Alaska Air (ALK) 10-Q 4 May 18 2018 Q1 Quarterly report Financial data

DOCUMENT AND ENTITY INFORMATION

DOCUMENT AND ENTITY INFORMATION - shares	3 Months Ended
	Mar. 31, 2018	Apr. 30, 2018
Document and Entity Information [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Mar. 31, 2018
Document Fiscal Year Focus	2,018
Document Fiscal Period Focus	Q1
Entity Registrant Name	ALASKA AIR GROUP, INC.
Entity Central Index Key	766,421
Current Fiscal Year End Date	--12-31
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding		123,258,837

CONDENSED CONSOLIDATED BALANCE

CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Millions	Mar. 31, 2018	Dec. 31, 2017
Current Assets
Cash and cash equivalents	$ 177	$ 194
Marketable securities	1,351	1,427
Total cash and marketable securities	1,528	1,621
Receivables—net	350	341
Inventories and supplies—net	62	57
Prepaid expenses and other current assets	174	133
Total Current Assets	2,114	2,152
Property and Equipment
Aircraft and other flight equipment	7,567	7,559
Other property and equipment	1,287	1,222
Deposits for future flight equipment	560	494
Property and Equipment Total	9,414	9,275
Less accumulated depreciation and amortization	3,011	2,991
Total Property and Equipment—Net	6,403	6,284
Goodwill	1,943	1,943
Intangible assets	132	133
Other noncurrent assets	256	234
Other Assets	2,331	2,310
Total Assets	10,848	10,746
Current Liabilities
Accounts payable	102	120
Accrued wages, vacation and payroll taxes	299	418
Air traffic liability	1,122	806
Other accrued liabilities	433	400
Deferred revenue, current	649	635
Current portion of long-term debt	387	307
Total Current Liabilities	2,992	2,686
Long-Term Debt, Net of Current Portion	2,062	2,262
Other Liabilities and Credits
Deferred income taxes	372	370
Deferred revenue, noncurrent	1,102	1,090
Obligation for pension and postretirement medical benefits	458	453
Other liabilities	423	425
Other Liabilities and Credits Totals	2,355	2,338
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: 2018 - 130,378,645 shares; 2017 - 129,903,498 shares, Outstanding: 2018 - 123,350,124 shares; 2017 - 123,060,638 shares	1	1
Capital in excess of par value	190	164
Treasury stock (common), at cost: 2018 - 7,028,521 shares; 2017 - 6,842,860 shares	(531)	(518)
Accumulated other comprehensive loss	(440)	(380)
Retained earnings	4,219	4,193
Total Shareholders' Equity	3,439	3,460
Total Liabilities and Shareholders' Equity	$ 10,848	$ 10,746

CONDENSED CONSOLIDATED BALANCE3

CONDENSED CONSOLIDATED BALANCE SHEETS (PARENTHETICALS) - $ / shares	Mar. 31, 2018	Dec. 31, 2017
Stockholders' Equity:
Preferred Stock, par value (usd per share)	$ 0.01	$ 0.01
Preferred stock, shares authorized (shares)	5,000,000	5,000,000
Preferred stock, shares issued (shares)	0	0
Preferred stock, shares outstanding (shares)	0	0
Common stock, par value (usd per share)	$ 0.01	$ 0.01
Common stock, shares authorized (shares)	400,000,000	400,000,000
Common stock, shares issued (shares)	130,378,645	129,903,498
Common stock, shares outstanding (shares)	123,350,124	123,060,638
Treasury Stock, Shares (shares)	7,028,521	6,842,860

CONDENSED CONSOLIDATED STATEMEN

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Millions	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Operating Revenues
Passenger revenue	$ 1,685	$ 1,602
Mileage plan other revenue	107	100
Cargo and other	40	38
Total Operating Revenues	1,832	1,740
Operating Expenses
Wages and benefits	536	450
Variable incentive pay	39	31
Aircraft fuel, including hedging gains and losses	409	339
Aircraft maintenance	107	87
Aircraft rent	74	65
Landing fees and other rentals	126	115
Contracted services	81	81
Selling expenses	78	83
Depreciation and amortization	94	90
Food and beverage service	50	45
Third-party regional carrier expense	37	27
Other	141	131
Special items—merger-related costs	6	39
Special items—other	25	0
Total Operating Expenses	1,803	1,583
Operating Income	29	157
Nonoperating Income (Expense)
Interest income	8	7
Interest expense	(24)	(25)
Interest capitalized	5	4
Other—net	(12)	(1)
Nonoperating Income (Expense) Total	(23)	(15)
Income Before Income Tax	6	142
Income tax expense	2	49
Net Income	$ 4	$ 93
Basic Earnings Per Share (usd per share)	$ 0.03	$ 0.75
Diluted Earnings Per Share (usd per share)	$ 0.03	$ 0.75
Shares used for computation:
Basic shares (shares)	123,155	123,495
Diluted shares (shares)	123,630	124,299
Cash dividend declared per share (usd per share)	$ 0.32	$ 0.3

CONDENSED CONSOLIDATED STATEME5

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE OPERATIONS - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Statement of Comprehensive Income [Abstract]
Net Income	$ 4	$ 93
Related to marketable securities:
Unrealized holding gain (loss) arising during the period	(13)	3
Reclassification of (gain) loss into Other—net nonoperating income (expense)	2	0
Income tax effect	3	(1)
Total	(8)	2
Related to employee benefit plans:
Reclassification of net pension expense into Wages and benefits	7	6
Income tax effect	(2)	(2)
Total	5	4
Related to interest rate derivative instruments:
Unrealized holding gain (loss) arising during the period	6	1
Reclassification of (gain) loss into Aircraft rent	1	0
Income tax effect	(2)	(1)
Total	5	0
Other Comprehensive Income	2	6
Comprehensive Income	$ 6	$ 99

CONDENSED CONSOLIDATED STATEME6

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Cash flows from operating activities:
Net Income	$ 4	$ 93
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	94	90
Stock-based compensation and other	8	13
Changes in certain assets and liabilities:
Changes in deferred tax provision	2	44
Increase in air traffic liability	316	364
Increase in deferred revenue	26	31
Other—net	(144)	(165)
Net cash provided by operating activities	306	470
Property and equipment additions:
Aircraft and aircraft purchase deposits	(135)	(160)
Other flight equipment	(29)	(20)
Other property and equipment	(71)	(36)
Total property and equipment additions, including capitalized interest	(235)	(216)
Purchases of marketable securities	(238)	(557)
Sales and maturities of marketable securities	301	285
Other investing activities	8	0
Net cash used in investing activities	(164)	(488)
Cash flows from financing activities:
Long-term debt payments	(120)	(101)
Common stock repurchases	(12)	0
Dividends paid	(39)	(37)
Other financing activities	15	11
Net cash used in financing activities	(156)	(127)
Net increase (decrease) in cash, cash equivalents, and restricted cash	(14)	(145)
Cash, cash equivalents, and restricted cash at beginning of year	197	328
Cash, cash equivalents, and restricted cash at end of the period	183	183
Cash paid during the period for:
Interest (net of amount capitalized)	24	26
Income taxes	$ 0	$ 2

CONDENSED CONSOLIDATED STATEME7

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Parenthetical) - USD ($) $ in Millions	Mar. 31, 2018	Mar. 31, 2017
Statement of Cash Flows [Abstract]
Cash and cash equivalents	$ 177	$ 183
Restricted cash included in Prepaid expenses and other current assets	6	0
Total cash, cash equivalents, and restricted cash at end of the period	$ 183	$ 183

GENERAL AND SUMMARY OF SIGNIFIC

GENERAL AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES	3 Months Ended
	Mar. 31, 2018
Accounting Policies [Abstract]
GENERAL AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES	GENERAL AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Organization and Basis of Presentation The condensed consolidated financial statements include the accounts of Air Group, or the Company, and its primary subsidiaries, Alaska, Horizon, and Virgin America. Our condensed consolidated financial statements also include McGee Air Services, a ground services 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 accordance with accounting principles generally accepted in the United States (GAAP) for interim financial information. Consistent with these requirements, this Form 10-Q does not include all the information required by GAAP for complete financial statements. It should be read in conjunction with the consolidated financial statements and accompanying notes in the Form 10-K for the year ended December 31, 2017 . In the opinion of management, all adjustments have been made that are necessary to fairly present the Company’s financial position as of March 31, 2018 and the results of operations for the three months ended March 31, 2018 and 2017 . Such adjustments were of a normal recurring nature. Certain reclassifications have been made to prior year financial statements to conform to classifications used in the current year. In preparing these statements, the Company is required to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent liabilities, as well as the reported amounts of revenues and expenses. Due to seasonal variations in the demand for air travel, the volatility of aircraft fuel prices, changes in global economic conditions, changes in the competitive environment and other factors, operating results for the three months ended March 31, 2018 are not necessarily indicative of operating results for the entire year. Recently Issued Accounting Pronouncements 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 and related liability 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. In March 2018, the FASB approved amendments to Topic 842 that would give companies an alternative transition method which would not require adjusting comparative period financial information. The ASU codification of this new transition method has not yet been issued, but the Company will consider the alternative in greater detail upon issuance. The new standard is effective for the Company on January 1, 2019. In November 2016, the FASB issued ASU 2016-18, "Statement of Cash Flows—Restricted Cash (Topic 230)" related to the presentation of restricted cash on the statement of cash flows, and within the accompanying footnotes. The Company adopted the standard effective January 1, 2018. 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. In February 2018, the FASB issued ASU 2018-02, "Income Statement—Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income." The standard allows a reclassification from accumulated other comprehensive income (AOCI) to retained earnings for stranded tax effects resulting from the Tax Cuts and Jobs Act. The amount of the reclassification is the difference between the amount initially recorded directly to other comprehensive income at the previously enacted U.S. federal corporate income tax rate that remains in AOCI and the amount that would have been recorded directly to other comprehensive income using the newly enacted U.S. federal income tax rate. The standard is effective for interim and annual reporting periods beginning after December 15, 2018, and early adoption is permitted. The Company elected to early adopt the standard effective January 1, 2018. As a result, retained earnings increased approximately $62 million due to the reclassification of tax effects in AOCI recorded in prior periods at previously enacted tax rates.

RECENTLY ADOPTED ACCOUNTING PRO

RECENTLY ADOPTED ACCOUNTING PRONOUNCEMENTS	3 Months Ended
	Mar. 31, 2018
Accounting Changes and Error Corrections [Abstract]
RECENTLY ADOPTED ACCOUNTING PRONOUNCEMENTS	RECENTLY ADOPTED ACCOUNTING PRONOUNCEMENTS Revenue Recognition and Retirement Benefits Accounting Standards In May 2014, the FASB issued ASU 2014-09 , "Revenue from Contracts with Customers (Topic 606)." The Company adopted the new standard as of January 1, 2018, utilizing a full retrospective transition method. Adoption of the new standard resulted in changes to accounting policies for revenue recognition related to frequent flyer activity, certain ancillary revenues such as change fees, air traffic liabilities, and sales and marketing expenses. As a result of adoption, the Company also changed certain financial statement line item disclosure captions. See Note 3 for a discussion of the impact of this standard. Although less significant, in March 2017 the FASB issued ASU 2017-07, "Compensation - Retirement Benefits (Topic 715)," which requires the Company to present the service cost component of net periodic benefit cost as Wages and benefits in the statement of operations. The Company adopted the new standard as of January 1, 2018, utilizing a full retrospective transition method. Under this new standard, all components of net periodic benefit cost are presented in Nonoperating income (expense), except service cost, which remains in Wages and benefits. Certain line item captions on the balance sheet and statement of operations changed as a result of the newly implemented standards. Accordingly, historical financial information presented below as reported has been presented using the new captions. The cumulative impact to retained earnings at January 1, 2016 as a result of the new revenue recognition standard was $171 million . Below are the impacts of these newly adopted accounting standards to the financial statements. Consolidated balance sheet as of December 31, 2017 (in millions): December 31, 2017 As Reported Adjustments - Revenue Recognition As Adjusted Current Assets: Prepaid expenses and other current assets $ 127 $ 6 $ 133 Current Liabilities: Air traffic liability 937 (131 ) 806 Deferred revenue 518 117 635 Other liabilities and credits: Deferred income taxes 454 (84 ) 370 Deferred revenue 699 391 1,090 Other liabilities 451 (26 ) 425 Shareholders' Equity: Retained earnings 4,454 (261 ) 4,193 Condensed consolidated statement of operations for the three months ended March 31, 2017 (in millions): Three Months Ended March 31, 2017 As Reported Adjustments - Revenue Recognition Adjustments - Retirement Benefits As Adjusted Operating Revenues Passenger Revenue $ 1,484 $ 118 $ — $ 1,602 Mileage plan other revenue 119 (19 ) — 100 Cargo and other revenue 146 (108 ) — 38 Total Operating Revenue 1,749 (9 ) — 1,740 Operating Expenses Wages and benefits 448 — 2 450 Selling expenses 81 2 — 83 Special items—merger-related costs 40 (1 ) — 39 All other operating expenses 1,011 — — 1,011 Total Operating Expenses 1,580 1 2 1,583 Operating Income 169 (10 ) (2 ) 157 Nonoperating Income (Expense) Other—net (3 ) — 2 (1 ) All other nonoperating income (expense) (14 ) — — (14 ) (17 ) — 2 (15 ) Income (loss) before income tax 152 (10 ) — 142 Income tax expense (benefit) 53 (4 ) — 49 Net Income (Loss) $ 99 $ (6 ) $ — $ 93 Condensed consolidated statement of cash flows for the three months ended March 31, 2017 (in millions): Three Months Ended March 31, 2017 As Reported Adjustments - Revenue Recognition As Adjusted Cash flows from operating activities: Net income $ 99 (6 ) $ 93 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 90 — 90 Stock-based compensation and other 13 — 13 Changes in certain assets and liabilities: Changes in deferred tax provision 48 (4 ) 44 Increase in air traffic liability 369 (5 ) 364 Increase in deferred revenue 1 30 31 Other—net (150 ) (15 ) (165 ) Net cash provided by operating activities 470 — 470 Net cash used in investing activities (488 ) — (488 ) Net cash used in financing activities (127 ) — (127 ) Net increase (decrease) in cash and cash equivalents (145 ) — (145 ) Cash and cash equivalents at beginning of year 328 — 328 Cash and cash equivalents at end of the period $ 183 — $ 183

REVENUE FROM CONTRACTS WITH CUS

REVENUE FROM CONTRACTS WITH CUSTOMERS	3 Months Ended
	Mar. 31, 2018
Revenue Recognition [Abstract]
REVENUE FROM CONTRACTS WITH CUSTOMERS	REVENUE Ticket revenue is recorded as Passenger revenue, and represents the primary source of the Company's revenue. Also included in Passenger revenue are passenger ancillary revenues such as bag fees, on-board food and beverage, ticket change fees, and certain revenue from the frequent flyer program. Mileage plan™ other revenue includes brand and marketing revenue from our co-branded credit card and other partners and certain interline frequent flyer revenue, net of commissions. Cargo and other revenue includes freight and mail revenue, and to a lesser extent, other ancillary revenue products such as lounge membership and certain commissions. The Company disaggregates revenue by segment in Note 9 . The level of detail within the Company’s statements of operations, segment disclosures, and in this footnote depict the nature, amount, timing and uncertainty of revenue and how cash flows are affected by economic and other factors. Passenger Ticket and Ancillary Services Revenue The primary performance obligation in a typical passenger ticket is to provide air travel to the Company’s passengers. Ticket revenue is collected in advance of travel and recorded as Air Traffic Liability (ATL) on the consolidated balance sheets. The Company satisfies its performance obligation and recognizes ticket revenue on each flight segment when the transportation is provided. Ancillary passenger revenues relate to items such as checked-bag fees, ticket change fees, and on-board food and beverage sales, all of which are provided at time of flight. As such, the obligation to perform these services is satisfied at the time of travel and is recorded with ticket revenue in Passenger revenue. Revenue is also recognized for tickets that are expected to expire unused, a concept referred to as “passenger ticket breakage.” Passenger ticket breakage is recorded in advance of the flight date using estimates based on the Company’s historical experience of expired tickets, and other facts such as program changes and modifications. In addition to selling tickets on its own marketed flights, the Company has interline agreements with partner airlines where it sells multi-city tickets with one or more segments of the trip flown by a partner airline, or it operates a connecting flight sold by a partner airline. Each segment in a connecting flight represents a separate performance obligation. Revenue on segments sold and operated by the Company is recognized as Passenger revenue in the gross amount of the allocated ticket price when the travel occurs, while the commission paid to the partner airline is recognized as a selling expense when the related transportation is provided. Revenue on segments operated by a partner airline is deferred for the full amount of the consideration received at the time the ticket is sold and, once the segment has been flown the Company records the net amount, after compensating the partner airline, as Cargo and other revenue. A portion of revenue from the Mileage Plan™ program is recorded in Passenger revenue. As members are awarded mileage credits on flown tickets, these credits become a distinct performance obligation to the Company. The Company allocates the transaction price to each performance obligation identified in a passenger ticket contract on a relative standalone selling price basis. The standalone selling price for loyalty mileage credits issued is discussed in the Loyalty Mileage Credits section of this Note below. The amount allocated to the mileage credits is deferred on the balance sheet. Once a member travels using a travel award redeemed with mileage credits on one of the Company's airline carriers, the revenue associated with those mileage credits is recorded as Passenger revenue. 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. Passenger revenue recognized in the condensed consolidated statements of operations (in millions): Three Months Ended March 31, 2018 2017 Passenger ticket revenue, including ticket breakage and net of taxes and fees $ 1,428 $ 1,358 Passenger ancillary revenue 118 116 Mileage Plan TM passenger revenue 139 128 Total passenger revenue $ 1,685 $ 1,602 As passenger tickets and related ancillary services are primarily sold via credit cards, certain amounts due from credit card processors are recorded as airline traffic receivables. These credit card receivables and receivables from our affinity credit card partner represent the majority of the receivables balance on the Balance Sheet. For performance obligations with performance periods of less than one year,GAAP provides a practical expedient that allows the Company not to disclose the transaction price allocated to remaining performance obligations and the timing of related revenue recognition. As passenger tickets expire one year from ticketing, if unused or not exchanged, the Company elected to apply this practical expedient. Mileage Plan™ Loyalty Program Loyalty mileage credits The Company’s Mileage Plan™ loyalty program provides frequent flyer travel awards to program members based upon accumulated loyalty mileage credits. Mileage credits are earned through travel, purchases using the Mileage Plan™ co-branded credit card and purchases from other participating partners. The program has a 24-month expiration period for unused mileage credits from the month of last account activity. The Company offers redemption of mileage credits through free, discounted or upgraded air travel on Alaska flights or on one of its 16 airline partners. The Company uses a relative standalone selling price allocation to allocate consideration to material performance obligations in contracts with customers that include loyalty mileage credits. As directly observable selling prices for mileage credits are not available, the Company determines the standalone selling price of mileage credits primarily using actual ticket purchase prices for similar tickets flown, adjusted for the likelihood of redemption, or breakage. In determining similar tickets flown, the Company considers current market prices, class of service, type of award, and other factors. For mileage credits accumulated through travel on partner airlines, the Company uses actual consideration received from the partners. Revenue related to air transportation is deferred in the amount of the relative standalone selling price allocated to the loyalty mileage credits as they are issued. The Company satisfies its performance obligation when the mileage credits are redeemed and the related air transportation is delivered. The Company estimates breakage for the portion of loyalty mileage credits not expected to be redeemed using a statistical analysis of historical data, including actual mileage credits expiring, slow-moving and low-credit accounts, among other factors. The breakage rate for the three months ended March 31, 2018 and 2017 was 17.4% . The Company reviews the breakage rate used on an annual basis. Co-brand credit card agreement and other In addition to mileage credits, the co-brand credit card agreement, referred to herein as the Agreement, also includes performance obligations for waived bag fees, Companion Fare™ offers to purchase an additional ticket at a discount, marketing, and the use of intellectual property including the brand (unlimited access to the use of the Company’s brand and frequent flyer member lists), which is the predominant element in the Agreement. The affinity card bank partner is the related customer for some elements, including the brand and marketing, while the Mileage Plan™ member is the customer for other elements such as mileage credits, bag waivers, and companion fares. At the inception of the Agreement, management estimated the selling price of each of the deliverables, or performance obligations. The objective was to determine the price at which a sale would be transacted if the product or service was sold on a stand-alone basis. The Company determined its best estimate of selling price for each element by considering multiple inputs and methods including, but not limited to, the estimated selling price of comparable travel, discounted cash flows, brand value, published selling prices, number of miles awarded and number of miles redeemed. The Company estimated the selling prices and volumes over the term of the Agreement in order to determine the allocation of proceeds to each of the multiple deliverables. The estimates of the standalone selling prices of each element do not change subsequent to the original valuation of the contract unless the contract is materially modified, but the allocation between elements may change based upon the actual and updated projected volumes of each element delivered during the term of the contract. Consideration received from the bank is variable and is primarily from consumer spend on the card, among other items. The Company allocates consideration to each of the performance obligations, including mileage credits, waived bag fees, companion fares, and brand and marketing, using their relative standalone selling price. Because the performance obligation related to providing use of intellectual property including the brand is satisfied over time, it is recognized in Mileage Plan TM other revenue in the period that those elements are sold. The Company records passenger revenue related to the air transportation and certificates for discounted companion travel when the transportation is delivered. In contracts with non-bank partners, the Company has identified two performance obligations in most cases - travel and brand. Revenue is recognized using the residual method, where the travel performance obligation is deferred until transportation is provided in the amount of the estimated standalone selling price of the ticket, less breakage. The residual amount, if any, is recognized as commission revenue when the brand element is sold. Mileage credit sales recorded under the residual approach are immaterial to the overall program. Interline loyalty The Company has interline arrangements with certain airlines whereby its members may earn and redeem Mileage Plan™ credits on those airlines, and members of a partner airline’s loyalty program may earn and redeem frequent flyer program credits on Alaska. When a Mileage Plan™ member earns credits on a partner airline, the partner airline remits a contractually-agreed upon fee to the Company that is deferred and recognized as Passenger revenue for mileage credits redeemed and flown on the Company's airlines, and as Mileage Plan other revenue for mileage credits redeemed and flown on other airlines (less the cost paid to the other airlines based on contractual agreements). When a member of a partner airline redeems frequent flyer credits on Alaska, the partner airline remits a contractually-agreed upon amount to the Company, recognized as Passenger revenue upon travel. If the partner airline’s member earns frequent flyer program credits on an Alaska flight, the Company remits a contractually-agreed upon fee to the partner airline and records a commission expense. Mileage Plan™ revenue included in the condensed consolidated statements of operations (in millions): Three Months Ended March 31, 2018 2017 Passenger revenue $ 139 $ 128 Mileage Plan TM other revenue 107 100 Total Mileage Plan™ revenue $ 246 $ 228 Mileage Plan™ other revenue is primarily brand and marketing revenue from our affinity card products. Cargo and Other The Company provides freight and mail services (cargo). The majority of cargo services are provided to commercial businesses and the United States Postal Service. The Company satisfies cargo service performance obligations and recognizes revenue when the shipment arrives at its final destination, or is transferred to a third-party carrier for delivery. The Company also earns other revenue for lounge memberships, hotel and car commissions, and certain other immaterial items not intrinsically tied to providing air travel to passengers. Revenue is recognized when these services are rendered and recorded as Cargo and other revenue. The transaction price for Cargo and other revenue is the price paid by the customer. Cargo and other revenue included in the condensed consolidated statements of operations for the three months ended March 31, 2018 and 2017 (in millions): Three Months Ended March 31, 2018 2017 Cargo revenue $ 26 $ 24 Other revenue 14 14 Total Cargo and other revenue $ 40 $ 38 Air Traffic Liability and Deferred Revenue Passenger ticket and ancillary services liabilities Air traffic liability included on the consolidated balance sheets represents the remaining obligation associated with passenger tickets and ancillary services. The air traffic liability balance fluctuates with seasonal travel patterns. The Company recognized Passenger revenue of $434 million and $431 million from the prior year-end air traffic liability balance for the three months ended March 31, 2018 and 2017 . Mileage Plan TM liabilities The total Deferred revenue liability included on the consolidated balance sheets represents the remaining transaction price that has been allocated to Mileage Plan TM performance obligations not yet satisfied by the Company. In general, the current amounts will be recognized as revenue within 12 months and the long term amounts will be recognized as revenue over, on average, a period of approximately three to four years. This period of time represents the average time that members have historically earned and redeemed miles. The Company records a receivable for amounts due from the affinity card partner and from other partners as mileage credits are sold until the payments are collected. The Company had $101 million of such receivables as of both March 31, 2018 and December 31, 2017 . Mileage credits are combined in one homogeneous pool and are not specifically identifiable. As such, loyalty revenues disclosed earlier in this Note are comprised of miles that were part of the deferred revenue and liabilities balances at the beginning of the period and miles that were issued during the period. The table below presents a roll forward of the total frequent flyer liability (in millions): Three Months Ended March 31, 2018 2017 Total Deferred Revenue balance at January 1 $ 1,726 $ 1,535 Travel miles and companion certificate redemption - Passenger revenue (139 ) (128 ) Miles redeemed on partner airlines - Other revenue (19 ) (23 ) Increase in liability for mileage credits issued 183 185 Total Deferred Revenue balance at March 31 $ 1,751 $ 1,569 Selling Costs Certain costs such as credit card fees, travel agency and other commissions paid, as well as Global Distribution Systems (GDS) booking fees are incurred when the Company sells passenger tickets and ancillary services in advance of the travel date. The Company defers such costs and recognizes them as expense when the travel occurs. Prepaid expense recorded on the consolidated balance sheets for such costs was $29 million and $24 million as of March 31, 2018 and December 31, 2017 . The Company recorded related expense on the condensed consolidated statement of operations of $51 million and $56 million for the three months ended March 31, 2018 and 2017 .

FAIR VALUE MEASUREMENTS

FAIR VALUE MEASUREMENTS	3 Months Ended
	Mar. 31, 2018
Fair Value Disclosures [Abstract]
FAIR VALUE MEASUREMENTS	FAIR VALUE MEASUREMENTS In determining fair value, there is a three-level hierarchy based on the reliability of the inputs used. Level 1 refers to fair values based on quoted prices in active markets for identical assets or liabilities. Level 2 refers to fair values estimated using significant other observable inputs and Level 3 refers to fair values estimated using significant unobservable inputs. Fair Value of Financial Instruments on a Recurring Basis As of March 31, 2018 , total cost basis for all 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): March 31, 2018 Level 1 Level 2 Total Assets Marketable securities U.S. government and agency securities $ 330 $ — $ 330 Foreign government bonds — 32 32 Asset-backed securities — 208 208 Mortgage-backed securities — 86 86 Corporate notes and bonds — 685 685 Municipal securities — 10 10 Total Marketable securities 330 1,021 1,351 Derivative instruments Fuel hedge—call options — 35 35 Interest rate swap agreements — 13 13 Total Assets 330 1,069 1,399 Liabilities Derivative instruments Interest rate swap agreements — (6 ) (6 ) Total Liabilities — (6 ) (6 ) 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 Total Marketable securities 328 1,099 1,427 Derivative instruments Fuel hedge—call options — 22 22 Interest rate swap agreements — 9 9 Total Assets 328 1,130 1,458 Liabilities Derivative instruments Interest rate swap agreements — (8 ) (8 ) Total Liabilities — (8 ) (8 ) The Company uses both the market and income approach to determine the fair value of marketable securities. U.S. government securities are Level 1 as the fair value is based on quoted prices in active markets. Foreign government bonds, asset-backed securities, mortgage-backed securities, corporate notes and bonds, and municipal securities are Level 2 as the fair value is based on standard valuation models that are calculated based on observable inputs such as quoted interest rates, yield curves, credit ratings of the security and other observable market information. The Company uses the market approach and the income approach to determine the fair value of derivative instruments. The fair value for fuel hedge call options is determined utilizing an option pricing model based on inputs that are readily available in active markets or can be derived from information available in active markets. In addition, the fair value considers the exposure to credit losses in the event of non-performance by counterparties. Interest rate swap agreements are Level 2 as the fair value of these contracts is determined based on the difference between the fixed interest rate in the agreements and the observable LIBOR-based interest forward rates at period end multiplied by the total notional value. Activity and Maturities for Marketable Securities Unrealized losses from marketable securities are primarily attributable to changes in interest rates. Management does not believe any unrealized losses represent other-than-temporary impairments based on its evaluation of available information as of March 31, 2018 . Maturities for marketable securities (in millions): March 31, 2018 Cost Basis Fair Value Due in one year or less $ 141 $ 141 Due after one year through five years 1,207 1,187 Due after five years through 10 years 23 23 Total $ 1,371 $ 1,351 Fair Value of Other Financial Instruments The Company uses the following methods and assumptions to determine the fair value of financial instruments that are not recognized at fair value as described below. Cash, Cash Equivalents and Restricted Cash : 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 fair value. 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. 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 debt as of March 31, 2018 , the Company uses the income approach by discounting cash flows using borrowing rates for comparable debt over the remaining 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 is as follows (in millions): March 31, 2018 December 31, 2017 Fixed-rate debt at cost $ 874 $ 956 Non-recurring purchase price accounting fair value adjustment 3 3 Total fixed-rate debt 877 959 Estimated fair value 871 959 Assets and Liabilities Measured at Fair Value on Nonrecurring Basis Certain assets and liabilities are recognized or disclosed at fair value on a nonrecurring basis, including property, plant and equipment, goodwill, and intangible assets. These assets are subject to fair valuation when there is evidence of impairment. No impairment was recognized in the three months ended March 31, 2018 or March 31, 2017 .

LONG-TERM DEBT

LONG-TERM DEBT	3 Months Ended
	Mar. 31, 2018
Debt Disclosure [Abstract]
LONG-TERM DEBT	LONG-TERM DEBT Long-term debt obligations on the consolidated balance sheet (in millions): March 31, 2018 December 31, 2017 Fixed-rate notes payable due through 2028 $ 877 $ 959 Variable-rate notes payable due through 2028 1,587 1,625 Less debt issuance costs (15 ) (15 ) Total debt 2,449 2,569 Less current portion 387 307 Long-term debt, less current portion $ 2,062 $ 2,262 Weighted-average fixed-interest rate 4.2 % 4.2 % Weighted-average variable-interest rate 3.3 % 2.8 % During the three months ended March 31, 2018 the Company made debt payments of $120 million , including the prepayment of $23 million of debt. At March 31, 2018 long-term debt principal payments for the next five years and thereafter are as follows (in millions): Total Remainder of 2018 $ 266 2019 321 2020 439 2021 421 2022 246 Thereafter 768 Total $ 2,461 Bank Lines of Credit The Company has three credit facilities totaling $475 million . All three facilities have variable interest rates based on LIBOR plus a specified margin. One credit facility for $250 million expires in June 2021 and is secured by aircraft. A second credit facility for $75 million expires in September 2018 , with a mechanism for annual renewal, and is secured by aircraft. A third credit facility for $150 million 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 March 31, 2018 .

EMPLOYEE BENEFIT PLANS

EMPLOYEE BENEFIT PLANS	3 Months Ended
	Mar. 31, 2018
Compensation and Retirement Disclosure [Abstract]
EMPLOYEE BENEFIT PLANS	EMPLOYEE BENEFIT PLANS See Note 2 for a discussion of the impacts of ASU 2017-07, "Compensation - Retirement Benefits" which became effective January 1, 2018. Net periodic benefit costs for qualified defined-benefit plans include the following (in millions): Three Months Ended March 31, 2018 2017 Service cost $ 12 $ 10 Pension expense included in Wages and benefits 12 10 Interest cost 20 18 Expected return on assets (27 ) (27 ) Recognized actuarial loss (gain) 8 7 Pension expense (benefit) included in Nonoperating $ 1 $ (2 )

COMMITMENTS

COMMITMENTS	3 Months Ended
	Mar. 31, 2018
Commitments and Contingencies Disclosure [Abstract]
COMMITMENTS	COMMITMENTS AND CONTINGENCIES Future minimum payments for commitments as of March 31, 2018 (in millions): Aircraft Leases Facility Leases Aircraft Commitments (a) Capacity Purchase Agreements (b) Aircraft Maintenance Deposits Remainder of 2018 $ 265 $ 58 $ 610 $ 100 $ 60 2019 356 68 560 151 65 2020 330 61 514 159 68 2021 287 52 562 166 64 2022 264 33 303 174 52 Thereafter 1,037 141 141 1,205 38 Total $ 2,539 $ 413 $ 2,690 $ 1,955 $ 347 (a) Includes non-cancelable contractual commitments for aircraft and engines, buyer furnished equipment, and aircraft maintenance and parts management. (b) 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, as well as aircraft leases operated by third-parties. At March 31, 2018 , the Company had lease contracts for 10 Boeing 737 (B737) aircraft, 59 Airbus aircraft, 15 Bombardier Q400 aircraft, and 25 Embraer 175 (E175) with SkyWest Airlines, Inc. (SkyWest). The Company has an additional four scheduled lease deliveries of A321neo aircraft through 2019 , as well as 10 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 2031 . 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 $153 million and $138 million for the three months ended March 31, 2018 and 2017 . Aircraft Commitments Aircraft purchase commitments include non-cancelable contractual commitments for aircraft and engines. As of March 31, 2018 , the Company had commitments to purchase 43 B737 aircraft ( 11 B737 NextGen aircraft and 32 B737 MAX aircraft), with deliveries in the remainder of 2018 through 2023 . In the first quarter of 2018 the Company entered into a supplemental agreement with Boeing to defer certain B737 deliveries and to convert 15 MAX8 aircraft orders to MAX9 aircraft orders. The Company also has commitments to purchase 22 E175 aircraft with deliveries in the remainder of 2018 through 2021 . The Company also has cancelable purchase commitments for 30 Airbus A320neo aircraft with deliveries from 2021 through 2023 . 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. 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.

SHAREHOLDERS' EQUITY

SHAREHOLDERS' EQUITY	3 Months Ended
	Mar. 31, 2018
Equity [Abstract]
SHAREHOLDERS' EQUITY	SHAREHOLDERS' EQUITY Dividends During the three months ended March 31, 2018 , the Company declared and paid cash dividends of $0.32 per share, or $39 million . Common Stock Repurchase In August 2015 , the Board of Directors authorized a $1 billion share repurchase program. The program was paused in the second quarter of 2016 in anticipation of the acquisition of Virgin America. The Company resumed the share repurchase program in the second quarter of 2017. As of March 31, 2018 , the Company has repurchased 5.3 million shares for $401 million under this program. Share repurchase activity (in millions, except share amounts): Three Months Ended March 31, 2018 2017 Shares Amount Shares Amount 2015 Repurchase Program—$1 billion 185,661 $ 12 — $ — Accumulated Other Comprehensive Loss Components of accumulated other comprehensive loss, net of tax (in millions): March 31, 2018 December 31, 2017 Related to marketable securities $ (15 ) $ (5 ) Related to employee benefit plans (431 ) (376 ) Related to interest rate derivatives 6 1 Total $ (440 ) $ (380 ) During the three months ended March 31, 2018 , the Company elected to early adopt ASU 2018-02. As a result, the Company reclassified approximately $62 million of tax effects in AOCI recorded in prior periods at previously enacted tax rates thus increasing Retained earnings. Earnings Per Share (EPS) Diluted EPS is calculated by dividing net income by the average number of common shares outstanding plus the number of 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. For the three months ended March 31, 2018 and 2017 , anti-dilutive shares excluded from the calculation of EPS were not material.

OPERATING SEGMENT INFORMATION

OPERATING SEGMENT INFORMATION	3 Months Ended
	Mar. 31, 2018
Segment Reporting [Abstract]
OPERATING SEGMENT INFORMATION	OPERATING SEGMENT INFORMATION Alaska Air Group has two operating airlines—Alaska (including Virgin America after the single operating certificate received in January 2018) and Horizon. Each is regulated 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. GAAP, 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 scheduled air transportation on Alaska's Boeing or Airbus jet aircraft for passengers and cargo throughout the U.S., and in parts of Canada, Mexico, and Costa Rica. • 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): Three Months Ended March 31, 2018 Mainline Regional Horizon Consolidating & Other (a) Air Group Adjusted (b) Special Items (c) Consolidated Operating revenues Passenger revenues $ 1,442 $ 243 $ — $ — $ 1,685 $ — $ 1,685 CPA revenues — — 110 (110 ) — — — Mileage plan other revenue 98 9 — — 107 — 107 Cargo and other 39 — 1 — 40 — 40 Total operating revenues 1,579 252 111 (110 ) 1,832 — 1,832 Operating expenses Operating expenses, excluding fuel 1,131 239 104 (111 ) 1,363 31 1,394 Economic fuel 367 55 — — 422 (13 ) 409 Total operating expenses 1,498 294 104 (111 ) 1,785 18 1,803 Nonoperating income (expense) Interest income 11 — — (3 ) 8 — 8 Interest expense (22 ) — (5 ) 3 (24 ) — (24 ) Interest capitalized 4 — 1 — 5 — 5 Other—net (5 ) (7 ) — — (12 ) — (12 ) Total Nonoperating income (expense) (12 ) (7 ) (4 ) — (23 ) — (23 ) Income (loss) before income tax $ 69 $ (49 ) $ 3 $ 1 $ 24 $ (18 ) $ 6 Three Months Ended March 31, 2017 (d) Mainline Regional Horizon Consolidating & Other (a) Air Group Adjusted (b) Special Items (c) Consolidated Operating revenues Passenger revenues $ 1,375 $ 227 $ — $ — $ 1,602 $ — $ 1,602 CPA revenues — — 97 (97 ) — — — Mileage plan other revenue 93 7 — — 100 — 100 Cargo and other 36 1 1 — 38 — 38 Total operating revenues 1,504 235 98 (97 ) 1,740 — 1,740 Operating expenses Operating expenses, excluding fuel 1,000 200 103 (98 ) 1,205 39 1,244 Economic fuel 292 37 — — 329 10 339 Total operating expenses 1,292 237 103 (98 ) 1,534 49 1,583 Nonoperating income (expense) Interest income 7 — — — 7 — 7 Interest expense (23 ) — (2 ) — (25 ) — (25 ) Interest capitalized 4 — — — 4 — 4 Other—net (1 ) — — — (1 ) — (1 ) Total Nonoperating income (expense) (13 ) — (2 ) — (15 ) — (15 ) Income (loss) before income tax $ 199 $ (2 ) $ (7 ) $ 1 $ 191 $ (49 ) $ 142 (a) Includes consolidating entries, Parent Company, McGee Air Services, and other immaterial business units. (b) The Air Group Adjusted column represents the financial information that is reviewed by management to assess performance of operations and determine capital allocations and does not include certain income and charges. (c) Includes merger-related costs, mark-to-market fuel-hedge accounting charges, and other special items. (d) Certain historical information has been adjusted to reflect the adoption of new accounting standards. Total assets were as follows (in millions): March 31, 2018 December 31, 2017 Mainline $ 15,088 $ 16,663 Horizon 945 929 Consolidating & Other (5,185 ) (6,846 ) Consolidated $ 10,848 $ 10,746

GENERAL AND SUMMARY OF SIGNIF17

GENERAL AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)	3 Months Ended
	Mar. 31, 2018
Accounting Policies [Abstract]
Organization and Basis of Presentation	Organization and Basis of Presentation The condensed consolidated financial statements include the accounts of Air Group, or the Company, and its primary subsidiaries, Alaska, Horizon, and Virgin America. Our condensed consolidated financial statements also include McGee Air Services, a ground services 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 accordance with accounting principles generally accepted in the United States (GAAP) for interim financial information. Consistent with these requirements, this Form 10-Q does not include all the information required by GAAP for complete financial statements. It should be read in conjunction with the consolidated financial statements and accompanying notes in the Form 10-K for the year ended December 31, 2017 . In the opinion of management, all adjustments have been made that are necessary to fairly present the Company’s financial position as of March 31, 2018 and the results of operations for the three months ended March 31, 2018 and 2017 . Such adjustments were of a normal recurring nature. Certain reclassifications have been made to prior year financial statements to conform to classifications used in the current year. In preparing these statements, the Company is required to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent liabilities, as well as the reported amounts of revenues and expenses. Due to seasonal variations in the demand for air travel, the volatility of aircraft fuel prices, changes in global economic conditions, changes in the competitive environment and other factors, operating results for the three months ended March 31, 2018 are not necessarily indicative of operating results for the entire year.
Recently Issued Accounting Pronouncements	Recently Issued Accounting Pronouncements 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 and related liability 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. In March 2018, the FASB approved amendments to Topic 842 that would give companies an alternative transition method which would not require adjusting comparative period financial information. The ASU codification of this new transition method has not yet been issued, but the Company will consider the alternative in greater detail upon issuance. The new standard is effective for the Company on January 1, 2019. In November 2016, the FASB issued ASU 2016-18, "Statement of Cash Flows—Restricted Cash (Topic 230)" related to the presentation of restricted cash on the statement of cash flows, and within the accompanying footnotes. The Company adopted the standard effective January 1, 2018. 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. In February 2018, the FASB issued ASU 2018-02, "Income Statement—Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income." The standard allows a reclassification from accumulated other comprehensive income (AOCI) to retained earnings for stranded tax effects resulting from the Tax Cuts and Jobs Act. The amount of the reclassification is the difference between the amount initially recorded directly to other comprehensive income at the previously enacted U.S. federal corporate income tax rate that remains in AOCI and the amount that would have been recorded directly to other comprehensive income using the newly enacted U.S. federal income tax rate. The standard is effective for interim and annual reporting periods beginning after December 15, 2018, and early adoption is permitted. The Company elected to early adopt the standard effective January 1, 2018. As a result, retained earnings increased approximately $62 million due to the reclassification of tax effects in AOCI recorded in prior periods at previously enacted tax rates.

RECENTLY ADOPTED ACCOUNTING P18

RECENTLY ADOPTED ACCOUNTING PRONOUNCEMENTS (Tables)	3 Months Ended
	Mar. 31, 2018
Accounting Changes and Error Corrections [Abstract]
Schedule of New Accounting Pronouncements Impact	Consolidated balance sheet as of December 31, 2017 (in millions): December 31, 2017 As Reported Adjustments - Revenue Recognition As Adjusted Current Assets: Prepaid expenses and other current assets $ 127 $ 6 $ 133 Current Liabilities: Air traffic liability 937 (131 ) 806 Deferred revenue 518 117 635 Other liabilities and credits: Deferred income taxes 454 (84 ) 370 Deferred revenue 699 391 1,090 Other liabilities 451 (26 ) 425 Shareholders' Equity: Retained earnings 4,454 (261 ) 4,193 Condensed consolidated statement of operations for the three months ended March 31, 2017 (in millions): Three Months Ended March 31, 2017 As Reported Adjustments - Revenue Recognition Adjustments - Retirement Benefits As Adjusted Operating Revenues Passenger Revenue $ 1,484 $ 118 $ — $ 1,602 Mileage plan other revenue 119 (19 ) — 100 Cargo and other revenue 146 (108 ) — 38 Total Operating Revenue 1,749 (9 ) — 1,740 Operating Expenses Wages and benefits 448 — 2 450 Selling expenses 81 2 — 83 Special items—merger-related costs 40 (1 ) — 39 All other operating expenses 1,011 — — 1,011 Total Operating Expenses 1,580 1 2 1,583 Operating Income 169 (10 ) (2 ) 157 Nonoperating Income (Expense) Other—net (3 ) — 2 (1 ) All other nonoperating income (expense) (14 ) — — (14 ) (17 ) — 2 (15 ) Income (loss) before income tax 152 (10 ) — 142 Income tax expense (benefit) 53 (4 ) — 49 Net Income (Loss) $ 99 $ (6 ) $ — $ 93 Condensed consolidated statement of cash flows for the three months ended March 31, 2017 (in millions): Three Months Ended March 31, 2017 As Reported Adjustments - Revenue Recognition As Adjusted Cash flows from operating activities: Net income $ 99 (6 ) $ 93 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 90 — 90 Stock-based compensation and other 13 — 13 Changes in certain assets and liabilities: Changes in deferred tax provision 48 (4 ) 44 Increase in air traffic liability 369 (5 ) 364 Increase in deferred revenue 1 30 31 Other—net (150 ) (15 ) (165 ) Net cash provided by operating activities 470 — 470 Net cash used in investing activities (488 ) — (488 ) Net cash used in financing activities (127 ) — (127 ) Net increase (decrease) in cash and cash equivalents (145 ) — (145 ) Cash and cash equivalents at beginning of year 328 — 328 Cash and cash equivalents at end of the period $ 183 — $ 183

REVENUE FROM CONTRACTS WITH C19

REVENUE FROM CONTRACTS WITH CUSTOMERS (Tables)	3 Months Ended
	Mar. 31, 2018
Revenue Recognition [Abstract]
Disaggregation of Revenue	Cargo and other revenue included in the condensed consolidated statements of operations for the three months ended March 31, 2018 and 2017 (in millions): Three Months Ended March 31, 2018 2017 Cargo revenue $ 26 $ 24 Other revenue 14 14 Total Cargo and other revenue $ 40 $ 38 Passenger revenue recognized in the condensed consolidated statements of operations (in millions): Three Months Ended March 31, 2018 2017 Passenger ticket revenue, including ticket breakage and net of taxes and fees $ 1,428 $ 1,358 Passenger ancillary revenue 118 116 Mileage Plan TM passenger revenue 139 128 Total passenger revenue $ 1,685 $ 1,602 Mileage Plan™ revenue included in the condensed consolidated statements of operations (in millions): Three Months Ended March 31, 2018 2017 Passenger revenue $ 139 $ 128 Mileage Plan TM other revenue 107 100 Total Mileage Plan™ revenue $ 246 $ 228
Contract with Customer Liabilities	The table below presents a roll forward of the total frequent flyer liability (in millions): Three Months Ended March 31, 2018 2017 Total Deferred Revenue balance at January 1 $ 1,726 $ 1,535 Travel miles and companion certificate redemption - Passenger revenue (139 ) (128 ) Miles redeemed on partner airlines - Other revenue (19 ) (23 ) Increase in liability for mileage credits issued 183 185 Total Deferred Revenue balance at March 31 $ 1,751 $ 1,569

FAIR VALUE MEASUREMENTS (Tables

FAIR VALUE MEASUREMENTS (Tables)	3 Months Ended
	Mar. 31, 2018
Fair Value Disclosures [Abstract]
Activity for Marketable Securities
Investments Classified by Contractual Maturity Date	Maturities for marketable securities (in millions): March 31, 2018 Cost Basis Fair Value Due in one year or less $ 141 $ 141 Due after one year through five years 1,207 1,187 Due after five years through 10 years 23 23 Total $ 1,371 $ 1,351
Fair Value, by Balance Sheet Grouping	Fair values of financial instruments on the consolidated balance sheet (in millions): March 31, 2018 Level 1 Level 2 Total Assets Marketable securities U.S. government and agency securities $ 330 $ — $ 330 Foreign government bonds — 32 32 Asset-backed securities — 208 208 Mortgage-backed securities — 86 86 Corporate notes and bonds — 685 685 Municipal securities — 10 10 Total Marketable securities 330 1,021 1,351 Derivative instruments Fuel hedge—call options — 35 35 Interest rate swap agreements — 13 13 Total Assets 330 1,069 1,399 Liabilities Derivative instruments Interest rate swap agreements — (6 ) (6 ) Total Liabilities — (6 ) (6 ) 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 Total Marketable securities 328 1,099 1,427 Derivative instruments Fuel hedge—call options — 22 22 Interest rate swap agreements — 9 9 Total Assets 328 1,130 1,458 Liabilities Derivative instruments Interest rate swap agreements — (8 ) (8 ) Total Liabilities — (8 ) (8 ) Fixed-rate debt on the consolidated balance sheet and the estimated fair value of long-term fixed-rate debt is as follows (in millions): March 31, 2018 December 31, 2017 Fixed-rate debt at cost $ 874 $ 956 Non-recurring purchase price accounting fair value adjustment 3 3 Total fixed-rate debt 877 959 Estimated fair value 871 959

LONG-TERM DEBT (Tables)

LONG-TERM DEBT (Tables)	3 Months Ended
	Mar. 31, 2018
Debt Disclosure [Abstract]
Schedule of Long-term Debt Instruments	Long-term debt obligations on the consolidated balance sheet (in millions): March 31, 2018 December 31, 2017 Fixed-rate notes payable due through 2028 $ 877 $ 959 Variable-rate notes payable due through 2028 1,587 1,625 Less debt issuance costs (15 ) (15 ) Total debt 2,449 2,569 Less current portion 387 307 Long-term debt, less current portion $ 2,062 $ 2,262 Weighted-average fixed-interest rate 4.2 % 4.2 % Weighted-average variable-interest rate 3.3 % 2.8 %
Schedule of Maturities of Long-term Debt	At March 31, 2018 long-term debt principal payments for the next five years and thereafter are as follows (in millions): Total Remainder of 2018 $ 266 2019 321 2020 439 2021 421 2022 246 Thereafter 768 Total $ 2,461

EMPLOYEE BENEFIT PLANS (Tables)

EMPLOYEE BENEFIT PLANS (Tables)	3 Months Ended
	Mar. 31, 2018
Compensation and Retirement Disclosure [Abstract]
Schedule of Net Benefit Costs	Net periodic benefit costs for qualified defined-benefit plans include the following (in millions): Three Months Ended March 31, 2018 2017 Service cost $ 12 $ 10 Pension expense included in Wages and benefits 12 10 Interest cost 20 18 Expected return on assets (27 ) (27 ) Recognized actuarial loss (gain) 8 7 Pension expense (benefit) included in Nonoperating $ 1 $ (2 )

COMMITMENTS (Tables)

COMMITMENTS (Tables)	3 Months Ended
	Mar. 31, 2018
Commitments and Contingencies Disclosure [Abstract]
Schedule of Future Minimum Rental Payments for Operating Leases and Unrecorded Unconditional Purchase Obligtaions	Future minimum payments for commitments as of March 31, 2018 (in millions): Aircraft Leases Facility Leases Aircraft Commitments (a) Capacity Purchase Agreements (b) Aircraft Maintenance Deposits Remainder of 2018 $ 265 $ 58 $ 610 $ 100 $ 60 2019 356 68 560 151 65 2020 330 61 514 159 68 2021 287 52 562 166 64 2022 264 33 303 174 52 Thereafter 1,037 141 141 1,205 38 Total $ 2,539 $ 413 $ 2,690 $ 1,955 $ 347 (a) Includes non-cancelable contractual commitments for aircraft and engines, buyer furnished equipment, and aircraft maintenance and parts management. (b) Includes all non-aircraft lease costs associated with capacity purchase agreements.

SHAREHOLDERS' EQUITY (Tables)

SHAREHOLDERS' EQUITY (Tables)	3 Months Ended
	Mar. 31, 2018
Equity [Abstract]
Schedule of Treasury Stock by Class	Share repurchase activity (in millions, except share amounts): Three Months Ended March 31, 2018 2017 Shares Amount Shares Amount 2015 Repurchase Program—$1 billion 185,661 $ 12 — $ —
Schedule of Accumulated Other Comprehensive Income (Loss)	Components of accumulated other comprehensive loss, net of tax (in millions): March 31, 2018 December 31, 2017 Related to marketable securities $ (15 ) $ (5 ) Related to employee benefit plans (431 ) (376 ) Related to interest rate derivatives 6 1 Total $ (440 ) $ (380 )

OPERATING SEGMENT INFORMATION (

OPERATING SEGMENT INFORMATION (Tables)	3 Months Ended
	Mar. 31, 2018
Segment Reporting [Abstract]
Schedule of Segment Reporting Information, by Segment	Operating segment information is as follows (in millions): Three Months Ended March 31, 2018 Mainline Regional Horizon Consolidating & Other (a) Air Group Adjusted (b) Special Items (c) Consolidated Operating revenues Passenger revenues $ 1,442 $ 243 $ — $ — $ 1,685 $ — $ 1,685 CPA revenues — — 110 (110 ) — — — Mileage plan other revenue 98 9 — — 107 — 107 Cargo and other 39 — 1 — 40 — 40 Total operating revenues 1,579 252 111 (110 ) 1,832 — 1,832 Operating expenses Operating expenses, excluding fuel 1,131 239 104 (111 ) 1,363 31 1,394 Economic fuel 367 55 — — 422 (13 ) 409 Total operating expenses 1,498 294 104 (111 ) 1,785 18 1,803 Nonoperating income (expense) Interest income 11 — — (3 ) 8 — 8 Interest expense (22 ) — (5 ) 3 (24 ) — (24 ) Interest capitalized 4 — 1 — 5 — 5 Other—net (5 ) (7 ) — — (12 ) — (12 ) Total Nonoperating income (expense) (12 ) (7 ) (4 ) — (23 ) — (23 ) Income (loss) before income tax $ 69 $ (49 ) $ 3 $ 1 $ 24 $ (18 ) $ 6 Three Months Ended March 31, 2017 (d) Mainline Regional Horizon Consolidating & Other (a) Air Group Adjusted (b) Special Items (c) Consolidated Operating revenues Passenger revenues $ 1,375 $ 227 $ — $ — $ 1,602 $ — $ 1,602 CPA revenues — — 97 (97 ) — — — Mileage plan other revenue 93 7 — — 100 — 100 Cargo and other 36 1 1 — 38 — 38 Total operating revenues 1,504 235 98 (97 ) 1,740 — 1,740 Operating expenses Operating expenses, excluding fuel 1,000 200 103 (98 ) 1,205 39 1,244 Economic fuel 292 37 — — 329 10 339 Total operating expenses 1,292 237 103 (98 ) 1,534 49 1,583 Nonoperating income (expense) Interest income 7 — — — 7 — 7 Interest expense (23 ) — (2 ) — (25 ) — (25 ) Interest capitalized 4 — — — 4 — 4 Other—net (1 ) — — — (1 ) — (1 ) Total Nonoperating income (expense) (13 ) — (2 ) — (15 ) — (15 ) Income (loss) before income tax $ 199 $ (2 ) $ (7 ) $ 1 $ 191 $ (49 ) $ 142 (a) Includes consolidating entries, Parent Company, McGee Air Services, and other immaterial business units. (b) The Air Group Adjusted column represents the financial information that is reviewed by management to assess performance of operations and determine capital allocations and does not include certain income and charges. (c) Includes merger-related costs, mark-to-market fuel-hedge accounting charges, and other special items. (d) Certain historical information has been adjusted to reflect the adoption of new accounting standards. Total assets were as follows (in millions): March 31, 2018 December 31, 2017 Mainline $ 15,088 $ 16,663 Horizon 945 929 Consolidating & Other (5,185 ) (6,846 ) Consolidated $ 10,848 $ 10,746

GENERAL AND SUMMARY OF SIGNIF26

GENERAL AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES NARRATIVE (Details) - USD ($) $ in Millions	Jan. 01, 2018	Jan. 01, 2016
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Reclassification from AOCI to retained earnings	$ 62
Accounting Standards Update 2014-09 [Member]
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Cumulative effect of new accounting pronouncements		$ 171

RECENTLY ADOPTED ACCOUNTING P27

RECENTLY ADOPTED ACCOUNTING PRONOUNCEMENTS (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017	Mar. 31, 2018	Dec. 31, 2017	Mar. 31, 2017	Jan. 01, 2016
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Cash and cash equivalents			$ 177	$ 194	$ 183
Cash, cash equivalents, and restricted cash	$ 197	$ 328	183	197	183
Current Assets
Prepaid expenses and other current assets			174	133
Current Liabilities
Air traffic liability			1,122	806
Other accrued liabilities			433	400
Deferred revenue, current			649	635
Other Liabilities and Credits
Deferred income taxes			372	370
Deferred revenue, noncurrent			1,102	1,090
Other liabilities			423	425
Shareholders' Equity
Retained earnings			$ 4,219	4,193
Operating Revenues
Passenger revenues	1,685	1,602
Mileage plan other revenue	107	100
Cargo and other	40	38
Total Operating Revenues	1,832	1,740
Operating Expenses
Wages and benefits	536	450
Selling expenses	78	83
Special items—merger-related costs	6	39
All other operating expenses		1,011
Total Operating Expenses	1,803	1,583
Operating Income	29	157
Nonoperating Income (Expense)
Other—net	(12)	(1)
All other nonoperating income (expense)		(14)
Nonoperating Income (Expense) Total	(23)	(15)
Income Before Income Tax	6	142
Income tax expense	2	49
Net Income (loss)	4	93
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	94	90
Stock-based compensation and other	8	13
Changes in deferred tax provision	2	44
Increase in air traffic liability	316	364
Increase in deferred revenue	26	31
Other—net	(144)	(165)
Net cash provided by operating activities	306	470
Net cash used in investing activities	(164)	(488)
Net cash used in financing activities	(156)	(127)
Net increase (decrease) in cash, cash equivalents, and restricted cash	(14)	(145)
Cash, cash equivalents, and restricted cash at beginning of year	197	328
Cash, cash equivalents, and restricted cash at end of the period	$ 183	183
As Reported [Member]
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Cash, cash equivalents, and restricted cash		328			183
Current Assets
Prepaid expenses and other current assets				127
Current Liabilities
Air traffic liability				937
Deferred revenue, current				518
Other Liabilities and Credits
Deferred income taxes				454
Deferred revenue, noncurrent				699
Other liabilities				451
Shareholders' Equity
Retained earnings				4,454
Operating Revenues
Passenger revenues		1,484
Mileage plan other revenue		119
Cargo and other		146
Total Operating Revenues		1,749
Operating Expenses
Wages and benefits		448
Selling expenses		81
Special items—merger-related costs		40
All other operating expenses		1,011
Total Operating Expenses		1,580
Operating Income		169
Nonoperating Income (Expense)
Other—net		(3)
All other nonoperating income (expense)		(14)
Nonoperating Income (Expense) Total		(17)
Income Before Income Tax		152
Income tax expense		53
Net Income (loss)		99
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		90
Stock-based compensation and other		13
Changes in deferred tax provision		48
Increase in air traffic liability		369
Increase in deferred revenue		1
Other—net		(150)
Net cash provided by operating activities		470
Net cash used in investing activities		(488)
Net cash used in financing activities		(127)
Net increase (decrease) in cash, cash equivalents, and restricted cash		(145)
Cash, cash equivalents, and restricted cash at beginning of year		328
Cash, cash equivalents, and restricted cash at end of the period		183
Accounting Standards Update 2014-09 [Member]
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Cumulative effect of new accounting pronouncements						$ 171
Accounting Standards Update 2014-09 [Member] | Adjustments [Member]
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Cash, cash equivalents, and restricted cash		0			$ 0
Current Assets
Prepaid expenses and other current assets				6
Current Liabilities
Air traffic liability				(131)
Deferred revenue, current				117
Other Liabilities and Credits
Deferred income taxes				(84)
Deferred revenue, noncurrent				391
Other liabilities				(26)
Shareholders' Equity
Retained earnings				$ (261)
Operating Revenues
Passenger revenues		118
Mileage plan other revenue		(19)
Cargo and other		(108)
Total Operating Revenues		(9)
Operating Expenses
Wages and benefits		0
Selling expenses		2
Special items—merger-related costs		(1)
All other operating expenses		0
Total Operating Expenses		1
Operating Income		(10)
Nonoperating Income (Expense)
Other—net		0
All other nonoperating income (expense)		0
Nonoperating Income (Expense) Total		0
Income Before Income Tax		(10)
Income tax expense		(4)
Net Income (loss)		(6)
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		0
Stock-based compensation and other		0
Changes in deferred tax provision		(4)
Increase in air traffic liability		(5)
Increase in deferred revenue		30
Other—net		(15)
Net cash provided by operating activities		0
Net cash used in investing activities		0
Net cash used in financing activities		0
Net increase (decrease) in cash, cash equivalents, and restricted cash		0
Cash, cash equivalents, and restricted cash at beginning of year		0
Cash, cash equivalents, and restricted cash at end of the period		0
Accounting Standards Update 2017-07 [Member] | Adjustments [Member]
Operating Revenues
Passenger revenues		0
Mileage plan other revenue		0
Cargo and other		0
Total Operating Revenues		0
Operating Expenses
Wages and benefits		2
Selling expenses		0
Special items—merger-related costs		0
All other operating expenses		0
Total Operating Expenses		2
Operating Income		(2)
Nonoperating Income (Expense)
Other—net		2
All other nonoperating income (expense)		0
Nonoperating Income (Expense) Total		2
Income Before Income Tax		0
Income tax expense		0
Net Income (loss)		$ 0

REVENUE FROM CONTRACTS WITH C28

REVENUE FROM CONTRACTS WITH CUSTOMERS - Disaggregation of Revenue (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Disaggregation of Revenue [Line Items]
Mileage plan other revenue	$ 107	$ 100
Passenger Revenue [Member]
Disaggregation of Revenue [Line Items]
Revenue	1,685	1,602
Passenger Revenue [Member] | Passenger ticket revenue, including ticket breakage and net of taxes and fees [Member]
Disaggregation of Revenue [Line Items]
Revenue	1,428	1,358
Passenger Revenue [Member] | Passenger ancillary revenue [Member]
Disaggregation of Revenue [Line Items]
Revenue	118	116
Passenger Revenue [Member] | Mileage Plan passenger revenue [Member]
Disaggregation of Revenue [Line Items]
Revenue	139	128
Mileage Plan Revenue [Member]
Disaggregation of Revenue [Line Items]
Revenue	246	228
Mileage Plan Revenue [Member] | Passenger revenue [Member]
Disaggregation of Revenue [Line Items]
Revenue	139	128
Mileage Plan Revenue [Member] | Mileage plan other revenue [Member]
Disaggregation of Revenue [Line Items]
Mileage plan other revenue	107	100
Cargo and Other Revenue [Member]
Disaggregation of Revenue [Line Items]
Revenue	40	38
Cargo and Other Revenue [Member] | Cargo revenue [Member]
Disaggregation of Revenue [Line Items]
Revenue	26	24
Cargo and Other Revenue [Member] | Other revenue [Member]
Disaggregation of Revenue [Line Items]
Revenue	$ 14	$ 14

REVENUE FROM CONTRACTS WITH C29

REVENUE FROM CONTRACTS WITH CUSTOMERS - Narrative (Details) $ in Millions	3 Months Ended
	Mar. 31, 2018USD ($)airline	Mar. 31, 2017USD ($)	Dec. 31, 2017USD ($)
Deferred Revenue Arrangement [Line Items]
Number of airline partners | airline	16
Breakage rate	17.40%	17.40%
Air traffic liability	$ 1,122		$ 806
Receivable	350		341
Contract cost recognized	51	$ 56
Prepaid Expenses and Other Current Assets [Member]
Deferred Revenue Arrangement [Line Items]
Contract costs	29		24
Mileage Plan Revenue [Member]
Deferred Revenue Arrangement [Line Items]
Receivable	101		$ 101
Mileage Plan Revenue [Member] | Mileage plan other revenue [Member]
Deferred Revenue Arrangement [Line Items]
Contract liability revenue recognized	(19)	(23)
Passenger Revenue [Member]
Deferred Revenue Arrangement [Line Items]
Contract liability revenue recognized	$ 434	$ 431

REVENUE FROM CONTRACTS WITH C30

REVENUE FROM CONTRACTS WITH CUSTOMERS - Contract Liabilities Activity (Details) - Mileage Plan Revenue [Member] - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Change in Contract with Customer, Liability [Roll Forward]
Total Deferred Revenue balance at January 1	$ 1,726	$ 1,535
Increase in liability for mileage credits issued	183	185
Total Deferred Revenue balance at March 31	1,751	1,569
Passenger revenue [Member]
Change in Contract with Customer, Liability [Roll Forward]
Revenue recognized	(139)	(128)
Mileage plan other revenue [Member]
Change in Contract with Customer, Liability [Roll Forward]
Revenue recognized	$ (19)	$ (23)

FAIR VALUE MEASUREMENTS - FAIR

FAIR VALUE MEASUREMENTS - FAIR VALUE OF ASSETS AND LIABILITIES (Details) - Recurring [Member] - USD ($) $ in Millions	Mar. 31, 2018	Dec. 31, 2017
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Marketable securities	$ 1,351	$ 1,427
Assets, Fair Value Disclosure, Recurring	1,399	1,458
Liabilities, Fair Value Disclosure, Recurring	6	8
Level 1 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Marketable securities	330	328
Assets, Fair Value Disclosure, Recurring	330	328
Liabilities, Fair Value Disclosure, Recurring	0	0
Level 2 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Marketable securities	1,021	1,099
Assets, Fair Value Disclosure, Recurring	1,069	1,130
Liabilities, Fair Value Disclosure, Recurring	6	8
Fuel hedge contracts [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative instruments, assets	35	22
Fuel hedge contracts [Member] | Level 1 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative instruments, assets	0	0
Fuel hedge contracts [Member] | Level 2 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative instruments, assets	35	22
Interest rate swaps agreements [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative instruments, assets	13	9
Derivative instruments, liabilities	6	8
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	0
Derivative instruments, liabilities	0	0
Interest rate swaps agreements [Member] | Level 2 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative instruments, assets	13	9
Derivative instruments, liabilities	6	8
U.S. government and agency securities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Marketable securities	330	328
U.S. government and agency securities [Member] | Level 1 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Marketable securities	330	328
U.S. government and agency securities [Member] | Level 2 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Marketable securities	0	0
Foreign government bonds [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Marketable securities	32	43
Foreign government bonds [Member] | Level 1 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Marketable securities	0	0
Foreign government bonds [Member] | Level 2 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Marketable securities	32	43
Asset-backed securities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Marketable securities	208	209
Asset-backed securities [Member] | Level 1 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Marketable securities	0	0
Asset-backed securities [Member] | Level 2 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Marketable securities	208	209
Mortgage-backed securities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Marketable securities	86	99
Mortgage-backed securities [Member] | Level 1 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Marketable securities	0	0
Mortgage-backed securities [Member] | Level 2 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Marketable securities	86	99
Corporate notes and bonds [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Marketable securities	685	726
Corporate notes and bonds [Member] | Level 1 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Marketable securities	0	0
Corporate notes and bonds [Member] | Level 2 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Marketable securities	685	726
Municipal securities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Marketable securities	10	22
Municipal securities [Member] | Level 1 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Marketable securities	0	0
Municipal securities [Member] | Level 2 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Marketable securities	$ 10	$ 22

FAIR VALUE MEASUREMENTS - MATU

FAIR VALUE MEASUREMENTS - MATURITIES FOR MARKETABLE SECURITIES (Details) $ in Millions	Mar. 31, 2018USD ($)
Cost Basis
Due in one year or less	$ 141
Due after one year through five years	1,207
Due after five years through 10 years	23
Total	1,371
Fair Value
Due in one year or less	141
Due after one year through five years	1,187
Due after five years through 10 years	23
Total	$ 1,351

FAIR VALUE MEASUREMENTS - LONG-

FAIR VALUE MEASUREMENTS - LONG-TERM DEBT (Details) - USD ($) $ in Millions	Mar. 31, 2018	Dec. 31, 2017
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Non-recurring purchase price accounting fair value adjustment	$ 3	$ 3
Carrying amount [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Fixed rate debt at cost	874	956
Long-term debt	877	959
Fair value [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Long-term debt	$ 871	$ 959

LONG-TERM DEBT - SCHEDULE OF LO

LONG-TERM DEBT - SCHEDULE OF LONG-TERM DEBT (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017	Dec. 31, 2017
Debt Instrument [Line Items]
Debt Issuance Costs, Net	$ (15)		$ (15)
Total	2,449		2,569
Less current portion	387		307
Long-term debt, less current portion	$ 2,062		$ 2,262
Weighted-average fixed-interest rate	4.20%		4.20%
Weighted-average variable-interest rate	3.30%		2.80%
Long-term debt payments	$ 120	$ 101
Repayments of Debt	23
Fixed rate notes payable due through 2028 [Member]
Debt Instrument [Line Items]
Total	877		$ 959
Variable rate notes payable due through 2028 [Member]
Debt Instrument [Line Items]
Total	$ 1,587		$ 1,625

LONG-TERM DEBT LONG-TERM DEBT -

LONG-TERM DEBT LONG-TERM DEBT - FUTURE PAYMENTS (Details) $ in Millions	Mar. 31, 2018USD ($)
Long-term Debt, Fiscal Year Maturity [Abstract]
Remainder of 2018	$ 266
2,019	321
2,020	439
2,021	421
2,022	246
Thereafter	768
Total	$ 2,461

LONG-TERM DEBT - LINE OF CREDIT

LONG-TERM DEBT - LINE OF CREDIT (Details)	3 Months Ended
	Mar. 31, 2018USD ($)credit_facility
Line of Credit Facility [Line Items]
Line of Credit Facility, Number of Credit Facilities | credit_facility	3
Line of Credit Facility, Maximum Borrowing Capacity	$ 475,000,000
Line of Credit Facility, Asset Restrictions	500,000,000
Credit Facility 1 [Member] | Secured by aircraft [Member]
Line of Credit Facility [Line Items]
Line of Credit Facility, Maximum Borrowing Capacity	$ 250,000,000
Line of Credit Facility, Expiration Date	Jun. 30, 2021
Credit Facility 2 [Member] | Secured by aircraft [Member]
Line of Credit Facility [Line Items]
Line of Credit Facility, Maximum Borrowing Capacity	$ 75,000,000
Line of Credit Facility, Expiration Date	Sep. 30, 2018
Credit Facility 3 [Member] | Secured by certain accounts receivable, spare engines, spare parts and ground service equipment [Member]
Line of Credit Facility [Line Items]
Line of Credit Facility, Maximum Borrowing Capacity	$ 150,000,000
Line of Credit Facility, Expiration Date	Mar. 31, 2022

EMPLOYEE BENEFIT PLANS - NET PE

EMPLOYEE BENEFIT PLANS - NET PENSION EXPENSE (Details) - Qualified Defined Benefit [Member] - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Defined Benefit Plan, Net Periodic Benefit Cost [Abstract]
Service cost	$ 12	$ 10
Interest cost	20	18
Expected return on assets	(27)	(27)
Recognized actuarial loss (gain)	8	7
Operating Expense [Member]
Defined Benefit Plan, Net Periodic Benefit Cost [Abstract]
Net pension expense	12	10
Nonoperating Income (Expense) [Member]
Defined Benefit Plan, Net Periodic Benefit Cost [Abstract]
Net pension expense	$ 1	$ (2)

COMMITMENTS (Details)

COMMITMENTS (Details) $ in Millions	3 Months Ended
	Mar. 31, 2018USD ($)aircraft	Mar. 31, 2017USD ($)
Unrecorded Unconditional Purchase Obligation, Fiscal Year Maturity [Abstract]
Rent Expense	$ 153	$ 138
B-737 [Member]
Unrecorded Unconditional Purchase Obligation, Fiscal Year Maturity [Abstract]
Committed to Purchase (in Aircraft) | aircraft	43
Options to Purchase Additional (in Aircraft) | aircraft	37
B737-900ER [Member]
Unrecorded Unconditional Purchase Obligation, Fiscal Year Maturity [Abstract]
Committed to Purchase (in Aircraft) | aircraft	11
B737 MAX [Member]
Unrecorded Unconditional Purchase Obligation, Fiscal Year Maturity [Abstract]
Committed to Purchase (in Aircraft) | aircraft	32
Unrecorded Unconditional Purchase Obligation, Minimum Quantity Required, Number Converted to MAX 9 | aircraft	15
A320neo [Member]
Unrecorded Unconditional Purchase Obligation, Fiscal Year Maturity [Abstract]
Unrecorded Unconditional Purchase Obligation, Option to Cancel | aircraft	30
E175 [Member]
Unrecorded Unconditional Purchase Obligation, Fiscal Year Maturity [Abstract]
Committed to Purchase (in Aircraft) | aircraft	22
Options to Purchase Additional (in Aircraft) | aircraft	30
Property Subject to Operating Lease [Member] | B-737 [Member]
Unrecorded Unconditional Purchase Obligation, Fiscal Year Maturity [Abstract]
Number of units involved in lease contracts | aircraft	10
Property Subject to Operating Lease [Member] | Airbus [Member]
Unrecorded Unconditional Purchase Obligation, Fiscal Year Maturity [Abstract]
Number of units involved in lease contracts | aircraft	59
Property Subject to Operating Lease [Member] | Q400 [Member]
Unrecorded Unconditional Purchase Obligation, Fiscal Year Maturity [Abstract]
Number of units involved in lease contracts | aircraft	15
Property Subject to Operating Lease [Member] | E175 [Member]
Unrecorded Unconditional Purchase Obligation, Fiscal Year Maturity [Abstract]
Number of units involved in lease contracts | aircraft	25
Property Available for Operating Lease [Member] | A321neo [Member]
Unrecorded Unconditional Purchase Obligation, Fiscal Year Maturity [Abstract]
Number of optional additional units | aircraft	4
Property Available for Operating Lease [Member] | E175 [Member]
Unrecorded Unconditional Purchase Obligation, Fiscal Year Maturity [Abstract]
Number of optional additional units | aircraft	10
Capacity Purchase Agreement with SkyWest [Member] | E175 [Member]
Unrecorded Unconditional Purchase Obligation, Fiscal Year Maturity [Abstract]
Number of optional additional units | aircraft	8
Aircraft Maintenance Deposits [Member]
Unrecorded Unconditional Purchase Obligation, Fiscal Year Maturity [Abstract]
Remainder of 2018	$ 60
2,019	65
2,020	68
2,021	64
2,022	52
Thereafter	38
Total	347
Aircraft Commitments [Member]
Unrecorded Unconditional Purchase Obligation, Fiscal Year Maturity [Abstract]
Remainder of 2018	610
2,019	560
2,020	514
2,021	562
2,022	303
Thereafter	141
Total	2,690
Capacity Purchase Agreements [Member]
Unrecorded Unconditional Purchase Obligation, Fiscal Year Maturity [Abstract]
Remainder of 2018	100
2,019	151
2,020	159
2,021	166
2,022	174
Thereafter	1,205
Total	1,955
Aircraft Leases [Member]
Operating Leases, Future Minimum Payments Due, Fiscal Year Maturity [Abstract]
Remainder of 2018	265
2,019	356
2,020	330
2,021	287
2,022	264
Thereafter	1,037
Total	2,539
Facility Leases [Member]
Operating Leases, Future Minimum Payments Due, Fiscal Year Maturity [Abstract]
Remainder of 2018	58
2,019	68
2,020	61
2,021	52
2,022	33
Thereafter	141
Total	$ 413

SHAREHOLDERS' EQUITY, CASH DIVI

SHAREHOLDERS' EQUITY, CASH DIVIDEND (Details) - USD ($) $ / shares in Units, $ in Millions	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Equity [Abstract]
Cash dividend declared per share (usd per share)	$ 0.32	$ 0.3
Payments of Dividends	$ 39	$ 37

SHAREHOLDERS' EQUITY, COMMON ST

SHAREHOLDERS' EQUITY, COMMON STOCK REPURCHASE (Details) - 2015 1 Billion Repurchase Program [Member] - USD ($) $ in Millions	3 Months Ended		31 Months Ended
	Mar. 31, 2018	Mar. 31, 2017	Mar. 31, 2018	Aug. 31, 2015
Class of Stock [Line Items]
Stock repurchase program, authorized amount				$ 1,000
Stock repurchased during period (shares)			5,279,024
Value of stock repurchased during period			$ 401
Shares	185,661	0
Amount	$ 12	$ 0

SHAREHOLDERS' EQUITY, ACCUMULAT

SHAREHOLDERS' EQUITY, ACCUMULATED OTHER COMPREHENSIVE LOSS (Details) - USD ($) $ in Millions	Jan. 01, 2018	Mar. 31, 2018	Dec. 31, 2017
Equity [Abstract]
Related to marketable securities		$ (15)	$ (5)
Related to employee benefit plans		(431)	(376)
Related to interest rate derivatives		6	1
Total		$ (440)	$ (380)
Reclassification from AOCI to retained earnings	$ 62

OPERATING SEGMENT INFORMATION42

OPERATING SEGMENT INFORMATION (Details) $ in Millions	3 Months Ended
	Mar. 31, 2018USD ($)segment	Mar. 31, 2017USD ($)
Segment Reporting Information [Line Items]
Number of Operating Segments | segment	3
Operating Revenues
Passenger revenue	$ 1,685	$ 1,602
CPA revenues	0	0
Mileage plan other revenue	107	100
Cargo and other	40	38
Total Operating Revenues	1,832	1,740
Operating expenses
Operating Expenses, Excluding Fuel	1,394	1,244
Economic fuel	409	339
Total Operating Expenses	1,803	1,583
Nonoperating Income (Expense)
Interest income	8	7
Interest expense	(24)	(25)
Interest Costs Capitalized	5	4
Other	(12)	(1)
Nonoperating Income (Expense) Total	(23)	(15)
Income (loss) before income tax	6	142
Air Group Adjusted [Member]
Operating Revenues
Passenger revenue	1,685	1,602
CPA revenues	0	0
Mileage plan other revenue	107	100
Cargo and other	40	38
Total Operating Revenues	1,832	1,740
Operating expenses
Operating Expenses, Excluding Fuel	1,363	1,205
Economic fuel	422	329
Total Operating Expenses	1,785	1,534
Nonoperating Income (Expense)
Interest income	8	7
Interest expense	(24)	(25)
Interest Costs Capitalized	5	4
Other	(12)	(1)
Nonoperating Income (Expense) Total	(23)	(15)
Income (loss) before income tax	24	191
Alaska Mainline [Member]
Operating Revenues
Passenger revenue	1,442	1,375
CPA revenues	0	0
Mileage plan other revenue	98	93
Cargo and other	39	36
Total Operating Revenues	1,579	1,504
Operating expenses
Operating Expenses, Excluding Fuel	1,131	1,000
Economic fuel	367	292
Total Operating Expenses	1,498	1,292
Nonoperating Income (Expense)
Interest income	11	7
Interest expense	(22)	(23)
Interest Costs Capitalized	4	4
Other	(5)	(1)
Nonoperating Income (Expense) Total	(12)	(13)
Income (loss) before income tax	69	199
Alaska Regional [Member]
Operating Revenues
Passenger revenue	243	227
CPA revenues	0	0
Mileage plan other revenue	9	7
Cargo and other	0	1
Total Operating Revenues	252	235
Operating expenses
Operating Expenses, Excluding Fuel	239	200
Economic fuel	55	37
Total Operating Expenses	294	237
Nonoperating Income (Expense)
Interest income	0	0
Interest expense	0	0
Interest Costs Capitalized	0	0
Other	(7)	0
Nonoperating Income (Expense) Total	(7)	0
Income (loss) before income tax	(49)	(2)
Horizon [Member]
Operating Revenues
Passenger revenue	0	0
CPA revenues	110	97
Mileage plan other revenue	0	0
Cargo and other	1	1
Total Operating Revenues	111	98
Operating expenses
Operating Expenses, Excluding Fuel	104	103
Economic fuel	0	0
Total Operating Expenses	104	103
Nonoperating Income (Expense)
Interest income	0	0
Interest expense	(5)	(2)
Interest Costs Capitalized	1	0
Other	0	0
Nonoperating Income (Expense) Total	(4)	(2)
Income (loss) before income tax	3	(7)
Intersegment Elimination [Member]
Operating Revenues
Passenger revenue	0	0
CPA revenues	(110)	(97)
Mileage plan other revenue	0	0
Cargo and other	0	0
Total Operating Revenues	(110)	(97)
Operating expenses
Operating Expenses, Excluding Fuel	(111)	(98)
Economic fuel	0	0
Total Operating Expenses	(111)	(98)
Nonoperating Income (Expense)
Interest income	(3)	0
Interest expense	3	0
Interest Costs Capitalized	0	0
Other	0	0
Nonoperating Income (Expense) Total	0	0
Income (loss) before income tax	1	1
Special Revenue and Charges [Member]
Operating Revenues
Passenger revenue	0	0
CPA revenues	0	0
Mileage plan other revenue	0	0
Cargo and other	0	0
Total Operating Revenues	0	0
Operating expenses
Operating Expenses, Excluding Fuel	31	39
Economic fuel	(13)	10
Total Operating Expenses	18	49
Nonoperating Income (Expense)
Interest income	0	0
Interest expense	0	0
Interest Costs Capitalized	0	0
Other	0	0
Nonoperating Income (Expense) Total	0	0
Income (loss) before income tax	$ (18)	$ (49)

OPERATING SEGMENT INFORMATION,

OPERATING SEGMENT INFORMATION, ASSETS (Details) - USD ($) $ in Millions	Mar. 31, 2018	Dec. 31, 2017
Total assets	$ 10,848	$ 10,746
Alaska Airlines [Member]
Total assets	15,088	16,663
Horizon [Member]
Total assets	945	929
Parent [Member]
Total assets	$ (5,185)	$ (6,846)