DOCUMENT AND ENTITY INFORMATION
DOCUMENT AND ENTITY INFORMATION - USD ($) $ in Billions | 12 Months Ended | ||
Dec. 31, 2016 | Feb. 22, 2017 | Jun. 30, 2015 | |
Entity Information [Line Items] | |||
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 | ||
Document Type | 10-K | ||
Document Fiscal Year Focus | 2,016 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | false | ||
Entity Common Stock, Shares Outstanding | 123,468,367 | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Public Float | $ 7.1 | ||
Document Period End Date | Dec. 31, 2016 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Millions | Dec. 31, 2016 | Dec. 31, 2015 |
Current Assets | ||
Cash and cash equivalents | $ 328 | $ 73 |
Marketable securities | 1,252 | 1,255 |
Total cash and marketable securities | 1,580 | 1,328 |
Receivables—less allowance for doubtful accounts of $1 and $1 | 302 | 212 |
Inventories and supplies—net | 47 | 51 |
Prepaid expenses and other current assets | 121 | 72 |
Total Current Assets | 2,050 | 1,663 |
Property and Equipment | ||
Aircraft and other flight equipment | 6,947 | 5,690 |
Other property and equipment | 1,103 | 955 |
Deposits for future flight equipment | 545 | 771 |
Property and Equipment | 8,595 | 7,416 |
Less accumulated depreciation and amortization | 2,929 | 2,614 |
Total Property and Equipment—Net | 5,666 | 4,802 |
Other Assets [Abstract] | ||
Goodwill | 1,934 | 0 |
Intangible assets | 143 | 0 |
Other noncurrent assets | 169 | 65 |
Total Other Assets | 2,246 | 65 |
Total Assets | 9,962 | 6,530 |
Current Liabilities | ||
Accounts payable | 92 | 63 |
Accrued wages, vacation and payroll taxes | 397 | 298 |
Other accrued liabilities | 878 | 661 |
Air traffic liability | 849 | 669 |
Current portion of long-term debt | 319 | 114 |
Total Current Liabilities | 2,535 | 1,805 |
Long-Term Debt, Net of Current Portion | 2,645 | 569 |
Other Liabilities and Credits | ||
Deferred income taxes | 463 | 682 |
Deferred revenue | 640 | 431 |
Obligation for pension and postretirement medical benefits | 331 | 270 |
Other liabilities | 417 | 362 |
Other Liabilities and Credits Totals | 1,851 | 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 - 129,189,634 shares; 2015 - 128,442,099 shares, Outstanding: 2016 - 123,328,051 shares; 2015 - 125,175,325 shares | 1 | 1 |
Capital in excess of par value | 110 | 73 |
Treasury stock (common), at cost: 2016 - 5,861,583 shares; 2015 - 3,266,774 shares | (443) | (250) |
Accumulated other comprehensive loss | (305) | (303) |
Retained earnings | 3,568 | 2,890 |
Shareholders' Equity Total | 2,931 | 2,411 |
Total Liabilities and Shareholders' Equity | $ 9,962 | $ 6,530 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Millions | Dec. 31, 2016 | Dec. 31, 2015 |
Allowance for doubtful accounts | $ 1 | $ 1 |
Stockholders' Equity: | ||
Preferred Stock, par value | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized | 5,000,000 | 5,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 200,000,000 | 200,000,000 |
Common stock, shares issued | 129,189,634 | 128,442,099 |
Common Stock, Shares, Outstanding | 123,328,051 | 125,175,325 |
Treasury Stock, Shares | 5,861,583 | 3,266,774 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Operating Revenues | |||
Passenger, Mainline | $ 4,098 | $ 3,939 | $ 3,774 |
Passenger, Regional | 908 | 854 | 805 |
Total passenger revenue | 5,006 | 4,793 | 4,579 |
Freight and mail | 108 | 108 | 114 |
Other—net | 817 | 697 | 675 |
Total Operating Revenues | 5,931 | 5,598 | 5,368 |
Operating Expenses | |||
Wages and benefits | 1,382 | 1,254 | 1,136 |
Variable incentive pay | 127 | 120 | 116 |
Aircraft fuel, including hedging gains and losses | 831 | 954 | 1,418 |
Aircraft maintenance | 270 | 253 | 229 |
Aircraft rent | 114 | 105 | 110 |
Landing fees and other rentals | 320 | 296 | 279 |
Contracted services | 247 | 214 | 196 |
Selling expenses | 225 | 211 | 199 |
Depreciation and amortization | 363 | 320 | 294 |
Food and beverage service | 126 | 113 | 93 |
Third-party regional carrier expense | 95 | 72 | 58 |
Third-party regional carrier expense | 365 | 356 | 308 |
Special items—merger-related costs and other | 117 | 32 | (30) |
Total Operating Expenses | 4,582 | 4,300 | 4,406 |
Operating Income | 1,349 | 1,298 | 962 |
Nonoperating Income (Expense) | |||
Interest income | 27 | 21 | 21 |
Interest expense | (55) | (42) | (48) |
Interest capitalized | 25 | 34 | 20 |
Other—net | (1) | 1 | 20 |
Nonoperating Income (Expense) Total | (4) | 14 | 13 |
Income before income tax | 1,345 | 1,312 | 975 |
Income tax expense | 531 | 464 | 370 |
Net Income | $ 814 | $ 848 | $ 605 |
Basic Earnings Per Share: | $ 6.59 | $ 6.61 | $ 4.47 |
Diluted Earnings Per Share: | $ 6.54 | $ 6.56 | $ 4.42 |
Shares used for computation: | |||
Basic | 123,557 | 128,373 | 135,445 |
Diluted | 124,389 | 129,372 | 136,801 |
Cash dividend declared per share | $ 1.10 | $ 0.80 | $ 0.50 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE OPERATIONS - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Net Income | $ 814 | $ 848 | $ 605 |
Related to marketable securities: | |||
Unrealized holding gains (losses) arising during the period | 1 | (6) | 2 |
Reclassification of (gains) losses into Other-net nonoperating income (expense) | (1) | 1 | (2) |
Income tax benefit (expense) | 0 | 2 | 0 |
Marketable securities, net of tax | 0 | (3) | 0 |
Related to employee benefit plans: | |||
Actuarial gains (losses) related to pension and other postretirement benefit plans | (43) | 10 | (210) |
Reclassification of net pension expense into Wages and benefits | 20 | 14 | 9 |
Income tax benefit (expense) | 12 | (14) | 76 |
Total | (11) | 10 | (125) |
Related to interest rate derivative instruments: | |||
Unrealized holding gains (losses) arising during the period | 8 | (5) | (8) |
Reclassification of losses into Aircraft rent | 6 | 6 | 6 |
Income tax benefit (expense) | (5) | (1) | 0 |
Interest rate derivative instruments, net of tax | 9 | 0 | (2) |
Other comprehensive loss | (2) | 7 | (127) |
Comprehensive income | $ 812 | $ 855 | $ 478 |
CONSOLIDATED STATEMENTS OF SHAR
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY - USD ($) $ in Millions | Total | Common Stock | Capital in Excess of Par Value | Treasury Stock, at Cost | Accumulated Other Comprehensive Loss | Retained Earnings |
Stockholders' Equity at Dec. 31, 2013 | $ 2,029 | $ 1 | $ 606 | $ (2) | $ (183) | $ 1,607 |
Common Stock Outstanding at Dec. 31, 2013 | 137,492,000 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net Income | 605 | 605 | ||||
Other comprehensive loss | $ (127) | (127) | ||||
Common stock repurchase (in shares) | (7,316,731) | (7,317,000) | ||||
Common stock repurchase | $ (348) | (346) | (2) | |||
Stock-based compensation | 16 | 16 | ||||
Cash dividend declared | (68) | (68) | ||||
Stock issued for employee stock purchase plan (in shares) | 299,000 | |||||
Stock issued for employee stock purchase plan | 9 | 9 | ||||
Stock issued under stock plans (in shares) | 1,007,000 | |||||
Stock issued under stock plans | 11 | 11 | ||||
Stockholders' Equity at Dec. 31, 2014 | 2,127 | $ 1 | 296 | (4) | (310) | 2,144 |
Common Stock Outstanding at Dec. 31, 2014 | 131,481,000 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net Income | 848 | 848 | ||||
Other comprehensive loss | $ 7 | 7 | ||||
Common stock repurchase (in shares) | (7,208,328) | (7,208,000) | ||||
Common stock repurchase | $ (505) | (259) | (246) | |||
Stock-based compensation | 17 | 17 | ||||
Cash dividend declared | (102) | (102) | ||||
Stock issued for employee stock purchase plan (in shares) | 281,000 | |||||
Stock issued for employee stock purchase plan | 13 | 13 | ||||
Stock issued under stock plans (in shares) | 621,000 | |||||
Stock issued under stock plans | 6 | 6 | ||||
Stockholders' Equity at Dec. 31, 2015 | $ 2,411 | $ 1 | 73 | (250) | (303) | 2,890 |
Common Stock Outstanding at Dec. 31, 2015 | 125,175,325 | 125,175,000 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net Income | $ 814 | 814 | ||||
Other comprehensive loss | $ (2) | (2) | ||||
Common stock repurchase (in shares) | (2,594,809) | (2,595,000) | ||||
Common stock repurchase | $ (193) | 0 | (193) | |||
Stock-based compensation | 19 | 19 | ||||
Cash dividend declared | (136) | (136) | ||||
Stock issued for employee stock purchase plan (in shares) | 309,000 | |||||
Stock issued for employee stock purchase plan | 17 | 17 | ||||
Stock issued under stock plans (in shares) | 439,000 | |||||
Stock issued under stock plans | 1 | 1 | ||||
Stockholders' Equity at Dec. 31, 2016 | $ 2,931 | $ 1 | $ 110 | $ (443) | $ (305) | $ 3,568 |
Common Stock Outstanding at Dec. 31, 2016 | 123,328,051 | 123,328,000 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Cash flows from operating activities: | |||
Net Income | $ 814 | $ 848 | $ 605 |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Depreciation and amortization | 363 | 320 | 294 |
Stock-based compensation and other | 26 | 25 | 6 |
Changes in certain assets and liabilities: | |||
Changes in deferred tax provision | 94 | 56 | 114 |
(Increase) decrease in accounts receivable | (46) | 47 | (110) |
Increase (decrease) in air traffic liability | 9 | 38 | 67 |
Increase (decrease) in deferred revenue | 83 | 57 | 40 |
Changes in pension and other postretirement benefits | 23 | 36 | (18) |
Other—net | 20 | 157 | 32 |
Net cash provided by operating activities | 1,386 | 1,584 | 1,030 |
Property and equipment additions: | |||
Aircraft and aircraft purchase deposits | (528) | (681) | (498) |
Other flight equipment | (53) | (79) | (131) |
Other property and equipment | (97) | (71) | (65) |
Total property and equipment additions | (678) | (831) | (694) |
Acquisition of Virgin America, net of cash acquired | (1,951) | 0 | 0 |
Purchases of marketable securities | (960) | (1,327) | (949) |
Sales and maturities of marketable securities | 962 | 1,175 | 1,092 |
Proceeds from disposition of assets and changes in restricted deposits | 5 | 53 | 10 |
Net cash used in investing activities | (2,622) | (930) | (541) |
Cash flows from financing activities: | |||
Proceeds from issuance of long-term debt, net of issuance costs | 2,044 | 0 | 51 |
Long-term debt payments | (249) | (116) | (119) |
Common stock repurchases | (193) | (505) | (348) |
Cash dividend paid | (136) | (102) | (68) |
Other financing activities | 25 | 35 | 22 |
Net cash provided by (used in) financing activities | 1,491 | (688) | (462) |
Net increase (decrease) in cash and cash equivalents | 255 | (34) | 27 |
Cash and cash equivalents at beginning of year | 73 | 107 | 80 |
Cash and cash equivalents at end of year | 328 | 73 | 107 |
Cash paid during the year for: | |||
Interest, net of amount capitalized | 24 | 8 | 28 |
Income taxes, net of refunds received | $ 459 | $ 349 | $ 326 |
GENERAL AND SUMMARY OF SIGNIFIC
GENERAL AND SUMMARY OF SIGNIFICANT ACCOUNTING | 12 Months Ended |
Dec. 31, 2016 | |
Accounting Policies [Abstract] | |
GENERAL AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | GENERAL AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Organization and Basis of Presentation The consolidated financial statements include the accounts of Air Group, or the Company, and its primary subsidiaries, Alaska, Horizon and, starting December 14, 2016, Virgin America. 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 conformity with accounting principles generally accepted in the United States of America and their preparation requires the use of management’s estimates. Actual results may differ from these estimates. Certain reclassifications have been made to prior year financial statements to conform to classifications used in the current year. Cash and Cash Equivalents 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 market value. The Company reduces cash balances when funds are disbursed. Due to the time delay in funds clearing the banks, the Company normally maintains a negative balance in its cash disbursement accounts, which is reported as a current liability. The amount of the negative cash balance was $15 million and $12 million at December 31, 2016 and 2015 and is included in accounts payable, with the change in the balance during the year included in other financing activities in the consolidated statements of cash flows. 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. Marketable Securities Investments with original maturities of greater than three months and remaining maturities of less than one year are classified as short-term investments. Investments with maturities beyond one year may be classified as short-term based on their highly liquid nature and because such marketable securities represent the investment of cash that is available for current operations. All cash equivalents and short-term investments are classified as available-for-sale and realized gains and losses are recorded using the specific identification method. Changes in market value, excluding other-than-temporary impairments, are reflected in accumulated other comprehensive loss ("AOCL"). Investments are considered to be impaired when a decline in fair value is judged to be other-than-temporary. The Company uses a systematic methodology that considers available quantitative and qualitative evidence in evaluating potential impairment. If the cost of an investment exceeds its fair value, management evaluates, among other factors, general market conditions, credit quality of debt instrument issuers, the duration and extent to which the fair value is less than cost, the Company's intent and ability to hold, or plans to sell, the investment. Once a decline in fair value is determined to be other-than-temporary, an impairment charge is recorded to Other—net in the consolidated statements of operations and a new cost basis in the investment is established. Receivables Receivables are due on demand and consist primarily of airline traffic (including credit card) receivables, Mileage Plan™ partner receivables, amounts due from other airlines related to interline agreements, government tax authorities and other miscellaneous amounts due to the Company, and are net of an allowance for doubtful accounts. Management determines the allowance for doubtful accounts based on known troubled accounts and historical experience applied to an aging of accounts. Inventories and Supplies—net Expendable aircraft parts, materials and supplies are stated at average cost and are included in inventories and supplies — net. An obsolescence allowance for expendable parts is accrued based on estimated lives of the corresponding fleet type and salvage values. The allowance for expendable inventories was $ 36 million and $37 million at December 31, 2016 and 2015 , respectively. Inventory and supplies — net also includes fuel inventory of $ 16 million and $14 million at December 31, 2016 and 2015 , respectively. Repairable and rotable aircraft parts inventories are included in flight equipment. Property, Equipment and Depreciation Property and equipment are recorded at cost and depreciated using the straight-line method over their estimated useful lives less an estimated salvage value, which are as follows: Aircraft and related flight equipment: Boeing 737 and Airbus 319/320 aircraft 20-25 years Bombardier Q400 aircraft 15 years Buildings 25 - 30 years Minor building and land improvements 10 years Capitalized leases and leasehold improvements Generally shorter of lease term or estimated useful life Computer hardware and software 3-10 years Other furniture and equipment 5-10 years Salvage values used for aircraft are 10% of the fair value, but as aircraft near the end of their useful lives, management updates the salvage value estimates based on current market conditions and expected use of the aircraft. “Related flight equipment” includes rotable and repairable spare inventories, which are depreciated over the associated fleet life unless otherwise noted. Beginning October 1, 2016, the Company changed its accounting estimate for the expected useful life of the B737 NextGen aircraft, which includes the B737-700, -800, -900, -900ER aircraft and the related parts, from 20 years to 25 years. The change in estimate was precipitated by management's annual accounting policy review, which considered market studies, asset performance and intended use, as well as industry benchmarking. The change in estimate was applied prospectively effective October 1, 2016. The impact of this change in estimate in 2016 is a $17 million decrease to depreciation and amortization expense. Capitalized interest, based on the Company’s weighted-average borrowing rate, is added to the cost of the related asset, and is depreciated over the estimated useful life of the asset. Maintenance and repairs are expensed when incurred. Major modifications that extend the life or improve the usefulness of aircraft are capitalized and depreciated over their estimated period of use. The Company evaluates long-lived assets to be held and used for impairment whenever events or changes in circumstances indicate that the total carrying amount of an asset or asset group may not be recoverable. The Company groups assets for purposes of such reviews at the lowest level, at which identifiable cash flows are largely independent of the cash flows of other groups of assets and liabilities. An impairment loss is considered when estimated future undiscounted cash flows expected to result from the use of the asset or asset group and its eventual disposition are less than its carrying amount. If the asset or asset group is not considered recoverable, a write-down equal to the excess of the carrying amount over the fair value will be recorded. Goodwill Goodwill represents the excess of purchase price over the fair value of the related net assets acquired in the Company's acquisition of Virgin America and is not amortized. As of December 31, 2016 the goodwill balance, based on a provisional purchase price allocation, was $1.9 billion . No goodwill impairment test occurred in 2016, as the acquisition was completed late in the fourth quarter. In future periods, the Company will review goodwill for impairment at least annually, or more frequently if events or circumstances indicate than an impairment may exist. The Company will perform this impairment at the reporting unit level. If fair value of the reporting unit exceeds the carrying amount, an impairment charge may be recorded. Intangible Assets Intangible assets as of December 31, 2016 were recorded as a result of the acquisition of Virgin America, and consist primarily of indefinite-lived airport slots, finite-lived airport gates and finite-lived customer relationships. Finite-lived intangibles are amortized over their estimated useful lives. Indefinite-lived intangibles are not amortized but are tested at least annually for impairment using a similar methodology to property, equipment and goodwill as described above. Internally Used Software Costs The Company capitalizes costs to develop internal-use software that are incurred in the application development stage. Amortization commences when the software is ready for its intended use and the amortization period is the estimated useful life of the software, generally three to five years. Capitalized costs primarily include contract labor and payroll costs of the individuals dedicated to the development of internal-use software. Deferred Revenue Deferred revenue results primarily from the sale of Mileage Plan™ miles and Elevate® points to third-parties. It also includes the liability for Elevate® flown points outstanding at the acquisition date that was recorded at its estimated fair value as part of purchase price accounting. The related revenue is recognized when award transportation is provided or over the term of the applicable agreement. Operating Leases The Company leases aircraft, airport and terminal facilities, office space and other equipment under operating leases. Some of these lease agreements contain rent escalation clauses or rent holidays. For scheduled rent escalation clauses during the lease terms or for rental payments commencing at a date other than the date of initial occupancy, the Company records minimum rental expenses on a straight-line basis over the terms of the leases in the consolidated statements of operations. Leased Aircraft Return Costs Cash payments associated with returning leased aircraft are accrued when it is probable that a cash payment will be made and that amount is reasonably estimable, usually no sooner than after the last scheduled maintenance event prior to lease return. Any accrual is based on the time remaining on the lease, planned aircraft usage and the provisions included in the lease agreement, although the actual amount due to any lessor upon return may not be known with certainty until lease termination. As leased aircraft are returned, any payments are charged against the established accrual. The accrual is part of other current and long-term liabilities and was not material as of December 31, 2016 and December 31, 2015 . The expense is included in Aircraft maintenance in the consolidated statements of operations. Revenue Recognition Passenger revenue is recognized when the passenger travels. Tickets sold but not yet used are reported as air traffic liability until travel or date of expiration. Air traffic liability includes approximately $62 million and $42 million related to credits for future travel, as of December 31, 2016 and December 31, 2015 , respectively. These credits are recognized into revenue either when the passenger travels or at the date of expiration, which is twelve months from issuance. Commissions to travel agents and related fees are expensed when the related revenue is recognized. Passenger traffic commissions and related fees not yet recognized are recorded as a prepaid expense. Taxes collected from passengers, including transportation excise taxes, airport and security fees and other fees, are recorded on a net basis within passenger revenue in the consolidated statements of operations. Due to complex pricing structures, refund and exchange policies, and interline agreements with other airlines, certain amounts are recognized as revenue using estimates regarding both the timing of the revenue recognition and the amount of revenue to be recognized. These estimates are based on the Company’s historical data. Freight and mail revenues are recognized when the related services are provided. Other—net revenues are primarily related to the Mileage Plan™ and Elevate® programs. They are recognized as described in the “Frequent Flyer Programs” paragraph below. Other—net also includes certain ancillary or non-ticket revenues, such as checked-bag fees, reservations fees, ticket change fees, on-board food and beverage sales, and, to a much lesser extent, commissions from car and hotel vendors and sales of travel insurance. These items are recognized as revenue when the related services are provided. Airport lounge memberships are recognized as revenue over the membership period. Frequent Flyer Programs Alaska operates the Mileage Plan™ frequent flyer program, and Virgin America operates the Elevate® frequent flyer program. Both programs provide travel awards to members based on accumulated mileage or points. For miles or points earned by flying on the Company's airlines and through airline partners, the estimated cost of providing award travel is recognized as a selling expense and accrued as a liability, as miles are earned and accumulated. Alaska and Virgin America also sell services, including miles or points for transportation, to non-airline partners, such as hotels, car rental agencies and major banks that offer Alaska's and Virgin America's affinity credit cards. The Company defers revenue related to air transportation and certificates for discounted companion travel until the transportation is delivered. The deferred proceeds are recognized as passenger revenue for awards redeemed and flown on the Company's airlines and as Other—net revenue for awards redeemed and flown on other airlines (less the cost paid to the other airlines based on contractual agreements). The elements that represent use of the Alaska and Virgin America brands and access to frequent flyer member lists and advertising are recognized as commission income in the period that those elements are sold and included in Other—net revenue in the consolidated statements of operations. Frequent flyer program deferred revenue and liabilities included in the consolidated balance sheets (in millions): 2016 2015 Current Liabilities: Other accrued liabilities $ 484 $ 368 Other Liabilities and Credits: Deferred revenue 638 427 Other liabilities 21 19 Total $ 1,143 $ 814 The amounts recorded in other accrued liabilities relate primarily to deferred revenue expected to be realized within one year, which includes Mileage Plan™ awards that have been issued but not yet flown for $ 43 million and $37 million at December 31, 2016 and 2015 . Frequent flyer program revenue included in the consolidated statements of operations (in millions): 2016 2015 2014 Passenger revenues $ 293 $ 267 $ 246 Other — net revenues 429 329 295 Total frequent flyer program revenues $ 722 $ 596 $ 541 Other — net revenue includes commission revenues of $329 million , $280 million , and $261 million in 2016 , 2015 , and 2014 . Selling Expenses Selling expenses include credit card fees, global distribution systems charges, the estimated cost of frequent flyer travel awards earned through air travel, advertising, promotional costs, commissions and incentives. Advertising production costs are expensed as incurred. Advertising expense was $ 61 million , $55 million , and $49 million during the years ended December 31, 2016 , 2015 , and 2014 . Derivative Financial Instruments The Company's operations are significantly impacted by changes in aircraft fuel prices and interest rates. In an effort to manage exposure to these risks, the Company periodically enters into fuel and interest rate derivative instruments. These derivative instruments are recognized at fair value on the balance sheet and changes in the fair value are recognized in AOCL or in the consolidated statements of operations, depending on the nature of the instrument. The Company does not hold or issue derivative fuel hedge contracts for trading purposes and does not apply hedge accounting. For cash flow hedges related to interest rate swaps, the effective portion of the derivative represents the change in fair value of the hedge that offsets the change in fair value of the hedged item. To the extent the change in the fair value of the hedge does not perfectly offset the change in the fair value of the hedged item, the ineffective portion of the hedge is immediately recognized in interest expense. Fair Value Measurements Accounting standards define fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. The standards also establish a fair value hierarchy, which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. There are three levels of inputs that may be used to measure fair value: Level 1 - Quoted prices in active markets for identical assets or liabilities. Level 2 - Observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Level 3 - Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. The Company has elected not to use the fair value option provided in the accounting standards for non-financial instruments. Accordingly, those assets and liabilities are carried at amortized cost. For financial instruments, the assets and liabilities are carried at fair value, which is determined based on the market approach or income approach, depending upon the level of inputs used. Assets and liabilities recognized or disclosed at fair value on a nonrecurring basis include items such as property, plant and equipment, goodwill, intangible assets and certain other assets and liabilities. The Company determines the fair value of these items using Level 3 inputs, as described in Note 2 and Note 5 . Income Taxes The Company uses the asset and liability approach for accounting for and reporting income taxes. Deferred tax assets and liabilities are recognized for future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and for operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the period that includes the enactment date. A valuation allowance would be established, if necessary, for the amount of any tax benefits that, based on available evidence, are not expected to be realized. As of December 31, 2016, there is a partial valuation allowance against net deferred tax assets. The Company accounts for unrecognized tax benefits in accordance with the applicable accounting standards. Virgin America has substantial federal and state net operating losses ("NOLs") for income tax purposes. The Company's ability to utilize Virgin America's NOLs could be limited if Virgin America had an “ownership change,” as defined in Section 382 of the Internal Revenue Code and similar state provisions. In general terms, an ownership change can occur whenever there is a collective shift in the ownership of a company by more than 50% by one or more “5% stockholders” within a three-year period. The occurrence of such a change generally limits the amount of NOL carryforwards a company could utilize in a given year to the aggregate fair market value of the company's common stock immediately prior to the ownership change, multiplied by the long-term tax-exempt interest rate in effect for the month of the ownership change. The acquisition constituted an ownership change and the potential for further limitations following the acquisition. See Note 7 to the consolidated financial statements for more discussion of the calculation. Stock-Based Compensation Accounting standards require companies to recognize as expense the fair value of stock options and other equity-based compensation issued to employees as of the grant date. These standards apply to all stock awards that the Company grants to employees as well as the Company’s Employee Stock Purchase Plan ("ESPP"), which features a look-back provision and allows employees to purchase stock at a 15% discount. All stock-based compensation expense is recorded in wages and benefits in the consolidated statements of operations. Earnings Per Share (EPS) Diluted EPS is calculated by dividing net income by the average common shares outstanding plus additional common shares that would have been outstanding assuming the exercise of in-the-money stock options and restricted stock units, using the treasury-stock method. In 2016 , 2015 , and 2014 , antidilutive stock options excluded from the calculation of EPS were not material. Recently Issued Accounting Pronouncements In May 2014, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2014-09, "Revenue from Contracts with Customers"(Topic 606), 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. This comprehensive new standard will replace most existing revenue recognition guidance in U.S. GAAP when it becomes effective. In March 2016, the FASB issued ASU 2016-08, "Revenue from Contracts with Customers (Topic 606), Principal versus Agent Considerations" to clarify the guidance on determining whether the Company is considered the principal or the agent in a revenue transaction where a third party is providing goods or services to a customer. Entities are permitted to use either a full retrospective or cumulative effect transition method, and are required to adopt all parts of the new revenue standard using the same transition method. The new standard is effective for the Company on January 1, 2018. At this time, the Company believes the most significant impact to the financial statements will be to Mileage Plan™ revenues and liabilities. The Company currently uses the incremental cost approach for miles earned through travel. As this approach will be eliminated with the standard, the Company will be required to significantly increase its liability for earned miles through a relative selling price model. The Company continues to evaluate and model the full impact of the standard and currently plans to apply the full retrospective 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 the ASU. 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. At this time, the Company believes the most significant impact to the financial statements will relate to the recording of a right of use asset associated with leased aircraft. Other leases, including airports and real estate, equipment, software and other miscellaneous leases continue to be assessed for impact as it relates to ASU 2016-02. The Company has not yet determined whether it will early adopt the standard. In March 2016, the FASB issued ASU 2016-09, "Compensation—Stock Compensation" (Topic 718), which 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 ASU is effective for the Company beginning January 1, 2017. The adoption of the standard will not have a material impact on the Company's statements of operations or financial position. In January 2017, the FASB issued ASU 2017-04, "Intangibles—Goodwill and Other" (Topic 350), which eliminates step 2 from the goodwill impairment test. Step 2 measures a goodwill impairment loss by comparing the implied fair value of a reporting unit’s goodwill with the carrying amount of that goodwill. The ASU is effective for the Company beginning January 1, 2019. Early adoption of the standard is permitted. Beginning in fiscal 2017 the Company will be required to perform an impairment test for goodwill arising from its acquisition of Virgin America and plans to adopt the standard in 2017. |
ACQUISITION OF VIRGIN AMERICA,
ACQUISITION OF VIRGIN AMERICA, INC. (Notes) | 12 Months Ended |
Dec. 31, 2016 | |
Business Combinations [Abstract] | |
ACQUISITION OF VIRGIN AMERICA, INC. | ACQUISITION OF VIRGIN AMERICA INC. Virgin America On December 14, 2016 , the Company acquired 100% of the outstanding common shares and voting interest of Virgin America. Virgin America offers scheduled air transport throughout the United States and Mexico primarily from its focus cities of Los Angeles, San Francisco and, to a lesser extent, Dallas Love Field, to other major business and leisure destinations in North America. The Company believes the acquisition of Virgin America will provide broader national reach and position the Company to better serve people living on the West Coast. The combined airline will provide 1,200 daily departures to its guests, leveraging Alaska's strength in the Pacific Northwest with Virgin America's strength in California. The Company believes that combining loyalty programs and networks will provide greater benefits for its guests and expand its international partner portfolio, giving guests an even more expansive global reach. The results of Virgin America have been included in the consolidated financial statements since the acquisition date. For the year ended December 31, 2016 , revenue and net income from Virgin America recognized in the Company's consolidated results of operations were $99 million and $15 million . Fair value of consideration transferred The fair value of consideration transferred on the closing date includes the value of the cash consideration and accelerated and vested equity awards attributable to pre-acquisition service. The purchase price is as follows (in millions, except per-share stock price): December 14, 2016 Number of shares of Virgin America common stock issued and outstanding 44.645 Multiplied by cash consideration for each share of common stock per the merger agreement $ 57.00 Cash consideration paid for common stock issued and outstanding 2,545 Accelerated and vested equity awards attributable to pre-acquisition service 51 Total Purchase Price $ 2,596 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 the market, income and cost approaches. The purchase price allocation was prepared on a preliminary basis and is subject to further adjustments as additional information becomes available concerning the fair value of the assets acquired and liabilities assumed. The Company expects to continue obtaining information to assist it with determining the fair values of the net assets acquired during the measurement period. Any adjustments to the purchase price allocation will be made as soon as practicable but no later than one year from the acquisition date. Provisional fair value of the assets acquired and the liabilities assumed as of the acquisition date, December 14, 2016 , (in millions) are as follows: December 14, 2016 Cash and cash equivalents $ 645 Receivables 44 Prepaid expenses and other current assets 16 Property and equipment 560 Intangible assets 143 Goodwill 1,934 Other assets 84 Total assets 3,426 Accounts payable 22 Accrued wages, vacation and payroll taxes 51 Air traffic liabilities 172 Other accrued liabilities 196 Current portion of long-term debt 125 Long-term debt, net of current portion 360 Deferred income taxes (304 ) Deferred revenue 126 Other liabilities 82 Total liabilities 830 Total purchase price $ 2,596 Intangible Assets Of the $143 million of acquired intangible assets, $89 million was provisionally assigned to airport slots. Airport slots are rights to take-off or land at a slot-controlled airport during a specific time period and are a means by which the FAA manages airspace/airport congestion. The Company acquired slots at three such airports—John F. Kennedy International, LaGuardia and Ronald Reagan Washington National. These slots either have no expiration dates or are expected to be renewed indefinitely in line with the FAA's past practice. They require no maintenance and do not have an established residual value. As the demands for air travel at these airports have remained very strong, the Company expects to use these slots in perpetuity and has determined these airport slots to be indefinite-lived intangible assets. They will not be amortized but rather tested for impairment annually, or more frequently when events and circumstances indicate that impairment may exist. Of the remaining $54 million , $40 million was provisionally assigned to customer relationships to be amortized on a straight-line basis over the estimated economic life of eight years and $14 million to airport gates to be amortized on straight-line basis over the remaining lease term of twelve years. As noted above, the fair value of the acquired identifiable intangible assets is provisional pending results of their final valuation. The Company considered examples of intangible assets that the FASB believes meet the criteria for recognition apart from goodwill, as well as any other intangible assets common to the airline industry, and did not identify any other such intangible assets acquired in the transaction. Goodwill Goodwill of $1.9 billion represents the excess of the purchase price over the fair value of the underlying net assets acquired and largely results from expected future synergies from combining operations as well as an assembled workforce, which does not qualify for separate recognition. Goodwill is not amortized to earnings, but instead is reviewed for impairment at least annually, absent any indicators of impairment. Repayment of related-party debt and merger-related costs Soon after the acquisition, the Company repaid $55 million of related-party debt held by Virgin America as of December 14, 2016 to comply with the change-of-control provision triggered by the transaction. As of December 31, 2016 , the Company has incurred pretax merger-related costs of $117 million . Costs classified as merger-related are directly attributable to merger activities. These costs are classified as "Special items—merger-related costs and other" within the Statement of Operations. Refer to Note 11 for further information on special items. The Company expects to continue to incur merger-related costs in the future as the integration continues. Pro forma impact of the acquisition The unaudited pro forma financial information presented below represents a summary of the consolidated results of operations for the Company and Virgin America as if the acquisition of Virgin America had been consummated as of January 1, 2015. 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, 2015. (in millions, except per share amounts) Years Ended December 31, 2016 2015 Revenue $ 7,511 $ 7,111 Net Income 1,008 914 |
CASH, CASH EQUIVALENTS AND MARK
CASH, CASH EQUIVALENTS AND MARKETABLE SECURITIES | 12 Months Ended |
Dec. 31, 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): December 31, 2016 Cost Basis Unrealized Gains Unrealized Losses Fair Value Cash $ 283 $ — $ — $ 283 Cash equivalents 45 — — 45 Cash and cash equivalents 328 — — 328 U.S. government and agency securities 290 — (3 ) 287 Foreign government bonds 36 — — 36 Asset-backed securities 138 — — 138 Mortgage-backed securities 89 — — 89 Corporate notes and bonds 693 2 (4 ) 691 Municipal securities 11 — — 11 Marketable securities 1,257 2 (7 ) 1,252 Total $ 1,585 $ 2 $ (7 ) $ 1,580 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 marketable securities are primarily attributable to changes in interest rates. Management does not believe any remaining unrealized losses represent other-than-temporary impairments based on the Company's evaluation of available evidence as of December 31, 2016 . Activity for marketable securities (in millions): 2016 2015 2014 Proceeds from sales and maturities $ 962 $ 1,175 $ 1,092 Gross realized gains 3 2 4 Gross realized losses (1 ) (3 ) (2 ) Maturities for marketable securities (in millions): December 31, 2016 Cost Basis Fair Value Due in one year or less $ 182 $ 182 Due after one year through five years 1,070 1,065 Due after five years through 10 years 5 5 Due after 10 years — — Total $ 1,257 $ 1,252 |
DERIVATIVE INSTRUMENTS
DERIVATIVE INSTRUMENTS | 12 Months Ended |
Dec. 31, 2016 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
DERIVATIVE INSTRUMENTS | DERIVATIVE INSTRUMENTS AND RISK MANAGEMENT Fuel Hedge Contracts The Company’s operations are inherently dependent upon the price and availability of aircraft fuel. To manage economic risks associated with fluctuations in aircraft fuel prices, the Company periodically enters into call options for crude oil. As of December 31, 2016 , the Company had fuel hedge contracts outstanding covering 394 million gallons of crude oil that will be settled from January 2017 to June 2018 . Interest Rate Swap Agreements The Company is exposed to market risk from adverse changes in variable interest rates on long term debt and certain aircraft lease agreements. To manage this risk, the Company periodically enters into interest rate swap agreements. As of December 31, 2016 , the Company has outstanding interest rate swap agreements with a third party designed to hedge the volatility of the underlying variable interest rates on lease agreements for six B737-800 aircraft, as well as two interest rate swap agreements with third parties designed to hedge the volatility of the underlying variable interest rates on $295 million of the debt obtained in 2016. All of the interest rate swap agreements stipulate that the Company pay a fixed interest rate and receive a floating interest rate over the term of the underlying contracts. The interest rate swap agreements expire from February 2020 through March 2021 to coincide with the lease termination dates and October 2022 through September 2026 to coincide with the debt maturity dates. All significant terms of the swap agreements match the terms of the underlying hedged items, and have been designated as qualifying hedging instruments, which are accounted for as cash flow hedges. As qualifying cash flow hedges, the interest rate swaps are recognized at fair value on the balance sheet, and changes in the fair value are recognized in accumulated other comprehensive income (loss). The effective portion of the derivative represents the change in fair value of the hedge that offsets the change in fair value of the hedged item. To the extent the change in fair value of the hedge does not perfectly offset the change in the fair value of the hedged item, the ineffective portion of the hedge is recognized in interest expense, if material. Fair Values of Derivative Instruments Fair values of derivative instruments on the consolidated balance sheet (in millions): 2016 2015 Derivative Instruments Not Designated as Hedges Fuel hedge contracts Prepaid expenses and other current assets $ 17 $ 2 Other assets 3 2 Derivative Instruments Designated as Hedges Interest rate swaps Other accrued liabilities (5 ) (5 ) Other liabilities — (13 ) Losses in accumulated other comprehensive loss (AOCL) (5 ) (18 ) The net cash paid for new fuel hedge positions and settlements was $19 million , $17 million and $9 million during 2016 , 2015 , and 2014 . Pretax effect of derivative instruments on earnings and AOCL (in millions): 2016 2015 2014 Derivative Instruments Not Designated as Hedges Fuel hedge contracts Gains (losses) recognized in Aircraft fuel $ (3 ) $ (19 ) $ (18 ) Derivative Instruments Designated as Hedges Interest rate swaps Gains (losses) recognized in Aircraft rent (6 ) (6 ) (6 ) Gains (losses) recognized in other comprehensive income (OCI) 8 (5 ) (8 ) The amounts shown as recognized in aircraft rent for cash flow hedges (interest rate swaps) represent the realized losses transferred out of AOCL to aircraft rent. No gains or losses related to interest rate swaps on variable rate debt have been recognized in interest expense during 2016 . The amounts shown as recognized in OCI are prior to the losses recognized in aircraft rent during the period. The Company expects $4 million to be reclassified from OCI to aircraft rent and $1 million to interest expense within the next twelve months. Credit Risk and Collateral The Company is exposed to credit losses in the event of non-performance by counterparties to these derivative instruments. To mitigate exposure, the Company periodically reviews the risk of counterparty nonperformance by monitoring the absolute exposure levels and credit ratings. The Company maintains security agreements with a number of its counterparties which may require the Company to post collateral if the fair value of the selected derivative instruments fall below specified thresholds. The posted collateral does not offset the fair value of the derivative instruments and is included in "Prepaid expenses and other current assets" on the consolidated balance sheet. The amount posted as collateral for these contracts is not material to the consolidated balance sheets as of December 31, 2016 and 2015 . |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 12 Months Ended |
Dec. 31, 2016 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE MEASUREMENTS | FAIR VALUE MEASUREMENTS Fair Value of Financial Instruments on a Recurring Basis Fair values of financial instruments on the consolidated balance sheet (in millions): December 31, 2016 Level 1 Level 2 Total Assets Marketable securities U.S. government and agency securities $ 287 $ — $ 287 Foreign government bonds — 36 36 Asset-backed securities — 138 138 Mortgage-backed securities — 89 89 Corporate notes and bonds — 691 691 Municipal securities — 11 11 Derivative instruments Fuel hedge contracts—call options — 20 20 Liabilities Derivative instruments Interest rate swap agreements — (5 ) (5 ) 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 Derivative instruments Fuel hedge contracts—call options — 4 4 Liabilities Derivative instruments Interest rate swap agreements — (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. Fuel hedge contracts that are not traded on a public exchange are Level 2 as the fair value is primarily based on inputs which are readily available in active markets or can be derived from information available in active markets. The fair value for 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 other financial assets that are measured at fair value on a nonrecurring basis at December 31, 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 costs which approximate fair value. Debt : The carrying amounts of the Company's variable-rate debt approximate fair values. For fixed-rate debt, the Company uses the income approach to determine the estimated fair value, by discounting 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): 2016 2015 Carrying amount $ 1,179 $ 520 Fair value 1,199 557 |
LONG-TERM DEBT
LONG-TERM DEBT | 12 Months Ended |
Dec. 31, 2016 | |
Debt Disclosure [Abstract] | |
LONG-TERM DEBT | LONG-TERM DEBT Long-term debt obligations (in millions): 2016 2015 Fixed-rate notes payable due through 2028 $ 1,179 $ 520 Variable-rate notes payable due through 2028 1,803 166 Less debt issuance costs (18 ) (3 ) Long-term debt 2,964 683 Less current portion 319 114 $ 2,645 $ 569 Weighted-average fixed-interest rate 4.4 % 5.7 % Weighted-average variable-interest rate 2.4 % 1.8 % During 2016 , the Company's total debt increased $2.3 billion , primarily due to the addition of $2.0 billion of secured debt financing from multiple lenders to fund the acquisition of Virgin America. Approximately $1.6 billion of the loans are secured by a total of 56 aircraft, including 37 B737-900ER aircraft and 19 B737-800 aircraft. An additional $400 million is secured by Air Group's interest in certain aircraft purchase agreements. The remainder is due to assumed debt from Virgin America. During 2016 , the Company made debt payments of $249 million , including $95 million of debt extinguishment that arose from the Virgin America acquisition, and $12 million related to prepayments of existing loans. The Company's variable-rate notes payable bear interest at a floating rate per annum equal to a margin plus the three or six-month LIBOR in effect at the commencement of each semi-annual or three-month period, as applicable. As of December 31, 2016 , none of the Company's borrowings were restricted by financial covenants. Long-term debt principal payments for the next five years and thereafter (in millions): Total 2017 $ 321 2018 351 2019 424 2020 451 2021 424 Thereafter 1,007 Total principal payments $ 2,978 Bank Line 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 2017 with a mechanism for annual renewal and is secured by two aircraft. The Company has secured letters of credit against the $52 million facility, but has no plans to borrow using either of the two remaining facilities. 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 December 31, 2016 . |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Dec. 31, 2016 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES Deferred Income Taxes Deferred income taxes reflect the impact of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and such amounts for tax purposes. Primarily due to differences in depreciation rates for federal income tax purposes and for financial reporting purposes, the Company has generated a net deferred tax liability. Deferred tax (assets) and liabilities comprise the following (in millions): 2016 2015 Excess of tax over book depreciation $ 1,282 $ 1,110 Intangibles 39 — Other—net 26 23 Gross deferred tax liabilities 1,347 1,133 Mileage Plan™ (310 ) (208 ) Inventory obsolescence (23 ) (22 ) Deferred gains (8 ) (8 ) Employee benefits (196 ) (167 ) Fuel hedge contracts — (5 ) Acquired net operating losses (289 ) — Other—net (62 ) (41 ) Gross deferred tax assets (888 ) (451 ) Valuation allowance 4 — Net deferred tax (assets) liabilities $ 463 $ 682 Changes in net deferred tax liabilities resulted from 2016 activity and the acquisition of Virgin America. At December 31, 2016 , as a result of the acquisition of Virgin America, discussed in Note 2 , Virgin America had federal NOLs of approximately $ 773 million that expire beginning in 2028 and continuing through 2036 , and state NOLs of approximately $ 344 million that expire beginning in 2027 and continuing through 2035 . Virgin America has experienced multiple “ownership changes” as defined in Section 382 of the Internal Revenue Code of 1986, as amended (the “Code”), the most recent being its acquisition by the Company. Section 382 of the Code imposes an annual limitation on the amount of pre-ownership change NOLs of the corporation that experiences an ownership change. The limitation imposed by Section 382 of the Code for any post-ownership change year generally would be determined by multiplying the value of such corporation’s stock immediately before the ownership change by the applicable long-term tax-exempt rate. Any unused annual limitation may, subject to certain limits, be carried over to later years, and the limitation may, under certain circumstances, be increased by built-in gains or reduced by built-in losses in the assets held by such corporation at the time of the ownership change. The combined company’s use of NOLs generated after the date of an ownership change would not be limited unless the combined company were to experience a subsequent ownership change. The combined company’s ability to use the NOLs will also depend on the amount of taxable income generated in future periods. The NOLs may expire before the combined company can generate sufficient taxable income to utilize the NOLs. Valuation allowances are provided to reduce the related deferred income tax assets to an amount which will, more likely than not, be realized. The Company has determined it is more likely than not that a portion of the state NOL carryforward will not be realized and, therefore, has provided a valuation allowance of $4 million for that portion. The Company has likewise concluded that it is more likely than not that all of its federal and the remaining state deferred income tax assets will be realized and thus no additional valuation allowance has been recorded. The Company reassesses the need for a valuation allowance each reporting period. Components of Income Tax Expense The components of income tax expense were as follows (in millions): 2016 2015 2014 Current income tax expense: Federal $ 392 $ 397 $ 229 State 48 30 27 Total current income tax expense 440 427 256 Deferred income tax expense: Federal 77 60 103 State 14 (23 ) 11 Total deferred income tax expense 91 37 114 Income tax expense $ 531 $ 464 $ 370 Income Tax Rate Reconciliation Income tax expense reconciles to the amount computed by applying the U.S. federal rate of 35% to income before income tax and accounting changes as follows (in millions): 2016 2015 2014 Income before income tax $ 1,345 $ 1,312 $ 975 Expected tax expense 471 459 341 Nondeductible expenses 20 4 4 State income taxes 28 19 25 State income sourcing 13 (15 ) — Other—net (1 ) (3 ) — Actual tax expense $ 531 $ 464 $ 370 Effective tax rate 39.5 % 35.4 % 37.9 % In 2016, the Company incurred $39 million of acquisition-related costs that are not deductible under U.S. federal tax law. These expenses are included in Special items—merger-related costs and other on the Company’s consolidated statement of operations for the year ended December 31, 2016 and are reflected as a permanent unfavorable adjustment for the year ended December 31, 2016, in the table above. In the fourth quarter of 2015, the Company filed amended state tax returns for the years 2010 through 2013 to change the Company’s position on income sourcing in various states. These positions were also taken on 2014 and future filings, unless guidance or rules changed. In 2016, adjustments were made to the Company's position on income sourcing in various states due to updated guidance from state taxing authorities. The impact of this guidance is reflected as an unfavorable adjustment of approximately $17 million for the year ended December 31, 2016 . Uncertain Tax Positions The Company has identified its federal tax return and its state tax returns in Alaska, Oregon and California as “major” tax jurisdictions. A summary of the Company's jurisdictions and the periods that are subject to examination are as follows: Jurisdiction Period Federal 2006 to 2015 (a)(b) Alaska 2012 to 2015 California 2006 to 2015 (a) Oregon 2003 to 2015 (a) (a) The 2003, 2004, 2008-2010 and 2011 Oregon tax returns are subject to examination only to the extent of net operating loss carryforwards from those years that were utilized in 2010 and later years. The 2006-2012 Federal and California Virgin America tax returns are subject to examination only to the extent of net operating loss carryforwards from those years that were utilized in 2012 and later years. (b) Income tax years 2012 and 2013 are currently under exam by the Internal Revenue Service. Changes in the liability for unrecognized tax benefits during 2016 , 2015 and 2014 are as follows (in millions): 2016 2015 2014 Balance at January 1, $ 22 $ 3 $ 2 Additions based on tax positions and settlements related to the current year 3 19 1 Additions from acquisitions 8 — — Balance at December 31, $ 33 $ 22 $ 3 At December 31, 2016 , the total amount of unrecognized tax benefits is recorded as a liability and some have reduced the NOL carryover from the Virgin America acquisition. The Company added $3 million of reserves for uncertain tax positions in 2016, primarily due to changes in income sourcing for state income taxes and added $8 million related to the acquisition of Virgin America. These uncertain tax positions could change as a result of the Company's ongoing audits, settlement of issues, new audits and status of other taxpayer court cases. The Company cannot predict the timing of these actions. Due to the positions being taken in various jurisdictions, the amounts currently accrued are the Company's best estimate as of December 31, 2016. |
EMPLOYEE BENEFIT PLANS
EMPLOYEE BENEFIT PLANS | 12 Months Ended |
Dec. 31, 2016 | |
Compensation and Retirement Disclosure [Abstract] | |
EMPLOYEE BENEFIT PLANS | EMPLOYEE BENEFIT PLANS Four defined-benefit and five defined-contribution retirement plans cover various employee groups of Alaska and Horizon. Following the acquisition of Virgin America on December 14, 2016, there is a sixth defined contribution plan which covers the Virgin America employee groups. The defined-benefit plans provide benefits based on an employee’s term of service and average compensation for a specified period of time before retirement. The qualified defined-benefit pension plans are closed to new entrants. Accounting standards require recognition of the overfunded or underfunded status of an entity’s defined-benefit pension and other postretirement plan as an asset or liability in the consolidated financial statements and requires recognition of the funded status in AOCL. Qualified Defined-Benefit Pension Plans The Company’s pension plans are funded as required by the Employee Retirement Income Security Act of 1974. The defined-benefit plan assets consist primarily of marketable equity and fixed-income securities. The Company uses a December 31 measurement date for these plans. Weighted average assumptions used to determine benefit obligations: 2016 2015 Discount rates (a) 4.29% to 4.50% 4.55% to 4.69% Rate of compensation increases (a) 2.12% to 2.59% 2.06% to 2.65% (a) Varies by plan and related work group. Weighted average assumptions used to determine net periodic benefit cost: 2016 2015 2014 Discount rates (a) 4.55% to 4.69% 4.20% 4.85% Expected return on plan assets (a) 6.00% to 6.50% 6.50% 6.75% Rate of compensation increases (a) 2.06% to 2.65% 2.85% to 3.91% 2.90% to 3.93% (a) Varies by plan and related work group. The discount rates are determined using current rates earned on high-quality, long-term bonds with maturities that correspond with the estimated cash distributions from the pension plans. At December 31, 2016 , the Company selected discount rates for each of the plans using a pool of higher-yielding bonds estimated to be more reflective of settlement rates, as management has taken steps to ultimately terminate or settle plans that are frozen and move toward freezing benefits in active plans in the future. In determining the expected return on plan assets, the Company assesses the current level of expected returns on risk-free investments (primarily government bonds), the historical level of the risk premium associated with the other asset classes in which the portfolio is invested and the expectations for future returns of each asset class. The expected return for each asset class is then weighted based on the target asset allocation to develop the expected long-term rate of return on assets assumption for the portfolio. Plan assets are invested in common commingled trust funds invested in equity and fixed income securities and in certain real estate assets. The target and actual asset allocation of the funds in the qualified defined-benefit plans, by asset category, are as follows: Target 2016 2015 Asset category: Domestic equity securities 22% - 33% 30 % 28 % Non-U.S. equity securities 9% - 16% 12 % 12 % Fixed income securities 48% - 67% 53 % 55 % Real estate 0% - 8% 5 % 5 % Plan assets 100 % 100 % The Company’s investment policy focuses on achieving maximum returns at a reasonable risk for pension assets over a full market cycle. In 2015, the Company separated the management of plan assets for the defined-benefit plan that covers the Company's non-union, management participants. This plan has been closed to new participants since 2003 and benefits were frozen effective January 1, 2014. These assets have a higher allocation to fixed income securities than the other plans. The Company uses a fund manager and invests in various asset classes to diversify risk. The Company determines the strategic allocation between equities, fixed income and real estate based on current funded status and other characteristics of the plans. As the funded status improves, the Company increases the fixed income allocation of the portfolio and decreases the equity allocation. Actual asset allocations are reviewed regularly and periodically rebalanced as appropriate. As of December 31, 2016 , all assets other than real estate were invested in common commingled trust funds. The Company uses the net asset values of these funds to determine fair value as allowed using the practical expediency method outlined in the accounting standards. Fair value estimates for real estate are calculated using the present value of expected future cash flows based on independent appraisals, local market conditions and current and projected operating performance. Certain investments were previously misclassified in the fair value hierarchy disclosure in 2015 based on the Company's interpretation of relevant guidance. Upon further evaluation, investments in common commingled trusts were determined to have a readily determinable fair value and are now disclosed within the fair value hierarchy. Additionally, investments in the real estate limited partnership are measured at net asset value per share as a practical expedient and excluded from the fair value hierarchy. These changes in disclosure do not have a material impact on the financial statements and are consistent with presentation of amounts as of December 31, 2016 as shown below. Plan asset by fund category (in millions): 2016 2015 Fair Value Hierarchy Fund type: U.S. equity market fund $ 545 $ 491 1 Non-U.S. equity fund 218 208 1 Credit bond index fund 992 953 1 Plan assets in common commingled trusts $ 1,755 $ 1,652 Real estate 91 85 (a) Total plan assets $ 1,846 $ 1,737 (a) In accordance with Subtopic 820-10, certain investments that are measured at net asset value per share (or its equivalent) have not been classified in the fair value hierarchy. The following table sets forth the status of the qualified defined-benefit pension plans (in millions): 2016 2015 Projected benefit obligation ("PBO") Beginning of year $ 1,898 $ 2,050 Service cost 37 41 Interest cost 73 84 Plan settlement — (62 ) Actuarial (gain) loss 104 (140 ) Benefits paid (69 ) (75 ) End of year $ 2,043 $ 1,898 Plan assets at fair value Beginning of year $ 1,737 $ 1,917 Actual return on plan assets 178 (43 ) Employer contributions — — Plan settlement — (62 ) Benefits paid (69 ) (75 ) End of year $ 1,846 $ 1,737 Funded status (unfunded) $ (197 ) $ (161 ) Percent funded 90 % 92 % The accumulated benefit obligation for the combined qualified defined-benefit pension was $1.9 billion and $1.8 billion at December 31, 2016 and 2015 . The amounts recognized in the consolidated balance sheets (in millions): 2016 2015 Accrued benefit liability-long term $ 225 $ 173 Plan assets-long term (within Other noncurrent assets) (28 ) (12 ) Total liability recognized $ 197 $ 161 The amounts not yet reflected in net periodic benefit cost and included in AOCL (in millions): 2016 2015 Prior service credit $ (10 ) $ (11 ) Net loss 509 499 Amount recognized in AOCL (pretax) $ 499 $ 488 The expected amortization of prior service credit and net loss from AOCL in 2017 is $1 million and $26 million , respectively, for the qualified defined-benefit pension plans. Net pension expense for the qualified defined-benefit plans included the following components (in millions): 2016 2015 2014 Service cost $ 37 $ 41 $ 33 Interest cost 73 84 81 Expected return on assets (108 ) (122 ) (117 ) Amortization of prior service credit (1 ) (1 ) (1 ) Recognized actuarial loss 25 26 13 Settlement expense (special item) — 14 — Net pension expense $ 26 $ 42 $ 9 In 2015, the Company recognized a settlement charge of $14 million related to lump sum settlements offered to terminated, vested plan participants. The result was a reduction in the projected benefit obligation of $62 million . The settlement charge reflects the remaining unamortized actuarial loss in AOCL associated with the settled obligation. There are no current statutory funding requirements for the Company’s plans in 2017 , nor does the Company expect to contribute to the qualified defined-benefit pension plans during 2017 . Future benefits expected to be paid over the next ten years under the qualified defined-benefit pension plans from the assets of those plans (in millions): Total 2017 $ 85 2018 93 2019 96 2020 109 2021 109 2022– 2026 652 Nonqualified Defined-Benefit Pension Plan Alaska also maintains an unfunded, noncontributory defined-benefit plan for certain elected officers. This plan uses a December 31 measurement date. The assumptions used to determine benefit obligations and the net period benefit cost for the nonqualified defined-benefit pension plan are similar to those used to calculate the qualified defined-benefit pension plan. The plan's unfunded status, PBO and accumulated benefit obligation are immaterial. The net pension expense in prior year and expected future expense is also immaterial. Postretirement Medical Benefits The Company allows certain retirees to continue their medical, dental and vision benefits by paying all or a portion of the active employee plan premium until eligible for Medicare, currently age 65. This results in a subsidy to retirees, because the premiums received by the Company are less than the actual cost of the retirees’ claims. The accumulated postretirement benefit obligation for this subsidy is unfunded. The accumulated postretirement benefit obligation was $76 million and $64 million at December 31, 2016 and 2015 respectively. The net periodic benefit cost was not material in 2016 or 2015 . During 2014, the Company made changes to the postretirement medical benefits for non-union personnel and certain labor groups to sunset the postretirement medical benefits effective in 2015. As a result of these changes, the Company recognized a partial curtailment gain of $25 million in 2014. The curtailment gain included $5 million associated with an embedded sick leave subsidy. This subsidy was used to establish a new compensated absence liability. The net impact of the curtailment gain of $20 million is included in special items in the income statement. Defined-Contribution Plans The defined-contribution plans are deferred compensation plans under section 401(k) of the Internal Revenue Code. All of these plans require Company contributions. Total expense for the defined-contribution plans was $67 million , $60 million and $54 million in 2016 , 2015 , and 2014 . The Company also has a noncontributory, unfunded defined-contribution plan for certain elected officers of the Company who are ineligible for the nonqualified defined-benefit pension plan. Amounts recorded as liabilities under the plan are not material to the consolidated balance sheets at December 31, 2016 and 2015 . Pilot Long-term Disability Benefits Alaska maintains a long-term disability plan for its pilots. The long-term disability plan does not have a service requirement. Therefore, the liability is calculated based on estimated future benefit payments associated with pilots that were assumed to be disabled on a long-term basis as of December 31, 2016 and does not include any assumptions for future disability. The liability includes the discounted expected future benefit payments and medical costs. The total liability was $25 million and $19 million , which was recorded net of a prefunded trust account of $3 million and $2 million , and included in long-term other liabilities on the consolidated balance sheets as of December 31, 2016 and December 31, 2015 , respectively. Employee Incentive-Pay Plans The Company has employee incentive plans that pay employees based on certain financial and operational metrics. These metrics are set and approved annually by the Compensation Committee of the Board of Directors. The aggregate expense under these plans in 2016 , 2015 and 2014 was $127 million , $120 million and $116 million . The Air Group plans are summarized below. • Performance-Based Pay ("PBP") is a program that rewards the majority of Air Group employees. The program is based on four separate metrics related to Air Group profitability, safety, achievement of unit-cost goals and employee engagement as measured by customer satisfaction. • The Operational Performance Rewards Program entitles the majority of Air Group employees to quarterly payouts of up to $300 per person if certain operational and customer service objectives are met. Virgin America operated three similar plans, including a traditional profit sharing plan, through 2016. The impact of these plans was immaterial for the period from the date of acquisition through December 31, 2016. Starting January 1, 2017 all employees will participate in the Air Group plans described above. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Dec. 31, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIES Future minimum payments for commitments as of December 31, 2016 (in millions): Aircraft Leases Facility Leases Aircraft Purchase Commitments Capacity Purchase Agreements Aircraft Maintenance Deposits Aircraft Maintenance and Parts Management 2017 $ 302 $ 123 $ 926 $ 76 $ 59 $ 30 2018 316 73 848 80 61 32 2019 305 63 694 85 65 35 2020 279 57 354 90 68 37 2021 242 50 277 94 63 40 Thereafter 953 171 361 676 90 — Total $ 2,397 $ 537 $ 3,460 $ 1,101 $ 406 $ 174 Lease Commitments Aircraft lease commitments include future obligations for all of the Company's operating airlines—Alaska, Virgin America and Horizon, as well as aircraft leases operated by third-parties. At December 31, 2016 , the Company had lease contracts for 17 B737 aircraft, 15 Q400 aircraft and 53 Airbus aircraft. Additionally, as of December 31, 2016 the Company has 15 leased E175s with SkyWest. The Company has 10 scheduled lease deliveries of A321neo aircraft from 2017 through 2018 and five scheduled lease deliveries of E175s in 2017 to be operated by SkyWest. All lease contracts have remaining noncancelable lease terms ranging from 2017 to 2030 . The Company has the option to increase capacity flown by SkyWest with eight additional E175 aircraft with deliveries in 2019 . Options to lease are not reflected in the commitments table above. Facility lease commitments primarily include airport and terminal facilities and building leases. Total rent expense for aircraft and facility leases was $315 million , $295 million and $288 million , in 2016 , 2015 and 2014 . Aircraft Purchase Commitments Aircraft purchase commitments include non-cancelable contractual commitments for aircrafts and engines. As of December 31, 2016 , the Company is committed to purchasing 54 B737 aircraft ( 22 B737 NextGen aircraft and 32 B737 MAX aircraft, with deliveries in 2017 through 2023 ) and 33 E175 aircraft with deliveries in 2017 through 2019 . In addition, the Company has options to purchase 41 B737 aircraft, 30 A320neo aircraft and 30 E175 aircraft. Option payments are not reflected in the table above. Capacity Purchase Agreements ("CPAs") At December 31, 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 Airlines, Inc ("SkyWest") to fly certain routes in the Lower 48 and Canada and with Peninsula Airways, Inc ("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. Aircraft Maintenance Deposits The Company is contractually required to make maintenance deposit payments to aircraft lessors, which represent maintenance reserves made solely to collateralize the lessor for future maintenance events should the Company not perform required maintenance. Under most leases, the lease agreements provide that maintenance reserves are reimbursable upon completion of the major maintenance event in an amount equal to the lesser of (i) the amount qualified for reimbursement from maintenance reserves held by the lessor associated with the specific major maintenance event or (ii) the qualifying costs related to the specific major maintenance event. Aircraft Maintenance and Parts Management The Company has a separate maintenance-cost-per-hour contract for management and repair of certain rotable parts to support airframe and engine maintenance and repair. This agreement requires monthly payments based upon utilization, such as flight hours, cycles and age of the aircraft, and, in turn, the agreement transfers certain risks to the third-party service provider. There are minimum payments under this agreement, which are reflected in the table above. Accordingly, payments could differ materially based on actual aircraft utilization. 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. Plaintiffs received class certification in November 2016. Virgin America filed a motion for summary judgment seeking to dismiss all claims on various federal preemption grounds. In January 2017, the Court denied in part and granted in part Virgin America’s motion. Virgin America believes the claims in this case are without factual and legal merit and intends to defend this lawsuit through, among other strategies, filing a motion for reconsideration of the Court’s certification decision and denial of summary judgment and, if necessary, a motion for certification of interlocutory appeal to the U.S. Court of Appeals for the Ninth Circuit. 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. |
SHAREHOLDER'S EQUITY
SHAREHOLDER'S EQUITY | 12 Months Ended |
Dec. 31, 2016 | |
Equity [Abstract] | |
SHAREHOLDER'S EQUITY | SHAREHOLDERS' EQUITY Common Stock Changes During the second quarter of 2014, shareholders voted to increase the number of authorized shares from 100 million to 200 million shares and reduce the par value of common stock from $1 per share to $0.01 per share, and the Board of Directors declared a two-for-one stock split by means of a stock distribution. The additional shares were distributed on July 9, 2014, to the shareholders of record on June 23, 2014. Dividends During 2016 , the Board of Directors declared dividends of $1.10 per share. The Company paid dividends of $136 million , $102 million and $68 million to shareholders of record during 2016 , 2015 and 2014 . Subsequent to year-end, the Board of Directors declared a quarterly cash dividend of $0.30 per share to be paid in March 2017 to shareholders of record as of February 21, 2017. This is a 9% increase from the most recent quarterly dividends of $0.275 per share. 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 $1.0 billion share repurchase program, which was paused in the second quarter of 2016 in anticipation of the acquisition of Virgin America. At December 31, 2016 , the Company held 5,861,583 shares in treasury. Management does not anticipate retiring common shares held in treasury for the foreseeable future. Share repurchase activity (in millions, except shares): 2016 2015 2014 Shares Amount Shares Amount Shares Amount 2015 $1 billion Repurchase Program 2,594,809 $ 193 1,517,277 $ 120 — $ — 2014 $650 million Repurchase Program — — 5,691,051 385 5,497,427 265 2012 $250 million Repurchase Program — — — — 1,819,304 83 Total 2,594,809 $ 193 7,208,328 $ 505 7,316,731 $ 348 Accumulated Other Comprehensive Loss (AOCL) AOCL consisted of the following (in millions, net of tax): 2016 2015 Related to marketable securities $ (3 ) $ (3 ) Related to employee benefit plans (299 ) (288 ) Related to interest rate derivatives (3 ) (12 ) $ (305 ) $ (303 ) |
SPECIAL ITEMS SPECIAL ITEMS
SPECIAL ITEMS SPECIAL ITEMS | 12 Months Ended |
Dec. 31, 2016 | |
SPECIAL ITEMS [Abstract] | |
Unusual or Infrequent Items Disclosure [Text Block] | SPECIAL ITEMS In 2016, the Company recognized special items of $117 million for merger-related costs associated with its acquisition of Virgin America. Costs classified as merger-related are directly attributable to merger activities. $39 million of these costs were not deductible under U.S. federal tax law, as discussed in Note 7 . The Company also recognized a special tax expense of $17 million representing the impact of adjustments to the Company's position on income sourcing in various states. In 2015, the Company recognized special items of $32 million in aggregate. The special items comprise an expense of $14 million for a lump sum settlements offered to terminated and vested participants in the qualified defined benefit pension plans and a litigation-related matter. See Note 8 for more information regarding the pension settlement charge. The Company also recognized a special tax benefit of $26 million representing the discrete impacts of adjustments to the Company's position on income sourcing in various states. In 2014, the Company recognized special items of $30 million . As discussed in Note 8 , a $20 million benefit was recognized related to the curtailment of certain postretirement benefit plans. Furthermore, in 2014 the Company recorded a one-time gain of $10 million associated with the settlement of a legal matter. |
STOCK-BASED COMPENSATION PLANS
STOCK-BASED COMPENSATION PLANS | 12 Months Ended |
Dec. 31, 2016 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
STOCK-BASED COMPENSATION PLANS | STOCK-BASED COMPENSATION PLANS The table below summarizes the components of total stock-based compensation (in millions): 2016 2015 2014 Stock options $ 2 $ 2 $ 3 Stock awards 11 11 10 Deferred stock awards 1 1 1 Employee stock purchase plan 5 3 2 Stock-based compensation $ 19 $ 17 $ 16 Tax benefit related to stock-based compensation $ 7 $ 7 $ 6 Unrecognized stock-based compensation for non-vested options and awards and the weighted-average period the expense will be recognized (in millions): Amount Weighted-Average Period Stock options $ 2 1.1 Stock awards 21 0.9 Unrecognized stock-based compensation $ 23 0.9 The Company has various equity incentive plans under which it may grant stock awards to directors, officers and employees. The Company also has an employee stock purchase plan. The Company is authorized to issue 17 million shares of common stock under these plans, of which 11,847,713 shares remain available for future grants of either options or stock awards as of December 31, 2016 . Stock Options Stock options to purchase common stock are granted at the fair market value of the stock on the date of grant. The stock options granted have terms of up to ten years. The fair value of each option grant was estimated on the date of grant using the Black-Scholes option-pricing model with the following weighted-average assumptions used for grants: 2016 2015 2014 Expected volatility 51 % 53 % 65 % Expected term 6 years 6 years 6 years Risk-free interest rate 1.23 % 1.67 % 1.87 % Expected dividend yield 1.50 % 1.25 % 1.25 % Weighted-average grant date fair value per share $ 27.14 $ 28.71 $ 21.70 Estimated fair value of options granted (millions) $ 2 $ 3 $ 3 The expected market price volatility is based on the historical volatility. The expected term is based on the estimated period of time until exercise based on historical experience. The risk-free interest rate is based on the U.S. Treasury yield curve in effect at the time of the grant. The expected dividend yield is based on the estimated weighted average dividend yield over the expected term. The expected forfeiture rates are based on historical experience. The tables below summarize stock option activity for the year ended December 31, 2016: Shares Weighted- Average Exercise Price Per Share Weighted- Average Contractual Life (Years) Aggregate Intrinsic Value (in millions) Outstanding, December 31, 2015 540,345 $ 31.58 6.3 $ 26 Granted 79,340 65.63 Exercised (158,758 ) 23.62 Canceled — — Forfeited or expired (7,253 ) 49.66 Outstanding, December 31, 2016 453,674 $ 40.02 6.2 $ 22 Exercisable, December 31, 2016 199,676 $ 25.35 5.1 $ 13 Vested or expected to vest, December 31, 2016 453,435 $ 40.03 6.2 $ 22 (in millions) 2016 2015 2014 Intrinsic value of option exercises $ 9 $ 14 $ 20 Cash received from stock option exercises 3 4 6 Tax benefit related to stock option exercises 3 5 7 Fair value of options vested 3 3 2 Stock Awards Restricted Stock Units ("RSUs") are awarded to eligible employees and entitle the grantee to receive shares of common stock at the end of the vest period. The fair value of the RSUs is based on the stock price on the date of grant. The RSUs “cliff vest” after three years, or the period from the date of grant to the employee’s retirement eligibility, and expense is recognized accordingly. Performance Share Units (PSUs) are awarded to certain executives to receive shares of common stock if specific performance goals and market conditions are achieved. There are several tranches of PSUs which vest when performance goals and market conditions are met. The following table summarizes information about outstanding stock awards: Number of Units Weighted-Average Grant Date Fair Value Weighted- Average Contractual Life (Years) Aggregate Intrinsic Value (in millions) Non-vested, December 31, 2015 470,715 $ 38.09 0.8 $ 38 Granted 374,863 63.53 Vested (366,319 ) 32.87 Forfeited (39,166 ) 40.35 Non-vested, December 31, 2016 440,093 $ 63.86 1.4 $ 39 Deferred Stock Awards Deferred Stock Units ("DSUs") are awarded to members of its Board of Directors as part of their retainers. The underlying common shares are issued upon retirement from the Board, but require no future service period. As a result, the entire intrinsic value of the awards is expensed on the date of grant. Employee Stock Purchase Plan The ESPP allows employees to purchase common stock at 85% of the stock price on the first day of the offering period or the specified purchase date, whichever is lower. Employees may contribute up to 10% of their base earnings during the offering period to purchase stock. Employees purchased 308,920 , 281,058 and 298,283 shares in 2016 , 2015 and 2014 under the ESPP. |
OPERATING SEGMENT INFORMATION
OPERATING SEGMENT INFORMATION | 12 Months Ended |
Dec. 31, 2016 | |
Segment Reporting [Abstract] | |
Operating Segment Information | OPERATING SEGMENT INFORMATION Alaska Air Group has three operating airlines—Alaska, Virgin America and Horizon. Each is a regulated airline 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 SkyWest and PenAir, under which Alaska receives all passenger revenues. Under U.S. General Accepted Accounting Principles, 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 Alaska's and Virgin America’s scheduled air transportation for passengers and cargo throughout the U.S., and in parts of Canada, Mexico, Costa Rica and Cuba. • Regional - includes Horizon's and other third-party carriers’ scheduled air transportation for passengers across a shorter distance network within the U.S. under CPAs. 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 parent company activity, 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 CODM to evaluate performance and allocate resources. Adjustments are further explained below in reconciling to consolidated GAAP results. The operating segment information that follows (in millions) includes financial results for Virgin America for the period from December 14, 2016 to December 31, 2016 and the impact of purchase accounting as of December 14, 2016. Year Ended December 31, 2016 Mainline (a) Regional Horizon Consolidating & Other (b) Air Group Adjusted (c) Special Items (d) Consolidated Operating revenues Passenger Mainline $ 4,098 $ — $ — $ — $ 4,098 $ — $ 4,098 Regional — 908 — — 908 — 908 Total passenger revenues 4,098 908 — — 5,006 — 5,006 CPA revenues — — 424 (424 ) — — — Freight and mail 104 5 — (1 ) 108 — 108 Other-net 738 74 4 1 817 — 817 Total operating revenues 4,940 987 428 (424 ) 5,931 — 5,931 Operating expenses Operating expenses, excluding fuel 2,883 769 407 (425 ) 3,634 117 3,751 Fuel expense 719 125 — — 844 (13 ) 831 Total operating expenses 3,602 894 407 (425 ) 4,478 104 4,582 Nonoperating income (expense) Interest income 26 — 1 — 27 — 27 Interest expense (42 ) — (9 ) (4 ) (55 ) — (55 ) Other 19 — 1 4 24 — 24 3 — (7 ) — (4 ) — (4 ) Income (loss) before income tax $ 1,341 $ 93 $ 14 $ 1 $ 1,449 $ (104 ) $ 1,345 Year Ended December 31, 2015 Mainline Regional Horizon Consolidating & Other (b) Air Group Adjusted (c) Special Items (d) Consolidated Operating revenues Passenger Mainline $ 3,939 $ — $ — $ — $ 3,939 $ — $ 3,939 Regional — 854 — — 854 — 854 Total passenger revenues 3,939 854 — — 4,793 — 4,793 CPA revenues — — 408 (408 ) — — — Freight and mail 103 5 — — 108 — 108 Other-net 621 72 4 — 697 — 697 Total operating revenues 4,663 931 412 (408 ) 5,598 — 5,598 Operating expenses Operating expenses, excluding fuel 2,653 695 375 (409 ) 3,314 32 3,346 Fuel expense 823 131 — — 954 — 954 Total operating expenses 3,476 826 375 (409 ) 4,268 32 4,300 Nonoperating income (expense) Interest income 19 — — 2 21 — 21 Interest expense (28 ) — (10 ) (4 ) (42 ) — (42 ) Other 28 — 1 6 35 — 35 19 — (9 ) 4 14 — 14 Income (loss) before income tax $ 1,206 $ 105 $ 28 $ 5 $ 1,344 $ (32 ) $ 1,312 Year Ended December 31, 2014 Mainline Regional Horizon Consolidating & Other (b) Air Group Adjusted (c) Special Items (d) Consolidated Operating revenues Passenger Mainline $ 3,774 $ — $ — $ — $ 3,774 $ — $ 3,774 Regional — 805 — — 805 — 805 Total passenger revenues 3,774 805 — — 4,579 — 4,579 CPA revenues — — 371 (371 ) — — — Freight and mail 109 5 — — 114 — 114 Other-net 592 78 5 — 675 — 675 Total operating revenues 4,475 888 376 (371 ) 5,368 — 5,368 Operating expenses Operating expenses, excluding fuel 2,417 623 349 (371 ) 3,018 (30 ) 2,988 Fuel expense 1,251 190 — — 1,441 (23 ) 1,418 Total operating expenses 3,668 813 349 (371 ) 4,459 (53 ) 4,406 Nonoperating income (expense) Interest income 20 — — 1 21 — 21 Interest expense (32 ) — (12 ) (4 ) (48 ) — (48 ) Other 39 (1 ) 2 — 40 — 40 27 (1 ) (10 ) (3 ) 13 — 13 Income (loss) before income tax $ 834 $ 74 $ 17 $ (3 ) $ 922 $ 53 $ 975 (a) Includes Alaska activity for the full period and Virgin America financial results for the period December 14, 2016 through December 31, 2016, and the impacts associated with purchase accounting as of December 14, 2016. (b) Includes consolidating entries, Parent Company and other immaterial business units. (c) The adjusted column excludes certain charges described in (d) and represents the financial information that is reviewed by management to assess performance of operations and determine capital allocations. (d) Includes accounting adjustments related to mark-to-market fuel hedge accounting charges (all years), merger-related costs (2016), pension settlement charge (2015), litigation-related matter (2015), non-cash curtailment gain (2014) and a gain related to a legal matter (2014). 2016 2015 2014 Depreciation and amortization: Mainline $ 296 $ 268 $ 243 Horizon 67 52 51 Consolidated $ 363 $ 320 $ 294 Capital expenditures: Mainline $ 608 $ 821 $ 659 Horizon 70 10 35 Consolidated $ 678 $ 831 $ 694 Total assets at end of period: Mainline $ 15,260 $ 8,127 Horizon 690 717 Consolidating & Other (5,988 ) (2,314 ) Consolidated $ 9,962 $ 6,530 |
GENERAL AND SUMMARY OF SIGNIF21
GENERAL AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2016 | |
Accounting Policies [Abstract] | |
Organization and Basis of Accounting, Policy [Policy Text Block] | Organization and Basis of Presentation The consolidated financial statements include the accounts of Air Group, or the Company, and its primary subsidiaries, Alaska, Horizon and, starting December 14, 2016, Virgin America. 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 conformity with accounting principles generally accepted in the United States of America and their preparation requires the use of management’s estimates. Actual results may differ from these estimates. Certain reclassifications have been made to prior year financial statements to conform to classifications used in the current year. |
Cash and Cash Equivalents, Policy [Policy Text Block] | Cash and Cash Equivalents 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 market value. The Company reduces cash balances when funds are disbursed. Due to the time delay in funds clearing the banks, the Company normally maintains a negative balance in its cash disbursement accounts, which is reported as a current liability. The amount of the negative cash balance was $15 million and $12 million at December 31, 2016 and 2015 and is included in accounts payable, with the change in the balance during the year included in other financing activities in the consolidated statements of cash flows. 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. |
Marketable Securities, Available-for-sale Securities, Policy [Policy Text Block] | Marketable Securities Investments with original maturities of greater than three months and remaining maturities of less than one year are classified as short-term investments. Investments with maturities beyond one year may be classified as short-term based on their highly liquid nature and because such marketable securities represent the investment of cash that is available for current operations. All cash equivalents and short-term investments are classified as available-for-sale and realized gains and losses are recorded using the specific identification method. Changes in market value, excluding other-than-temporary impairments, are reflected in accumulated other comprehensive loss ("AOCL"). Investments are considered to be impaired when a decline in fair value is judged to be other-than-temporary. The Company uses a systematic methodology that considers available quantitative and qualitative evidence in evaluating potential impairment. If the cost of an investment exceeds its fair value, management evaluates, among other factors, general market conditions, credit quality of debt instrument issuers, the duration and extent to which the fair value is less than cost, the Company's intent and ability to hold, or plans to sell, the investment. Once a decline in fair value is determined to be other-than-temporary, an impairment charge is recorded to Other—net in the consolidated statements of operations and a new cost basis in the investment is established. |
Receivables, Policy [Policy Text Block] | Receivables Receivables are due on demand and consist primarily of airline traffic (including credit card) receivables, Mileage Plan™ partner receivables, amounts due from other airlines related to interline agreements, government tax authorities and other miscellaneous amounts due to the Company, and are net of an allowance for doubtful accounts. Management determines the allowance for doubtful accounts based on known troubled accounts and historical experience applied to an aging of accounts. |
Inventory, Policy [Policy Text Block] | Inventories and Supplies—net Expendable aircraft parts, materials and supplies are stated at average cost and are included in inventories and supplies — net. An obsolescence allowance for expendable parts is accrued based on estimated lives of the corresponding fleet type and salvage values. The allowance for expendable inventories was $ 36 million and $37 million at December 31, 2016 and 2015 , respectively. Inventory and supplies — net also includes fuel inventory of $ 16 million and $14 million at December 31, 2016 and 2015 , respectively. Repairable and rotable aircraft parts inventories are included in flight equipment. |
Property, Plant and Equipment, Policy [Policy Text Block] | Property, Equipment and Depreciation Property and equipment are recorded at cost and depreciated using the straight-line method over their estimated useful lives less an estimated salvage value, which are as follows: Aircraft and related flight equipment: Boeing 737 and Airbus 319/320 aircraft 20-25 years Bombardier Q400 aircraft 15 years Buildings 25 - 30 years Minor building and land improvements 10 years Capitalized leases and leasehold improvements Generally shorter of lease term or estimated useful life Computer hardware and software 3-10 years Other furniture and equipment 5-10 years Salvage values used for aircraft are 10% of the fair value, but as aircraft near the end of their useful lives, management updates the salvage value estimates based on current market conditions and expected use of the aircraft. “Related flight equipment” includes rotable and repairable spare inventories, which are depreciated over the associated fleet life unless otherwise noted. Beginning October 1, 2016, the Company changed its accounting estimate for the expected useful life of the B737 NextGen aircraft, which includes the B737-700, -800, -900, -900ER aircraft and the related parts, from 20 years to 25 years. The change in estimate was precipitated by management's annual accounting policy review, which considered market studies, asset performance and intended use, as well as industry benchmarking. The change in estimate was applied prospectively effective October 1, 2016. The impact of this change in estimate in 2016 is a $17 million decrease to depreciation and amortization expense. Capitalized interest, based on the Company’s weighted-average borrowing rate, is added to the cost of the related asset, and is depreciated over the estimated useful life of the asset. Maintenance and repairs are expensed when incurred. Major modifications that extend the life or improve the usefulness of aircraft are capitalized and depreciated over their estimated period of use. The Company evaluates long-lived assets to be held and used for impairment whenever events or changes in circumstances indicate that the total carrying amount of an asset or asset group may not be recoverable. The Company groups assets for purposes of such reviews at the lowest level, at which identifiable cash flows are largely independent of the cash flows of other groups of assets and liabilities. An impairment loss is considered when estimated future undiscounted cash flows expected to result from the use of the asset or asset group and its eventual disposition are less than its carrying amount. If the asset or asset group is not considered recoverable, a write-down equal to the excess of the carrying amount over the fair value will be recorded. |
Goodwill | Goodwill Goodwill represents the excess of purchase price over the fair value of the related net assets acquired in the Company's acquisition of Virgin America and is not amortized. As of December 31, 2016 the goodwill balance, based on a provisional purchase price allocation, was $1.9 billion . No goodwill impairment test occurred in 2016, as the acquisition was completed late in the fourth quarter. In future periods, the Company will review goodwill for impairment at least annually, or more frequently if events or circumstances indicate than an impairment may exist. The Company will perform this impairment at the reporting unit level. If fair value of the reporting unit exceeds the carrying amount, an impairment charge may be recorded. |
Intangible Assets | Intangible Assets Intangible assets as of December 31, 2016 were recorded as a result of the acquisition of Virgin America, and consist primarily of indefinite-lived airport slots, finite-lived airport gates and finite-lived customer relationships. Finite-lived intangibles are amortized over their estimated useful lives. Indefinite-lived intangibles are not amortized but are tested at least annually for impairment using a similar methodology to property, equipment and goodwill as described above. |
Internal Use Software, Policy [Policy Text Block] | Internally Used Software Costs The Company capitalizes costs to develop internal-use software that are incurred in the application development stage. Amortization commences when the software is ready for its intended use and the amortization period is the estimated useful life of the software, generally three to five years. Capitalized costs primarily include contract labor and payroll costs of the individuals dedicated to the development of internal-use software. |
Revenue Recognition, Deferred Revenue [Policy Text Block] | Deferred Revenue Deferred revenue results primarily from the sale of Mileage Plan™ miles and Elevate® points to third-parties. It also includes the liability for Elevate® flown points outstanding at the acquisition date that was recorded at its estimated fair value as part of purchase price accounting. The related revenue is recognized when award transportation is provided or over the term of the applicable agreement. |
Lease, Policy [Policy Text Block] | Operating Leases The Company leases aircraft, airport and terminal facilities, office space and other equipment under operating leases. Some of these lease agreements contain rent escalation clauses or rent holidays. For scheduled rent escalation clauses during the lease terms or for rental payments commencing at a date other than the date of initial occupancy, the Company records minimum rental expenses on a straight-line basis over the terms of the leases in the consolidated statements of operations. |
Leased Aircraft Return Costs [Policy Text Block] | Leased Aircraft Return Costs Cash payments associated with returning leased aircraft are accrued when it is probable that a cash payment will be made and that amount is reasonably estimable, usually no sooner than after the last scheduled maintenance event prior to lease return. Any accrual is based on the time remaining on the lease, planned aircraft usage and the provisions included in the lease agreement, although the actual amount due to any lessor upon return may not be known with certainty until lease termination. As leased aircraft are returned, any payments are charged against the established accrual. The accrual is part of other current and long-term liabilities and was not material as of December 31, 2016 and December 31, 2015 . The expense is included in Aircraft maintenance in the consolidated statements of operations. |
Revenue Recognition, Policy [Policy Text Block] | Revenue Recognition Passenger revenue is recognized when the passenger travels. Tickets sold but not yet used are reported as air traffic liability until travel or date of expiration. Air traffic liability includes approximately $62 million and $42 million related to credits for future travel, as of December 31, 2016 and December 31, 2015 , respectively. These credits are recognized into revenue either when the passenger travels or at the date of expiration, which is twelve months from issuance. Commissions to travel agents and related fees are expensed when the related revenue is recognized. Passenger traffic commissions and related fees not yet recognized are recorded as a prepaid expense. Taxes collected from passengers, including transportation excise taxes, airport and security fees and other fees, are recorded on a net basis within passenger revenue in the consolidated statements of operations. Due to complex pricing structures, refund and exchange policies, and interline agreements with other airlines, certain amounts are recognized as revenue using estimates regarding both the timing of the revenue recognition and the amount of revenue to be recognized. These estimates are based on the Company’s historical data. Freight and mail revenues are recognized when the related services are provided. Other—net revenues are primarily related to the Mileage Plan™ and Elevate® programs. They are recognized as described in the “Frequent Flyer Programs” paragraph below. Other—net also includes certain ancillary or non-ticket revenues, such as checked-bag fees, reservations fees, ticket change fees, on-board food and beverage sales, and, to a much lesser extent, commissions from car and hotel vendors and sales of travel insurance. These items are recognized as revenue when the related services are provided. Airport lounge memberships are recognized as revenue over the membership period. |
Frequent Flier Program, Policy [Policy Text Block] | Frequent Flyer Programs Alaska operates the Mileage Plan™ frequent flyer program, and Virgin America operates the Elevate® frequent flyer program. Both programs provide travel awards to members based on accumulated mileage or points. For miles or points earned by flying on the Company's airlines and through airline partners, the estimated cost of providing award travel is recognized as a selling expense and accrued as a liability, as miles are earned and accumulated. Alaska and Virgin America also sell services, including miles or points for transportation, to non-airline partners, such as hotels, car rental agencies and major banks that offer Alaska's and Virgin America's affinity credit cards. The Company defers revenue related to air transportation and certificates for discounted companion travel until the transportation is delivered. The deferred proceeds are recognized as passenger revenue for awards redeemed and flown on the Company's airlines and as Other—net revenue for awards redeemed and flown on other airlines (less the cost paid to the other airlines based on contractual agreements). The elements that represent use of the Alaska and Virgin America brands and access to frequent flyer member lists and advertising are recognized as commission income in the period that those elements are sold and included in Other—net revenue in the consolidated statements of operations. |
Advertising Cost, Policy, Expensed Advertising Cost [Policy Text Block] | Selling Expenses Selling expenses include credit card fees, global distribution systems charges, the estimated cost of frequent flyer travel awards earned through air travel, advertising, promotional costs, commissions and incentives. Advertising production costs are expensed as incurred. |
Derivatives, Policy [Policy Text Block] | Derivative Financial Instruments The Company's operations are significantly impacted by changes in aircraft fuel prices and interest rates. In an effort to manage exposure to these risks, the Company periodically enters into fuel and interest rate derivative instruments. These derivative instruments are recognized at fair value on the balance sheet and changes in the fair value are recognized in AOCL or in the consolidated statements of operations, depending on the nature of the instrument. The Company does not hold or issue derivative fuel hedge contracts for trading purposes and does not apply hedge accounting. For cash flow hedges related to interest rate swaps, the effective portion of the derivative represents the change in fair value of the hedge that offsets the change in fair value of the hedged item. To the extent the change in the fair value of the hedge does not perfectly offset the change in the fair value of the hedged item, the ineffective portion of the hedge is immediately recognized in interest expense. |
Fair Value of Financial Instruments, Policy [Policy Text Block] | Fair Value Measurements Accounting standards define fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. The standards also establish a fair value hierarchy, which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. There are three levels of inputs that may be used to measure fair value: Level 1 - Quoted prices in active markets for identical assets or liabilities. Level 2 - Observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Level 3 - Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. The Company has elected not to use the fair value option provided in the accounting standards for non-financial instruments. Accordingly, those assets and liabilities are carried at amortized cost. For financial instruments, the assets and liabilities are carried at fair value, which is determined based on the market approach or income approach, depending upon the level of inputs used. Assets and liabilities recognized or disclosed at fair value on a nonrecurring basis include items such as property, plant and equipment, goodwill, intangible assets and certain other assets and liabilities. The Company determines the fair value of these items using Level 3 inputs, as described in Note 2 and Note 5 . |
Income Tax, Policy [Policy Text Block] | Income Taxes The Company uses the asset and liability approach for accounting for and reporting income taxes. Deferred tax assets and liabilities are recognized for future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and for operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the period that includes the enactment date. A valuation allowance would be established, if necessary, for the amount of any tax benefits that, based on available evidence, are not expected to be realized. As of December 31, 2016, there is a partial valuation allowance against net deferred tax assets. The Company accounts for unrecognized tax benefits in accordance with the applicable accounting standards. Virgin America has substantial federal and state net operating losses ("NOLs") for income tax purposes. The Company's ability to utilize Virgin America's NOLs could be limited if Virgin America had an “ownership change,” as defined in Section 382 of the Internal Revenue Code and similar state provisions. In general terms, an ownership change can occur whenever there is a collective shift in the ownership of a company by more than 50% by one or more “5% stockholders” within a three-year period. The occurrence of such a change generally limits the amount of NOL carryforwards a company could utilize in a given year to the aggregate fair market value of the company's common stock immediately prior to the ownership change, multiplied by the long-term tax-exempt interest rate in effect for the month of the ownership change. The acquisition constituted an ownership change and the potential for further limitations following the acquisition. See Note 7 to the consolidated financial statements for more discussion of the calculation. |
Share-based Compensation, Option and Incentive Plans Policy [Policy Text Block] | Stock-Based Compensation Accounting standards require companies to recognize as expense the fair value of stock options and other equity-based compensation issued to employees as of the grant date. These standards apply to all stock awards that the Company grants to employees as well as the Company’s Employee Stock Purchase Plan ("ESPP"), which features a look-back provision and allows employees to purchase stock at a 15% discount. All stock-based compensation expense is recorded in wages and benefits in the consolidated statements of operations. |
Earnings Per Share, Policy [Policy Text Block] | Earnings Per Share (EPS) Diluted EPS is calculated by dividing net income by the average common shares outstanding plus additional common shares that would have been outstanding assuming the exercise of in-the-money stock options and restricted stock units, using the treasury-stock method. In 2016 , 2015 , and 2014 , antidilutive stock options excluded from the calculation of EPS were not material. |
New Accounting Pronouncements, Policy [Policy Text Block] | Recently Issued Accounting Pronouncements In May 2014, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2014-09, "Revenue from Contracts with Customers"(Topic 606), 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. This comprehensive new standard will replace most existing revenue recognition guidance in U.S. GAAP when it becomes effective. In March 2016, the FASB issued ASU 2016-08, "Revenue from Contracts with Customers (Topic 606), Principal versus Agent Considerations" to clarify the guidance on determining whether the Company is considered the principal or the agent in a revenue transaction where a third party is providing goods or services to a customer. Entities are permitted to use either a full retrospective or cumulative effect transition method, and are required to adopt all parts of the new revenue standard using the same transition method. The new standard is effective for the Company on January 1, 2018. At this time, the Company believes the most significant impact to the financial statements will be to Mileage Plan™ revenues and liabilities. The Company currently uses the incremental cost approach for miles earned through travel. As this approach will be eliminated with the standard, the Company will be required to significantly increase its liability for earned miles through a relative selling price model. The Company continues to evaluate and model the full impact of the standard and currently plans to apply the full retrospective 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 the ASU. 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. At this time, the Company believes the most significant impact to the financial statements will relate to the recording of a right of use asset associated with leased aircraft. Other leases, including airports and real estate, equipment, software and other miscellaneous leases continue to be assessed for impact as it relates to ASU 2016-02. The Company has not yet determined whether it will early adopt the standard. In March 2016, the FASB issued ASU 2016-09, "Compensation—Stock Compensation" (Topic 718), which 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 ASU is effective for the Company beginning January 1, 2017. The adoption of the standard will not have a material impact on the Company's statements of operations or financial position. In January 2017, the FASB issued ASU 2017-04, "Intangibles—Goodwill and Other" (Topic 350), which eliminates step 2 from the goodwill impairment test. Step 2 measures a goodwill impairment loss by comparing the implied fair value of a reporting unit’s goodwill with the carrying amount of that goodwill. The ASU is effective for the Company beginning January 1, 2019. Early adoption of the standard is permitted. Beginning in fiscal 2017 the Company will be required to perform an impairment test for goodwill arising from its acquisition of Virgin America and plans to adopt the standard in 2017. |
GENERAL AND SUMMARY OF SIGNIF22
GENERAL AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Accounting Policies [Abstract] | |
Property, Plant and Equipment [Table Text Block] | Property and equipment are recorded at cost and depreciated using the straight-line method over their estimated useful lives less an estimated salvage value, which are as follows: Aircraft and related flight equipment: Boeing 737 and Airbus 319/320 aircraft 20-25 years Bombardier Q400 aircraft 15 years Buildings 25 - 30 years Minor building and land improvements 10 years Capitalized leases and leasehold improvements Generally shorter of lease term or estimated useful life Computer hardware and software 3-10 years Other furniture and equipment 5-10 years Salvage values used for aircraft are 10% of the fair value, but as aircraft near the end of their useful lives, management updates the salvage value estimates based on current market conditions and expected use of the aircraft. “Related flight equipment” includes rotable and repairable spare inventories, which are depreciated over the associated fleet life unless otherwise noted. |
Liabilities from Mileage Plan [Table Text Block] | Frequent flyer program deferred revenue and liabilities included in the consolidated balance sheets (in millions): 2016 2015 Current Liabilities: Other accrued liabilities $ 484 $ 368 Other Liabilities and Credits: Deferred revenue 638 427 Other liabilities 21 19 Total $ 1,143 $ 814 |
Revenue from Mileage Plan [Table Text Block] | Frequent flyer program revenue included in the consolidated statements of operations (in millions): 2016 2015 2014 Passenger revenues $ 293 $ 267 $ 246 Other — net revenues 429 329 295 Total frequent flyer program revenues $ 722 $ 596 $ 541 |
ACQUISITION OF VIRGIN AMERICA23
ACQUISITION OF VIRGIN AMERICA, INC. (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Business Combinations [Abstract] | |
Schedule of Fair Value of Consideration Transferred | The fair value of consideration transferred on the closing date includes the value of the cash consideration and accelerated and vested equity awards attributable to pre-acquisition service. The purchase price is as follows (in millions, except per-share stock price): December 14, 2016 Number of shares of Virgin America common stock issued and outstanding 44.645 Multiplied by cash consideration for each share of common stock per the merger agreement $ 57.00 Cash consideration paid for common stock issued and outstanding 2,545 Accelerated and vested equity awards attributable to pre-acquisition service 51 Total Purchase Price $ 2,596 |
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed | Provisional fair value of the assets acquired and the liabilities assumed as of the acquisition date, December 14, 2016 , (in millions) are as follows: December 14, 2016 Cash and cash equivalents $ 645 Receivables 44 Prepaid expenses and other current assets 16 Property and equipment 560 Intangible assets 143 Goodwill 1,934 Other assets 84 Total assets 3,426 Accounts payable 22 Accrued wages, vacation and payroll taxes 51 Air traffic liabilities 172 Other accrued liabilities 196 Current portion of long-term debt 125 Long-term debt, net of current portion 360 Deferred income taxes (304 ) Deferred revenue 126 Other liabilities 82 Total liabilities 830 Total purchase price $ 2,596 |
Business Acquisition, Pro Forma Information | 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, 2015. (in millions, except per share amounts) Years Ended December 31, 2016 2015 Revenue $ 7,511 $ 7,111 Net Income 1,008 914 |
CASH, CASH EQUIVALENTS AND MA24
CASH, CASH EQUIVALENTS AND MARKETABLE SECURITIES (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Cash, Cash Equivalents, and Short-term Investments [Abstract] | |
Schedule of Cash, Cash Equivalents and Short-term Investments [Table Text Block] | Components for cash, cash equivalents and marketable securities (in millions): December 31, 2016 Cost Basis Unrealized Gains Unrealized Losses Fair Value Cash $ 283 $ — $ — $ 283 Cash equivalents 45 — — 45 Cash and cash equivalents 328 — — 328 U.S. government and agency securities 290 — (3 ) 287 Foreign government bonds 36 — — 36 Asset-backed securities 138 — — 138 Mortgage-backed securities 89 — — 89 Corporate notes and bonds 693 2 (4 ) 691 Municipal securities 11 — — 11 Marketable securities 1,257 2 (7 ) 1,252 Total $ 1,585 $ 2 $ (7 ) $ 1,580 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) [Table Text Block] | Activity for marketable securities (in millions): 2016 2015 2014 Proceeds from sales and maturities $ 962 $ 1,175 $ 1,092 Gross realized gains 3 2 4 Gross realized losses (1 ) (3 ) (2 ) |
Schedule of Debt Investment Maturities [Table Text Block] | Maturities for marketable securities (in millions): December 31, 2016 Cost Basis Fair Value Due in one year or less $ 182 $ 182 Due after one year through five years 1,070 1,065 Due after five years through 10 years 5 5 Due after 10 years — — Total $ 1,257 $ 1,252 |
DERIVATIVE INSTRUMENTS (Tables)
DERIVATIVE INSTRUMENTS (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of Derivative Instruments in Statement of Financial Position, Fair Value [Table Text Block] | Fair values of derivative instruments on the consolidated balance sheet (in millions): 2016 2015 Derivative Instruments Not Designated as Hedges Fuel hedge contracts Prepaid expenses and other current assets $ 17 $ 2 Other assets 3 2 Derivative Instruments Designated as Hedges Interest rate swaps Other accrued liabilities (5 ) (5 ) Other liabilities — (13 ) Losses in accumulated other comprehensive loss (AOCL) (5 ) (18 ) |
Schedule of Derivative Instruments, Gain (Loss) in Statement of Financial Performance [Table Text Block] | Pretax effect of derivative instruments on earnings and AOCL (in millions): 2016 2015 2014 Derivative Instruments Not Designated as Hedges Fuel hedge contracts Gains (losses) recognized in Aircraft fuel $ (3 ) $ (19 ) $ (18 ) Derivative Instruments Designated as Hedges Interest rate swaps Gains (losses) recognized in Aircraft rent (6 ) (6 ) (6 ) Gains (losses) recognized in other comprehensive income (OCI) 8 (5 ) (8 ) |
FAIR VALUE MEASUREMENTS (Tables
FAIR VALUE MEASUREMENTS (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Fair Value Disclosures [Abstract] | |
Fair Value, by Balance Sheet Grouping [Table Text Block] | Fair values of financial instruments on the consolidated balance sheet (in millions): December 31, 2016 Level 1 Level 2 Total Assets Marketable securities U.S. government and agency securities $ 287 $ — $ 287 Foreign government bonds — 36 36 Asset-backed securities — 138 138 Mortgage-backed securities — 89 89 Corporate notes and bonds — 691 691 Municipal securities — 11 11 Derivative instruments Fuel hedge contracts—call options — 20 20 Liabilities Derivative instruments Interest rate swap agreements — (5 ) (5 ) 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 Derivative instruments Fuel hedge contracts—call options — 4 4 Liabilities Derivative instruments Interest rate swap agreements — (18 ) (18 ) 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): 2016 2015 Carrying amount $ 1,179 $ 520 Fair value 1,199 557 |
LONG-TERM DEBT (Tables)
LONG-TERM DEBT (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Debt Disclosure [Abstract] | |
Schedule of Long-term Debt Instruments [Table Text Block] | Long-term debt obligations (in millions): 2016 2015 Fixed-rate notes payable due through 2028 $ 1,179 $ 520 Variable-rate notes payable due through 2028 1,803 166 Less debt issuance costs (18 ) (3 ) Long-term debt 2,964 683 Less current portion 319 114 $ 2,645 $ 569 Weighted-average fixed-interest rate 4.4 % 5.7 % Weighted-average variable-interest rate 2.4 % 1.8 % |
Schedule of Maturities of Long-term Debt [Table Text Block] | Long-term debt principal payments for the next five years and thereafter (in millions): Total 2017 $ 321 2018 351 2019 424 2020 451 2021 424 Thereafter 1,007 Total principal payments $ 2,978 |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Income Tax Disclosure [Abstract] | |
Schedule of Deferred Tax Assets and Liabilities [Table Text Block] | Deferred tax (assets) and liabilities comprise the following (in millions): 2016 2015 Excess of tax over book depreciation $ 1,282 $ 1,110 Intangibles 39 — Other—net 26 23 Gross deferred tax liabilities 1,347 1,133 Mileage Plan™ (310 ) (208 ) Inventory obsolescence (23 ) (22 ) Deferred gains (8 ) (8 ) Employee benefits (196 ) (167 ) Fuel hedge contracts — (5 ) Acquired net operating losses (289 ) — Other—net (62 ) (41 ) Gross deferred tax assets (888 ) (451 ) Valuation allowance 4 — Net deferred tax (assets) liabilities $ 463 $ 682 |
Schedule of Components of Income Tax Expense (Benefit) [Table Text Block] | The components of income tax expense were as follows (in millions): 2016 2015 2014 Current income tax expense: Federal $ 392 $ 397 $ 229 State 48 30 27 Total current income tax expense 440 427 256 Deferred income tax expense: Federal 77 60 103 State 14 (23 ) 11 Total deferred income tax expense 91 37 114 Income tax expense $ 531 $ 464 $ 370 |
Schedule of Effective Income Tax Rate Reconciliation [Table Text Block] | Income tax expense reconciles to the amount computed by applying the U.S. federal rate of 35% to income before income tax and accounting changes as follows (in millions): 2016 2015 2014 Income before income tax $ 1,345 $ 1,312 $ 975 Expected tax expense 471 459 341 Nondeductible expenses 20 4 4 State income taxes 28 19 25 State income sourcing 13 (15 ) — Other—net (1 ) (3 ) — Actual tax expense $ 531 $ 464 $ 370 Effective tax rate 39.5 % 35.4 % 37.9 % |
Summary of Income Tax Contingencies [Table Text Block] | The Company has identified its federal tax return and its state tax returns in Alaska, Oregon and California as “major” tax jurisdictions. A summary of the Company's jurisdictions and the periods that are subject to examination are as follows: Jurisdiction Period Federal 2006 to 2015 (a)(b) Alaska 2012 to 2015 California 2006 to 2015 (a) Oregon 2003 to 2015 (a) (a) The 2003, 2004, 2008-2010 and 2011 Oregon tax returns are subject to examination only to the extent of net operating loss carryforwards from those years that were utilized in 2010 and later years. The 2006-2012 Federal and California Virgin America tax returns are subject to examination only to the extent of net operating loss carryforwards from those years that were utilized in 2012 and later years. Changes in the liability for unrecognized tax benefits during 2016 , 2015 and 2014 are as follows (in millions): 2016 2015 2014 Balance at January 1, $ 22 $ 3 $ 2 Additions based on tax positions and settlements related to the current year 3 19 1 Additions from acquisitions 8 — — Balance at December 31, $ 33 $ 22 $ 3 |
EMPLOYEE BENEFIT PLANS (Tables)
EMPLOYEE BENEFIT PLANS (Tables) - Qualified Defined Benefit [Member] | 12 Months Ended |
Dec. 31, 2016 | |
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |
Schedule of Assumptions Used [Table Text Block] | Weighted average assumptions used to determine benefit obligations: 2016 2015 Discount rates (a) 4.29% to 4.50% 4.55% to 4.69% Rate of compensation increases (a) 2.12% to 2.59% 2.06% to 2.65% (a) Varies by plan and related work group. Weighted average assumptions used to determine net periodic benefit cost: 2016 2015 2014 Discount rates (a) 4.55% to 4.69% 4.20% 4.85% Expected return on plan assets (a) 6.00% to 6.50% 6.50% 6.75% Rate of compensation increases (a) 2.06% to 2.65% 2.85% to 3.91% 2.90% to 3.93% (a) Varies by plan and related work group. |
Schedule of Allocation of Plan Assets [Table Text Block] | The target and actual asset allocation of the funds in the qualified defined-benefit plans, by asset category, are as follows: Target 2016 2015 Asset category: Domestic equity securities 22% - 33% 30 % 28 % Non-U.S. equity securities 9% - 16% 12 % 12 % Fixed income securities 48% - 67% 53 % 55 % Real estate 0% - 8% 5 % 5 % Plan assets 100 % 100 % Plan asset by fund category (in millions): 2016 2015 Fair Value Hierarchy Fund type: U.S. equity market fund $ 545 $ 491 1 Non-U.S. equity fund 218 208 1 Credit bond index fund 992 953 1 Plan assets in common commingled trusts $ 1,755 $ 1,652 Real estate 91 85 (a) Total plan assets $ 1,846 $ 1,737 |
Schedule of Net Funded Status [Table Text Block] | The following table sets forth the status of the qualified defined-benefit pension plans (in millions): 2016 2015 Projected benefit obligation ("PBO") Beginning of year $ 1,898 $ 2,050 Service cost 37 41 Interest cost 73 84 Plan settlement — (62 ) Actuarial (gain) loss 104 (140 ) Benefits paid (69 ) (75 ) End of year $ 2,043 $ 1,898 Plan assets at fair value Beginning of year $ 1,737 $ 1,917 Actual return on plan assets 178 (43 ) Employer contributions — — Plan settlement — (62 ) Benefits paid (69 ) (75 ) End of year $ 1,846 $ 1,737 Funded status (unfunded) $ (197 ) $ (161 ) Percent funded 90 % 92 % |
Schedule of Amounts Recognized in Balance Sheet [Table Text Block] | The amounts recognized in the consolidated balance sheets (in millions): 2016 2015 Accrued benefit liability-long term $ 225 $ 173 Plan assets-long term (within Other noncurrent assets) (28 ) (12 ) Total liability recognized $ 197 $ 161 The amounts not yet reflected in net periodic benefit cost and included in AOCL (in millions): 2016 2015 Prior service credit $ (10 ) $ (11 ) Net loss 509 499 Amount recognized in AOCL (pretax) $ 499 $ 488 |
Schedule of Net Benefit Costs [Table Text Block] | Net pension expense for the qualified defined-benefit plans included the following components (in millions): 2016 2015 2014 Service cost $ 37 $ 41 $ 33 Interest cost 73 84 81 Expected return on assets (108 ) (122 ) (117 ) Amortization of prior service credit (1 ) (1 ) (1 ) Recognized actuarial loss 25 26 13 Settlement expense (special item) — 14 — Net pension expense $ 26 $ 42 $ 9 |
Schedule of Expected Benefit Payments [Table Text Block] | Future benefits expected to be paid over the next ten years under the qualified defined-benefit pension plans from the assets of those plans (in millions): Total 2017 $ 85 2018 93 2019 96 2020 109 2021 109 2022– 2026 652 |
COMMITMENTS AND CONTINGENCIES C
COMMITMENTS AND CONTINGENCIES COMMITMENTS AND CONTINGENCIES (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of Future Minimum Rental Payments for Operating Leases and Unrecorded Unconditional Purchase Obligtaions [Table Text Block] | Future minimum payments for commitments as of December 31, 2016 (in millions): Aircraft Leases Facility Leases Aircraft Purchase Commitments Capacity Purchase Agreements Aircraft Maintenance Deposits Aircraft Maintenance and Parts Management 2017 $ 302 $ 123 $ 926 $ 76 $ 59 $ 30 2018 316 73 848 80 61 32 2019 305 63 694 85 65 35 2020 279 57 354 90 68 37 2021 242 50 277 94 63 40 Thereafter 953 171 361 676 90 — Total $ 2,397 $ 537 $ 3,460 $ 1,101 $ 406 $ 174 |
SHAREHOLDER'S EQUITY (Tables)
SHAREHOLDER'S EQUITY (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Equity [Abstract] | |
Schedule of Treasury Stock by Class [Table Text Block] | Share repurchase activity (in millions, except shares): 2016 2015 2014 Shares Amount Shares Amount Shares Amount 2015 $1 billion Repurchase Program 2,594,809 $ 193 1,517,277 $ 120 — $ — 2014 $650 million Repurchase Program — — 5,691,051 385 5,497,427 265 2012 $250 million Repurchase Program — — — — 1,819,304 83 Total 2,594,809 $ 193 7,208,328 $ 505 7,316,731 $ 348 |
Schedule of Accumulated Other Comprehensive Income (Loss) [Table Text Block] | AOCL consisted of the following (in millions, net of tax): 2016 2015 Related to marketable securities $ (3 ) $ (3 ) Related to employee benefit plans (299 ) (288 ) Related to interest rate derivatives (3 ) (12 ) $ (305 ) $ (303 ) |
STOCK-BASED COMPENSATION PLANS
STOCK-BASED COMPENSATION PLANS (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Schedule of Compensation Cost for Share-based Payment Arrangements, Allocation of Share-based Compensation Costs by Plan [Table Text Block] | The table below summarizes the components of total stock-based compensation (in millions): 2016 2015 2014 Stock options $ 2 $ 2 $ 3 Stock awards 11 11 10 Deferred stock awards 1 1 1 Employee stock purchase plan 5 3 2 Stock-based compensation $ 19 $ 17 $ 16 Tax benefit related to stock-based compensation $ 7 $ 7 $ 6 |
Schedule of Unrecognized Compensation Cost, Nonvested Awards [Table Text Block] | Unrecognized stock-based compensation for non-vested options and awards and the weighted-average period the expense will be recognized (in millions): Amount Weighted-Average Period Stock options $ 2 1.1 Stock awards 21 0.9 Unrecognized stock-based compensation $ 23 0.9 |
Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions [Table Text Block] | The fair value of each option grant was estimated on the date of grant using the Black-Scholes option-pricing model with the following weighted-average assumptions used for grants: 2016 2015 2014 Expected volatility 51 % 53 % 65 % Expected term 6 years 6 years 6 years Risk-free interest rate 1.23 % 1.67 % 1.87 % Expected dividend yield 1.50 % 1.25 % 1.25 % Weighted-average grant date fair value per share $ 27.14 $ 28.71 $ 21.70 Estimated fair value of options granted (millions) $ 2 $ 3 $ 3 |
Schedule of Share-based Compensation, Stock Options, Activity [Table Text Block] | The tables below summarize stock option activity for the year ended December 31, 2016: Shares Weighted- Average Exercise Price Per Share Weighted- Average Contractual Life (Years) Aggregate Intrinsic Value (in millions) Outstanding, December 31, 2015 540,345 $ 31.58 6.3 $ 26 Granted 79,340 65.63 Exercised (158,758 ) 23.62 Canceled — — Forfeited or expired (7,253 ) 49.66 Outstanding, December 31, 2016 453,674 $ 40.02 6.2 $ 22 Exercisable, December 31, 2016 199,676 $ 25.35 5.1 $ 13 Vested or expected to vest, December 31, 2016 453,435 $ 40.03 6.2 $ 22 (in millions) 2016 2015 2014 Intrinsic value of option exercises $ 9 $ 14 $ 20 Cash received from stock option exercises 3 4 6 Tax benefit related to stock option exercises 3 5 7 Fair value of options vested 3 3 2 |
Schedule of Share-based Compensation, Restricted Stock Units Award Activity [Table Text Block] | The following table summarizes information about outstanding stock awards: Number of Units Weighted-Average Grant Date Fair Value Weighted- Average Contractual Life (Years) Aggregate Intrinsic Value (in millions) Non-vested, December 31, 2015 470,715 $ 38.09 0.8 $ 38 Granted 374,863 63.53 Vested (366,319 ) 32.87 Forfeited (39,166 ) 40.35 Non-vested, December 31, 2016 440,093 $ 63.86 1.4 $ 39 |
OPERATING SEGMENT INFORMATION (
OPERATING SEGMENT INFORMATION (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Segment Reporting [Abstract] | |
Schedule of Segment Reporting Information, by Segment | operating segment information that follows (in millions) includes financial results for Virgin America for the period from December 14, 2016 to December 31, 2016 and the impact of purchase accounting as of December 14, 2016. Year Ended December 31, 2016 Mainline (a) Regional Horizon Consolidating & Other (b) Air Group Adjusted (c) Special Items (d) Consolidated Operating revenues Passenger Mainline $ 4,098 $ — $ — $ — $ 4,098 $ — $ 4,098 Regional — 908 — — 908 — 908 Total passenger revenues 4,098 908 — — 5,006 — 5,006 CPA revenues — — 424 (424 ) — — — Freight and mail 104 5 — (1 ) 108 — 108 Other-net 738 74 4 1 817 — 817 Total operating revenues 4,940 987 428 (424 ) 5,931 — 5,931 Operating expenses Operating expenses, excluding fuel 2,883 769 407 (425 ) 3,634 117 3,751 Fuel expense 719 125 — — 844 (13 ) 831 Total operating expenses 3,602 894 407 (425 ) 4,478 104 4,582 Nonoperating income (expense) Interest income 26 — 1 — 27 — 27 Interest expense (42 ) — (9 ) (4 ) (55 ) — (55 ) Other 19 — 1 4 24 — 24 3 — (7 ) — (4 ) — (4 ) Income (loss) before income tax $ 1,341 $ 93 $ 14 $ 1 $ 1,449 $ (104 ) $ 1,345 Year Ended December 31, 2015 Mainline Regional Horizon Consolidating & Other (b) Air Group Adjusted (c) Special Items (d) Consolidated Operating revenues Passenger Mainline $ 3,939 $ — $ — $ — $ 3,939 $ — $ 3,939 Regional — 854 — — 854 — 854 Total passenger revenues 3,939 854 — — 4,793 — 4,793 CPA revenues — — 408 (408 ) — — — Freight and mail 103 5 — — 108 — 108 Other-net 621 72 4 — 697 — 697 Total operating revenues 4,663 931 412 (408 ) 5,598 — 5,598 Operating expenses Operating expenses, excluding fuel 2,653 695 375 (409 ) 3,314 32 3,346 Fuel expense 823 131 — — 954 — 954 Total operating expenses 3,476 826 375 (409 ) 4,268 32 4,300 Nonoperating income (expense) Interest income 19 — — 2 21 — 21 Interest expense (28 ) — (10 ) (4 ) (42 ) — (42 ) Other 28 — 1 6 35 — 35 19 — (9 ) 4 14 — 14 Income (loss) before income tax $ 1,206 $ 105 $ 28 $ 5 $ 1,344 $ (32 ) $ 1,312 Year Ended December 31, 2014 Mainline Regional Horizon Consolidating & Other (b) Air Group Adjusted (c) Special Items (d) Consolidated Operating revenues Passenger Mainline $ 3,774 $ — $ — $ — $ 3,774 $ — $ 3,774 Regional — 805 — — 805 — 805 Total passenger revenues 3,774 805 — — 4,579 — 4,579 CPA revenues — — 371 (371 ) — — — Freight and mail 109 5 — — 114 — 114 Other-net 592 78 5 — 675 — 675 Total operating revenues 4,475 888 376 (371 ) 5,368 — 5,368 Operating expenses Operating expenses, excluding fuel 2,417 623 349 (371 ) 3,018 (30 ) 2,988 Fuel expense 1,251 190 — — 1,441 (23 ) 1,418 Total operating expenses 3,668 813 349 (371 ) 4,459 (53 ) 4,406 Nonoperating income (expense) Interest income 20 — — 1 21 — 21 Interest expense (32 ) — (12 ) (4 ) (48 ) — (48 ) Other 39 (1 ) 2 — 40 — 40 27 (1 ) (10 ) (3 ) 13 — 13 Income (loss) before income tax $ 834 $ 74 $ 17 $ (3 ) $ 922 $ 53 $ 975 (a) Includes Alaska activity for the full period and Virgin America financial results for the period December 14, 2016 through December 31, 2016, and the impacts associated with purchase accounting as of December 14, 2016. (b) Includes consolidating entries, Parent Company and other immaterial business units. (c) The adjusted column excludes certain charges described in (d) and represents the financial information that is reviewed by management to assess performance of operations and determine capital allocations. (d) Includes accounting adjustments related to mark-to-market fuel hedge accounting charges (all years), merger-related costs (2016), pension settlement charge (2015), litigation-related matter (2015), non-cash curtailment gain (2014) and a gain related to a legal matter (2014). 2016 2015 2014 Depreciation and amortization: Mainline $ 296 $ 268 $ 243 Horizon 67 52 51 Consolidated $ 363 $ 320 $ 294 Capital expenditures: Mainline $ 608 $ 821 $ 659 Horizon 70 10 35 Consolidated $ 678 $ 831 $ 694 Total assets at end of period: Mainline $ 15,260 $ 8,127 Horizon 690 717 Consolidating & Other (5,988 ) (2,314 ) Consolidated $ 9,962 $ 6,530 |
GENERAL AND SUMMARY OF SIGNIF34
GENERAL AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CASH AND CASH EQUIVALENTS (Details) - USD ($) $ in Millions | Dec. 31, 2016 | Dec. 31, 2015 |
Accounting Policies [Abstract] | ||
Negative cash balance | $ 15 | $ 12 |
GENERAL AND SUMMARY OF SIGNIF35
GENERAL AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - INVENTORIES AND SUPPLIES - NET (Details) - USD ($) $ in Millions | Dec. 31, 2016 | Dec. 31, 2015 |
Accounting Policies [Abstract] | ||
Allowance for all non-surplus expendable inventories | $ 36 | $ 37 |
Fuel inventory | $ 16 | $ 14 |
GENERAL AND SUMMARY OF SIGNIF36
GENERAL AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - PROPERTY, EQUIPMENT AND DEPRECIATION (Details) - USD ($) $ in Millions | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2016 | Dec. 31, 2016 | Dec. 31, 2015 | |
Property, Plant and Equipment [Line Items] | |||
Goodwill | $ 1,934 | $ 0 | |
Buildings [Member] | Maximum [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Estimated useful life | 30 years | ||
Buildings [Member] | Minimum [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Estimated useful life | 25 years | ||
Minor building and land improvements [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Estimated useful life | 10 years | ||
Computer hardware and software [Member] | Maximum [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Estimated useful life | 5 years | ||
Computer hardware and software [Member] | Minimum [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Estimated useful life | 3 years | ||
Other furniture and equipment [Member] | Maximum [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Estimated useful life | 10 years | ||
Other furniture and equipment [Member] | Minimum [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Estimated useful life | 5 years | ||
B737 | Aircraft [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Estimated useful life | 20 years | 25 years | |
B737 | Aircraft [Member] | Maximum [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Estimated useful life | 25 years | ||
B737 | Aircraft [Member] | Minimum [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Estimated useful life | 20 years | ||
Airbus [Member] | Aircraft [Member] | Maximum [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Estimated useful life | 25 years | ||
Airbus [Member] | Aircraft [Member] | Minimum [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Estimated useful life | 20 years | ||
Q400 [Member] | Aircraft [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Estimated useful life | 15 years | ||
Service Life [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Depreciation, decrease | $ 17 |
GENERAL AND SUMMARY OF SIGNIF37
GENERAL AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - REVENUE RECOGNITION (Details) - USD ($) $ in Millions | Dec. 31, 2016 | Dec. 31, 2015 |
Accounting Policies [Abstract] | ||
Travel credits for future travel | $ 62 | $ 42 |
GENERAL AND SUMMARY OF SIGNIF38
GENERAL AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - MILEAGE PLAN (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Mileage Plan [Line Items] | |||
Other accrued liabilities | $ 878 | $ 661 | |
Other liabilities | 417 | 362 | |
Deferred revenue | 640 | 431 | |
Deferred revenue from Mileage Plan awards issued but not yet flown | 43 | 37 | |
Passenger revenues | 5,006 | 4,793 | $ 4,579 |
Other-net revenues | 817 | 697 | 675 |
Total Operating Revenues | 5,931 | 5,598 | 5,368 |
Revenue From Mileage Plan [Member] | |||
Mileage Plan [Line Items] | |||
Passenger revenues | 293 | 267 | 246 |
Other-net revenues | 429 | 329 | 295 |
Total Operating Revenues | 722 | 596 | 541 |
Commission revenue | 329 | 280 | $ 261 |
Liabilities From Mileage Plan [Member] | |||
Mileage Plan [Line Items] | |||
Other accrued liabilities | 484 | 368 | |
Other liabilities | 21 | 19 | |
Deferred revenue | 638 | 427 | |
Liabilities | $ 1,143 | $ 814 |
GENERAL AND SUMMARY OF SIGNIF39
GENERAL AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - SELLING EXPENSES (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Accounting Policies [Abstract] | |||
Advertising expense | $ 61 | $ 55 | $ 49 |
GENERAL AND SUMMARY OF SIGNIF40
GENERAL AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES GENERAL AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - STOCK-BASED COMPENSATION (Details) | 12 Months Ended |
Dec. 31, 2016 | |
Employee stock purchase plan [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Share-based Compensation Arrangement by Share-based Payment Award, Discount from Market Price, Purchase Date | 15.00% |
ACQUISITION OF VIRGIN AMERICA41
ACQUISITION OF VIRGIN AMERICA, INC. (Details) $ in Millions | Dec. 15, 2016USD ($) | Dec. 14, 2016USD ($)departures | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) | |
Business Acquisition [Line Items] | ||||||
Number of Daily Departures | departures | 1,200 | |||||
Revenue | $ 5,931 | $ 5,598 | $ 5,368 | |||
Net Income | 814 | 848 | 605 | |||
Goodwill | 1,934 | 0 | ||||
Repayments of related party debt | $ 55 | |||||
Special items—merger-related costs and other | 117 | 32 | (30) | |||
Virgin America Inc. [Member] | ||||||
Business Acquisition [Line Items] | ||||||
Percentage of interests acquired | 100.00% | |||||
Revenue | 99 | |||||
Net Income | 15 | |||||
Goodwill | $ 1,934 | |||||
Intangible assets | 143 | |||||
Finite-lived intangible assets acquired | 54 | |||||
Special items—merger-related costs and other | 117 | |||||
Airport Gates [Member] | Virgin America Inc. [Member] | ||||||
Business Acquisition [Line Items] | ||||||
Finite-lived intangible assets acquired | $ 14 | |||||
Finite-Lived intangible asset, useful Life | 12 years | |||||
Customer Relationships [Member] | Virgin America Inc. [Member] | ||||||
Business Acquisition [Line Items] | ||||||
Finite-lived intangible assets acquired | $ 40 | |||||
Finite-Lived intangible asset, useful Life | 8 years | |||||
Airport Slots [Member] | Virgin America Inc. [Member] | ||||||
Business Acquisition [Line Items] | ||||||
Indefinite-lived intangible assets acquired | $ 89 | |||||
Special Charges [Member] | ||||||
Business Acquisition [Line Items] | ||||||
Revenue | [1] | $ 0 | $ 0 | $ 0 | ||
[1] | {F|ahBzfndlYmZpbGluZ3MtaHJkcmoLEgZYTUxEb2MiXlhCUkxEb2NHZW5JbmZvOjcwOTdhOTM1ODYyYTRmZDE4YWRlNzJjOWQ0M2Q0NzUyfFRleHRTZWxlY3Rpb246NjdDN0U5MTdDNkRFMEZFNjQ2OEEyQzQ3MzZDRDc3MTUM} |
ACQUISITION OF VIRGIN AMERICA42
ACQUISITION OF VIRGIN AMERICA, INC. Fair value of consideration transferred (Details) - Virgin America Inc. [Member] $ / shares in Units, shares in Thousands, $ in Millions | Dec. 14, 2016USD ($)$ / sharesshares |
Business Acquisition [Line Items] | |
Number of shares of Virgin America common stock issued and outstanding | shares | 44,645 |
Multiplied by cash consideration for each share of common stock per the merger agreement | $ / shares | $ 57 |
Cash consideration paid for common stock issued and outstanding | $ 2,545 |
Accelerated and vested equity awards attributable to pre-acquisition service | 51 |
Total Purchase Price | $ 2,596 |
ACQUISITION OF VIRGIN AMERICA43
ACQUISITION OF VIRGIN AMERICA, INC. Fair values of the assets acquired and the liabilities assumed (Details) - USD ($) $ in Millions | Dec. 31, 2016 | Dec. 14, 2016 | Dec. 31, 2015 |
Business Combination, Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Net [Abstract] | |||
Goodwill | $ 1,934 | $ 0 | |
Virgin America Inc. [Member] | |||
Business Combination, Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Net [Abstract] | |||
Cash and cash equivalents | $ 645 | ||
Receivables | 44 | ||
Prepaid expenses and other current assets | 16 | ||
Property and equipment | 560 | ||
Intangible assets | 143 | ||
Goodwill | 1,934 | ||
Other assets | 84 | ||
Total assets | 3,426 | ||
Accounts payable | 22 | ||
Accrued wages, vacation and payroll taxes | 51 | ||
Air traffic liabilities | 172 | ||
Other accrued liabilities | 196 | ||
Current portion of long-term debt | 125 | ||
Long-term debt, net of current portion | 360 | ||
Deferred income taxes | (304) | ||
Deferred revenue | 126 | ||
Other liabilities | 82 | ||
Total liabilities | 830 | ||
Total purchase price | $ 2,596 |
ACQUISITION OF VIRGIN AMERICA44
ACQUISITION OF VIRGIN AMERICA, INC. Pro forma impact of the acquisition (Details) - Virgin America Inc. [Member] - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Business Acquisition [Line Items] | ||
Revenue | $ 7,511 | $ 7,111 |
Net Income | $ 1,008 | $ 914 |
CASH, CASH EQUIVALENTS AND MA45
CASH, CASH EQUIVALENTS AND MARKETABLE SECURITIES (Details) - USD ($) $ in Millions | 12 Months Ended | |||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Cash and Cash Equivalents [Abstract] | ||||
Cash | $ 283 | $ 4 | ||
Money Market Funds, at Carrying Value | 45 | 69 | ||
Cash equivalents | 45 | 69 | ||
Cash and cash equivalents | 328 | 73 | $ 107 | $ 80 |
Available-for-sale Securities, Current [Abstract] | ||||
Marketable securities, Cost Basis | 1,257 | 1,260 | ||
Marketable securities, Unrealized Gains | 2 | 1 | ||
Marketable securities, Unrealized Losses | (7) | (6) | ||
Marketable securities, Fair Value | 1,252 | 1,255 | ||
Cash and marketables securities, Cost Basis | 1,585 | 1,333 | ||
Cash and marketable securities, Unrealized Gains | 2 | 1 | ||
Cash and marketable securities, Unrealized Losses | (7) | (6) | ||
Total cash and marketable securities | 1,580 | 1,328 | ||
Available-for-sale Securities, Activity [Abstract] | ||||
Proceeds from sales and maturities | 962 | 1,175 | 1,092 | |
Gross realized gains | 3 | 2 | 4 | |
Gross realized losses | (1) | (3) | $ (2) | |
U.S. government and agency securities | ||||
Available-for-sale Securities, Current [Abstract] | ||||
Marketable securities, Cost Basis | 290 | 254 | ||
Marketable securities, Unrealized Gains | 0 | 0 | ||
Marketable securities, Unrealized Losses | (3) | (1) | ||
Marketable securities, Fair Value | 287 | 253 | ||
Foreign government bonds | ||||
Available-for-sale Securities, Current [Abstract] | ||||
Marketable securities, Cost Basis | 36 | 31 | ||
Marketable securities, Unrealized Gains | 0 | 0 | ||
Marketable securities, Unrealized Losses | 0 | 0 | ||
Marketable securities, Fair Value | 36 | 31 | ||
Asset-backed securities | ||||
Available-for-sale Securities, Current [Abstract] | ||||
Marketable securities, Cost Basis | 138 | 130 | ||
Marketable securities, Unrealized Gains | 0 | 0 | ||
Marketable securities, Unrealized Losses | 0 | 0 | ||
Marketable securities, Fair Value | 138 | 130 | ||
Mortgage-backed securities | ||||
Available-for-sale Securities, Current [Abstract] | ||||
Marketable securities, Cost Basis | 89 | 117 | ||
Marketable securities, Unrealized Gains | 0 | 0 | ||
Marketable securities, Unrealized Losses | 0 | (1) | ||
Marketable securities, Fair Value | 89 | 116 | ||
Corporate notes and bonds | ||||
Available-for-sale Securities, Current [Abstract] | ||||
Marketable securities, Cost Basis | 693 | 711 | ||
Marketable securities, Unrealized Gains | 2 | 1 | ||
Marketable securities, Unrealized Losses | (4) | (4) | ||
Marketable securities, Fair Value | 691 | 708 | ||
Municipal securities | ||||
Available-for-sale Securities, Current [Abstract] | ||||
Marketable securities, Cost Basis | 11 | 17 | ||
Marketable securities, Unrealized Gains | 0 | 0 | ||
Marketable securities, Unrealized Losses | 0 | 0 | ||
Marketable securities, Fair Value | $ 11 | $ 17 |
CASH, CASH EQUIVALENTS AND MA46
CASH, CASH EQUIVALENTS AND MARKETABLE SECURITIES - MATURITIES (Details) - USD ($) $ in Millions | Dec. 31, 2016 | Dec. 31, 2015 |
Cost Basis [Abstract] | ||
Due in one year or less | $ 182 | |
Due after one year through five years | 1,070 | |
Due after five years through 10 years | 5 | |
Due after 10 years | 0 | |
Marketable securities, Cost Basis | 1,257 | $ 1,260 |
Fair Value [Abstract] | ||
Due in one year or less | 182 | |
Due after one year through five years | 1,065 | |
Due after five years through 10 years | 5 | |
Due after 10 years | 0 | |
Marketable securities, Fair Value | $ 1,252 | $ 1,255 |
DERIVATIVE INSTRUMENTS - BALANC
DERIVATIVE INSTRUMENTS - BALANCE SHEET CLASSIFICATION (Details) - USD ($) $ in Millions | Dec. 31, 2016 | Dec. 31, 2015 |
Derivatives, Fair Value [Line Items] | ||
Accumulated other comprehensive loss | $ (305) | $ (303) |
Fuel hedge contracts [Member] | Derivative Instruments Not Designated as Hedges [Member] | Fuel Hedge Contracts, Current [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Derivative Assets, Current | 17 | 2 |
Fuel hedge contracts [Member] | Derivative Instruments Not Designated as Hedges [Member] | Fuel Hedge Contracts, Noncurrent [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Derivative Assets, Noncurrent | 3 | 2 |
Interest rate swaps agreements [Member] | Derivative Instruments Designated as Hedges [Member] | Other Accrued Liabilities [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Derivative Liabilities, Current | (5) | (5) |
Interest rate swaps agreements [Member] | Derivative Instruments Designated as Hedges [Member] | Other Liabilities [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Derivative Liabilities, Noncurrent | 0 | (13) |
Interest rate swaps agreements [Member] | Derivative Instruments Designated as Hedges [Member] | Accumulated Other Comprehensive Loss [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Accumulated other comprehensive loss | $ 5 | $ 18 |
DERIVATIVE INSTRUMENTS - INCOME
DERIVATIVE INSTRUMENTS - INCOME STATEMENT (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Gains (losses) recognized in aircraft rent [Member] | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Loss expected to be reclassified | $ 4 | ||
Gains (losses) recognized in Interest Expense [Member] | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Loss expected to be reclassified | 1 | ||
Derivative Instruments Not Designated as Hedges [Member] | Fuel hedge contracts [Member] | Gains (losses) recognized in aircraft fuel expense [Member] | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Losses recognized in income | (3) | $ (19) | $ (18) |
Cash Flow Hedging [Member] | Derivative Instruments Designated as Hedges [Member] | Interest rate swaps agreements [Member] | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Losses in accumulated other comprehensive loss | 8 | (5) | (8) |
Cash Flow Hedging [Member] | Derivative Instruments Designated as Hedges [Member] | Interest rate swaps agreements [Member] | Gains (losses) recognized in aircraft rent [Member] | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Losses recognized in income | $ (6) | $ (6) | $ (6) |
DERIVATIVE INSTRUMENTS - FAIR V
DERIVATIVE INSTRUMENTS - FAIR VALUE OF HEDGE POSITIONS (Details) gallons in Millions, $ in Millions | 12 Months Ended | ||
Dec. 31, 2016USD ($)gallonsaircraftagreement | Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) | |
Derivative [Line Items] | |||
Net cash received (paid) to for new positions and settlements | $ (19) | $ (17) | $ (9) |
B737-800 [Member] | |||
Derivative [Line Items] | |||
Capital Leased Assets, Number of B737-800 Aircraft | aircraft | 6 | ||
Not Designated as Hedging Instrument [Member] | Fuel hedge contracts [Member] | |||
Derivative [Line Items] | |||
Fuel hedge contracts outstanding (in gallons) | gallons | 394 | ||
Secured Debt [Member] | Interest rate swaps agreements [Member] | |||
Derivative [Line Items] | |||
Number of interest rate swap agreements | agreement | 2 | ||
Derivative, Notional Amount | $ 295 |
FAIR VALUE MEASUREMENTS - FAIR
FAIR VALUE MEASUREMENTS - FAIR VALUE OF ASSETS AND LIABILITIES (Details) - USD ($) $ in Millions | Dec. 31, 2016 | Dec. 31, 2015 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale Securities, Current | $ 1,252 | $ 1,255 |
Fuel hedge contracts [Member] | Recurring [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative instruments, assets | 20 | 4 |
Fuel hedge contracts [Member] | Level 1 [Member] | Recurring [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] | Recurring [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative instruments, assets | 20 | 4 |
Interest rate swaps agreements [Member] | Recurring [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative instruments, liabilities | (5) | (18) |
Interest rate swaps agreements [Member] | Level 1 [Member] | Recurring [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] | Recurring [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative instruments, liabilities | (5) | (18) |
U.S. government and agency securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale Securities, Current | 287 | 253 |
U.S. government and agency securities | Recurring [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Marketable securities | 287 | 253 |
U.S. government and agency securities | Level 1 [Member] | Recurring [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale Securities, Current | 287 | |
Marketable securities | 253 | |
U.S. government and agency securities | Level 2 [Member] | Recurring [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Marketable securities | 0 | 0 |
Foreign government bonds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale Securities, Current | 36 | 31 |
Foreign government bonds | Recurring [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Marketable securities | 36 | 31 |
Foreign government bonds | Level 1 [Member] | Recurring [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Marketable securities | 0 | 0 |
Foreign government bonds | Level 2 [Member] | Recurring [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Marketable securities | 36 | 31 |
Asset-backed securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale Securities, Current | 138 | 130 |
Asset-backed securities | Recurring [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Marketable securities | 138 | 130 |
Asset-backed securities | Level 1 [Member] | Recurring [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Marketable securities | 0 | 0 |
Asset-backed securities | Level 2 [Member] | Recurring [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Marketable securities | 138 | 130 |
Mortgage-backed securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale Securities, Current | 89 | 116 |
Mortgage-backed securities | Recurring [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Marketable securities | 89 | 116 |
Mortgage-backed securities | Level 1 [Member] | Recurring [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Marketable securities | 0 | 0 |
Mortgage-backed securities | Level 2 [Member] | Recurring [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Marketable securities | 89 | 116 |
Corporate notes and bonds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale Securities, Current | 691 | 708 |
Corporate notes and bonds | Recurring [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Marketable securities | 691 | 708 |
Corporate notes and bonds | Level 1 [Member] | Recurring [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Marketable securities | 0 | 0 |
Corporate notes and bonds | Level 2 [Member] | Recurring [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Marketable securities | 691 | 708 |
Municipal securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale Securities, Current | 11 | 17 |
Municipal securities | Recurring [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Marketable securities | 11 | 17 |
Municipal securities | Level 1 [Member] | Recurring [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Marketable securities | 0 | 0 |
Municipal securities | Level 2 [Member] | Recurring [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Marketable securities | $ 11 | $ 17 |
FAIR VALUE MEASUREMENTS - LONG-
FAIR VALUE MEASUREMENTS - LONG-TERM DEBT (Details) - USD ($) $ in Millions | Dec. 31, 2016 | Dec. 31, 2015 |
Carrying Amount [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Long-term debt | $ 1,179 | $ 520 |
Fair Value [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Long-term debt | $ 1,199 | $ 557 |
LONG-TERM DEBT - SCHEDULE OF LO
LONG-TERM DEBT - SCHEDULE OF LONG-TERM DEBT (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Debt Instrument [Line Items] | |||
Long-term Debt | $ 2,964 | $ 683 | |
Less debt issuance costs | (18) | (3) | |
Less current portion | 319 | 114 | |
Long-term debt, net of current portion | $ 2,645 | $ 569 | |
Weighted-average fixed-interest rate | 4.40% | 5.70% | |
Weighted-average variable-interest rate | 2.40% | 1.80% | |
Proceeds from issuance of long-term debt, net of issuance costs | $ 2,044 | $ 0 | $ 51 |
Long-term debt payments | 249 | 116 | $ 119 |
Long-term Debt, Fiscal Year Maturity [Abstract] | |||
2,017 | 321 | ||
2,018 | 351 | ||
2,019 | 424 | ||
2,020 | 451 | ||
2,021 | 424 | ||
Thereafter | 1,007 | ||
Long-term Debt | 2,978 | ||
Fixed-rate notes payable due through 2028 | |||
Debt Instrument [Line Items] | |||
Long-term Debt | 1,179 | 520 | |
Variable-rate notes payable due through 2028 | |||
Debt Instrument [Line Items] | |||
Long-term Debt | $ 1,803 | $ 166 |
LONG-TERM DEBT LONG-TERM DEBT -
LONG-TERM DEBT LONG-TERM DEBT - SECURED DEBT (Details) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016USD ($)aircraft | Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) | |
Debt Instrument [Line Items] | |||
Debt instrument, increase | $ 2,300 | ||
Secured debt, number of aircrafts securing debt financing | aircraft | 56 | ||
Long-term debt payments | $ 249 | $ 116 | $ 119 |
Repayments of debt | 12 | ||
Secured Debt [Member] | |||
Debt Instrument [Line Items] | |||
Proceeds from issuance of secured debt | 2,000 | ||
Secured Debt [Member] | Secured Debt, Aircraft Collateral [Member] | |||
Debt Instrument [Line Items] | |||
Proceeds from issuance of secured debt | 1,600 | ||
Secured Debt [Member] | Secured Debt, Aircraft Purchase Agreements [Member] | |||
Debt Instrument [Line Items] | |||
Proceeds from issuance of secured debt | $ 400 | ||
Boeing, 737-900ER [Member] | |||
Debt Instrument [Line Items] | |||
Secured debt, number of aircrafts securing debt financing | aircraft | 37 | ||
B737-800 [Member] | |||
Debt Instrument [Line Items] | |||
Secured debt, number of aircrafts securing debt financing | aircraft | 19 | ||
Virgin America Inc. [Member] | |||
Debt Instrument [Line Items] | |||
Long-term debt payments | $ 95 |
LONG-TERM DEBT - LINE OF CREDIT
LONG-TERM DEBT - LINE OF CREDIT (Details) | 12 Months Ended |
Dec. 31, 2016USD ($)aircraftcredit_facility | |
Line of Credit Facility [Line Items] | |
Number of credit facilities | credit_facility | 3 |
Number of credit facilities, no borrowing | credit_facility | 2 |
Credit Facilities 1 and 2 [Member] | |
Line of Credit Facility [Line Items] | |
Number of credit facilities | credit_facility | 2 |
Credit Facility 1 [Member] | |
Line of Credit Facility [Line Items] | |
Line of credit facility, asset restrictions, unrestricted cash and marketable securities | $ | $ 500,000,000 |
Credit Facility 1 [Member] | Secured by aircraft [Member] | |
Line of Credit Facility [Line Items] | |
Line of credit facility, borrowing capacity | $ | $ 100,000,000 |
Number of credit facilities | credit_facility | 1 |
Credit Facility 2 [Member] | Secured by other [Member] | |
Line of Credit Facility [Line Items] | |
Line of credit facility, borrowing capacity | $ | $ 100,000,000 |
Credit Facility 3 [Member] | |
Line of Credit Facility [Line Items] | |
Line of credit facility, borrowing capacity | $ | $ 52,000,000 |
Number of aircrafts used as collateral | aircraft | 2 |
Credit Facility 3 [Member] | Secured by aircraft [Member] | |
Line of Credit Facility [Line Items] | |
Number of credit facilities | credit_facility | 1 |
Secured Debt [Member] | Credit Facility 2 [Member] | |
Line of Credit Facility [Line Items] | |
Line of credit facility, borrowing capacity | $ | $ 100,000,000 |
INCOME TAXES - DEFERRED TAX ASS
INCOME TAXES - DEFERRED TAX ASSETS AND LIABILITIES (Details) - USD ($) $ in Millions | Dec. 31, 2016 | Dec. 31, 2015 |
Income Tax Disclosure [Abstract] | ||
Excess of tax over book depreciation | $ 1,282 | $ 1,110 |
Deferred Tax Liabilities, Intangible Assets | 39 | 0 |
Other—net | 26 | 23 |
Gross deferred tax liabilities | 1,347 | 1,133 |
Mileage Plan | (310) | (208) |
Inventory obsolescence | (23) | (22) |
Deferred gains | (8) | (8) |
Employee benefits | (196) | (167) |
Fuel hedge contracts | 0 | (5) |
Acquired net operating losses | (289) | 0 |
Other—net | (62) | (41) |
Gross deferred tax assets | (888) | (451) |
Valuation allowance | 4 | 0 |
Net deferred tax liabilities | 463 | $ 682 |
Federal [Member] | ||
Operating Loss Carryforwards [Line Items] | ||
Net operating loss | 773 | |
State [Member] | ||
Operating Loss Carryforwards [Line Items] | ||
Net operating loss | $ 344 |
INCOME TAXES - COMPONENTS OF TA
INCOME TAXES - COMPONENTS OF TAX EXPENSE (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Current tax expense (benefit): | |||
Federal | $ 392 | $ 397 | $ 229 |
State | 48 | 30 | 27 |
Total current | 440 | 427 | 256 |
Deferred tax expense: | |||
Federal | 77 | 60 | 103 |
State | 14 | (23) | 11 |
Total deferred | 91 | 37 | 114 |
Total tax expense related to income | $ 531 | $ 464 | $ 370 |
INCOME TAXES - EFFECTIVE INCOME
INCOME TAXES - EFFECTIVE INCOME TAX RECONCILIATION (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Business Acquisition [Line Items] | |||
U.S. federal tax rate | 35.00% | 35.00% | 35.00% |
Income before income tax | $ 1,345 | $ 1,312 | $ 975 |
Expected tax expense | 471 | 459 | 341 |
Nondeductible expenses | 20 | 4 | 4 |
State income taxes | 28 | 19 | 25 |
State income sourcing | 13 | (15) | 0 |
Other—net | (1) | (3) | 0 |
Total tax expense related to income | $ 531 | $ 464 | $ 370 |
Effective tax rate | 39.50% | 35.40% | 37.90% |
Special tax expense (benefit) | $ 17 | $ (26) | |
Additions based on tax positions and settlements related to the current year | 3 | $ 19 | $ 1 |
Virgin America Inc. [Member] | |||
Business Acquisition [Line Items] | |||
Nondeductible expenses | $ 39 |
INCOME TAXES INCOME TAXES - UNC
INCOME TAXES INCOME TAXES - UNCERTAIN TAX POSITIONS (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Income Tax Disclosure [Abstract] | |||
Beginning balance | $ 22 | $ 3 | $ 2 |
Additions based on tax positions and settlements related to the current year | 3 | 19 | 1 |
Additions from acquisitions | 8 | 0 | 0 |
Ending balance | $ 33 | $ 22 | $ 3 |
EMPLOYEE BENEFIT PLANS EMPLOYEE
EMPLOYEE BENEFIT PLANS EMPLOYEE BENEFIT PLANS - ADDITIONAL INFORMATION (Details) - plan | 1 Months Ended | 12 Months Ended |
Dec. 31, 2016 | Dec. 31, 2016 | |
Business Acquisition [Line Items] | ||
Number of defined benefit plans | 4 | |
Number of defined contribution plans | 5 | |
Virgin America Inc. [Member] | ||
Business Acquisition [Line Items] | ||
Number of defined contribution plans | 6 |
EMPLOYEE BENEFIT PLANS - ASSUMP
EMPLOYEE BENEFIT PLANS - ASSUMPTIONS (Details) - Qualified Defined Benefit [Member] | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Defined Benefit Plan, Weighted Average Assumptions Used in Calculating Net Periodic Benefit Cost [Abstract] | |||
Net period benefit costs, Weighted-average discount rate | 4.20% | 4.85% | |
Net period benefit costs, Weighted-average expected return on assets | 6.50% | 6.75% | |
Minimum [Member] | |||
Defined Benefit Plan, Weighted Average Assumptions Used in Calculating Benefit Obligation [Abstract] | |||
Benefit obligations, Weighted-average discount rate | 4.29% | 4.55% | |
Benefit obligations, Rate of compensation increase | 2.12% | 2.06% | |
Defined Benefit Plan, Weighted Average Assumptions Used in Calculating Net Periodic Benefit Cost [Abstract] | |||
Net period benefit costs, Weighted-average discount rate | 4.55% | ||
Net period benefit costs, Weighted-average expected return on assets | 6.00% | ||
Net period benefit costs, Rate of compensation increase | 2.06% | 2.85% | 2.90% |
Maximum [Member] | |||
Defined Benefit Plan, Weighted Average Assumptions Used in Calculating Benefit Obligation [Abstract] | |||
Benefit obligations, Weighted-average discount rate | 4.50% | 4.69% | |
Benefit obligations, Rate of compensation increase | 2.59% | 2.65% | |
Defined Benefit Plan, Weighted Average Assumptions Used in Calculating Net Periodic Benefit Cost [Abstract] | |||
Net period benefit costs, Weighted-average discount rate | 4.69% | ||
Net period benefit costs, Weighted-average expected return on assets | 6.50% | ||
Net period benefit costs, Rate of compensation increase | 2.65% | 3.91% | 3.93% |
EMPLOYEE BENEFIT PLANS - PLAN A
EMPLOYEE BENEFIT PLANS - PLAN ASSETS (Details) - Qualified Defined Benefit [Member] - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Defined Benefit Plan Disclosure [Line Items] | |||
Plan asset allocations | 100.00% | 100.00% | |
Defined Benefit Plan, Assets, Target Allocations [Abstract] | |||
Plan Assets | $ 1,846 | $ 1,737 | $ 1,917 |
Level 2 [Member] | |||
Defined Benefit Plan, Assets, Target Allocations [Abstract] | |||
Plan Assets | $ 1,755 | $ 1,652 | |
Equity funds [Member] | U.S. | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Plan asset allocations | 30.00% | 28.00% | |
Defined Benefit Plan, Assets, Target Allocations [Abstract] | |||
Equities, Range Minimum | 22.00% | ||
Equities, Range Maximum | 33.00% | ||
Equity funds [Member] | U.S. | Level 2 [Member] | |||
Defined Benefit Plan, Assets, Target Allocations [Abstract] | |||
Plan Assets | $ 545 | $ 491 | |
Equity funds [Member] | Non-U.S. [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Plan asset allocations | 12.00% | 12.00% | |
Defined Benefit Plan, Assets, Target Allocations [Abstract] | |||
Equities, Range Minimum | 9.00% | ||
Equities, Range Maximum | 16.00% | ||
Equity funds [Member] | Non-U.S. [Member] | Level 2 [Member] | |||
Defined Benefit Plan, Assets, Target Allocations [Abstract] | |||
Plan Assets | $ 218 | $ 208 | |
Credit bond index fund [Member] | Level 2 [Member] | |||
Defined Benefit Plan, Assets, Target Allocations [Abstract] | |||
Plan Assets | $ 992 | $ 953 | |
Fixed Income Funds [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Plan asset allocations | 53.00% | 55.00% | |
Defined Benefit Plan, Assets, Target Allocations [Abstract] | |||
Equities, Range Minimum | 48.00% | ||
Equities, Range Maximum | 67.00% | ||
Real Estate [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Plan asset allocations | 5.00% | 5.00% | |
Defined Benefit Plan, Assets, Target Allocations [Abstract] | |||
Equities, Range Minimum | 0.00% | ||
Equities, Range Maximum | 8.00% | ||
Real Estate [Member] | Level 3 [Member] | |||
Defined Benefit Plan, Assets, Target Allocations [Abstract] | |||
Plan Assets | $ 91 | $ 85 |
EMPLOYEE BENEFIT PLANS - FUNDED
EMPLOYEE BENEFIT PLANS - FUNDED STATUS (Details) - Qualified Defined Benefit [Member] - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Benefit obligation | |||
Beginning of year | $ 1,898 | $ 2,050 | |
Service cost | 37 | 41 | $ 33 |
Interest cost | 73 | 84 | 81 |
Plan settlement | 0 | (62) | |
Actuarial (gain) loss | 104 | (140) | |
Benefits paid | (69) | (75) | |
End of year | 2,043 | 1,898 | 2,050 |
Plan assets at fair value | |||
Beginning of year | 1,737 | 1,917 | |
Actual return on plan assets | 178 | (43) | |
Employer contributions | 0 | 0 | |
Plan settlement | 0 | (62) | |
Benefits paid | (69) | (75) | |
End of year | 1,846 | 1,737 | $ 1,917 |
Funded status (unfunded) | $ (197) | $ (161) | |
Percent funded | 90.00% | 92.00% | |
Accumulated benefit obligation | $ 1,900 | $ 1,800 |
EMPLOYEE BENEFIT PLANS - AMOUNT
EMPLOYEE BENEFIT PLANS - AMOUNTS RECOGNIZED IN CONSOLIDATED BALANCE SHEETS (Details) - USD ($) $ in Millions | Dec. 31, 2016 | Dec. 31, 2015 |
Pension and Other Postretirement Defined Benefit Plans, Liabilities [Abstract] | ||
Accrued benefit liability-long term | $ 331 | $ 270 |
Qualified Defined Benefit [Member] | ||
Pension and Other Postretirement Defined Benefit Plans, Liabilities [Abstract] | ||
Accrued benefit liability-long term | 225 | 173 |
Plan assets-long term (within Other noncurrent assets) | (28) | (12) |
Total liability recognized | 197 | 161 |
Pension and Other Postretirement Benefit Plans, Accumulated Other Comprehensive Income (Loss), before Tax [Abstract] | ||
Prior service credit | (10) | (11) |
Net loss | 509 | 499 |
Amount recognized in AOCL (pretax) | $ 499 | $ 488 |
EMPLOYEE BENEFIT PLANS - EXPECT
EMPLOYEE BENEFIT PLANS - EXPECTED AMORTIZATION FROM AOCI (Details) - Qualified Defined Benefit [Member] $ in Millions | 12 Months Ended |
Dec. 31, 2016USD ($) | |
Defined Benefit Plan Disclosure [Line Items] | |
Prior service credit | $ 1 |
Net loss | $ 26 |
EMPLOYEE BENEFIT PLANS - NET PE
EMPLOYEE BENEFIT PLANS - NET PENSION EXPENSE (Details) - Qualified Defined Benefit [Member] - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Defined Benefit Plan, Net Periodic Benefit Cost [Abstract] | |||
Service cost | $ 37 | $ 41 | $ 33 |
Interest cost | 73 | 84 | 81 |
Expected return on assets | (108) | (122) | (117) |
Amortization of prior service cost | (1) | (1) | (1) |
Recognized actuarial loss | 25 | 26 | 13 |
Settlement expense (special item) | 0 | 14 | 0 |
Net pension expense | 26 | 42 | $ 9 |
Plan settlement | $ 0 | $ 62 |
EMPLOYEE BENEFIT PLANS - FUTURE
EMPLOYEE BENEFIT PLANS - FUTURE BENEFITS EXPECTED TO BE PAID (Details) - Qualified Defined Benefit [Member] $ in Millions | Dec. 31, 2016USD ($) |
Defined Benefit Plan Disclosure [Line Items] | |
2,017 | $ 85 |
2,018 | 93 |
2,019 | 96 |
2,020 | 109 |
2,021 | 109 |
2022– 2026 | $ 652 |
EMPLOYEE BENEFIT PLANS EMPLOY67
EMPLOYEE BENEFIT PLANS EMPLOYEE BENEFIT PLANS - POSTRETIREMENT MEDICAL BENEFITS (Details) - Postretirement Medical Benefits [Member] - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||
Benefit obligation | $ 76 | $ 64 |
Recognized net gain (loss) due to curtailments | 25 | |
Recognized net gain (loss) due to curtailments, sick leave subsidy | 5 | |
Recognized net gain (loss) due to curtailments, special items | $ 20 |
EMPLOYEE BENEFIT PLANS - DEFINE
EMPLOYEE BENEFIT PLANS - DEFINED CONTRIBUTION PLANS (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Compensation and Retirement Disclosure [Abstract] | |||
Total expense for the defined-contribution plans | $ 67 | $ 60 | $ 54 |
EMPLOYEE BENEFIT PLANS - PILOT
EMPLOYEE BENEFIT PLANS - PILOT LONG-TERM DISABILITY BENEFITS (Details) - Postretirement Health Coverage [Member] - USD ($) $ in Millions | Dec. 31, 2016 | Dec. 31, 2015 |
Defined Benefit Plan Disclosure [Line Items] | ||
Total liability net of a prefunded trust account | $ 25 | $ 19 |
Prefunded trust account | $ 3 | $ 2 |
EMPLOYEE BENEFIT PLANS - EMPLOY
EMPLOYEE BENEFIT PLANS - EMPLOYEE INCENTIVE-PAY PLANS (Details) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016USD ($)$ / Quarter | Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) | |
Defined Benefit Plan Disclosure [Line Items] | |||
Variable incentive pay | $ | $ 127 | $ 120 | $ 116 |
Operational Performance Rewards Program entitles all Air Group employees to maximum quarterly payouts (in dollars per quarter) | $ / Quarter | 300 |
COMMITMENTS AND CONTINGENCIES71
COMMITMENTS AND CONTINGENCIES COMMITMENTS AND CONTINGENCIES (Details) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016USD ($)aircraftcarriers | Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) | |
Unrecorded Unconditional Purchase Obligation, Fiscal Year Maturity [Abstract] | |||
Rent expense | $ 315 | $ 295 | $ 288 |
Capacity purchase arrangements, Carriers | carriers | 3 | ||
Horizon [Member] | |||
Unrecorded Unconditional Purchase Obligation, Fiscal Year Maturity [Abstract] | |||
Capacity purchase arrangements, Percent | 100.00% | ||
Aircraft Commitments [Member] | |||
Unrecorded Unconditional Purchase Obligation, Fiscal Year Maturity [Abstract] | |||
2,017 | $ 926 | ||
2,018 | 848 | ||
2,019 | 694 | ||
2,020 | 354 | ||
2,021 | 277 | ||
Thereafter | 361 | ||
Total | 3,460 | ||
Capacity Purchase Agreements[Member] | |||
Unrecorded Unconditional Purchase Obligation, Fiscal Year Maturity [Abstract] | |||
2,017 | 76 | ||
2,018 | 80 | ||
2,019 | 85 | ||
2,020 | 90 | ||
2,021 | 94 | ||
Thereafter | 676 | ||
Total | 1,101 | ||
Aircraft Leases [Member] | |||
Operating Leases, Future Minimum Payments Due, Fiscal Year Maturity [Abstract] | |||
2,017 | 302 | ||
2,018 | 316 | ||
2,019 | 305 | ||
2,020 | 279 | ||
2,021 | 242 | ||
Thereafter | 953 | ||
Total | 2,397 | ||
Facility Leases [Member] | |||
Operating Leases, Future Minimum Payments Due, Fiscal Year Maturity [Abstract] | |||
2,017 | 123 | ||
2,018 | 73 | ||
2,019 | 63 | ||
2,020 | 57 | ||
2,021 | 50 | ||
Thereafter | 171 | ||
Total | $ 537 | ||
B-737 [Member] | |||
Unrecorded Unconditional Purchase Obligation, Fiscal Year Maturity [Abstract] | |||
Commited to purchase (in aircraft) | aircraft | 54 | ||
Option to purchase additional (in aircraft) | aircraft | 41 | ||
A-320-Neo [Member] | |||
Unrecorded Unconditional Purchase Obligation, Fiscal Year Maturity [Abstract] | |||
Option to purchase additional (in aircraft) | aircraft | 30 | ||
B737-900ER [Member] | |||
Unrecorded Unconditional Purchase Obligation, Fiscal Year Maturity [Abstract] | |||
Commited to purchase (in aircraft) | aircraft | 22 | ||
B737 MAX [Member] | |||
Unrecorded Unconditional Purchase Obligation, Fiscal Year Maturity [Abstract] | |||
Commited to purchase (in aircraft) | aircraft | 32 | ||
Q400 [Member] | |||
Unrecorded Unconditional Purchase Obligation, Fiscal Year Maturity [Abstract] | |||
Commited to purchase (in aircraft) | aircraft | 33 | ||
E-175 [Domain] | |||
Unrecorded Unconditional Purchase Obligation, Fiscal Year Maturity [Abstract] | |||
Option to purchase additional (in aircraft) | aircraft | 30 | ||
Property Subject to Operating Lease [Member] | B-737 [Member] | |||
Unrecorded Unconditional Purchase Obligation, Fiscal Year Maturity [Abstract] | |||
Operating leases, number of leased assets (in aircraft) | aircraft | 17 | ||
Property Subject to Operating Lease [Member] | Q400 [Member] | |||
Unrecorded Unconditional Purchase Obligation, Fiscal Year Maturity [Abstract] | |||
Operating leases, number of leased assets (in aircraft) | aircraft | 15 | ||
Property Subject to Operating Lease [Member] | Airbus [Member] | |||
Unrecorded Unconditional Purchase Obligation, Fiscal Year Maturity [Abstract] | |||
Operating leases, number of leased assets (in aircraft) | aircraft | 53 | ||
Property Subject to Operating Lease [Member] | E-175 [Domain] | |||
Unrecorded Unconditional Purchase Obligation, Fiscal Year Maturity [Abstract] | |||
Operating leases, number of leased assets (in aircraft) | aircraft | 15 | ||
Property Available for Operating Lease [Member] | A321neo [Member] | |||
Unrecorded Unconditional Purchase Obligation, Fiscal Year Maturity [Abstract] | |||
Property Subject to or Available for Operating Lease, Number of Optional Additional Units | aircraft | 10 | ||
Capacity Purchase Agreement with SkyWest [Member] | E175 [Member] | |||
Unrecorded Unconditional Purchase Obligation, Fiscal Year Maturity [Abstract] | |||
Property Subject to or Available for Operating Lease, Number of Optional Additional Units | aircraft | 8 | ||
Capacity Purchase Agreement with SkyWest [Member] | Property Available for Operating Lease [Member] | E-175 [Domain] | |||
Unrecorded Unconditional Purchase Obligation, Fiscal Year Maturity [Abstract] | |||
Property Subject to or Available for Operating Lease, Number of Optional Additional Units | aircraft | 5 | ||
Aircraft Maintenance Deposits [Member] | |||
Unrecorded Unconditional Purchase Obligation, Fiscal Year Maturity [Abstract] | |||
Other Commitment, Due after Fifth Year | $ 90 | ||
Other Commitment, Due in Fifth Year | 63 | ||
Other Commitment, Due in Fourth Year | 68 | ||
Other Commitment, Due in Third Year | 65 | ||
Other Commitment, Due in Second Year | 61 | ||
Other Commitment, Due in Next Twelve Months | 59 | ||
Other Commitment | 406 | ||
Aircraft Maintenance and Parts Management [Member] | |||
Unrecorded Unconditional Purchase Obligation, Fiscal Year Maturity [Abstract] | |||
Other Commitment, Due after Fifth Year | 0 | ||
Other Commitment, Due in Fifth Year | 40 | ||
Other Commitment, Due in Fourth Year | 37 | ||
Other Commitment, Due in Third Year | 35 | ||
Other Commitment, Due in Second Year | 32 | ||
Other Commitment, Due in Next Twelve Months | 30 | ||
Other Commitment | $ 174 |
SHAREHOLDER'S EQUITY SHAREHOLDE
SHAREHOLDER'S EQUITY SHAREHOLDERS' EQUITY - STOCK CHANGES (Details) - $ / shares | Dec. 31, 2016 | Dec. 31, 2015 |
Stock Split [Line Items] | ||
Common stock, shares authorized | 200,000,000 | 200,000,000 |
Common stock, par value | $ 0.01 | $ 0.01 |
prestocksplit [Domain] | ||
Stock Split [Line Items] | ||
Common stock, shares authorized | 100,000,000 | |
Common stock, par value | $ 1 |
SHAREHOLDER'S EQUITY SHAREHOL73
SHAREHOLDER'S EQUITY SHAREHOLDERS' EQUITY - DIVIDENDS (Details) - USD ($) $ / shares in Units, $ in Millions | Feb. 21, 2017 | Sep. 30, 2016 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 |
Subsequent Event [Line Items] | |||||
Cash dividend declared per share | $ 0.275 | $ 1.10 | $ 0.80 | $ 0.50 | |
Cash dividend paid | $ 136 | $ 102 | $ 68 | ||
Subsequent Event [Member] | |||||
Subsequent Event [Line Items] | |||||
Cash dividend declared per share | $ 0.30 | ||||
Dividend increase | 9.00% |
SHAREHOLDER'S EQUITY - COMMON S
SHAREHOLDER'S EQUITY - COMMON STOCK REPURCHASE (Details) - USD ($) $ in Millions | 12 Months Ended | ||||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Aug. 31, 2015 | May 01, 2014 | |
Equity, Class of Treasury Stock [Line Items] | |||||
Common stock repurchase (in shares) | 2,594,809 | 7,208,328 | 7,316,731 | ||
Common stock repurchase | $ 193 | $ 505 | $ 348 | ||
2015 $1 billion Repurchase Program [Member] | |||||
Equity, Class of Treasury Stock [Line Items] | |||||
Share repurchase program, authorized amount | $ 1,000 | ||||
Common stock repurchase (in shares) | 2,594,809 | 1,517,277 | 0 | ||
Common stock repurchase | $ 193 | $ 120 | $ 0 | ||
2014 $650 million Repurchase Program | |||||
Equity, Class of Treasury Stock [Line Items] | |||||
Share repurchase program, authorized amount | $ 650 | ||||
Common stock repurchase (in shares) | 0 | 5,691,051 | 5,497,427 | ||
Common stock repurchase | $ 0 | $ 385 | $ 265 | ||
2012 $250 million Repurchase Program | |||||
Equity, Class of Treasury Stock [Line Items] | |||||
Common stock repurchase (in shares) | 0 | 0 | 1,819,304 | ||
Common stock repurchase | $ 0 | $ 0 | $ 83 |
SHAREHOLDER'S EQUITY SHAREHOL75
SHAREHOLDER'S EQUITY SHAREHOLDERS' EQUITY - OTHER (Details) - shares | Dec. 31, 2016 | Dec. 31, 2015 |
Equity [Abstract] | ||
Treasury Stock, Shares | 5,861,583 | 3,266,774 |
SHAREHOLDER'S EQUITY SHAREHOL76
SHAREHOLDER'S EQUITY SHAREHOLDERS' EQUITY - ACCUMULATED OTHER COMPREHENSIVE LOSS (Details) - USD ($) $ in Millions | Dec. 31, 2016 | Dec. 31, 2015 |
Equity [Abstract] | ||
Unrealized gain on marketable securities considered available-for-sale | $ (3) | $ (3) |
Related to employee benefit plans | (299) | (288) |
Related to interest rate derivatives | (3) | (12) |
Accumulated other comprehensive loss | $ (305) | $ (303) |
SPECIAL ITEMS SPECIAL ITEMS (De
SPECIAL ITEMS SPECIAL ITEMS (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Special items—merger-related costs and other | $ 117 | $ 32 | $ (30) |
Nondeductible expenses | 20 | 4 | 4 |
Special tax expense (benefit) | 17 | (26) | |
Special Item, net of tax | 20 | ||
Gain related to litigation settlement | 10 | ||
Pension Plan [Member] | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Settlement expense (special item) | 0 | $ 14 | $ 0 |
Virgin America Inc. [Member] | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Special items—merger-related costs and other | 117 | ||
Nondeductible expenses | $ 39 |
STOCK-BASED COMPENSATION PLAN78
STOCK-BASED COMPENSATION PLANS (Details) - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock-based compensation | $ 19 | $ 17 | $ 16 |
Tax benefit related to stock-based compensation | 7 | 7 | 6 |
Unrecognized stock-based compensation for non-vested options and awards | $ 23 | ||
Unrecognized stock-based compensation awards weighted-average period | 10 months 24 days | ||
Shares authorized under stock-based compensation plans (in shares) | 17,000,000 | ||
Shares remaining available for future grants (shares) | 11,847,713 | ||
Stock options [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock-based compensation | $ 2 | $ 2 | $ 3 |
Unrecognized stock-based compensation for non-vested options and awards | $ 2 | ||
Unrecognized stock-based compensation awards weighted-average period | 1 year 1 month 6 days | ||
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions and Methodology [Abstract] | |||
Expected volatility | 51.00% | 53.00% | 65.00% |
Expected term | 6 years | 6 years | 6 years |
Risk-free interest rate | 1.23% | 1.67% | 1.87% |
Expected dividend yield | 1.50% | 1.25% | 1.25% |
Weighted-average grant date fair value per share (in dollars per share) | $ 27.14 | $ 28.71 | $ 21.70 |
Estimated fair value of options granted (millions) | $ 2 | $ 3 | $ 3 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward] | |||
Outstanding, beginning balance (in shares) | 540,345 | ||
Granted (in Shares) | 79,340 | ||
Exercised (in shares) | (158,758) | ||
Canceled (in shares) | 0 | ||
Forfeited or expired (in shares) | (7,253) | ||
Outstanding, ending balance (in shares) | 453,674 | 540,345 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Additional Disclosures [Abstract] | |||
Outstanding, beginning balance, Weighted-Average Exercise Price Per Share (in dollars per share) | $ 31.58 | ||
Granted, Weighted-Average Exercise Price Per Share (in dollars per share) | 65.63 | ||
Exercised, Weighted-Average Exercise Price Per Share (in dollars per share) | 23.62 | ||
Canceled, Weighted-Average Exercise Price Per Share (in dollars per share) | 0 | ||
Fofeited or expired, Weighted-Average Exercise Price Per Share (in dollars per share) | 49.66 | ||
Outstanding, ending balance, Weighted-Average Exercise Price Per Share (in dollars per share) | $ 40.02 | $ 31.58 | |
Outstanding, Weighted-Average Contractual Life | 6 years 2 months 12 days | 6 years 3 months 18 days | |
Outstanding, Aggregate Intrinsic Value | $ 22 | $ 26 | |
Exercisable, Outstanding (in shares) | 199,676 | ||
Exercisable, Weighted-Average Exercise Price Per Share (in dollars per share) | $ 25.35 | ||
Exercisable, Weighted-Average Contractual Life | 5 years 1 month 6 days | ||
Exercisable, Aggregate Intrinsic Value | $ 13 | ||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested and Expected to Vest [Abstract] | |||
Vested or expected to vest, Shares | 453,435 | ||
Vested or expected to vest, Weighted-Average Exercise Price Per Share (in dollars per share) | $ 40.03 | ||
Vested or expected to vest, Weighted-Average Contractual Life | 6 years 2 months 12 days | ||
Vested or expected to vest, Aggregate Intrinsic Value | $ 22 | ||
Intrinsic value of option exercises | 9 | 14 | 20 |
Cash received from stock option exercises | 3 | 4 | 6 |
Tax benefit related to stock option exercises | 3 | 5 | 7 |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Additional Disclosures [Abstract] | |||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested in Period, Fair Value | 3 | 3 | 2 |
Stock awards [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock-based compensation | 11 | $ 11 | 10 |
Unrecognized stock-based compensation for non-vested options and awards | $ 21 | ||
Unrecognized stock-based compensation awards weighted-average period | 10 months 24 days | ||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward] | |||
Non-vested, beginning balance (in shares) | 470,715 | ||
Granted (in shares) | 374,863 | ||
Vested (in shares) | (366,319) | ||
Forfeited (in shares) | (39,166) | ||
Non-vested, ending balance (in shares) | 440,093 | 470,715 | |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Additional Disclosures [Abstract] | |||
Non-vested, beginning balance, Weighted-Average Grant Date Fair Value (in dollars per share) | $ 38.09 | ||
Granted, Weighted-Average Grant Date Fair Value (in dollars per share) | 63.53 | ||
Vested, Weighted-Average Grant Date Fair Value (in dollars per share) | 32.87 | ||
Forfeited, Weighted-Average Grant Date Fair Value (in dollars per share) | 40.35 | ||
Non-vested, ending balance, Weighted-Average Price Per Share (in dollars per share) | $ 63.86 | $ 38.09 | |
Non-vested, Weighted-Average Contractual Life | 1 year 4 months 24 days | 9 months 18 days | |
Non-vested, Total Instrinsic Value (in dollars) | $ 39 | $ 38 | |
Deferred stock awards [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock-based compensation | 1 | 1 | 1 |
Employee stock purchase plan [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock-based compensation | $ 5 | $ 3 | $ 2 |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward] | |||
Granted (in shares) | 308,920 | 281,058 | 298,283 |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Additional Disclosures [Abstract] | |||
Share-based Compensation Arrangement by Share-based Payment Award, Purchase Price of Common Stock, Percent | 85.00% | ||
Share-based Compensation Arrangement by Share-based Payment Award, Maximum Employee Subscription Rate | 10.00% |
OPERATING SEGMENT INFORMATION79
OPERATING SEGMENT INFORMATION (Details) - USD ($) $ in Millions | 12 Months Ended | |||||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | ||||
Operating revenues | ||||||
Passenger, Mainline | $ 4,098 | $ 3,939 | $ 3,774 | |||
Passenger, Regional | 908 | 854 | 805 | |||
Total passenger revenue | 5,006 | 4,793 | 4,579 | |||
CPA revenues | 0 | 0 | 0 | |||
Freight and mail | 108 | 108 | 114 | |||
Other Net and Special Revenue | 817 | 697 | 675 | |||
Total Operating Revenues | 5,931 | 5,598 | 5,368 | |||
Operating expenses | ||||||
Operating expenses, excluding fuel | 3,751 | 3,346 | 2,988 | |||
Special items—merger-related costs and other | 117 | 32 | (30) | |||
Economic fuel | 831 | 954 | 1,418 | |||
Total Operating Expenses | 4,582 | 4,300 | 4,406 | |||
Nonoperating Income (Expense) | ||||||
Interest income | 27 | 21 | 21 | |||
Interest expense | (55) | (42) | (48) | |||
Other | 24 | 35 | 40 | |||
Nonoperating Income (Expense) Total | (4) | 14 | 13 | |||
Income (loss) before income tax | 1,345 | 1,312 | 975 | |||
Depreciation | 363 | 320 | 294 | |||
Capital expenditures | 678 | 831 | 694 | |||
Total assets | 9,962 | 6,530 | ||||
Air Group Adjusted [Member] | ||||||
Operating revenues | ||||||
Passenger, Mainline | [1] | 4,098 | 3,939 | 3,774 | ||
Passenger, Regional | [1] | 908 | 854 | 805 | ||
Total passenger revenue | [1] | 5,006 | 4,793 | 4,579 | ||
CPA revenues | [1] | 0 | 0 | 0 | ||
Freight and mail | [1] | 108 | 108 | 114 | ||
Other Net and Special Revenue | [1] | 817 | 697 | 675 | ||
Total Operating Revenues | [1] | 5,931 | 5,598 | 5,368 | ||
Operating expenses | ||||||
Operating expenses, excluding fuel | [1] | 3,634 | 3,314 | 3,018 | ||
Economic fuel | [1] | 844 | 954 | 1,441 | ||
Total Operating Expenses | [1] | 4,478 | 4,268 | 4,459 | ||
Nonoperating Income (Expense) | ||||||
Interest income | [1] | 27 | 21 | 21 | ||
Interest expense | [1] | (55) | (42) | (48) | ||
Other | [1] | 24 | 35 | 40 | ||
Nonoperating Income (Expense) Total | [1] | (4) | 14 | 13 | ||
Income (loss) before income tax | [1] | 1,449 | 1,344 | 922 | ||
Alaska Airlines [Member] | ||||||
Nonoperating Income (Expense) | ||||||
Depreciation | [2] | 296 | 268 | 243 | ||
Capital expenditures | [2] | 608 | 821 | 659 | ||
Total assets | [2] | 15,260 | 8,127 | |||
Alaska Mainline [Member] | ||||||
Operating revenues | ||||||
Passenger, Mainline | 4,098 | 3,939 | 3,774 | |||
Passenger, Regional | 0 | 0 | 0 | |||
Total passenger revenue | 4,098 | 3,939 | 3,774 | |||
CPA revenues | 0 | 0 | 0 | |||
Freight and mail | 104 | 103 | 109 | |||
Other Net and Special Revenue | 738 | 621 | 592 | |||
Total Operating Revenues | 4,940 | 4,663 | 4,475 | |||
Operating expenses | ||||||
Operating expenses, excluding fuel | 2,883 | 2,653 | 2,417 | |||
Economic fuel | 719 | 823 | 1,251 | |||
Total Operating Expenses | 3,602 | 3,476 | 3,668 | |||
Nonoperating Income (Expense) | ||||||
Interest income | 26 | 19 | 20 | |||
Interest expense | (42) | (28) | (32) | |||
Other | 19 | 28 | 39 | |||
Nonoperating Income (Expense) Total | 3 | 19 | 27 | |||
Income (loss) before income tax | 1,341 | 1,206 | 834 | |||
Alaska Regional [Member] | ||||||
Operating revenues | ||||||
Passenger, Mainline | 0 | 0 | 0 | |||
Passenger, Regional | 908 | 854 | 805 | |||
Total passenger revenue | 908 | 854 | 805 | |||
CPA revenues | 0 | 0 | 0 | |||
Freight and mail | 5 | 5 | 5 | |||
Other Net and Special Revenue | 74 | 72 | 78 | |||
Total Operating Revenues | 987 | 931 | 888 | |||
Operating expenses | ||||||
Operating expenses, excluding fuel | 769 | 695 | 623 | |||
Economic fuel | 125 | 131 | 190 | |||
Total Operating Expenses | 894 | 826 | 813 | |||
Nonoperating Income (Expense) | ||||||
Interest income | 0 | 0 | 0 | |||
Interest expense | 0 | 0 | 0 | |||
Other | 0 | 0 | (1) | |||
Nonoperating Income (Expense) Total | 0 | 0 | (1) | |||
Income (loss) before income tax | 93 | 105 | 74 | |||
Horizon [Member] | ||||||
Operating revenues | ||||||
Passenger, Mainline | 0 | 0 | 0 | |||
Passenger, Regional | 0 | 0 | 0 | |||
Total passenger revenue | 0 | 0 | 0 | |||
CPA revenues | 424 | 408 | 371 | |||
Freight and mail | 0 | 0 | 0 | |||
Other Net and Special Revenue | 4 | 4 | 5 | |||
Total Operating Revenues | 428 | 412 | 376 | |||
Operating expenses | ||||||
Operating expenses, excluding fuel | 407 | 375 | 349 | |||
Economic fuel | 0 | 0 | 0 | |||
Total Operating Expenses | 407 | 375 | 349 | |||
Nonoperating Income (Expense) | ||||||
Interest income | 1 | 0 | 0 | |||
Interest expense | (9) | (10) | (12) | |||
Other | 1 | 1 | 2 | |||
Nonoperating Income (Expense) Total | (7) | (9) | (10) | |||
Income (loss) before income tax | 14 | 28 | 17 | |||
Depreciation | 67 | 52 | 51 | |||
Capital expenditures | 70 | 10 | 35 | |||
Total assets | 690 | 717 | ||||
Parent [Member] | ||||||
Nonoperating Income (Expense) | ||||||
Total assets | (5,988) | (2,314) | ||||
Intersegment Eliminations | ||||||
Operating revenues | ||||||
Passenger, Mainline | 0 | 0 | 0 | |||
Passenger, Regional | 0 | 0 | 0 | |||
Total passenger revenue | 0 | 0 | 0 | |||
CPA revenues | (424) | (408) | (371) | |||
Freight and mail | (1) | 0 | 0 | |||
Other Net and Special Revenue | 1 | 0 | 0 | |||
Total Operating Revenues | (424) | (408) | (371) | |||
Operating expenses | ||||||
Operating expenses, excluding fuel | (425) | (409) | (371) | |||
Economic fuel | 0 | 0 | 0 | |||
Total Operating Expenses | (425) | (409) | (371) | |||
Nonoperating Income (Expense) | ||||||
Interest income | 0 | 2 | 1 | |||
Interest expense | (4) | (4) | (4) | |||
Other | 4 | 6 | 0 | |||
Nonoperating Income (Expense) Total | 0 | 4 | (3) | |||
Income (loss) before income tax | 1 | 5 | (3) | |||
Special Charges [Member] | ||||||
Operating revenues | ||||||
Passenger, Mainline | [3] | 0 | 0 | 0 | ||
Passenger, Regional | [3] | 0 | 0 | 0 | ||
Total passenger revenue | [3] | 0 | 0 | 0 | ||
CPA revenues | [3] | 0 | 0 | 0 | ||
Freight and mail | [3] | 0 | 0 | 0 | ||
Other Net and Special Revenue | [3] | 0 | 0 | 0 | ||
Total Operating Revenues | [3] | 0 | 0 | 0 | ||
Operating expenses | ||||||
Operating expenses, excluding fuel | 117 | 32 | [3] | (30) | [3] | |
Economic fuel | (13) | 0 | [3] | (23) | [3] | |
Total Operating Expenses | [3] | 104 | 32 | (53) | ||
Nonoperating Income (Expense) | ||||||
Interest income | [3] | 0 | 0 | 0 | ||
Interest expense | [3] | 0 | 0 | 0 | ||
Other | [3] | 0 | 0 | 0 | ||
Nonoperating Income (Expense) Total | [3] | 0 | 0 | 0 | ||
Income (loss) before income tax | [3] | $ (104) | $ (32) | $ 53 | ||
[1] | Year Ended December 31, 2014Mainline Regional Horizon Consolidating & Other(b) Air Group Adjusted(c) Special Items(d) ConsolidatedOperating revenues Passenger Mainline$3,774 $— $— $— $3,774 $— $3,774Regional— 805 — — 805 — 805Total passenger revenues3,774 805 — — 4,579 — 4,579CPA revenues— — 371 (371) — — —Freight and mail109 5 — — 114 — 114Other-net592 78 5 — 675 — 675Total operating revenues4,475 888 376 (371) 5,368 — 5,368 Operating expenses Operating expenses, excluding fuel2,417 623 349 (371) 3,018 (30) 2,988Fuel expense1,251 190 — — 1,441 (23) 1,418Total operating expenses3,668 813 349 (371) 4,459 (53) 4,406 Nonoperating income (expense) Interest income20 — — 1 21 — 21Interest expense(32) — (12) (4) (48) — (48)Other39 (1) 2 — 40 — 40 27 (1) (10) (3) 13 — 13Income (loss) before income tax$834 $74 $17 $(3) $922 $53 $975 | |||||
[2] | 2016 2015 2014Depreciation and amortization: Mainline$296 $268 $243Horizon67 52 51Consolidated$363 $320 $294 Capital expenditures: Mainline$608 $821 $659Horizon70 10 35Consolidated$678 $831 $694 Total assets at end of period: Mainline$15,260 $8,127 Horizon690 717 Consolidating & Other(5,988) (2,314) Consolidated$9,962 $6,530 | |||||
[3] | {F|ahBzfndlYmZpbGluZ3MtaHJkcmoLEgZYTUxEb2MiXlhCUkxEb2NHZW5JbmZvOjcwOTdhOTM1ODYyYTRmZDE4YWRlNzJjOWQ0M2Q0NzUyfFRleHRTZWxlY3Rpb246NjdDN0U5MTdDNkRFMEZFNjQ2OEEyQzQ3MzZDRDc3MTUM} |