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LEASES
 12 Months Ended
Dec. 31, 2024
Leases [Abstract]  
LEASES LEASES
We lease property and equipment under finance and operating leases. For leases with terms greater than 12 months, we record the related asset and obligation at the present value of the fixed minimum lease payments over the term. Many of our leases include rental escalation clauses, renewal options and/or termination options that are factored into our determination of lease payments when appropriate. We do not separate lease and nonlease components of contracts, except for regional aircraft and information technology ("IT") assets as discussed below.

We use the rate implicit in the lease to discount lease payments to present value, when readily determinable. As the rate implicit in the lease is rarely readily determinable, we use our incremental borrowing rate, which is based on the estimated interest rate for collateralized borrowing over a similar term of the lease at commencement date.

Some of our aircraft lease agreements include provisions for residual value guarantees. These guarantees represent an immaterial portion of our lease liability.

Aircraft

As of December 31, 2024, including aircraft operated by our regional carriers, we leased 170 aircraft, of which 55 were under finance leases and 115 were operating leases. Our aircraft leases had remaining lease terms of three months to 11 years.

In addition, we have regional aircraft leases that are embedded within our capacity purchase agreements and included in the ROU asset and lease liability. We allocated the consideration in each capacity purchase agreement to the lease and nonlease components based on their relative standalone fair values. Lease components of these agreements consist of 119 aircraft as of December 31, 2024 and nonlease components primarily consist of flight operations, in-flight and maintenance services. We determined our best estimate of the standalone fair value of the individual components by considering observable information including rates paid by our wholly owned subsidiary, Endeavor Air, Inc., and rates published by independent valuation firms. See Note 10, "Commitments and Contingencies," for additional information about our capacity purchase agreements.

Airport Facilities

Our facility leases are primarily for space at approximately 300 airports around the world that we serve. These leases reflect our use of airport terminals, office space, cargo warehouses and maintenance facilities. We generally lease space from government agencies that control the use of the airport, and as a result, these leases are classified as operating leases. The remaining lease terms vary from one month to 29 years. At the majority of the U.S. airports, the lease rates depend on airport operating costs or use of the facilities and are reset at least annually. Because of the variable nature of the rates, these leases are not recorded on our balance sheets.

Some airport facilities have fixed payment schedules, the most significant of which is New York-JFK which comprises the majority of our ground and other operating right of use asset and lease liability. For those airport leases with fixed payment schedules, we have recorded a ROU asset and lease liability representing the fixed component of the lease payments. See Note 8, "Airport Redevelopment," for more information on our significant airport redevelopment projects.

Other Ground Property and Equipment

We lease certain IT assets (including servers, mainframes, etc.), ground support equipment (including tugs, tractors, fuel trucks and de-icers) and various other equipment. The remaining lease terms range from one month to five years. Certain leased assets are embedded within various ground and IT service agreements. For ground service contracts, we have elected to include both the lease and nonlease components in the lease asset and lease liability balances on our balance sheets. For IT service contracts, we have elected to separate the lease and nonlease components and only the lease components are included in the lease asset and lease liability balances on our balance sheets. The amounts of these lease and nonlease components are not significant.
Lease Position

The table below presents the lease-related assets and liabilities recorded on the balance sheets.

Lease asset and liability balance sheet position by category
December 31,
(in millions)Classification on the Balance Sheets20242023
Assets
Operating lease assets - Fleet(1)
Operating lease right-of-use assets$2,910 $3,420 
Operating lease assets - Ground and otherOperating lease right-of-use assets3,734 3,584 
Finance lease assetsProperty and equipment, net825 1,338 
Total lease assets$7,469 $8,342 
Liabilities
Current
Operating - Fleet(1)
Current maturities of operating leases$551 $552 
Operating - Ground and otherCurrent maturities of operating leases212 207 
FinanceCurrent maturities of debt and finance leases374 358 
Noncurrent
Operating - Fleet(1)
Noncurrent operating leases2,627 3,226 
Operating - Ground and otherNoncurrent operating leases3,187 3,242 
FinanceDebt and finance leases473 1,086 
Total lease liabilities$7,424 $8,671 
Weighted-average remaining lease term
Operating leases12 years13 years
Finance leases3 years4 years
Weighted-average discount rate
Operating leases
4.28 %3.73 %
Finance leases3.53 %3.12 %
(1)Includes mainline and regional aircraft leases, regional aircraft leases embedded within our capacity purchase arrangements and engine leases. The interest portion of straight-line rent expense related to fleet operating leases was $165 million and $189 million during the years ended December 31, 2024 and 2023, respectively.

Lease Costs

The table below presents certain information related to the lease costs for finance and operating leases.

Lease cost by category
Year Ended December 31,
(in millions)202420232022
Finance lease cost
Amortization of leased assets$88 $109 $120 
Interest of lease liabilities54 42 45 
Operating lease cost(1)
974 981 949 
Short-term lease cost(1)
206 258 281 
Variable lease cost(1)
2,902 2,230 1,859 
Total lease cost$4,224 $3,620 $3,254 
(1)Expenses are primarily classified within aircraft rent, landing fees and other rents and regional carrier expense on our income statement.
Other Information

The table below presents supplemental cash flow information related to leases.

Supplemental lease-related cash flow information
Year Ended December 31,
(in millions)202420232022
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows for operating leases$1,225 $1,230 $809 
Operating cash flows for finance leases56 71 49 
Financing cash flows for finance leases190 264 363 

Undiscounted Cash Flows

The table below reconciles the undiscounted cash flows for each of the first five years and total of the remaining years to the finance lease liabilities and operating lease liabilities recorded on the balance sheets.

Future lease cash flows and reconciliation to the balance sheet
(in millions)Operating LeasesFinance Leases
2025$993 $395 
2026917 90 
2027880 268 
2028781 40 
2029620 28 
Thereafter4,183 76 
Total minimum lease payments8,374 897 
Less: amount of lease payments representing interest(1,797)(50)
Present value of future minimum lease payments6,577 847 
Less: current obligations under leases(763)(374)
Long-term lease obligations$5,814 $473 
LEASES LEASES
We lease property and equipment under finance and operating leases. For leases with terms greater than 12 months, we record the related asset and obligation at the present value of the fixed minimum lease payments over the term. Many of our leases include rental escalation clauses, renewal options and/or termination options that are factored into our determination of lease payments when appropriate. We do not separate lease and nonlease components of contracts, except for regional aircraft and information technology ("IT") assets as discussed below.

We use the rate implicit in the lease to discount lease payments to present value, when readily determinable. As the rate implicit in the lease is rarely readily determinable, we use our incremental borrowing rate, which is based on the estimated interest rate for collateralized borrowing over a similar term of the lease at commencement date.

Some of our aircraft lease agreements include provisions for residual value guarantees. These guarantees represent an immaterial portion of our lease liability.

Aircraft

As of December 31, 2024, including aircraft operated by our regional carriers, we leased 170 aircraft, of which 55 were under finance leases and 115 were operating leases. Our aircraft leases had remaining lease terms of three months to 11 years.

In addition, we have regional aircraft leases that are embedded within our capacity purchase agreements and included in the ROU asset and lease liability. We allocated the consideration in each capacity purchase agreement to the lease and nonlease components based on their relative standalone fair values. Lease components of these agreements consist of 119 aircraft as of December 31, 2024 and nonlease components primarily consist of flight operations, in-flight and maintenance services. We determined our best estimate of the standalone fair value of the individual components by considering observable information including rates paid by our wholly owned subsidiary, Endeavor Air, Inc., and rates published by independent valuation firms. See Note 10, "Commitments and Contingencies," for additional information about our capacity purchase agreements.

Airport Facilities

Our facility leases are primarily for space at approximately 300 airports around the world that we serve. These leases reflect our use of airport terminals, office space, cargo warehouses and maintenance facilities. We generally lease space from government agencies that control the use of the airport, and as a result, these leases are classified as operating leases. The remaining lease terms vary from one month to 29 years. At the majority of the U.S. airports, the lease rates depend on airport operating costs or use of the facilities and are reset at least annually. Because of the variable nature of the rates, these leases are not recorded on our balance sheets.

Some airport facilities have fixed payment schedules, the most significant of which is New York-JFK which comprises the majority of our ground and other operating right of use asset and lease liability. For those airport leases with fixed payment schedules, we have recorded a ROU asset and lease liability representing the fixed component of the lease payments. See Note 8, "Airport Redevelopment," for more information on our significant airport redevelopment projects.

Other Ground Property and Equipment

We lease certain IT assets (including servers, mainframes, etc.), ground support equipment (including tugs, tractors, fuel trucks and de-icers) and various other equipment. The remaining lease terms range from one month to five years. Certain leased assets are embedded within various ground and IT service agreements. For ground service contracts, we have elected to include both the lease and nonlease components in the lease asset and lease liability balances on our balance sheets. For IT service contracts, we have elected to separate the lease and nonlease components and only the lease components are included in the lease asset and lease liability balances on our balance sheets. The amounts of these lease and nonlease components are not significant.
Lease Position

The table below presents the lease-related assets and liabilities recorded on the balance sheets.

Lease asset and liability balance sheet position by category
December 31,
(in millions)Classification on the Balance Sheets20242023
Assets
Operating lease assets - Fleet(1)
Operating lease right-of-use assets$2,910 $3,420 
Operating lease assets - Ground and otherOperating lease right-of-use assets3,734 3,584 
Finance lease assetsProperty and equipment, net825 1,338 
Total lease assets$7,469 $8,342 
Liabilities
Current
Operating - Fleet(1)
Current maturities of operating leases$551 $552 
Operating - Ground and otherCurrent maturities of operating leases212 207 
FinanceCurrent maturities of debt and finance leases374 358 
Noncurrent
Operating - Fleet(1)
Noncurrent operating leases2,627 3,226 
Operating - Ground and otherNoncurrent operating leases3,187 3,242 
FinanceDebt and finance leases473 1,086 
Total lease liabilities$7,424 $8,671 
Weighted-average remaining lease term
Operating leases12 years13 years
Finance leases3 years4 years
Weighted-average discount rate
Operating leases
4.28 %3.73 %
Finance leases3.53 %3.12 %
(1)Includes mainline and regional aircraft leases, regional aircraft leases embedded within our capacity purchase arrangements and engine leases. The interest portion of straight-line rent expense related to fleet operating leases was $165 million and $189 million during the years ended December 31, 2024 and 2023, respectively.

Lease Costs

The table below presents certain information related to the lease costs for finance and operating leases.

Lease cost by category
Year Ended December 31,
(in millions)202420232022
Finance lease cost
Amortization of leased assets$88 $109 $120 
Interest of lease liabilities54 42 45 
Operating lease cost(1)
974 981 949 
Short-term lease cost(1)
206 258 281 
Variable lease cost(1)
2,902 2,230 1,859 
Total lease cost$4,224 $3,620 $3,254 
(1)Expenses are primarily classified within aircraft rent, landing fees and other rents and regional carrier expense on our income statement.
Other Information

The table below presents supplemental cash flow information related to leases.

Supplemental lease-related cash flow information
Year Ended December 31,
(in millions)202420232022
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows for operating leases$1,225 $1,230 $809 
Operating cash flows for finance leases56 71 49 
Financing cash flows for finance leases190 264 363 

Undiscounted Cash Flows

The table below reconciles the undiscounted cash flows for each of the first five years and total of the remaining years to the finance lease liabilities and operating lease liabilities recorded on the balance sheets.

Future lease cash flows and reconciliation to the balance sheet
(in millions)Operating LeasesFinance Leases
2025$993 $395 
2026917 90 
2027880 268 
2028781 40 
2029620 28 
Thereafter4,183 76 
Total minimum lease payments8,374 897 
Less: amount of lease payments representing interest(1,797)(50)
Present value of future minimum lease payments6,577 847 
Less: current obligations under leases(763)(374)
Long-term lease obligations$5,814 $473