adjusted [Member]
Segment Reporting Information [Line Items]
Number of Airlines | airline			2
Operating revenues
Passenger, Mainline	1,036	1,019	$ 1,963	1,920
Passenger, Regional	227	212	433	398
Total passenger revenue	1,263	1,231	2,396	2,318
CPA revenues	0	0	0	0
Freight and mail	27	30	51	53
Other - net revenue	204	176	394	335
Total Operating Revenues	1,494	1,437	2,841	2,706
Operating expenses
Operating expenses, excluding fuel	861	804	1,751	1,600
Economic fuel	211	267	380	502
Total Operating Expenses	1,072	1,071	2,131	2,102
Nonoperating Income (Expense)
Interest income	7	6	13	11
Interest expense	(9)	(11)	(22)	(22)
Other	4	9	13	17
Nonoperating Income (Expense) Total	2	4	4	6
Income before income tax	424	370	714	610
Alaska Mainline [Member]
Operating revenues
Passenger, Mainline	1,036	1,019	1,963	1,920
Passenger, Regional	0	0	0	0
Total passenger revenue	1,036	1,019	1,963	1,920
CPA revenues	0	0	0	0
Freight and mail	26	28	49	50
Other - net revenue	184	156	356	298
Total Operating Revenues	1,246	1,203	2,368	2,268
Operating expenses
Operating expenses, excluding fuel	679	645	1,380	1,284
Economic fuel	180	232	324	436
Total Operating Expenses	859	877	1,704	1,720
Nonoperating Income (Expense)
Interest income	6	5	12	10
Interest expense	(4)	(7)	(16)	(14)
Other	3	7	10	14
Nonoperating Income (Expense) Total	5	5	6	10
Income before income tax	392	331	670	558
Alaska Regional [Member]
Operating revenues
Passenger, Mainline	0	0	0	0
Passenger, Regional	227	212	433	398
Total passenger revenue	227	212	433	398
CPA revenues	0	0	0	0
Freight and mail	1	2	2	3
Other - net revenue	19	19	36	35
Total Operating Revenues	247	233	471	436
Operating expenses
Operating expenses, excluding fuel	192	169	378	333
Economic fuel	31	35	56	66
Total Operating Expenses	223	204	434	399
Nonoperating Income (Expense)
Interest income	0	0	0	0
Interest expense	0	0	0	0
Other	0	0	0	0
Nonoperating Income (Expense) Total	0	0	0	0
Income before income tax	$ 24	29	$ 37	37
Horizon [Member]
Segment Reporting Information [Line Items]
Capacity purchase arrangements	100.00%		100.00%
Operating revenues
Passenger, Mainline	$ 0	0	$ 0	0
Passenger, Regional	0	0	0	0
Total passenger revenue	0	0	0	0
CPA revenues	110	99	213	198
Freight and mail	0	0	0	0
Other - net revenue	1	1	2	2
Total Operating Revenues	111	100	215	200
Operating expenses
Operating expenses, excluding fuel	101	90	206	181
Economic fuel	0	0	0	0
Total Operating Expenses	101	90	206	181
Nonoperating Income (Expense)
Interest income	1	0	1	0
Interest expense	(4)	(1)	(5)	(5)
Other	0	(1)	0	0
Nonoperating Income (Expense) Total	(3)	(2)	(4)	(5)
Income before income tax	7	8	5	14
Intersegment Elimination [Member]
Operating revenues
Passenger, Mainline	0	0	0	0
Passenger, Regional	0	0	0	0
Total passenger revenue	0	0	0	0
CPA revenues	(110)	(99)	(213)	(198)
Freight and mail	0	0	0	0
Other - net revenue	0	0	0	0
Total Operating Revenues	(110)	(99)	(213)	(198)
Operating expenses
Operating expenses, excluding fuel	(111)	(100)	(213)	(198)
Economic fuel	0	0	0	0
Total Operating Expenses	(111)	(100)	(213)	(198)
Nonoperating Income (Expense)
Interest income	0	1	0	1
Interest expense	(1)	(3)	(1)	(3)
Other	1	3	3	3
Nonoperating Income (Expense) Total	0	1	2	1
Income before income tax	1	2	2	1
Special Revenue and Charges [Member]
Operating revenues
Passenger, Mainline	0	0	0	0
Passenger, Regional	0	0	0	0
Total passenger revenue	0	0	0	0
CPA revenues	0	0	0	0
Freight and mail	0	0	0	0
Other - net revenue	0	0	0	0
Total Operating Revenues	0	0	0	0
Operating expenses
Operating expenses, excluding fuel	14	0	14	0
Economic fuel	(10)	(6)	(12)	(6)
Total Operating Expenses	4	(6)	2	(6)
Nonoperating Income (Expense)
Interest income	0	0	0	0
Interest expense	0	0	0	0
Other	0	0	0	0
Nonoperating Income (Expense) Total	0	0	0	0
Income before income tax	$ (4)	$ 6	$ (2)	$ 6

OPERATING SEGMENT INFORMATION,

OPERATING SEGMENT INFORMATION, ASSETS (Details) - USD ($) $ in Millions	Jun. 30, 2016	Dec. 31, 2015
Total assets	$ 7,035	$ 6,530
Alaska Airlines [Member]
Total assets	9,101	8,127
Horizon [Member]
Total assets	729	717
Parent [Member]
Total assets	5,200	4,734
Intersegment Elimination [Member]
Total assets	$ (7,995)	$ (7,048)