Cover
Cover - USD ($) $ in Billions | 12 Months Ended | ||
Dec. 31, 2020 | Jan. 31, 2021 | Jun. 30, 2020 | |
Cover [Abstract] | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Period End Date | Dec. 31, 2020 | ||
Document Transition Report | false | ||
Entity File Number | 1-8957 | ||
Entity Registrant Name | ALASKA AIR GROUP, INC. | ||
Entity Incorporation, State or Country Code | DE | ||
Entity Tax Identification Number | 91-1292054 | ||
Entity Address, Address Line One | 19300 International Boulevard | ||
Entity Address, City or Town | Seattle | ||
Entity Address, State or Province | WA | ||
Entity Address, Postal Zip Code | 98188 | ||
City Area Code | 206 | ||
Local Phone Number | 392-5040 | ||
Title of 12(b) Security | Common Stock, $0.01 Par Value | ||
Security Exchange Name | NYSE | ||
Trading Symbol | ALK | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Small Business | false | ||
Entity Emerging Growth Company | false | ||
Entity Shell Company | false | ||
Entity Common Stock, Shares Outstanding | 124,226,396 | ||
Entity Public Float | $ 4.5 | ||
Amendment Flag | false | ||
Document Fiscal Year Focus | 2020 | ||
Entity Central Index Key | 0000766421 | ||
Document Fiscal Period Focus | FY | ||
Current Fiscal Year End Date | --12-31 | ||
ICFR Auditor Attestation Flag | true |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ / shares in Units, shares in Thousands, $ in Millions | 12 Months Ended | 49 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2020 | |
Operating Revenues | ||||
Total Operating Revenues | $ 3,566 | $ 8,781 | $ 8,264 | |
Operating Expenses | ||||
Wages and benefits | 2,053 | 2,370 | 2,190 | |
Payroll Support Program Grant Recognized | (782) | 0 | 0 | |
Variable incentive pay | 130 | 163 | 147 | |
Aircraft fuel, including hedging gains and losses | 723 | 1,878 | 1,936 | |
Aircraft maintenance | 321 | 437 | 435 | |
Aircraft rent | 299 | 331 | 315 | |
Landing fees and other rentals | 417 | 531 | 499 | |
Contracted services | 181 | 289 | 306 | |
Selling expense | 101 | 313 | 326 | |
Depreciation and amortization | 420 | 423 | 398 | |
Cost of Services, Catering | 90 | 214 | 211 | |
Third-party regional carrier expense | 128 | 166 | 154 | |
Other operating expenses | 407 | 559 | 572 | |
Special items - merger-related costs | 6 | 44 | 87 | $ 370 |
Special Items - Impairment charges and other | 627 | 0 | 0 | |
Restructuring Charges | 220 | 0 | 0 | |
Special items—other | 0 | 0 | 45 | |
Total Operating Expenses | 5,341 | 7,718 | 7,621 | |
Operating Income (Loss) | (1,775) | 1,063 | 643 | |
Non-operating Income (Expense) | ||||
Interest income | 31 | 42 | 38 | |
Interest expense | (98) | (78) | (91) | |
Interest capitalized | 11 | 15 | 18 | |
Special Items - Net non-operating | (26) | 0 | 0 | |
Other - net | 17 | (26) | (23) | |
Nonoperating Income (Expense) Total | (65) | (47) | (58) | |
Income before income tax | (1,840) | 1,016 | 585 | |
Income Tax Expense, Before Tax Cuts and Jobs Act of 2017 | (516) | 247 | 148 | |
Income tax (benefit) expense | (516) | 247 | 148 | |
Net Income (Loss) | $ (1,324) | $ 769 | $ 437 | |
Basic earnings per share | $ (10.72) | $ 6.24 | $ 3.55 | |
Diluted earnings per share | $ (10.72) | $ 6.19 | $ 3.52 | |
Shares used for computation: | ||||
Basic | 123,450 | 123,279 | 123,230 | |
Diluted | 123,450 | 124,289 | 123,975 | |
Cash dividend declared per share | $ 0.375 | |||
Mileage Plan Services, Other [Member] | ||||
Operating Revenues | ||||
Revenue from Contract with Customer, Excluding Assessed Tax | $ 374 | $ 465 | $ 434 | |
Cargo and Freight [Member] | ||||
Operating Revenues | ||||
Revenue from Contract with Customer, Excluding Assessed Tax | 173 | 221 | 199 | |
Passenger Revenue [Member] | ||||
Operating Revenues | ||||
Revenue from Contract with Customer, Excluding Assessed Tax | 3,019 | 8,095 | 7,631 | |
Passenger Revenue [Member] | Passenger [Member] | ||||
Operating Revenues | ||||
Revenue from Contract with Customer, Excluding Assessed Tax | 3,019 | 8,095 | 7,631 | |
Mileage Plan Revenue [Member] | ||||
Operating Revenues | ||||
Revenue from Contract with Customer, Excluding Assessed Tax | 720 | 1,169 | 1,053 | |
Mileage Plan Revenue [Member] | Passenger [Member] | ||||
Operating Revenues | ||||
Revenue from Contract with Customer, Excluding Assessed Tax | 346 | 704 | 619 | |
Mileage Plan Revenue [Member] | Mileage Plan Services, Other [Member] | ||||
Operating Revenues | ||||
Revenue from Contract with Customer, Excluding Assessed Tax | 374 | 465 | 434 | |
Cargo and Other Revenue [Member] | ||||
Operating Revenues | ||||
Revenue from Contract with Customer, Excluding Assessed Tax | 173 | 221 | 199 | |
Cargo and Other Revenue [Member] | Cargo and Freight [Member] | ||||
Operating Revenues | ||||
Revenue from Contract with Customer, Excluding Assessed Tax | $ 173 | $ 221 | $ 199 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Millions | Dec. 31, 2020 | Dec. 31, 2019 |
Current Assets | ||
Cash and cash equivalents | $ 1,370 | $ 221 |
Marketable securities | 1,976 | 1,300 |
Total cash and marketable securities | 3,346 | 1,521 |
Receivables - net | 480 | 323 |
Inventories and supplies - net | 57 | 72 |
Prepaid expenses and other current assets | 123 | 121 |
Total Current Assets | 4,006 | 2,037 |
Property and Equipment | ||
Aircraft and other flight equipment | 7,761 | 8,549 |
Other property and equipment | 1,398 | 1,306 |
Deposits for future flight equipment | 583 | 533 |
Property and Equipment | 9,742 | 10,388 |
Less accumulated depreciation and amortization | 3,531 | 3,486 |
Total Property and Equipment - Net | 6,211 | 6,902 |
Other Assets | ||
Operating Lease, Right-of-Use Asset | 1,400 | 1,711 |
Goodwill | 1,943 | 1,943 |
Intangible assets - net | 107 | 122 |
Other noncurrent assets | 379 | 278 |
Total Other Assets | 3,829 | 4,054 |
Total Assets | 14,046 | 12,993 |
Current Liabilities | ||
Accounts payable | 108 | 146 |
Accrued wages, vacation and payroll taxes | 527 | 470 |
Other accrued liabilities | 424 | 431 |
Operating Lease, Liability, Current | 290 | 269 |
Current portion of long-term debt | 1,138 | 235 |
Total Current Liabilities | 4,293 | 3,201 |
Long-Term Debt, Net of Current Portion | 2,357 | 1,264 |
Other Liabilities and Credits | ||
Operating Lease, Liability, Noncurrent | 1,268 | 1,439 |
Deferred Income Tax Liabilities, Net | 407 | 715 |
Deferred revenue | 1,544 | 1,240 |
Obligation for pension and postretirement medical benefits | 665 | 571 |
Other liabilities | 524 | 232 |
Total Other Liabilities and Credits | 4,408 | 4,197 |
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: 2020 - 133,567,534 shares; 2019 - 131,812,173 shares, Outstanding: 2020 - 124,217,590 shares; 2019 - 123,000,307 shares | 1 | 1 |
Capital in excess of par value | 391 | 305 |
Treasury stock (common), at cost: 2020 - 9,349,944 shares; 2019 - 8,811,866 shares | (674) | (643) |
Accumulated other comprehensive loss | (494) | (465) |
Retained earnings | 3,764 | 5,133 |
Shareholders' Equity Total | 2,988 | 4,331 |
Total Liabilities and Shareholders' Equity | $ 14,046 | 12,993 |
Common stock, shares authorized | 400,000,000 | |
Common stock, par value | $ 0.01 | |
Air Traffic Liability | ||
Current Liabilities | ||
Air traffic liability | $ 1,073 | 900 |
Mileage Plan Revenue [Member] | ||
Current Liabilities | ||
Air traffic liability | $ 733 | $ 750 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Millions | Dec. 31, 2020 | Dec. 31, 2019 |
Allowance for doubtful accounts | $ 1 | $ 1 |
Shareholders' Equity: | ||
Preferred stock, par value | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized | 5,000,000 | 5,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value | $ 0.01 | |
Common stock, shares authorized | 400,000,000 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE OPERATIONS - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Net Income (Loss) | $ (1,324) | $ 769 | $ 437 |
Related to marketable securities: | |||
Unrealized holding gains (losses) arising during the period | 33 | 31 | (14) |
Reclassification of (gains) losses into Other-net non-operating income (expense) | (14) | (5) | 8 |
Income tax benefit (expense) | (5) | (6) | 2 |
Marketable securities, net of tax | 14 | 20 | (4) |
Related to employee benefit plans: | |||
Actuarial losses related to pension and other postretirement benefit plans | (69) | (71) | (34) |
Reclassification of net pension expense into Wages and benefits and Other-net non-operating income | 30 | 32 | 28 |
Income tax benefit (expense) | 10 | 10 | 2 |
Employee benefit plans, net of tax | 29 | 29 | 4 |
Related to interest rate derivative instruments: | |||
Unrealized holding gains (losses) arising during the period | (21) | (13) | 0 |
Reclassification of losses into Aircraft rent | 3 | 3 | 3 |
Income tax benefit (expense) | 4 | 2 | (1) |
Interest rate derivative instruments, net of tax | (14) | (8) | 2 |
Other comprehensive income (loss) | (29) | (17) | (6) |
Comprehensive income | $ (1,353) | $ 752 | $ 431 |
CONSOLIDATED STATEMENTS OF SHAR
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY - USD ($) shares in Thousands, $ in Millions | Total | Common Stock | Capital in Excess of Par Value | Treasury Stock, at Cost | Accumulated Other Comprehensive Loss | Retained Earnings |
Tax Cuts and Jobs Act, Reclassification from AOCI to Retained Earnings, Tax Effect | $ (62) | $ 62 | ||||
Stockholders' Equity at Dec. 31, 2017 | $ 3,460 | $ 1 | $ 164 | $ (518) | (380) | 4,193 |
Common Stock Outstanding at Dec. 31, 2017 | 123,061 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net Income (Loss) | 437 | 437 | ||||
Other comprehensive income (loss) | (6) | (6) | ||||
Common stock repurchase (in shares) | (776) | |||||
Common stock repurchase | (50) | 0 | (50) | |||
Stock-based compensation | 36 | 36 | ||||
Cash dividend declared ($1.28 per share) | (158) | (158) | ||||
Stock issued for employee stock purchase plan (in shares) | 632 | |||||
Stock issued for employee stock purchase plan | 35 | 35 | ||||
Stock issued under stock plans (in shares) | 277 | |||||
Stock issued under stock plans | (3) | (3) | ||||
Stockholders' Equity at Dec. 31, 2018 | 3,751 | $ 1 | 232 | (568) | (448) | 4,534 |
Common Stock Outstanding at Dec. 31, 2018 | 123,194 | |||||
Tax Cuts and Jobs Act, Reclassification from AOCI to Retained Earnings, Tax Effect | 3 | 3 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net Income (Loss) | 769 | 769 | ||||
Other comprehensive income (loss) | (17) | (17) | ||||
Common stock repurchase (in shares) | (1,193) | |||||
Common stock repurchase | (75) | 0 | (75) | |||
Stock-based compensation | 36 | 36 | ||||
Cash dividend declared ($1.28 per share) | (173) | (173) | ||||
Stock issued for employee stock purchase plan (in shares) | 785 | |||||
Stock issued for employee stock purchase plan | 40 | 40 | ||||
Stock issued under stock plans (in shares) | 214 | |||||
Stock issued under stock plans | (3) | (3) | ||||
Stockholders' Equity at Dec. 31, 2019 | 4,331 | $ 1 | 305 | (643) | (465) | 5,133 |
Common Stock Outstanding at Dec. 31, 2019 | 123,000 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net Income (Loss) | (1,324) | (1,324) | ||||
Other comprehensive income (loss) | (29) | (29) | ||||
Common stock repurchase (in shares) | (538) | |||||
Common stock repurchase | (31) | 0 | (31) | |||
Stock-based compensation | 34 | 34 | ||||
Adjustments to Additional Paid in Capital, Warrant Issued | 14 | 14 | ||||
Cash dividend declared ($1.28 per share) | (45) | (45) | ||||
Stock issued for employee stock purchase plan (in shares) | 1,524 | |||||
Stock issued for employee stock purchase plan | 41 | 41 | ||||
Stock issued under stock plans (in shares) | 231 | |||||
Stock issued under stock plans | (3) | (3) | ||||
Stockholders' Equity at Dec. 31, 2020 | $ 2,988 | $ 1 | $ 391 | $ (674) | $ (494) | $ 3,764 |
Common Stock Outstanding at Dec. 31, 2020 | 124,217 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Cash flows from operating activities: | |||
Net Income (Loss) | $ (1,324) | $ 769 | $ 437 |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Depreciation and amortization | 420 | 423 | 398 |
Stock-based compensation and other | 24 | 29 | 47 |
Special Items - Impairment charges and other | 627 | 0 | 0 |
Restructuring Charges | 220 | 0 | 0 |
Changes in certain assets and liabilities: | |||
Changes in deferred tax provision | (300) | 209 | 146 |
(Increase) decrease in accounts receivable | (160) | 43 | (25) |
Increase (decrease) in air traffic liability | 173 | 112 | (18) |
Increase in deferred revenue | 288 | 116 | 149 |
Other - net | (202) | 86 | 61 |
Net cash provided by (used in) operating activities | (234) | 1,722 | 1,195 |
Property and equipment additions: | |||
Aircraft and aircraft purchase deposits | (64) | (356) | (686) |
Other flight equipment | (55) | (178) | (105) |
Other property and equipment | (87) | (162) | (169) |
Total property and equipment additions | (206) | (696) | (960) |
Purchases of marketable securities | (2,962) | (1,810) | (834) |
Sales and maturities of marketable securities | 2,318 | 1,674 | 1,116 |
Proceeds from Sale of Productive Assets | 279 | 28 | 16 |
Other investing activities | (22) | 13 | 31 |
Net cash used in investing activities | (593) | (791) | (631) |
Cash flows from financing activities: | |||
Proceeds from issuance of long-term debt, net of issuance costs | 2,564 | 450 | 339 |
Long-term debt payments | (565) | (1,058) | (807) |
Common stock repurchases | (31) | (75) | (50) |
Cash dividend paid | (45) | (173) | (158) |
Other financing activities | 58 | 43 | 29 |
Net cash provided by (used in) financing activities | 1,981 | (813) | (647) |
Net increase (decrease) in cash, cash equivalents, and restricted cash | 1,154 | 118 | (83) |
Cash, cash equivalents, and restricted cash at beginning of year | 232 | 114 | 197 |
Cash, cash equivalents, and restricted cash at end of year | 1,386 | 232 | 114 |
Cash paid during the year for: | |||
Interest, net of amount capitalized | 50 | 60 | 72 |
Income taxes, net of refunds received | $ 0 | $ 31 | $ 0 |
CONSOLIDATED STATEMENTS OF CA_2
CONSOLIDATED STATEMENTS OF CASH FLOWS (Parenthetical) - USD ($) $ in Millions | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Reconciliation of cash, cash equivalents, and restricted cash at end of the period | |||
Cash and cash equivalents | $ 1,370 | $ 221 | $ 105 |
Restricted Cash and Investments, Current | 16 | 11 | 9 |
Total cash, cash equivalents, and restricted cash at end of the period | $ 1,386 | $ 232 | $ 114 |
GENERAL AND SUMMARY OF SIGNIFIC
GENERAL AND SUMMARY OF SIGNIFICANT ACCOUNTING | 12 Months Ended |
Dec. 31, 2020 | |
Accounting Policies [Abstract] | |
GENERAL AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | GENERAL AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Organization and Basis of Presentation The consolidated financial statements include the accounts of Air Group, or the Company, and its primary subsidiaries, Alaska and Horizon. Our 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 conformity with accounting principles generally accepted in the United States of America and their preparation requires the use of management’s estimates. Actual results may differ from these estimates. Certain reclassifications have been made to prior year financial statements to conform to classifications used in the current year. Cash and Cash Equivalents Cash equivalents consist of highly liquid investments with original maturities of three months or less, such as money market funds, commercial paper and certificates of deposit. They are carried at cost, which approximates market value. The Company reduces cash balances when funds are disbursed. Due to the time delay in funds clearing the banks, the Company normally maintains a negative balance in its cash disbursement accounts, which is reported as a current liability. The amount of the negative cash balance was $5 million and $7 million at December 31, 2020 and 2019, and is included in accounts payable, with the change in the balance during the year included in other financing activities in the consolidated statements of cash flows. The Company's restricted cash balances are not material and are classified as Other noncurrent assets. Restricted cash balances are primarily used to guarantee various letters of credit, self-insurance programs or other contractual rights. They consist of highly liquid securities with original maturities of three months or less. They are carried at cost, which approximates fair value. Marketable Securities Investments with original maturities of greater than three months and remaining maturities of less than one year are classified as short-term investments. Investments with maturities beyond one year may be classified as short-term based on their highly liquid nature and because such marketable securities represent the investment of cash that is available for current operations. All cash equivalents and short-term investments are classified as available-for-sale and realized gains and losses are recorded using the specific identification method. Changes in market value are reflected in accumulated other comprehensive loss (AOCL). The Company evaluates the investment portfolio on a quarterly basis for expected credit losses. The Company uses a systematic methodology that groups assets by relevant market sector, and considers available quantitative and qualitative evidence in evaluating potential allowances for credit losses. If the cost of an investment exceeds its fair value, management evaluates, among other factors, general market conditions, credit quality of debt instrument issuers, the duration and extent to which the fair value is less than cost, the Company's intent and ability to hold, or plans to sell, the investment. Once a decline in fair value is determined to be the result of an expected credit loss, an allowance is recorded to Other—net in the consolidated statements of operations. Inventories and Supplies—net Expendable aircraft parts, materials and supplies are stated at average cost and are included in Inventories and supplies — net. An obsolescence allowance for expendable parts is accrued based on estimated lives of the corresponding fleet type and salvage values. The allowance for expendable inventories was $46 million and $41 million at December 31, 2020 and 2019. Removals from the reserve in 2020 were immaterial. Inventory and supplies — net also includes fuel inventory of $15 million and $28 million at December 31, 2020 and 2019. Repairable and rotable aircraft parts inventories are included in flight equipment. Property, Equipment and Depreciation Property and equipment are recorded at cost and depreciated using the straight-line method over their estimated useful lives less an estimated salvage value, which are as follows: Estimated Useful Life Estimated Salvage Value Aircraft and other flight equipment: Boeing 737 and E175 aircraft 20-25 years 10% Bombardier Q400 aircraft 15 years 5% Buildings 25 - 40 years 10% Minor building and land improvements 10 years —% Capitalized leases and leasehold improvements Generally shorter of lease term or —% Computer hardware and software 3-10 years —% Other furniture and equipment 5-10 years —% Near the end of an asset's estimated useful life, management updates the salvage value estimates based on current market conditions and expected use of the asset. Repairable and rotable aircraft parts are included in Aircraft and other flight equipment, and are depreciated over the associated fleet life. Capitalized interest, based on the Company’s weighted-average borrowing rate, is added to the cost of the related asset, and is depreciated over the estimated useful life of the asset. Maintenance and repairs, other than engine maintenance on B737-800 engines, are expensed when incurred. Major modifications that extend the life or improve the usefulness of aircraft are capitalized and depreciated over their estimated period of use. Maintenance on B737-800 engines is covered under a power-by-the-hour agreement with a third party, whereby the Company pays a determinable amount, and transfers risk, to a third party. The Company expenses the contract amounts based on engine usage. The Company evaluates long-lived assets to be held and used for impairment whenever events or changes in circumstances indicate that the total carrying amount of an asset or asset group may not be recoverable. The Company groups assets for purposes of such reviews at the lowest level at which identifiable cash flows are largely independent of the cash flows of other groups of assets and liabilities, which is generally the fleet level. An impairment loss is considered when estimated future undiscounted cash flows expected to result from the use of the asset or asset group and its eventual disposition are less than its carrying amount. If the asset or asset group is not considered recoverable, a write-down equal to the excess of the carrying amount over the fair value will be recorded . For these purposes, the fair value is estimated using a combination of Level 2 inputs, including published market value estimates for the assets being assessed, and Level 3 inputs, including Company-specific and asset-specific indicators. See Note 2 for a discussion of impairments and related charges recorded in 2020. Goodwill Goodwill represents the excess of purchase price over the fair value of the related net assets acquired in the Company's acquisition of Virgin America and is not amortized. The total balance of goodwill is associated with the Mainline reporting unit. The Company reviews goodwill for impairment annually in the fourth quarter, or more frequently if events or circumstances indicate than an impairment may exist. The assessment utilizes either a qualitative or quantitative approach. The qualitative approach considers factors such as Alaska Air Group market capitalization and other market trends, and unobservable inputs, including Company specific cash flow and performance information. If it is determined that it is more likely than not that the asset may be impaired, management utilizes a quantitative approach to assess the asset's fair value and the amount of impairment and a charge may be recorded. In 2020, we performed a quantitative analysis using a market approach through which the fair value of the reporting unit was based on quoted market prices and an assumed market participant acquisition premium. The fair value of the reporting unit with goodwill substantially exceeded its carrying value. Intangible Assets Intangible assets are comprised primarily of indefinite-lived airport slots and finite-lived customer relationships recorded in conjunction with the acquisition of Virgin America. Finite-lived intangibles were recorded at fair value upon acquisition and are amortized over their estimated useful lives. Indefinite-lived intangibles were recorded at fair value upon acquisition are not amortized, but are tested at least annually for impairment using a similar methodology to goodwill, as described above. See Note 2 for a discussion of intangible asset impairments recorded in 2020. Aircraft Maintenance Deposits Certain Airbus leases include contractually required maintenance deposit payments to the lessor, which collateralize the lessor for future maintenance events should the Company not perform required maintenance. Most of the lease agreements provide that maintenance deposits are reimbursable upon completion of the major maintenance event in an amount equal to the lesser of (i) the amount qualified for reimbursement from maintenance deposits held by the lessor associated with the specific major maintenance event or (ii) the qualifying costs related to the specific major maintenance event. The Company establishes accounting maintenance deposits as assets on the balance sheet using estimates of the anticipated timing and cost of the specific major maintenance events, such that the accounting deposits do not exceed the amount qualified for reimbursement. Aircraft maintenance deposits recorded on the consolidated balance sheets were $242 million and $143 million as of December 31, 2020 and December 31, 2019. Leased Aircraft Return Costs Costs of returning leased aircraft are accrued when the costs are probable and reasonably estimable, usually over the twelve months prior to the lease return, unless a determination is made that the leased asset is removed from operation. If the leased aircraft is removed from the operating fleet, the estimated cost of return is accrued at the time of removal. Any accrual is based on the time remaining on the lease, planned aircraft usage and the provisions included in the lease agreement, although the actual amount due to any lessor upon return may not be known with certainty until lease termination. As leased aircraft are returned, payments made reduce the outstanding lease return liability. Of the total outstanding liability, $54 million is included in Other accrued liabilities and $246 million is included in Other liabilities on our consolidated balance sheets as of December 31, 2020. The accrual was not material as of December 31, 2019. Expense associated with lease returns in the standard course of operating the aircraft is included in Aircraft maintenance in the consolidated statements of operations. Expense associated with lease returns when aircraft are permanently parked is recorded as a one-time charge at the date the aircraft is permanently parked, regardless of contractual return date, and is classified as Special items - impairment charges and other in the consolidated statements of operations. See Note 2 for further discussion of these special items. Advertising Expenses The Company's advertising expenses include advertising, sponsorship and promotional costs. Advertising production costs are expensed as incurred. Advertising expense was $41 million, $72 million and $79 million during the years ended December 31, 2020, 2019 and 2018. Derivative Financial Instruments The Company's operations are significantly impacted by changes in aircraft fuel prices and interest rates. In an effort to manage exposure to these risks, the Company periodically enters into fuel and interest rate derivative instruments. These derivative instruments are recognized at fair value on the balance sheet and changes in the fair value are recognized in AOCL or in the consolidated statements of operations, depending on the nature of the instrument. The Company does not apply hedge accounting to its derivative fuel hedge contracts, nor does it hold or issue them for trading purposes. For cash flow hedges related to interest rate swaps, the effective portion of the derivative represents the change in fair value of the hedge that offsets the change in fair value of the hedged item. To the extent the change in the fair value of the hedge does not perfectly offset the change in the fair value of the hedged item, the ineffective portion of the hedge is immediately recognized in interest expense. Fair Value Measurements Accounting standards define fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. The standards also establish a fair value hierarchy, which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. There are three levels of inputs that may be used to measure fair value: Level 1 - Quoted prices in active markets for identical assets or liabilities. Level 2 - Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Level 3 - Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. The Company has elected not to use the fair value option provided in the accounting standards for non-financial instruments. Accordingly, those assets and liabilities, including property, plant and equipment, goodwill, intangible assets and certain other assets and liabilities are carried at amortized cost. For financial instruments, the assets and liabilities are carried at fair value, which is determined based on the market approach or income approach, depending upon the level of inputs used. The leveling of inputs for financial and non-financial instruments are disclosed in this note, and Note 5. Income Taxes The Company uses the asset and liability approach for accounting for and reporting income taxes. Deferred tax assets and liabilities are recognized for future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities, and their respective tax bases and for operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the period that includes the enactment date. A valuation allowance would be established, if necessary, for the amount of any tax benefits that, based on available evidence, are not expected to be realized. As of December 31, 2020, there is a partial valuation allowance against net deferred tax assets. The Company accounts for unrecognized tax benefits in accordance with the applicable accounting standards. See Note 8 to the consolidated financial statements for more discussion of income taxes. Stock-Based Compensation Accounting standards require companies to recognize expense over the service period based on the fair value of stock options and other equity-based compensation issued to employees estimated as of the grant date. These standards apply to all stock awards that the Company grants to employees as well as the Company’s Employee Stock Purchase Plan (ESPP), which features a look-back provision and allows employees to purchase stock at a 15% discount. All stock-based compensation expense is recorded in wages and benefits in the consolidated statements of operations. Earnings Per Share (EPS) Diluted EPS is calculated by dividing net income by the average common shares outstanding plus additional common shares that would have been outstanding assuming the exercise of in-the-money stock options and restricted stock units, using the treasury-stock method. In 2019 and 2018, anti-dilutive stock options excluded from the calculation of EPS were not material. Recently Adopted Accounting Pronouncements |
COVID-19 Pandemic
COVID-19 Pandemic | 12 Months Ended |
Dec. 31, 2020 | |
Risks and Uncertainties [Abstract] | |
Impacts of COVID-19 | COVID-19 PANDEMIC The public health and economic crises resulting from the outbreak of COVID-19 has had an unprecedented impact on the Company. Travel restrictions, event cancellations and social distancing guidelines implemented throughout the country drove significant declines in demand beginning in February, and adversely impacted revenues beginning in March 2020. Although the Company has experienced several months of modest improvement in demand, traffic remains well below 2019 levels. It is uncertain when the impacts of the crisis may resolve and when demand may return to normal levels. In response to the COVID-19 pandemic, the Company implemented a "Peace-of-Mind" waiver, which allows travelers to book tickets for travel for a specified period of time that can be changed or canceled without incurring change fees, which was extended to cover all ticketed travel purchased through March 31, 2021. Also in 2020 the Company announced all change fees will be eliminated for first class and main cabin fares. Cancellations and postponement of travel exceeded new bookings in March and April 2020, and had a material impact on passenger revenues, air traffic liability, and cash position. Refer to Note 3 for further discussion. The Company has taken decisive action to reduce costs and preserve cash and liquidity. The Company implemented a company-wide hiring freeze, reduced salaries of senior management and hours for management employees, suspended or canceled annual pay increases and solicited voluntary leaves of absence. In addition to these cost saving measures, the Company has actively negotiated with vendor partners to reduce contractual minimums and spending in line with the reduction in demand. Management also made the difficult decision to reduce the Company's workforce through voluntary and involuntary leaves. With demand dramatically depressed, the Company has significantly reduced its planned flying capacity. As a result, many aircraft have been parked or removed from service. As of December 31, 2020, 32 mainline aircraft remain temporarily grounded and 40 Airbus aircraft have been permanently removed from the operating fleet. As of December 31, 2020, all operating regional aircraft were in service. Valuation of long-lived assets The Company reviews its long-lived assets for impairment whenever events or changes indicate that the total carrying amount of an asset or asset group may not be recoverable. To determine if impairment exists, a recoverability test is performed comparing the sum of estimated undiscounted future cash flows expected to be directly generated by the assets to the asset carrying value. Assets are grouped at the individual fleet level, which is the lowest level for which identifiable cash flows are available. The Company developed estimates of future cash flows utilizing historical results, adjusted for the current operating environment, including the impact of parked aircraft. Given the temporary and permanent parking of certain aircraft described above, the Company performed impairment tests on certain long-lived assets in each of the quarters of 2020. All individual fleets passed the recoverability test, except for the Q400 fleet and the 40 permanently parked Airbus aircraft. Q400 aircraft, including operating and held-for-sale assets, were written down to their fair value, resulting in an impairment charge of $61 million. Airbus aircraft, including owned and leased aircraft and associated capital improvements, were written off in full resulting in an impairment charge of $302 million. A summary of the impairment charges recorded for aircraft and other flight equipment for the year ended December 31, 2020 is as follows (in millions): Airbus Aircraft Q400 Aircraft Total Impairment Aircraft and other flight equipment, net $ 146 $ 58 $ 204 Operating lease assets 154 — 154 Inventory and supplies - net 2 — 2 Prepaid expenses and other current assets — 3 3 Total impairment and related charges - Long-lived assets $ 302 $ 61 $ 363 The Company will continue to evaluate the need for further impairment of long-lived assets as expectations of future demand, market conditions and fleet decisions evolve. Lease Return Costs As a result of removing certain leased Airbus aircraft from operating service, an estimate of the expected future lease return costs was recorded. Lease return costs that were recorded for aircraft that were permanently parked were classified as Special items - impairment charges and other in the consolidated statements of operations. Included in the total net charge of $209 million is the write off of associated maintenance deposits, as the Company no longer expects to perform maintenance events covered by those deposits. Valuation of intangible assets and goodwill The Company reviews definite- and indefinite-lived intangible assets and goodwill for impairment on an annual basis in the fourth quarter, or more frequently should events or circumstances indicate that an impairment may exist. Given the strain in the general economic environment and a significant decline in Alaska Air Group market capitalization, the Company performed impairment tests on all three asset types at the end of each quarter in 2020. As a result of these analyses, indefinite-lived intangible assets and goodwill were deemed recoverable, and no impairment charges were recorded. Of the company’s definite-lived intangibles, leased gates at Dallas-Love Field (DAL Gates) were deemed not recoverable and an impairment charge of $10 million was recorded. No additional impairment charges were identified for definite-lived intangibles. Workforce restructuring The Company expects that demand will remain depressed into 2021, but will continue rebuilding towards 2019 capacity levels throughout 2021. Accordingly, the Company reduced its workforce to better align with the expected size of the business. To mitigate the need for involuntary furloughs, various early-out and voluntary leave programs were made available to all frontline work groups, in addition to incentive leave programs made available to Alaska pilots and mechanics. Through these programs over 600 employees took permanent early-outs, and over 3,300 employees took voluntary or incentive leaves. As a result of the participation in these mitigation programs, the involuntary furloughs that became effective October 1, 2020 were limited to approximately 400 employees. As of December 31, 2020, the majority of those involuntarily furloughed have been recalled. In addition to these furloughs, the Company permanently eliminated approximately 300 non-union management positions. As a result of these programs, the Company recorded expense of $220 million to Special items - restructuring charges in the consolidated statement of operations for the year ended December 31, 2020. The charge is primarily comprised of wages for those pilots and mechanics on incentive leaves, ongoing medical benefit coverage, and lump-sum termination payments. This accrual is based on the Company's best estimate of capacity expectations and training schedules for 2021 as of the date of this filing. The Company has an outstanding liability of $127 million for these charges as of December 31, 2020. Other considerations The Company evaluated other outstanding assets for recovery. As part of this process, the Company determined $15 million in existing purchase deposits on-hand with Airbus were not likely to be recoverable. The Company also identified a $5 million receivable from a vendor that filed for bankruptcy, for which management determined that collectability is not probable. The full balance for each of these assets were reserved and charged to Special items - impairment charges and other in the consolidated statements of operations during the year-ended December 31, 2020. The total of all the special charges summarized in this note, plus certain other immaterial amounts and the recognized subsequent event discussed in Note 12 , comprise the $627 million in impairment charges and other special items reported on the Consolidated Statements of Operations for the period ending December 31, 2020. Refer to Note 6. Long-Term Debt for further information regarding liquidity obtained in response to the COVID-19 crisis. CARES Act Funding In 2020, Alaska, Horizon, and McGee finalized agreements with the U.S. Department of the Treasury (the Treasury) through the Payroll Support Program (PSP) under the Coronavirus Aid, Relief and Economic Security (CARES) Act. Under the PSP and associated agreements, Alaska, Horizon, and McGee received total funds of approximately $1.1 billion. These funds are to be used exclusively toward continuing to pay employee salaries, wages and benefits. The funds received took the form of debt, warrants and a grant. The unsecured debt portion of $290 million was recorded at par, and warrants of $8 million were recorded on the consolidated balance sheet at fair value determined using the Black-Scholes model. The residual amount of $753 million was recorded as grant proceeds. The grant was recognized into earnings as eligible wages, salaries and benefits were incurred. During the year ended December 31, 2020, the Company recognized $753 million of the PSP grant proceeds as a wage offset. Also included within the annual total offset is approximately $29 million in employee retention credits as stipulated in the CARES Act. Also in 2020, the Company reached an agreement with the Treasury to participate in the CARES Act loan program. The loan agreement provides for a secured term loan facility, which allows Alaska to borrow up to $1.9 billion. As of December 31, 2020, the Company has borrowed $135 million under the loan facility. Refer to Note 6. Long-Term Debt and Note 11. Shareholders' Equity for further details regarding terms of the CARES Act loan agreement. In early 2021, Alaska, Horizon and McGee finalized agreements with the Treasury and accepted partial disbursement of funds through an extension of the PSP, made available under the Consolidated Appropriations Act, 2021. Under these extension agreements, Alaska, Horizon and McGee will receive a total of $546 million to be used exclusively toward continuing to pay employee salaries, wages and benefits. Alaska and Horizon received $266 million on January 15, 2021, with the remainder expected to be received in March 2021. McGee received a disbursement of $6 million on February 5, 2021. Of the funds received, $51 million takes the form of a senior term loan with a 10-year term, bearing an interest rate of 1% in years 1–5, and SOFR + 2% in years 6–10. The loan is prepayable at par at any time. As additional taxpayer protection required under the PSP extension, the Company granted the Treasury 101,227 warrants at a strike price of $52.25, based on the closing price on December 24, 2020. The warrants are non-voting, freely transferable, and may be settled as net shares or in cash at the Company's option. |
REVENUE FROM CONTRACTS WITH CUS
REVENUE FROM CONTRACTS WITH CUSTOMERS (Notes) | 12 Months Ended |
Dec. 31, 2020 | |
Revenue from Contracts with Customer [Abstract] | |
Revenue from Contract with Customer [Text Block] | 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. In 2020, the Company eliminated ticket change fees indefinitely from its main cabin and first class fares. 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 14. The level of detail within the Company’s consolidated 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 on a typical passenger ticket is to provide air travel to the passenger. 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 for 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 at the flight date using estimates made at the time of sale 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, Alaska has interline agreements with partner airlines under which 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 consolidated statements of operations (in millions): Twelve Months Ended December 31, 2020 2019 2018 Passenger ticket revenue, including ticket breakage and net of taxes and fees $ 2,428 $ 6,824 $ 6,482 Passenger ancillary revenue 245 567 530 Mileage Plan passenger revenue 346 704 619 Total passenger revenue $ 3,019 $ 8,095 $ 7,631 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 $83 million and $212 million of the outstanding receivables balance on the consolidated balance sheets as of December 31, 2020 and 2019. 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. In response to the COVID-19 pandemic, the Company suspended expiry of outstanding mileage credits through December 31, 2021. The Company offers redemption of mileage credits through free, discounted or upgraded air travel on flights operated by Alaska and its regional partners or on one of its 17 airline partners, as well as redemption at partner hotels. The Company uses a relative standalone selling price 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 twelve months ended December 31, 2020 and 2019 was 17.4%. The Company reviews the breakage rate used on an annual basis. Co-brand credit card agreements and other In addition to mileage credits, the co-brand credit card agreements, referred to herein as the Agreements, also include 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 co-brand card bank partners are the 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 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 banks 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. The travel performance obligation is deferred until the transportation is provided in the amount of the estimated standalone selling price of the ticket, less breakage, and the brand performance obligation is recognized using the residual method as commission revenue when the brand element is sold. Mileage credit sales recorded under the residual approach are immaterial to the overall program. Partner airline loyalty Alaska 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 flights operated by Alaska and its regional partners. When a Mileage Plan™ member earns credits on a partner airline, the partner airline remits a contractually-agreed upon fee to the Company which is deferred until credits are redeemed. When a Mileage Plan™ member redeems credits on a partner airline, the Company pays a contractually agreed upon fee to the other airline, which is netted against the revenue recognized associated with the award travel. 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 consolidated statements of operations (in millions): Twelve Months Ended December 31, 2020 2019 2018 Passenger revenue $ 346 $ 704 $ 619 Mileage Plan other revenue 374 465 434 Total Mileage Plan revenue $ 720 $ 1,169 $ 1,053 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 consolidated statements of operations (in millions): Twelve Months Ended December 31, 2020 2019 2018 Cargo revenue $ 112 $ 133 $ 129 Other revenue 61 88 70 Total Cargo and other revenue $ 173 $ 221 $ 199 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 $502 million and $577 million from the 2019 and 2018 year-end air traffic liability balance during the twelve months ended December 31, 2020 and 2019. Given the reduction in demand for air travel stemming from the COVID-19 pandemic, advance bookings and associated cash receipts have been significantly depressed. The Company also experienced elevated cancellations beginning in March 2020 and again, although at a lesser rate, in November 2020, which led to cash refunds or the issuance of credits for future travel. During the year, the Company issued cash refunds of approximately $600 million and credits for future travel of approximately $1 billion. At December 31, 2020, such credits, which are included in the air traffic liability balance, totaled $569 million, net of breakage. In January 2021, the Company announced updated expiration terms for these credits, extending to December 31, 2021. At this time, the Company is unable to estimate how and when the air traffic liability will be recognized in earnings given ongoing uncertainty around the return in demand for air travel. As a result, the timing of recognition of these travel credits may differ from current assumptions, which may result in increased breakage in future periods. 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 a period of approximately three to four years. This period of time represents the average time that members have historically taken to earn and redeem 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 $48 million and $105 million of such receivables as of December 31, 2020 and December 31, 2019. Mileage credits are combined into 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): Twelve Months Ended December 31, 2020 2019 Total Deferred Revenue balance at January 1 $ 1,990 $ 1,874 Travel miles and companion certificate redemption - Passenger revenue (346) (704) Miles redeemed on partner airlines - Other revenue (23) (111) Increase in liability for mileage credits issued 656 931 Total Deferred Revenue balance at December 31 $ 2,277 $ 1,990 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 expenses when the travel occurs. Prepaid expense recorded on the consolidated balance sheets for such costs was $24 million and $27 million as of December 31, 2020 and December 31, 2019. The Company recorded related expense on the consolidated statements of operations of $43 million, $208 million and $217 million for the twelve months ended December 31, 2020, 2019 and 2018. |
DERIVATIVE INSTRUMENTS
DERIVATIVE INSTRUMENTS | 12 Months Ended |
Dec. 31, 2020 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
DERIVATIVE INSTRUMENTS | DERIVATIVE INSTRUMENTS AND RISK MANAGEMENT Fuel Hedge Contracts The Company’s operations are inherently dependent upon the price and availability of aircraft fuel. To manage economic risks associated with fluctuations in aircraft fuel prices, the Company periodically enters into call options for crude oil. As of December 31, 2020, the Company had outstanding fuel hedge contracts covering approximately 300 million gallons of crude oil that will be settled from January 2021 to June 2022. Interest Rate Swap Agreements The Company is exposed to market risk from adverse changes in variable interest rates on long-term debt and certain aircraft lease agreements. To manage this risk, the Company periodically enters into interest rate swap agreements. As of December 31, 2020, the Company has an outstanding interest rate swap agreement with a third party designed to hedge the volatility of the underlying variable interest rates on a lease agreement for one B737-800 aircraft, as well as 13 interest rate swap agreements with third parties designed to hedge the volatility of the underlying variable interest rates on $614 million of debt. All of the interest rate swap agreements stipulate that the Company pay a fixed interest rate and receive a floating interest rate over the term of the underlying contracts. The interest rate swap agreement associated with the lease expires in March 2021, corresponding with the aircraft lease term, and December 2021 through August 2029 to coincide with the debt maturity dates. All significant terms of the swap agreements match the terms of the underlying hedged items and have been designated as qualifying hedging instruments, which are accounted for as cash flow hedges. As qualifying cash flow hedges, the interest rate swaps are recognized at fair value on the balance sheet, and changes in the fair value are recognized in accumulated other comprehensive loss. The effective portion of the derivative represents the change in fair value of the hedge that offsets the change in fair value of the hedged item. To the extent the change in fair value of the hedge does not perfectly offset the change in the fair value of the hedged item, the ineffective portion of the hedge is recognized in interest expense, if material. Fair Values of Derivative Instruments Fair values of derivative instruments on the consolidated balance sheet (in millions): 2020 2019 Fuel hedge contracts (not designated as hedges) Prepaid expenses and other current assets $ 11 $ 8 Other assets 4 3 Interest rate swaps (designated as hedges) Prepaid expenses and other current assets — 1 Other noncurrent assets — 2 Other accrued liabilities (10) (5) Other liabilities (15) (5) Losses in accumulated other comprehensive loss (AOCL) (21) (13) The net cash paid for new fuel hedge positions and received from settlements was $14 million, $19 million and $21 million during 2020, 2019, and 2018. Pretax effect of derivative instruments on earnings and AOCL (in millions): 2020 2019 2018 Fuel hedge contracts (not designated as hedges) Gains (losses) recognized in Aircraft fuel $ (10) $ (10) $ 1 Interest rate swaps (designated as hedges) Losses recognized in Aircraft rent (3) (3) (3) Gains (losses) recognized in other comprehensive income (OCI) (21) (13) — The amounts shown as recognized in aircraft rent for cash flow hedges (interest rate swaps) represent the realized losses transferred out of AOCL to aircraft rent. Losses related to interest rate swaps on variable rate debt of $6 million were recognized in interest expense during 2020. The amounts shown as recognized in OCI are prior to the losses recognized in aircraft rent during the period. The Company expects an insignificant amount to be reclassified from OCI to aircraft rent and $10 million to interest expense within the next twelve months. |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 12 Months Ended |
Dec. 31, 2020 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE MEASUREMENTS | FAIR VALUE MEASUREMENTS Fair Value of Financial Instruments on a Recurring Basis As of December 31, 2020, the total cost basis for marketable securities was $1.9 billion. There were no significant differences between the cost basis and fair value of any individual class of marketable securities. Fair values of financial instruments on the consolidated balance sheet (in millions): December 31, 2020 December 31, 2019 Level 1 Level 2 Total Level 1 Level 2 Total Assets Marketable securities U.S. government and agency securities $ 407 $ — $ 407 $ 330 $ — $ 330 Equity mutual funds 7 — 7 6 — 6 Foreign government bonds — 20 20 — 31 31 Asset-backed securities — 224 224 — 211 211 Mortgage-backed securities — 290 290 — 176 176 Corporate notes and bonds — 978 978 — 523 523 Municipal securities — 50 50 — 23 23 Total Marketable securities 414 1,562 1,976 336 964 1,300 Derivative instruments Fuel hedge contracts - call options — 15 15 — 11 11 Interest rate swap agreements — — — — 3 3 Total Assets $ 414 $ 1,577 $ 1,991 $ 336 $ 978 $ 1,314 Liabilities Derivative instruments Interest rate swap agreements — (25) (25) — (10) (10) Total Liabilities $ — $ (25) $ (25) $ — $ (10) $ (10) The Company uses the market and income approach to determine the fair value of marketable securities. U.S. government securities and equity mutual funds are Level 1 as the fair value is based on quoted prices in active markets. The remaining marketable securities instruments are Level 2 as the fair value is based on standard valuation models that calculate values from observable inputs such as quoted interest rates, yield curves, credit ratings of the security and other observable market information. The Company uses the market and income approaches to determine the fair value of derivative instruments. The fair value for fuel hedge call options is determined utilizing an option pricing model that uses inputs that are readily available in active markets or can be derived from information available in active markets. In addition, the fair value considers 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 are the result of expected credit losses based on the Company's evaluation of available evidence as of December 31, 2020. Proceeds from sales of marketable securities were $2.3 billion, $1.7 billion and $1.1 billion in 2020, 2019, and 2018. Maturities for marketable securities (in millions): December 31, 2020 Cost Basis Fair Value Due in one year or less $ 775 $ 777 Due after one year through five years 1,146 1,175 Due after five years through 10 years 23 24 Total $ 1,944 $ 1,976 Fair Value of Other Financial Instruments The Company used the following methods and assumptions to determine the fair value of financial instruments that are not recognized at fair value on the consolidated balance sheets. Cash and Cash Equivalents : These assets are carried at amortized costs which approximate fair value. Debt : Debt assumed in the acquisition of Virgin America was subject to a non-recurring fair valuation adjustment as part of purchase price accounting. The adjustment was amortized over the life of the associated debt. Following the prepayment of the debt in 2020, this fair valuation adjustment was eliminated. All other fixed-rate debt is carried at cost. To estimate the fair value of all fixed-rate debt as of December 31, 2020, the Company uses the income approach by discounting cash flows utilizing borrowing rates for comparable debt over the remaining life of the outstanding debt, or using quoted market prices. The estimated fair value of the fixed-rate EETC debt is Level 2, as it is estimated using quoted market prices, while the estimated fair value of $488 million of other fixed-rate debt, including PSP notes payable, is classified as Level 3, as it is not actively traded and is valued using discounted cash flows which is an unobservable input. Fixed-rate debt on the consolidated balance sheet and the estimated fair value of long-term fixed-rate debt (in millions): December 31, 2020 December 31, 2019 Total fixed rate debt $ 1,662 $ 475 Estimated fair value $ 1,778 $ 483 |
LONG-TERM DEBT
LONG-TERM DEBT | 12 Months Ended |
Dec. 31, 2020 | |
Debt Disclosure [Abstract] | |
LONG-TERM DEBT | LONG-TERM DEBT Long-term debt obligations (in millions): 2020 2019 Fixed-rate notes payable due through 2029 $ 198 $ 475 Fixed-rate PSP note payable due through 2030 290 — Fixed-rate EETC payable due through 2025 & 2027 1,174 — Variable-rate notes payable due through 2029 1,866 1,032 Less debt issuance costs and unamortized debt discount (33) (8) Total debt 3,495 1,499 Less current portion 1,138 235 Long-term debt, less current portion $ 2,357 $ 1,264 Weighted-average fixed-interest rate 4.3 % 3.3 % Weighted-average variable-interest rate 1.9 % 2.9 % Approximately $614 million of the Company's total variable-rate notes payable are effectively fixed via interest rate swaps at December 31, 2020, bringing the weighted-average interest rate for the full debt portfolio to 3.3%. The Company's variable-rate debt bears interest at a floating rate per annum equal to a margin plus the one, three or six-month LIBOR in effect at the commencement of each one, three or six-month period, as applicable. As of December 31, 2020, none of the Company's borrowings were restricted by financial covenants. Debt Activity During 2020, the Company's total debt increased $2.0 billion, the result of issuances of $2.6 billion, including draws of $400 million on existing bank lines of credit. These issuances were offset by payments of $565 million, including the prepayment of $314 million of debt. Total issuances include $1.2 billion in Enhanced Equipment Trust Certificates (EETC). The EETC are collateralized by 42 Boeing 737 aircraft and 19 Embraer E175 aircraft. Principal and interest payments are due semiannually, beginning on February 15, 2021. Also included in total issuances is $589 million in secured debt financing backed by a total of 32 aircraft. CARES Act Under the terms of the PSP program, Alaska, Horizon and McGee recorded a combined $290 million unsecured senior term loan. The note has a 10-year term, bearing an interest rate of 1% the first five years, and an interest rate equal to the Secured Overnight Financing Rate (SOFR) plus 2% in years 6 through 10. The loan is prepayable at par at any time. In 2020, the Company also finalized an agreement with the Treasury to obtain up to $1.9 billion via a secured term loan facility. Obligations of the Company under the loan agreement are secured by assets related to, and revenues generated by, Alaska's Mileage Plan TM frequent flyer program, as well as by 34 aircraft and 15 spare engines. As of December 31, 2020, the Company has drawn $135 million available under the agreement, and may, at its option, borrow additional amounts in up to two subsequent borrowings until May 28, 2021. All proceeds drawn must be used for certain general corporate purposes and operating expenses in accordance with the terms and conditions of the loan agreement and the applicable provisions of the CARES Act. In conjunction with the initial draw, the Company granted the Treasury 427,080 warrants to purchase ALK common stock at a strike price of $31.61. The value of the warrants was estimated using a Black-Scholes option pricing model, and the relative fair value of the warrants of $6 million was recorded in shareholders' equity, with an offsetting debt discount to the CARES Act Loan issuance. In early 2021, Alaska, Horizon and McGee finalized agreements with the Treasury and accepted partial disbursement of funds through an extension of the PSP, made available under the Consolidated Appropriations Act, 2021. Under these extension agreements, Alaska and Horizon will receive a total of $546 million to be used exclusively toward continuing to pay employee salaries, wages and benefits. Of the total funds the Company will receive, approximately $130 million takes the form of a senior term loan with a 10-year term, bearing an interest rate of 1% in years 1–5, and SOFR + 2% in years 6–10. The loan is prepayable at par at any time. Debt Maturity Long-term debt principal payments for the next five years and thereafter (in millions): Total 2021 $ 1,145 2022 371 2023 334 2024 240 2025 396 Thereafter 1,042 Total principal payments $ 3,528 Bank Line of Credit The Company has three credit facilities with capacity totaling $461 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, which was renegotiated in September 2020, resulting in decreased capacity from $150 million to $120 million, expires in March 2022 and is secured by certain accounts receivable, spare engines, spare parts and ground service equipment. A third credit facility for $91 million expires in June 2021, with a mechanism for annual renewal, and is secured by aircraft. |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES Deferred Income Taxes Deferred income taxes reflect the impact of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and such amounts for tax purposes. The Company has a net deferred tax liability, primarily due to differences in depreciation rates for federal income tax purposes and for financial reporting purposes. Deferred tax (assets) and liabilities comprise the following (in millions): 2020 2019 Excess of tax over book depreciation $ 1,126 $ 1,233 Intangibles - net 15 16 Operating lease assets 342 416 Other - net 106 58 Deferred tax liabilities 1,589 1,723 Mileage Plan™ (385) (337) Inventory obsolescence (17) (15) Employee benefits (215) (179) Net operating losses (27) (13) Operating lease liabilities (381) (417) Leasehold maintenance (73) — Other - net (103) (48) Deferred tax assets (1,201) (1,009) Valuation allowance 19 1 Net deferred tax liabilities $ 407 $ 715 The CARES Act, among other things, permits federal Net Operating Loss (NOL) carryovers and carrybacks to offset 100% of taxable income for taxable years beginning before 2021. In addition, the CARES Act allows NOLs incurred in 2018, 2019, and 2020 to be carried back to each of the five preceding taxable years to generate a refund of previously paid income taxes. The Company also carried back a portion of NOLs incurred in 2018 as allowed by the CARES Act and has received a refund for those losses. At December 31, 2020, the Company had federal NOLs of approximately $644 million, the majority of which will be carried back under the CARES Act to be applied against previous years' taxable income. The Company has recorded a receivable of $225 million associated with the federal carry back. The remaining NOL, which resulted from the 2016 Virgin America merger, must be carried forward and will expire in 2036. The Company also has state NOLs of approximately $562 million that expire beginning in 2021 and continuing through 2040. Of these state NOLs, approximately $85 million may be used to offset previous years’ state taxable income due to states’ conformity to the Internal Revenue Code or state specific carryback provisions. Virgin America experienced multiple “ownership changes” as defined in Section 382 of the Internal Revenue Code of 1986, as amended (the “Code”), the most recent being its acquisition by the Company. Section 382 of the Code imposes an annual limitation on the utilization of pre-ownership change NOLs. Any unused annual limitation may, subject to certain limits, be carried over to later years. The combined Company’s ability to use the NOLs will also depend on the amount of taxable income generated in future periods. Valuation allowances are provided to reduce the related deferred income tax assets to an amount which will, more likely than not, be realized. The Company has determined it is more likely than not that a portion of the state NOL carryforward will not be realized and, therefore, has provided a valuation allowance of $19 million for that portion as of December 31, 2020. The Company has likewise concluded it is more likely than not that all of its federal and the remaining state deferred income tax assets will be realized and thus no additional valuation allowance has been recorded. The Company reassesses the need for a valuation allowance each reporting period. Components of Income Tax Expense (Benefit) The components of income tax expense (benefit) are as follows (in millions): 2020 2019 2018 Current income tax expense (benefit): Federal $ (212) $ 26 $ (5) State (11) 13 9 Total current income tax expense (benefit) (223) 39 4 Deferred income tax expense (benefit): Federal (246) 175 125 State (47) 33 19 Total deferred income tax expense (benefit) (293) 208 144 Income tax expense (benefit) $ (516) $ 247 $ 148 Income Tax Rate Reconciliation Income tax expense (benefit) reconciles to the amount computed by applying the 2020 U.S. federal rate of 21% to income (loss) before income tax and for deferred taxes as follows (in millions): 2020 2019 2018 Income (loss) before income tax $ (1,840) $ 1,016 $ 585 Expected tax expense (benefit) (386) 213 123 Nondeductible expenses 9 9 9 State income tax expense (benefit) (62) 36 21 Tax law changes (93) (9) (7) Valuation allowance 18 — — Other - net (2) (2) 2 Actual tax expense (benefit) $ (516) $ 247 $ 148 Effective tax rate 28.0 % 24.3 % 25.3 % As a result of tax changes signed into law during 2017, with final regulations issued in 2019, the Company recorded a current tax benefit of $9 million in 2019. The Company recorded a current tax benefit of $93 million in 2020 as a result of provisions outlined in the CARES Act. Uncertain Tax Positions The Company has identified its federal tax return and its state tax returns in Alaska, Oregon and California as “major” tax jurisdictions. A summary of the Company's jurisdictions and the periods that are subject to examination are as follows: Jurisdiction Period Federal 2007 to 2019 Alaska 2015 to 2019 California 2007 to 2019 Oregon 2003 to 2019 Certain tax years are open to the extent of net operating loss carryforwards. Changes in the liability for gross unrecognized tax benefits during 2020, 2019 and 2018 are as follows (in millions): 2020 2019 2018 Balance at January 1, $ 40 $ 40 $ 43 Additions related to prior years 1 — 1 Releases related to prior years (1) (1) (4) Additions related to current year activity — 2 2 Releases due to settlements (4) — (1) Releases due to lapse of statute of limitations (1) (1) (1) Balance at December 31, $ 35 $ 40 $ 40 As of December 31, 2020, the Company had $35 million of accrued tax contingencies, of which $29 million, if fully recognized, would increase the effective tax rate. As of December 31, 2020, 2019 and 2018, the Company has accrued interest and penalties, net of federal income tax benefit, of $6 million, $7 million, and $6 million. In 2020, the Company recognized a benefit of $1 million, compared to the recognition of expense of $1 million in 2019, and $1 million in 2018, for interest and penalties, net of federal income tax benefit. At December 31, 2020, the Company has unrecognized tax benefits recorded as a liability and some reducing deferred tax assets. The Company reduced $5 million of reserves for uncertain tax positions in 2020, primarily due to settlements on state income taxes and statute lapses on reserved amounts. These uncertain tax positions could change as a result of the Company's ongoing audits, settlement of issues, new audits and status of other taxpayer court cases. The Company cannot predict the timing of these actions. Due to the positions being taken in various jurisdictions, the amounts currently accrued are the Company's best estimate as of December 31, 2020. |
EMPLOYEE BENEFIT PLANS
EMPLOYEE BENEFIT PLANS | 12 Months Ended |
Dec. 31, 2020 | |
Retirement Benefits [Abstract] | |
EMPLOYEE BENEFIT PLANS | EMPLOYEE BENEFIT PLANS Four qualified defined-benefit plans, one non-qualified defined-benefit plan, and seven defined-contribution retirement plans cover various employee groups of Alaska, Horizon and McGee Air Services. The defined-benefit plans provide benefits based on an employee’s term of service and average compensation for a specified period of time before retirement. The qualified defined-benefit pension plans are closed to new entrants. Accounting standards require recognition of the overfunded or underfunded status of an entity’s defined-benefit pension and other postretirement plan as an asset or liability in the consolidated financial statements and requires recognition of the funded status in AOCL. Qualified Defined-Benefit Pension Plans The Company’s four qualified defined-benefit pension plans are funded as required by the Employee Retirement Income Security Act of 1974. The defined-benefit plan assets consist primarily of marketable equity and fixed-income securities. The work groups covered by qualified defined-benefit pension plans include salaried employees, pilots, clerical, office, passenger service employees, mechanics and related craft employees. The Company uses a December 31 measurement date for these plans. All plans are closed to new entrants. Weighted average assumptions used to determine benefit obligations: The rates below vary by plan and related work group. 2020 2019 Discount rates 2.43% to 2.58% 3.33% to 3.47% Rate of compensation increases 2.02% to 2.43% 2.11% to 5.44% Weighted average assumptions used to determine net periodic benefit cost: The rates below vary by plan and related work group. 2020 2019 2018 Discount rates 3.33% to 3.47% 4.37% to 4.46% 3.69% to 3.78% Expected return on plan assets 3.25% to 5.50% 4.25% to 5.50% 4.25% to 5.50% Rate of compensation increases 2.11% to 5.44% 2.11% to 3.50% 2.11% to 16.51% The discount rates are determined using current interest rates earned on high-quality, long-term bonds with maturities that correspond with the estimated cash distributions from the pension plans. At December 31, 2020, the Company selected discount rates for each of the plans using a pool of higher-yielding bonds estimated to be more reflective of settlement rates, as management has taken steps to ultimately terminate or settle plans that are frozen and move toward freezing benefits in active plans in the future. In determining the expected return on plan assets, the Company assesses the current level of expected returns on risk-free investments (primarily government bonds), the historical level of the risk premium associated with the other asset classes in which the portfolio is invested and the expectations for future returns of each asset class. The expected return for each asset class is then weighted based on the target asset allocation to develop the expected long-term rate of return on assets assumption for the portfolio. Plan assets are invested in common commingled trust funds invested in equity and fixed income securities and in certain real estate assets. The target and actual asset allocation of the funds in the qualified defined-benefit plans, by asset category, are as follows: Salaried Plan (a) All other plans Target 2020 2019 Target 2020 2019 Asset category: Domestic equity securities 2% - 12% 7 % 7 % 36% - 46% 44 % 41 % Non-U.S. equity securities 0% - 8% 3 % 3 % 13% - 23% 18 % 18 % Fixed income securities 85% - 95% 90 % 90 % 31% - 41% 33 % 35 % Real estate — % — % — % 0% - 10% 5 % 6 % Plan assets 100 % 100 % 100 % 100 % (a) As our Salaried Plan is frozen and fully funded, our investment strategies differ significantly from that of our other outstanding plans. Investments are in lower-risk securities, with earnings designed to maintain a fully-funded status. The Company’s investment policy focuses on achieving maximum returns at a reasonable risk for pension assets over a full market cycle. The Company determines the strategic allocation between equities, fixed income and real estate based on current funded status and other characteristics of the plans. As the funded status improves, the Company increases the fixed income allocation of the portfolio and decreases the equity allocation. Actual asset allocations are reviewed regularly and periodically rebalanced as appropriate. Plan assets invested in common commingled trust funds are fair valued using the net asset values of these funds to determine fair value as allowed using the practical expedient method outlined in the accounting standards. Fair value estimates for real estate are calculated using the present value of expected future cash flows based on independent appraisals, local market conditions and current and projected operating performance. Plan assets by fund category (in millions): 2020 2019 Fair Value Hierarchy Fund type: U.S. equity market fund $ 914 $ 773 1 Non-U.S. equity fund 384 344 1 Credit bond index fund 1,088 1,009 1 Plan assets in common commingled trusts $ 2,386 $ 2,126 Real estate 96 102 (a) Cash equivalents 6 11 1 Total plan assets $ 2,488 $ 2,239 (a) In accordance with Subtopic 820-10, certain investments that are measured at net asset value per share (or its equivalent) have not been classified in the fair value hierarchy. The following table sets forth the status of the qualified defined-benefit pension plans (in millions): 2020 2019 Projected benefit obligation (PBO) Beginning of year $ 2,602 $ 2,225 Service cost 52 42 Interest cost 75 89 Actuarial (gain)/loss 339 359 Benefits paid (134) (113) End of year $ 2,934 $ 2,602 Plan assets at fair value Beginning of year $ 2,239 $ 1,858 Actual return on plan assets 383 429 Employer contributions — 65 Benefits paid (134) (113) End of year $ 2,488 $ 2,239 Unfunded status $ (446) $ (363) Percent funded 85 % 86 % The accumulated benefit obligation for the combined qualified defined-benefit pension plans was $2.8 billion and $2.4 billion at December 31, 2020 and 2019. During 2020 and 2019 actuarial losses increased the benefit obligation primarily due to the decrease in discount rates. The amounts recognized in the consolidated balance sheets (in millions): 2020 2019 Accrued benefit liability-long term $ 502 $ 412 Plan assets-long term (within Other noncurrent assets) (51) (49) Total liability recognized $ 451 $ 363 The amounts not yet reflected in net periodic benefit cost and included in AOCL (in millions): 2020 2019 Prior service credit $ (5) $ (6) Net loss 626 595 Amount recognized in AOCL (pretax) $ 621 $ 589 Defined benefit plans with projected benefit obligations exceeding fair value of plan assets are as follows (in millions): 2020 2019 Projected benefit obligation $ 2,207 $ 1,957 Fair value of plan assets 1,710 1,545 Defined benefit plans with accumulated benefit obligations exceeding fair value of plan assets are as follows (in millions): 2020 2019 Projected benefit obligation $ 2,207 $ 1,957 Accumulated benefit obligation 2,057 1,539 Fair value of plan assets 1,710 1,545 Net pension expense for the qualified defined-benefit plans included the following components (in millions): 2020 2019 2018 Service cost $ 46 $ 42 $ 48 Interest cost 75 89 79 Restructuring charges (a) 11 — — Expected return on assets (110) (95) (107) Amortization of prior service credit (1) (1) (1) Recognized actuarial loss 35 37 33 Net pension expense $ 56 $ 72 $ 52 (a) In conjunction with the workforce reductions stemming from the COVID-19 pandemic, the Company recorded additional expense for employees accepting incentive leaves of absence. Such expense is included in Special items - restructuring charges on the consolidated statement of operations for the year-ended December 31, 2020. There are no current statutory funding requirements for the Company’s plans in 2021. Future benefits expected to be paid over the next ten years under the qualified defined-benefit pension plans from the assets of those plans (in millions): Total 2021 $ 123 2022 142 2023 143 2024 141 2025 157 2026– 2030 829 Nonqualified Defined-Benefit Pension Plan Alaska also maintains an unfunded, noncontributory defined-benefit plan for certain elected officers. This plan uses a December 31 measurement date. The assumptions used to determine benefit obligations and the net period benefit cost for the nonqualified defined-benefit pension plan are similar to those used to calculate the qualified defined-benefit pension plan. The plan's unfunded status, PBO and accumulated benefit obligation are immaterial. The net pension expense in prior year and expected future expense is also immaterial. Post-retirement Medical Benefits The Company allows certain retirees to continue their medical, dental and vision benefits by paying all or a portion of the active employee plan premium until eligible for Medicare, currently age 65. This results in a subsidy to retirees, because the premiums received by the Company are less than the actual cost of the retirees’ claims. The accumulated post-retirement benefit obligation for this subsidy is unfunded. The accumulated post-retirement benefit obligation was $138 million and $129 million at December 31, 2020 and 2019. The net periodic benefit cost was not material in 2020 or 2019. Defined-Contribution Plans The seven defined-contribution plans are deferred compensation plans under section 401(k) of the Internal Revenue Code. All of these plans require Company contributions. Total expense for the defined-contribution plans was $126 million, $132 million and $126 million in 2020, 2019, and 2018. The Company also has a noncontributory, unfunded defined-contribution plan for certain elected officers of the Company who are ineligible for the nonqualified defined-benefit pension plan. Amounts recorded as liabilities under the plan are not material to the consolidated balance sheets at December 31, 2020 and 2019. Pilot Long-term Disability Benefits Alaska maintains a long-term disability plan for its pilots. The long-term disability plan does not have a service requirement. Therefore, the liability is calculated based on estimated future benefit payments associated with pilots that were assumed to be disabled on a long-term basis as of December 31, 2020 and does not include any assumptions for future disability. The liability includes the discounted expected future benefit payments and medical costs. The total liability was $61 million and $45 million, which was recorded net of a prefunded trust account of $7 million and $6 million, and included in long-term other liabilities on the consolidated balance sheets as of December 31, 2020 and December 31, 2019. Employee Incentive-Pay Plans The Company has employee incentive plans that pay employees based on certain financial and operational metrics. These metrics are set and approved annually by the Compensation and Leadership Development Committee of the Board of Directors. The aggregate expense under these plans in 2020, 2019 and 2018 was $130 million, $163 million and $147 million. The incentive plans are summarized below. • Performance-Based Pay (PBP) is a program that rewards the majority of Alaska and Horizon employees. The program is based on various metrics that adjust periodically, including those related to Air Group profitability, achievement of unit-cost goals, safety, and guest preference and opinion of performance measured as brand strength. • COVID Business Recovery Incentive Pay Plan (CBRP) is a supplemental program implemented in the third quarter of 2020, aimed at incentivizing employees as the Company manages recovery through the COVID-19 pandemic. The program was based on metrics related to cash preservation and COVID-related safety metrics. • The Operational Performance Rewards Program (OPR) entitles the majority of Alaska and Horizon employees to quarterly payouts of up to $450 per person if certain monthly operational and customer service objectives are met. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Dec. 31, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIES Future minimum payments for commitments as of December 31, 2020 (in millions): Aircraft Commitments (a) Capacity Purchase Agreements (b) 2021 $ 873 $ 166 2022 372 174 2023 238 179 2024 27 184 2025 16 189 Thereafter 13 690 Total $ 1,539 $ 1,582 (a) Includes non-cancelable contractual commitments for aircraft and engines, buyer furnished equipment, and contractual aircraft maintenance obligations. (b) Includes all non-aircraft lease costs associated with capacity purchase agreements. Aircraft Commitments Aircraft purchase commitments include non-cancelable contractual commitments for aircrafts and engines. As of December 31, 2020, Alaska had commitments to purchase 32 Boeing 737-9 MAX aircraft with deliveries in 2021 through 2023. Horizon also has commitments to purchase three E175 aircraft with deliveries in 2023 and Alaska has cancelable purchase commitments for 30 Airbus A320neo aircraft with deliveries from 2024 through 2026. In addition, Alaska has options to purchase 37 737 MAX aircraft and Horizon has options to purchase 30 E175 aircraft. Alaska has an option to increase capacity flown by Skywest with eight additional E175 aircraft with deliveries in 2022. The cancelable purchase commitments and option payments are not reflected in the table above. In December 2020, Alaska announced an agreement in principle with Boeing to restructure the existing aircraft purchase agreement. Upon execution of the agreement, Alaska will have commitments to purchase an additional 23 737-9 MAX aircraft with deliveries between 2023 and 2024. The agreement in principle also provides for an incremental 15 options to purchase aircraft, which are expected to be available for delivery between 2023 and 2026. The incremental purchase commitments per the agreement in principle, as well as renegotiated payment streams which will lower 2021 cash outflow requirements, are not contractually obligated at December 31, 2020, and are not reflected in the table above. Aircraft Maintenance and Parts Management Through its acquisition of Virgin America, the Company has a separate maintenance-cost-per-hour contract for management and repair of certain rotable parts to support Airbus airframe and engine maintenance and repair. In 2017, Alaska entered into a similar contract for maintenance on its B737-800 aircraft engines. These agreements require monthly payments based upon utilization, such as flight hours, cycles and age of the aircraft, and, in turn, the agreement transfers certain risks to the third-party service provider. There are minimum payments under both agreements, which are reflected in the table above. Accordingly, payments could differ materially based on actual aircraft utilization. Aircraft Maintenance Deposits Certain Airbus leases include contractually required maintenance deposit payments to the lessor, which collateralize the lessor for future maintenance events should the Company not perform required maintenance. Payments of such deposits follow contractual terms and timing, regardless of operating status of the respective aircraft. Most of the lease agreements provide that maintenance deposits are reimbursable upon completion of the major maintenance event in an amount equal to the lesser of (i) the amount qualified for reimbursement from maintenance deposits held by the lessor associated with the specific major maintenance event or (ii) the qualifying costs related to the specific major maintenance event. Los Angeles International Airport (LAX) Construction In May 2019, we executed an amended lease agreement with Los Angeles World Airports, which includes an agreement to renovate and upgrade the fuel system, jet bridges and concourse facilities at Terminal 6 of LAX. Project terms and pre-construction readiness was approved and finalized in 2020. We expect construction will be completed by early 2024. Under the terms of the agreement, we expect to have total reimbursable cash outlays for the project of approximately $230 million. To date, we have made total cash outlays of $24 million and have received reimbursement for $8.7 million of that total. 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. The court certified a class of approximately 1,800 flight attendants in November 2016. The Company believes the claims in this case are without factual and legal merit. In July 2018, the Court granted in part Plaintiffs' motion for summary judgment, finding Virgin America, and Alaska Airlines, as a successor-in-interest to Virgin America, responsible for various damages and penalties sought by the class members. In February 2019, the Court entered final judgment against Virgin America and Alaska Airlines in the amount of approximately $78 million. It did not award injunctive relief against Alaska Airlines. In February 2021, an appellate court reversed portions of the lower court decision and significantly reduced the judgment. The determination of total judgment has not been completed as of the date of this filing. The Company accrued its best estimate in the December 31, 2020 financial statements for this recognized subsequent event. The Company is seeking an appellate court ruling that the California laws on which the judgment is based are invalid as applied to national airlines pursuant to the U.S. Constitution and federal law and for other employment law and improper class certification reasons. The Company remains confident that a higher court will respect the federal preemption principles that were enacted to shield inter-state common carriers from a patchwork of state and local wage and hour regulations such as those at issue in this case and agree with the Company's other bases for appeal. In January 2019, a pilot filed a class action lawsuit seeking to represent all Alaska and Horizon pilots for damages based on alleged violations of the Uniformed Services Employment and Reemployment Rights Act (USERRA). Plaintiff received class certification in August 2020. The case is in discovery. The Company believes the claims in the case are without factual and legal merit and intends to defend the lawsuit. |
SHAREHOLDER'S EQUITY
SHAREHOLDER'S EQUITY | 12 Months Ended |
Dec. 31, 2020 | |
Equity [Abstract] | |
SHAREHOLDER'S EQUITY | SHAREHOLDERS' EQUITY Dividends During 2020, the Board of Directors declared dividends of $0.375 per share. The Company paid dividends of $45 million, $173 million and $158 million to shareholders of record during 2020, 2019 and 2018. In March 2020, the Company suspended dividends indefinitely. Common Stock Repurchase In August 2015, the Board of Directors authorized a $1 billion share repurchase program. As of December 31, 2020, the Company has repurchased 7.6 million shares for $544 million under this program. In March 2020, the Company suspended the share repurchase program indefinitely. At December 31, 2020, the Company held 9,349,944 shares in treasury. Management does not anticipate retiring common shares held in treasury for the foreseeable future. Share repurchase activity (in millions, except shares): 2020 2019 2018 Shares Amount Shares Amount Shares Amount 2015 Repurchase Program – $1 billion 538,078 $ 31 1,192,820 $ 75 776,186 $ 50 CARES Act Warrant Issuance As taxpayer protection required under the PSP, during 2020 the Company granted the Treasury a total of 915,930 warrants to purchase Alaska Air Group (ALK) common stock at a strike price of $31.61, based on the closing price on April 9, 2020. The warrants are non-voting, freely transferable, may be settled as net shares or in cash at Alaska's option, and have a five year term. Additionally, in connection with the execution of the CARES Act loan agreement, the Company agreed to issue warrants to the Treasury to purchase up to an aggregate of 6,099,336 shares of ALK common stock (the Warrant Agreement). Under the Warrant Agreement, warrants will be granted to the Treasury in conjunction with each new borrowing under the Agreement. Warrants to purchase shares shall be equal to 10% of each borrowing, divided by $31.61, the closing price of Air Group common stock on April 9, 2020. Pursuant to the Warrant Agreement, on the closing date, Air Group granted the Treasury 427,080 warrants to purchase ALK common stock at a strike price of $31.61. Accumulated Other Comprehensive Loss (AOCL) AOCL consisted of the following (in millions, net of tax): 2020 2019 Related to marketable securities $ 23 $ 9 Related to employee benefit plans (498) (469) Related to interest rate derivatives (19) (5) $ (494) $ (465) |
SPECIAL ITEMS SPECIAL ITEMS
SPECIAL ITEMS SPECIAL ITEMS | 12 Months Ended |
Dec. 31, 2020 | |
SPECIAL ITEMS [Abstract] | |
Unusual or Infrequent Items Disclosure [Text Block] | SPECIAL ITEMS In 2020, the Company recognized $627 million in impairment charges and other special items, and $220 million in special restructuring costs. These special items are largely described in Note 2, but also include a n amount accrued for a judgment in a class action lawsuit issued subsequent to December 31, 2020 that was a recognized subsequent event. Also in 2020 the Company recognized special items of $6 million for merger-related costs associated with its acquisition of Virgin America. Costs classified as merger-related are directly attributable to merger activities. Additionally, the Company incurred $26 million in swap-break charges and pre-payment penalties related to the early payment of debt associated with the sale of ten owned Airbus aircraft. These charges are reflected as Special charges - net non-operating in the consolidated statements of operations. In 2019, the Company recognized $44 million in merger-related costs, primarily for expenses associated with a one-time true-up of Airbus flight attendant and pilot vacation balances, as well as certain technology integration costs. In 2018, the Company recognized $87 million in merger-related costs. The Company incurred a one-time settlement fee of $20 million for the termination of an existing maintenance services agreement and subsequently entered into a new services agreement that provides more flexibility for the timing and scope of engine work. Additionally, the Company incurred $25 million for one-time bonuses paid to employees as a result of tax reform. These charges were recognized as special charges and are included in the Special items - other line on our consolidated statements of operations. The Company has recognized $370 million in merger-related costs since the acquisition of Virgin America in December 2016. No additional merger-related costs will be incurred subsequent to 2020. Special items recorded as a result of the COVID-19 pandemic are disclosed in Note 2. COVID-19 Pandemic. The following breaks down merger-related costs incurred in 2020, 2019 and 2018 (in millions): 2020 2019 2018 Consulting and professional services $ 5 $ 18 $ 45 Employee-related costs (a) — 15 13 Legal and accounting fees 1 1 1 Other merger-related costs (b) — 10 28 Total Merger-related Costs $ 6 $ 44 $ 87 (a) Employee-related costs consist primarily of vacation balance true-ups, severance, retention bonuses, and training and skill development. (b) Other merger-related costs consist primarily of costs for marketing and advertising, IT, employee appreciation and company sponsored events, moving expenses, supplies, and other immaterial expenses. |
STOCK-BASED COMPENSATION PLANS
STOCK-BASED COMPENSATION PLANS | 12 Months Ended |
Dec. 31, 2020 | |
Share-based Payment Arrangement [Abstract] | |
STOCK-BASED COMPENSATION PLANS | STOCK-BASED COMPENSATION PLANS The Company has various equity incentive plans under which it may grant stock awards to directors, officers and employees. The Company also has an employee stock purchase plan. The table below summarizes the components of total stock-based compensation (in millions): 2020 2019 2018 Stock options $ 4 $ 3 $ 3 Stock awards 14 21 23 Deferred stock awards 1 1 1 Employee stock purchase plan 15 11 9 Stock-based compensation $ 34 $ 36 $ 36 Tax benefit related to stock-based compensation $ 8 $ 9 $ 9 Unrecognized stock-based compensation for non-vested options and awards and the weighted-average period the expense will be recognized (dollars in millions): Amount Weighted-Average Stock options $ 5 1.0 Stock awards 31 1.8 Unrecognized stock-based compensation $ 36 1.7 The Company is authorized to issue 17 million shares of common stock under these plans, of which 5,893,374 shares remain available for future grants of either options or stock awards as of December 31, 2020. Stock Options Stock options to purchase common stock are granted at the fair market value of the stock on the date of grant. The stock options granted have terms of up to ten years. The fair value of each option grant was estimated on the date of grant using the Black-Scholes option-pricing model with the following weighted-average assumptions used for grants: 2020 2019 2018 Expected volatility 34 % 30 % 30 % Expected term 6 years 6 years 6 years Risk-free interest rate 1.03 % 2.41 % 2.61 % Expected dividend yield 1.73 % 2.09 % 1.94 % Weighted-average grant date fair value per share $ 14.11 $ 16.84 $ 17.18 Estimated fair value of options granted (millions) $ 6 $ 4 $ 1 The expected market price volatility and expected term are based on historical results. The risk-free interest rate is based on the U.S. Treasury yield curve in effect at the time of the grant. The expected dividend yield is based on the estimated weighted average dividend yield over the expected term. The expected forfeiture rates are based on historical experience. The tables below summarize stock option activity for the year ended December 31, 2020: Shares Weighted- Weighted- Aggregate Intrinsic Outstanding, December 31, 2019 794,055 $ 60.98 6.5 $ 7 Granted 398,780 54.81 Exercised (52,674) 18.86 Canceled (15,417) 71.63 Forfeited or expired (13,874) 66.84 Outstanding, December 31, 2020 1,110,870 $ 60.54 6.8 $ 4 Exercisable, December 31, 2020 419,667 $ 60.56 4.6 $ 2 Vested or expected to vest, December 31, 2020 1,109,799 $ 60.54 6.8 $ 4 (in millions) 2020 2019 2018 Intrinsic value of option exercises $ 2 $ 1 $ 1 Cash received from stock option exercises — 1 1 Fair value of options vested 3 3 2 Stock Awards Restricted Stock Units (RSUs) are awarded to eligible employees and entitle the grantee to receive shares of common stock at the end of the vesting period. The fair value of the RSUs is based on the stock price on the date of grant. Generally, RSUs “cliff vest” after three years, or the period from the date of grant to the employee’s retirement eligibility, and expense is recognized accordingly. Performance Share Units (PSUs) are awarded to certain executives to receive shares of common stock if specific performance goals and market conditions are achieved. There are several tranches of PSUs which vest when performance goals and market conditions are met. The following table summarizes information about outstanding stock awards: Number Weighted-Average Grant Date Fair Value Weighted- Aggregate Non-vested, December 31, 2019 541,613 $ 71.82 1.4 $ 37 Granted 926,418 49.22 Vested (388,032) 67.83 Forfeited (112,955) 54.39 Non-vested, December 31, 2020 967,044 $ 51.85 1.7 $ 50 Deferred Stock Awards Deferred Stock Units (DSUs) are awarded to members of the Board of Directors as part of their retainers. The underlying common shares are issued upon retirement from the Board, but require no future service period. As a result, the entire intrinsic value of the awards is expensed on the date of grant. Employee Stock Purchase Plan The ESPP allows employees to purchase common stock at 85% of the stock price on the first day of the offering period or the specified purchase date, whichever is lower. Employees may contribute up to 10% of their base earnings during the offering period to purchase stock. Employees purchased 1,524,194, 784,786 and 632,145 shares in 2020, 2019 and 2018 under the ESPP. |
OPERATING SEGMENT INFORMATION
OPERATING SEGMENT INFORMATION | 12 Months Ended |
Dec. 31, 2020 | |
Segment Reporting [Abstract] | |
Operating Segment Information | OPERATING SEGMENT INFORMATION Alaska Air Group has two operating airlines—Alaska and Horizon. Each is a regulated airline by the U.S. Department of Transportation’s Federal Aviation Administration. Alaska has CPAs for regional capacity with Horizon, as well as with third-party carrier SkyWest, under which Alaska receives all passenger revenues. Under U.S. General Accepted Accounting Principles, operating segments are defined as components of a business for which there is discrete financial information that is regularly assessed by the Chief Operating Decision Maker (CODM) in making resource allocation decisions. Financial performance for the operating airlines and CPAs is managed and reviewed by the Company's CODM as part of three reportable operating segments: • Mainline - includes 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. and Canada under CPAs. This segment includes the actual revenues and expenses associated with regional flying, as well as an allocation of corporate overhead incurred by Air Group on behalf of the regional operations. • Horizon - includes the capacity sold to Alaska under CPA. Expenses include those typically borne by regional airlines such as crew costs, ownership costs and maintenance costs. The CODM makes resource allocation decisions for these reporting segments based on flight profitability data, aircraft type, route economics and other financial information. The "Consolidating and Other" column reflects parent company activity, McGee Air Services, consolidating entries and other immaterial business units of the company. The “Air Group Adjusted” column represents a non-GAAP measure that is used by the Company CODM to evaluate performance and allocate resources. Adjustments are further explained below in reconciling to consolidated GAAP results. Operating segment information is as follows (in millions): Year Ended December 31, 2020 Mainline Regional Horizon Consolidating & Other (a) Air Group Adjusted (b) Special Items (c) Consolidated Operating Revenues Passenger revenues 2,350 669 — — 3,019 — 3,019 CPA revenues — — 386 (386) — — — Mileage Plan other revenue 309 65 — — 374 — 374 Cargo and other 170 — — 3 173 — 173 Total Operating Revenues 2,829 734 386 (383) 3,566 — 3,566 Operating Expenses Non-fuel operating expenses 3,630 993 323 (399) 4,547 71 4,618 Fuel expense 569 162 — — 731 (8) 723 Total Operating Expenses 4,199 1,155 323 (399) 5,278 63 5,341 Total Non-operating Income (Expense) (19) — (22) 2 (39) (26) (65) Income (Loss) Before Income Tax $ (1,389) $ (421) $ 41 $ 18 $ (1,751) $ (89) $ (1,840) Year Ended December 31, 2019 Mainline Regional Horizon Consolidating & Other (a) Air Group Adjusted (b) Special Items (c) Consolidated Operating Revenues Passenger revenues 6,750 1,345 — — 8,095 — 8,095 CPA revenues — — 450 (450) — — — Mileage Plan other revenue 419 46 — — 465 — 465 Cargo and other 212 3 1 5 221 — 221 Total Operating Revenues 7,381 1,394 451 (445) 8,781 — 8,781 Operating Expenses Non-fuel operating expenses 4,778 1,097 385 (464) 5,796 44 5,840 Fuel expense 1,589 295 — — 1,884 (6) 1,878 Total Operating Expenses 6,367 1,392 385 (464) 7,680 38 7,718 Total Non-operating Income (Expense) (21) — (28) 2 (47) — (47) Income (Loss) Before Income Tax $ 993 $ 2 $ 38 $ 21 $ 1,054 $ (38) $ 1,016 Year Ended December 31, 2018 Mainline Regional Horizon Consolidating & Other (a) Air Group Adjusted (b) Special Items (c) Consolidated Operating Revenues Passenger revenues 6,474 1,157 — — 7,631 — 7,631 CPA revenues — — 508 (508) — — — Mileage Plan other revenue 397 37 — — 434 — 434 Cargo and other 192 3 4 — 199 — 199 Total Operating Revenues 7,063 1,197 512 (508) 8,264 — 8,264 Operating Expenses Non-fuel operating expenses 4,577 1,024 465 (513) 5,553 132 5,685 Fuel expense 1,652 262 — — 1,914 22 1,936 Total Operating Expenses 6,229 1,286 465 (513) 7,467 154 7,621 Total Non-operating Income (Expense) (25) (11) (20) (2) (58) — (58) Income (Loss) Before Income Tax $ 809 $ (100) $ 27 $ 3 $ 739 $ (154) $ 585 (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 excludes certain income and charges. (c) Includes payroll support program grant wage offsets, special items and mark-to-market fuel-hedge accounting adjustments. 2020 2019 2018 Depreciation and amortization: Mainline $ 346 $ 337 $ 316 Horizon 74 86 82 Consolidated $ 420 $ 423 $ 398 Capital expenditures: Mainline $ 194 $ 605 $ 571 Horizon 12 91 389 Consolidated $ 206 $ 696 $ 960 Total assets at end of period: Mainline $ 19,754 $ 19,207 Horizon 1,170 1,266 Consolidating & Other (6,878) (7,480) Consolidated $ 14,046 $ 12,993 |
GENERAL AND SUMMARY OF SIGNIF_2
GENERAL AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2020 | |
Accounting Policies [Abstract] | |
Organization and Basis of Accounting, Policy [Policy Text Block] | Organization and Basis of Presentation The consolidated financial statements include the accounts of Air Group, or the Company, and its primary subsidiaries, Alaska and Horizon. Our 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 conformity with accounting principles generally accepted in the United States of America and their preparation requires the use of management’s estimates. Actual results may differ from these estimates. Certain reclassifications have been made to prior year financial statements to conform to classifications used in the current year. |
Cash and Cash Equivalents, Policy [Policy Text Block] | Cash and Cash Equivalents Cash equivalents consist of highly liquid investments with original maturities of three months or less, such as money market funds, commercial paper and certificates of deposit. They are carried at cost, which approximates market value. The Company reduces cash balances when funds are disbursed. Due to the time delay in funds clearing the banks, the Company normally maintains a negative balance in its cash disbursement accounts, which is reported as a current liability. The amount of the negative cash balance was $5 million and $7 million at December 31, 2020 and 2019, and is included in accounts payable, with the change in the balance during the year included in other financing activities in the consolidated statements of cash flows. The Company's restricted cash balances are not material and are classified as Other noncurrent assets. Restricted cash balances are primarily used to guarantee various letters of credit, self-insurance programs or other contractual rights. They consist of highly liquid securities with original maturities of three months or less. They are carried at cost, which approximates fair value. |
Marketable Securities, Policy [Policy Text Block] | Marketable Securities Investments with original maturities of greater than three months and remaining maturities of less than one year are classified as short-term investments. Investments with maturities beyond one year may be classified as short-term based on their highly liquid nature and because such marketable securities represent the investment of cash that is available for current operations. All cash equivalents and short-term investments are classified as available-for-sale and realized gains and losses are recorded using the specific identification method. Changes in market value are reflected in accumulated other comprehensive loss (AOCL). The Company evaluates the investment portfolio on a quarterly basis for expected credit losses. The Company uses a systematic methodology that groups assets by relevant market sector, and considers available quantitative and qualitative evidence in evaluating potential allowances for credit losses. If the cost of an investment exceeds its fair value, management evaluates, among other factors, general market conditions, credit quality of debt instrument issuers, the duration and extent to which the fair value is less than cost, the Company's intent and ability to hold, or plans to sell, the investment. Once a decline in fair value is determined to be the result of an expected credit loss, an allowance is recorded to Other—net in the consolidated statements of operations. |
Inventory, Policy [Policy Text Block] | Inventories and Supplies—net Expendable aircraft parts, materials and supplies are stated at average cost and are included in Inventories and supplies — net. An obsolescence allowance for expendable parts is accrued based on estimated lives of the corresponding fleet type and salvage values. The allowance for expendable inventories was $46 million and $41 million at December 31, 2020 and 2019. Removals from the reserve in 2020 were immaterial. Inventory and supplies — net also includes fuel inventory of $15 million and $28 million at December 31, 2020 and 2019. Repairable and rotable aircraft parts inventories are included in flight equipment. |
Property, Plant and Equipment, Policy [Policy Text Block] | Property, Equipment and Depreciation Property and equipment are recorded at cost and depreciated using the straight-line method over their estimated useful lives less an estimated salvage value, which are as follows: Estimated Useful Life Estimated Salvage Value Aircraft and other flight equipment: Boeing 737 and E175 aircraft 20-25 years 10% Bombardier Q400 aircraft 15 years 5% Buildings 25 - 40 years 10% Minor building and land improvements 10 years —% Capitalized leases and leasehold improvements Generally shorter of lease term or —% Computer hardware and software 3-10 years —% Other furniture and equipment 5-10 years —% Near the end of an asset's estimated useful life, management updates the salvage value estimates based on current market conditions and expected use of the asset. Repairable and rotable aircraft parts are included in Aircraft and other flight equipment, and are depreciated over the associated fleet life. Capitalized interest, based on the Company’s weighted-average borrowing rate, is added to the cost of the related asset, and is depreciated over the estimated useful life of the asset. Maintenance and repairs, other than engine maintenance on B737-800 engines, are expensed when incurred. Major modifications that extend the life or improve the usefulness of aircraft are capitalized and depreciated over their estimated period of use. Maintenance on B737-800 engines is covered under a power-by-the-hour agreement with a third party, whereby the Company pays a determinable amount, and transfers risk, to a third party. The Company expenses the contract amounts based on engine usage. The Company evaluates long-lived assets to be held and used for impairment whenever events or changes in circumstances indicate that the total carrying amount of an asset or asset group may not be recoverable. The Company groups assets for purposes of such reviews at the lowest level at which identifiable cash flows are largely independent of the cash flows of other groups of assets and liabilities, which is generally the fleet level. An impairment loss is considered when estimated future undiscounted cash flows expected to result from the use of the asset or asset group and its eventual disposition are less than its carrying amount. If the asset or asset group is not considered recoverable, a write-down equal to the excess of the carrying amount over the fair value will be recorded . For these purposes, the fair value is estimated using a combination of Level 2 inputs, including published market value estimates for the assets being assessed, and Level 3 inputs, including Company-specific and asset-specific indicators. See Note 2 for a discussion of impairments and related charges recorded in 2020. Goodwill |
Goodwill | Goodwill Goodwill represents the excess of purchase price over the fair value of the related net assets acquired in the Company's acquisition of Virgin America and is not amortized. The total balance of goodwill is associated with the Mainline reporting unit. The Company reviews goodwill for impairment annually in the fourth quarter, or more frequently if events or circumstances indicate than an impairment may exist. The assessment utilizes either a qualitative or quantitative approach. The qualitative approach considers factors such as Alaska Air Group market capitalization and other market trends, and unobservable inputs, including Company specific cash flow and performance information. If it is determined that it is more likely than not that the asset may be impaired, management utilizes a quantitative approach to assess the asset's fair value and the amount of impairment and a charge may be recorded. In 2020, we performed a quantitative analysis using a market approach through which the fair value of the reporting unit was based on quoted market prices and an assumed market participant acquisition premium. The fair value of the reporting unit with goodwill substantially exceeded its carrying value. |
Intangible Assets | Intangible Assets Intangible assets are comprised primarily of indefinite-lived airport slots and finite-lived customer relationships recorded in conjunction with the acquisition of Virgin America. Finite-lived intangibles were recorded at fair value upon acquisition and are amortized over their estimated useful lives. Indefinite-lived intangibles were recorded at fair value upon acquisition are not amortized, but are tested at least annually for impairment using a similar methodology to goodwill, as described above. See Note 2 for a discussion of intangible asset impairments recorded in 2020. |
Aircraft Maintenance Deposits | Aircraft Maintenance DepositsCertain Airbus leases include contractually required maintenance deposit payments to the lessor, which collateralize the lessor for future maintenance events should the Company not perform required maintenance. Most of the lease agreements provide that maintenance deposits are reimbursable upon completion of the major maintenance event in an amount equal to the lesser of (i) the amount qualified for reimbursement from maintenance deposits held by the lessor associated with the specific major maintenance event or (ii) the qualifying costs related to the specific major maintenance event. The Company establishes accounting maintenance deposits as assets on the balance sheet using estimates of the anticipated timing and cost of the specific major maintenance events, such that the accounting deposits do not exceed the amount qualified for reimbursement. Aircraft maintenance deposits recorded on the consolidated balance sheets were $242 million and $143 million as of December 31, 2020 and December 31, 2019. |
Leased Aircraft Return Costs [Policy Text Block] | Leased Aircraft Return Costs Costs of returning leased aircraft are accrued when the costs are probable and reasonably estimable, usually over the twelve months prior to the lease return, unless a determination is made that the leased asset is removed from operation. If the leased aircraft is removed from the operating fleet, the estimated cost of return is accrued at the time of removal. Any accrual is based on the time remaining on the lease, planned aircraft usage and the provisions included in the lease agreement, although the actual amount due to any lessor upon return may not be known with certainty until lease termination. |
Advertising Cost, Policy, Expensed Advertising Cost [Policy Text Block] | Advertising Expenses |
Derivatives, Policy [Policy Text Block] | Derivative Financial Instruments The Company's operations are significantly impacted by changes in aircraft fuel prices and interest rates. In an effort to manage exposure to these risks, the Company periodically enters into fuel and interest rate derivative instruments. These derivative instruments are recognized at fair value on the balance sheet and changes in the fair value are recognized in AOCL or in the consolidated statements of operations, depending on the nature of the instrument. The Company does not apply hedge accounting to its derivative fuel hedge contracts, nor does it hold or issue them for trading purposes. For cash flow hedges related to interest rate swaps, the effective portion of the derivative represents the change in fair value of the hedge that offsets the change in fair value of the hedged item. To the extent the change in the fair value of the hedge does not perfectly offset the change in the fair value of the hedged item, the ineffective portion of the hedge is immediately recognized in interest expense. |
Fair Value of Financial Instruments, Policy [Policy Text Block] | Fair Value Measurements Accounting standards define fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. The standards also establish a fair value hierarchy, which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. There are three levels of inputs that may be used to measure fair value: Level 1 - Quoted prices in active markets for identical assets or liabilities. Level 2 - Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Level 3 - Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. The Company has elected not to use the fair value option provided in the accounting standards for non-financial instruments. Accordingly, those assets and liabilities, including property, plant and equipment, goodwill, intangible assets and certain other assets and liabilities are carried at amortized cost. For financial instruments, the assets and liabilities are carried at fair value, which is determined based on the market approach or income approach, depending upon the level of inputs used. The leveling of inputs for financial and non-financial instruments are disclosed in this note, and Note 5. |
Income Tax, Policy [Policy Text Block] | Income Taxes The Company uses the asset and liability approach for accounting for and reporting income taxes. Deferred tax assets and liabilities are recognized for future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities, and their respective tax bases and for operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the period that includes the enactment date. A valuation allowance would be established, if necessary, for the amount of any tax benefits that, based on available evidence, are not expected to be realized. As of December 31, 2020, there is a partial valuation allowance against net deferred tax assets. The Company accounts for unrecognized tax benefits in accordance with the applicable accounting standards. |
Share-based Compensation, Option and Incentive Plans Policy [Policy Text Block] | Stock-Based Compensation Accounting standards require companies to recognize expense over the service period based on the fair value of stock options and other equity-based compensation issued to employees estimated as of the grant date. These standards apply to all stock awards that the Company grants to employees as well as the Company’s Employee Stock Purchase Plan (ESPP), which features a look-back provision and allows employees to purchase stock at a 15% discount. All stock-based compensation expense is recorded in wages and benefits in the consolidated statements of operations. |
Earnings Per Share, Policy [Policy Text Block] | Earnings Per Share (EPS) Diluted EPS is calculated by dividing net income by the average common shares outstanding plus additional common shares that would have been outstanding assuming the exercise of in-the-money stock options and restricted stock units, using the treasury-stock method. In 2019 and 2018, anti-dilutive stock options excluded from the calculation of EPS were not material. |
New Accounting Pronouncements, Policy [Policy Text Block] | Recently Adopted Accounting PronouncementsIn June 2016, the Financial Accounting Standards Board issued ASU 2016-13, "Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments." The ASU requires the use of an "expected credit loss model" on certain financial instruments. The ASU also amends the impairment model for available-for-sale debt securities, and requires the estimation of credit losses to be recorded as allowances instead of reductions to amortized cost. The ASU was effective for the Company beginning January 1, 2020, and was adopted prospectively, but it did not have a significant impact on the Company's financial statements and disclosures. |
GENERAL AND SUMMARY OF SIGNIF_3
GENERAL AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Accounting Policies [Abstract] | |
Property, Plant and Equipment [Table Text Block] | Property and equipment are recorded at cost and depreciated using the straight-line method over their estimated useful lives less an estimated salvage value, which are as follows: Estimated Useful Life Estimated Salvage Value Aircraft and other flight equipment: Boeing 737 and E175 aircraft 20-25 years 10% Bombardier Q400 aircraft 15 years 5% Buildings 25 - 40 years 10% Minor building and land improvements 10 years —% Capitalized leases and leasehold improvements Generally shorter of lease term or —% Computer hardware and software 3-10 years —% Other furniture and equipment 5-10 years —% |
COVID-19 PANDEMIC (Tables)
COVID-19 PANDEMIC (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Risks and Uncertainties [Abstract] | |
Details of Impairment of Long-Lived Assets Held and Used by Asset | A summary of the impairment charges recorded for aircraft and other flight equipment for the year ended December 31, 2020 is as follows (in millions): Airbus Aircraft Q400 Aircraft Total Impairment Aircraft and other flight equipment, net $ 146 $ 58 $ 204 Operating lease assets 154 — 154 Inventory and supplies - net 2 — 2 Prepaid expenses and other current assets — 3 3 Total impairment and related charges - Long-lived assets $ 302 $ 61 $ 363 |
REVENUE FROM CONTRACTS WITH C_2
REVENUE FROM CONTRACTS WITH CUSTOMERS (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Revenue from Contracts with Customer [Abstract] | |
Disaggregation of Revenue [Table Text Block] | Passenger revenue recognized in the consolidated statements of operations (in millions): Twelve Months Ended December 31, 2020 2019 2018 Passenger ticket revenue, including ticket breakage and net of taxes and fees $ 2,428 $ 6,824 $ 6,482 Passenger ancillary revenue 245 567 530 Mileage Plan passenger revenue 346 704 619 Total passenger revenue $ 3,019 $ 8,095 $ 7,631 Mileage Plan revenue included in the consolidated statements of operations (in millions): Twelve Months Ended December 31, 2020 2019 2018 Passenger revenue $ 346 $ 704 $ 619 Mileage Plan other revenue 374 465 434 Total Mileage Plan revenue $ 720 $ 1,169 $ 1,053 Cargo and other revenue included in the consolidated statements of operations (in millions): Twelve Months Ended December 31, 2020 2019 2018 Cargo revenue $ 112 $ 133 $ 129 Other revenue 61 88 70 Total Cargo and other revenue $ 173 $ 221 $ 199 |
Contract with Customer, Asset and Liability [Table Text Block] | The table below presents a roll forward of the total frequent flyer liability (in millions): Twelve Months Ended December 31, 2020 2019 Total Deferred Revenue balance at January 1 $ 1,990 $ 1,874 Travel miles and companion certificate redemption - Passenger revenue (346) (704) Miles redeemed on partner airlines - Other revenue (23) (111) Increase in liability for mileage credits issued 656 931 Total Deferred Revenue balance at December 31 $ 2,277 $ 1,990 |
DERIVATIVE INSTRUMENTS (Tables)
DERIVATIVE INSTRUMENTS (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of Derivative Instruments in Statement of Financial Position, Fair Value [Table Text Block] | Fair values of derivative instruments on the consolidated balance sheet (in millions): 2020 2019 Fuel hedge contracts (not designated as hedges) Prepaid expenses and other current assets $ 11 $ 8 Other assets 4 3 Interest rate swaps (designated as hedges) Prepaid expenses and other current assets — 1 Other noncurrent assets — 2 Other accrued liabilities (10) (5) Other liabilities (15) (5) Losses in accumulated other comprehensive loss (AOCL) (21) (13) |
Schedule of Derivative Instruments, Gain (Loss) in Statement of Financial Performance [Table Text Block] | Pretax effect of derivative instruments on earnings and AOCL (in millions): 2020 2019 2018 Fuel hedge contracts (not designated as hedges) Gains (losses) recognized in Aircraft fuel $ (10) $ (10) $ 1 Interest rate swaps (designated as hedges) Losses recognized in Aircraft rent (3) (3) (3) Gains (losses) recognized in other comprehensive income (OCI) (21) (13) — |
FAIR VALUE MEASUREMENTS (Tables
FAIR VALUE MEASUREMENTS (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Fair Value Disclosures [Abstract] | |
Fair Value, by Balance Sheet Grouping [Table Text Block] | Fair values of financial instruments on the consolidated balance sheet (in millions): December 31, 2020 December 31, 2019 Level 1 Level 2 Total Level 1 Level 2 Total Assets Marketable securities U.S. government and agency securities $ 407 $ — $ 407 $ 330 $ — $ 330 Equity mutual funds 7 — 7 6 — 6 Foreign government bonds — 20 20 — 31 31 Asset-backed securities — 224 224 — 211 211 Mortgage-backed securities — 290 290 — 176 176 Corporate notes and bonds — 978 978 — 523 523 Municipal securities — 50 50 — 23 23 Total Marketable securities 414 1,562 1,976 336 964 1,300 Derivative instruments Fuel hedge contracts - call options — 15 15 — 11 11 Interest rate swap agreements — — — — 3 3 Total Assets $ 414 $ 1,577 $ 1,991 $ 336 $ 978 $ 1,314 Liabilities Derivative instruments Interest rate swap agreements — (25) (25) — (10) (10) Total Liabilities $ — $ (25) $ (25) $ — $ (10) $ (10) Fixed-rate debt on the consolidated balance sheet and the estimated fair value of long-term fixed-rate debt (in millions): December 31, 2020 December 31, 2019 Total fixed rate debt $ 1,662 $ 475 Estimated fair value $ 1,778 $ 483 |
Schedule of Realized Gain (Loss) [Table Text Block] | Proceeds from sales of marketable securities were $2.3 billion, $1.7 billion and $1.1 billion in 2020, 2019, and 2018. |
Schedule of Debt Investment Maturities [Table Text Block] | Maturities for marketable securities (in millions): December 31, 2020 Cost Basis Fair Value Due in one year or less $ 775 $ 777 Due after one year through five years 1,146 1,175 Due after five years through 10 years 23 24 Total $ 1,944 $ 1,976 |
LONG-TERM DEBT (Tables)
LONG-TERM DEBT (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Debt Disclosure [Abstract] | |
Schedule of Long-term Debt Instruments [Table Text Block] | Long-term debt obligations (in millions): 2020 2019 Fixed-rate notes payable due through 2029 $ 198 $ 475 Fixed-rate PSP note payable due through 2030 290 — Fixed-rate EETC payable due through 2025 & 2027 1,174 — Variable-rate notes payable due through 2029 1,866 1,032 Less debt issuance costs and unamortized debt discount (33) (8) Total debt 3,495 1,499 Less current portion 1,138 235 Long-term debt, less current portion $ 2,357 $ 1,264 Weighted-average fixed-interest rate 4.3 % 3.3 % Weighted-average variable-interest rate 1.9 % 2.9 % |
Schedule of Maturities of Long-term Debt [Table Text Block] | Long-term debt principal payments for the next five years and thereafter (in millions): Total 2021 $ 1,145 2022 371 2023 334 2024 240 2025 396 Thereafter 1,042 Total principal payments $ 3,528 |
Leases, Codification Topic 842
Leases, Codification Topic 842 (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Leases [Abstract] | |
Schedule of Lease Assets | Operating lease assets balance by asset class was as follows (in millions): December 31, 2020 December 31, 2019 Aircraft $ 750 $ 1,049 CPA Aircraft 579 596 Airport and terminal facilities 16 18 Corporate real estate and other 55 48 Total Operating lease assets $ 1,400 $ 1,711 |
Lease, Cost | The impact of leases, including variable lease cost, was as follows (in millions): Classification 2020 2019 Expense Aircraft Aircraft rent $ 215 $ 246 CPA Aircraft Aircraft rent 80 79 Airport and terminal facilities Landing fees and other rentals 288 324 Corporate real estate and other Landing fees and other rentals 19 19 Total lease expense $ 602 $ 668 Revenue Lease income Cargo and other revenues (14) (13) Net lease impact $ 588 $ 655 |
Lessee, Operating Lease, Liability, Maturity | Future minimum lease payments under non-cancellable leases as of December 31, 2020 (in millions): Aircraft (a) CPA Aircraft Airport and Terminal Facilities Corporate Real Estate and Other 2021 $ 244 $ 84 $ 2 $ 8 2022 195 84 2 7 2023 135 84 2 7 2024 83 84 2 6 2025 76 84 2 4 Thereafter 257 261 9 78 Total Lease Payments $ 990 $ 681 $ 19 $ 110 Less: Imputed interest (114) (71) (3) (54) Total $ 876 $ 610 $ 16 $ 56 |
Weighted Average Lease Assumptions | The weighted average IBR and weighted average remaining lease term (in years) for all asset classes were as follows at December 31, 2020. Weighted Average IBR Weighted Average Remaining Lease term Aircraft 3.9 % 6.4 CPA Aircraft 2.7 % 8.2 Airports and terminal facilities 4.1 % 9.3 Corporate real estate and other 4.1 % 31.6 |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | |
Schedule of Deferred Tax Assets and Liabilities [Table Text Block] | Deferred tax (assets) and liabilities comprise the following (in millions): 2020 2019 Excess of tax over book depreciation $ 1,126 $ 1,233 Intangibles - net 15 16 Operating lease assets 342 416 Other - net 106 58 Deferred tax liabilities 1,589 1,723 Mileage Plan™ (385) (337) Inventory obsolescence (17) (15) Employee benefits (215) (179) Net operating losses (27) (13) Operating lease liabilities (381) (417) Leasehold maintenance (73) — Other - net (103) (48) Deferred tax assets (1,201) (1,009) Valuation allowance 19 1 Net deferred tax liabilities $ 407 $ 715 |
Schedule of Components of Income Tax Expense (Benefit) [Table Text Block] | The components of income tax expense (benefit) are as follows (in millions): 2020 2019 2018 Current income tax expense (benefit): Federal $ (212) $ 26 $ (5) State (11) 13 9 Total current income tax expense (benefit) (223) 39 4 Deferred income tax expense (benefit): Federal (246) 175 125 State (47) 33 19 Total deferred income tax expense (benefit) (293) 208 144 Income tax expense (benefit) $ (516) $ 247 $ 148 |
Schedule of Effective Income Tax Rate Reconciliation [Table Text Block] | 2020 2019 2018 Income (loss) before income tax $ (1,840) $ 1,016 $ 585 Expected tax expense (benefit) (386) 213 123 Nondeductible expenses 9 9 9 State income tax expense (benefit) (62) 36 21 Tax law changes (93) (9) (7) Valuation allowance 18 — — Other - net (2) (2) 2 Actual tax expense (benefit) $ (516) $ 247 $ 148 Effective tax rate 28.0 % 24.3 % 25.3 % |
Summary of Income Tax Contingencies [Table Text Block] | The Company has identified its federal tax return and its state tax returns in Alaska, Oregon and California as “major” tax jurisdictions. A summary of the Company's jurisdictions and the periods that are subject to examination are as follows: Jurisdiction Period Federal 2007 to 2019 Alaska 2015 to 2019 California 2007 to 2019 Oregon 2003 to 2019 Certain tax years are open to the extent of net operating loss carryforwards. Changes in the liability for gross unrecognized tax benefits during 2020, 2019 and 2018 are as follows (in millions): 2020 2019 2018 Balance at January 1, $ 40 $ 40 $ 43 Additions related to prior years 1 — 1 Releases related to prior years (1) (1) (4) Additions related to current year activity — 2 2 Releases due to settlements (4) — (1) Releases due to lapse of statute of limitations (1) (1) (1) Balance at December 31, $ 35 $ 40 $ 40 |
EMPLOYEE BENEFIT PLANS (Tables)
EMPLOYEE BENEFIT PLANS (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |
Defined Benefit Plan, Plan with Accumulated Benefit Obligation in Excess of Plan Assets | Defined benefit plans with accumulated benefit obligations exceeding fair value of plan assets are as follows (in millions): 2020 2019 Projected benefit obligation $ 2,207 $ 1,957 Accumulated benefit obligation 2,057 1,539 Fair value of plan assets 1,710 1,545 |
Defined Benefit Plan, Plan with Projected Benefit Obligation in Excess of Plan Assets | Defined benefit plans with projected benefit obligations exceeding fair value of plan assets are as follows (in millions): 2020 2019 Projected benefit obligation $ 2,207 $ 1,957 Fair value of plan assets 1,710 1,545 |
Qualified Defined Benefit [Member] | |
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |
Schedule of Assumptions Used [Table Text Block] | Weighted average assumptions used to determine benefit obligations: The rates below vary by plan and related work group. 2020 2019 Discount rates 2.43% to 2.58% 3.33% to 3.47% Rate of compensation increases 2.02% to 2.43% 2.11% to 5.44% Weighted average assumptions used to determine net periodic benefit cost: The rates below vary by plan and related work group. 2020 2019 2018 Discount rates 3.33% to 3.47% 4.37% to 4.46% 3.69% to 3.78% Expected return on plan assets 3.25% to 5.50% 4.25% to 5.50% 4.25% to 5.50% Rate of compensation increases 2.11% to 5.44% 2.11% to 3.50% 2.11% to 16.51% |
Schedule of Allocation of Plan Assets [Table Text Block] | The target and actual asset allocation of the funds in the qualified defined-benefit plans, by asset category, are as follows: Salaried Plan (a) All other plans Target 2020 2019 Target 2020 2019 Asset category: Domestic equity securities 2% - 12% 7 % 7 % 36% - 46% 44 % 41 % Non-U.S. equity securities 0% - 8% 3 % 3 % 13% - 23% 18 % 18 % Fixed income securities 85% - 95% 90 % 90 % 31% - 41% 33 % 35 % Real estate — % — % — % 0% - 10% 5 % 6 % Plan assets 100 % 100 % 100 % 100 % (a) As our Salaried Plan is frozen and fully funded, our investment strategies differ significantly from that of our other outstanding plans. Investments are in lower-risk securities, with earnings designed to maintain a fully-funded status. Plan assets by fund category (in millions): 2020 2019 Fair Value Hierarchy Fund type: U.S. equity market fund $ 914 $ 773 1 Non-U.S. equity fund 384 344 1 Credit bond index fund 1,088 1,009 1 Plan assets in common commingled trusts $ 2,386 $ 2,126 Real estate 96 102 (a) Cash equivalents 6 11 1 Total plan assets $ 2,488 $ 2,239 |
Schedule of Net Funded Status [Table Text Block] | The following table sets forth the status of the qualified defined-benefit pension plans (in millions): 2020 2019 Projected benefit obligation (PBO) Beginning of year $ 2,602 $ 2,225 Service cost 52 42 Interest cost 75 89 Actuarial (gain)/loss 339 359 Benefits paid (134) (113) End of year $ 2,934 $ 2,602 Plan assets at fair value Beginning of year $ 2,239 $ 1,858 Actual return on plan assets 383 429 Employer contributions — 65 Benefits paid (134) (113) End of year $ 2,488 $ 2,239 Unfunded status $ (446) $ (363) Percent funded 85 % 86 % |
Schedule of Amounts Recognized in Balance Sheet [Table Text Block] | The amounts recognized in the consolidated balance sheets (in millions): 2020 2019 Accrued benefit liability-long term $ 502 $ 412 Plan assets-long term (within Other noncurrent assets) (51) (49) Total liability recognized $ 451 $ 363 The amounts not yet reflected in net periodic benefit cost and included in AOCL (in millions): 2020 2019 Prior service credit $ (5) $ (6) Net loss 626 595 Amount recognized in AOCL (pretax) $ 621 $ 589 |
Schedule of Net Benefit Costs [Table Text Block] | Net pension expense for the qualified defined-benefit plans included the following components (in millions): 2020 2019 2018 Service cost $ 46 $ 42 $ 48 Interest cost 75 89 79 Restructuring charges (a) 11 — — Expected return on assets (110) (95) (107) Amortization of prior service credit (1) (1) (1) Recognized actuarial loss 35 37 33 Net pension expense $ 56 $ 72 $ 52 (a) In conjunction with the workforce reductions stemming from the COVID-19 pandemic, the Company recorded additional expense for employees accepting incentive leaves of absence. Such expense is included in Special items - restructuring charges on the consolidated statement of operations for the year-ended December 31, 2020. |
Schedule of Expected Benefit Payments [Table Text Block] | Future benefits expected to be paid over the next ten years under the qualified defined-benefit pension plans from the assets of those plans (in millions): Total 2021 $ 123 2022 142 2023 143 2024 141 2025 157 2026– 2030 829 |
COMMITMENTS AND CONTINGENCIES C
COMMITMENTS AND CONTINGENCIES COMMITMENTS AND CONTINGENCIES (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of Future Minimum Rental Payments for Operating Leases and Unrecorded Unconditional Purchase Obligtaions [Table Text Block] | Future minimum payments for commitments as of December 31, 2020 (in millions): Aircraft Commitments (a) Capacity Purchase Agreements (b) 2021 $ 873 $ 166 2022 372 174 2023 238 179 2024 27 184 2025 16 189 Thereafter 13 690 Total $ 1,539 $ 1,582 |
SHAREHOLDER'S EQUITY (Tables)
SHAREHOLDER'S EQUITY (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Equity [Abstract] | |
Schedule of Accumulated Other Comprehensive Income (Loss) [Table Text Block] | AOCL consisted of the following (in millions, net of tax): 2020 2019 Related to marketable securities $ 23 $ 9 Related to employee benefit plans (498) (469) Related to interest rate derivatives (19) (5) $ (494) $ (465) |
SPECIAL ITEMS (Tables)
SPECIAL ITEMS (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Unusual or Infrequent Items, or Both [Abstract] | |
Merger-related Costs [Table Text Block] | The following breaks down merger-related costs incurred in 2020, 2019 and 2018 (in millions): 2020 2019 2018 Consulting and professional services $ 5 $ 18 $ 45 Employee-related costs (a) — 15 13 Legal and accounting fees 1 1 1 Other merger-related costs (b) — 10 28 Total Merger-related Costs $ 6 $ 44 $ 87 (a) Employee-related costs consist primarily of vacation balance true-ups, severance, retention bonuses, and training and skill development. (b) Other merger-related costs consist primarily of costs for marketing and advertising, IT, employee appreciation and company sponsored events, moving expenses, supplies, and other immaterial expenses. |
STOCK-BASED COMPENSATION PLANS
STOCK-BASED COMPENSATION PLANS (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Share-based Payment Arrangement [Abstract] | |
Schedule of Compensation Cost for Share-based Payment Arrangements, Allocation of Share-based Compensation Costs by Plan [Table Text Block] | The table below summarizes the components of total stock-based compensation (in millions): 2020 2019 2018 Stock options $ 4 $ 3 $ 3 Stock awards 14 21 23 Deferred stock awards 1 1 1 Employee stock purchase plan 15 11 9 Stock-based compensation $ 34 $ 36 $ 36 Tax benefit related to stock-based compensation $ 8 $ 9 $ 9 |
Schedule of Unrecognized Compensation Cost, Nonvested Awards [Table Text Block] | Unrecognized stock-based compensation for non-vested options and awards and the weighted-average period the expense will be recognized (dollars in millions): Amount Weighted-Average Stock options $ 5 1.0 Stock awards 31 1.8 Unrecognized stock-based compensation $ 36 1.7 |
Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions [Table Text Block] | The fair value of each option grant was estimated on the date of grant using the Black-Scholes option-pricing model with the following weighted-average assumptions used for grants: 2020 2019 2018 Expected volatility 34 % 30 % 30 % Expected term 6 years 6 years 6 years Risk-free interest rate 1.03 % 2.41 % 2.61 % Expected dividend yield 1.73 % 2.09 % 1.94 % Weighted-average grant date fair value per share $ 14.11 $ 16.84 $ 17.18 Estimated fair value of options granted (millions) $ 6 $ 4 $ 1 |
Share-based Compensation, Stock Options, Activity [Table Text Block] | The tables below summarize stock option activity for the year ended December 31, 2020: Shares Weighted- Weighted- Aggregate Intrinsic Outstanding, December 31, 2019 794,055 $ 60.98 6.5 $ 7 Granted 398,780 54.81 Exercised (52,674) 18.86 Canceled (15,417) 71.63 Forfeited or expired (13,874) 66.84 Outstanding, December 31, 2020 1,110,870 $ 60.54 6.8 $ 4 Exercisable, December 31, 2020 419,667 $ 60.56 4.6 $ 2 Vested or expected to vest, December 31, 2020 1,109,799 $ 60.54 6.8 $ 4 (in millions) 2020 2019 2018 Intrinsic value of option exercises $ 2 $ 1 $ 1 Cash received from stock option exercises — 1 1 Fair value of options vested 3 3 2 |
Schedule of Share-based Compensation, Restricted Stock Units Award Activity [Table Text Block] | The following table summarizes information about outstanding stock awards: Number Weighted-Average Grant Date Fair Value Weighted- Aggregate Non-vested, December 31, 2019 541,613 $ 71.82 1.4 $ 37 Granted 926,418 49.22 Vested (388,032) 67.83 Forfeited (112,955) 54.39 Non-vested, December 31, 2020 967,044 $ 51.85 1.7 $ 50 |
OPERATING SEGMENT INFORMATION (
OPERATING SEGMENT INFORMATION (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Segment Reporting, Asset Reconciling Item [Line Items] | |
Schedule of Segment Reporting Information, by Segment | Operating segment information is as follows (in millions): Year Ended December 31, 2020 Mainline Regional Horizon Consolidating & Other (a) Air Group Adjusted (b) Special Items (c) Consolidated Operating Revenues Passenger revenues 2,350 669 — — 3,019 — 3,019 CPA revenues — — 386 (386) — — — Mileage Plan other revenue 309 65 — — 374 — 374 Cargo and other 170 — — 3 173 — 173 Total Operating Revenues 2,829 734 386 (383) 3,566 — 3,566 Operating Expenses Non-fuel operating expenses 3,630 993 323 (399) 4,547 71 4,618 Fuel expense 569 162 — — 731 (8) 723 Total Operating Expenses 4,199 1,155 323 (399) 5,278 63 5,341 Total Non-operating Income (Expense) (19) — (22) 2 (39) (26) (65) Income (Loss) Before Income Tax $ (1,389) $ (421) $ 41 $ 18 $ (1,751) $ (89) $ (1,840) Year Ended December 31, 2019 Mainline Regional Horizon Consolidating & Other (a) Air Group Adjusted (b) Special Items (c) Consolidated Operating Revenues Passenger revenues 6,750 1,345 — — 8,095 — 8,095 CPA revenues — — 450 (450) — — — Mileage Plan other revenue 419 46 — — 465 — 465 Cargo and other 212 3 1 5 221 — 221 Total Operating Revenues 7,381 1,394 451 (445) 8,781 — 8,781 Operating Expenses Non-fuel operating expenses 4,778 1,097 385 (464) 5,796 44 5,840 Fuel expense 1,589 295 — — 1,884 (6) 1,878 Total Operating Expenses 6,367 1,392 385 (464) 7,680 38 7,718 Total Non-operating Income (Expense) (21) — (28) 2 (47) — (47) Income (Loss) Before Income Tax $ 993 $ 2 $ 38 $ 21 $ 1,054 $ (38) $ 1,016 Year Ended December 31, 2018 Mainline Regional Horizon Consolidating & Other (a) Air Group Adjusted (b) Special Items (c) Consolidated Operating Revenues Passenger revenues 6,474 1,157 — — 7,631 — 7,631 CPA revenues — — 508 (508) — — — Mileage Plan other revenue 397 37 — — 434 — 434 Cargo and other 192 3 4 — 199 — 199 Total Operating Revenues 7,063 1,197 512 (508) 8,264 — 8,264 Operating Expenses Non-fuel operating expenses 4,577 1,024 465 (513) 5,553 132 5,685 Fuel expense 1,652 262 — — 1,914 22 1,936 Total Operating Expenses 6,229 1,286 465 (513) 7,467 154 7,621 Total Non-operating Income (Expense) (25) (11) (20) (2) (58) — (58) Income (Loss) Before Income Tax $ 809 $ (100) $ 27 $ 3 $ 739 $ (154) $ 585 (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 excludes certain income and charges. (c) Includes payroll support program grant wage offsets, special items and mark-to-market fuel-hedge accounting adjustments. 2020 2019 2018 Depreciation and amortization: Mainline $ 346 $ 337 $ 316 Horizon 74 86 82 Consolidated $ 420 $ 423 $ 398 Capital expenditures: Mainline $ 194 $ 605 $ 571 Horizon 12 91 389 Consolidated $ 206 $ 696 $ 960 Total assets at end of period: Mainline $ 19,754 $ 19,207 Horizon 1,170 1,266 Consolidating & Other (6,878) (7,480) Consolidated $ 14,046 $ 12,993 |
GENERAL AND SUMMARY OF SIGNIF_4
GENERAL AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CASH AND CASH EQUIVALENTS (Details) - USD ($) $ in Millions | Dec. 31, 2020 | Dec. 31, 2019 |
Accounting Policies [Abstract] | ||
Negative cash balance | $ 5 | $ 7 |
GENERAL AND SUMMARY OF SIGNIF_5
GENERAL AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - INVENTORIES AND SUPPLIES - NET (Details) - USD ($) $ in Millions | Dec. 31, 2020 | Dec. 31, 2019 |
Accounting Policies [Abstract] | ||
Allowance for all non-surplus expendable inventories | $ 46 | $ 41 |
Fuel inventory | $ 15 | $ 28 |
GENERAL AND SUMMARY OF SIGNIF_6
GENERAL AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - PROPERTY, EQUIPMENT AND DEPRECIATION (Details) | 12 Months Ended |
Dec. 31, 2020 | |
Buildings [Member] | |
Property, Plant and Equipment [Line Items] | |
Property, Plant, and Equipment, Salvage Value, Percentage | 0.00% |
Buildings [Member] | Minimum [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life | 25 years |
Buildings [Member] | Maximum [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life | 30 years |
Minor building and land improvements [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life | 10 years |
Property, Plant, and Equipment, Salvage Value, Percentage | 0.00% |
Leaseholds and Leasehold Improvements [Member] | Minimum [Member] | |
Property, Plant and Equipment [Line Items] | |
Property, Plant, and Equipment, Salvage Value, Percentage | 0.00% |
Leaseholds and Leasehold Improvements [Member] | Maximum [Member] | |
Property, Plant and Equipment [Line Items] | |
Property, Plant, and Equipment, Salvage Value, Percentage | 10.00% |
Computer hardware and software [Member] | |
Property, Plant and Equipment [Line Items] | |
Property, Plant, and Equipment, Salvage Value, Percentage | 0.00% |
Computer hardware and software [Member] | Minimum [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life | 3 years |
Computer hardware and software [Member] | Maximum [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life | 10 years |
Other furniture and equipment [Member] | |
Property, Plant and Equipment [Line Items] | |
Property, Plant, and Equipment, Salvage Value, Percentage | 0.00% |
Other furniture and equipment [Member] | Minimum [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life | 5 years |
Other furniture and equipment [Member] | Maximum [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life | 10 years |
B737 | Aircraft [Member] | |
Property, Plant and Equipment [Line Items] | |
Property, Plant, and Equipment, Salvage Value, Percentage | 10.00% |
B737 | Aircraft [Member] | Minimum [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life | 20 years |
B737 | Aircraft [Member] | Maximum [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life | 25 years |
Airbus | Aircraft [Member] | |
Property, Plant and Equipment [Line Items] | |
Property, Plant, and Equipment, Salvage Value, Percentage | 10.00% |
Airbus | Aircraft [Member] | Minimum [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life | 20 years |
Airbus | Aircraft [Member] | Maximum [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life | 25 years |
E175 [Member] | Aircraft [Member] | |
Property, Plant and Equipment [Line Items] | |
Property, Plant, and Equipment, Salvage Value, Percentage | 10.00% |
E175 [Member] | Aircraft [Member] | Minimum [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life | 20 years |
E175 [Member] | Aircraft [Member] | Maximum [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life | 25 years |
Q400 | Aircraft [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life | 15 years |
Property, Plant, and Equipment, Salvage Value, Percentage | 10.00% |
GENERAL AND SUMMARY OF SIGNIF_7
GENERAL AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - ADVERTISING EXPENSES (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Accounting Policies [Abstract] | |||
Advertising Expense | $ 41 | $ 72 | $ 79 |
GENERAL AND SUMMARY OF SIGNIF_8
GENERAL AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES GENERAL AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - STOCK-BASED COMPENSATION (Details) | 12 Months Ended |
Dec. 31, 2020 | |
Employee stock purchase plan [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Share-based Compensation Arrangement by Share-based Payment Award, Discount from Market Price, Purchase Date | 15.00% |
GENERAL AND SUMMARY OF SIGNIF_9
GENERAL AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - MAINTENANCE DEPOSITS (Details) - USD ($) $ in Millions | Dec. 31, 2020 | Dec. 31, 2019 |
Accounting Policies [Abstract] | ||
Aircraft Maintenance Deposits | $ 242 | $ 143 |
GENERAL AND SUMMARY OF SIGNI_10
GENERAL AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - LEASE RETURN PROVISION (Details) $ in Millions | Dec. 31, 2020USD ($) |
Accounting Policies [Abstract] | |
Lease Return Provision, Current | $ (54) |
Lease Return Provision, Non-Current | $ (246) |
COVID-19 PANDEMIC (Details)
COVID-19 PANDEMIC (Details) $ in Millions | 12 Months Ended |
Dec. 31, 2020USD ($) | |
Impaired Long-Lived Assets Held and Used [Line Items] | |
Asset Impairment Charges | $ 3 |
Operating Lease, Impairment Loss | 154 |
Inventory Write-down | 2 |
Asset Impairment Charges | 363 |
Impairment of Long-Lived Assets Held-for-use | 204 |
Airbus | |
Impaired Long-Lived Assets Held and Used [Line Items] | |
Asset Impairment Charges | 0 |
Operating Lease, Impairment Loss | 154 |
Inventory Write-down | 2 |
Asset Impairment Charges | 302 |
Impairment of Long-Lived Assets Held-for-use | 146 |
Q400 | |
Impaired Long-Lived Assets Held and Used [Line Items] | |
Asset Impairment Charges | 3 |
Operating Lease, Impairment Loss | 0 |
Inventory Write-down | 0 |
Asset Impairment Charges | 61 |
Impairment of Long-Lived Assets Held-for-use | $ 58 |
COVID-19 PANDEMIC NARRATIVE (De
COVID-19 PANDEMIC NARRATIVE (Details) | 12 Months Ended | 60 Months Ended | ||||||
Dec. 31, 2020USD ($)aircraftshares | Dec. 31, 2019USD ($) | Dec. 31, 2018USD ($) | Apr. 22, 2030 | Feb. 05, 2021USD ($) | Jan. 15, 2021USD ($)shares | Dec. 24, 2020$ / shares | Apr. 23, 2020$ / shares | |
Concentration Risk [Line Items] | ||||||||
Number of Mainline Aircraft Parked | aircraft | 32 | |||||||
Asset Impairment Charges | $ 363,000,000 | |||||||
Leased Aircraft Return Costs | 209,000,000 | |||||||
Impairment of Intangible Assets, Finite-lived | 10 | |||||||
Restructuring Charges | 220,000,000 | $ 0 | $ 0 | |||||
Restructuring Reserve | 127,000,000 | |||||||
Aircraft Purchase Deposit, Write-off | 15,000,000 | |||||||
Accounts Receivable, Allowance for Credit Loss, Writeoff | 5,000,000 | |||||||
Special Items - Impairment charges and other | 627,000,000 | 0 | $ 0 | |||||
Total Expected Relief from PSP of CARES Act | 1,100,000,000 | |||||||
Unsecured Term Loan through PSP of CARES Act | 290,000,000 | $ 0 | ||||||
Line of credit facility, borrowing capacity | 461,000,000 | |||||||
Proceeds from Lines of Credit | 400,000,000 | |||||||
CARES Act Payroll Tax Relief | 29,000,000 | |||||||
Adjustments to Additional Paid in Capital, Warrant Issued | 14,000,000 | |||||||
Proceeds From Payroll Support Program Grant | $ 753,000,000 | |||||||
Airbus | ||||||||
Concentration Risk [Line Items] | ||||||||
Aircraft Permanently Parked | aircraft | 40 | |||||||
Asset Impairment Charges | $ 302,000,000 | |||||||
Q400 | ||||||||
Concentration Risk [Line Items] | ||||||||
Asset Impairment Charges | 61,000,000 | |||||||
ALK Common Stock Warrant | ||||||||
Concentration Risk [Line Items] | ||||||||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ / shares | $ 52.25 | $ 31.61 | ||||||
Subsequent Event | ||||||||
Concentration Risk [Line Items] | ||||||||
Unsecured Term Loan through PSP of CARES Act | $ 130,000,000 | $ 51,000,000 | ||||||
Total Relief from Extension of PSP | $ 546,000,000 | |||||||
Subsequent Event | ALK Common Stock Warrant | ||||||||
Concentration Risk [Line Items] | ||||||||
Class of Warrant or Right, Number of Securities Called by Warrants or Rights | shares | 101,227 | |||||||
Subsequent Event | Alaska Airlines and Horizon Air | ||||||||
Concentration Risk [Line Items] | ||||||||
PSP Installments Received | $ 266,000,000 | |||||||
Subsequent Event | McGee Air Services | ||||||||
Concentration Risk [Line Items] | ||||||||
PSP Installments Received | $ 6,000,000 | |||||||
CARES Act PSP Term Loan | ||||||||
Concentration Risk [Line Items] | ||||||||
Adjustments to Additional Paid in Capital, Warrant Issued | 8,000,000 | |||||||
US Treasury CARES Act Loan | ||||||||
Concentration Risk [Line Items] | ||||||||
Line of credit facility, borrowing capacity | 1,900,000,000 | |||||||
Proceeds from Lines of Credit | $ 135,000,000 | |||||||
Class of Warrant or Right, Number of Securities Called by Warrants or Rights | shares | 427,080 | |||||||
Adjustments to Additional Paid in Capital, Warrant Issued | $ 6,000,000 | |||||||
CARES Act Unsecured Interest Rate | ||||||||
Concentration Risk [Line Items] | ||||||||
Debt Instrument, Interest Rate, Stated Percentage | 1.00% | |||||||
CARES Act Unsecured Interest Rate | Subsequent Event | ||||||||
Concentration Risk [Line Items] | ||||||||
Debt Instrument, Basis Spread on Variable Rate | 2.00% |
REVENUE FROM CONTRACTS WITH C_3
REVENUE FROM CONTRACTS WITH CUSTOMERS (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Cargo and Other Revenue [Member] | |||
Disaggregation of Revenue [Line Items] | |||
Revenue from Contract with Customer, Excluding Assessed Tax | $ 173 | $ 221 | $ 199 |
Passenger Revenue [Member] | |||
Disaggregation of Revenue [Line Items] | |||
Revenue from Contract with Customer, Excluding Assessed Tax | 3,019 | 8,095 | 7,631 |
Passenger [Member] | Cargo and Other Revenue [Member] | |||
Disaggregation of Revenue [Line Items] | |||
Revenue from Contract with Customer, Excluding Assessed Tax | 112 | 133 | 129 |
Passenger Tickets [Member] | Passenger Revenue [Member] | |||
Disaggregation of Revenue [Line Items] | |||
Revenue from Contract with Customer, Excluding Assessed Tax | 2,428 | 6,824 | 6,482 |
Passenger Ancillary Services [Member] | Passenger Revenue [Member] | |||
Disaggregation of Revenue [Line Items] | |||
Revenue from Contract with Customer, Excluding Assessed Tax | 245 | 567 | 530 |
Mileage Plan Services [Member] | Passenger Revenue [Member] | |||
Disaggregation of Revenue [Line Items] | |||
Revenue from Contract with Customer, Excluding Assessed Tax | 346 | 704 | 619 |
Mileage Plan Services, Other [Member] | |||
Disaggregation of Revenue [Line Items] | |||
Revenue from Contract with Customer, Excluding Assessed Tax | 374 | 465 | 434 |
Other Services [Member] | Cargo and Other Revenue [Member] | |||
Disaggregation of Revenue [Line Items] | |||
Revenue from Contract with Customer, Excluding Assessed Tax | $ 61 | $ 88 | $ 70 |
REVENUE FROM CONTRACTS WITH C_4
REVENUE FROM CONTRACTS WITH CUSTOMERS Contract Liabilities Activity (Details) - Mileage Plan Revenue [Member] - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Contract with Customer, Liability | $ 2,277 | $ 1,990 | $ 1,874 |
Contract with Customer, Liability, Increase From Issuance of Credits | 656 | 931 | |
Mileage Plan Services, Other [Member] | |||
Contract with Customer, Liability, Revenue Recognized | (23) | (111) | |
Passenger Services [Member] | |||
Contract with Customer, Liability, Revenue Recognized | $ (346) | $ (704) |
REVENUE FROM CONTRACTS WITH C_5
REVENUE FROM CONTRACTS WITH CUSTOMERS Narrative (Details) $ in Millions | 12 Months Ended | ||
Dec. 31, 2020USD ($)agreement | Dec. 31, 2019USD ($) | Dec. 31, 2018USD ($) | |
Deferred Revenue Arrangement [Line Items] | |||
Percent of Mileage Breakage | 17.40% | 17.40% | |
Contract cost recognized | $ 43 | $ 208 | $ 217 |
Receivable | $ 480 | 323 | |
Number of Partner AIrlines | agreement | 17 | ||
Deferred Revenue, Refund Payments | $ 600 | ||
COVID-19 Credits Issued, Balance | 569 | ||
COVID-19 Related Credits Issued | 1,000 | ||
Credit Card Receivables | 83 | 212 | |
Prepaid Expenses and Other Current Assets [Member] | |||
Deferred Revenue Arrangement [Line Items] | |||
Capitalized Contract Cost, Net | 24 | 27 | |
Passenger Revenue [Member] | |||
Deferred Revenue Arrangement [Line Items] | |||
Contract with Customer, Liability, Revenue Recognized | 502 | 577 | |
Mileage Plan Revenue [Member] | |||
Deferred Revenue Arrangement [Line Items] | |||
Receivable | $ 48 | $ 105 |
DERIVATIVE INSTRUMENTS - BALANC
DERIVATIVE INSTRUMENTS - BALANCE SHEET CLASSIFICATION (Details) - USD ($) $ in Millions | Dec. 31, 2020 | Dec. 31, 2019 |
Derivatives, Fair Value [Line Items] | ||
Accumulated other comprehensive loss | $ (494) | $ (465) |
Fuel hedge contracts [Member] | Derivative Instruments Not Designated as Hedges [Member] | Fuel Hedge Contracts, Current [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Derivative Assets, Current | 11 | 8 |
Fuel hedge contracts [Member] | Derivative Instruments Not Designated as Hedges [Member] | Fuel Hedge Contracts, Noncurrent [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Derivative Assets, Noncurrent | 4 | 3 |
Interest rate swaps agreements [Member] | Derivative Instruments Designated as Hedges [Member] | Prepaid Expenses and Other Current Assets [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Derivative Assets, Current | 0 | 1 |
Interest rate swaps agreements [Member] | Derivative Instruments Designated as Hedges [Member] | Other Noncurrent Assets [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Derivative Assets, Noncurrent | 0 | 2 |
Interest rate swaps agreements [Member] | Derivative Instruments Designated as Hedges [Member] | Other Accrued Liabilities [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Derivative Liabilities, Current | (10) | (5) |
Interest rate swaps agreements [Member] | Derivative Instruments Designated as Hedges [Member] | Other Liabilities [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Derivative Liabilities, Noncurrent | (15) | (5) |
Interest rate swaps agreements [Member] | Derivative Instruments Designated as Hedges [Member] | Accumulated Other Comprehensive Loss [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Accumulated other comprehensive loss | $ (21) | $ (13) |
DERIVATIVE INSTRUMENTS - INCOME
DERIVATIVE INSTRUMENTS - INCOME STATEMENT (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Gains (losses) recognized in interest income [Member] | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Loss expected to be reclassified | $ 10 | ||
Derivative Instruments Not Designated as Hedges [Member] | Fuel hedge contracts [Member] | Gains (losses) recognized in aircraft fuel expense [Member] | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Losses recognized in income | (10) | $ (10) | $ 1 |
Cash Flow Hedging [Member] | Derivative Instruments Designated as Hedges [Member] | Interest rate swaps agreements [Member] | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Losses in accumulated other comprehensive loss | (21) | (13) | 0 |
Cash Flow Hedging [Member] | Derivative Instruments Designated as Hedges [Member] | Interest rate swaps agreements [Member] | Gains (losses) recognized in aircraft rent [Member] | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Losses recognized in income | $ (3) | $ (3) | $ (3) |
DERIVATIVE INSTRUMENTS - FAIR V
DERIVATIVE INSTRUMENTS - FAIR VALUE OF HEDGE POSITIONS (Details) gallons in Millions, $ in Millions | 12 Months Ended | ||
Dec. 31, 2020USD ($)gallonsaircraftnumberOfInterestRateSwaps | Dec. 31, 2019USD ($) | Dec. 31, 2018USD ($) | |
Derivative Instruments, Gain (Loss) [Line Items] | |||
Payments for (Proceeds from) Hedge, Investing Activities | $ 14 | $ 19 | $ (21) |
Interest Income [Member] | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Price Risk Cash Flow Hedge Unrealized Gain (Loss) to be Reclassified During Next 12 Months | $ (10) | ||
B737-800 [Member] | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Capital Leased Assets, Number of Units | aircraft | 1 | ||
Fuel hedge contracts [Member] | Derivative Instruments Not Designated as Hedges [Member] | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Derivative, Nonmonetary Notional Amount | gallons | 300 | ||
Interest rate swaps agreements [Member] | Secured Debt [Member] | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Derivative, Notional Amount | $ 614 | ||
Number of interest rate swap agreements | numberOfInterestRateSwaps | 13 |
FAIR VALUE MEASUREMENTS - FAIR
FAIR VALUE MEASUREMENTS - FAIR VALUE OF ASSETS AND LIABILITIES (Details) - USD ($) $ in Millions | Dec. 31, 2020 | Dec. 31, 2019 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Marketable securities | $ 1,944 | |
Fair Value, Measurements, Recurring [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale Securities | 1,976 | $ 1,300 |
Derivative instruments, assets | 1,991 | 1,314 |
Derivative instruments, liabilities | (25) | (10) |
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 1 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale Securities | 414 | 336 |
Derivative instruments, assets | 414 | 336 |
Derivative instruments, liabilities | 0 | 0 |
Fair Value, Measurements, Recurring [Member] | Level 2 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale Securities | 1,562 | 964 |
Derivative instruments, assets | 1,577 | 978 |
Derivative instruments, liabilities | (25) | (10) |
Fair Value, Measurements, Recurring [Member] | Fuel hedge contracts [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative instruments, assets | 15 | 11 |
Fair Value, Measurements, Recurring [Member] | Fuel hedge contracts [Member] | Fair Value, Inputs, Level 1 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative instruments, assets | 0 | 0 |
Fair Value, Measurements, Recurring [Member] | Fuel hedge contracts [Member] | Level 2 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative instruments, assets | 15 | 11 |
Fair Value, Measurements, Recurring [Member] | Interest rate swaps agreements [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative instruments, assets | 0 | 3 |
Derivative instruments, liabilities | (25) | (10) |
Fair Value, Measurements, Recurring [Member] | Interest rate swaps agreements [Member] | Fair Value, Inputs, 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 |
Fair Value, Measurements, Recurring [Member] | Interest rate swaps agreements [Member] | Level 2 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative instruments, assets | 0 | 3 |
Derivative instruments, liabilities | (25) | (10) |
Fair Value, Measurements, Recurring [Member] | US Treasury and Government [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale Securities | 407 | 330 |
Fair Value, Measurements, Recurring [Member] | US Treasury and Government [Member] | Fair Value, Inputs, Level 1 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale Securities | 407 | 330 |
Fair Value, Measurements, Recurring [Member] | US Treasury and Government [Member] | Level 2 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale Securities | 0 | 0 |
Fair Value, Measurements, Recurring [Member] | Debt Security, Government, Non-US [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale Securities | 20 | 31 |
Fair Value, Measurements, Recurring [Member] | Debt Security, Government, Non-US [Member] | Fair Value, Inputs, Level 1 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale Securities | 0 | 0 |
Fair Value, Measurements, Recurring [Member] | Debt Security, Government, Non-US [Member] | Level 2 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale Securities | 20 | 31 |
Fair Value, Measurements, Recurring [Member] | Asset-backed Securities, Securitized Loans and Receivables [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale Securities | 224 | 211 |
Fair Value, Measurements, Recurring [Member] | Asset-backed Securities, Securitized Loans and Receivables [Member] | Fair Value, Inputs, Level 1 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale Securities | 0 | 0 |
Fair Value, Measurements, Recurring [Member] | Asset-backed Securities, Securitized Loans and Receivables [Member] | Level 2 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale Securities | 224 | 211 |
Fair Value, Measurements, Recurring [Member] | Collateralized Mortgage Backed Securities [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale Securities | 290 | 176 |
Fair Value, Measurements, Recurring [Member] | Collateralized Mortgage Backed Securities [Member] | Fair Value, Inputs, Level 1 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale Securities | 0 | 0 |
Fair Value, Measurements, Recurring [Member] | Collateralized Mortgage Backed Securities [Member] | Level 2 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale Securities | 290 | 176 |
Fair Value, Measurements, Recurring [Member] | Corporate Debt Securities [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale Securities | 978 | 523 |
Fair Value, Measurements, Recurring [Member] | Corporate Debt Securities [Member] | Fair Value, Inputs, Level 1 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale Securities | 0 | 0 |
Fair Value, Measurements, Recurring [Member] | Corporate Debt Securities [Member] | Level 2 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale Securities | 978 | 523 |
Fair Value, Measurements, Recurring [Member] | US States and Political Subdivisions Debt Securities [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale Securities | 50 | 23 |
Fair Value, Measurements, Recurring [Member] | US States and Political Subdivisions Debt Securities [Member] | Fair Value, Inputs, Level 1 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale Securities | 0 | 0 |
Fair Value, Measurements, Recurring [Member] | US States and Political Subdivisions Debt Securities [Member] | Level 2 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale Securities | 50 | 23 |
Fair Value, Measurements, Recurring [Member] | Equity funds [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale Securities | 7 | 6 |
Fair Value, Measurements, Recurring [Member] | Equity funds [Member] | Fair Value, Inputs, Level 1 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale Securities | 7 | 6 |
Fair Value, Measurements, Recurring [Member] | Equity funds [Member] | Level 2 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale Securities | $ 0 | $ 0 |
FAIR VALUE MEASUREMENTS FAIR VA
FAIR VALUE MEASUREMENTS FAIR VALUE MEASUREMENTS - CASH, CASH EQUIVALENTS AND MARKETABLE SECURITIES (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Debt Securities, Available-for-sale [Line Items] | |||
Sales and maturities of marketable securities | $ 2,318 | $ 1,674 | $ 1,116 |
FAIR VALUE MEASUREMENTS FAIR _2
FAIR VALUE MEASUREMENTS FAIR VALUE MEASUREMENTS - CASH, CASH EQUIVALENTS AND MARKETABLE SECURITIES - MATURITIES (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Cash, Cash Equivalents, and Short-term Investments [Abstract] | |||
Sales and maturities of marketable securities | $ 2,318 | $ 1,674 | $ 1,116 |
Debt Securities, Available-for-sale, Fair Value, Fiscal Year Maturity [Abstract] | |||
Due in one year or less | 777 | ||
Due after one year through five years | 1,175 | ||
Due after five years through 10 years | 24 | ||
Debt Securities, Available-for-sale, Total | 1,976 | ||
Debt Securities, Available-for-sale, Amortized Cost, Fiscal Year Maturity [Abstract] | |||
Due in one year or less | 775 | ||
Due after one year through five years | 1,146 | ||
Due after five years through 10 years | 23 | ||
Marketable securities | $ 1,944 |
FAIR VALUE MEASUREMENTS - LONG-
FAIR VALUE MEASUREMENTS - LONG-TERM DEBT (Details) - USD ($) $ in Millions | Dec. 31, 2020 | Dec. 31, 2019 |
Level 3 [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Long-term Debt, Fair Value | $ 488 | |
Carrying Amount [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Long-term debt | 1,662 | $ 475 |
Fair Value [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Long-term debt | $ 1,778 | $ 483 |
LONG-TERM DEBT - SCHEDULE OF LO
LONG-TERM DEBT - SCHEDULE OF LONG-TERM DEBT (Details) - USD ($) $ in Millions | 12 Months Ended | 60 Months Ended | ||||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Apr. 22, 2030 | Feb. 05, 2021 | Jan. 15, 2021 | |
Debt Instrument [Line Items] | ||||||
Long-term Debt | $ 3,495 | $ 1,499 | ||||
Less debt issuance costs and unamortized debt discount | (33) | (8) | ||||
Less current portion | 1,138 | 235 | ||||
Long-term debt, net of current portion | $ 2,357 | $ 1,264 | ||||
Weighted-average fixed-interest rate | 4.30% | 3.30% | ||||
Weighted-average variable-interest rate | 1.90% | 2.90% | ||||
Proceeds from issuance of long-term debt, net of issuance costs | $ 2,564 | $ 450 | $ 339 | |||
Long-term debt payments | 565 | 1,058 | $ 807 | |||
Repayments of debt | 314 | |||||
Long-term Debt, Fiscal Year Maturity [Abstract] | ||||||
2021 | 1,145 | |||||
2022 | 371 | |||||
2023 | 334 | |||||
2024 | 240 | |||||
2025 | 396 | |||||
Thereafter | 1,042 | |||||
Long-term Debt | 3,528 | |||||
Unsecured Term Loan through PSP of CARES Act | 290 | 0 | ||||
Adjustments to Additional Paid in Capital, Warrant Issued | $ 14 | |||||
Long-term Debt, Weighted Average Interest Rate, at Point in Time | 3.30% | |||||
Adjustments to Additional Paid in Capital, Warrant Issued | $ 14 | |||||
Subsequent Event | ||||||
Long-term Debt, Fiscal Year Maturity [Abstract] | ||||||
Unsecured Term Loan through PSP of CARES Act | $ 130 | $ 51 | ||||
Aircraft Type [Domain] | ||||||
Long-term Debt, Fiscal Year Maturity [Abstract] | ||||||
Debt Instrument, Collateral | 32 | |||||
Debt Instrument, Collateral | 32 | |||||
Fixed-rate notes payable due through 2029 | ||||||
Debt Instrument [Line Items] | ||||||
Long-term Debt | $ 198 | 475 | ||||
Variable-rate notes payable due through 2029 | ||||||
Debt Instrument [Line Items] | ||||||
Long-term Debt | 1,032 | |||||
Variable Rate Notes Payable due through 2029 | ||||||
Debt Instrument [Line Items] | ||||||
Long-term Debt | 1,866 | |||||
Long-term Debt, Fiscal Year Maturity [Abstract] | ||||||
Proceeds from Issuance of Long-term Debt | 589 | |||||
Proceeds from Issuance of Long-term Debt | 589 | |||||
July 2020 EETC | ||||||
Debt Instrument [Line Items] | ||||||
Long-term Debt | $ 1,174 | $ 0 | ||||
July 2020 EETC | B737 | Aircraft Type [Domain] | ||||||
Long-term Debt, Fiscal Year Maturity [Abstract] | ||||||
Debt Instrument, Collateral | 42 | |||||
Debt Instrument, Collateral | 42 | |||||
July 2020 EETC | E175 [Member] | Aircraft Type [Domain] | ||||||
Long-term Debt, Fiscal Year Maturity [Abstract] | ||||||
Debt Instrument, Collateral | 19 | |||||
Debt Instrument, Collateral | 19 | |||||
US Treasury CARES Act Loan | ||||||
Long-term Debt, Fiscal Year Maturity [Abstract] | ||||||
Adjustments to Additional Paid in Capital, Warrant Issued | $ 6 | |||||
Adjustments to Additional Paid in Capital, Warrant Issued | $ 6 | |||||
US Treasury CARES Act Loan | Aircraft Type [Domain] | ||||||
Long-term Debt, Fiscal Year Maturity [Abstract] | ||||||
Debt Instrument, Collateral | 34 | |||||
Debt Instrument, Collateral | 34 | |||||
US Treasury CARES Act Loan | 3724 Aircraft Engines and Engine Parts | ||||||
Long-term Debt, Fiscal Year Maturity [Abstract] | ||||||
Debt Instrument, Collateral | 15 | |||||
Debt Instrument, Collateral | 15 | |||||
CARES Act Unsecured Interest Rate | ||||||
Long-term Debt, Fiscal Year Maturity [Abstract] | ||||||
Debt Instrument, Interest Rate, Stated Percentage | 1.00% | |||||
Debt Instrument, Interest Rate, Stated Percentage | 1.00% | |||||
CARES Act Unsecured Interest Rate | Subsequent Event | ||||||
Long-term Debt, Fiscal Year Maturity [Abstract] | ||||||
Debt Instrument, Basis Spread on Variable Rate | 2.00% | |||||
Debt Instrument, Basis Spread on Variable Rate | 2.00% |
LONG-TERM DEBT LONG-TERM DEBT -
LONG-TERM DEBT LONG-TERM DEBT - SECURED DEBT (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Debt Instrument [Line Items] | |||
Debt instrument, increase (decrease) | $ 2,000 | ||
Long-term Debt | 3,495 | $ 1,499 | |
Long-term debt payments | 565 | 1,058 | $ 807 |
Repayments of debt | 314 | ||
Proceeds from Issuance of Debt | $ 2,564 | $ 450 | $ 339 |
LONG-TERM DEBT - LINE OF CREDIT
LONG-TERM DEBT - LINE OF CREDIT (Details) | 12 Months Ended | |||
Dec. 31, 2020USD ($)credit_facility | Sep. 30, 2020USD ($) | Sep. 01, 2020USD ($) | Jun. 30, 2020USD ($) | |
Line of Credit Facility [Line Items] | ||||
Line of credit facility, borrowing capacity | $ 461,000,000 | |||
Number of credit facilities | credit_facility | 3 | |||
Line of Credit Facility, Periodic Payment, Principal | $ 37,000,000 | |||
Proceeds from Lines of Credit | 400,000,000 | |||
Credit Facility 1 [Member] | ||||
Line of Credit Facility [Line Items] | ||||
Line of credit facility, asset restrictions, unrestricted cash and marketable securities | $ 500,000,000 | |||
Credit Facility 1 [Member] | Secured by aircraft [Member] | ||||
Line of Credit Facility [Line Items] | ||||
Line of credit facility, borrowing capacity | $ 250,000,000 | |||
Number of credit facilities | credit_facility | 1 | |||
Credit Facility 2 [Member] | Secured by other [Member] | ||||
Line of Credit Facility [Line Items] | ||||
Line of credit facility, borrowing capacity | $ 120,000,000 | $ 150,000,000 | ||
Credit Facility 3 [Member] | Secured by aircraft [Member] | ||||
Line of Credit Facility [Line Items] | ||||
Line of credit facility, borrowing capacity | $ 91,000,000 | |||
US Treasury CARES Act Loan | ||||
Line of Credit Facility [Line Items] | ||||
Line of credit facility, borrowing capacity | 1,900,000,000 | |||
Proceeds from Lines of Credit | $ 135,000,000 |
LEASES - NARRATIVE (Details)
LEASES - NARRATIVE (Details) $ in Millions | 12 Months Ended | ||
Dec. 31, 2020USD ($)aircraft | Dec. 31, 2019USD ($) | Dec. 31, 2018USD ($) | |
Lessee, Lease, Description [Line Items] | |||
Sublease Income | $ 14 | $ 13 | |
Right-of-Use Asset Obtained in Exchange for Operating Lease Liability | 81 | ||
Operating Lease, Payments | 302 | ||
Rent expense | $ 619 | ||
Lessor, Operating Lease, Lease Not yet Commenced, Assumption and Judgment, Value of Underlying Asset, Amount | $ 453 | ||
Property Subject to Operating Lease [Member] | Airbus | |||
Lessee, Lease, Description [Line Items] | |||
Operating leases, number of leased assets (in aircraft) | aircraft | 71 | ||
Property Subject to Operating Lease [Member] | Q400 | |||
Lessee, Lease, Description [Line Items] | |||
Operating leases, number of leased assets (in aircraft) | aircraft | 7 | ||
Property Subject to Operating Lease [Member] | E175 [Member] | |||
Lessee, Lease, Description [Line Items] | |||
Operating leases, number of leased assets (in aircraft) | aircraft | 32 | ||
Property Subject to Operating Lease [Member] | B737 | |||
Lessee, Lease, Description [Line Items] | |||
Operating leases, number of leased assets (in aircraft) | aircraft | 10 | ||
Airport Facilities [Member] | |||
Lessee, Lease, Description [Line Items] | |||
Variable Lease, Cost | $ 286 | 322 | |
Aircraft Leases [Member] | Maximum [Member] | |||
Lessee, Lease, Description [Line Items] | |||
Lessee, Operating Lease, Term of Contract | 11 years | ||
Corporate real estate [Member] | |||
Lessee, Lease, Description [Line Items] | |||
Variable Lease, Cost | $ 12 | $ 10 | |
CPA Aircraft [Member] | Maximum [Member] | |||
Lessee, Lease, Description [Line Items] | |||
Lessee, Operating Lease, Term of Contract | 10 years | ||
CPA Aircraft [Member] | Minimum [Member] | |||
Lessee, Lease, Description [Line Items] | |||
Lessee, Operating Lease, Term of Contract | 6 years 6 months |
LEASES - Schedule of Leased Ass
LEASES - Schedule of Leased Assets (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Lessee, Lease, Description [Line Items] | ||
Operating Lease, Right-of-Use Asset | $ 1,400 | $ 1,711 |
Operating Lease, Expense | 602 | 668 |
Sublease Income | (14) | (13) |
Lease, Cost | 588 | 655 |
Aircraft Leases [Member] | ||
Lessee, Lease, Description [Line Items] | ||
Operating Lease, Right-of-Use Asset | 750 | 1,049 |
Operating Lease, Cost | 215 | 246 |
CPA Aircraft [Member] | ||
Lessee, Lease, Description [Line Items] | ||
Operating Lease, Right-of-Use Asset | 579 | 596 |
Operating Lease, Cost | 80 | 79 |
Airport Facilities [Member] | ||
Lessee, Lease, Description [Line Items] | ||
Operating Lease, Right-of-Use Asset | 16 | 18 |
Operating Lease, Cost | 288 | 324 |
Corporate real estate [Member] | ||
Lessee, Lease, Description [Line Items] | ||
Operating Lease, Right-of-Use Asset | 55 | 48 |
Operating Lease, Cost | $ 19 | $ 19 |
LEASES - Lease Cost (Details)
LEASES - Lease Cost (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Lessee, Lease, Description [Line Items] | ||
Operating Lease, Expense | $ 602 | $ 668 |
Sublease Income | 14 | 13 |
Lease, Cost | 588 | 655 |
Aircraft Leases [Member] | ||
Lessee, Lease, Description [Line Items] | ||
Operating Lease, Cost | $ 215 | 246 |
Operating Lease, Weighted Average Discount Rate, Percent | 3.90% | |
Operating Lease, Weighted Average Remaining Lease Term | 6 years 4 months 24 days | |
CPA Aircraft [Member] | ||
Lessee, Lease, Description [Line Items] | ||
Operating Lease, Cost | $ 80 | 79 |
Operating Lease, Weighted Average Discount Rate, Percent | 2.70% | |
Operating Lease, Weighted Average Remaining Lease Term | 8 years 2 months 12 days | |
Airport Facilities [Member] | ||
Lessee, Lease, Description [Line Items] | ||
Operating Lease, Cost | $ 288 | 324 |
Operating Lease, Weighted Average Discount Rate, Percent | 4.10% | |
Operating Lease, Weighted Average Remaining Lease Term | 9 years 3 months 18 days | |
Corporate real estate [Member] | ||
Lessee, Lease, Description [Line Items] | ||
Operating Lease, Cost | $ 19 | $ 19 |
Operating Lease, Weighted Average Discount Rate, Percent | 4.10% | |
Operating Lease, Weighted Average Remaining Lease Term | 31 years 7 months 6 days |
LEASES - Maturity of Lease Liab
LEASES - Maturity of Lease Liabilities (Details) $ in Millions | Dec. 31, 2020USD ($) |
Aircraft Leases [Member] | |
Lessee, Lease, Description [Line Items] | |
Lessee, Operating Lease, Liability, Payments, Due Next Twelve Months | $ 244 |
Lessee, Operating Lease, Liability, Payments, Due Year Two | 195 |
Lessee, Operating Lease, Liability, Payments, Due Year Three | 135 |
Lessee, Operating Lease, Liability, Payments, Due Year Four | 83 |
Lessee, Operating Lease, Liability, Payments, Due Year Five | 76 |
Lessee, Operating Lease, Liability, Payments, Due after Year Five | 257 |
Lessee, Operating Lease, Liability, Payments, Due | 990 |
Lessee, Operating Lease, Liability, Undiscounted Excess Amount | 114 |
Operating Lease, Liability | 876 |
CPA Aircraft [Member] | |
Lessee, Lease, Description [Line Items] | |
Lessee, Operating Lease, Liability, Payments, Due Next Twelve Months | 84 |
Lessee, Operating Lease, Liability, Payments, Due Year Two | 84 |
Lessee, Operating Lease, Liability, Payments, Due Year Three | 84 |
Lessee, Operating Lease, Liability, Payments, Due Year Four | 84 |
Lessee, Operating Lease, Liability, Payments, Due Year Five | 84 |
Lessee, Operating Lease, Liability, Payments, Due after Year Five | 261 |
Lessee, Operating Lease, Liability, Payments, Due | 681 |
Lessee, Operating Lease, Liability, Undiscounted Excess Amount | 71 |
Operating Lease, Liability | 610 |
Airport Facilities [Member] | |
Lessee, Lease, Description [Line Items] | |
Operating Leases, Future Minimum Payments, Next Rolling Twelve Months | 2 |
Lessee, Operating Lease, Liability, Payments, Due Year Two | 2 |
Lessee, Operating Lease, Liability, Payments, Due Year Three | 2 |
Lessee, Operating Lease, Liability, Payments, Due Year Four | 2 |
Lessee, Operating Lease, Liability, Payments, Due Year Five | 2 |
Lessee, Operating Lease, Liability, Payments, Due after Year Five | 9 |
Lessee, Operating Lease, Liability, Payments, Due | 19 |
Lessee, Operating Lease, Liability, Undiscounted Excess Amount | 3 |
Operating Lease, Liability | 16 |
Corporate real estate [Member] | |
Lessee, Lease, Description [Line Items] | |
Operating Leases, Future Minimum Payments, Next Rolling Twelve Months | 8 |
Lessee, Operating Lease, Liability, Payments, Due Year Two | 7 |
Lessee, Operating Lease, Liability, Payments, Due Year Three | 7 |
Lessee, Operating Lease, Liability, Payments, Due Year Four | 6 |
Lessee, Operating Lease, Liability, Payments, Due Year Five | 4 |
Lessee, Operating Lease, Liability, Payments, Due after Year Five | 78 |
Lessee, Operating Lease, Liability, Payments, Due | 110 |
Lessee, Operating Lease, Liability, Undiscounted Excess Amount | 54 |
Operating Lease, Liability | $ 56 |
INCOME TAXES - DEFERRED TAX ASS
INCOME TAXES - DEFERRED TAX ASSETS AND LIABILITIES (Details) - USD ($) $ in Millions | Dec. 31, 2020 | Dec. 31, 2019 |
Income Tax Disclosure [Abstract] | ||
Excess of tax over book depreciation | $ 1,126 | $ 1,233 |
Deferred Tax Liabilities, Intangible Assets | 15 | 16 |
Deferred Tax Liabilities, Other | 106 | 58 |
Gross deferred tax liabilities | 1,589 | 1,723 |
Mileage Plan | (385) | (337) |
Inventory obsolescence | (17) | (15) |
Employee benefits | (215) | (179) |
Net operating losses | (27) | (13) |
Other - net | (103) | (48) |
Deferred tax assets | (1,201) | (1,009) |
Valuation allowance | 19 | 1 |
Net deferred tax liabilities | 407 | 715 |
Operating Loss Carryforwards [Line Items] | ||
Deferred Tax Liabilities, Other Finite-Lived Assets | 342 | 416 |
Deferred Tax Assets - Leasing Arrangement | 381 | 417 |
Deferred Tax Assets, Leasehold Maintenance | (73) | $ 0 |
Federal [Member] | ||
Operating Loss Carryforwards [Line Items] | ||
Net operating loss | 644 | |
Income Taxes Receivable | 225 | |
State [Member] | ||
Operating Loss Carryforwards [Line Items] | ||
Net operating loss | 562 | |
Operating Loss, Available to Offset Prior Year Income | $ 85 |
INCOME TAXES - COMPONENTS OF TA
INCOME TAXES - COMPONENTS OF TAX EXPENSE (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Current tax expense (benefit): | |||
Federal | $ (212) | $ 26 | $ (5) |
State | (11) | 13 | 9 |
Total current | (223) | 39 | 4 |
Deferred tax expense: | |||
Federal | (246) | 175 | 125 |
State | (47) | 33 | 19 |
Total deferred | (293) | 208 | 144 |
Income tax (benefit) expense | $ (516) | $ 247 | $ 148 |
INCOME TAXES - EFFECTIVE INCOME
INCOME TAXES - EFFECTIVE INCOME TAX RECONCILIATION (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Business Acquisition [Line Items] | |||
U.S. federal tax rate | 21.00% | 35.00% | 35.00% |
Income before income tax | $ (1,840) | $ 1,016 | $ 585 |
Expected tax expense | (386) | 213 | 123 |
Nondeductible expenses | 9 | 9 | 9 |
State income taxes | (62) | 36 | 21 |
Valuation allowance | 18 | 0 | 0 |
Tax law changes | (93) | (9) | (7) |
Other—net | (2) | (2) | 2 |
Income tax (benefit) expense | $ (516) | $ 247 | $ 148 |
Effective tax rate | 28.00% | 24.30% | 25.30% |
INCOME TAXES INCOME TAXES - UNC
INCOME TAXES INCOME TAXES - UNCERTAIN TAX POSITIONS (Details) - USD ($) $ in Millions | 12 Months Ended | |||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Income Tax Contingency [Line Items] | ||||
Unrecognized Tax Benefits that Would Impact Effective Tax Rate | $ 29 | |||
Income Tax Examination, Penalties and Interest Accrued | 6 | $ 7 | $ 6 | |
Income Tax Examination, Penalties and Interest Expense | (1) | 1 | $ 1 | |
Unrecognized Tax Benefits, Decrease Resulting from Settlements with Taxing Authorities | 4 | 0 | 1 | |
Beginning balance | 40 | 40 | 43 | |
Additions related to prior years | 1 | 0 | 1 | |
Releases related to prior years | (1) | (1) | (4) | |
Additions related to current year activity | 0 | 2 | 2 | |
Releases due to settlements | (4) | 0 | (1) | |
Releases due to lapse of statute of limitations | (1) | (1) | (1) | |
Ending balance | 35 | $ 40 | $ 40 | |
State [Member] | ||||
Income Tax Contingency [Line Items] | ||||
Unrecognized Tax Benefits, Decrease Resulting from Settlements with Taxing Authorities | 5 | |||
Releases due to settlements | $ (5) |
INCOME TAXES INCOME TAXES NARRA
INCOME TAXES INCOME TAXES NARRATIVE (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | |||
Tax law changes | $ (93) | $ (9) | $ (7) |
INCOME TAXES NEW ACCOUNTING STA
INCOME TAXES NEW ACCOUNTING STANDARDS (Details) - USD ($) $ in Millions | Dec. 31, 2020 | Dec. 31, 2019 |
Other Special Items [Line Items] | ||
Deferred Tax Liabilities, Other | $ 106 | $ 58 |
Valuation allowance | $ 19 | $ 1 |
EMPLOYEE BENEFIT PLANS EMPLOYEE
EMPLOYEE BENEFIT PLANS EMPLOYEE BENEFIT PLANS - ADDITIONAL INFORMATION (Details) | 12 Months Ended |
Dec. 31, 2020plan | |
Business Acquisition [Line Items] | |
Number of Qualified Defined Benefit Plans | 4 |
Number of defined benefit plans | 1 |
Number of defined contribution plans | 7 |
EMPLOYEE BENEFIT PLANS - ASSUMP
EMPLOYEE BENEFIT PLANS - ASSUMPTIONS (Details) - Qualified Defined Benefit [Member] | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Minimum [Member] | |||
Defined Benefit Plan, Weighted Average Assumptions Used in Calculating Benefit Obligation [Abstract] | |||
Benefit obligations, Weighted-average discount rate | 2.43% | 3.33% | 4.37% |
Benefit obligations, Rate of compensation increase | 2.02% | 2.11% | 2.11% |
Defined Benefit Plan, Weighted Average Assumptions Used in Calculating Net Periodic Benefit Cost [Abstract] | |||
Net period benefit costs, Weighted-average discount rate | 3.33% | 4.37% | 3.69% |
Net period benefit costs, Weighted-average expected return on assets | 3.25% | 4.25% | 4.25% |
Net period benefit costs, Rate of compensation increase | 2.11% | 2.11% | 2.11% |
Maximum [Member] | |||
Defined Benefit Plan, Weighted Average Assumptions Used in Calculating Benefit Obligation [Abstract] | |||
Benefit obligations, Weighted-average discount rate | 2.58% | 3.47% | 4.46% |
Benefit obligations, Rate of compensation increase | 2.43% | 5.44% | 3.50% |
Defined Benefit Plan, Weighted Average Assumptions Used in Calculating Net Periodic Benefit Cost [Abstract] | |||
Net period benefit costs, Weighted-average discount rate | 3.47% | 4.46% | 3.78% |
Net period benefit costs, Weighted-average expected return on assets | 5.50% | 5.50% | 5.50% |
Net period benefit costs, Rate of compensation increase | 5.44% | 3.50% | 16.51% |
EMPLOYEE BENEFIT PLANS - PLAN A
EMPLOYEE BENEFIT PLANS - PLAN ASSETS (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Qualified Defined Benefit [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined Benefit Plan, Plan Assets, Amount | $ 2,488 | $ 2,239 | $ 1,858 |
Plan asset allocations | 100.00% | 100.00% | |
Qualified Defined Benefit [Member] | Fair Value, Inputs, Level 1 [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined Benefit Plan, Plan Assets, Amount | $ 2,386 | $ 2,126 | |
Qualified Defined Benefit [Member] | Fixed Income Securities [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Plan asset allocations | 33.00% | 35.00% | |
Qualified Defined Benefit [Member] | Credit bond index fund [Member] | Fair Value, Inputs, Level 1 [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined Benefit Plan, Plan Assets, Amount | $ 1,088 | $ 1,009 | |
Qualified Defined Benefit [Member] | Real Estate [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Plan asset allocations | 5.00% | 6.00% | |
Qualified Defined Benefit [Member] | Real Estate [Member] | Level 3 [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined Benefit Plan, Plan Assets, Amount | $ 96 | $ 102 | |
Qualified Defined Benefit [Member] | Cash Equivalents [Member] | Fair Value, Inputs, Level 1 [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined Benefit Plan, Plan Assets, Amount | $ 6 | $ 11 | |
Qualified Defined Benefit [Member] | Defined Benefit Plan, Equity Securities, US | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Plan asset allocations | 44.00% | 41.00% | |
Qualified Defined Benefit [Member] | Defined Benefit Plan, Equity Securities, US | Fair Value, Inputs, Level 1 [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined Benefit Plan, Plan Assets, Amount | $ 914 | $ 773 | |
Qualified Defined Benefit [Member] | Defined Benefit Plan, Equity Securities, Non-US | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Plan asset allocations | 18.00% | 18.00% | |
Qualified Defined Benefit [Member] | Defined Benefit Plan, Equity Securities, Non-US | Fair Value, Inputs, Level 1 [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined Benefit Plan, Plan Assets, Amount | $ 384 | $ 344 | |
Qualified Defined Benefit Plan - Salaried [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Plan asset allocations | 100.00% | 100.00% | |
Qualified Defined Benefit Plan - Salaried [Member] | Fixed Income Securities [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Plan asset allocations | 90.00% | 90.00% | |
Qualified Defined Benefit Plan - Salaried [Member] | Real Estate [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Plan asset allocations | 0.00% | 0.00% | |
Qualified Defined Benefit Plan - Salaried [Member] | Defined Benefit Plan, Equity Securities, US | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Plan asset allocations | 7.00% | 7.00% | |
Qualified Defined Benefit Plan - Salaried [Member] | Defined Benefit Plan, Equity Securities, Non-US | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Plan asset allocations | 3.00% | 3.00% | |
Minimum [Member] | Qualified Defined Benefit [Member] | Fixed Income Securities [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined Benefit Plan, Plan Assets, Investment Policy and Strategy, Description | 11 | ||
Minimum [Member] | Qualified Defined Benefit [Member] | Real Estate [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined Benefit Plan, Plan Assets, Investment Policy and Strategy, Description | — | ||
Minimum [Member] | Qualified Defined Benefit [Member] | Defined Benefit Plan, Equity Securities, US | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined Benefit Plan, Plan Assets, Investment Policy and Strategy, Description | 36 | ||
Minimum [Member] | Qualified Defined Benefit [Member] | Defined Benefit Plan, Equity Securities, Non-US | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined Benefit Plan, Plan Assets, Investment Policy and Strategy, Description | 13 | ||
Minimum [Member] | Qualified Defined Benefit Plan - Salaried [Member] | Fixed Income Securities [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined Benefit Plan, Plan Assets, Investment Policy and Strategy, Description | 85 | ||
Minimum [Member] | Qualified Defined Benefit Plan - Salaried [Member] | Real Estate [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined Benefit Plan, Plan Assets, Investment Policy and Strategy, Description | — | ||
Minimum [Member] | Qualified Defined Benefit Plan - Salaried [Member] | Defined Benefit Plan, Equity Securities, US | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined Benefit Plan, Plan Assets, Investment Policy and Strategy, Description | 2 | ||
Minimum [Member] | Qualified Defined Benefit Plan - Salaried [Member] | Defined Benefit Plan, Equity Securities, Non-US | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined Benefit Plan, Plan Assets, Investment Policy and Strategy, Description | — | ||
Maximum [Member] | Qualified Defined Benefit [Member] | Fixed Income Securities [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined Benefit Plan, Plan Assets, Investment Policy and Strategy, Description | 25 | ||
Maximum [Member] | Qualified Defined Benefit [Member] | Real Estate [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined Benefit Plan, Plan Assets, Investment Policy and Strategy, Description | 10 | ||
Maximum [Member] | Qualified Defined Benefit [Member] | Defined Benefit Plan, Equity Securities, US | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined Benefit Plan, Plan Assets, Investment Policy and Strategy, Description | 46 | ||
Maximum [Member] | Qualified Defined Benefit [Member] | Defined Benefit Plan, Equity Securities, Non-US | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined Benefit Plan, Plan Assets, Investment Policy and Strategy, Description | 23 | ||
Maximum [Member] | Qualified Defined Benefit Plan - Salaried [Member] | Fixed Income Securities [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined Benefit Plan, Plan Assets, Investment Policy and Strategy, Description | 95 | ||
Maximum [Member] | Qualified Defined Benefit Plan - Salaried [Member] | Real Estate [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined Benefit Plan, Plan Assets, Investment Policy and Strategy, Description | — | ||
Maximum [Member] | Qualified Defined Benefit Plan - Salaried [Member] | Defined Benefit Plan, Equity Securities, US | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined Benefit Plan, Plan Assets, Investment Policy and Strategy, Description | 12 | ||
Maximum [Member] | Qualified Defined Benefit Plan - Salaried [Member] | Defined Benefit Plan, Equity Securities, Non-US | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined Benefit Plan, Plan Assets, Investment Policy and Strategy, Description | 5 |
EMPLOYEE BENEFIT PLANS - FUNDED
EMPLOYEE BENEFIT PLANS - FUNDED STATUS (Details) - Qualified Defined Benefit [Member] - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Benefit obligation | |||
Beginning of year | $ 2,602 | $ 2,225 | |
Service cost | 46 | 42 | $ 48 |
Interest cost | 75 | 89 | 79 |
Actuarial (gain) loss | 339 | 359 | |
Defined Benefit Plan, Benefit Obligation, Benefits Paid | (134) | (113) | |
End of year | 2,934 | 2,602 | 2,225 |
Defined Benefit Plan Service Cost, including early-out expense | 52 | ||
Plan assets at fair value | |||
Beginning of year | 2,239 | 1,858 | |
Actual return on plan assets | 383 | 429 | |
Employer contributions | 0 | 65 | 0 |
Defined Benefit Plan, Plan Assets, Benefits Paid | (134) | (113) | |
End of year | 2,488 | 2,239 | $ 1,858 |
Funded status (unfunded) | $ (446) | $ (363) | |
Percent funded | 85.00% | 86.00% | |
Accumulated benefit obligation | $ 2,800 | $ 2,400 | |
Defined Benefit Plan, Plan Assets, Benefits Paid | $ 134 | $ 113 |
EMPLOYEE BENEFIT PLANS - AMOUNT
EMPLOYEE BENEFIT PLANS - AMOUNTS RECOGNIZED IN CONSOLIDATED BALANCE SHEETS (Details) - USD ($) $ in Millions | Dec. 31, 2020 | Dec. 31, 2019 |
Liability, Defined Benefit Plan [Abstract] | ||
Accrued benefit liability-long term | $ 665 | $ 571 |
Qualified Defined Benefit [Member] | ||
Liability, Defined Benefit Plan [Abstract] | ||
Accrued benefit liability-long term | 502 | 412 |
Plan assets-long term (within Other noncurrent assets) | (51) | (49) |
Total liability recognized | 451 | 363 |
Defined Benefit Plan, Accumulated Other Comprehensive (Income) Loss, before Tax [Abstract] | ||
Prior service credit | (5) | (6) |
Net loss | 626 | 595 |
Amount recognized in AOCL (pretax) | $ 621 | $ 589 |
EMPLOYEE BENEFIT PLANS - EXPECT
EMPLOYEE BENEFIT PLANS - EXPECTED AMORTIZATION FROM AOCI (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Qualified Defined Benefit [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined Benefit Plan, Expected Return (Loss) on Plan Assets | $ 110 | $ 95 | $ 107 |
EMPLOYEE BENEFIT PLANS - NET PE
EMPLOYEE BENEFIT PLANS - NET PENSION EXPENSE (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Defined Benefit Plan, Net Periodic Benefit Cost (Credit) [Abstract] | |||
Defined Benefit Plan, Benefit Obligation, Special and Contractual Termination Benefits | $ 11 | $ 0 | $ 0 |
Qualified Defined Benefit [Member] | |||
Defined Benefit Plan, Net Periodic Benefit Cost (Credit) [Abstract] | |||
Service cost | 46 | 42 | 48 |
Interest cost | 75 | 89 | 79 |
Defined Benefit Plan, Expected Return (Loss) on Plan Assets | 110 | 95 | 107 |
Amortization of prior service cost | (1) | (1) | (1) |
Defined Benefit Plan, Amortization of Gain (Loss) | (35) | (37) | (33) |
Net pension expense | $ 56 | $ 72 | $ 52 |
EMPLOYEE BENEFIT PLANS - FUTURE
EMPLOYEE BENEFIT PLANS - FUTURE BENEFITS EXPECTED TO BE PAID (Details) - Qualified Defined Benefit [Member] $ in Millions | Dec. 31, 2020USD ($) |
Defined Benefit Plan Disclosure [Line Items] | |
2021 | $ 123 |
2022 | 142 |
2023 | 143 |
2024 | 141 |
2025 | 157 |
2026– 2030 | $ 829 |
EMPLOYEE BENEFIT PLANS EMPLOY_2
EMPLOYEE BENEFIT PLANS EMPLOYEE BENEFIT PLANS - POSTRETIREMENT MEDICAL BENEFITS (Details) - USD ($) $ in Millions | Dec. 31, 2020 | Dec. 31, 2019 |
Postretirement Medical Benefits [Member] | ||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||
Benefit obligation | $ 138 | $ 129 |
EMPLOYEE BENEFIT PLANS - DEFINE
EMPLOYEE BENEFIT PLANS - DEFINED CONTRIBUTION PLANS (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Retirement Benefits [Abstract] | |||
Total expense for the defined-contribution plans | $ 126 | $ 132 | $ 126 |
EMPLOYEE BENEFIT PLANS - PILOT
EMPLOYEE BENEFIT PLANS - PILOT LONG-TERM DISABILITY BENEFITS (Details) - Postretirement Health Coverage [Member] - USD ($) $ in Millions | Dec. 31, 2020 | Dec. 31, 2019 |
Defined Benefit Plan Disclosure [Line Items] | ||
Total liability net of a prefunded trust account | $ 61 | $ 45 |
Prefunded trust account | $ 7 | $ 6 |
EMPLOYEE BENEFIT PLANS - EMPLOY
EMPLOYEE BENEFIT PLANS - EMPLOYEE INCENTIVE-PAY PLANS (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Retirement Benefits [Abstract] | |||
Operational Performance Rewards Program entitles all Air Group employees to maximum quarterly payouts (in dollars per quarter) | 450 | ||
Variable incentive pay | $ 130,000,000 | $ 163,000,000 | $ 147,000,000 |
EMPLOYEE BENEFIT PLANS - PROJEC
EMPLOYEE BENEFIT PLANS - PROJECTED BENEFIT OBLIGATION (Details) - USD ($) $ in Millions | Dec. 31, 2020 | Dec. 31, 2019 |
Defined Benefit Plan Disclosure [Line Items] | ||
Defined Benefit Plan, Pension Plan with Projected Benefit Obligation in Excess of Plan Assets, Projected Benefit Obligation | $ 2,207 | $ 1,957 |
Defined Benefit Plan, Plan with Accumulated Benefit Obligation in Excess of Plan Assets, Accumulated Benefit Obligation | 2,057 | 1,539 |
Defined Benefit Plan, Plan with Accumulated Benefit Obligation in Excess of Plan Assets, Plan Assets | $ 1,710 | $ 1,545 |
COMMITMENTS AND CONTINGENCIES_2
COMMITMENTS AND CONTINGENCIES COMMITMENTS AND CONTINGENCIES (Details) | 12 Months Ended | 20 Months Ended | |
Dec. 31, 2020USD ($)aircraft | Dec. 31, 2018USD ($) | Dec. 31, 2020USD ($)aircraft | |
Unrecorded Unconditional Purchase Obligation, Fiscal Year Maturity [Abstract] | |||
Rent expense | $ 619,000,000 | ||
Payments for Construction in Process | $ 24,000,000 | ||
LAX Construction, Amount Reimbursed | 8,700,000 | ||
LAX Redevelopment Project, Total Expected Outlay | $ 230,000,000 | 230,000,000 | |
Virgin America Flight Attendants [Member] | |||
Unrecorded Unconditional Purchase Obligation, Fiscal Year Maturity [Abstract] | |||
Loss Contingency, Damages Sought, Value | 78,000,000 | ||
Loss Contingency, Damages Sought, Value | 78,000,000 | ||
Aircraft Commitments [Member] | |||
Unrecorded Unconditional Purchase Obligation, Fiscal Year Maturity [Abstract] | |||
2021 | 873,000,000 | 873,000,000 | |
2022 | 372,000,000 | 372,000,000 | |
2023 | 238,000,000 | 238,000,000 | |
2024 | 27,000,000 | 27,000,000 | |
2025 | 16,000,000 | 16,000,000 | |
Thereafter | 13,000,000 | 13,000,000 | |
Total | 1,539,000,000 | 1,539,000,000 | |
Capacity Purchase Agreements[Member] | |||
Unrecorded Unconditional Purchase Obligation, Fiscal Year Maturity [Abstract] | |||
2021 | 166,000,000 | 166,000,000 | |
2022 | 174,000,000 | 174,000,000 | |
2023 | 179,000,000 | 179,000,000 | |
2024 | 184,000,000 | 184,000,000 | |
2025 | 189,000,000 | 189,000,000 | |
Thereafter | 690,000,000 | 690,000,000 | |
Total | $ 1,582,000,000 | $ 1,582,000,000 | |
B737 | |||
Unrecorded Unconditional Purchase Obligation, Fiscal Year Maturity [Abstract] | |||
Commited to purchase (in aircraft) | aircraft | 32 | 32 | |
Option to purchase additional (in aircraft) | aircraft | 37 | 37 | |
A-320-Neo [Member] | |||
Unrecorded Unconditional Purchase Obligation, Fiscal Year Maturity [Abstract] | |||
Option to purchase additional (in aircraft) | aircraft | 30 | 30 | |
B737 MAX [Member] | |||
Unrecorded Unconditional Purchase Obligation, Fiscal Year Maturity [Abstract] | |||
Commited to purchase (in aircraft) | aircraft | 23 | 23 | |
Option to purchase additional (in aircraft) | aircraft | 15 | 15 | |
E175 [Member] | |||
Unrecorded Unconditional Purchase Obligation, Fiscal Year Maturity [Abstract] | |||
Commited to purchase (in aircraft) | aircraft | 3 | 3 | |
Option to purchase additional (in aircraft) | aircraft | 30 | 30 | |
Capacity Purchase Agreement with SkyWest [Member] | E175 [Member] | |||
Unrecorded Unconditional Purchase Obligation, Fiscal Year Maturity [Abstract] | |||
Property Subject to or Available for Operating Lease, Number of Optional Additional Units | aircraft | 8 | 8 | |
Property Subject to Operating Lease [Member] | B737 | |||
Unrecorded Unconditional Purchase Obligation, Fiscal Year Maturity [Abstract] | |||
Operating leases, number of leased assets (in aircraft) | aircraft | 10 | 10 | |
Property Subject to Operating Lease [Member] | Q400 | |||
Unrecorded Unconditional Purchase Obligation, Fiscal Year Maturity [Abstract] | |||
Operating leases, number of leased assets (in aircraft) | aircraft | 7 | 7 | |
Property Subject to Operating Lease [Member] | Airbus | |||
Unrecorded Unconditional Purchase Obligation, Fiscal Year Maturity [Abstract] | |||
Operating leases, number of leased assets (in aircraft) | aircraft | 71 | 71 | |
Property Subject to Operating Lease [Member] | E175 [Member] | |||
Unrecorded Unconditional Purchase Obligation, Fiscal Year Maturity [Abstract] | |||
Operating leases, number of leased assets (in aircraft) | aircraft | 32 | 32 |
SHAREHOLDER'S EQUITY SHAREHOLDE
SHAREHOLDER'S EQUITY SHAREHOLDERS' EQUITY - STOCK CHANGES (Details) | Dec. 31, 2020$ / sharesshares |
Equity [Abstract] | |
Common stock, shares authorized | shares | 400,000,000 |
Common stock, par value | $ / shares | $ 0.01 |
SHAREHOLDER'S EQUITY SHAREHOL_2
SHAREHOLDER'S EQUITY SHAREHOLDERS' EQUITY - DIVIDENDS (Details) - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Subsequent Event [Line Items] | |||
Cash dividend declared per share | $ 0.375 | ||
Cash dividend paid | $ 45 | $ 173 | $ 158 |
SHAREHOLDER'S EQUITY - COMMON S
SHAREHOLDER'S EQUITY - COMMON STOCK REPURCHASE (Details) - USD ($) $ in Millions | 12 Months Ended | 64 Months Ended | |||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2020 | Aug. 31, 2015 | |
Equity, Class of Treasury Stock [Line Items] | |||||
Common stock repurchase | $ 31 | $ 75 | $ 50 | ||
2015 $1 billion Repurchase Program [Member] | |||||
Equity, Class of Treasury Stock [Line Items] | |||||
Share repurchase program, authorized amount | $ 1,000 | ||||
Common stock repurchase (in shares) | 538,078 | 1,192,820 | 776,186 | 7,600,000 | |
Common stock repurchase | $ 31 | $ 75 | $ 50 | $ 544 |
SHAREHOLDER'S EQUITY SHAREHOL_3
SHAREHOLDER'S EQUITY SHAREHOLDERS' EQUITY - ACCUMULATED OTHER COMPREHENSIVE LOSS (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2020 | |
Equity [Abstract] | ||
Tax Cuts and Jobs Act, Reclassification from AOCI to Retained Earnings, Tax Effect | $ 3 | |
Unrealized gain on marketable securities considered available-for-sale | 9 | $ 23 |
Related to employee benefit plans | (469) | (498) |
Related to interest rate derivatives | (5) | (19) |
Accumulated other comprehensive loss | $ (465) | $ (494) |
SHAREHOLDER'S EQUITY CARES Act
SHAREHOLDER'S EQUITY CARES Act Issuance (Details) - USD ($) | Dec. 31, 2020 | Dec. 24, 2020 | Apr. 23, 2020 |
Class of Warrant or Right [Line Items] | |||
Class of Warrant or Right, Number of Warrants Authorized | $ 6,099,336 | ||
US Treasury CARES Act Loan | |||
Class of Warrant or Right [Line Items] | |||
Class of Warrant or Right, Number of Securities Called by Warrants or Rights | 427,080 | ||
ALK Common Stock Warrant | |||
Class of Warrant or Right [Line Items] | |||
Class of Warrant or Right, Number of Securities Called by Each Warrant or Right | 915,930 | ||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ 52.25 | $ 31.61 |
SPECIAL ITEMS SPECIAL ITEMS (De
SPECIAL ITEMS SPECIAL ITEMS (Details) - USD ($) $ in Millions | 12 Months Ended | 49 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2020 | |
Merger-related Costs [Line Items] | ||||
Special items - merger-related costs | $ 6 | $ 44 | $ 87 | $ 370 |
Special items—other | 0 | 0 | 45 | |
Nondeductible expenses | 9 | 9 | 9 | |
Virgin America Inc. [Member] | ||||
Merger-related Costs [Line Items] | ||||
Special items - merger-related costs | 6 | $ 44 | $ 87 | |
Settlement Fee [Member] | ||||
Merger-related Costs [Line Items] | ||||
Special items—other | 20 | |||
One-time Bonus Payment [Member] | ||||
Merger-related Costs [Line Items] | ||||
Special items—other | $ 25 |
SPECIAL ITEMS SPECIAL ITEMS - M
SPECIAL ITEMS SPECIAL ITEMS - MERGER-RELATED COSTS (Details) - USD ($) $ in Millions | 12 Months Ended | 49 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2020 | |
Merger-related Costs [Line Items] | ||||
Contracted services | $ 181 | $ 289 | $ 306 | |
Special items—merger-related costs | 6 | 44 | 87 | $ 370 |
Virgin America Inc. [Member] | ||||
Merger-related Costs [Line Items] | ||||
Contracted services | 5 | 18 | 45 | |
Severance Costs | 0 | 15 | 13 | |
Legal Fees | 1 | 1 | 1 | |
Business Acquisition, Transaction Costs | 0 | 10 | 28 | |
Special items—merger-related costs | $ 6 | $ 44 | $ 87 |
SPECIAL ITEMS Other Special Ite
SPECIAL ITEMS Other Special Items (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Other Special Items [Line Items] | |||
Special items—other | $ 0 | $ 0 | $ 45 |
Settlement Fee [Member] | |||
Other Special Items [Line Items] | |||
Special items—other | 20 | ||
One-time Bonus Payment [Member] | |||
Other Special Items [Line Items] | |||
Special items—other | $ 25 |
STOCK-BASED COMPENSATION PLAN_2
STOCK-BASED COMPENSATION PLANS (Details) - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock-based compensation | $ 34 | $ 36 | $ 36 |
Tax benefit related to stock-based compensation | 8 | 9 | 9 |
Unrecognized stock-based compensation for non-vested options and awards | $ 36 | ||
Unrecognized stock-based compensation awards weighted-average period | 1 year 8 months 12 days | ||
Shares authorized under stock-based compensation plans (in shares) | 17,000,000 | ||
Shares remaining available for future grants (shares) | 5,893,374 | ||
Stock options [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock-based compensation | $ 4 | $ 3 | $ 3 |
Unrecognized stock-based compensation for non-vested options and awards | $ 5 | ||
Unrecognized stock-based compensation awards weighted-average period | 1 year | ||
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions and Methodology [Abstract] | |||
Expected volatility | 34.00% | 30.00% | 30.00% |
Expected term | 6 years | 6 years | 6 years |
Risk-free interest rate | 1.03% | 2.41% | 2.61% |
Expected dividend yield | 1.73% | 2.09% | 1.94% |
Weighted-average grant date fair value per share (in dollars per share) | $ 14.11 | $ 16.84 | $ 17.18 |
Estimated fair value of options granted (millions) | $ 6 | $ 4 | $ 1 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward] | |||
Outstanding, beginning balance (in shares) | 794,055 | ||
Granted (in Shares) | 398,780 | ||
Exercised (in shares) | (52,674) | ||
Canceled (in shares) | (15,417) | ||
Forfeited or expired (in shares) | (13,874) | ||
Outstanding, ending balance (in shares) | 1,110,870 | 794,055 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Additional Disclosures [Abstract] | |||
Outstanding, beginning balance, Weighted-Average Exercise Price Per Share (in dollars per share) | $ 60.98 | ||
Granted, Weighted-Average Exercise Price Per Share (in dollars per share) | 54.81 | ||
Exercised, Weighted-Average Exercise Price Per Share (in dollars per share) | 18.86 | ||
Canceled, Weighted-Average Exercise Price Per Share (in dollars per share) | 71.63 | ||
Fofeited or expired, Weighted-Average Exercise Price Per Share (in dollars per share) | 66.84 | ||
Outstanding, ending balance, Weighted-Average Exercise Price Per Share (in dollars per share) | $ 60.54 | $ 60.98 | |
Outstanding, Weighted-Average Contractual Life | 6 years 9 months 18 days | 6 years 6 months | |
Outstanding, Aggregate Intrinsic Value | $ 4 | $ 7 | |
Exercisable, Outstanding (in shares) | 419,667 | ||
Exercisable, Weighted-Average Exercise Price Per Share (in dollars per share) | $ 60.56 | ||
Exercisable, Weighted-Average Contractual Life | 4 years 7 months 6 days | ||
Exercisable, Aggregate Intrinsic Value | $ 2 | ||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested and Expected to Vest [Abstract] | |||
Vested or expected to vest, Shares | 1,109,799 | ||
Vested or expected to vest, Weighted-Average Exercise Price Per Share (in dollars per share) | $ 60.54 | ||
Vested or expected to vest, Weighted-Average Contractual Life | 6 years 9 months 18 days | ||
Vested or expected to vest, Aggregate Intrinsic Value | $ 4 | ||
Intrinsic value of option exercises | 2 | 1 | 1 |
Cash received from stock option exercises | 0 | 1 | 1 |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Additional Disclosures [Abstract] | |||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested in Period, Fair Value | 3 | 3 | 2 |
Stock awards [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock-based compensation | 14 | $ 21 | 23 |
Unrecognized stock-based compensation for non-vested options and awards | $ 31 | ||
Unrecognized stock-based compensation awards weighted-average period | 1 year 9 months 18 days | ||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward] | |||
Non-vested, beginning balance (in shares) | 541,613 | ||
Granted (in shares) | 926,418 | ||
Vested (in shares) | (388,032) | ||
Forfeited (in shares) | (112,955) | ||
Non-vested, ending balance (in shares) | 967,044 | 541,613 | |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Additional Disclosures [Abstract] | |||
Non-vested, beginning balance, Weighted-Average Grant Date Fair Value (in dollars per share) | $ 71.82 | ||
Granted, Weighted-Average Grant Date Fair Value (in dollars per share) | 49.22 | ||
Vested, Weighted-Average Grant Date Fair Value (in dollars per share) | 67.83 | ||
Forfeited, Weighted-Average Grant Date Fair Value (in dollars per share) | 54.39 | ||
Non-vested, ending balance, Weighted-Average Price Per Share (in dollars per share) | $ 51.85 | $ 71.82 | |
Non-vested, Weighted-Average Contractual Life | 1 year 8 months 12 days | 1 year 4 months 24 days | |
Non-vested, Total Instrinsic Value (in dollars) | $ 50 | $ 37 | |
Deferred stock awards [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock-based compensation | 1 | 1 | 1 |
Employee stock purchase plan [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock-based compensation | $ 15 | $ 11 | $ 9 |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward] | |||
Granted (in shares) | 1,524,194 | 784,786 | 632,145 |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Additional Disclosures [Abstract] | |||
Share-based Compensation Arrangement by Share-based Payment Award, Purchase Price of Common Stock, Percent | 85.00% | ||
Share-based Compensation Arrangement by Share-based Payment Award, Maximum Employee Subscription Rate | 10.00% |
OPERATING SEGMENT INFORMATION_2
OPERATING SEGMENT INFORMATION (Details) - USD ($) $ in Millions | 12 Months Ended | 49 Months Ended | |||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2020 | ||
Operating revenues | |||||
Total Operating Revenues | $ 3,566 | $ 8,781 | $ 8,264 | ||
Operating expenses | |||||
Operating expenses, excluding fuel | 4,618 | 5,840 | 5,685 | ||
Special items - merger-related costs | 6 | 44 | 87 | $ 370 | |
Economic fuel | 723 | 1,878 | 1,936 | ||
Total Operating Expenses | 5,341 | 7,718 | 7,621 | ||
Non-operating Income (Expense) | |||||
Interest income | 31 | 42 | 38 | ||
Interest expense | (98) | (78) | (91) | ||
Interest capitalized | 11 | 15 | 18 | ||
Other - net | 17 | (26) | (23) | ||
Nonoperating Income (Expense) Total | (65) | (47) | (58) | ||
Income (loss) before income tax | (1,840) | 1,016 | 585 | ||
Depreciation | 420 | 423 | 398 | ||
Total property and equipment additions | (206) | (696) | (960) | ||
Total assets | 14,046 | 12,993 | 14,046 | ||
Air Group Adjusted [Member] | |||||
Operating revenues | |||||
Total Operating Revenues | 3,566 | 8,781 | 8,264 | ||
Operating expenses | |||||
Operating expenses, excluding fuel | 4,547 | 5,796 | 5,553 | ||
Economic fuel | 731 | 1,884 | 1,914 | ||
Total Operating Expenses | 5,278 | 7,680 | 7,467 | ||
Non-operating Income (Expense) | |||||
Nonoperating Income (Expense) Total | (39) | (47) | (58) | ||
Income (loss) before income tax | (1,751) | 1,054 | 739 | ||
Horizon [Member] | |||||
Operating revenues | |||||
Total Operating Revenues | 386 | 451 | 512 | ||
Operating expenses | |||||
Operating expenses, excluding fuel | 323 | 385 | 465 | ||
Economic fuel | 0 | 0 | 0 | ||
Total Operating Expenses | 323 | 385 | 465 | ||
Non-operating Income (Expense) | |||||
Nonoperating Income (Expense) Total | (22) | (28) | (20) | ||
Income (loss) before income tax | 41 | 38 | 27 | ||
Depreciation | 74 | 86 | 82 | ||
Total property and equipment additions | (12) | (91) | (389) | ||
Total assets | 1,170 | 1,266 | 1,170 | ||
Consolidating & Other | |||||
Operating revenues | |||||
Total Operating Revenues | (383) | (445) | (508) | ||
Operating expenses | |||||
Operating expenses, excluding fuel | (399) | (464) | (513) | ||
Economic fuel | 0 | 0 | 0 | ||
Total Operating Expenses | (399) | (464) | (513) | ||
Non-operating Income (Expense) | |||||
Nonoperating Income (Expense) Total | 2 | 2 | (2) | ||
Income (loss) before income tax | 18 | 21 | 3 | ||
Total assets | (6,878) | (7,480) | (6,878) | ||
Special Charges [Member] | |||||
Operating revenues | |||||
Total Operating Revenues | 0 | 0 | 0 | ||
Operating expenses | |||||
Operating expenses, excluding fuel | 71 | 44 | 132 | ||
Economic fuel | (8) | (6) | 22 | ||
Total Operating Expenses | 63 | 38 | 154 | ||
Non-operating Income (Expense) | |||||
Nonoperating Income (Expense) Total | (26) | 0 | 0 | ||
Income (loss) before income tax | (89) | (38) | (154) | ||
Alaska Mainline [Member] | |||||
Operating revenues | |||||
Total Operating Revenues | 2,829 | 7,381 | 7,063 | ||
Operating expenses | |||||
Operating expenses, excluding fuel | 3,630 | 4,778 | 4,577 | ||
Economic fuel | 569 | 1,589 | 1,652 | ||
Total Operating Expenses | 4,199 | 6,367 | 6,229 | ||
Non-operating Income (Expense) | |||||
Nonoperating Income (Expense) Total | (19) | (21) | (25) | ||
Income (loss) before income tax | (1,389) | 993 | 809 | ||
Depreciation | [1] | 346 | 337 | 316 | |
Total property and equipment additions | [1] | (194) | (605) | (571) | |
Total assets | [1] | 19,754 | 19,207 | $ 19,754 | |
Alaska Regional [Member] | |||||
Operating revenues | |||||
Total Operating Revenues | 734 | 1,394 | 1,197 | ||
Operating expenses | |||||
Operating expenses, excluding fuel | 993 | 1,097 | 1,024 | ||
Economic fuel | 162 | 295 | 262 | ||
Total Operating Expenses | 1,155 | 1,392 | 1,286 | ||
Non-operating Income (Expense) | |||||
Nonoperating Income (Expense) Total | 0 | 0 | (11) | ||
Income (loss) before income tax | (421) | 2 | (100) | ||
Passenger Revenue [Member] | |||||
Operating revenues | |||||
Revenue from Contract with Customer, Excluding Assessed Tax | 3,019 | 8,095 | 7,631 | ||
Passenger Revenue [Member] | Air Group Adjusted [Member] | |||||
Operating revenues | |||||
Revenue from Contract with Customer, Excluding Assessed Tax | 3,019 | 8,095 | 7,631 | ||
Passenger Revenue [Member] | Horizon [Member] | |||||
Operating revenues | |||||
Revenue from Contract with Customer, Excluding Assessed Tax | 0 | 0 | 0 | ||
Passenger Revenue [Member] | Consolidating & Other | |||||
Operating revenues | |||||
Revenue from Contract with Customer, Excluding Assessed Tax | 0 | 0 | 0 | ||
Passenger Revenue [Member] | Special Charges [Member] | |||||
Operating revenues | |||||
Revenue from Contract with Customer, Excluding Assessed Tax | 0 | 0 | 0 | ||
Passenger Revenue [Member] | Alaska Mainline [Member] | |||||
Operating revenues | |||||
Revenue from Contract with Customer, Excluding Assessed Tax | 2,350 | 6,750 | 6,474 | ||
Passenger Revenue [Member] | Alaska Regional [Member] | |||||
Operating revenues | |||||
Revenue from Contract with Customer, Excluding Assessed Tax | 669 | 1,345 | 1,157 | ||
Capacity Purchase Agreements [Member] | |||||
Operating revenues | |||||
Revenue from Contract with Customer, Excluding Assessed Tax | 0 | 0 | 0 | ||
Capacity Purchase Agreements [Member] | Air Group Adjusted [Member] | |||||
Operating revenues | |||||
Revenue from Contract with Customer, Excluding Assessed Tax | 0 | 0 | 0 | ||
Capacity Purchase Agreements [Member] | Horizon [Member] | |||||
Operating revenues | |||||
Revenue from Contract with Customer, Excluding Assessed Tax | 386 | 450 | 508 | ||
Capacity Purchase Agreements [Member] | Consolidating & Other | |||||
Operating revenues | |||||
Revenue from Contract with Customer, Excluding Assessed Tax | (386) | (450) | (508) | ||
Capacity Purchase Agreements [Member] | Special Charges [Member] | |||||
Operating revenues | |||||
Revenue from Contract with Customer, Excluding Assessed Tax | 0 | 0 | 0 | ||
Capacity Purchase Agreements [Member] | Alaska Mainline [Member] | |||||
Operating revenues | |||||
Revenue from Contract with Customer, Excluding Assessed Tax | 0 | 0 | 0 | ||
Capacity Purchase Agreements [Member] | Alaska Regional [Member] | |||||
Operating revenues | |||||
Revenue from Contract with Customer, Excluding Assessed Tax | 0 | 0 | 0 | ||
Mileage Plan Services, Other [Member] | |||||
Operating revenues | |||||
Revenue from Contract with Customer, Excluding Assessed Tax | 374 | 465 | 434 | ||
Mileage Plan Services, Other [Member] | Air Group Adjusted [Member] | |||||
Operating revenues | |||||
Revenue from Contract with Customer, Excluding Assessed Tax | 374 | 465 | 434 | ||
Mileage Plan Services, Other [Member] | Horizon [Member] | |||||
Operating revenues | |||||
Revenue from Contract with Customer, Excluding Assessed Tax | 0 | 0 | 0 | ||
Mileage Plan Services, Other [Member] | Consolidating & Other | |||||
Operating revenues | |||||
Revenue from Contract with Customer, Excluding Assessed Tax | 0 | 0 | 0 | ||
Mileage Plan Services, Other [Member] | Special Charges [Member] | |||||
Operating revenues | |||||
Revenue from Contract with Customer, Excluding Assessed Tax | 0 | 0 | 0 | ||
Mileage Plan Services, Other [Member] | Alaska Mainline [Member] | |||||
Operating revenues | |||||
Revenue from Contract with Customer, Excluding Assessed Tax | 309 | 419 | 397 | ||
Mileage Plan Services, Other [Member] | Alaska Regional [Member] | |||||
Operating revenues | |||||
Revenue from Contract with Customer, Excluding Assessed Tax | 65 | 46 | 37 | ||
Cargo and Freight [Member] | |||||
Operating revenues | |||||
Revenue from Contract with Customer, Excluding Assessed Tax | 173 | 221 | 199 | ||
Cargo and Freight [Member] | Air Group Adjusted [Member] | |||||
Operating revenues | |||||
Revenue from Contract with Customer, Excluding Assessed Tax | 173 | 221 | 199 | ||
Cargo and Freight [Member] | Horizon [Member] | |||||
Operating revenues | |||||
Revenue from Contract with Customer, Excluding Assessed Tax | 0 | 1 | 4 | ||
Cargo and Freight [Member] | Consolidating & Other | |||||
Operating revenues | |||||
Revenue from Contract with Customer, Excluding Assessed Tax | 3 | 5 | 0 | ||
Cargo and Freight [Member] | Special Charges [Member] | |||||
Operating revenues | |||||
Revenue from Contract with Customer, Excluding Assessed Tax | 0 | 0 | 0 | ||
Cargo and Freight [Member] | Alaska Mainline [Member] | |||||
Operating revenues | |||||
Revenue from Contract with Customer, Excluding Assessed Tax | 170 | 212 | 192 | ||
Cargo and Freight [Member] | Alaska Regional [Member] | |||||
Operating revenues | |||||
Revenue from Contract with Customer, Excluding Assessed Tax | $ 0 | $ 3 | $ 3 | ||
[1] | INCOME TAXES Deferred Income Taxes Deferred income taxes reflect the impact of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and such amounts for tax purposes. The Company has a net deferred tax liability, primarily due to differences in depreciation rates for federal income tax purposes and for financial reporting purposes. Deferred tax (assets) and liabilities comprise the following (in millions): 2020 2019 Excess of tax over book depreciation $ 1,126 $ 1,233 Intangibles - net 15 16 Operating lease assets 342 416 Other - net 106 58 Deferred tax liabilities 1,589 1,723 Mileage Plan™ (385) (337) Inventory obsolescence (17) (15) Employee benefits (215) (179) Net operating losses (27) (13) Operating lease liabilities (381) (417) Leasehold maintenance (73) — Other - net (103) (48) Deferred tax assets (1,201) (1,009) Valuation allowance 19 1 Net deferred tax liabilities $ 407 $ 715 The CARES Act, among other things, permits federal Net Operating Loss (NOL) carryovers and carrybacks to offset 100% of taxable income for taxable years beginning before 2021. In addition, the CARES Act allows NOLs incurred in 2018, 2019, and 2020 to be carried back to each of the five preceding taxable years to generate a refund of previously paid income taxes. The Company also carried back a portion of NOLs incurred in 2018 as allowed by the CARES Act and has received a refund for those losses. At December 31, 2020, the Company had federal NOLs of approximately $644 million, the majority of which will be carried back under the CARES Act to be applied against previous years' taxable income. The Company has recorded a receivable of $225 million associated with the federal carry back. The remaining NOL, which resulted from the 2016 Virgin America merger, must be carried forward and will expire in 2036. The Company also has state NOLs of approximately $562 million that expire beginning in 2021 and continuing through 2040. Of these state NOLs, approximately $85 million may be used to offset previous years’ state taxable income due to states’ conformity to the Internal Revenue Code or state specific carryback provisions. Virgin America experienced multiple “ownership changes” as defined in Section 382 of the Internal Revenue Code of 1986, as amended (the “Code”), the most recent being its acquisition by the Company. Section 382 of the Code imposes an annual limitation on the utilization of pre-ownership change NOLs. Any unused annual limitation may, subject to certain limits, be carried over to later years. The combined Company’s ability to use the NOLs will also depend on the amount of taxable income generated in future periods. Valuation allowances are provided to reduce the related deferred income tax assets to an amount which will, more likely than not, be realized. The Company has determined it is more likely than not that a portion of the state NOL carryforward will not be realized and, therefore, has provided a valuation allowance of $19 million for that portion as of December 31, 2020. The Company has likewise concluded it is more likely than not that all of its federal and the remaining state deferred income tax assets will be realized and thus no additional valuation allowance has been recorded. The Company reassesses the need for a valuation allowance each reporting period. Components of Income Tax Expense (Benefit) The components of income tax expense (benefit) are as follows (in millions): 2020 2019 2018 Current income tax expense (benefit): Federal $ (212) $ 26 $ (5) State (11) 13 9 Total current income tax expense (benefit) (223) 39 4 Deferred income tax expense (benefit): Federal (246) 175 125 State (47) 33 19 Total deferred income tax expense (benefit) (293) 208 144 Income tax expense (benefit) $ (516) $ 247 $ 148 Income Tax Rate Reconciliation Income tax expense (benefit) reconciles to the amount computed by applying the 2020 U.S. federal rate of 21% to income (loss) before income tax and for deferred taxes as follows (in millions): 2020 2019 2018 Income (loss) before income tax $ (1,840) $ 1,016 $ 585 Expected tax expense (benefit) (386) 213 123 Nondeductible expenses 9 9 9 State income tax expense (benefit) (62) 36 21 Tax law changes (93) (9) (7) Valuation allowance 18 — — Other - net (2) (2) 2 Actual tax expense (benefit) $ (516) $ 247 $ 148 Effective tax rate 28.0 % 24.3 % 25.3 % As a result of tax changes signed into law during 2017, with final regulations issued in 2019, the Company recorded a current tax benefit of $9 million in 2019. The Company recorded a current tax benefit of $93 million in 2020 as a result of provisions outlined in the CARES Act. Uncertain Tax Positions The Company has identified its federal tax return and its state tax returns in Alaska, Oregon and California as “major” tax jurisdictions. A summary of the Company's jurisdictions and the periods that are subject to examination are as follows: Jurisdiction Period Federal 2007 to 2019 Alaska 2015 to 2019 California 2007 to 2019 Oregon 2003 to 2019 Certain tax years are open to the extent of net operating loss carryforwards. Changes in the liability for gross unrecognized tax benefits during 2020, 2019 and 2018 are as follows (in millions): 2020 2019 2018 Balance at January 1, $ 40 $ 40 $ 43 Additions related to prior years 1 — 1 Releases related to prior years (1) (1) (4) Additions related to current year activity — 2 2 Releases due to settlements (4) — (1) Releases due to lapse of statute of limitations (1) (1) (1) Balance at December 31, $ 35 $ 40 $ 40 As of December 31, 2020, the Company had $35 million of accrued tax contingencies, of which $29 million, if fully recognized, would increase the effective tax rate. As of December 31, 2020, 2019 and 2018, the Company has accrued interest and penalties, net of federal income tax benefit, of $6 million, $7 million, and $6 million. In 2020, the Company recognized a benefit of $1 million, compared to the recognition of expense of $1 million in 2019, and $1 million in 2018, for interest and penalties, net of federal income tax benefit. At December 31, 2020, the Company has unrecognized tax benefits recorded as a liability and some reducing deferred tax assets. The Company reduced $5 million of reserves for uncertain tax positions in 2020, primarily due to settlements on state income taxes and statute lapses on reserved amounts. These uncertain tax positions could change as a result of the Company's ongoing audits, settlement of issues, new audits and status of other taxpayer court cases. The Company cannot predict the timing of these actions. Due to the positions being taken in various jurisdictions, the amounts currently accrued are the Company's best estimate as of December 31, 2020. |