DOCUMENT AND ENTITY INFORMATION
DOCUMENT AND ENTITY INFORMATION - USD ($) $ in Billions | 12 Months Ended | ||
Dec. 31, 2017 | Jan. 31, 2018 | Jun. 30, 2016 | |
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 | 2,017 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | false | ||
Entity Common Stock, Shares Outstanding | 122,996,587 | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Public Float | $ 11.1 | ||
Document Period End Date | Dec. 31, 2017 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Current Assets | ||
Cash and cash equivalents | $ 194 | $ 328 |
Marketable securities | 1,427 | 1,252 |
Total cash and marketable securities | 1,621 | 1,580 |
Receivables—less allowance for doubtful accounts of $1 and $1 | 341 | 302 |
Inventories and supplies—net | 57 | 47 |
Prepaid expenses and other current assets | 127 | 121 |
Total Current Assets | 2,146 | 2,050 |
Property and Equipment | ||
Aircraft and other flight equipment | 7,559 | 6,947 |
Other property and equipment | 1,222 | 1,103 |
Deposits for future flight equipment | 494 | 545 |
Property and Equipment | 9,275 | 8,595 |
Less accumulated depreciation and amortization | 2,991 | 2,929 |
Total Property and Equipment—Net | 6,284 | 5,666 |
Other Assets | ||
Goodwill | 1,943 | 1,934 |
Intangible assets—net | 133 | 143 |
Other noncurrent assets | 234 | 169 |
Total Other Assets | 2,310 | 2,246 |
Total Assets | 10,740 | 9,962 |
Current Liabilities | ||
Accounts payable | 120 | 92 |
Accrued wages, vacation and payroll taxes | 418 | 397 |
Air traffic liability | 937 | 849 |
Other accrued liabilities | 918 | 878 |
Current portion of long-term debt | 307 | 319 |
Total Current Liabilities | 2,700 | 2,535 |
Long-Term Debt, Net of Current Portion | 2,262 | 2,645 |
Other Liabilities and Credits | ||
Deferred income taxes | 454 | 463 |
Deferred revenue | 699 | 640 |
Obligation for pension and postretirement medical benefits | 453 | 331 |
Other liabilities | 451 | 417 |
Total Other Liabilities and Credits | 2,057 | 1,851 |
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: 400,000,000 shares, Issued: 2017 - 129,903,498 shares; 2016 - 129,189,634 shares, Outstanding: 2017 - 123,060,638 shares; 2016 - 123,328,051 shares | 1 | 1 |
Capital in excess of par value | 164 | 110 |
Treasury stock (common), at cost: 2017 - 6,842,860 shares; 2016 - 5,861,583 shares | (518) | (443) |
Accumulated other comprehensive loss | (380) | (305) |
Retained earnings | 4,454 | 3,568 |
Shareholders' Equity Total | 3,721 | 2,931 |
Total Liabilities and Shareholders' Equity | $ 10,740 | $ 9,962 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Allowance for doubtful accounts | $ 1 | $ 1 |
Shareholders' 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 | 400,000,000 | 200,000,000 |
Common stock, shares issued | 129,903,498 | 129,189,634 |
Common stock, shares, outstanding | 123,060,638 | 123,328,051 |
Treasury stock, shares | 6,842,860 | 5,861,583 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Operating Revenues | |||
Passenger, Mainline | $ 5,858 | $ 4,098 | $ 3,939 |
Passenger, Regional | 960 | 908 | 854 |
Total passenger revenue | 6,818 | 5,006 | 4,793 |
Freight and mail | 114 | 108 | 108 |
Other—net | 1,001 | 817 | 697 |
Total Operating Revenues | 7,933 | 5,931 | 5,598 |
Operating Expenses | |||
Wages and benefits | 1,924 | 1,382 | 1,254 |
Variable incentive pay | 135 | 127 | 120 |
Aircraft fuel, including hedging gains and losses | 1,447 | 831 | 954 |
Aircraft maintenance | 391 | 270 | 253 |
Aircraft rent | 274 | 114 | 105 |
Landing fees and other rentals | 460 | 320 | 296 |
Contracted services | 314 | 247 | 214 |
Selling expense | 357 | 225 | 211 |
Depreciation and amortization | 372 | 363 | 320 |
Food and beverage service | 195 | 126 | 113 |
Third-party regional carrier expense | 121 | 95 | 72 |
Other operating expenses | 565 | 365 | 356 |
Special items—merger-related costs and other | 118 | 117 | |
Special items—other | 32 | ||
Total Operating Expenses | 6,673 | 4,582 | 4,300 |
Operating Income | 1,260 | 1,349 | 1,298 |
Nonoperating Income (Expense) | |||
Interest income | 34 | 27 | 21 |
Interest expense | (103) | (55) | (42) |
Interest capitalized | 17 | 25 | 34 |
Other—net | (1) | (1) | 1 |
Nonoperating Income (Expense) Total | (53) | (4) | 14 |
Income before income tax | 1,207 | 1,345 | 1,312 |
Income Tax Expense, Before Tax Cuts and Jobs Act of 2017 | 453 | 514 | 490 |
Special tax expense (benefit) | (280) | 17 | (26) |
Income tax expense | 173 | 531 | 464 |
Net Income | $ 1,034 | $ 814 | $ 848 |
Basic earnings per share | $ 8.39 | $ 6.59 | $ 6.61 |
Diluted earnings per share | $ 8.35 | $ 6.54 | $ 6.56 |
Shares used for computation: | |||
Basic | 123,211 | 123,557 | 128,373 |
Diluted | 123,854 | 124,389 | 129,372 |
Cash dividend declared per share | $ 1.20 | $ 1.10 | $ 0.80 |
Virgin America Inc. [Member] | |||
Operating Expenses | |||
Contracted services | $ 52 | $ 32 | |
Special items—merger-related costs and other | $ 118 | $ 117 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE OPERATIONS - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Net Income | $ 1,034 | $ 814 | $ 848 |
Related to marketable securities: | |||
Unrealized holding gains (losses) arising during the period | (4) | 1 | (6) |
Reclassification of (gains) losses into Other-net nonoperating income (expense) | 1 | (1) | 1 |
Income tax benefit (expense) | 1 | 0 | 2 |
Marketable securities, net of tax | (2) | 0 | (3) |
Related to employee benefit plans: | |||
Actuarial gains (losses) related to pension and other postretirement benefit plans | (123) | (43) | 10 |
Reclassification of net pension expense into Wages and benefits | 22 | 20 | 14 |
Income tax benefit (expense) | 24 | 12 | (14) |
Employee benefit plans, net of tax | (77) | (11) | 10 |
Related to interest rate derivative instruments: | |||
Unrealized holding gains (losses) arising during the period | 1 | 8 | (5) |
Reclassification of losses into Aircraft rent | 5 | 6 | 6 |
Income tax benefit (expense) | (2) | (5) | (1) |
Interest rate derivative instruments, net of tax | 4 | 9 | 0 |
Other comprehensive income (loss) | (75) | (2) | 7 |
Comprehensive income | $ 959 | $ 812 | $ 855 |
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, 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 income (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 | 125,175,000 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net Income | 814 | 814 | ||||
Other comprehensive income (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 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net Income | $ 1,034 | 1,034 | ||||
Other comprehensive income (loss) | $ (75) | (75) | ||||
Common stock repurchase (in shares) | (981,277) | (981,000) | ||||
Common stock repurchase | $ (75) | 0 | (75) | |||
Stock-based compensation | 34 | 34 | ||||
Cash dividend declared | (148) | (148) | ||||
Stock issued for employee stock purchase plan (in shares) | 407,000 | |||||
Stock issued for employee stock purchase plan | 24 | 24 | ||||
Stock issued under stock plans (in shares) | 307,000 | |||||
Stock issued under stock plans | (4) | (4) | ||||
Stockholders' Equity at Dec. 31, 2017 | $ 3,721 | $ 1 | $ 164 | $ (518) | $ (380) | $ 4,454 |
Common Stock Outstanding at Dec. 31, 2017 | 123,060,638 | 123,061,000 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Cash flows from operating activities: | |||
Net Income | $ 1,034 | $ 814 | $ 848 |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Depreciation and amortization | 372 | 363 | 320 |
Stock-based compensation and other | 55 | 26 | 25 |
Changes in certain assets and liabilities: | |||
Changes in deferred tax provision | 19 | 94 | 56 |
(Increase) decrease in accounts receivable | (39) | (46) | 47 |
Increase (decrease) in air traffic liability | 88 | 9 | 38 |
Increase (decrease) in deferred revenue | 63 | 83 | 57 |
Changes in pension and other postretirement benefits | 17 | 23 | 36 |
Other—net | (19) | 20 | 157 |
Net cash provided by operating activities | 1,590 | 1,386 | 1,584 |
Property and equipment additions: | |||
Aircraft and aircraft purchase deposits | (804) | (528) | (681) |
Other flight equipment | (96) | (53) | (79) |
Other property and equipment | (126) | (97) | (71) |
Total property and equipment additions | (1,026) | (678) | (831) |
Acquisition of Virgin America, net of cash acquired | 0 | (1,951) | 0 |
Purchases of marketable securities | (1,569) | (960) | (1,327) |
Sales and maturities of marketable securities | 1,388 | 962 | 1,175 |
Proceeds from disposition of assets and changes in restricted deposits | 75 | 5 | 53 |
Net cash used in investing activities | (1,132) | (2,622) | (930) |
Cash flows from financing activities: | |||
Proceeds from issuance of long-term debt, net of issuance costs | 0 | 2,044 | 0 |
Long-term debt payments | (397) | (249) | (116) |
Common stock repurchases | (75) | (193) | (505) |
Cash dividend paid | (148) | (136) | (102) |
Other financing activities | 28 | 25 | 35 |
Net cash provided by (used in) financing activities | (592) | 1,491 | (688) |
Net increase (decrease) in cash and cash equivalents | (134) | 255 | (34) |
Cash and cash equivalents at beginning of year | 328 | 73 | 107 |
Cash and cash equivalents at end of year | 194 | 328 | 73 |
Cash paid during the year for: | |||
Interest, net of amount capitalized | 84 | 24 | 8 |
Income taxes, net of refunds received | $ 177 | $ 459 | $ 349 |
GENERAL AND SUMMARY OF SIGNIFIC
GENERAL AND SUMMARY OF SIGNIFICANT ACCOUNTING | 12 Months Ended |
Dec. 31, 2017 | |
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 Virgin America. Our consolidated financial statements also include McGee Air Services, a subsidiary of Alaska. 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 $10 million and $15 million at December 31, 2017 and 2016 respectively, 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. 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 $ 38 million and $36 million at December 31, 2017 and 2016 , respectively. Inventory and supplies — net also includes fuel inventory of $ 23 million and $16 million at December 31, 2017 and 2016 , 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: Estimated Useful Life Estimated Salvage Value Aircraft and other flight equipment: Boeing 737, Airbus A319/320, and E175 aircraft 20-25 years 10% Bombardier Q400 aircraft 15 years 10% 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 0-10% Computer hardware and software 3-10 years —% Other furniture and equipment 5-10 years —% Near the end of an asset's estimated useful life, management updates the salvage value estimates based on current market conditions and expected use of the asset. Repairable and rotable aircraft parts are included in Aircraft and other flight equipment, and are depreciated over the associated fleet life. In 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. 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, other than engine maintenance on B737-800 engines, 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. Maintenance on B737-800 engines is covered under a power-by-the-hour agreement with a third party beginning in the fourth quarter of 2017, whereby the Company pays a determinable amount, and transfers risk, to a third party. The Company expenses the contract amounts based on engine usage. 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, 2017 the goodwill balance was $1.9 billion , and is associated with the Mainline reporting unit. The Company reviews goodwill for impairment annually in Q4, or more frequently if events or circumstances indicate than an impairment may exist. If fair value of the reporting unit does not exceed the carrying amount, an impairment charge may be recorded. In 2017 , the fair value of the reporting unit with goodwill substantially exceeded its carrying value. Intangible Assets Intangible assets recorded in conjunction with the acquisition of Virgin America 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. Deferred Revenue Deferred revenue results primarily from the sale of Mileage Plan™ miles to third-parties. It also includes Virgin America's Elevate® flown points outstanding at the acquisition date that were recorded at their estimated fair value as part of purchase price accounting. Recognition of this deferred revenue occurs 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. Airport and terminal facility leases are variable based on volumes and expensed as incurred. 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, 2017 and December 31, 2016 . 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 $106 million and $62 million related to credits for future travel, as of December 31, 2017 and December 31, 2016 , 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™ program. They are recognized as described in the “Mileage Plan” 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 operated the Elevate frequent flyer program for the duration of 2017. Both programs provide travel awards to members based on accumulated mileage or points. For miles 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 affinity credit card. 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): 2017 2016 Current Liabilities: Other accrued liabilities $ 519 $ 484 Other Liabilities and Credits: Deferred revenue 699 638 Other liabilities 26 21 Total $ 1,244 $ 1,143 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 $ 47 million and $43 million at December 31, 2017 and 2016 . Frequent flyer program revenue included in the consolidated statements of operations (in millions): 2017 2016 2015 Passenger revenues $ 380 $ 293 $ 267 Other — net revenues 482 429 329 Total frequent flyer program revenues $ 862 $ 722 $ 596 Other — net revenue includes commission revenues of $396 million , $329 million , and $280 million in 2017 , 2016 , and 2015 . 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 $ 91 million , $61 million , and $55 million during the years ended December 31, 2017 , 2016 , and 2015 . 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 apply hedge accounting to its derivative fuel hedge contracts nor does it hold or issue them for trading purposes. 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 4 . 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, 2017 , there is no 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 6 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 2017 , 2016 , and 2015 , 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. 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 became effective for the Company on January 1, 2018. Under the new standard, the Company estimates a net increase to Mileage Plan™ deferred revenues of approximately $345 million to $365 million as of the beginning of the retroactive reporting period (January 1, 2016) at the time of adoption. Additionally, the Company estimates the change in ticket breakage methodology will not have a significant impact on the statements of operations, but will decrease air traffic liability by approximately $70 million to $80 million at adoption of the standard. The overall impact to equity as of the beginning of the retroactive reporting period, including these, as well as other less material changes, is expected to be between $165 million and $175 million . In January 2016, the FASB issued ASU No. 2016-01, "Financial Instruments—Overall (Subtopic 825-10)." This standard makes several changes, including the elimination of the available-for-sale classification of equity investments, and requires equity investments with readily determinable fair values to be measured at fair value with changes in fair value recognized in net income. It is effective for the Company beginning January 1, 2018. The Company does not expect the adoption of ASU 2016-01 to have a material impact on its consolidated financial statements. 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. 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 the ASU. The new standard is effective for the Company on January 1, 2019. The Company will not 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 was adopted prospectively as of January 1, 2017. Prior periods have not been adjusted. The adoption of the standard did 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. In 2017, the Company performed an impairment test for goodwill arising from its acquisition of Virgin America and adopted the standard effective January 1, 2017. In March 2017, the FASB issued ASU 2017-07, "Compensation—Retirement Benefits" (Topic 715), which will require the Company to present the service cost component of net periodic benefit cost as Wages and benefits in the statements of operations. All other components of net periodic benefit cost will be required to be presented in Nonoperating income (expense) in the statements of operations. These components will not be eligible for capitalization. The ASU is effective for the Company beginning January 1, 2018. Changes to the statements of operations under the ASU are applicable retrospectively. The adoption of this standard will have no impact on Income before income tax or Net income for the periods subject to retrospective reclassification. See Note 7 for the current components of the Company's net periodic benefit costs. In August 2017, the FASB issued ASU 2017-12, "Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities." The ASU expands the activities that qualify for hedge accounting and simplifies the rules for reporting hedging relationships. The ASU is effective for the Company beginning January 1, 2019. The Company will not early adopt the standard. |
ACQUISITION OF VIRGIN AMERICA,
ACQUISITION OF VIRGIN AMERICA, INC. (Notes) | 12 Months Ended |
Dec. 31, 2017 | |
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 for $57 per share, or total cash consideration of $2.6 billion . Fair values of the assets acquired and the liabilities assumed The transaction was 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. There were no significant fair value adjustments made during the twelve months ended December 31, 2017 . Fair values of the assets acquired and the liabilities assumed as of the acquisition date, December 14, 2016 , at December 31, 2017 and December 31, 2016 were as follows (in millions): December 31, 2017 December 31, 2016 Cash and cash equivalents $ 645 $ 645 Receivables 53 44 Prepaid expenses and other current assets 18 16 Property and equipment 571 560 Intangible assets 141 143 Goodwill 1,943 1,934 Other assets 89 84 Total assets 3,460 3,426 Accounts payable 22 22 Accrued wages, vacation and payroll taxes 54 51 Air traffic liabilities 172 172 Other accrued liabilities 198 196 Current portion of long-term debt 125 125 Long-term debt, net of current portion 360 360 Deferred income taxes (300 ) (304 ) Deferred revenue 126 126 Other liabilities 107 82 Total liabilities 864 830 Total purchase price $ 2,596 $ 2,596 Intangible Assets Of the $141 million of acquired intangible assets, $89 million represents 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 demand for air travel at these airports has 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 $52 million , $37 million represents customer relationships, subject to amortization on a straight-line basis over the estimated economic life of seven years, $1 million represents credit card agreements amortized on a straight-line basis over one year, and $14 million represents airport gates to be amortized on a straight-line basis over the remaining lease term of eleven years. 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. Merger-related costs The Company incurred pretax merger-related costs of $118 million and $117 million for the twelve months ended December 31, 2017 and 2016 , respectively. Costs classified as merger-related are directly attributable to merger activities and are recorded as "Special items—merger-related costs" within the Statements of Operations. Refer to Note 10 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 including 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 |
DERIVATIVE INSTRUMENTS
DERIVATIVE INSTRUMENTS | 12 Months Ended |
Dec. 31, 2017 | |
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, 2017 , the Company had outstanding fuel hedge contracts covering 434 million gallons of crude oil that will be settled from January 2018 to June 2019 . 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, 2017 , 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 $265 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): 2017 2016 Fuel hedge contracts (not designated as hedges) Prepaid expenses and other current assets $ 19 $ 17 Other assets 3 3 Interest rate swaps (designated as hedges) Prepaid expenses and other current assets 1 — Other noncurrent assets 8 — Other accrued liabilities (3 ) (5 ) Other liabilities (5 ) — Losses in accumulated other comprehensive loss (AOCL) (2 ) (5 ) The net cash paid for new fuel hedge positions and received from settlements was $12 million , $19 million and $17 million during 2017 , 2016 , and 2015 , respectively. Pretax effect of derivative instruments on earnings and AOCL (in millions): 2017 2016 2015 Fuel hedge contracts (not designated as hedges) Gains (losses) recognized in Aircraft fuel $ (6 ) $ (3 ) $ (19 ) Interest rate swaps (designated as hedges) Gains (losses) recognized in Aircraft rent (5 ) (6 ) (6 ) Gains (losses) recognized in other comprehensive income (OCI) 1 8 (5 ) 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 2017 . The amounts shown as recognized in OCI are prior to the losses recognized in aircraft rent during the period. The Company expects $3 million to be reclassified from OCI to aircraft rent and $1 million to interest income within the next twelve months. |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 12 Months Ended |
Dec. 31, 2017 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE MEASUREMENTS | FAIR VALUE MEASUREMENTS Fair Value of Financial Instruments on a Recurring Basis As of December 31, 2017 , the total cost basis for marketable securities was $1.4 billion . There were no significant differences between the cost basis and fair value of any individual class of marketable securities. Fair values of financial instruments on the consolidated balance sheet (in millions): December 31, 2017 Level 1 Level 2 Total Assets Marketable securities U.S. government and agency securities $ 328 $ — $ 328 Foreign government bonds — 43 43 Asset-backed securities — 209 209 Mortgage-backed securities — 99 99 Corporate notes and bonds — 726 726 Municipal securities — 22 22 Derivative instruments Fuel hedge contracts—call options — 22 22 Interest rate swap agreements — 9 9 Liabilities Derivative instruments Interest rate swap agreements — (8 ) (8 ) 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 ) 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 and income approaches to determine the fair value of derivative instruments. The fair value for fuel hedge call options is determined utilizing an option pricing model based on inputs that are readily available in active markets or can be derived from information available in active markets. In addition, the fair value considers the exposure to credit losses in the event of non-performance by counterparties. Interest rate swap agreements are Level 2 as the fair value of these contracts is determined based on the difference between the fixed interest rate in the agreements and the observable LIBOR-based interest forward rates at period end, multiplied by the total notional value. The Company has no other financial assets that are measured at fair value on a nonrecurring basis at December 31, 2017 . Activity and Maturities for Marketable Securities Unrealized losses from marketable securities are primarily attributable to changes in interest rates. Management does not believe any remaining losses represent other-than-temporary impairments based on the Company's evaluation of available evidence as of December 31, 2017. Activity for marketable securities (in millions): 2017 2016 2015 Proceeds from sales and maturities $ 1,388 $ 962 $ 1,175 Maturities for marketable securities (in millions): December 31, 2017 Cost Basis Fair Value Due in one year or less $ 113 $ 113 Due after one year through five years 1,272 1,264 Due after five years through 10 years 50 50 Total $ 1,435 $ 1,427 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 : Debt assumed in the acquisition of Virgin America was subject to a non-recurring fair valuation adjustment as part of purchase price accounting. The adjustment is amortized over the life of the associated debt. All other fixed-rate debt is carried at cost. To estimate the fair value of all fixed-rate as of December 31, 2017, the Company uses the income approach 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 on the consolidated balance sheet and the estimated fair value of long-term fixed-rate debt (in millions): 2017 2016 Fixed rate debt at cost $ 956 $ 1,175 Non-recurring purchase price accounting fair value adjustment 3 4 Total fixed rate debt $ 959 $ 1,179 December 31, 2017 estimated fair value $ 959 $ 1,199 |
LONG-TERM DEBT
LONG-TERM DEBT | 12 Months Ended |
Dec. 31, 2017 | |
Debt Disclosure [Abstract] | |
LONG-TERM DEBT | LONG-TERM DEBT Long-term debt obligations (in millions): 2017 2016 Fixed-rate notes payable due through 2028 $ 959 $ 1,179 Variable-rate notes payable due through 2028 1,625 1,803 Less debt issuance costs (15 ) (18 ) Total debt 2,569 2,964 Less current portion 307 319 Long-term debt, less current portion $ 2,262 $ 2,645 Weighted-average fixed-interest rate 4.2 % 4.4 % Weighted-average variable-interest rate 2.8 % 2.4 % During 2017 , the Company's total debt decreased $395 million , primarily due to payments of $397 million in 2017 , including the prepayment of $74 million of debt. Approximately $2.2 billion of the loans are secured by a total of 113 aircraft and two spare engines. An additional $392 million is secured by Air Group's interest in certain aircraft purchase deposits. The Company's variable-rate debt bears 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, 2017 , 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 2018 $ 310 2019 393 2020 449 2021 414 2022 247 Thereafter 768 Total principal payments $ 2,581 Bank Line of Credit The Company has three credit facilities with availability totaling $475 million . All three facilities have variable interest rates based on LIBOR plus a specified margin. One credit facility increased from $100 million to $250 million in June 2017 . It expires in June 2021 and is secured by aircraft. A second credit facility increased from $52 million to $75 million in September 2017 . It expires in September 2018 , has a mechanism for annual renewal, and is secured by aircraft. A third credit facility increased from $100 million to $150 million in March 2017 . It expires in March 2022 and is secured by certain accounts receivable, spare engines, spare parts and ground service equipment. The Company has secured letters of credit against the $75 million facility, but has no plans to borrow using either of the two other 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, 2017 . |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Dec. 31, 2017 | |
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. The Company has a net deferred tax liability, primarily due to differences in depreciation rates for federal income tax purposes and for financial reporting purposes. Deferred tax (assets) and liabilities comprise the following (in millions): 2017 2016 Excess of tax over book depreciation $ 964 $ 1,282 Intangibles—net 14 39 Other—net 43 26 Gross deferred tax liabilities 1,021 1,347 Mileage Plan™ (208 ) (310 ) Inventory obsolescence (16 ) (23 ) Deferred gains (5 ) (8 ) Employee benefits (154 ) (196 ) Acquired net operating losses (127 ) (289 ) Other—net (57 ) (62 ) Gross deferred tax assets (567 ) (888 ) Valuation allowance — 4 Net deferred tax (assets) liabilities $ 454 $ 463 On December 22, 2017, the Tax Cuts and Jobs Act was signed into law. The Tax Cuts and Jobs Act changed many aspects of the U.S. corporate income taxation, including but not limited to, a reduction in the corporate income tax rate from 35% to 21% and accelerated depreciation that will allow for full expensing of qualified property. ASC 740 requires a company to record the effects of a tax law change in the period of enactment. The Company evaluated the impact of the Tax Cuts and Jobs Act and other law changes and recorded a discrete adjustment in our 2017 income tax expense of $280 million . The Company will continue to evaluate the impact of the new law and future guidance as issued. At December 31, 2017 , the Company had federal NOLs of approximately $ 525 million that expire beginning in 2029 and continuing through 2036 , and state NOLs of approximately $ 254 million that expire beginning in 2028 and continuing through 2035 . Virgin America 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 utilization of pre-ownership change NOLs. Any unused annual limitation may, subject to certain limits, be carried over to later years. The combined Company’s ability to use the NOLs will also depend on the amount of taxable income generated in future periods. Valuation allowances are provided to reduce the related deferred income tax assets to an amount which will, more likely than not, be realized. As a result of the Company’s assessment of the realization of deferred income tax assets, the Company concluded that it is more likely than not that all of its federal and state deferred income tax assets will be realized and thus no valuation allowance is necessary. The change from 2016 to 2017 was due to the reversal of the valuation allowance related to state NOL carryforwards. 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): 2017 2016 2015 Current income tax expense: Federal $ 127 $ 392 $ 397 State 35 48 30 Total current income tax expense 162 440 427 Deferred income tax expense (benefit): Federal (30 ) 77 60 State 41 14 (23 ) Total deferred income tax expense (benefit) 11 91 37 Income tax expense $ 173 $ 531 $ 464 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 the 2018 US federal rate of 21% for deferred taxes as follows (in millions): 2017 2016 2015 Income before income tax $ 1,207 $ 1,345 $ 1,312 Expected tax expense 422 471 459 Nondeductible expenses 5 20 4 State income taxes 29 28 19 State income sourcing 9 13 (15 ) Tax law changes (280 ) — — Other—net (12 ) (1 ) (3 ) Actual tax expense $ 173 $ 531 $ 464 Effective tax rate 14.3 % 39.5 % 35.4 % As a result of tax changes signed into law during 2017, the Company recorded a deferred tax benefit of $280 million as a result of the reduction in future corporate income tax rate and other state law changes. The Company incurred $39 million of acquisition-related costs that are not deductible under U.S. federal tax law in 2016 . These expenses are included in Special items—merger-related costs and other on the Company’s consolidated statement of operations 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 subsequent filings, unless guidance or rules changed. In 2017 , 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 increase in income tax expense of approximately $9 million for the year ended December 31, 2017 . 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 2007 to 2016 (a)(b) Alaska 2012 to 2016 California 2006 to 2016 (a) Oregon 2003 to 2016 (a) (a) The 2007-2012 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. 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. (b) Income tax years 2012 and 2013 are currently under exam by the Internal Revenue Service. Changes in the liability for gross unrecognized tax benefits during 2017 , 2016 and 2015 are as follows (in millions): 2017 2016 2015 Balance at January 1, $ 40 $ 32 $ 3 Additions related to prior years 16 — 29 Releases related to prior years (2 ) — — Additions related to current year activity 2 — — Additions from acquisitions — 8 — Releases due to settlements (11 ) — — Releases due to lapse of statute of limitations (2 ) — — Balance at December 31, $ 43 $ 40 $ 32 As of December 31, 2017 , the Company had $43 million of accrued tax contingencies, of which $36 million , if fully recognized, would decrease the effective tax rate. As of December 31, 2017 , 2016 and 2015 , the Company has accrued interest and penalties, net of federal income tax benefit, of $5 million , $3 million , and zero . In 2017 , 2016 , and 2015 , the Company recognized an expense of $2 million , $3 million , and zero for interest and penalties, net of federal income tax benefit. At December 31, 2017, the Company has unrecognized tax benefits recorded as a liability and some reducing deferred tax assets. The Company added $3 million of reserves for uncertain tax positions in 2017, primarily due to changes in income sourcing for state income taxes. 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, 2017. |
EMPLOYEE BENEFIT PLANS
EMPLOYEE BENEFIT PLANS | 12 Months Ended |
Dec. 31, 2017 | |
Compensation and Retirement Disclosure [Abstract] | |
EMPLOYEE BENEFIT PLANS | EMPLOYEE BENEFIT PLANS Four qualified defined-benefit plans, one non-qualified defined-benefit plan, and seven defined-contribution retirement plans cover various employee groups of Alaska, Virgin America, McGee Air Services and Horizon. 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 four qualified defined-benefit 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 work groups covered by qualified defined-benefit pension plans include salaried employees, pilots, clerical, office, and passenger service employees, and mechanics and related craft employees. The Company uses a December 31 measurement date for these plans. Weighted average assumptions used to determine benefit obligations: The rates below vary by plan and related work group. 2017 2016 Discount rates 3.69% to 3.78% 4.29% to 4.50% Rate of compensation increases 2.11% to 3.00% 2.12% to 2.59% Weighted average assumptions used to determine net periodic benefit cost: The rates below vary by plan and related work group. 2017 2016 2015 Discount rates 4.29% to 4.50% 4.55% to 4.69% 4.20% Expected return on plan assets 5.50% to 6.00% 6.00% to 6.50% 6.50% Rate of compensation increases 2.12% to 2.59% 2.06% to 2.65% 2.85% to 3.91% The discount rates are determined using current interest rates earned on high-quality, long-term bonds with maturities that correspond with the estimated cash distributions from the pension plans. At December 31, 2017 , 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 2017 2016 Asset category: Domestic equity securities 5% - 33% 25 % 30 % Non-U.S. equity securities 1% - 16% 11 % 12 % Fixed income securities 48% - 95% 59 % 53 % Real estate 2% - 8% 4 % 5 % Cash equivalents 0% 1 % — % 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. 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. Plan assets invested in common commingled trust funds are fair valued using 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. Plan asset by fund category (in millions): 2017 2016 Fair Value Hierarchy Fund type: U.S. equity market fund $ 515 $ 545 1 Non-U.S. equity fund 226 218 1 Credit bond index fund 1,232 989 1 Plan assets in common commingled trusts $ 1,973 $ 1,752 Real estate 97 91 (a) Cash equivalents 13 3 1 Total plan assets $ 2,083 $ 1,846 (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): 2017 2016 Projected benefit obligation (PBO) Beginning of year $ 2,043 $ 1,898 Service cost 39 37 Interest cost 74 73 Actuarial loss 300 104 Benefits paid (69 ) (69 ) End of year $ 2,387 $ 2,043 Plan assets at fair value Beginning of year $ 1,846 $ 1,737 Actual return on plan assets 291 178 Employer contributions 15 — Benefits paid (69 ) (69 ) End of year $ 2,083 $ 1,846 Unfunded status $ (304 ) $ (197 ) Percent funded 87 % 90 % The accumulated benefit obligation for the combined qualified defined-benefit pension plans was $2.2 billion and $1.9 billion at December 31, 2017 and 2016 . The amounts recognized in the consolidated balance sheets (in millions): 2017 2016 Accrued benefit liability-long term $ 335 $ 225 Plan assets-long term (within Other noncurrent assets) (31 ) (28 ) Total liability recognized $ 304 $ 197 The amounts not yet reflected in net periodic benefit cost and included in AOCL (in millions): 2017 2016 Prior service credit $ (9 ) $ (10 ) Net loss 597 509 Amount recognized in AOCL (pretax) $ 588 $ 499 The expected amortization of prior service credit and net loss from AOCL in 2018 is $1 million and $31 million , respectively, for the qualified defined-benefit pension plans. Net pension expense for the qualified defined-benefit plans included the following components (in millions): 2017 2016 2015 Service cost $ 39 $ 37 $ 41 Interest cost 74 73 84 Expected return on assets (106 ) (108 ) (122 ) Amortization of prior service credit (1 ) (1 ) (1 ) Recognized actuarial loss 26 25 26 Settlement expense (special item) — — 14 Net pension expense $ 32 $ 26 $ 42 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 2018 . 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 2018 $ 97 2019 101 2020 116 2021 116 2022 130 2023– 2027 723 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 $85 million and $76 million at December 31, 2017 and 2016 , respectively. The net periodic benefit cost was not material in 2017 or 2016 . Defined-Contribution Plans The seven 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 $103 million , $67 million and $60 million in 2017 , 2016 , and 2015 , respectively. 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, 2017 and 2016 . 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, 2017 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 $28 million and $25 million , which was recorded net of a prefunded trust account of $3 million and $3 million , and included in long-term other liabilities on the consolidated balance sheets as of December 31, 2017 and December 31, 2016 , 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 2017 , 2016 and 2015 was $135 million , $127 million and $120 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 six separate metrics related to Air Group profitability, safety, loyalty Mileage Plan™ and credit card growth, 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. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Dec. 31, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIES Future minimum payments for commitments as of December 31, 2017 (in millions): Aircraft Leases Facility Leases Aircraft Purchase Commitments Capacity Purchase Agreements (a) Aircraft Maintenance Deposits Aircraft Maintenance and Parts Management 2018 $ 354 $ 77 $ 955 $ 129 $ 61 $ 98 2019 356 67 816 151 65 102 2020 330 61 377 159 68 105 2021 285 53 268 165 64 121 2022 262 34 193 173 52 76 Thereafter 1,021 142 145 1,079 39 80 Total $ 2,608 $ 434 $ 2,754 $ 1,856 $ 349 $ 582 (a) Includes all non-aircraft lease costs associated with capacity purchase agreements. 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, 2017 , the Company had lease contracts for 10 B737 (B737) aircraft, 57 Airbus aircraft, 15 Bombardier Q400 aircraft, and 23 Embraer 175 (E175) aircraft with SkyWest Airlines, Inc. (SkyWest). The Company has an additional six scheduled lease deliveries of A321neo aircraft through 2018 , as well as 12 scheduled lease deliveries of E175 aircraft through 2018 to be operated by SkyWest. All lease contracts have remaining non-cancelable lease terms ranging from 2018 to 2030 . The Company has the option to increase capacity flown by SkyWest with eight additional E175 aircraft with deliveries in 2020 . 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 $552 million , $315 million and $295 million , in 2017 , 2016 and 2015 . Aircraft Purchase Commitments Aircraft purchase commitments include non-cancelable contractual commitments for aircrafts and engines. As of December 31, 2017 , the Company had commitments to purchase 44 B737 aircraft ( 12 B737 NextGen aircraft and 32 B737 MAX aircraft, with deliveries in 2018 through 2023 ) and 23 E175 aircraft with deliveries in 2018 through 2019 . The Company also has cancelable purchase commitments for 30 Airbus A320neo aircraft with deliveries from 2020 through 2022 . In addition, the Company has options to purchase 37 B737 aircraft and 30 E175 aircraft. The cancelable purchase commitments and option payments are not reflected in the table above. The Company expects to defer certain purchase commitments in 2019 and beyond, which is not currently reflected in the contractual aircraft purchase commitments above. Capacity Purchase Agreements (CPAs) At December 31, 2017 , Alaska had CPAs with three carriers, including the Company's wholly-owned subsidiary, Horizon. Horizon sells 100% of its capacity under a CPA with Alaska. In addition, Alaska has CPAs with SkyWest to fly certain routes 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 Certain Airbus leases include contractually required maintenance deposit payments to the lessor, which collateralize the lessor for future maintenance events should the Company not perform required maintenance. Most of the lease agreements provide that maintenance deposits 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 deposits 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 Through its acquisition of Virgin America, the Company has a separate maintenance-cost-per-hour contract for management and repair of certain rotable parts to support Airbus airframe and engine maintenance and repair. On October 1, 2017, Alaska entered into a similar contract for maintenance on its B737-800 aircraft engines. These agreements require 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 both agreements, 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. In January 2018, Virgin America filed a motion to decertify the class and Plaintiffs filed a motion for summary judgment seeking the court to rule in their favor on all remaining claims. The Company believes the claims in this case are without factual and legal merit and intends to defend this lawsuit. 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, 2017 | |
Equity [Abstract] | |
SHAREHOLDER'S EQUITY | SHAREHOLDERS' EQUITY Common Stock Changes During the second quarter of 2017, shareholders voted to increase the number of authorized shares of common stock from 200 million to 400 million . Dividends During 2017 , the Board of Directors declared dividends of $1.20 per share. The Company paid dividends of $148 million , $136 million and $102 million to shareholders of record during 2017 , 2016 and 2015 . Subsequent to year-end, the Board of Directors declared a quarterly cash dividend of $0.32 per share to be paid in March 2018 to shareholders of record as of February 20, 2018. This is a 7% increase from the most recent quarterly dividend of $0.30 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 billion share repurchase program. As of December 31, 2017 , the Company has repurchased 5.1 million shares for $388 million under this program. At December 31, 2017 , the Company held 6,842,860 shares in treasury. Management does not anticipate retiring common shares held in treasury for the foreseeable future. Share repurchase activity (in millions, except shares): 2017 2016 2015 Shares Amount Shares Amount Shares Amount 2015 Repurchase Program – $1 billion 981,277 $ 75 2,594,809 $ 193 1,517,277 $ 120 2014 Repurchase Program – $650 million — — — — 5,691,051 385 Total 981,277 $ 75 2,594,809 $ 193 7,208,328 $ 505 Accumulated Other Comprehensive Loss (AOCL) AOCL consisted of the following (in millions, net of tax): 2017 2016 Related to marketable securities $ (5 ) $ (3 ) Related to employee benefit plans (376 ) (299 ) Related to interest rate derivatives 1 (3 ) $ (380 ) $ (305 ) In relation to the Tax Cuts and Jobs Act, amounts recognized in other comprehensive income subsequent to the December 22, 2017 enactment date, are taxed at the revised federal income tax rates. The Company's actuarial adjustments for employee benefit plans occur annually at December 31, and therefore are tax effected at the new lower rates. Accordingly, the effective tax rate for employee benefit plan amounts recognized in other comprehensive income at December 31, 2017 is lower than it historically has been. |
SPECIAL ITEMS SPECIAL ITEMS
SPECIAL ITEMS SPECIAL ITEMS | 12 Months Ended |
Dec. 31, 2017 | |
SPECIAL ITEMS [Abstract] | |
Unusual or Infrequent Items Disclosure [Text Block] | SPECIAL ITEMS In 2017, the Company recognized special items of $118 million for merger-related costs associated with its acquisition of Virgin America. Costs classified as merger-related are directly attributable to merger activities. The Company also recognized a special tax benefit of $280 million due to the remeasurement of net deferred tax liabilities as a result of the Tax Cuts and Jobs Act signed into law on December 22, 2017, partially offset by certain state tax law enactments. In 2016, the Company recognized $117 million in merger-related costs. $39 million of these costs were not deductible under the U.S. federal tax law, as discussed in Note 6 . The Company 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 included 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 7 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. The following breaks down merger-related costs incurred in 2017 and 2016 (in millions): 2017 2016 Consulting and professional services $ 52 $ 32 Severance and retention benefits 40 22 Banking fees — 36 Legal and accounting fees 3 22 Other merger-related costs (a) 23 5 Total Merger-related Costs $ 118 $ 117 (a) Other merger-related costs consist primarily of costs for marketing and advertising, IT, training and skill development, employee appreciation and company sponsored events, moving expenses, supplies, and other immaterial expenses. |
STOCK-BASED COMPENSATION PLANS
STOCK-BASED COMPENSATION PLANS | 12 Months Ended |
Dec. 31, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
STOCK-BASED COMPENSATION PLANS | STOCK-BASED COMPENSATION PLANS 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 table below summarizes the components of total stock-based compensation (in millions): 2017 2016 2015 Stock options $ 3 $ 2 $ 2 Stock awards 24 11 11 Deferred stock awards 1 1 1 Employee stock purchase plan 6 5 3 Stock-based compensation $ 34 $ 19 $ 17 Tax benefit related to stock-based compensation $ 13 $ 7 $ 7 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 $ 3 1.2 Stock awards 34 1.7 Unrecognized stock-based compensation $ 37 1.7 The Company is authorized to issue 17 million shares of common stock under these plans, of which 10,927,824 shares remain available for future grants of either options or stock awards as of December 31, 2017 . 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: 2017 2016 2015 Expected volatility 51 % 51 % 53 % Expected term 6 years 6 years 6 years Risk-free interest rate 2.04 % 1.23 % 1.67 % Expected dividend yield 1.10 % 1.50 % 1.25 % Weighted-average grant date fair value per share $ 41.19 $ 27.14 $ 28.71 Estimated fair value of options granted (millions) $ 4 $ 2 $ 3 The expected market price volatility and expected term are based on historical results. 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, 2017 : Shares Weighted- Average Exercise Price Per Share Weighted- Average Contractual Life (Years) Aggregate Intrinsic Value (in millions) Outstanding, December 31, 2016 453,674 $ 40.02 6.2 $ 22 Granted 88,580 94.67 Exercised (91,013 ) 31.31 Canceled — — Forfeited or expired (9,774 ) 60.33 Outstanding, December 31, 2017 441,467 $ 52.34 6.0 $ 11 Exercisable, December 31, 2017 229,233 $ 32.08 4.9 $ 9 Vested or expected to vest, December 31, 2017 441,467 $ 52.34 6.0 $ 11 (in millions) 2017 2016 2015 Intrinsic value of option exercises $ 6 $ 9 $ 14 Cash received from stock option exercises 3 3 4 Tax benefit related to stock option exercises 2 3 5 Fair value of options vested 3 3 3 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. Generally, 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, 2016 440,093 $ 63.86 1.4 $ 39 Granted 433,340 88.43 Vested (286,138 ) 61.47 Forfeited (62,150 ) 65.06 Non-vested, December 31, 2017 525,145 $ 85.47 1.6 $ 39 Deferred Stock Awards Deferred Stock Units (DSUs) are awarded to members of the 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 406,628 , 308,920 and 281,058 shares in 2017 , 2016 and 2015 under the ESPP. |
OPERATING SEGMENT INFORMATION
OPERATING SEGMENT INFORMATION | 12 Months Ended |
Dec. 31, 2017 | |
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, and Latin America. • 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, McGee Air Services, 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. Operating segment information is as follows (in millions): Year Ended December 31, 2017 Mainline Regional Horizon Consolidating & Other (b) Air Group Adjusted (c) Special Items (d) Consolidated Operating revenues Passenger Mainline $ 5,858 $ — $ — $ — $ 5,858 $ — $ 5,858 Regional — 960 — — 960 — 960 Total passenger revenues 5,858 960 — — 6,818 — 6,818 CPA revenues — — 426 (426 ) — — — Freight and mail 110 4 — — 114 — 114 Other-net 922 74 4 1 1,001 — 1,001 Total operating revenues 6,890 1,038 430 (425 ) 7,933 — 7,933 Operating expenses Operating expenses, excluding fuel 4,257 851 427 (427 ) 5,108 118 5,226 Fuel expense 1,282 172 — — 1,454 (7 ) 1,447 Total operating expenses 5,539 1,023 427 (427 ) 6,562 111 6,673 Nonoperating income (expense) Interest income 39 — — (5 ) 34 — 34 Interest expense (92 ) — (13 ) 2 (103 ) — (103 ) Other 14 — 2 — 16 — 16 (39 ) — (11 ) (3 ) (53 ) — (53 ) Income (loss) before income tax $ 1,312 $ 15 $ (8 ) $ (1 ) $ 1,318 $ (111 ) $ 1,207 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 (a) As the acquisition of Virgin America closed on December 14, 2016, Mainline financial results, presented above include Virgin America for the twelve months ended December 31, 2017 , and not for the prior period. Financial results also reflect the impacts of purchase accounting. (b) Includes consolidating entries, Parent Company, McGee Air Services, and other immaterial business units. (c) The Air Group 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 (2017 and 2016), pension settlement charge (2015), and a litigation-related matter (2015). 2017 2016 2015 Depreciation and amortization: Mainline $ 308 $ 296 $ 268 Horizon 64 67 52 Consolidated $ 372 $ 363 $ 320 Capital expenditures: Mainline $ 734 $ 608 $ 821 Horizon 292 70 10 Consolidated $ 1,026 $ 678 $ 831 Total assets at end of period: Mainline $ 16,650 $ 15,260 Horizon 929 690 Consolidating & Other (6,839 ) (5,988 ) Consolidated $ 10,740 $ 9,962 |
GENERAL AND SUMMARY OF SIGNIF20
GENERAL AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2017 | |
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 Virgin America. Our consolidated financial statements also include McGee Air Services, a subsidiary of Alaska. 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 $10 million and $15 million at December 31, 2017 and 2016 respectively, 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] | |
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 $ 38 million and $36 million at December 31, 2017 and 2016 , respectively. Inventory and supplies — net also includes fuel inventory of $ 23 million and $16 million at December 31, 2017 and 2016 , 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: Estimated Useful Life Estimated Salvage Value Aircraft and other flight equipment: Boeing 737, Airbus A319/320, and E175 aircraft 20-25 years 10% Bombardier Q400 aircraft 15 years 10% 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 0-10% Computer hardware and software 3-10 years —% Other furniture and equipment 5-10 years —% Near the end of an asset's estimated useful life, management updates the salvage value estimates based on current market conditions and expected use of the asset. Repairable and rotable aircraft parts are included in Aircraft and other flight equipment, and are depreciated over the associated fleet life. In 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. 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, other than engine maintenance on B737-800 engines, 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. Maintenance on B737-800 engines is covered under a power-by-the-hour agreement with a third party beginning in the fourth quarter of 2017, whereby the Company pays a determinable amount, and transfers risk, to a third party. The Company expenses the contract amounts based on engine usage. 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, 2017 the goodwill balance was $1.9 billion , and is associated with the Mainline reporting unit. The Company reviews goodwill for impairment annually in Q4, or more frequently if events or circumstances indicate than an impairment may exist. If fair value of the reporting unit does not exceed the carrying amount, an impairment charge may be recorded. In 2017 , the fair value of the reporting unit with goodwill substantially exceeded its carrying value. |
Intangible Assets | Intangible Assets Intangible assets recorded in conjunction with the acquisition of Virgin America 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] | |
Revenue Recognition, Deferred Revenue [Policy Text Block] | Deferred Revenue Deferred revenue results primarily from the sale of Mileage Plan™ miles to third-parties. It also includes Virgin America's Elevate® flown points outstanding at the acquisition date that were recorded at their estimated fair value as part of purchase price accounting. Recognition of this deferred revenue occurs 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. Airport and terminal facility leases are variable based on volumes and expensed as incurred. 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, 2017 and December 31, 2016 . 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 $106 million and $62 million related to credits for future travel, as of December 31, 2017 and December 31, 2016 , 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™ program. They are recognized as described in the “Mileage Plan” 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 operated the Elevate frequent flyer program for the duration of 2017. Both programs provide travel awards to members based on accumulated mileage or points. For miles 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 affinity credit card. 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 apply hedge accounting to its derivative fuel hedge contracts nor does it hold or issue them for trading purposes. 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 4 . |
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, 2017 , there is no 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 6 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 2017 , 2016 , and 2015 , 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. 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 became effective for the Company on January 1, 2018. Under the new standard, the Company estimates a net increase to Mileage Plan™ deferred revenues of approximately $345 million to $365 million as of the beginning of the retroactive reporting period (January 1, 2016) at the time of adoption. Additionally, the Company estimates the change in ticket breakage methodology will not have a significant impact on the statements of operations, but will decrease air traffic liability by approximately $70 million to $80 million at adoption of the standard. The overall impact to equity as of the beginning of the retroactive reporting period, including these, as well as other less material changes, is expected to be between $165 million and $175 million . In January 2016, the FASB issued ASU No. 2016-01, "Financial Instruments—Overall (Subtopic 825-10)." This standard makes several changes, including the elimination of the available-for-sale classification of equity investments, and requires equity investments with readily determinable fair values to be measured at fair value with changes in fair value recognized in net income. It is effective for the Company beginning January 1, 2018. The Company does not expect the adoption of ASU 2016-01 to have a material impact on its consolidated financial statements. 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. 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 the ASU. The new standard is effective for the Company on January 1, 2019. The Company will not 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 was adopted prospectively as of January 1, 2017. Prior periods have not been adjusted. The adoption of the standard did 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. In 2017, the Company performed an impairment test for goodwill arising from its acquisition of Virgin America and adopted the standard effective January 1, 2017. In March 2017, the FASB issued ASU 2017-07, "Compensation—Retirement Benefits" (Topic 715), which will require the Company to present the service cost component of net periodic benefit cost as Wages and benefits in the statements of operations. All other components of net periodic benefit cost will be required to be presented in Nonoperating income (expense) in the statements of operations. These components will not be eligible for capitalization. The ASU is effective for the Company beginning January 1, 2018. Changes to the statements of operations under the ASU are applicable retrospectively. The adoption of this standard will have no impact on Income before income tax or Net income for the periods subject to retrospective reclassification. See Note 7 for the current components of the Company's net periodic benefit costs. In August 2017, the FASB issued ASU 2017-12, "Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities." The ASU expands the activities that qualify for hedge accounting and simplifies the rules for reporting hedging relationships. The ASU is effective for the Company beginning January 1, 2019. The Company will not early adopt the standard. |
GENERAL AND SUMMARY OF SIGNIF21
GENERAL AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
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: Estimated Useful Life Estimated Salvage Value Aircraft and other flight equipment: Boeing 737, Airbus A319/320, and E175 aircraft 20-25 years 10% Bombardier Q400 aircraft 15 years 10% 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 0-10% Computer hardware and software 3-10 years —% Other furniture and equipment 5-10 years —% |
Liabilities from Mileage Plan [Table Text Block] | Frequent flyer program deferred revenue and liabilities included in the consolidated balance sheets (in millions): 2017 2016 Current Liabilities: Other accrued liabilities $ 519 $ 484 Other Liabilities and Credits: Deferred revenue 699 638 Other liabilities 26 21 Total $ 1,244 $ 1,143 |
Revenue from Mileage Plan [Table Text Block] | Frequent flyer program revenue included in the consolidated statements of operations (in millions): 2017 2016 2015 Passenger revenues $ 380 $ 293 $ 267 Other — net revenues 482 429 329 Total frequent flyer program revenues $ 862 $ 722 $ 596 |
ACQUISITION OF VIRGIN AMERICA22
ACQUISITION OF VIRGIN AMERICA, INC. (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Business Combinations [Abstract] | |
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed | Fair values of the assets acquired and the liabilities assumed as of the acquisition date, December 14, 2016 , at December 31, 2017 and December 31, 2016 were as follows (in millions): December 31, 2017 December 31, 2016 Cash and cash equivalents $ 645 $ 645 Receivables 53 44 Prepaid expenses and other current assets 18 16 Property and equipment 571 560 Intangible assets 141 143 Goodwill 1,943 1,934 Other assets 89 84 Total assets 3,460 3,426 Accounts payable 22 22 Accrued wages, vacation and payroll taxes 54 51 Air traffic liabilities 172 172 Other accrued liabilities 198 196 Current portion of long-term debt 125 125 Long-term debt, net of current portion 360 360 Deferred income taxes (300 ) (304 ) Deferred revenue 126 126 Other liabilities 107 82 Total liabilities 864 830 Total purchase price $ 2,596 $ 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 |
DERIVATIVE INSTRUMENTS (Tables)
DERIVATIVE INSTRUMENTS (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
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): 2017 2016 Fuel hedge contracts (not designated as hedges) Prepaid expenses and other current assets $ 19 $ 17 Other assets 3 3 Interest rate swaps (designated as hedges) Prepaid expenses and other current assets 1 — Other noncurrent assets 8 — Other accrued liabilities (3 ) (5 ) Other liabilities (5 ) — Losses in accumulated other comprehensive loss (AOCL) (2 ) (5 ) |
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): 2017 2016 2015 Fuel hedge contracts (not designated as hedges) Gains (losses) recognized in Aircraft fuel $ (6 ) $ (3 ) $ (19 ) Interest rate swaps (designated as hedges) Gains (losses) recognized in Aircraft rent (5 ) (6 ) (6 ) Gains (losses) recognized in other comprehensive income (OCI) 1 8 (5 ) |
FAIR VALUE MEASUREMENTS (Tables
FAIR VALUE MEASUREMENTS (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Fair Value Disclosures [Abstract] | |
Schedule of Realized Gain (Loss) [Table Text Block] | Activity for marketable securities (in millions): 2017 2016 2015 Proceeds from sales and maturities $ 1,388 $ 962 $ 1,175 |
Schedule of Debt Investment Maturities [Table Text Block] | Maturities for marketable securities (in millions): December 31, 2017 Cost Basis Fair Value Due in one year or less $ 113 $ 113 Due after one year through five years 1,272 1,264 Due after five years through 10 years 50 50 Total $ 1,435 $ 1,427 |
Fair Value, by Balance Sheet Grouping [Table Text Block] | Fair values of financial instruments on the consolidated balance sheet (in millions): December 31, 2017 Level 1 Level 2 Total Assets Marketable securities U.S. government and agency securities $ 328 $ — $ 328 Foreign government bonds — 43 43 Asset-backed securities — 209 209 Mortgage-backed securities — 99 99 Corporate notes and bonds — 726 726 Municipal securities — 22 22 Derivative instruments Fuel hedge contracts—call options — 22 22 Interest rate swap agreements — 9 9 Liabilities Derivative instruments Interest rate swap agreements — (8 ) (8 ) 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 ) Fixed-rate debt on the consolidated balance sheet and the estimated fair value of long-term fixed-rate debt (in millions): 2017 2016 Fixed rate debt at cost $ 956 $ 1,175 Non-recurring purchase price accounting fair value adjustment 3 4 Total fixed rate debt $ 959 $ 1,179 December 31, 2017 estimated fair value $ 959 $ 1,199 |
LONG-TERM DEBT (Tables)
LONG-TERM DEBT (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Debt Disclosure [Abstract] | |
Schedule of Long-term Debt Instruments [Table Text Block] | Long-term debt obligations (in millions): 2017 2016 Fixed-rate notes payable due through 2028 $ 959 $ 1,179 Variable-rate notes payable due through 2028 1,625 1,803 Less debt issuance costs (15 ) (18 ) Total debt 2,569 2,964 Less current portion 307 319 Long-term debt, less current portion $ 2,262 $ 2,645 Weighted-average fixed-interest rate 4.2 % 4.4 % Weighted-average variable-interest rate 2.8 % 2.4 % |
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 2018 $ 310 2019 393 2020 449 2021 414 2022 247 Thereafter 768 Total principal payments $ 2,581 |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | |
Schedule of Deferred Tax Assets and Liabilities [Table Text Block] | Deferred tax (assets) and liabilities comprise the following (in millions): 2017 2016 Excess of tax over book depreciation $ 964 $ 1,282 Intangibles—net 14 39 Other—net 43 26 Gross deferred tax liabilities 1,021 1,347 Mileage Plan™ (208 ) (310 ) Inventory obsolescence (16 ) (23 ) Deferred gains (5 ) (8 ) Employee benefits (154 ) (196 ) Acquired net operating losses (127 ) (289 ) Other—net (57 ) (62 ) Gross deferred tax assets (567 ) (888 ) Valuation allowance — 4 Net deferred tax (assets) liabilities $ 454 $ 463 |
Schedule of Components of Income Tax Expense (Benefit) [Table Text Block] | The components of income tax expense were as follows (in millions): 2017 2016 2015 Current income tax expense: Federal $ 127 $ 392 $ 397 State 35 48 30 Total current income tax expense 162 440 427 Deferred income tax expense (benefit): Federal (30 ) 77 60 State 41 14 (23 ) Total deferred income tax expense (benefit) 11 91 37 Income tax expense $ 173 $ 531 $ 464 |
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 the 2018 US federal rate of 21% for deferred taxes as follows (in millions): 2017 2016 2015 Income before income tax $ 1,207 $ 1,345 $ 1,312 Expected tax expense 422 471 459 Nondeductible expenses 5 20 4 State income taxes 29 28 19 State income sourcing 9 13 (15 ) Tax law changes (280 ) — — Other—net (12 ) (1 ) (3 ) Actual tax expense $ 173 $ 531 $ 464 Effective tax rate 14.3 % 39.5 % 35.4 % |
Summary of Income Tax Contingencies [Table Text Block] | Changes in the liability for gross unrecognized tax benefits during 2017 , 2016 and 2015 are as follows (in millions): 2017 2016 2015 Balance at January 1, $ 40 $ 32 $ 3 Additions related to prior years 16 — 29 Releases related to prior years (2 ) — — Additions related to current year activity 2 — — Additions from acquisitions — 8 — Releases due to settlements (11 ) — — Releases due to lapse of statute of limitations (2 ) — — Balance at December 31, $ 43 $ 40 $ 32 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 2007 to 2016 (a)(b) Alaska 2012 to 2016 California 2006 to 2016 (a) Oregon 2003 to 2016 (a) (a) The 2007-2012 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. 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. (b) Income tax years 2012 and 2013 are currently under exam by the Internal Revenue Service. |
EMPLOYEE BENEFIT PLANS (Tables)
EMPLOYEE BENEFIT PLANS (Tables) - Qualified Defined Benefit [Member] | 12 Months Ended |
Dec. 31, 2017 | |
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: The rates below vary by plan and related work group. 2017 2016 Discount rates 3.69% to 3.78% 4.29% to 4.50% Rate of compensation increases 2.11% to 3.00% 2.12% to 2.59% Weighted average assumptions used to determine net periodic benefit cost: The rates below vary by plan and related work group. 2017 2016 2015 Discount rates 4.29% to 4.50% 4.55% to 4.69% 4.20% Expected return on plan assets 5.50% to 6.00% 6.00% to 6.50% 6.50% Rate of compensation increases 2.12% to 2.59% 2.06% to 2.65% 2.85% to 3.91% |
Schedule of Allocation of Plan Assets [Table Text Block] | Plan asset by fund category (in millions): 2017 2016 Fair Value Hierarchy Fund type: U.S. equity market fund $ 515 $ 545 1 Non-U.S. equity fund 226 218 1 Credit bond index fund 1,232 989 1 Plan assets in common commingled trusts $ 1,973 $ 1,752 Real estate 97 91 (a) Cash equivalents 13 3 1 Total plan assets $ 2,083 $ 1,846 (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 target and actual asset allocation of the funds in the qualified defined-benefit plans, by asset category, are as follows: Target 2017 2016 Asset category: Domestic equity securities 5% - 33% 25 % 30 % Non-U.S. equity securities 1% - 16% 11 % 12 % Fixed income securities 48% - 95% 59 % 53 % Real estate 2% - 8% 4 % 5 % Cash equivalents 0% 1 % — % Plan assets 100 % 100 % |
Schedule of Net Funded Status [Table Text Block] | The following table sets forth the status of the qualified defined-benefit pension plans (in millions): 2017 2016 Projected benefit obligation (PBO) Beginning of year $ 2,043 $ 1,898 Service cost 39 37 Interest cost 74 73 Actuarial loss 300 104 Benefits paid (69 ) (69 ) End of year $ 2,387 $ 2,043 Plan assets at fair value Beginning of year $ 1,846 $ 1,737 Actual return on plan assets 291 178 Employer contributions 15 — Benefits paid (69 ) (69 ) End of year $ 2,083 $ 1,846 Unfunded status $ (304 ) $ (197 ) Percent funded 87 % 90 % |
Schedule of Amounts Recognized in Balance Sheet [Table Text Block] | The amounts recognized in the consolidated balance sheets (in millions): 2017 2016 Accrued benefit liability-long term $ 335 $ 225 Plan assets-long term (within Other noncurrent assets) (31 ) (28 ) Total liability recognized $ 304 $ 197 The amounts not yet reflected in net periodic benefit cost and included in AOCL (in millions): 2017 2016 Prior service credit $ (9 ) $ (10 ) Net loss 597 509 Amount recognized in AOCL (pretax) $ 588 $ 499 |
Schedule of Net Benefit Costs [Table Text Block] | Net pension expense for the qualified defined-benefit plans included the following components (in millions): 2017 2016 2015 Service cost $ 39 $ 37 $ 41 Interest cost 74 73 84 Expected return on assets (106 ) (108 ) (122 ) Amortization of prior service credit (1 ) (1 ) (1 ) Recognized actuarial loss 26 25 26 Settlement expense (special item) — — 14 Net pension expense $ 32 $ 26 $ 42 |
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 2018 $ 97 2019 101 2020 116 2021 116 2022 130 2023– 2027 723 |
COMMITMENTS AND CONTINGENCIES C
COMMITMENTS AND CONTINGENCIES COMMITMENTS AND CONTINGENCIES (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
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, 2017 (in millions): Aircraft Leases Facility Leases Aircraft Purchase Commitments Capacity Purchase Agreements (a) Aircraft Maintenance Deposits Aircraft Maintenance and Parts Management 2018 $ 354 $ 77 $ 955 $ 129 $ 61 $ 98 2019 356 67 816 151 65 102 2020 330 61 377 159 68 105 2021 285 53 268 165 64 121 2022 262 34 193 173 52 76 Thereafter 1,021 142 145 1,079 39 80 Total $ 2,608 $ 434 $ 2,754 $ 1,856 $ 349 $ 582 |
SHAREHOLDER'S EQUITY (Tables)
SHAREHOLDER'S EQUITY (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Equity [Abstract] | |
Schedule of Treasury Stock by Class [Table Text Block] | Share repurchase activity (in millions, except shares): 2017 2016 2015 Shares Amount Shares Amount Shares Amount 2015 Repurchase Program – $1 billion 981,277 $ 75 2,594,809 $ 193 1,517,277 $ 120 2014 Repurchase Program – $650 million — — — — 5,691,051 385 Total 981,277 $ 75 2,594,809 $ 193 7,208,328 $ 505 |
Schedule of Accumulated Other Comprehensive Income (Loss) [Table Text Block] | AOCL consisted of the following (in millions, net of tax): 2017 2016 Related to marketable securities $ (5 ) $ (3 ) Related to employee benefit plans (376 ) (299 ) Related to interest rate derivatives 1 (3 ) $ (380 ) $ (305 ) In relation to the Tax Cuts and Jobs Act, amounts recognized in other comprehensive income subsequent to the December 22, 2017 enactment date, are taxed at the revised federal income tax rates. The Company's actuarial adjustments for employee benefit plans occur annually at December 31, and therefore are tax effected at the new lower rates. Accordingly, the effective tax rate for employee benefit plan amounts recognized in other comprehensive income at December 31, 2017 is lower than it historically has been. |
SPECIAL ITEMS (Tables)
SPECIAL ITEMS (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Unusual or Infrequent Items, or Both [Abstract] | |
Merger-related Costs [Table Text Block] | The following breaks down merger-related costs incurred in 2017 and 2016 (in millions): 2017 2016 Consulting and professional services $ 52 $ 32 Severance and retention benefits 40 22 Banking fees — 36 Legal and accounting fees 3 22 Other merger-related costs (a) 23 5 Total Merger-related Costs $ 118 $ 117 (a) Other merger-related costs consist primarily of costs for marketing and advertising, IT, training and skill development, employee appreciation and company sponsored events, moving expenses, supplies, and other immaterial expenses. |
STOCK-BASED COMPENSATION PLANS
STOCK-BASED COMPENSATION PLANS (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
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): 2017 2016 2015 Stock options $ 3 $ 2 $ 2 Stock awards 24 11 11 Deferred stock awards 1 1 1 Employee stock purchase plan 6 5 3 Stock-based compensation $ 34 $ 19 $ 17 Tax benefit related to stock-based compensation $ 13 $ 7 $ 7 |
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 $ 3 1.2 Stock awards 34 1.7 Unrecognized stock-based compensation $ 37 1.7 |
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: 2017 2016 2015 Expected volatility 51 % 51 % 53 % Expected term 6 years 6 years 6 years Risk-free interest rate 2.04 % 1.23 % 1.67 % Expected dividend yield 1.10 % 1.50 % 1.25 % Weighted-average grant date fair value per share $ 41.19 $ 27.14 $ 28.71 Estimated fair value of options granted (millions) $ 4 $ 2 $ 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, 2017 : Shares Weighted- Average Exercise Price Per Share Weighted- Average Contractual Life (Years) Aggregate Intrinsic Value (in millions) Outstanding, December 31, 2016 453,674 $ 40.02 6.2 $ 22 Granted 88,580 94.67 Exercised (91,013 ) 31.31 Canceled — — Forfeited or expired (9,774 ) 60.33 Outstanding, December 31, 2017 441,467 $ 52.34 6.0 $ 11 Exercisable, December 31, 2017 229,233 $ 32.08 4.9 $ 9 Vested or expected to vest, December 31, 2017 441,467 $ 52.34 6.0 $ 11 (in millions) 2017 2016 2015 Intrinsic value of option exercises $ 6 $ 9 $ 14 Cash received from stock option exercises 3 3 4 Tax benefit related to stock option exercises 2 3 5 Fair value of options vested 3 3 3 |
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, 2016 440,093 $ 63.86 1.4 $ 39 Granted 433,340 88.43 Vested (286,138 ) 61.47 Forfeited (62,150 ) 65.06 Non-vested, December 31, 2017 525,145 $ 85.47 1.6 $ 39 |
OPERATING SEGMENT INFORMATION (
OPERATING SEGMENT INFORMATION (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Segment Reporting [Abstract] | |
Schedule of Segment Reporting Information, by Segment | Operating segment information is as follows (in millions): Year Ended December 31, 2017 Mainline Regional Horizon Consolidating & Other (b) Air Group Adjusted (c) Special Items (d) Consolidated Operating revenues Passenger Mainline $ 5,858 $ — $ — $ — $ 5,858 $ — $ 5,858 Regional — 960 — — 960 — 960 Total passenger revenues 5,858 960 — — 6,818 — 6,818 CPA revenues — — 426 (426 ) — — — Freight and mail 110 4 — — 114 — 114 Other-net 922 74 4 1 1,001 — 1,001 Total operating revenues 6,890 1,038 430 (425 ) 7,933 — 7,933 Operating expenses Operating expenses, excluding fuel 4,257 851 427 (427 ) 5,108 118 5,226 Fuel expense 1,282 172 — — 1,454 (7 ) 1,447 Total operating expenses 5,539 1,023 427 (427 ) 6,562 111 6,673 Nonoperating income (expense) Interest income 39 — — (5 ) 34 — 34 Interest expense (92 ) — (13 ) 2 (103 ) — (103 ) Other 14 — 2 — 16 — 16 (39 ) — (11 ) (3 ) (53 ) — (53 ) Income (loss) before income tax $ 1,312 $ 15 $ (8 ) $ (1 ) $ 1,318 $ (111 ) $ 1,207 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 (a) As the acquisition of Virgin America closed on December 14, 2016, Mainline financial results, presented above include Virgin America for the twelve months ended December 31, 2017 , and not for the prior period. Financial results also reflect the impacts of purchase accounting. (b) Includes consolidating entries, Parent Company, McGee Air Services, and other immaterial business units. (c) The Air Group 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 (2017 and 2016), pension settlement charge (2015), and a litigation-related matter (2015). 2017 2016 2015 Depreciation and amortization: Mainline $ 308 $ 296 $ 268 Horizon 64 67 52 Consolidated $ 372 $ 363 $ 320 Capital expenditures: Mainline $ 734 $ 608 $ 821 Horizon 292 70 10 Consolidated $ 1,026 $ 678 $ 831 Total assets at end of period: Mainline $ 16,650 $ 15,260 Horizon 929 690 Consolidating & Other (6,839 ) (5,988 ) Consolidated $ 10,740 $ 9,962 |
GENERAL AND SUMMARY OF SIGNIF33
GENERAL AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CASH AND CASH EQUIVALENTS (Details) - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Accounting Policies [Abstract] | ||
Negative cash balance | $ 10 | $ 15 |
GENERAL AND SUMMARY OF SIGNIF34
GENERAL AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - INVENTORIES AND SUPPLIES - NET (Details) - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Accounting Policies [Abstract] | ||
Allowance for all non-surplus expendable inventories | $ 38 | $ 36 |
Fuel inventory | $ 23 | $ 16 |
GENERAL AND SUMMARY OF SIGNIF35
GENERAL AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - PROPERTY, EQUIPMENT AND DEPRECIATION (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Property, Plant and Equipment [Line Items] | ||
Goodwill | $ 1,943 | $ 1,934 |
Buildings [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, Plant, and Equipment, Salvage Value, Percentage | 0.00% | |
Buildings [Member] | Minimum [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Estimated useful life | 25 years | |
Buildings [Member] | Maximum [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Estimated useful life | 30 years | |
Minor building and land improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Estimated useful life | 10 years | |
Property, Plant, and Equipment, Salvage Value, Percentage | 0.00% | |
Leaseholds and Leasehold Improvements [Member] | Minimum [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, Plant, and Equipment, Salvage Value, Percentage | 0.00% | |
Leaseholds and Leasehold Improvements [Member] | Maximum [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, Plant, and Equipment, Salvage Value, Percentage | 10.00% | |
Computer hardware and software [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, Plant, and Equipment, Salvage Value, Percentage | 0.00% | |
Computer hardware and software [Member] | Minimum [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Estimated useful life | 3 years | |
Computer hardware and software [Member] | Maximum [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Estimated useful life | 10 years | |
Other furniture and equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, Plant, and Equipment, Salvage Value, Percentage | 0.00% | |
Other furniture and equipment [Member] | Minimum [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Estimated useful life | 5 years | |
Other furniture and equipment [Member] | Maximum [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Estimated useful life | 10 years | |
B737 | Aircraft [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, Plant, and Equipment, Salvage Value, Percentage | 10.00% | |
B737 | Aircraft [Member] | Minimum [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Estimated useful life | 20 years | |
B737 | Aircraft [Member] | Maximum [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Estimated useful life | 25 years | |
Airbus [Member] | Aircraft [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, Plant, and Equipment, Salvage Value, Percentage | 10.00% | |
Airbus [Member] | 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 | |
E175 [Member] | Aircraft [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, Plant, and Equipment, Salvage Value, Percentage | 10.00% | |
E175 [Member] | Aircraft [Member] | Minimum [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Estimated useful life | 20 years | |
E175 [Member] | Aircraft [Member] | Maximum [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Estimated useful life | 25 years | |
Q400 [Member] | Aircraft [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Estimated useful life | 15 years | |
Property, Plant, and Equipment, Salvage Value, Percentage | 10.00% |
GENERAL AND SUMMARY OF SIGNIF36
GENERAL AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - REVENUE RECOGNITION (Details) - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Accounting Policies [Abstract] | ||
Travel credits for future travel | $ 106 | $ 62 |
GENERAL AND SUMMARY OF SIGNIF37
GENERAL AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - MILEAGE PLAN (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Mileage Plan [Line Items] | |||
Other accrued liabilities | $ 918 | $ 878 | |
Deferred revenue | 699 | 640 | |
Other liabilities | 451 | 417 | |
Deferred revenue from Mileage Plan awards issued but not yet flown | 47 | 43 | |
Passenger revenues | 6,818 | 5,006 | $ 4,793 |
Other-net revenues | 1,001 | 817 | 697 |
Total Operating Revenues | 7,933 | 5,931 | 5,598 |
Revenue From Mileage Plan [Member] | |||
Mileage Plan [Line Items] | |||
Passenger revenues | 380 | 293 | 267 |
Other-net revenues | 482 | 429 | 329 |
Total Operating Revenues | 862 | 722 | 596 |
Commission revenue | 396 | 329 | $ 280 |
Liabilities From Mileage Plan [Member] | |||
Mileage Plan [Line Items] | |||
Other accrued liabilities | 519 | 484 | |
Deferred revenue | 699 | 638 | |
Other liabilities | 26 | 21 | |
Liabilities | $ 1,244 | $ 1,143 |
GENERAL AND SUMMARY OF SIGNIF38
GENERAL AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - SELLING EXPENSES (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Accounting Policies [Abstract] | |||
Advertising expense | $ 91 | $ 61 | $ 55 |
GENERAL AND SUMMARY OF SIGNIF39
GENERAL AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES GENERAL AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - STOCK-BASED COMPENSATION (Details) | 12 Months Ended |
Dec. 31, 2017 | |
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% |
GENERAL AND SUMMARY OF SIGNIF40
GENERAL AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES GENERAL AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS (Details) - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Deferred revenue | $ 699 | $ 640 | |
Decrease in air traffic liability | 937 | 849 | |
Overall impact to equity | 4,454 | 3,568 | |
Liabilities From Mileage Plan [Member] | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Deferred revenue | $ 699 | 638 | |
Minimum [Member] | Difference between Revenue Guidance in Effect before and after Topic 606 [Member]]] | Accounting Standards Update 2014-09 [Member] | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Decrease in air traffic liability | (70) | ||
Overall impact to equity | $ 165 | ||
Minimum [Member] | Difference between Revenue Guidance in Effect before and after Topic 606 [Member]]] | Accounting Standards Update 2014-09 [Member] | Liabilities From Mileage Plan [Member] | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Deferred revenue | 345 | ||
Maximum [Member] | Difference between Revenue Guidance in Effect before and after Topic 606 [Member]]] | Accounting Standards Update 2014-09 [Member] | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Decrease in air traffic liability | (80) | ||
Overall impact to equity | $ 175 | ||
Maximum [Member] | Difference between Revenue Guidance in Effect before and after Topic 606 [Member]]] | Accounting Standards Update 2014-09 [Member] | Liabilities From Mileage Plan [Member] | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Deferred revenue | $ 365 |
ACQUISITION OF VIRGIN AMERICA41
ACQUISITION OF VIRGIN AMERICA, INC. (Details) - USD ($) $ / shares in Units, $ in Millions | Dec. 14, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Business Acquisition [Line Items] | |||||
Revenue | $ 7,933 | $ 5,931 | $ 5,598 | ||
Net Income | 1,034 | 814 | 848 | ||
Goodwill | 1,943 | 1,934 | |||
Special items—merger-related costs and other | 118 | 117 | |||
Virgin America Inc. [Member] | |||||
Business Acquisition [Line Items] | |||||
Percentage of interests acquired | 100.00% | ||||
Business Acquisition, Share Price | $ 57 | ||||
Business Combination, Consideration Transferred | $ 2,600 | ||||
Goodwill | 1,943 | ||||
Intangible assets | 141 | ||||
Finite-lived intangible assets acquired | 52 | ||||
Special items—merger-related costs and other | 118 | 117 | |||
Airport Gates [Member] | Virgin America Inc. [Member] | |||||
Business Acquisition [Line Items] | |||||
Finite-lived intangible assets acquired | $ 14 | ||||
Finite-Lived intangible asset, useful Life | 11 years | ||||
Credit Card Agreements [Member] | Virgin America Inc. [Member] | |||||
Business Acquisition [Line Items] | |||||
Finite-lived intangible assets acquired | $ 1 | ||||
Finite-Lived intangible asset, useful Life | 1 year | ||||
Customer Relationships [Member] | Virgin America Inc. [Member] | |||||
Business Acquisition [Line Items] | |||||
Finite-lived intangible assets acquired | $ 37 | ||||
Finite-Lived intangible asset, useful Life | 7 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 | |
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ACQUISITION OF VIRGIN AMERICA42
ACQUISITION OF VIRGIN AMERICA, INC. Fair values of the assets acquired and the liabilities assumed (Details) - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 14, 2016 |
Business Combination, Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Net [Abstract] | |||
Goodwill | $ 1,943 | $ 1,934 | |
Virgin America Inc. [Member] | |||
Business Combination, Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Net [Abstract] | |||
Cash and cash equivalents | $ 645 | ||
Receivables | 53 | ||
Prepaid expenses and other current assets | 18 | ||
Property and equipment | 571 | ||
Intangible assets | 141 | ||
Goodwill | 1,943 | ||
Other assets | 89 | ||
Total assets | 3,460 | ||
Accounts payable | 22 | ||
Accrued wages, vacation and payroll taxes | 54 | ||
Air traffic liabilities | 172 | ||
Other accrued liabilities | 198 | ||
Current portion of long-term debt | 125 | ||
Long-term debt, net of current portion | 360 | ||
Deferred income taxes | (300) | ||
Deferred revenue | 126 | ||
Other liabilities | 107 | ||
Total liabilities | 864 | ||
Total purchase price | 2,596 | ||
Scenario, Previously Reported [Member] | 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 AMERICA43
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 |
DERIVATIVE INSTRUMENTS - BALANC
DERIVATIVE INSTRUMENTS - BALANCE SHEET CLASSIFICATION (Details) - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Derivatives, Fair Value [Line Items] | ||
Accumulated other comprehensive loss | $ (380) | $ (305) |
Fuel hedge contracts [Member] | Derivative Instruments Not Designated as Hedges [Member] | Fuel Hedge Contracts, Current [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Derivative Assets, Current | 19 | 17 |
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 | 3 |
Interest rate swaps agreements [Member] | Derivative Instruments Designated as Hedges [Member] | Prepaid Expenses and Other Current Assets [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Derivative Assets, Current | 1 | 0 |
Interest rate swaps agreements [Member] | Derivative Instruments Designated as Hedges [Member] | Other Noncurrent Assets [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Derivative Assets, Noncurrent | 8 | 0 |
Interest rate swaps agreements [Member] | Derivative Instruments Designated as Hedges [Member] | Other Accrued Liabilities [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Derivative Liabilities, Current | (3) | (5) |
Interest rate swaps agreements [Member] | Derivative Instruments Designated as Hedges [Member] | Other Liabilities [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Derivative Liabilities, Noncurrent | (5) | 0 |
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 | $ (2) | $ (5) |
DERIVATIVE INSTRUMENTS - INCOME
DERIVATIVE INSTRUMENTS - INCOME STATEMENT (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Gains (losses) recognized in aircraft rent [Member] | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Loss expected to be reclassified | $ 3 | ||
Gains (losses) recognized in interest income [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 | (6) | $ (3) | $ (19) |
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 | 1 | 8 | (5) |
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 | $ (5) | $ (6) | $ (6) |
DERIVATIVE INSTRUMENTS - FAIR V
DERIVATIVE INSTRUMENTS - FAIR VALUE OF HEDGE POSITIONS (Details) gallons in Millions, $ in Millions | 12 Months Ended | ||
Dec. 31, 2017USD ($)gallonsaircraftagreement | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) | |
Derivative [Line Items] | |||
Net cash received (paid) to for new positions and settlements | $ (12) | $ (19) | $ (17) |
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 | 434 | ||
Secured Debt [Member] | Interest rate swaps agreements [Member] | |||
Derivative [Line Items] | |||
Number of interest rate swap agreements | agreement | 2 | ||
Derivative, Notional Amount | $ 265 | ||
Aircraft Rent [Member] | |||
Derivative [Line Items] | |||
Price Risk Cash Flow Hedge Unrealized Gain (Loss) to be Reclassified During Next 12 Months | (3) | ||
Interest Income [Member] | |||
Derivative [Line Items] | |||
Price Risk Cash Flow Hedge Unrealized Gain (Loss) to be Reclassified During Next 12 Months | $ 1 |
FAIR VALUE MEASUREMENTS - FAIR
FAIR VALUE MEASUREMENTS - FAIR VALUE OF ASSETS AND LIABILITIES (Details) - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Marketable securities | $ 1,435 | |
Fair Value, Measurements, Recurring [Member] | Fuel hedge contracts [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative instruments, assets | 22 | $ 20 |
Fair Value, Measurements, Recurring [Member] | Fuel hedge contracts [Member] | Level 1 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative instruments, assets | 0 | 0 |
Fair Value, Measurements, Recurring [Member] | Fuel hedge contracts [Member] | Level 2 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative instruments, assets | 22 | 20 |
Fair Value, Measurements, Recurring [Member] | Interest rate swaps agreements [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative instruments, assets | 9 | |
Derivative instruments, liabilities | (8) | (5) |
Fair Value, Measurements, Recurring [Member] | Interest rate swaps agreements [Member] | Level 1 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative instruments, assets | 0 | |
Derivative instruments, liabilities | 0 | 0 |
Fair Value, Measurements, Recurring [Member] | Interest rate swaps agreements [Member] | Level 2 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative instruments, assets | 9 | |
Derivative instruments, liabilities | (8) | (5) |
Fair Value, Measurements, Recurring [Member] | U.S. government and agency securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale Securities | 328 | 287 |
Fair Value, Measurements, Recurring [Member] | U.S. government and agency securities | Level 1 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale Securities | 328 | 287 |
Fair Value, Measurements, Recurring [Member] | U.S. government and agency securities | Level 2 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale Securities | 0 | 0 |
Fair Value, Measurements, Recurring [Member] | Foreign government bonds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale Securities | 43 | 36 |
Fair Value, Measurements, Recurring [Member] | Foreign government bonds | Level 1 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale Securities | 0 | 0 |
Fair Value, Measurements, Recurring [Member] | Foreign government bonds | Level 2 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale Securities | 43 | 36 |
Fair Value, Measurements, Recurring [Member] | Asset-backed securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale Securities | 209 | 138 |
Fair Value, Measurements, Recurring [Member] | Asset-backed securities | Level 1 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale Securities | 0 | 0 |
Fair Value, Measurements, Recurring [Member] | Asset-backed securities | Level 2 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale Securities | 209 | 138 |
Fair Value, Measurements, Recurring [Member] | Mortgage-backed securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale Securities | 99 | 89 |
Fair Value, Measurements, Recurring [Member] | Mortgage-backed securities | Level 1 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale Securities | 0 | 0 |
Fair Value, Measurements, Recurring [Member] | Mortgage-backed securities | Level 2 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale Securities | 99 | 89 |
Fair Value, Measurements, Recurring [Member] | Corporate notes and bonds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale Securities | 726 | 691 |
Fair Value, Measurements, Recurring [Member] | Corporate notes and bonds | Level 1 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale Securities | 0 | 0 |
Fair Value, Measurements, Recurring [Member] | Corporate notes and bonds | Level 2 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale Securities | 726 | 691 |
Fair Value, Measurements, Recurring [Member] | Municipal securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale Securities | 22 | 11 |
Fair Value, Measurements, Recurring [Member] | Municipal securities | Level 1 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale Securities | 0 | 0 |
Fair Value, Measurements, Recurring [Member] | Municipal securities | Level 2 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale Securities | $ 22 | $ 11 |
FAIR VALUE MEASUREMENTS FAIR VA
FAIR VALUE MEASUREMENTS FAIR VALUE MEASUREMENTS - CASH, CASH EQUIVALENTS AND MARKETABLE SECURITIES (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Available-for-sale Securities, Activity [Abstract] | |||
Proceeds from sales and maturities | $ 1,388 | $ 962 | $ 1,175 |
FAIR VALUE MEASUREMENTS FAIR 49
FAIR VALUE MEASUREMENTS FAIR VALUE MEASUREMENTS - CASH, CASH EQUIVALENTS AND MARKETABLE SECURITIES - MATURITIES (Details) - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Available-for-sale Securities, Current [Abstract] | ||
Due in one year or less | $ 113 | |
Due after one year through five years | 1,264 | |
Due after five years through 10 years | 50 | |
Marketable securities | 1,427 | $ 1,252 |
Available-for-sale Securities, Amortized Cost Basis [Abstract] | ||
Due in one year or less | 113 | |
Due after one year through five years | 1,272 | |
Due after five years through 10 years | 50 | |
Marketable securities | $ 1,435 |
FAIR VALUE MEASUREMENTS - LONG-
FAIR VALUE MEASUREMENTS - LONG-TERM DEBT (Details) - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Non-recurring purchase price accounting fair value adjustment | $ 3 | $ 4 |
Carrying Amount [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fixed rate debt at cost | 956 | 1,175 |
Long-term debt | 959 | 1,179 |
Fair Value [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Long-term debt | $ 959 | $ 1,199 |
LONG-TERM DEBT - SCHEDULE OF LO
LONG-TERM DEBT - SCHEDULE OF LONG-TERM DEBT (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Debt Instrument [Line Items] | |||
Long-term Debt | $ 2,569 | $ 2,964 | |
Less debt issuance costs | (15) | (18) | |
Less current portion | 307 | 319 | |
Long-term debt, net of current portion | $ 2,262 | $ 2,645 | |
Weighted-average fixed-interest rate | 4.20% | 4.40% | |
Weighted-average variable-interest rate | 2.80% | 2.40% | |
Proceeds from issuance of long-term debt, net of issuance costs | $ 0 | $ 2,044 | $ 0 |
Long-term debt payments | 397 | 249 | $ 116 |
Repayments of debt | 74 | ||
Long-term Debt, Fiscal Year Maturity [Abstract] | |||
2,018 | 310 | ||
2,019 | 393 | ||
2,020 | 449 | ||
2,021 | 414 | ||
2,022 | 247 | ||
Thereafter | 768 | ||
Long-term Debt | 2,581 | ||
Fixed-rate notes payable due through 2028 | |||
Debt Instrument [Line Items] | |||
Long-term Debt | 959 | 1,179 | |
Variable-rate notes payable due through 2028 | |||
Debt Instrument [Line Items] | |||
Long-term Debt | $ 1,625 | $ 1,803 |
LONG-TERM DEBT LONG-TERM DEBT -
LONG-TERM DEBT LONG-TERM DEBT - SECURED DEBT (Details) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017USD ($)aircraft | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) | |
Debt Instrument [Line Items] | |||
Debt instrument, increase (decrease) | $ (395) | ||
Secured debt, number of aircrafts securing debt financing | aircraft | 113 | ||
Long-term Debt | $ 2,569 | $ 2,964 | |
Secured Debt, Number of Spare Engines Securing Debt Financing | aircraft | 2 | ||
Long-term debt payments | $ 397 | $ 249 | $ 116 |
Repayments of debt | 74 | ||
Secured Debt [Member] | Secured Debt, Aircraft Collateral [Member] | |||
Debt Instrument [Line Items] | |||
Long-term Debt | 2,200 | ||
Secured Debt [Member] | Secured Debt, Aircraft Purchase Agreements [Member] | |||
Debt Instrument [Line Items] | |||
Long-term Debt | $ 392 |
LONG-TERM DEBT - LINE OF CREDIT
LONG-TERM DEBT - LINE OF CREDIT (Details) | 12 Months Ended | ||||
Dec. 31, 2017USD ($)credit_facility | Sep. 30, 2017USD ($) | Jun. 30, 2017USD ($) | Mar. 31, 2017USD ($) | Dec. 31, 2016USD ($) | |
Line of Credit Facility [Line Items] | |||||
Line of credit facility, borrowing capacity | $ 475,000,000 | ||||
Number of credit facilities | credit_facility | 3 | ||||
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 | $ 250,000,000 | $ 100,000,000 | |||
Line of Credit Facility, Expiration Date | Jun. 30, 2021 | ||||
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 | $ 150,000,000 | $ 100,000,000 | |||
Line of Credit Facility, Expiration Date | Mar. 31, 2022 | ||||
Credit Facility 3 [Member] | Secured by aircraft [Member] | |||||
Line of Credit Facility [Line Items] | |||||
Line of credit facility, borrowing capacity | $ 75,000,000 | $ 52,000,000 | |||
Line of Credit Facility, Expiration Date | Sep. 30, 2018 | ||||
Credit Facilities 1 and 2 [Member] | |||||
Line of Credit Facility [Line Items] | |||||
Number of credit facilities, no borrowing | credit_facility | 2 |
INCOME TAXES - DEFERRED TAX ASS
INCOME TAXES - DEFERRED TAX ASSETS AND LIABILITIES (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Income Tax Disclosure [Abstract] | ||
Excess of tax over book depreciation | $ 964 | $ 1,282 |
Deferred Tax Liabilities, Intangible Assets | 14 | 39 |
Other—net | 43 | 26 |
Gross deferred tax liabilities | 1,021 | 1,347 |
Mileage Plan | (208) | (310) |
Inventory obsolescence | (16) | (23) |
Deferred gains | (5) | (8) |
Employee benefits | (154) | (196) |
Acquired net operating losses | (127) | (289) |
Other—net | (57) | (62) |
Gross deferred tax assets | (567) | (888) |
Valuation allowance | 0 | 4 |
Net deferred tax liabilities | 454 | $ 463 |
Operating Loss Carryforwards [Line Items] | ||
Tax Cuts And Jobs Act Of 2017, Change In Tax Rate, Deferred Tax Asset, Income Tax Expense | 280 | |
Federal [Member] | ||
Operating Loss Carryforwards [Line Items] | ||
Net operating loss | 525 | |
State [Member] | ||
Operating Loss Carryforwards [Line Items] | ||
Net operating loss | $ 254 | |
Minimum [Member] | Federal [Member] | ||
Operating Loss Carryforwards [Line Items] | ||
Operating Loss Carryforwards, Expiration Date | Jan. 1, 2029 | |
Minimum [Member] | State [Member] | ||
Operating Loss Carryforwards [Line Items] | ||
Operating Loss Carryforwards, Expiration Date | Jan. 1, 2028 | |
Maximum [Member] | Federal [Member] | ||
Operating Loss Carryforwards [Line Items] | ||
Operating Loss Carryforwards, Expiration Date | Jan. 1, 2036 | |
Maximum [Member] | State [Member] | ||
Operating Loss Carryforwards [Line Items] | ||
Operating Loss Carryforwards, Expiration Date | Jan. 1, 2035 |
INCOME TAXES - COMPONENTS OF TA
INCOME TAXES - COMPONENTS OF TAX EXPENSE (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Current tax expense (benefit): | |||
Federal | $ 127 | $ 392 | $ 397 |
State | 35 | 48 | 30 |
Total current | 162 | 440 | 427 |
Deferred tax expense: | |||
Federal | (30) | 77 | 60 |
State | 41 | 14 | (23) |
Total deferred | 11 | 91 | 37 |
Income tax expense | $ 173 | $ 531 | $ 464 |
INCOME TAXES - EFFECTIVE INCOME
INCOME TAXES - EFFECTIVE INCOME TAX RECONCILIATION (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Business Acquisition [Line Items] | |||
U.S. federal tax rate | 35.00% | 35.00% | 35.00% |
Income before income tax | $ 1,207 | $ 1,345 | $ 1,312 |
Expected tax expense | 422 | 471 | 459 |
Nondeductible expenses | 5 | 20 | 4 |
State income taxes | 29 | 28 | 19 |
State income sourcing | 9 | 13 | (15) |
Tax law changes | (280) | 0 | 0 |
Other—net | (12) | (1) | (3) |
Income tax expense | $ 173 | $ 531 | $ 464 |
Effective tax rate | 14.30% | 39.50% | 35.40% |
Tax Cuts And Jobs Act Of 2017, Change In Tax Rate, Deferred Tax Asset, Income Tax Expense | $ 280 | ||
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, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Income Tax Contingency [Line Items] | |||
Unrecognized Tax Benefits that Would Impact Effective Tax Rate | $ 36 | ||
Income Tax Examination, Penalties and Interest Accrued | 5 | $ 3 | $ 0 |
Income Tax Examination, Penalties and Interest Expense | 2 | 3 | 0 |
Unrecognized Tax Benefits, Period Increase (Decrease) | 3 | ||
Beginning balance | 40 | 32 | 3 |
Additions related to prior years | 16 | 0 | 29 |
Releases related to prior years | (2) | 0 | 0 |
Additions related to current year activity | 2 | 0 | 0 |
Additions from acquisitions | 0 | 8 | 0 |
Releases due to settlements | (11) | 0 | 0 |
Releases due to lapse of statute of limitations | (2) | 0 | 0 |
Ending balance | $ 43 | $ 40 | $ 32 |
EMPLOYEE BENEFIT PLANS EMPLOYEE
EMPLOYEE BENEFIT PLANS EMPLOYEE BENEFIT PLANS - ADDITIONAL INFORMATION (Details) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017USD ($)plan | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) | |
Business Acquisition [Line Items] | |||
Number of Qualified Defined Benefit Plans | 4 | ||
Number of defined benefit plans | 1 | ||
Number of defined contribution plans | 7 | ||
Pension Plan [Member] | |||
Business Acquisition [Line Items] | |||
Settlement expense (special item) | $ | $ 0 | $ 0 | $ (14) |
Plan settlement | $ | $ (62) |
EMPLOYEE BENEFIT PLANS - ASSUMP
EMPLOYEE BENEFIT PLANS - ASSUMPTIONS (Details) - Qualified Defined Benefit [Member] | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Defined Benefit Plan, Weighted Average Assumptions Used in Calculating Net Periodic Benefit Cost [Abstract] | |||
Net period benefit costs, Weighted-average discount rate | 4.20% | ||
Net period benefit costs, Weighted-average expected return on assets | 6.50% | ||
Minimum [Member] | |||
Defined Benefit Plan, Weighted Average Assumptions Used in Calculating Benefit Obligation [Abstract] | |||
Benefit obligations, Weighted-average discount rate | 3.69% | 4.29% | 4.55% |
Benefit obligations, Rate of compensation increase | 2.11% | 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 | 4.29% | 4.55% | |
Net period benefit costs, Weighted-average expected return on assets | 5.50% | 6.00% | |
Net period benefit costs, Rate of compensation increase | 2.12% | 2.06% | 2.85% |
Maximum [Member] | |||
Defined Benefit Plan, Weighted Average Assumptions Used in Calculating Benefit Obligation [Abstract] | |||
Benefit obligations, Weighted-average discount rate | 3.78% | 4.50% | 4.69% |
Benefit obligations, Rate of compensation increase | 3.00% | 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 | 4.50% | 4.69% | |
Net period benefit costs, Weighted-average expected return on assets | 6.00% | 6.50% | |
Net period benefit costs, Rate of compensation increase | 2.59% | 2.65% | 3.91% |
EMPLOYEE BENEFIT PLANS - PLAN A
EMPLOYEE BENEFIT PLANS - PLAN ASSETS (Details) - Qualified Defined Benefit [Member] - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Defined Benefit Plan Disclosure [Line Items] | |||
Plan asset allocations | 100.00% | 100.00% | |
Defined Benefit Plan, Assets, Target Allocations [Abstract] | |||
Plan Assets | $ 2,083 | $ 1,846 | $ 1,737 |
Level 1 [Member] | |||
Defined Benefit Plan, Assets, Target Allocations [Abstract] | |||
Plan Assets | $ 1,973 | $ 1,752 | |
Equity funds [Member] | U.S. | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Plan asset allocations | 25.00% | 30.00% | |
Defined Benefit Plan, Assets, Target Allocations [Abstract] | |||
Equities, Range Minimum | 5.00% | ||
Equities, Range Maximum | 33.00% | ||
Equity funds [Member] | U.S. | Level 1 [Member] | |||
Defined Benefit Plan, Assets, Target Allocations [Abstract] | |||
Plan Assets | $ 515 | $ 545 | |
Equity funds [Member] | Non-U.S. [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Plan asset allocations | 11.00% | 12.00% | |
Defined Benefit Plan, Assets, Target Allocations [Abstract] | |||
Equities, Range Minimum | 1.00% | ||
Equities, Range Maximum | 16.00% | ||
Equity funds [Member] | Non-U.S. [Member] | Level 1 [Member] | |||
Defined Benefit Plan, Assets, Target Allocations [Abstract] | |||
Plan Assets | $ 226 | $ 218 | |
Credit bond index fund [Member] | Level 1 [Member] | |||
Defined Benefit Plan, Assets, Target Allocations [Abstract] | |||
Plan Assets | $ 1,232 | $ 989 | |
Fixed Income Funds [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Plan asset allocations | 59.00% | 53.00% | |
Defined Benefit Plan, Assets, Target Allocations [Abstract] | |||
Equities, Range Minimum | 48.00% | ||
Equities, Range Maximum | 95.00% | ||
Real Estate [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Plan asset allocations | 4.00% | 5.00% | |
Defined Benefit Plan, Assets, Target Allocations [Abstract] | |||
Equities, Range Minimum | 2.00% | ||
Equities, Range Maximum | 8.00% | ||
Real Estate [Member] | Level 3 [Member] | |||
Defined Benefit Plan, Assets, Target Allocations [Abstract] | |||
Plan Assets | $ 97 | $ 91 | |
Cash Equivalents [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Plan asset allocations | 1.00% | 0.00% | |
Cash Equivalents [Member] | Level 1 [Member] | |||
Defined Benefit Plan, Assets, Target Allocations [Abstract] | |||
Plan Assets | $ 13 | $ 3 |
EMPLOYEE BENEFIT PLANS - FUNDED
EMPLOYEE BENEFIT PLANS - FUNDED STATUS (Details) - Qualified Defined Benefit [Member] - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Benefit obligation | |||
Beginning of year | $ 2,043 | $ 1,898 | |
Service cost | 39 | 37 | $ 41 |
Interest cost | 74 | 73 | 84 |
Actuarial (gain) loss | 300 | 104 | |
Benefits paid | (69) | (69) | |
End of year | 2,387 | 2,043 | 1,898 |
Plan assets at fair value | |||
Beginning of year | 1,846 | 1,737 | |
Actual return on plan assets | 291 | 178 | |
Employer contributions | 15 | 0 | |
Benefits paid | (69) | (69) | |
End of year | 2,083 | 1,846 | $ 1,737 |
Funded status (unfunded) | $ (304) | $ (197) | |
Percent funded | 87.00% | 90.00% | |
Accumulated benefit obligation | $ 2,200 | $ 1,900 |
EMPLOYEE BENEFIT PLANS - AMOUNT
EMPLOYEE BENEFIT PLANS - AMOUNTS RECOGNIZED IN CONSOLIDATED BALANCE SHEETS (Details) - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Pension and Other Postretirement Defined Benefit Plans, Liabilities [Abstract] | ||
Accrued benefit liability-long term | $ 453 | $ 331 |
Qualified Defined Benefit [Member] | ||
Pension and Other Postretirement Defined Benefit Plans, Liabilities [Abstract] | ||
Accrued benefit liability-long term | 335 | 225 |
Plan assets-long term (within Other noncurrent assets) | (31) | (28) |
Total liability recognized | 304 | 197 |
Pension and Other Postretirement Benefit Plans, Accumulated Other Comprehensive Income (Loss), before Tax [Abstract] | ||
Prior service credit | (9) | (10) |
Net loss | 597 | 509 |
Amount recognized in AOCL (pretax) | $ 588 | $ 499 |
EMPLOYEE BENEFIT PLANS - EXPECT
EMPLOYEE BENEFIT PLANS - EXPECTED AMORTIZATION FROM AOCI (Details) - Qualified Defined Benefit [Member] $ in Millions | 12 Months Ended |
Dec. 31, 2017USD ($) | |
Defined Benefit Plan Disclosure [Line Items] | |
Prior service credit | $ 1 |
Net loss | $ 31 |
EMPLOYEE BENEFIT PLANS - NET PE
EMPLOYEE BENEFIT PLANS - NET PENSION EXPENSE (Details) - Qualified Defined Benefit [Member] - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Defined Benefit Plan, Net Periodic Benefit Cost [Abstract] | |||
Service cost | $ 39 | $ 37 | $ 41 |
Interest cost | 74 | 73 | 84 |
Expected return on assets | (106) | (108) | (122) |
Amortization of prior service cost | (1) | (1) | (1) |
Recognized actuarial loss | 26 | 25 | 26 |
Settlement expense (special item) | 0 | 0 | 14 |
Net pension expense | $ 32 | $ 26 | 42 |
Plan settlement | $ (62) |
EMPLOYEE BENEFIT PLANS - FUTURE
EMPLOYEE BENEFIT PLANS - FUTURE BENEFITS EXPECTED TO BE PAID (Details) - Qualified Defined Benefit [Member] $ in Millions | Dec. 31, 2017USD ($) |
Defined Benefit Plan Disclosure [Line Items] | |
2,018 | $ 97 |
2,019 | 101 |
2,020 | 116 |
2,021 | 116 |
2,022 | 130 |
2023– 2027 | $ 723 |
EMPLOYEE BENEFIT PLANS EMPLOY66
EMPLOYEE BENEFIT PLANS EMPLOYEE BENEFIT PLANS - POSTRETIREMENT MEDICAL BENEFITS (Details) - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Postretirement Medical Benefits [Member] | ||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||
Benefit obligation | $ 85 | $ 76 |
EMPLOYEE BENEFIT PLANS - DEFINE
EMPLOYEE BENEFIT PLANS - DEFINED CONTRIBUTION PLANS (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Compensation and Retirement Disclosure [Abstract] | |||
Total expense for the defined-contribution plans | $ 103 | $ 67 | $ 60 |
EMPLOYEE BENEFIT PLANS - PILOT
EMPLOYEE BENEFIT PLANS - PILOT LONG-TERM DISABILITY BENEFITS (Details) - Postretirement Health Coverage [Member] - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Defined Benefit Plan Disclosure [Line Items] | ||
Total liability net of a prefunded trust account | $ 28 | $ 25 |
Prefunded trust account | $ 3 | $ 3 |
EMPLOYEE BENEFIT PLANS - EMPLOY
EMPLOYEE BENEFIT PLANS - EMPLOYEE INCENTIVE-PAY PLANS (Details) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017USD ($)$ / Quarter | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) | |
Defined Benefit Plan Disclosure [Line Items] | |||
Variable incentive pay | $ | $ 135 | $ 127 | $ 120 |
Operational Performance Rewards Program entitles all Air Group employees to maximum quarterly payouts (in dollars per quarter) | $ / Quarter | 300 |
COMMITMENTS AND CONTINGENCIES70
COMMITMENTS AND CONTINGENCIES COMMITMENTS AND CONTINGENCIES (Details) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017USD ($)aircraftcarriers | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) | |
Unrecorded Unconditional Purchase Obligation, Fiscal Year Maturity [Abstract] | |||
Rent expense | $ 552 | $ 315 | $ 295 |
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] | |||
2,018 | $ 955 | ||
2,019 | 816 | ||
2,020 | 377 | ||
2,021 | 268 | ||
2,022 | 193 | ||
Thereafter | 145 | ||
Total | 2,754 | ||
Capacity Purchase Agreements[Member] | |||
Unrecorded Unconditional Purchase Obligation, Fiscal Year Maturity [Abstract] | |||
2,018 | 129 | ||
2,019 | 151 | ||
2,020 | 159 | ||
2,021 | 165 | ||
2,022 | 173 | ||
Thereafter | 1,079 | ||
Total | 1,856 | ||
Aircraft Leases [Member] | |||
Operating Leases, Future Minimum Payments Due, Fiscal Year Maturity [Abstract] | |||
2,018 | 354 | ||
2,019 | 356 | ||
2,020 | 330 | ||
2,021 | 285 | ||
2,022 | 262 | ||
Thereafter | 1,021 | ||
Total | 2,608 | ||
Facility Leases [Member] | |||
Operating Leases, Future Minimum Payments Due, Fiscal Year Maturity [Abstract] | |||
2,018 | 77 | ||
2,019 | 67 | ||
2,020 | 61 | ||
2,021 | 53 | ||
2,022 | 34 | ||
Thereafter | 142 | ||
Total | $ 434 | ||
B-737 [Member] | |||
Unrecorded Unconditional Purchase Obligation, Fiscal Year Maturity [Abstract] | |||
Commited to purchase (in aircraft) | aircraft | 44 | ||
Option to purchase additional (in aircraft) | aircraft | 37 | ||
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 | 12 | ||
B737 MAX [Member] | |||
Unrecorded Unconditional Purchase Obligation, Fiscal Year Maturity [Abstract] | |||
Commited to purchase (in aircraft) | aircraft | 32 | ||
E175 [Member] | |||
Unrecorded Unconditional Purchase Obligation, Fiscal Year Maturity [Abstract] | |||
Commited to purchase (in aircraft) | aircraft | 23 | ||
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 | 10 | ||
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 | 57 | ||
Property Subject to Operating Lease [Member] | E175 [Member] | |||
Unrecorded Unconditional Purchase Obligation, Fiscal Year Maturity [Abstract] | |||
Operating leases, number of leased assets (in aircraft) | aircraft | 23 | ||
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 | 6 | ||
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] | E175 [Member] | |||
Unrecorded Unconditional Purchase Obligation, Fiscal Year Maturity [Abstract] | |||
Property Subject to or Available for Operating Lease, Number of Optional Additional Units | aircraft | 12 | ||
Aircraft Maintenance Deposits [Member] | |||
Unrecorded Unconditional Purchase Obligation, Fiscal Year Maturity [Abstract] | |||
2,018 | $ 61 | ||
2,019 | 65 | ||
2,020 | 68 | ||
2,021 | 64 | ||
2,022 | 52 | ||
Thereafter | 39 | ||
Total | 349 | ||
Aircraft Maintenance and Parts Management [Member] | |||
Unrecorded Unconditional Purchase Obligation, Fiscal Year Maturity [Abstract] | |||
2,018 | 98 | ||
2,019 | 102 | ||
2,020 | 105 | ||
2,021 | 121 | ||
2,022 | 76 | ||
Thereafter | 80 | ||
Total | $ 582 |
SHAREHOLDER'S EQUITY SHAREHOLDE
SHAREHOLDER'S EQUITY SHAREHOLDERS' EQUITY - STOCK CHANGES (Details) - $ / shares | Dec. 31, 2017 | Mar. 31, 2017 | Dec. 31, 2016 |
Equity [Abstract] | |||
Common stock, shares authorized | 400,000,000 | 200,000,000 | 200,000,000 |
Common stock, par value | $ 0.01 | $ 0.01 |
SHAREHOLDER'S EQUITY SHAREHOL72
SHAREHOLDER'S EQUITY SHAREHOLDERS' EQUITY - DIVIDENDS (Details) - USD ($) $ / shares in Units, $ in Millions | Feb. 20, 2018 | Dec. 31, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Subsequent Event [Line Items] | |||||
Cash dividend declared per share | $ 0.30 | $ 1.20 | $ 1.10 | $ 0.80 | |
Cash dividend paid | $ 148 | $ 136 | $ 102 | ||
Subsequent Event [Member] | |||||
Subsequent Event [Line Items] | |||||
Cash dividend declared per share | $ 0.32 | ||||
Dividend increase | 7.00% |
SHAREHOLDER'S EQUITY - COMMON S
SHAREHOLDER'S EQUITY - COMMON STOCK REPURCHASE (Details) - USD ($) $ in Millions | 12 Months Ended | 28 Months Ended | ||||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2017 | Aug. 31, 2015 | May 01, 2014 | |
Equity, Class of Treasury Stock [Line Items] | ||||||
Common stock repurchase (in shares) | 981,277 | 2,594,809 | 7,208,328 | |||
Common stock repurchase | $ 75 | $ 193 | $ 505 | |||
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) | 981,277 | 2,594,809 | 1,517,277 | 5,093,363 | ||
Common stock repurchase | $ 75 | $ 193 | $ 120 | $ 388 | ||
2014 Repurchase Program – $650 million | ||||||
Equity, Class of Treasury Stock [Line Items] | ||||||
Share repurchase program, authorized amount | $ 650 | |||||
Common stock repurchase (in shares) | 0 | 0 | 5,691,051 | |||
Common stock repurchase | $ 0 | $ 0 | $ 385 |
SHAREHOLDER'S EQUITY SHAREHOL74
SHAREHOLDER'S EQUITY SHAREHOLDERS' EQUITY - OTHER (Details) - shares | Dec. 31, 2017 | Dec. 31, 2016 |
Equity [Abstract] | ||
Treasury stock, shares | 6,842,860 | 5,861,583 |
SHAREHOLDER'S EQUITY SHAREHOL75
SHAREHOLDER'S EQUITY SHAREHOLDERS' EQUITY - ACCUMULATED OTHER COMPREHENSIVE LOSS (Details) - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Equity [Abstract] | ||
Unrealized gain on marketable securities considered available-for-sale | $ (5) | $ (3) |
Related to employee benefit plans | (376) | (299) |
Related to interest rate derivatives | 1 | (3) |
Accumulated other comprehensive loss | $ (380) | $ (305) |
SPECIAL ITEMS SPECIAL ITEMS (De
SPECIAL ITEMS SPECIAL ITEMS (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Special items—merger-related costs and other | $ 118 | $ 117 | |
Special items—other | $ 32 | ||
Special tax expense (benefit) | (280) | 17 | (26) |
Nondeductible expenses | 5 | 20 | 4 |
Pension Plan [Member] | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Settlement expense (special item) | 0 | 0 | $ 14 |
Virgin America Inc. [Member] | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Special items—merger-related costs and other | $ 118 | 117 | |
Nondeductible expenses | $ 39 |
SPECIAL ITEMS SPECIAL ITEMS - M
SPECIAL ITEMS SPECIAL ITEMS - MERGER-RELATED COSTS (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Merger-related Costs [Line Items] | |||
Contracted services | $ 314 | $ 247 | $ 214 |
Special items—merger-related costs | 118 | 117 | |
Virgin America Inc. [Member] | |||
Merger-related Costs [Line Items] | |||
Contracted services | 52 | 32 | |
Severance Costs | 40 | 22 | |
Banking Fees and Commissions | 0 | 36 | |
Legal Fees | 3 | 22 | |
Business Acquisition, Transaction Costs | 23 | 5 | |
Special items—merger-related costs | $ 118 | $ 117 |
STOCK-BASED COMPENSATION PLAN78
STOCK-BASED COMPENSATION PLANS (Details) - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock-based compensation | $ 34 | $ 19 | $ 17 |
Tax benefit related to stock-based compensation | 13 | 7 | 7 |
Unrecognized stock-based compensation for non-vested options and awards | $ 37 | ||
Unrecognized stock-based compensation awards weighted-average period | 1 year 8 months 12 days | ||
Shares authorized under stock-based compensation plans (in shares) | 17,000,000 | ||
Shares remaining available for future grants (shares) | 10,927,824 | ||
Stock options [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock-based compensation | $ 3 | $ 2 | $ 2 |
Unrecognized stock-based compensation for non-vested options and awards | $ 3 | ||
Unrecognized stock-based compensation awards weighted-average period | 1 year 2 months 12 days | ||
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions and Methodology [Abstract] | |||
Expected volatility | 51.00% | 51.00% | 53.00% |
Expected term | 6 years | 6 years | 6 years |
Risk-free interest rate | 2.04% | 1.23% | 1.67% |
Expected dividend yield | 1.10% | 1.50% | 1.25% |
Weighted-average grant date fair value per share (in dollars per share) | $ 41.19 | $ 27.14 | $ 28.71 |
Estimated fair value of options granted (millions) | $ 4 | $ 2 | $ 3 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward] | |||
Outstanding, beginning balance (in shares) | 453,674 | ||
Granted (in Shares) | 88,580 | ||
Exercised (in shares) | (91,013) | ||
Canceled (in shares) | 0 | ||
Forfeited or expired (in shares) | (9,774) | ||
Outstanding, ending balance (in shares) | 441,467 | 453,674 | |
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) | $ 40.02 | ||
Granted, Weighted-Average Exercise Price Per Share (in dollars per share) | 94.67 | ||
Exercised, Weighted-Average Exercise Price Per Share (in dollars per share) | 31.31 | ||
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) | 60.33 | ||
Outstanding, ending balance, Weighted-Average Exercise Price Per Share (in dollars per share) | $ 52.34 | $ 40.02 | |
Outstanding, Weighted-Average Contractual Life | 6 years | 6 years 2 months 12 days | |
Outstanding, Aggregate Intrinsic Value | $ 11 | $ 22 | |
Exercisable, Outstanding (in shares) | 229,233 | ||
Exercisable, Weighted-Average Exercise Price Per Share (in dollars per share) | $ 32.08 | ||
Exercisable, Weighted-Average Contractual Life | 4 years 10 months 24 days | ||
Exercisable, Aggregate Intrinsic Value | $ 9 | ||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested and Expected to Vest [Abstract] | |||
Vested or expected to vest, Shares | 441,467 | ||
Vested or expected to vest, Weighted-Average Exercise Price Per Share (in dollars per share) | $ 52.34 | ||
Vested or expected to vest, Weighted-Average Contractual Life | 6 years | ||
Vested or expected to vest, Aggregate Intrinsic Value | $ 11 | ||
Intrinsic value of option exercises | 6 | 9 | 14 |
Cash received from stock option exercises | 3 | 3 | 4 |
Tax benefit related to stock option exercises | 2 | 3 | 5 |
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 | 3 |
Stock awards [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock-based compensation | 24 | $ 11 | 11 |
Unrecognized stock-based compensation for non-vested options and awards | $ 34 | ||
Unrecognized stock-based compensation awards weighted-average period | 1 year 8 months 12 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) | 440,093 | ||
Granted (in shares) | 433,340 | ||
Vested (in shares) | (286,138) | ||
Forfeited (in shares) | (62,150) | ||
Non-vested, ending balance (in shares) | 525,145 | 440,093 | |
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) | $ 63.86 | ||
Granted, Weighted-Average Grant Date Fair Value (in dollars per share) | 88.43 | ||
Vested, Weighted-Average Grant Date Fair Value (in dollars per share) | 61.47 | ||
Forfeited, Weighted-Average Grant Date Fair Value (in dollars per share) | 65.06 | ||
Non-vested, ending balance, Weighted-Average Price Per Share (in dollars per share) | $ 85.47 | $ 63.86 | |
Non-vested, Weighted-Average Contractual Life | 1 year 7 months 24 days | 1 year 4 months 24 days | |
Non-vested, Total Instrinsic Value (in dollars) | $ 39 | $ 39 | |
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 | $ 6 | $ 5 | $ 3 |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward] | |||
Granted (in shares) | 406,628 | 308,920 | 281,058 |
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, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | ||||
Operating revenues | ||||||
Passenger, Mainline | $ 5,858 | $ 4,098 | $ 3,939 | |||
Passenger, Regional | 960 | 908 | 854 | |||
Total passenger revenue | 6,818 | 5,006 | 4,793 | |||
CPA revenues | 0 | 0 | 0 | |||
Freight and mail | 114 | 108 | 108 | |||
Other Net and Special Revenue | 1,001 | 817 | 697 | |||
Total Operating Revenues | 7,933 | 5,931 | 5,598 | |||
Operating expenses | ||||||
Operating expenses, excluding fuel | 5,226 | 3,751 | 3,346 | |||
Special items—merger-related costs and other | 118 | 117 | ||||
Economic fuel | 1,447 | 831 | 954 | |||
Total Operating Expenses | 6,673 | 4,582 | 4,300 | |||
Nonoperating Income (Expense) | ||||||
Interest income | 34 | 27 | 21 | |||
Interest expense | (103) | (55) | (42) | |||
Other | 16 | 24 | 35 | |||
Nonoperating Income (Expense) Total | (53) | (4) | 14 | |||
Income (loss) before income tax | 1,207 | 1,345 | 1,312 | |||
Depreciation | 372 | 363 | 320 | |||
Capital expenditures | 1,026 | 678 | 831 | |||
Total assets | 10,740 | 9,962 | ||||
Air Group Adjusted [Member] | ||||||
Operating revenues | ||||||
Passenger, Mainline | [1] | 5,858 | 4,098 | 3,939 | ||
Passenger, Regional | [1] | 960 | 908 | 854 | ||
Total passenger revenue | [1] | 6,818 | 5,006 | 4,793 | ||
CPA revenues | [1] | 0 | 0 | 0 | ||
Freight and mail | [1] | 114 | 108 | 108 | ||
Other Net and Special Revenue | [1] | 1,001 | 817 | 697 | ||
Total Operating Revenues | [1] | 7,933 | 5,931 | 5,598 | ||
Operating expenses | ||||||
Operating expenses, excluding fuel | [1] | 5,108 | 3,634 | 3,314 | ||
Economic fuel | [1] | 1,454 | 844 | 954 | ||
Total Operating Expenses | [1] | 6,562 | 4,478 | 4,268 | ||
Nonoperating Income (Expense) | ||||||
Interest income | [1] | 34 | 27 | 21 | ||
Interest expense | [1] | (103) | (55) | (42) | ||
Other | [1] | 16 | 24 | 35 | ||
Nonoperating Income (Expense) Total | [1] | (53) | (4) | 14 | ||
Income (loss) before income tax | [1] | 1,318 | 1,449 | 1,344 | ||
Alaska Mainline [Member] | ||||||
Operating revenues | ||||||
Passenger, Mainline | 5,858 | 4,098 | 3,939 | |||
Passenger, Regional | 0 | 0 | 0 | |||
Total passenger revenue | 5,858 | 4,098 | 3,939 | |||
CPA revenues | 0 | 0 | 0 | |||
Freight and mail | 110 | 104 | 103 | |||
Other Net and Special Revenue | 922 | 738 | 621 | |||
Total Operating Revenues | 6,890 | 4,940 | 4,663 | |||
Operating expenses | ||||||
Operating expenses, excluding fuel | 4,257 | 2,883 | 2,653 | |||
Economic fuel | 1,282 | 719 | 823 | |||
Total Operating Expenses | 5,539 | 3,602 | 3,476 | |||
Nonoperating Income (Expense) | ||||||
Interest income | 39 | 26 | 19 | |||
Interest expense | (92) | (42) | (28) | |||
Other | 14 | 19 | 28 | |||
Nonoperating Income (Expense) Total | (39) | 3 | 19 | |||
Income (loss) before income tax | 1,312 | 1,341 | 1,206 | |||
Depreciation | [2] | 308 | 296 | 268 | ||
Capital expenditures | [2] | 734 | 608 | 821 | ||
Total assets | [2] | 16,650 | 15,260 | |||
Alaska Regional [Member] | ||||||
Operating revenues | ||||||
Passenger, Mainline | 0 | 0 | 0 | |||
Passenger, Regional | 960 | 908 | 854 | |||
Total passenger revenue | 960 | 908 | 854 | |||
CPA revenues | 0 | 0 | 0 | |||
Freight and mail | 4 | 5 | 5 | |||
Other Net and Special Revenue | 74 | 74 | 72 | |||
Total Operating Revenues | 1,038 | 987 | 931 | |||
Operating expenses | ||||||
Operating expenses, excluding fuel | 851 | 769 | 695 | |||
Economic fuel | 172 | 125 | 131 | |||
Total Operating Expenses | 1,023 | 894 | 826 | |||
Nonoperating Income (Expense) | ||||||
Interest income | 0 | 0 | 0 | |||
Interest expense | 0 | 0 | 0 | |||
Other | 0 | 0 | 0 | |||
Nonoperating Income (Expense) Total | 0 | 0 | 0 | |||
Income (loss) before income tax | 15 | 93 | 105 | |||
Horizon [Member] | ||||||
Operating revenues | ||||||
Passenger, Mainline | 0 | 0 | 0 | |||
Passenger, Regional | 0 | 0 | 0 | |||
Total passenger revenue | 0 | 0 | 0 | |||
CPA revenues | 426 | 424 | 408 | |||
Freight and mail | 0 | 0 | 0 | |||
Other Net and Special Revenue | 4 | 4 | 4 | |||
Total Operating Revenues | 430 | 428 | 412 | |||
Operating expenses | ||||||
Operating expenses, excluding fuel | 427 | 407 | 375 | |||
Economic fuel | 0 | 0 | 0 | |||
Total Operating Expenses | 427 | 407 | 375 | |||
Nonoperating Income (Expense) | ||||||
Interest income | 0 | 1 | 0 | |||
Interest expense | (13) | (9) | (10) | |||
Other | 2 | 1 | 1 | |||
Nonoperating Income (Expense) Total | (11) | (7) | (9) | |||
Income (loss) before income tax | (8) | 14 | 28 | |||
Depreciation | 64 | 67 | 52 | |||
Capital expenditures | 292 | 70 | 10 | |||
Total assets | 929 | 690 | ||||
Parent [Member] | ||||||
Nonoperating Income (Expense) | ||||||
Total assets | (6,839) | (5,988) | ||||
Intersegment Eliminations | ||||||
Operating revenues | ||||||
Passenger, Mainline | 0 | 0 | 0 | |||
Passenger, Regional | 0 | 0 | 0 | |||
Total passenger revenue | 0 | 0 | 0 | |||
CPA revenues | (426) | (424) | (408) | |||
Freight and mail | 0 | (1) | 0 | |||
Other Net and Special Revenue | 1 | 1 | 0 | |||
Total Operating Revenues | (425) | (424) | (408) | |||
Operating expenses | ||||||
Operating expenses, excluding fuel | (427) | (425) | (409) | |||
Economic fuel | 0 | 0 | 0 | |||
Total Operating Expenses | (427) | (425) | (409) | |||
Nonoperating Income (Expense) | ||||||
Interest income | (5) | 0 | 2 | |||
Interest expense | 2 | (4) | (4) | |||
Other | 0 | 4 | 6 | |||
Nonoperating Income (Expense) Total | (3) | 0 | 4 | |||
Income (loss) before income tax | (1) | 1 | 5 | |||
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 | 118 | 117 | [3] | 32 | [3] | |
Economic fuel | (7) | (13) | [3] | 0 | [3] | |
Total Operating Expenses | [3] | 111 | 104 | 32 | ||
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] | $ (111) | $ (104) | $ (32) | ||
[1] | Year Ended December 31, 2015Mainline Regional Horizon Consolidating & Other(b) Air Group Adjusted(c) Special Items(d) ConsolidatedOperating revenues Passenger Mainline$3,939 $— $— $— $3,939 $— $3,939Regional— 854 — — 854 — 854Total passenger revenues3,939 854 — — 4,793 — 4,793CPA revenues— — 408 (408) — — —Freight and mail103 5 — — 108 — 108Other-net621 72 4 — 697 — 697Total operating revenues4,663 931 412 (408) 5,598 — 5,598 Operating expenses Operating expenses, excluding fuel2,653 695 375 (409) 3,314 32 3,346Fuel expense823 131 — — 954 — 954Total operating expenses3,476 826 375 (409) 4,268 32 4,300 Nonoperating income (expense) Interest income19 — — 2 21 — 21Interest expense(28) — (10) (4) (42) — (42)Other28 — 1 6 35 — 35 19 — (9) 4 14 — 14Income (loss) before income tax$1,206 $105 $28 $5 $1,344 $(32) $1,312 | |||||
[2] | 2017 2016 2015Depreciation and amortization: Mainline$308 $296 $268Horizon64 67 52Consolidated$372 $363 $320 Capital expenditures: Mainline$734 $608 $821Horizon292 70 10Consolidated$1,026 $678 $831 Total assets at end of period: Mainline$16,650 $15,260 Horizon929 690 Consolidating & Other(6,839) (5,988) Consolidated$10,740 $9,962 | |||||
[3] | {F|ahBzfndlYmZpbGluZ3MtaHJkcmoLEgZYTUxEb2MiXlhCUkxEb2NHZW5JbmZvOjM5ZjdhNGQ2YWQ0ZDQ4OTA4NDhlNzk3NjM4Y2JmZjI1fFRleHRTZWxlY3Rpb246ODU0Q0ZGN0FCNUFCM0JCQUVCRUYzQTEyMEI5MTc3QzgM} |