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COMMITMENTS AND CONTINGENCIES | 12 Months Ended
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Dec. 31, 2022
Commitments and Contingencies Disclosure [Abstract] |
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIES Aircraft Purchase Commitments Our future aircraft purchase commitments totaled approximately $19.0 billion at December 31, 2022:
Aircraft purchase commitments(1) |
(in millions) | Total
2023 | $ | 2,610 |
2024 | 4,440 |
2025 | 4,330 |
2026 | 3,800 |
2027 | 2,570 |
Thereafter | 1,210 |
Total | $ | 18,960 |
(1)The timing of these commitments is based on our contractual agreements with the aircraft manufacturers and may be subject to change based on modifications to those agreements or changes in delivery schedules. Our future aircraft purchase commitments included the following aircraft at December 31, 2022:
Aircraft purchase commitments by fleet type |
Fleet Type | Purchase Commitments
A220-300 | 60 |
A321-200neo | 134 |
A330-900neo | 18 |
A350-900 | 16 |
B-737-10 | 100 |
Total | 328 |
Aircraft Orders During 2022, we entered into a purchase agreement with Boeing for 100 Boeing 737-10s, the largest model in the 737 MAX family, to start delivery in 2025 with the option to purchase an additional thirty 737-10s. Additionally during 2022, we agreed to acquire four B-737-900ERs, one A330-900 and exercised purchase rights for 24 A220-300s. Deliveries of the pre-owned B-737-900ERs occurred during 2022, delivery of the new A330-900 is expected to occur in 2024, and deliveries of the new A220-300s are expected to start in 2026. Contract Carrier Agreements We have contract carrier agreements with regional carriers expiring through 2034. These agreements are structured as either capacity purchase or revenue proration agreements. Capacity Purchase Agreements. Our regional carriers primarily operate for us under capacity purchase agreements. Under these agreements, the regional carriers operate some or all of their aircraft using our flight designator codes, and we control the scheduling, pricing, reservations, ticketing and seat inventories of those aircraft and retain the revenues associated with those flights. We pay those airlines an amount, as defined in the applicable agreement, which is based on a determination of their cost of operating those flights and other factors intended to approximate market rates for those services. The following table shows our minimum obligations under our existing capacity purchase agreements with third-party regional carriers, excluding contract carrier payments accounted for as leases of aircraft, which are described in Note 7, "Leases." The obligations set forth in the table contemplate minimum levels of flying by the regional carriers under the respective agreements and also reflect assumptions regarding certain costs associated with the minimum levels of flying such as the cost of fuel, labor, maintenance, insurance, catering, property tax and landing fees. Accordingly, our actual payments under these agreements could differ materially from the minimum fixed obligations set forth in the table below.
Contract carrier minimum obligations |
(in millions) | Amount
2023 | $ | 1,590 |
2024 | 1,560 |
2025 | 1,610 |
2026 | 1,590 |
2027 | 1,560 |
Thereafter | 2,690 |
Total | $ | 10,600 |
Revenue Proration Agreement. As of December 31, 2022, a portion of our contract carrier arrangement with SkyWest Airlines, Inc. was structured as a revenue proration agreement. This revenue proration agreement establishes a fixed dollar or percentage division of revenues for tickets sold to passengers traveling on connecting flight itineraries. Legal Contingencies We are involved in various legal proceedings related to employment practices, environmental issues, antitrust matters and other matters concerning our business. We record liabilities for losses from legal proceedings when we determine that it is probable that the outcome in a legal proceeding will be unfavorable and the amount of loss can be reasonably estimated. Although the outcome of the legal proceedings in which we are involved cannot be predicted with certainty, we believe that the resolution of current matters will not have a material adverse effect on our Consolidated Financial Statements. Credit Card Processing Agreements Our VISA/MasterCard and American Express credit card processing agreements provide that no cash reserve ("Reserve") is required, and no withholding of payment related to receivables collected will occur, except in certain circumstances, including when we do not maintain a required level of liquidity as outlined in the merchant processing agreements. In circumstances in which the credit card processor can establish a Reserve or withhold payments, the amount of the Reserve or payments that may be withheld would be equal to the potential liability of the credit card processor for tickets purchased with VISA/MasterCard or American Express credit cards, as applicable, that had not yet been used for travel. We did not have a Reserve or an amount withheld as of December 31, 2022 or 2021. Other Contingencies General Indemnifications We are the lessee under many commercial real estate leases. It is common in these transactions for us, as the lessee, to agree to indemnify the lessor and the lessor's related parties for tort, environmental and other liabilities that arise out of or relate to our use or occupancy of the leased premises. This type of indemnity would typically make us responsible to indemnified parties for liabilities arising out of the conduct of, among others, contractors, licensees and invitees at, or in connection with, the use or occupancy of the leased premises. This indemnity often extends to related liabilities arising from the negligence of the indemnified parties, but usually excludes any liabilities caused by either their sole or gross negligence or their willful misconduct. Our aircraft and other equipment lease and financing agreements typically contain provisions requiring us, as the lessee or obligor, to indemnify the other parties to those agreements, including certain of those parties' related persons, against virtually any liabilities that might arise from the use or operation of the aircraft or other equipment. We believe that our insurance would cover most of our exposure to liabilities and related indemnities associated with the commercial real estate leases and aircraft and other equipment lease and financing agreements described above. While our insurance does not typically cover environmental liabilities, we have insurance policies in place as required by applicable environmental laws. Some of our aircraft and other financing transactions include provisions that require us to make payments to preserve an expected economic return to the lenders if that economic return is diminished due to specified changes in law or regulations. In some of these financing transactions, we also bear the risk of changes in tax laws that would subject payments to non-U.S. lenders to withholding taxes. We cannot reasonably estimate our potential future payments under the indemnities and related provisions described above because we cannot predict (1) when and under what circumstances these provisions may be triggered and (2) the amount that would be payable if the provisions were triggered because the amounts would be based on facts and circumstances existing at such time. Employees Under Collective Bargaining Agreements As of December 31, 2022, we had approximately 95,000 full-time equivalent employees, approximately 20% of whom were represented by unions.
Domestic airline employees represented by collective bargaining agreements by group
Employee Group | Approximate Number of Employees Represented |  | Union | Date on which Collective Bargaining Agreement Becomes Amendable
Delta Pilots | 15,040 |  |  | ALPA | December 31, 2019
Delta Flight Superintendents (Dispatchers) | 450 |  |  | PAFCA | November 1, 2024
Endeavor Pilots | 1,750 |  |  | ALPA | January 1, 2029
Endeavor Flight Attendants | 1,800 |  |  | AFA | March 31, 2027
Delta and ALPA reached an Agreement in Principle on a new collective bargaining agreement in December 2022. In January 2023, a tentative agreement was ratified by ALPA’s Delta Master Executive Council ("MEC") and is subject to ratification by Delta’s pilots through a vote that is scheduled to close on March 1, 2023. In addition to various work rule changes and an 18% pay rate increase in 2023, the tentative agreement includes a provision for a one-time payment of approximately $700 million upon pilot ratification. As voting on the tentative agreement has not closed and there is significant uncertainty about the outcome of this process, we have not accrued for this one-time payment as of December 31, 2022. In addition to the domestic airline employee groups discussed above, approximately 200 refinery employees of our wholly owned subsidiary Monroe are represented by the United Steel Workers under an agreement that expires on February 28, 2026. This agreement is governed by the National Labor Relations Act, which generally allows either party to engage in self-help upon the expiration of the agreement. Certain of our employees outside the U.S. are represented by unions, work councils or other local representative groups. Other We have certain contracts for goods and services that require us to pay a penalty, acquire inventory specific to us or purchase contract-specific equipment, as defined by each respective contract, if we terminate the contract without cause prior to its expiration date. Because these obligations are contingent on our termination of the contract without cause prior to its expiration date, no obligation would exist unless such a termination occurs.

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