DOCUMENT AND ENTITY INFORMATION
DOCUMENT AND ENTITY INFORMATION - shares | 9 Months Ended | |
Sep. 30, 2016 | Oct. 31, 2016 | |
Document and Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Sep. 30, 2016 | |
Document Fiscal Year Focus | 2,016 | |
Document Fiscal Period Focus | Q3 | |
Entity Registrant Name | ALASKA AIR GROUP, INC. | |
Entity Central Index Key | 766,421 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 123,271,393 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Millions | Sep. 30, 2016 | Dec. 31, 2015 |
Current Assets | ||
Cash and cash equivalents | $ 1,818 | $ 73 |
Marketable securities | 1,408 | 1,255 |
Total cash and marketable securities | 3,226 | 1,328 |
Receivables - net | 232 | 212 |
Inventories and supplies - net | 44 | 51 |
Prepaid expenses and other current assets | 98 | 72 |
Total Current Assets | 3,600 | 1,663 |
Property and Equipment | ||
Aircraft and other flight equipment | 6,398 | 5,690 |
Other property and equipment | 1,021 | 955 |
Deposits for future flight equipment | 489 | 771 |
Property and Equipment Total | 7,908 | 7,416 |
Less accumulated depreciation and amortization | 2,877 | 2,614 |
Total Property and Equipment - Net | 5,031 | 4,802 |
Other Assets | 68 | 65 |
Total Assets | 8,699 | 6,530 |
Current Liabilities | ||
Accounts payable | 71 | 63 |
Accrued wages, vacation and payroll taxes | 257 | 298 |
Air traffic liability | 785 | 669 |
Other accrued liabilities | 735 | 661 |
Current portion of long-term debt | 275 | 114 |
Total Current Liabilities | 2,123 | 1,805 |
Long-Term Debt, Net of Current Portion | 1,861 | 569 |
Other Liabilities and Credits | ||
Deferred income taxes | 733 | 682 |
Deferred revenue | 491 | 431 |
Obligation for pension and postretirement medical benefits | 272 | 270 |
Other liabilities | 355 | 362 |
Other Liabilities and Credits Totals | 1,851 | 1,745 |
Commitments and Contingencies | ||
Shareholders' Equity | ||
Preferred stock, $0.01 par value, Authorized: 5,000,000 shares, none issued or outstanding | 0 | 0 |
Common stock, $0.01 par value, Authorized: 200,000,000 shares, Issued: 2016 - 128,941,102 shares; 2015 - 128,442,099 shares, Outstanding: 2016 - 123,079,519 shares; 2015 - 125,175,325 shares | 1 | 1 |
Capital in excess of par value | 103 | 73 |
Treasury stock (common), at cost: 2016 - 5,861,583 shares; 2015 - 3,266,774 shares | (444) | (250) |
Accumulated other comprehensive loss | (284) | (303) |
Retained earnings | 3,488 | 2,890 |
Total Shareholders' Equity | 2,864 | 2,411 |
Total Liabilities and Shareholders' Equity | $ 8,699 | $ 6,530 |
CONDENSED CONSOLIDATED BALANCE3
CONDENSED CONSOLIDATED BALANCE SHEETS (PARENTHETICALS) - $ / shares | Sep. 30, 2016 | Dec. 31, 2015 |
Stockholders' Equity: | ||
Preferred Stock, par value (usd per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized (shares) | 5,000,000 | 5,000,000 |
Preferred stock, shares issued (shares) | 0 | 0 |
Preferred stock, shares outstanding (shares) | 0 | 0 |
Common stock, par value (usd per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (shares) | 200,000,000 | 200,000,000 |
Common stock, shares issued (shares) | 129,127,597 | 128,442,099 |
Common stock, shares outstanding (shares) | 123,266,014 | 125,175,325 |
Treasury Stock, Shares (shares) | 5,861,583 | 3,266,774 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Operating Revenues | ||||
Passenger, Mainline | $ 1,073 | $ 1,057 | $ 3,036 | $ 2,977 |
Passenger, Regional | 249 | 240 | 682 | 638 |
Total passenger revenue | 1,322 | 1,297 | 3,718 | 3,615 |
Freight and mail | 31 | 30 | 82 | 83 |
Other - net | 213 | 188 | 607 | 523 |
Total Operating Revenues | 1,566 | 1,515 | 4,407 | 4,221 |
Operating Expenses | ||||
Wages and benefits | 340 | 312 | 1,008 | 923 |
Variable incentive pay | 31 | 32 | 95 | 90 |
Aircraft fuel, including hedging gains and losses | 225 | 245 | 593 | 741 |
Aircraft maintenance | 64 | 67 | 197 | 182 |
Aircraft rent | 25 | 26 | 80 | 78 |
Landing fees and other rentals | 89 | 80 | 232 | 217 |
Contracted services | 63 | 54 | 183 | 157 |
Selling expenses | 58 | 53 | 162 | 160 |
Depreciation and amortization | 101 | 81 | 281 | 236 |
Food and beverage service | 31 | 30 | 93 | 83 |
Third-party regional carrier expense | 25 | 20 | 72 | 52 |
Other | 92 | 82 | 267 | 259 |
Special items - merger costs | 22 | 0 | 36 | 0 |
Total Operating Expenses | 1,166 | 1,082 | 3,299 | 3,178 |
Operating Income | 400 | 433 | 1,108 | 1,043 |
Nonoperating Income (Expense) | ||||
Interest income | 7 | 5 | 20 | 16 |
Interest expense | (11) | (10) | (33) | (32) |
Interest capitalized | 6 | 9 | 21 | 25 |
Other - net | 0 | 0 | (2) | 1 |
Nonoperating Income (Expense) Total | 2 | 4 | 6 | 10 |
Income before income tax | 402 | 437 | 1,114 | 1,053 |
Income tax expense | 146 | 163 | 414 | 396 |
Net Income | $ 256 | $ 274 | $ 700 | $ 657 |
Basic Earnings Per Share (usd per share) | $ 2.08 | $ 2.15 | $ 5.66 | $ 5.08 |
Diluted Earnings Per Share (usd per share) | $ 2.07 | $ 2.14 | $ 5.63 | $ 5.05 |
Shares used for computation: | ||||
Basic shares (shares) | 123,149,000 | 127,308,000 | 123,648,000 | 129,231,000 |
Diluted shares (shares) | 123,833,000 | 128,205,000 | 124,393,000 | 130,200,000 |
Cash dividend declared per share (usd per share) | $ 0.275 | $ 0.20 | $ 0.825 | $ 0.60 |
CONDENSED CONSOLIDATED STATEME5
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE OPERATIONS - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Statement of Comprehensive Income [Abstract] | ||||
Net Income | $ 256 | $ 274 | $ 700 | $ 657 |
Related to marketable securities: | ||||
Unrealized holding gains (losses) arising during the period | (2) | 0 | 17 | 2 |
Reclassification of (gains) losses into Other-net nonoperating income (expense) | 0 | 0 | 1 | 0 |
Income tax effect | 0 | 0 | (6) | (1) |
Total | (2) | 0 | 10 | 1 |
Related to employee benefit plans: | ||||
Reclassification of net pension expense into Wages and benefits | 5 | 3 | 15 | 11 |
Income tax effect | (1) | (1) | (5) | (4) |
Total | 4 | 2 | 10 | 7 |
Related to interest rate derivative instruments: | ||||
Unrealized holding gains (losses) arising during the period | 1 | (5) | (6) | (8) |
Reclassification of (gains) losses into Aircraft rent | 1 | 2 | 4 | 5 |
Income tax effect | (1) | 2 | 1 | 2 |
Total | 1 | (1) | (1) | (1) |
Other Comprehensive Income | 3 | 1 | 19 | 7 |
Comprehensive Income | $ 259 | $ 275 | $ 719 | $ 664 |
CONDENSED CONSOLIDATED STATEME6
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2016 | Sep. 30, 2015 | |
Cash flows from operating activities: | ||
Net Income | $ 700 | $ 657 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization | 281 | 236 |
Stock-based compensation and other | 19 | 22 |
Changes in certain assets and liabilities: | ||
Changes in deferred tax provision | 47 | (17) |
Increase (decrease) in air traffic liability | 116 | 129 |
Increase (decrease) in deferred revenue | 60 | 42 |
Other - net | (17) | 160 |
Net cash provided by operating activities | 1,206 | 1,229 |
Property and equipment additions: | ||
Aircraft and aircraft purchase deposits | (408) | (563) |
Other flight equipment | (35) | (61) |
Other property and equipment | (66) | (44) |
Total property and equipment additions, including capitalized interest | (509) | (668) |
Purchases of marketable securities | (775) | (876) |
Sales and maturities of marketable securities | 638 | 818 |
Proceeds from disposition of assets and changes in restricted deposits | 5 | (1) |
Net cash used in investing activities | (641) | (727) |
Cash flows from financing activities: | ||
Proceeds from issuance of debt | 1,546 | 0 |
Long-term debt payments | (93) | (93) |
Common stock repurchases | (193) | (381) |
Dividends paid | (102) | (78) |
Other financing activities | 22 | 31 |
Net cash used in financing activities | 1,180 | (521) |
Net increase (decrease) in cash and cash equivalents | 1,745 | (19) |
Cash and cash equivalents at beginning of year | 73 | 107 |
Cash and cash equivalents at end of the period | 1,818 | 88 |
Cash paid during the period for: | ||
Interest (net of amount capitalized) | 12 | 9 |
Income taxes paid (received) | $ 321 | $ 262 |
GENERAL AND SUMMARY OF SIGNIFIC
GENERAL AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 9 Months Ended |
Sep. 30, 2016 | |
Accounting Policies [Abstract] | |
GENERAL AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | GENERAL AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Organization and Basis of Presentation The interim condensed consolidated financial statements include the accounts of Alaska Air Group, Inc. (Air Group or the Company) and its primary subsidiaries, Alaska Airlines, Inc. (Alaska) and Horizon Air Industries, Inc. (Horizon), through which the Company conducts substantially all of its operations. All intercompany balances and transactions have been eliminated. These financial statements have been prepared in accordance with accounting principles generally accepted in the United States (GAAP) for interim financial information. Consistent with these requirements, this Form 10-Q does not include all the information required by GAAP for complete financial statements. As a result, this Form 10-Q should be read in conjunction with the Consolidated Financial Statements and accompanying Notes in the Form 10-K for the year ended December 31, 2015 . In the opinion of management, all adjustments have been made that are necessary to present fairly the Company’s financial position as of September 30, 2016 , as well as the results of operations for the three and nine months ended September 30, 2016 and 2015 . The adjustments made were of a normal recurring nature. In preparing these statements, the Company is required to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent liabilities, as well as the reported amounts of revenues and expenses. Due to seasonal variations in the demand for air travel, the volatility of aircraft fuel prices, changes in global economic conditions, changes in the competitive environment, and other factors, operating results for the three and nine months ended September 30, 2016 are not necessarily indicative of operating results for the entire year. Certain reclassifications have been made to prior year financial statements to conform with classifications used in the current year. Recently Issued Accounting Pronouncements In May 2014, the FASB issued Accounting Standards Update 2014-09, "Revenue from Contracts with Customers" (ASU 2014-09), which requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. The ASU will replace most existing revenue recognition guidance in U.S. GAAP when it becomes effective. In March 2016, the FASB issued ASU 2016-08, "Revenue from Contracts with Customers" (Topic 606), Principal versus Agent Considerations, which provides guidance when a revenue transaction involves a third party in providing goods or services to a customer in determining whether the Company is considered the principal or the agent in the transaction. Entities are permitted to use either a full retrospective or cumulative effect transition method, and are required to adopt all parts of the new revenue standard using the same transition method. The new standard is effective for the Company on January 1, 2018. At this time, the Company believes the most significant impact to the financial statements will be in Mileage Plan revenues and liabilities. The Company currently uses the incremental cost approach for miles earned through travel. This standard eliminates that option and the Company will be required to increase its liability for earned miles through a relative selling price model. The Company continues to evaluate the full impact of the standard, and currently plans to apply the full retrospective transition method. In April 2015, the FASB issued ASU 2015-03, "Interest - Imputation of Interest" (Subtopic 835-30), which requires debt issuance costs related to a debt liability be presented as a direct deduction from the carrying value of the debt liability. The amendment was adopted as of January 1, 2016. Prior period debt balances have been adjusted to reflect the adoption of ASU 2015-03. The adoption of the ASU had no impact on the Statements of Operations or retained earnings. In February 2016, the FASB issued ASU 2016-02, "Leases" (Topic 842), which requires lessees to recognize assets and liabilities for leases currently classified as operating leases. Under the new standard a lessee will recognize a liability on the balance sheet representing the lease payments owed, and a right-of-use-asset representing its right to use the underlying asset for the lease term. For leases with a term of 12 months or less, a lessee is permitted to make an accounting policy election not to recognize lease assets and lease liabilities. The new standard is effective for the Company on January 1, 2019. Early adoption of the standard is permitted. The Company is evaluating the effect that ASU 2016-02 will have on its financial statements and related disclosures. The Company has not yet determined whether it will early adopt the standard. In March 2016, the FASB issued ASU 2016-09, "Compensation - Stock Compensation" (Topic 718). The proposed standard simplifies several aspects of accounting for employee share-based payment awards, including the accounting for income taxes, forfeitures, and statutory tax withholding requirements, as well as classification in the statement of cash flows. The Company is evaluating the effect of ASU 2016-09 on the consolidated financial statements and related disclosures. The ASU is effective for the Company beginning January 1, 2017. The Company has not yet elected a transition method. |
PROPOSED ACQUISITION OF VIRGIN
PROPOSED ACQUISITION OF VIRGIN AMERICA INC. | 9 Months Ended |
Sep. 30, 2016 | |
Business Combinations [Abstract] | |
PROPOSED ACQUISITION OF VIRGIN AMERICA INC. | PROPOSED ACQUISITION OF VIRGIN AMERICA On April 1, 2016 the Company entered into an agreement to acquire Virgin America. The Company has agreed to pay Virgin America shareholders $57 per share, or approximately $2.6 billion , in cash for the outstanding common stock of Virgin America. In addition, the Company expects to assume Virgin America's debt and lease obligations, other than related party debt, on the date of acquisition. The merger has been approved by Virgin America's shareholders and is subject to final approval by various regulatory bodies. The Department of Justice (DOJ) is currently reviewing the transaction. As of September 30, 2016 , the Company has incurred merger-related costs of $36 million . Costs classified as merger-related are directly attributable to merger activities. These costs are classified as special items within the Statement of Operations. The Company expects to continue to incur merger-related costs in the future if the transaction closes. |
CASH, CASH EQUIVALENTS AND MARK
CASH, CASH EQUIVALENTS AND MARKETABLE SECURITIES | 9 Months Ended |
Sep. 30, 2016 | |
Cash, Cash Equivalents, and Short-term Investments [Abstract] | |
CASH, CASH EQUIVALENTS AND MARKETABLE SECURITIES | CASH, CASH EQUIVALENTS AND MARKETABLE SECURITIES Components for cash, cash equivalents and marketable securities (in millions): September 30, 2016 Cost Basis Unrealized Gains Unrealized Losses Fair Value Cash $ 16 $ — $ — $ 16 Cash equivalents 1,802 — — 1,802 Cash and cash equivalents 1,818 — — 1,818 U.S. government and agency securities 330 2 — 332 Foreign government bonds 36 — — 36 Asset-backed securities 153 1 — 154 Mortgage-backed securities 102 — — 102 Corporate notes and bonds 760 8 (1 ) 767 Municipal securities 17 — — 17 Marketable securities 1,398 11 (1 ) 1,408 Total $ 3,216 $ 11 $ (1 ) $ 3,226 December 31, 2015 Cost Basis Unrealized Gains Unrealized Losses Fair Value Cash $ 4 $ — $ — $ 4 Cash equivalents 69 — — 69 Cash and cash equivalents 73 — — 73 U.S. government and agency securities 254 — (1 ) 253 Foreign government bonds 31 — — 31 Asset-backed securities 130 — — 130 Mortgage-backed securities 117 — (1 ) 116 Corporate notes and bonds 711 1 (4 ) 708 Municipal securities 17 — — 17 Marketable securities 1,260 1 (6 ) 1,255 Total $ 1,333 $ 1 $ (6 ) $ 1,328 The large increase in cash and cash equivalents is due to debt financing received in anticipation of the pending merger with Virgin America. Unrealized losses from fixed-income securities are primarily attributable to changes in interest rates. Management does not believe any remaining unrealized losses represent other-than-temporary impairments based on our evaluation of available evidence as of September 30, 2016 . Activity for marketable securities (in millions): Three Months Ended September 30, Nine Months Ended September 30, 2016 2015 2016 2015 Proceeds from sales and maturities $ 280 $ 142 $ 638 $ 818 Gross realized gains — — 2 2 Gross realized losses — — (1 ) (2 ) Maturities for marketable securities (in millions): September 30, 2016 Cost Basis Fair Value Due in one year or less $ 283 $ 283 Due after one year through five years 1,108 1,118 Due after five years through 10 years 7 7 Due after 10 years — — Total $ 1,398 $ 1,408 |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 9 Months Ended |
Sep. 30, 2016 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE MEASUREMENTS | FAIR VALUE MEASUREMENTS In determining fair value, there is a three-level hierarchy based on the reliability of the inputs used. Level 1 refers to fair values based on quoted prices in active markets for identical assets or liabilities, Level 2 refers to fair values estimated using significant other observable inputs and Level 3 refers to fair values estimated using significant unobservable inputs. Fair Value of Financial Instruments on a Recurring Basis Fair values of financial instruments on the consolidated balance sheet (in millions): September 30, 2016 Level 1 Level 2 Total Assets Marketable securities U.S. government and agency securities $ 332 $ — $ 332 Foreign government bonds — 36 36 Asset-backed securities — 154 154 Mortgage-backed securities — 102 102 Corporate notes and bonds — 767 767 Municipal securities — 17 17 Total Marketable securities 332 1,076 1,408 Derivative instruments Fuel hedge call options — 16 16 Total Assets 332 1,092 1,424 Liabilities Derivative instruments Interest rate swap agreements — (20 ) (20 ) Total Liabilities — (20 ) (20 ) December 31, 2015 Level 1 Level 2 Total Assets Marketable securities U.S. government and agency securities $ 253 $ — $ 253 Foreign government bonds — 31 31 Asset-backed securities — 130 130 Mortgage-backed securities — 116 116 Corporate notes and bonds — 708 708 Municipal securities — 17 17 Total Marketable securities 253 1,002 1,255 Derivative instruments Fuel hedge call options — 4 4 Total Assets 253 1,006 1,259 Liabilities Derivative instruments Interest rate swap agreements — (18 ) (18 ) Total Liabilities — (18 ) (18 ) The Company uses the market and income approach to determine the fair value of marketable securities. U.S. government securities are Level 1 as the fair value is based on quoted prices in active markets. Foreign government bonds, asset-backed securities, mortgage-backed securities, corporate notes and bonds, and municipal securities are Level 2 as the fair value is based on standard valuation models that are calculated based on observable inputs such as quoted interest rates, yield curves, credit ratings of the security and other observable market information. The Company uses the market approach and the income approach to determine the fair value of derivative instruments. The fair value for fuel hedge call options is determined utilizing an option pricing model based on inputs that are readily available in active markets, or can be derived from information available in active markets. In addition, the fair value considers the exposure to credit losses in the event of non-performance by counterparties. Interest rate swap agreements are Level 2 as the fair value of these contracts is determined based on the difference between the fixed interest rate in the agreements and the observable LIBOR-based interest forward rates at period end, multiplied by the total notional value. The Company has no financial assets that are measured at fair value on a nonrecurring basis at September 30, 2016 . Fair Value of Other Financial Instruments The Company used the following methods and assumptions to determine the fair value of financial instruments that are not recognized at fair value as described below. Cash and Cash Equivalents : Carried at amortized cost, which approximates fair value. Debt : The carrying amount of the Company's variable-rate debt approximates fair values. For fixed-rate debt, the Company uses the income approach to determine the estimated fair value, by using discounted cash flows using borrowing rates for comparable debt over the weighted life of the outstanding debt. The estimated fair value of the fixed-rate debt is Level 3 as certain inputs used are unobservable. Fixed-rate debt which is not carried at fair value on the consolidated balance sheet, has an estimated fair value of (in millions): September 30, December 31, Carrying amount $ 730 $ 520 Fair value 759 557 |
MILEAGE PLAN
MILEAGE PLAN | 9 Months Ended |
Sep. 30, 2016 | |
MILEAGE PLAN [Abstract] | |
MILEAGE PLAN | MILEAGE PLAN Alaska's Mileage Plan liabilities and deferrals on the consolidated balance sheets (in millions): September 30, December 31, Current Liabilities: Other accrued liabilities $ 405 $ 368 Other Liabilities and Credits: Deferred revenue 489 427 Other liabilities 19 19 Total $ 913 $ 814 Alaska's Mileage Plan revenue included in the consolidated statements of operations (in millions): Three Months Ended September 30, Nine Months Ended September 30, 2016 2015 2016 2015 Passenger revenues $ 73 $ 66 $ 215 $ 199 Other - net revenues 107 85 318 244 Total $ 180 $ 151 $ 533 $ 443 |
LONG-TERM DEBT
LONG-TERM DEBT | 9 Months Ended |
Sep. 30, 2016 | |
Debt Disclosure [Abstract] | |
LONG-TERM DEBT | LONG-TERM DEBT Long-term debt obligations on the consolidated balance sheet (in millions): September 30, December 31, Fixed-rate notes payable due through 2026 $ 730 $ 520 Variable-rate notes payable due through 2028 1,423 166 Less debt issuance costs (17 ) (3 ) Total debt 2,136 683 Less current portion 275 114 Long-term debt, less current portion $ 1,861 $ 569 Weighted-average fixed-interest rate 4.6 % 5.7 % Weighted-average variable-interest rate 2.3 % 1.8 % During the nine months ended September 30, 2016 , the Company made debt payments of $93 million . In the current quarter the Company obtained approximately $1.5 billion of secured debt financing from multiple lenders in anticipation of the pending merger with Virgin America. The loans are secured by a total of 53 aircraft, including 34 737-900ER aircraft and 19 737-800 aircraft. To hedge the volatility of the underlying variable interest rates on $300 million of the debt obtained in the third quarter of 2016, the Company entered into two interest rate swap agreements. The interest rate swap agreements stipulate that the Company pay a fixed interest rate over the term of the loans and receive a floating interest rate. We have designated these agreements as qualifying hedging instruments and are accounting for them as cash flow hedges. The interest rate swap agreements expire October 2022 and September 2026 to coincide with the debt termination dates. Interest rate swaps are recognized at fair value on the balance sheet, and changes in the fair value are recognized in accumulated other comprehensive income (loss). The effective portion of the derivative represents the change in fair value of the hedge that offsets the change in fair value of the hedged item. To the extent the change in fair value of the hedge does not perfectly offset the change in the fair value of the hedged item, the ineffective portion of the hedge is recognized in interest expense, if material. Subsequent to September 30, 2016 , the Company obtained an additional $100 million of secured debt financing in anticipation of the pending merger with Virgin America. Subsequent events are further discussed in Note 11. As discussed in Note 1, the Company adopted ASU 2015-03 which resulted in a reclassification of debt issuance costs as an offset to debt in the consolidated balance sheet. At September 30, 2016 , scheduled long-term debt principal payments for the next five years and thereafter are as follows (in millions): Total Remainder of 2016 $ 47 2017 282 2018 315 2019 281 2020 286 Thereafter 942 Total $ 2,153 Bank Lines of Credit The Company has two $100 million credit facilities and one $52 million credit facility. All three facilities have variable interest rates based on LIBOR plus a specified margin. One of the $100 million facilities, which expires in September 2017 , is secured by aircraft. The other $100 million facility, which expires in March 2017 , is secured by certain accounts receivable, spare engines, spare parts and ground service equipment. The $52 million facility expires in October 2017 with a mechanism for annual renewal and is secured by two 737-800 aircraft. The Company has no immediate plans to borrow using any of these facilities. All three credit facilities have a requirement to maintain a minimum unrestricted cash and marketable securities balance of $500 million . The Company is in compliance with this covenant at September 30, 2016 . |
EMPLOYEE BENEFIT PLANS
EMPLOYEE BENEFIT PLANS | 9 Months Ended |
Sep. 30, 2016 | |
Compensation and Retirement Disclosure [Abstract] | |
EMPLOYEE BENEFIT PLANS | EMPLOYEE BENEFIT PLANS The Company has a number of employee benefit plans, including qualified and nonqualified defined-benefit plans, defined-contribution plans, postretirement medical benefits, and long-term disability benefits. In relation to the qualified plans, net periodic benefit costs recognized included the following components for the three and nine months ended September 30, 2016 (in millions). Amounts recognized in relation to all other plans were immaterial to the quarter. Qualified Defined - Benefit Plans Three Months Ended September 30, Nine Months Ended September 30, 2016 2015 2016 2015 Service cost $ 9 $ 11 $ 27 $ 31 Interest cost 18 21 55 63 Expected return on assets (27 ) (31 ) (81 ) (92 ) Amortization of prior service costs (1 ) (1 ) (1 ) (1 ) Recognized actuarial loss (gain) 7 7 19 20 Total $ 6 $ 7 $ 19 $ 21 |
COMMITMENTS
COMMITMENTS | 9 Months Ended |
Sep. 30, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS | COMMITMENTS Future minimum fixed payments for commitments (in millions): September 30, 2016 Aircraft Leases Facility Leases Aircraft Purchase Commitments Capacity Purchase Agreements (a) Remainder of 2016 $ 20 $ 24 $ 146 $ 17 2017 99 91 931 78 2018 90 43 724 81 2019 82 43 645 86 2020 73 40 334 92 Thereafter 400 188 397 746 Total $ 764 $ 429 $ 3,177 $ 1,100 (a) Includes all non-aircraft lease costs associated with CPA arrangements. Lease Commitments At September 30, 2016 , the Company’s fleet includes lease contracts for 18 B737 aircraft and 15 Q400s. Additionally, the fleet includes 16 lease commitments under the CPA with SkyWest, comprising 3 CRJ-700s and 13 E175s. All lease contracts have remaining noncancelable lease terms ranging from 2016 to 2029. The Company has the option to increase capacity flown by SkyWest with 8 additional E175 aircraft with delivery in 2019. The majority of airport and terminal facilities are also leased. Rent expense for aircraft and facility leases was $82 million and $77 million for the three months ended September 30, 2016 and 2015 , respectively. Rent expense for aircraft and facility leases was $226 million and $217 million for the nine months ended September 30, 2016 and 2015 , respectively. Aircraft Purchase Commitments As discussed in Note 11, subsequent to September 30, 2016 the Company deferred the delivery of four 737-MAX aircraft with deliveries in 2017 and 2018, and exercised five 737-900ER options for delivery in 2018. These changes are not reflected in the commitments table above. Inclusive of these changes, the Company is committed to purchasing 56 B737 aircraft ( 19 737-900ER aircraft and 37 737 MAX aircraft), and 33 E175 aircraft, with deliveries in 2016 through 2023 . In addition, the Company has options to purchase 41 B737 aircraft, and 30 E175 aircraft, which are not reflected in the commitments table above. Capacity Purchase Agreements (CPAs) At September 30, 2016 , Alaska had CPAs with three carriers, including the Company's wholly-owned subsidiary, Horizon. Horizon sells 100% of its capacity under a CPA with Alaska. In addition, Alaska has CPAs with SkyWest to fly certain routes in the Lower 48 and with PenAir to fly certain routes in the state of Alaska. Under these agreements, Alaska pays the carriers an amount which is based on a determination of their cost of operating those flights and other factors intended to approximate market rates for those services. Future payments (excluding Horizon) are based on minimum levels of flying by the third-party carriers, which could differ materially due to variable payments based on actual levels of flying and certain costs associated with operating flights such as fuel. Contingencies The Company is a party to routine litigation matters incidental to its business and with respect to which no material liability is expected. Management believes the ultimate disposition of these matters is not likely to materially affect the Company's financial position or results of operations. This forward-looking statement is based on management's current understanding of the relevant law and facts, and is subject to various contingencies, including the potential costs and risks associated with litigation and the actions of arbitrators, judges and juries. On September 7, 2016, a private antitrust action captioned Daniel Grace, et al., v. Alaska Air Group, Inc., et al. was filed in the United States District Court for the Northern District of California, against the Company. The complaint was subsequently amended by the plaintiffs on October 28, 2016 to, among other matters, add Virgin America Inc. as a defendant and modify the list of named plaintiffs. The plaintiffs, each of whom the complaint describes as air passengers, allege that the pending merger of Virgin America Inc. with the Company would violate Section 7 of the Clayton Antitrust Act (15 U.S.C. §18), as well as Section 1 of the Sherman Antitrust Act (15 U.S.C. §1). The complaint seeks, among other matters, to preliminarily as well as permanently enjoin the pending merger, and also seeks attorneys’ fees. On October 19, 2016, the Court held a hearing on plaintiffs’ motion for a preliminary injunction. The Court did not rule at the hearing on whether to issue the preliminary injunction, but did subsequently issue an order requiring the defendants to provide the Court and the plaintiffs with at least seven calendar days’ notice before consummating the merger, noting that any consummation of the merger would be subject to divestiture. At the Court’s direction, the parties have submitted to the Court a proposed pretrial and trial schedule assuming a December 2016 trial date. The Company believes the allegations in this complaint are without merit and we intend to defend against them vigorously. |
SHAREHOLDERS' EQUITY
SHAREHOLDERS' EQUITY | 9 Months Ended |
Sep. 30, 2016 | |
Equity [Abstract] | |
SHAREHOLDERS' EQUITY | SHAREHOLDERS' EQUITY Dividends During the three months ended September 30, 2016 , the Company declared and paid cash dividends of $0.275 per share, or $34 million . During the nine months ended September 30, 2016 , the Company declared and paid cash dividends of $0.825 per share, or $102 million . Common Stock Repurchase In May 2014, the Board of Directors authorized a $650 million share repurchase program, which was completed in October 2015. In August 2015, the Board of Directors authorized a $1 billion share repurchase program, which was paused in the second quarter of 2016 in anticipation of the pending acquisition of Virgin America. Share repurchase activity (in millions, except share amounts): Three Months Ended September 30, Nine Months Ended September 30, 2016 2015 2016 2015 Shares Amount Shares Amount Shares Amount Shares Amount 2015 Repurchase Program - $1 billion — $ — — $ — 2,594,809 $ 193 — $ — 2014 Repurchase Program - $650 million — — 1,588,251 119 — — 5,649,805 381 Total — $ — 1,588,251 $ 119 2,594,809 $ 193 5,649,805 $ 381 Accumulated Other Comprehensive Loss Components of accumulated other comprehensive income (loss), net of tax (in millions): September 30, December 31, Marketable securities $ 7 $ (3 ) Employee benefit plans (278 ) (288 ) Interest rate derivatives (13 ) (12 ) Total $ (284 ) $ (303 ) |
OPERATING SEGMENT INFORMATION
OPERATING SEGMENT INFORMATION | 9 Months Ended |
Sep. 30, 2016 | |
Segment Reporting [Abstract] | |
OPERATING SEGMENT INFORMATION | OPERATING SEGMENT INFORMATION Air Group has two operating airlines - Alaska and Horizon. Each is a regulated airline with separate management teams. To manage the two operating airlines and the revenues and expenses associated with the CPAs, management views the business in three operating segments: Alaska Mainline - The Boeing 737 part of Alaska's business. Alaska Regional - Alaska's shorter distance network. In this segment, Alaska Regional records actual on board passenger revenue and costs such as fuel, distribution costs, and payments made to Horizon, SkyWest and PenAir for the capacity purchased under CPAs. Additionally, Alaska Regional includes an allocation of corporate overhead such as IT, finance and other administrative costs incurred by Alaska on behalf of the regional operations. Horizon - Horizon operates regional aircraft. All of Horizon's capacity is sold to Alaska under a CPA. Expenses include those typically borne by regional airlines such as crew costs, ownership costs, station handling costs, and maintenance costs. Additionally, the following table reports “Air Group adjusted,” which is not a measure determined in accordance with GAAP. The Company's chief operating decision-makers and others in management use this measure to evaluate operational performance and determine resource allocations. Adjustments are further explained below in a reconciliation to consolidated GAAP results. Operating segment information is as follows (in millions): Three Months Ended September 30, 2016 Alaska Mainline Regional Horizon Parent & Consolidating (a) Air Group Adjusted (b) Special Items (c) Consolidated Operating revenues Passenger Mainline $ 1,073 $ — $ — $ — $ 1,073 $ — $ 1,073 Regional — 249 — — 249 — 249 Total passenger revenues 1,073 249 — — 1,322 — 1,322 CPA revenues — — 109 (109 ) — — — Freight and mail 30 1 — — 31 — 31 Other - net 190 21 1 1 213 — 213 Total operating revenues 1,293 271 110 (108 ) 1,566 — 1,566 Operating expenses Operating expenses, excluding fuel 727 202 99 (109 ) 919 22 941 Economic fuel 188 34 — — 222 3 225 Total operating expenses 915 236 99 (109 ) 1,141 25 1,166 Nonoperating income (expense) Interest income 7 — — — 7 — 7 Interest expense (7 ) — (2 ) (2 ) (11 ) — (11 ) Other 5 — — 1 6 — 6 5 — (2 ) (1 ) 2 — 2 Income (loss) before income tax $ 383 $ 35 $ 9 $ — $ 427 $ (25 ) $ 402 Three Months Ended September 30, 2015 Alaska Mainline Regional Horizon Parent & Consolidating (a) Air Group Adjusted (b) Special Items (c) Consolidated Operating revenues Passenger Mainline $ 1,057 $ — $ — $ — $ 1,057 $ — $ 1,057 Regional — 240 — — 240 — 240 Total passenger revenues 1,057 240 — — 1,297 — 1,297 CPA revenues — — 105 (105 ) — — — Freight and mail 29 1 — — 30 — 30 Other - net 167 20 1 — 188 — 188 Total operating revenues 1,253 261 106 (105 ) 1,515 — 1,515 Operating expenses Operating expenses, excluding fuel 667 181 93 (104 ) 837 — 837 Economic fuel 205 35 — — 240 5 245 Total operating expenses 872 216 93 (104 ) 1,077 5 1,082 Nonoperating income (expense) Interest income 5 — — — 5 — 5 Interest expense (7 ) — (3 ) — (10 ) — (10 ) Other 7 — — 2 9 — 9 5 — (3 ) 2 4 — 4 Income (loss) before income tax $ 386 $ 45 $ 10 $ 1 $ 442 $ (5 ) $ 437 Nine Months Ended September 30, 2016 Alaska Mainline Regional Horizon Parent & Consolidating (a) Air Group Adjusted (b) Special Items (c) Consolidated Operating revenues Passenger Mainline 3,036 — $ — $ — $ 3,036 $ — $ 3,036 Regional — 682 — — 682 — 682 Total passenger revenues 3,036 682 — — 3,718 — 3,718 CPA revenues — — 322 (322 ) — — — Freight and mail 79 3 — — 82 — 82 Other - net 546 57 3 1 607 — 607 Total operating revenues 3,661 742 325 (321 ) 4,407 — 4,407 Operating expenses Operating expenses, excluding fuel 2,107 580 305 (322 ) 2,670 36 2,706 Economic fuel 512 90 — — 602 (9 ) 593 Total operating expenses 2,619 670 305 (322 ) 3,272 27 3,299 Nonoperating income (expense) Interest income 19 — 1 — 20 — 20 Interest expense (23 ) — (7 ) (3 ) (33 ) — (33 ) Other 15 — — 4 19 — 19 11 — (6 ) 1 6 — 6 Income (loss) before income tax $ 1,053 $ 72 $ 14 $ 2 $ 1,141 $ (27 ) $ 1,114 Nine Months Ended September 30, 2015 Alaska Mainline Regional Horizon Parent & Consolidating (a) Air Group Adjusted (b) Special Items (c) Consolidated Operating revenues Passenger Mainline $ 2,977 $ — $ — $ — $ 2,977 $ — $ 2,977 Regional — 638 — — 638 — 638 Total passenger revenues 2,977 638 — — 3,615 — 3,615 CPA revenues — — 303 (303 ) — — — Freight and mail 79 4 — — 83 — 83 Other - net 465 55 3 — 523 — 523 Total operating revenues 3,521 697 306 (303 ) 4,221 — 4,221 Operating expenses Operating expenses, excluding fuel 1,951 514 274 (302 ) 2,437 — 2,437 Economic fuel 641 101 — — 742 (1 ) 741 Total operating expenses 2,592 615 274 (302 ) 3,179 (1 ) 3,178 Nonoperating income (expense) Interest income 15 — — 1 16 — 16 Interest expense (21 ) — (8 ) (3 ) (32 ) — (32 ) Other 21 — — 5 26 — 26 15 — (8 ) 3 10 — 10 Income (loss) before income tax $ 944 $ 82 $ 24 $ 2 $ 1,052 $ 1 $ 1,053 (a) Includes consolidating entries, Parent Company, and other immaterial business units. (b) The adjusted column represents the financial information that is reviewed by management to assess performance of operations and determine capital allocations and does not include certain income and charges. (c) Includes mark-to-market fuel-hedge accounting charges, and other special items described previously. Total assets were as follows (in millions): September 30, December 31, Alaska (a) $ 10,949 $ 8,127 Horizon 716 717 Parent company 5,479 4,734 Elimination of inter-company accounts (8,445 ) (7,048 ) Consolidated $ 8,699 $ 6,530 (a) There are no assets associated with capacity purchase flying at Alaska. |
SUBSEQUENT EVENT
SUBSEQUENT EVENT | 9 Months Ended |
Sep. 30, 2016 | |
Subsequent Events [Abstract] | |
Subsequent Events | SUBSEQUENT EVENTS |
GENERAL AND SUMMARY OF SIGNIF18
GENERAL AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 9 Months Ended |
Sep. 30, 2016 | |
Accounting Policies [Abstract] | |
Organization and Basis of Presentation | Organization and Basis of Presentation The interim condensed consolidated financial statements include the accounts of Alaska Air Group, Inc. (Air Group or the Company) and its primary subsidiaries, Alaska Airlines, Inc. (Alaska) and Horizon Air Industries, Inc. (Horizon), through which the Company conducts substantially all of its operations. All intercompany balances and transactions have been eliminated. These financial statements have been prepared in accordance with accounting principles generally accepted in the United States (GAAP) for interim financial information. Consistent with these requirements, this Form 10-Q does not include all the information required by GAAP for complete financial statements. As a result, this Form 10-Q should be read in conjunction with the Consolidated Financial Statements and accompanying Notes in the Form 10-K for the year ended December 31, 2015 . In the opinion of management, all adjustments have been made that are necessary to present fairly the Company’s financial position as of September 30, 2016 , as well as the results of operations for the three and nine months ended September 30, 2016 and 2015 . The adjustments made were of a normal recurring nature. In preparing these statements, the Company is required to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent liabilities, as well as the reported amounts of revenues and expenses. Due to seasonal variations in the demand for air travel, the volatility of aircraft fuel prices, changes in global economic conditions, changes in the competitive environment, and other factors, operating results for the three and nine months ended September 30, 2016 are not necessarily indicative of operating results for the entire year. Certain reclassifications have been made to prior year financial statements to conform with classifications used in the current year. |
Recently Issued Accounting Pronouncements | Recently Issued Accounting Pronouncements In May 2014, the FASB issued Accounting Standards Update 2014-09, "Revenue from Contracts with Customers" (ASU 2014-09), which requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. The ASU will replace most existing revenue recognition guidance in U.S. GAAP when it becomes effective. In March 2016, the FASB issued ASU 2016-08, "Revenue from Contracts with Customers" (Topic 606), Principal versus Agent Considerations, which provides guidance when a revenue transaction involves a third party in providing goods or services to a customer in determining whether the Company is considered the principal or the agent in the transaction. Entities are permitted to use either a full retrospective or cumulative effect transition method, and are required to adopt all parts of the new revenue standard using the same transition method. The new standard is effective for the Company on January 1, 2018. At this time, the Company believes the most significant impact to the financial statements will be in Mileage Plan revenues and liabilities. The Company currently uses the incremental cost approach for miles earned through travel. This standard eliminates that option and the Company will be required to increase its liability for earned miles through a relative selling price model. The Company continues to evaluate the full impact of the standard, and currently plans to apply the full retrospective transition method. In April 2015, the FASB issued ASU 2015-03, "Interest - Imputation of Interest" (Subtopic 835-30), which requires debt issuance costs related to a debt liability be presented as a direct deduction from the carrying value of the debt liability. The amendment was adopted as of January 1, 2016. Prior period debt balances have been adjusted to reflect the adoption of ASU 2015-03. The adoption of the ASU had no impact on the Statements of Operations or retained earnings. In February 2016, the FASB issued ASU 2016-02, "Leases" (Topic 842), which requires lessees to recognize assets and liabilities for leases currently classified as operating leases. Under the new standard a lessee will recognize a liability on the balance sheet representing the lease payments owed, and a right-of-use-asset representing its right to use the underlying asset for the lease term. For leases with a term of 12 months or less, a lessee is permitted to make an accounting policy election not to recognize lease assets and lease liabilities. The new standard is effective for the Company on January 1, 2019. Early adoption of the standard is permitted. The Company is evaluating the effect that ASU 2016-02 will have on its financial statements and related disclosures. The Company has not yet determined whether it will early adopt the standard. In March 2016, the FASB issued ASU 2016-09, "Compensation - Stock Compensation" (Topic 718). The proposed standard simplifies several aspects of accounting for employee share-based payment awards, including the accounting for income taxes, forfeitures, and statutory tax withholding requirements, as well as classification in the statement of cash flows. The Company is evaluating the effect of ASU 2016-09 on the consolidated financial statements and related disclosures. The ASU is effective for the Company beginning January 1, 2017. The Company has not yet elected a transition method. |
CASH, CASH EQUIVALENTS AND MA19
CASH, CASH EQUIVALENTS AND MARKETABLE SECURITIES (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Cash, Cash Equivalents, and Short-term Investments [Abstract] | |
Schedule of Cash, Cash Equivalents and Short-term Investments | Components for cash, cash equivalents and marketable securities (in millions): September 30, 2016 Cost Basis Unrealized Gains Unrealized Losses Fair Value Cash $ 16 $ — $ — $ 16 Cash equivalents 1,802 — — 1,802 Cash and cash equivalents 1,818 — — 1,818 U.S. government and agency securities 330 2 — 332 Foreign government bonds 36 — — 36 Asset-backed securities 153 1 — 154 Mortgage-backed securities 102 — — 102 Corporate notes and bonds 760 8 (1 ) 767 Municipal securities 17 — — 17 Marketable securities 1,398 11 (1 ) 1,408 Total $ 3,216 $ 11 $ (1 ) $ 3,226 December 31, 2015 Cost Basis Unrealized Gains Unrealized Losses Fair Value Cash $ 4 $ — $ — $ 4 Cash equivalents 69 — — 69 Cash and cash equivalents 73 — — 73 U.S. government and agency securities 254 — (1 ) 253 Foreign government bonds 31 — — 31 Asset-backed securities 130 — — 130 Mortgage-backed securities 117 — (1 ) 116 Corporate notes and bonds 711 1 (4 ) 708 Municipal securities 17 — — 17 Marketable securities 1,260 1 (6 ) 1,255 Total $ 1,333 $ 1 $ (6 ) $ 1,328 |
Schedule of Realized Gain (Loss) | Activity for marketable securities (in millions): Three Months Ended September 30, Nine Months Ended September 30, 2016 2015 2016 2015 Proceeds from sales and maturities $ 280 $ 142 $ 638 $ 818 Gross realized gains — — 2 2 Gross realized losses — — (1 ) (2 ) |
Schedule of Debt Investment Maturities | Maturities for marketable securities (in millions): September 30, 2016 Cost Basis Fair Value Due in one year or less $ 283 $ 283 Due after one year through five years 1,108 1,118 Due after five years through 10 years 7 7 Due after 10 years — — Total $ 1,398 $ 1,408 |
FAIR VALUE MEASUREMENTS (Tables
FAIR VALUE MEASUREMENTS (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Fair Value Disclosures [Abstract] | |
Fair Value, Measurement Inputs, Disclosure | Fair values of financial instruments on the consolidated balance sheet (in millions): September 30, 2016 Level 1 Level 2 Total Assets Marketable securities U.S. government and agency securities $ 332 $ — $ 332 Foreign government bonds — 36 36 Asset-backed securities — 154 154 Mortgage-backed securities — 102 102 Corporate notes and bonds — 767 767 Municipal securities — 17 17 Total Marketable securities 332 1,076 1,408 Derivative instruments Fuel hedge call options — 16 16 Total Assets 332 1,092 1,424 Liabilities Derivative instruments Interest rate swap agreements — (20 ) (20 ) Total Liabilities — (20 ) (20 ) December 31, 2015 Level 1 Level 2 Total Assets Marketable securities U.S. government and agency securities $ 253 $ — $ 253 Foreign government bonds — 31 31 Asset-backed securities — 130 130 Mortgage-backed securities — 116 116 Corporate notes and bonds — 708 708 Municipal securities — 17 17 Total Marketable securities 253 1,002 1,255 Derivative instruments Fuel hedge call options — 4 4 Total Assets 253 1,006 1,259 Liabilities Derivative instruments Interest rate swap agreements — (18 ) (18 ) Total Liabilities — (18 ) (18 ) |
Fair Value, by Balance Sheet Grouping | Fixed-rate debt which is not carried at fair value on the consolidated balance sheet, has an estimated fair value of (in millions): September 30, December 31, Carrying amount $ 730 $ 520 Fair value 759 557 |
MILEAGE PLAN MILEAGE PLAN (Tabl
MILEAGE PLAN MILEAGE PLAN (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
MILEAGE PLAN [Abstract] | |
Mileage Plan Liabilities | Alaska's Mileage Plan liabilities and deferrals on the consolidated balance sheets (in millions): September 30, December 31, Current Liabilities: Other accrued liabilities $ 405 $ 368 Other Liabilities and Credits: Deferred revenue 489 427 Other liabilities 19 19 Total $ 913 $ 814 |
Mileage Plan Revenue | Alaska's Mileage Plan revenue included in the consolidated statements of operations (in millions): Three Months Ended September 30, Nine Months Ended September 30, 2016 2015 2016 2015 Passenger revenues $ 73 $ 66 $ 215 $ 199 Other - net revenues 107 85 318 244 Total $ 180 $ 151 $ 533 $ 443 |
LONG-TERM DEBT (Tables)
LONG-TERM DEBT (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Debt Disclosure [Abstract] | |
Schedule of Long-term Debt Instruments | Long-term debt obligations on the consolidated balance sheet (in millions): September 30, December 31, Fixed-rate notes payable due through 2026 $ 730 $ 520 Variable-rate notes payable due through 2028 1,423 166 Less debt issuance costs (17 ) (3 ) Total debt 2,136 683 Less current portion 275 114 Long-term debt, less current portion $ 1,861 $ 569 Weighted-average fixed-interest rate 4.6 % 5.7 % Weighted-average variable-interest rate 2.3 % 1.8 % |
Schedule of Maturities of Long-term Debt | At September 30, 2016 , scheduled long-term debt principal payments for the next five years and thereafter are as follows (in millions): Total Remainder of 2016 $ 47 2017 282 2018 315 2019 281 2020 286 Thereafter 942 Total $ 2,153 |
EMPLOYEE BENEFIT PLANS (Tables)
EMPLOYEE BENEFIT PLANS (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Compensation and Retirement Disclosure [Abstract] | |
Schedule of Net Benefit Costs | et periodic benefit costs recognized included the following components for the three and nine months ended September 30, 2016 (in millions). Amounts recognized in relation to all other plans were immaterial to the quarter. Qualified Defined - Benefit Plans Three Months Ended September 30, Nine Months Ended September 30, 2016 2015 2016 2015 Service cost $ 9 $ 11 $ 27 $ 31 Interest cost 18 21 55 63 Expected return on assets (27 ) (31 ) (81 ) (92 ) Amortization of prior service costs (1 ) (1 ) (1 ) (1 ) Recognized actuarial loss (gain) 7 7 19 20 Total $ 6 $ 7 $ 19 $ 21 |
COMMITMENTS (Tables)
COMMITMENTS (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of Future Minimum Rental Payments for Operating Leases and Unrecorded Unconditional Purchase Obligtaions | Future minimum fixed payments for commitments (in millions): September 30, 2016 Aircraft Leases Facility Leases Aircraft Purchase Commitments Capacity Purchase Agreements (a) Remainder of 2016 $ 20 $ 24 $ 146 $ 17 2017 99 91 931 78 2018 90 43 724 81 2019 82 43 645 86 2020 73 40 334 92 Thereafter 400 188 397 746 Total $ 764 $ 429 $ 3,177 $ 1,100 |
SHAREHOLDERS' EQUITY (Tables)
SHAREHOLDERS' EQUITY (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Equity [Abstract] | |
Schedule of Treasury Stock by Class | Share repurchase activity (in millions, except share amounts): Three Months Ended September 30, Nine Months Ended September 30, 2016 2015 2016 2015 Shares Amount Shares Amount Shares Amount Shares Amount 2015 Repurchase Program - $1 billion — $ — — $ — 2,594,809 $ 193 — $ — 2014 Repurchase Program - $650 million — — 1,588,251 119 — — 5,649,805 381 Total — $ — 1,588,251 $ 119 2,594,809 $ 193 5,649,805 $ 381 |
Schedule of Accumulated Other Comprehensive Income (Loss) | Components of accumulated other comprehensive income (loss), net of tax (in millions): September 30, December 31, Marketable securities $ 7 $ (3 ) Employee benefit plans (278 ) (288 ) Interest rate derivatives (13 ) (12 ) Total $ (284 ) $ (303 ) |
OPERATING SEGMENT INFORMATION (
OPERATING SEGMENT INFORMATION (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Segment Reporting [Abstract] | |
Schedule of Segment Reporting Information, by Segment | Operating segment information is as follows (in millions): Three Months Ended September 30, 2016 Alaska Mainline Regional Horizon Parent & Consolidating (a) Air Group Adjusted (b) Special Items (c) Consolidated Operating revenues Passenger Mainline $ 1,073 $ — $ — $ — $ 1,073 $ — $ 1,073 Regional — 249 — — 249 — 249 Total passenger revenues 1,073 249 — — 1,322 — 1,322 CPA revenues — — 109 (109 ) — — — Freight and mail 30 1 — — 31 — 31 Other - net 190 21 1 1 213 — 213 Total operating revenues 1,293 271 110 (108 ) 1,566 — 1,566 Operating expenses Operating expenses, excluding fuel 727 202 99 (109 ) 919 22 941 Economic fuel 188 34 — — 222 3 225 Total operating expenses 915 236 99 (109 ) 1,141 25 1,166 Nonoperating income (expense) Interest income 7 — — — 7 — 7 Interest expense (7 ) — (2 ) (2 ) (11 ) — (11 ) Other 5 — — 1 6 — 6 5 — (2 ) (1 ) 2 — 2 Income (loss) before income tax $ 383 $ 35 $ 9 $ — $ 427 $ (25 ) $ 402 Three Months Ended September 30, 2015 Alaska Mainline Regional Horizon Parent & Consolidating (a) Air Group Adjusted (b) Special Items (c) Consolidated Operating revenues Passenger Mainline $ 1,057 $ — $ — $ — $ 1,057 $ — $ 1,057 Regional — 240 — — 240 — 240 Total passenger revenues 1,057 240 — — 1,297 — 1,297 CPA revenues — — 105 (105 ) — — — Freight and mail 29 1 — — 30 — 30 Other - net 167 20 1 — 188 — 188 Total operating revenues 1,253 261 106 (105 ) 1,515 — 1,515 Operating expenses Operating expenses, excluding fuel 667 181 93 (104 ) 837 — 837 Economic fuel 205 35 — — 240 5 245 Total operating expenses 872 216 93 (104 ) 1,077 5 1,082 Nonoperating income (expense) Interest income 5 — — — 5 — 5 Interest expense (7 ) — (3 ) — (10 ) — (10 ) Other 7 — — 2 9 — 9 5 — (3 ) 2 4 — 4 Income (loss) before income tax $ 386 $ 45 $ 10 $ 1 $ 442 $ (5 ) $ 437 Nine Months Ended September 30, 2016 Alaska Mainline Regional Horizon Parent & Consolidating (a) Air Group Adjusted (b) Special Items (c) Consolidated Operating revenues Passenger Mainline 3,036 — $ — $ — $ 3,036 $ — $ 3,036 Regional — 682 — — 682 — 682 Total passenger revenues 3,036 682 — — 3,718 — 3,718 CPA revenues — — 322 (322 ) — — — Freight and mail 79 3 — — 82 — 82 Other - net 546 57 3 1 607 — 607 Total operating revenues 3,661 742 325 (321 ) 4,407 — 4,407 Operating expenses Operating expenses, excluding fuel 2,107 580 305 (322 ) 2,670 36 2,706 Economic fuel 512 90 — — 602 (9 ) 593 Total operating expenses 2,619 670 305 (322 ) 3,272 27 3,299 Nonoperating income (expense) Interest income 19 — 1 — 20 — 20 Interest expense (23 ) — (7 ) (3 ) (33 ) — (33 ) Other 15 — — 4 19 — 19 11 — (6 ) 1 6 — 6 Income (loss) before income tax $ 1,053 $ 72 $ 14 $ 2 $ 1,141 $ (27 ) $ 1,114 Nine Months Ended September 30, 2015 Alaska Mainline Regional Horizon Parent & Consolidating (a) Air Group Adjusted (b) Special Items (c) Consolidated Operating revenues Passenger Mainline $ 2,977 $ — $ — $ — $ 2,977 $ — $ 2,977 Regional — 638 — — 638 — 638 Total passenger revenues 2,977 638 — — 3,615 — 3,615 CPA revenues — — 303 (303 ) — — — Freight and mail 79 4 — — 83 — 83 Other - net 465 55 3 — 523 — 523 Total operating revenues 3,521 697 306 (303 ) 4,221 — 4,221 Operating expenses Operating expenses, excluding fuel 1,951 514 274 (302 ) 2,437 — 2,437 Economic fuel 641 101 — — 742 (1 ) 741 Total operating expenses 2,592 615 274 (302 ) 3,179 (1 ) 3,178 Nonoperating income (expense) Interest income 15 — — 1 16 — 16 Interest expense (21 ) — (8 ) (3 ) (32 ) — (32 ) Other 21 — — 5 26 — 26 15 — (8 ) 3 10 — 10 Income (loss) before income tax $ 944 $ 82 $ 24 $ 2 $ 1,052 $ 1 $ 1,053 (a) Includes consolidating entries, Parent Company, and other immaterial business units. (b) The adjusted column represents the financial information that is reviewed by management to assess performance of operations and determine capital allocations and does not include certain income and charges. (c) Includes mark-to-market fuel-hedge accounting charges, and other special items described previously. Total assets were as follows (in millions): September 30, December 31, Alaska (a) $ 10,949 $ 8,127 Horizon 716 717 Parent company 5,479 4,734 Elimination of inter-company accounts (8,445 ) (7,048 ) Consolidated $ 8,699 $ 6,530 (a) There are no assets associated with capacity purchase flying at Alaska. |
PROPOSED ACQUISITION OF VIRGI27
PROPOSED ACQUISITION OF VIRGIN AMERICA INC. (Details) - USD ($) $ / shares in Units, $ in Millions | Apr. 01, 2016 | Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 |
Business Acquisition [Line Items] | |||||
Special items - merger costs | $ 22 | $ 0 | $ 36 | $ 0 | |
Virgin America Inc. [Member] | |||||
Business Acquisition [Line Items] | |||||
Approximate Acquisition purchase price | $ 2,600 | ||||
Virgin America Inc. [Member] | Common Stock [Member] | |||||
Business Acquisition [Line Items] | |||||
Acquisition share price | $ 57 |
CASH, CASH EQUIVALENTS AND MA28
CASH, CASH EQUIVALENTS AND MARKETABLE SECURITIES (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | Dec. 31, 2015 | Dec. 31, 2014 | |
Cash and Cash Equivalents [Abstract] | ||||||
Cash | $ 16 | $ 16 | $ 4 | |||
Money market funds and other securities | 1,802 | 1,802 | 69 | |||
Cash and cash equivalents | 1,818 | $ 88 | 1,818 | $ 88 | 73 | $ 107 |
Available-for-sale Securities, Current [Abstract] | ||||||
Marketable securities, Cost Basis | 1,398 | 1,398 | 1,260 | |||
Marketable securities, Unrealized Gains | 11 | 11 | 1 | |||
Marketable securities, Unrealized Losses | (1) | (1) | (6) | |||
Marketable securities, Fair Value | 1,408 | 1,408 | 1,255 | |||
Cash and marketables securities, Cost Basis | 3,216 | 3,216 | 1,333 | |||
Cash and marketable securities, Unrealized Gains | 11 | 11 | 1 | |||
Cash and marketable securities, Unrealized Losses | (1) | (1) | (6) | |||
Total cash and marketable securities | 3,226 | 3,226 | 1,328 | |||
Available-for-sale Securities, Activity [Abstract] | ||||||
Proceeds from sales and maturities | 280 | 142 | 638 | 818 | ||
Gross realized gains | 0 | 0 | 2 | 2 | ||
Gross realized losses | 0 | $ 0 | (1) | $ (2) | ||
U.S. government and agency securities [Member] | ||||||
Available-for-sale Securities, Current [Abstract] | ||||||
Marketable securities, Cost Basis | 330 | 330 | 254 | |||
Marketable securities, Unrealized Gains | 2 | 2 | 0 | |||
Marketable securities, Unrealized Losses | 0 | 0 | (1) | |||
Marketable securities, Fair Value | 332 | 332 | 253 | |||
Foreign government bonds [Member] | ||||||
Available-for-sale Securities, Current [Abstract] | ||||||
Marketable securities, Cost Basis | 36 | 36 | 31 | |||
Marketable securities, Unrealized Gains | 0 | 0 | 0 | |||
Marketable securities, Unrealized Losses | 0 | 0 | 0 | |||
Marketable securities, Fair Value | 36 | 36 | 31 | |||
Asset-backed securities [Member] | ||||||
Available-for-sale Securities, Current [Abstract] | ||||||
Marketable securities, Cost Basis | 153 | 153 | 130 | |||
Marketable securities, Unrealized Gains | 1 | 1 | 0 | |||
Marketable securities, Unrealized Losses | 0 | 0 | 0 | |||
Marketable securities, Fair Value | 154 | 154 | 130 | |||
Mortgage-backed securities [Member] | ||||||
Available-for-sale Securities, Current [Abstract] | ||||||
Marketable securities, Cost Basis | 102 | 102 | 117 | |||
Marketable securities, Unrealized Gains | 0 | 0 | 0 | |||
Marketable securities, Unrealized Losses | 0 | 0 | (1) | |||
Marketable securities, Fair Value | 102 | 102 | 116 | |||
Corporate notes and bonds [Member] | ||||||
Available-for-sale Securities, Current [Abstract] | ||||||
Marketable securities, Cost Basis | 760 | 760 | 711 | |||
Marketable securities, Unrealized Gains | 8 | 8 | 1 | |||
Marketable securities, Unrealized Losses | (1) | (1) | (4) | |||
Marketable securities, Fair Value | 767 | 767 | 708 | |||
Municipal securities [Member] | ||||||
Available-for-sale Securities, Current [Abstract] | ||||||
Marketable securities, Cost Basis | 17 | 17 | 17 | |||
Marketable securities, Unrealized Gains | 0 | 0 | 0 | |||
Marketable securities, Unrealized Losses | 0 | 0 | 0 | |||
Marketable securities, Fair Value | $ 17 | $ 17 | $ 17 |
CASH, CASH EQUIVALENTS AND MA29
CASH, CASH EQUIVALENTS AND MARKETABLE SECURITIES - MATURITIES (Details) - USD ($) $ in Millions | Sep. 30, 2016 | Dec. 31, 2015 |
Cost Basis [Abstract] | ||
Due in one year or less | $ 283 | |
Due after one year through five years | 1,108 | |
Due after five years through 10 years | 7 | |
Due after 10 years | 0 | |
Marketable securities, Cost Basis | 1,398 | $ 1,260 |
Fair Value [Abstract] | ||
Due in one year or less | 283 | |
Due after one year through five years | 1,118 | |
Due after five years through 10 years | 7 | |
Due after 10 years | 0 | |
Marketable securities, Fair Value | $ 1,408 | $ 1,255 |
FAIR VALUE MEASUREMENTS - FAIR
FAIR VALUE MEASUREMENTS - FAIR VALUE OF ASSETS AND LIABILITIES (Details) - Recurring [Member] - USD ($) $ in Millions | Sep. 30, 2016 | Dec. 31, 2015 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Marketable securities | $ 1,408 | $ 1,255 |
Derivative instruments, assets | 1,424 | 1,259 |
Derivative instruments, liabilities | (20) | (18) |
Level 1 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Marketable securities | 332 | 253 |
Derivative instruments, assets | 332 | 253 |
Derivative instruments, liabilities | 0 | 0 |
Level 2 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Marketable securities | 1,076 | 1,002 |
Derivative instruments, assets | 1,092 | 1,006 |
Derivative instruments, liabilities | (20) | (18) |
Fuel hedge contracts [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative instruments, assets | 16 | 4 |
Fuel hedge contracts [Member] | Level 1 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative instruments, assets | 0 | 0 |
Fuel hedge contracts [Member] | Level 2 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative instruments, assets | 16 | 4 |
Interest rate swaps agreements [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative instruments, liabilities | (20) | (18) |
Interest rate swaps agreements [Member] | Level 1 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative instruments, liabilities | 0 | 0 |
Interest rate swaps agreements [Member] | Level 2 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative instruments, liabilities | (20) | (18) |
U.S. government and agency securities [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Marketable securities | 332 | 253 |
U.S. government and agency securities [Member] | Level 1 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Marketable securities | 332 | 253 |
U.S. government and agency securities [Member] | Level 2 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Marketable securities | 0 | 0 |
Foreign government bonds [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Marketable securities | 36 | 31 |
Foreign government bonds [Member] | Level 1 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Marketable securities | 0 | 0 |
Foreign government bonds [Member] | Level 2 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Marketable securities | 36 | 31 |
Asset-backed securities [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Marketable securities | 154 | 130 |
Asset-backed securities [Member] | Level 1 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Marketable securities | 0 | 0 |
Asset-backed securities [Member] | Level 2 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Marketable securities | 154 | 130 |
Mortgage-backed securities [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Marketable securities | 102 | 116 |
Mortgage-backed securities [Member] | Level 1 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Marketable securities | 0 | 0 |
Mortgage-backed securities [Member] | Level 2 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Marketable securities | 102 | 116 |
Corporate notes and bonds [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Marketable securities | 767 | 708 |
Corporate notes and bonds [Member] | Level 1 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Marketable securities | 0 | 0 |
Corporate notes and bonds [Member] | Level 2 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Marketable securities | 767 | 708 |
Municipal securities [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Marketable securities | 17 | 17 |
Municipal securities [Member] | Level 1 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Marketable securities | 0 | 0 |
Municipal securities [Member] | Level 2 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Marketable securities | $ 17 | $ 17 |
FAIR VALUE MEASUREMENTS - LONG-
FAIR VALUE MEASUREMENTS - LONG-TERM DEBT (Details) - USD ($) $ in Millions | Sep. 30, 2016 | Dec. 31, 2015 |
Carrying Amount [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Long-term debt | $ 730 | $ 520 |
Fair Value [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Long-term debt | $ 759 | $ 557 |
MILEAGE PLAN MILEAGE PLAN (Deta
MILEAGE PLAN MILEAGE PLAN (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | Dec. 31, 2015 | |
Mileage Plan [Line Items] | |||||
Other accrued liabilities | $ 735 | $ 735 | $ 661 | ||
Deferred revenue | 491 | 491 | 431 | ||
Other liabilities | 355 | 355 | 362 | ||
Passenger revenues | 1,322 | $ 1,297 | 3,718 | $ 3,615 | |
Other - net revenues | 213 | 188 | 607 | 523 | |
Liabilities From Mileage Plan [Member] | |||||
Mileage Plan [Line Items] | |||||
Other accrued liabilities | 405 | 405 | 368 | ||
Deferred revenue | 489 | 489 | 427 | ||
Other liabilities | 19 | 19 | 19 | ||
Total | 913 | 913 | $ 814 | ||
Revenue From Mileage Plan [Member] | |||||
Mileage Plan [Line Items] | |||||
Passenger revenues | 73 | 66 | 215 | 199 | |
Other - net revenues | 107 | 85 | 318 | 244 | |
Total Mileage Plan Revenues | $ 180 | $ 151 | $ 533 | $ 443 |
LONG-TERM DEBT - SCHEDULE OF LO
LONG-TERM DEBT - SCHEDULE OF LONG-TERM DEBT (Details) - USD ($) $ in Millions | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Dec. 31, 2015 | |
Debt Instrument [Line Items] | |||
Total | $ 2,136 | $ 683 | |
Less debt issuance costs | (17) | (3) | |
Less current portion | 275 | 114 | |
Long-term debt, less current portion | $ 1,861 | $ 569 | |
Weighted-average fixed-interest rate | 4.60% | 5.70% | |
Weighted-average variable-interest rate | 2.30% | 1.80% | |
Repayments of Long-term Debt | $ 93 | $ 93 | |
Fixed-rate notes payable due through 2026 [Member] | |||
Debt Instrument [Line Items] | |||
Total | 730 | $ 520 | |
Variable-rate notes payable due through 2028 [Member] | |||
Debt Instrument [Line Items] | |||
Total | $ 1,423 | $ 166 |
LONG-TERM DEBT LONG-TERM DEBT -
LONG-TERM DEBT LONG-TERM DEBT - FUTURE PAYMENTS (Details) $ in Millions | Sep. 30, 2016USD ($) |
Long-term Debt, Fiscal Year Maturity [Abstract] | |
Remainder of 2016 | $ 47 |
2,017 | 282 |
2,018 | 315 |
2,019 | 281 |
2,020 | 286 |
Thereafter | 942 |
Total | $ 2,153 |
LONG-TERM DEBT - LINE OF CREDIT
LONG-TERM DEBT - LINE OF CREDIT (Details) | 9 Months Ended |
Sep. 30, 2016USD ($)aircraftcredit_facility | |
Line of Credit Facility [Line Items] | |
Line of Credit Facility, Number of Credit Facilities | credit_facility | 3 |
Secured by aircraft [Member] | |
Line of Credit Facility [Line Items] | |
Line of Credit Facility, Expiration Date | Sep. 30, 2017 |
Secured by other [Member] | |
Line of Credit Facility [Line Items] | |
Line of Credit Facility, Expiration Date | Mar. 31, 2017 |
Credit Facilities 1 and 2 [Member] | |
Line of Credit Facility [Line Items] | |
Line of Credit Facility, Number of Credit Facilities | credit_facility | 2 |
Credit Facility 1 [Member] | |
Line of Credit Facility [Line Items] | |
Line of Credit Facility, Asset Restrictions | $ 500,000,000 |
Credit Facility 1 [Member] | Secured by aircraft [Member] | |
Line of Credit Facility [Line Items] | |
Line of Credit Facility, Number of Credit Facilities | credit_facility | 1 |
Line of Credit Facility, Maximum Borrowing Capacity | $ 100,000,000 |
Credit Facility 2 [Member] | |
Line of Credit Facility [Line Items] | |
Line of Credit Facility, Asset Restrictions | 500,000,000 |
Credit Facility 2 [Member] | Secured by other [Member] | |
Line of Credit Facility [Line Items] | |
Line of Credit Facility, Maximum Borrowing Capacity | 100,000,000 |
Credit Facility 3 [Member] | |
Line of Credit Facility [Line Items] | |
Line of Credit Facility, Asset Restrictions | $ 500,000,000 |
Credit Facility 3 [Member] | Secured by aircraft [Member] | |
Line of Credit Facility [Line Items] | |
Line of Credit Facility, Number of Credit Facilities | credit_facility | 1 |
Line of Credit Facility, Maximum Borrowing Capacity | $ 52,000,000 |
B-737-800 [Member] | Credit Facility 3 [Member] | |
Line of Credit Facility [Line Items] | |
Number of Aircraft Securing Credit Facility | aircraft | 2 |
LONG-TERM DEBT LONG-TERM DEBT36
LONG-TERM DEBT LONG-TERM DEBT - SECURED DEBT (Details) $ in Millions | 1 Months Ended | 3 Months Ended | 9 Months Ended | ||
Nov. 01, 2016USD ($)aircraft | Sep. 30, 2016USD ($)agreementaircraft | Sep. 30, 2016USD ($)agreementaircraft | Sep. 30, 2015USD ($) | Oct. 11, 2016aircraft | |
Debt Instrument [Line Items] | |||||
Secured Debt, Number of Aircrafts Securing Debt Financing | 53 | 53 | |||
Repayments of Long-term Debt | $ | $ 93 | $ 93 | |||
Secured by aircraft [Member] | |||||
Debt Instrument [Line Items] | |||||
Proceeds from Issuance of Secured Debt | $ | $ 1,500 | ||||
Interest rate swaps agreements [Member] | |||||
Debt Instrument [Line Items] | |||||
Derivative, Amount of Hedged Item | $ | $ 300 | $ 300 | |||
Derivative, Number of Instruments Held | agreement | 2 | 2 | |||
Subsequent Event [Member] | Secured by aircraft [Member] | |||||
Debt Instrument [Line Items] | |||||
Proceeds from Issuance of Secured Debt | $ | $ 100 | ||||
Boeing, 737-900ER [Member] | |||||
Debt Instrument [Line Items] | |||||
Secured Debt, Number of Aircrafts Securing Debt Financing | 34 | 34 | |||
Boeing, 737-900ER [Member] | Subsequent Event [Member] | |||||
Debt Instrument [Line Items] | |||||
Secured Debt, Number of Aircrafts Securing Debt Financing | 3 | ||||
Committed to Purchase (in Aircraft) | 19 | ||||
B-737-800 [Member] | |||||
Debt Instrument [Line Items] | |||||
Secured Debt, Number of Aircrafts Securing Debt Financing | 19 | 19 |
EMPLOYEE BENEFIT PLANS - NET PE
EMPLOYEE BENEFIT PLANS - NET PENSION EXPENSE (Details) - Qualified Defined Benefit [Member] - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Defined Benefit Plan, Net Periodic Benefit Cost [Abstract] | ||||
Service cost | $ 9 | $ 11 | $ 27 | $ 31 |
Interest cost | 18 | 21 | 55 | 63 |
Expected return on assets | (27) | (31) | (81) | (92) |
Amortization of prior service costs | (1) | (1) | (1) | (1) |
Recognized actuarial loss (gain) | 7 | 7 | 19 | 20 |
Net pension expense | $ 6 | $ 7 | $ 19 | $ 21 |
COMMITMENTS (Details)
COMMITMENTS (Details) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2016USD ($)aircraftcarriers | Sep. 30, 2015USD ($) | Sep. 30, 2016USD ($)aircraftcarriers | Sep. 30, 2015USD ($) | Oct. 11, 2016aircraft | |
Unrecorded Unconditional Purchase Obligation, Fiscal Year Maturity [Abstract] | |||||
Rent Expense | $ 82 | $ 77 | $ 226 | $ 217 | |
Capacity purchase arrangements (carriers) | carriers | 3 | 3 | |||
Aircraft Commitments [Member] | |||||
Unrecorded Unconditional Purchase Obligation, Fiscal Year Maturity [Abstract] | |||||
Remainder of 2016 | $ 146 | $ 146 | |||
2,017 | 931 | 931 | |||
2,018 | 724 | 724 | |||
2,019 | 645 | 645 | |||
2,020 | 334 | 334 | |||
Thereafter | 397 | 397 | |||
Total | 3,177 | 3,177 | |||
Capacity Purchase Agreements [Member] | |||||
Unrecorded Unconditional Purchase Obligation, Fiscal Year Maturity [Abstract] | |||||
Remainder of 2016 | 17 | 17 | |||
2,017 | 78 | 78 | |||
2,018 | 81 | 81 | |||
2,019 | 86 | 86 | |||
2,020 | 92 | 92 | |||
Thereafter | 746 | 746 | |||
Total | 1,100 | 1,100 | |||
Aircraft [Member] | |||||
Operating Leases, Future Minimum Payments Due, Fiscal Year Maturity [Abstract] | |||||
Remainder of 2016 | 20 | 20 | |||
2,017 | 99 | 99 | |||
2,018 | 90 | 90 | |||
2,019 | 82 | 82 | |||
2,020 | 73 | 73 | |||
Thereafter | 400 | 400 | |||
Total | 764 | 764 | |||
Facility Leases [Member] | |||||
Operating Leases, Future Minimum Payments Due, Fiscal Year Maturity [Abstract] | |||||
Remainder of 2016 | 24 | 24 | |||
2,017 | 91 | 91 | |||
2,018 | 43 | 43 | |||
2,019 | 43 | 43 | |||
2,020 | 40 | 40 | |||
Thereafter | 188 | 188 | |||
Total | $ 429 | $ 429 | |||
B-737 [Member] | |||||
Unrecorded Unconditional Purchase Obligation [Line Items] | |||||
Number of lease contracts (aircraft) | aircraft | 18 | 18 | |||
Q400 [Member] | |||||
Unrecorded Unconditional Purchase Obligation [Line Items] | |||||
Number of lease contracts (aircraft) | aircraft | 15 | 15 | |||
E175 [Member] | |||||
Unrecorded Unconditional Purchase Obligation, Fiscal Year Maturity [Abstract] | |||||
Committed to Purchase (in Aircraft) | aircraft | 33 | 33 | |||
Options to Purchase Additional (in Aircraft) | aircraft | 30 | 30 | |||
Horizon [Member] | |||||
Unrecorded Unconditional Purchase Obligation, Fiscal Year Maturity [Abstract] | |||||
Capacity purchase arrangements | 100.00% | 100.00% | |||
Capacity Purchase Agreement with SkyWest [Member] | |||||
Unrecorded Unconditional Purchase Obligation [Line Items] | |||||
Number of lease contracts (aircraft) | aircraft | 16 | 16 | |||
Capacity Purchase Agreement with SkyWest [Member] | CRJ-700 [Member] | |||||
Unrecorded Unconditional Purchase Obligation [Line Items] | |||||
Number of lease contracts (aircraft) | aircraft | 3 | 3 | |||
Capacity Purchase Agreement with SkyWest [Member] | E175 [Member] | |||||
Unrecorded Unconditional Purchase Obligation [Line Items] | |||||
Number of lease contracts (aircraft) | aircraft | 13 | 13 | |||
Number of optional additional leases (aircraft) | aircraft | 8 | 8 | |||
Subsequent Event [Member] | B-737 [Member] | |||||
Unrecorded Unconditional Purchase Obligation, Fiscal Year Maturity [Abstract] | |||||
Committed to Purchase (in Aircraft) | aircraft | 56 | ||||
Options to Purchase Additional (in Aircraft) | aircraft | 41 | ||||
Subsequent Event [Member] | B737 MAX [Member] | |||||
Unrecorded Unconditional Purchase Obligation, Fiscal Year Maturity [Abstract] | |||||
Unrecorded Unconditional Purchase Obligation, Quantity Deferred | aircraft | 4 | ||||
Committed to Purchase (in Aircraft) | aircraft | 37 | ||||
Subsequent Event [Member] | Boeing, 737-900ER [Member] | |||||
Unrecorded Unconditional Purchase Obligation, Fiscal Year Maturity [Abstract] | |||||
Options to Purchase Additional, Exercised(in Aircraft) | aircraft | 5 | ||||
Committed to Purchase (in Aircraft) | aircraft | 19 |
SHAREHOLDERS' EQUITY, COMMON ST
SHAREHOLDERS' EQUITY, COMMON STOCK REPURCHASE (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | Aug. 31, 2015 | May 31, 2014 | |
Class of Stock [Line Items] | ||||||
Stock repurchased during period (shares) | 0 | 1,588,251 | 2,594,809 | 5,649,805 | ||
Stock repurchased during period | $ 0 | $ 119 | $ 193 | $ 381 | ||
2015 1 Billion Repurchase Program [Member] | ||||||
Class of Stock [Line Items] | ||||||
Stock repurchase program, authorized amount (shares) | $ 1,000 | |||||
Stock repurchased during period (shares) | 0 | 0 | 2,594,809 | 0 | ||
Stock repurchased during period | $ 0 | $ 0 | $ 193 | $ 0 | ||
May 2014 Stock Repurchase Program [Member] | ||||||
Class of Stock [Line Items] | ||||||
Stock repurchase program, authorized amount (shares) | $ 650 | |||||
Stock repurchased during period (shares) | 0 | 1,588,251 | 0 | 5,649,805 | ||
Stock repurchased during period | $ 0 | $ 119 | $ 0 | $ 381 |
SHAREHOLDERS' EQUITY, ACCUMULAT
SHAREHOLDERS' EQUITY, ACCUMULATED OTHER COMPREHENSIVE LOSS (Details) - USD ($) $ in Millions | Sep. 30, 2016 | Dec. 31, 2015 |
Equity [Abstract] | ||
Marketable securities | $ 7 | $ (3) |
Employee benefit plans | (278) | (288) |
Interest rate derivatives | (13) | (12) |
Total | $ (284) | $ (303) |
SHAREHOLDERS' EQUITY, CASH DIVI
SHAREHOLDERS' EQUITY, CASH DIVIDEND (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Equity [Abstract] | ||||
Cash dividend declared per share (usd per share) | $ 0.275 | $ 0.20 | $ 0.825 | $ 0.60 |
Payments of Dividends | $ 34 | $ 102 | $ 78 |
OPERATING SEGMENT INFORMATION42
OPERATING SEGMENT INFORMATION (Details) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016USD ($) | Sep. 30, 2015USD ($) | Sep. 30, 2016USD ($)airline | Sep. 30, 2015USD ($) | |
Segment Reporting Information [Line Items] | ||||
Number of Airlines | airline | 2 | |||
Number of Operating Segments | airline | 3 | |||
Operating revenues | ||||
Passenger, Mainline | $ 1,073 | $ 1,057 | $ 3,036 | $ 2,977 |
Passenger, Regional | 249 | 240 | 682 | 638 |
Total passenger revenue | 1,322 | 1,297 | 3,718 | 3,615 |
CPA revenues | 0 | 0 | 0 | 0 |
Freight and mail | 31 | 30 | 82 | 83 |
Other - net revenue | 213 | 188 | 607 | 523 |
Total Operating Revenues | 1,566 | 1,515 | 4,407 | 4,221 |
Operating expenses | ||||
Operating expenses, excluding fuel | 941 | 837 | 2,706 | 2,437 |
Economic fuel | 225 | 245 | 593 | 741 |
Total Operating Expenses | 1,166 | 1,082 | 3,299 | 3,178 |
Nonoperating Income (Expense) | ||||
Interest income | 7 | 5 | 20 | 16 |
Interest expense | (11) | (10) | (33) | (32) |
Other | 6 | 9 | 19 | 26 |
Nonoperating Income (Expense) Total | 2 | 4 | 6 | 10 |
Income before income tax | 402 | 437 | $ 1,114 | 1,053 |
Air Group Adjusted [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Number of Airlines | airline | 2 | |||
Operating revenues | ||||
Passenger, Mainline | 1,073 | 1,057 | $ 3,036 | 2,977 |
Passenger, Regional | 249 | 240 | 682 | 638 |
Total passenger revenue | 1,322 | 1,297 | 3,718 | 3,615 |
CPA revenues | 0 | 0 | 0 | 0 |
Freight and mail | 31 | 30 | 82 | 83 |
Other - net revenue | 213 | 188 | 607 | 523 |
Total Operating Revenues | 1,566 | 1,515 | 4,407 | 4,221 |
Operating expenses | ||||
Operating expenses, excluding fuel | 919 | 837 | 2,670 | 2,437 |
Economic fuel | 222 | 240 | 602 | 742 |
Total Operating Expenses | 1,141 | 1,077 | 3,272 | 3,179 |
Nonoperating Income (Expense) | ||||
Interest income | 7 | 5 | 20 | 16 |
Interest expense | (11) | (10) | (33) | (32) |
Other | 6 | 9 | 19 | 26 |
Nonoperating Income (Expense) Total | 2 | 4 | 6 | 10 |
Income before income tax | 427 | 442 | 1,141 | 1,052 |
Alaska Mainline [Member] | ||||
Operating revenues | ||||
Passenger, Mainline | 1,073 | 1,057 | 3,036 | 2,977 |
Passenger, Regional | 0 | 0 | 0 | 0 |
Total passenger revenue | 1,073 | 1,057 | 3,036 | 2,977 |
CPA revenues | 0 | 0 | 0 | 0 |
Freight and mail | 30 | 29 | 79 | 79 |
Other - net revenue | 190 | 167 | 546 | 465 |
Total Operating Revenues | 1,293 | 1,253 | 3,661 | 3,521 |
Operating expenses | ||||
Operating expenses, excluding fuel | 727 | 667 | 2,107 | 1,951 |
Economic fuel | 188 | 205 | 512 | 641 |
Total Operating Expenses | 915 | 872 | 2,619 | 2,592 |
Nonoperating Income (Expense) | ||||
Interest income | 7 | 5 | 19 | 15 |
Interest expense | (7) | (7) | (23) | (21) |
Other | 5 | 7 | 15 | 21 |
Nonoperating Income (Expense) Total | 5 | 5 | 11 | 15 |
Income before income tax | 383 | 386 | 1,053 | 944 |
Alaska Regional [Member] | ||||
Operating revenues | ||||
Passenger, Mainline | 0 | 0 | 0 | 0 |
Passenger, Regional | 249 | 240 | 682 | 638 |
Total passenger revenue | 249 | 240 | 682 | 638 |
CPA revenues | 0 | 0 | 0 | 0 |
Freight and mail | 1 | 1 | 3 | 4 |
Other - net revenue | 21 | 20 | 57 | 55 |
Total Operating Revenues | 271 | 261 | 742 | 697 |
Operating expenses | ||||
Operating expenses, excluding fuel | 202 | 181 | 580 | 514 |
Economic fuel | 34 | 35 | 90 | 101 |
Total Operating Expenses | 236 | 216 | 670 | 615 |
Nonoperating Income (Expense) | ||||
Interest income | 0 | 0 | 0 | 0 |
Interest expense | 0 | 0 | 0 | 0 |
Other | 0 | 0 | 0 | 0 |
Nonoperating Income (Expense) Total | 0 | 0 | 0 | 0 |
Income before income tax | $ 35 | 45 | $ 72 | 82 |
Horizon [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Capacity purchase arrangements | 100.00% | 100.00% | ||
Operating revenues | ||||
Passenger, Mainline | $ 0 | 0 | $ 0 | 0 |
Passenger, Regional | 0 | 0 | 0 | 0 |
Total passenger revenue | 0 | 0 | 0 | 0 |
CPA revenues | 109 | 105 | 322 | 303 |
Freight and mail | 0 | 0 | 0 | 0 |
Other - net revenue | 1 | 1 | 3 | 3 |
Total Operating Revenues | 110 | 106 | 325 | 306 |
Operating expenses | ||||
Operating expenses, excluding fuel | 99 | 93 | 305 | 274 |
Economic fuel | 0 | 0 | 0 | 0 |
Total Operating Expenses | 99 | 93 | 305 | 274 |
Nonoperating Income (Expense) | ||||
Interest income | 0 | 0 | 1 | 0 |
Interest expense | (2) | (3) | (7) | (8) |
Other | 0 | 0 | 0 | 0 |
Nonoperating Income (Expense) Total | (2) | (3) | (6) | (8) |
Income before income tax | 9 | 10 | 14 | 24 |
Intersegment Elimination [Member] | ||||
Operating revenues | ||||
Passenger, Mainline | 0 | 0 | 0 | 0 |
Passenger, Regional | 0 | 0 | 0 | 0 |
Total passenger revenue | 0 | 0 | 0 | 0 |
CPA revenues | (109) | (105) | (322) | (303) |
Freight and mail | 0 | 0 | 0 | 0 |
Other - net revenue | 1 | 0 | 1 | 0 |
Total Operating Revenues | (108) | (105) | (321) | (303) |
Operating expenses | ||||
Operating expenses, excluding fuel | (109) | (104) | (322) | (302) |
Economic fuel | 0 | 0 | 0 | 0 |
Total Operating Expenses | (109) | (104) | (322) | (302) |
Nonoperating Income (Expense) | ||||
Interest income | 0 | 0 | 0 | 1 |
Interest expense | (2) | 0 | (3) | (3) |
Other | 1 | 2 | 4 | 5 |
Nonoperating Income (Expense) Total | (1) | 2 | 1 | 3 |
Income before income tax | 0 | 1 | 2 | 2 |
Special Revenue and Charges [Member] | ||||
Operating revenues | ||||
Passenger, Mainline | 0 | 0 | 0 | 0 |
Passenger, Regional | 0 | 0 | 0 | 0 |
Total passenger revenue | 0 | 0 | 0 | 0 |
CPA revenues | 0 | 0 | 0 | 0 |
Freight and mail | 0 | 0 | 0 | 0 |
Other - net revenue | 0 | 0 | 0 | 0 |
Total Operating Revenues | 0 | 0 | 0 | 0 |
Operating expenses | ||||
Operating expenses, excluding fuel | 22 | 0 | 36 | 0 |
Economic fuel | 3 | 5 | 9 | 1 |
Total Operating Expenses | 25 | 5 | 27 | (1) |
Nonoperating Income (Expense) | ||||
Interest income | 0 | 0 | 0 | 0 |
Interest expense | 0 | 0 | 0 | 0 |
Other | 0 | 0 | 0 | 0 |
Nonoperating Income (Expense) Total | 0 | 0 | 0 | 0 |
Income before income tax | $ (25) | $ (5) | $ (27) | $ 1 |
OPERATING SEGMENT INFORMATION,
OPERATING SEGMENT INFORMATION, ASSETS (Details) - USD ($) $ in Millions | Sep. 30, 2016 | Dec. 31, 2015 |
Total assets | $ 8,699 | $ 6,530 |
Alaska Airlines [Member] | ||
Total assets | 10,949 | 8,127 |
Horizon [Member] | ||
Total assets | 716 | 717 |
Parent [Member] | ||
Total assets | 5,479 | 4,734 |
Intersegment Elimination [Member] | ||
Total assets | $ (8,445) | $ (7,048) |
SUBSEQUENT EVENT (Details)
SUBSEQUENT EVENT (Details) $ in Billions | Oct. 01, 2016 | Nov. 01, 2016USD ($)aircraft | Sep. 30, 2016USD ($)aircraft | Sep. 30, 2016aircraft | Oct. 11, 2016aircraft |
Subsequent Event [Line Items] | |||||
Secured Debt, Number of Aircrafts Securing Debt Financing | 53 | 53 | |||
Secured by aircraft [Member] | |||||
Subsequent Event [Line Items] | |||||
Proceeds from Issuance of Secured Debt | $ | $ 1.5 | ||||
Secured by aircraft [Member] | Subsequent Event [Member] | |||||
Subsequent Event [Line Items] | |||||
Proceeds from Issuance of Secured Debt | $ | $ 0.1 | ||||
B-737 [Member] | |||||
Subsequent Event [Line Items] | |||||
Property, Plant and Equipment, Useful Life | 20 years | ||||
B-737 [Member] | Subsequent Event [Member] | |||||
Subsequent Event [Line Items] | |||||
Property, Plant and Equipment, Useful Life | 25 years | ||||
B737 MAX [Member] | Subsequent Event [Member] | |||||
Subsequent Event [Line Items] | |||||
Unrecorded Unconditional Purchase Obligation, Quantity Deferred | 4 | ||||
Boeing, 737-900ER [Member] | |||||
Subsequent Event [Line Items] | |||||
Secured Debt, Number of Aircrafts Securing Debt Financing | 34 | 34 | |||
Boeing, 737-900ER [Member] | Subsequent Event [Member] | |||||
Subsequent Event [Line Items] | |||||
Secured Debt, Number of Aircrafts Securing Debt Financing | 3 | ||||
Options to Purchase Additional, Exercised(in Aircraft) | 5 |