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Commitments and Contingencies | 6 Months Ended
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Jun. 30, 2023
Commitments and Contingencies Disclosure [Abstract] |
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIESCommitments. As of June 30, 2023, United had firm commitments to purchase aircraft from The Boeing Company ("Boeing") and Airbus S.A.S. ("Airbus") as presented in the table below:
|  |  |  | Contractual Aircraft Deliveries |  | Expected Aircraft Deliveries (b)
Aircraft Type |  | Number of Firm Commitments (a) |  | Last Six Months of 2023 |  | 2024 |  | After 2024 |  | Last Six Months of 2023 |  | 2024 |  | After 2024
787 |  | 100 |  |  | — |  |  | 8 |  |  | 92 |  |  | — |  |  | 8 |  |  | 92 |
737 MAX |  | 392 |  |  | 91 |  |  | 91 |  |  | 210 |  |  | 50 |  |  | 74 |  |  | 268 |
A321neo |  | 70 |  |  | 12 |  |  | 21 |  |  | 37 |  |  | 4 |  |  | 29 |  |  | 37 |
A321XLR |  | 50 |  |  | — |  |  | — |  |  | 50 |  |  | — |  |  | — |  |  | 50 |
A350 |  | 45 |  |  | — |  |  | — |  |  | 45 |  |  | — |  |  | — |  |  | 45 |
(a) United also has options and purchase rights for additional aircraft.
(b) Expected aircraft deliveries reflect adjustments communicated by Boeing and Airbus or estimated by United.
The aircraft listed in the table above are scheduled for delivery through 2033. The amount and timing of the Company's future capital commitments could change to the extent that: (i) the Company and the aircraft manufacturers, with whom the Company has existing orders for new aircraft, agree to modify the contracts governing those orders; (ii) rights are exercised pursuant to the relevant agreements to modify the timing of deliveries; or (iii) the aircraft manufacturers are unable to deliver in accordance with the terms of those orders. During the first half of 2023, United entered into agreements with third parties to finance through sale and leaseback transactions new Boeing model 737 MAX aircraft subject to purchase agreements between United and Boeing. For certain aircraft, United assigned its right to purchase such aircraft to the buyer, and simultaneous with the buyer's purchase from Boeing, United entered into a long-term lease for such aircraft with the buyer as lessor. Upon delivery of the aircraft in these sale and leaseback transactions, the Company accounted for these aircraft as part of Flight equipment on the Company's consolidated balance sheet and the related obligation recorded in Current maturities of other financial liabilities and Other financial liabilities since they did not qualify for sale recognition (failed sale and leaseback). The table below summarizes United's commitments as of June 30, 2023, which include aircraft and related spare engines, aircraft improvements and non-aircraft capital commitments. Aircraft commitments are based on contractual scheduled aircraft deliveries without any adjustments communicated by Boeing and Airbus or estimated by United.
(in billions) |  |
Last six months of 2023 |  | $ | 6.8 |
2024 |  | 6.9 |
2025 |  | 8.2 |
2026 |  | 6.2 |
2027 |  | 4.6 |
After 2027 |  | 16.6 |
|  | $ | 49.3 |
Regional CPAs. In the first quarter of 2023, United amended its CPA agreements with one of its regional carriers to increase the contractually agreed fees (carrier costs) paid to that carrier. The Company terminated its CPA and related regional flight operations with Air Wisconsin in June 2023. Our future commitments under our CPAs are dependent on numerous variables, and are, therefore, difficult to predict. The most important of these variables is the number of scheduled block hours. Although we are not required to purchase a minimum number of block hours under certain of our CPAs, we have set forth below estimates of our future payments under the CPAs based on our assumptions. The actual amounts we pay to our regional operators under CPAs could differ materially from these estimates. United's estimates of its future payments under all of the CPAs do not include the portion of the underlying obligation for any aircraft leased to a regional carrier or deemed to be leased from other regional carriers and facility rent. For purposes of calculating these estimates, we have assumed (1) the number of block hours flown is based on our anticipated level of flight activity or at any contractual minimum utilization levels if applicable, whichever is higher, (2) that we will reduce the fleet as rapidly as contractually allowed under each CPA, (3) that aircraft utilization, stage length and load factors will remain constant, (4) that each carrier's operational performance will remain at recent historic levels and (5) an annual projected inflation rate. Based on these assumptions as of June 30, 2023, our estimated future payments through the end of the terms of our CPAs are presented in the table below:
(in billions) |  |
Last six months of 2023 |  | $ | 1.1 |
2024 |  | 2.3 |
2025 |  | 1.9 |
2026 |  | 1.8 |
2027 |  | 1.3 |
After 2027 |  | 4.0 |
|  | $ | 12.4 |
Guarantees. As of June 30, 2023, United is the guarantor of approximately $2.0 billion in aggregate principal amount of tax-exempt special facilities revenue bonds and interest thereon. These bonds, issued by various airport municipalities, are payable solely from rentals paid under long-term agreements with the respective governing bodies. The leasing arrangements associated with these obligations are accounted for as operating leases recognized on the Company's consolidated balance sheet with the associated expense recorded on a straight-line basis over the expected lease term. All of these bonds are due between 2023 and 2041. As of June 30, 2023, United is the guarantor of $84 million of aircraft mortgage debt issued by one of United's regional carriers. The aircraft mortgage debt is subject to similar increased cost provisions as described below for the Company's debt, and the Company would potentially be responsible for those costs under the guarantees. Increased Cost Provisions. In United's financing transactions that include loans in which United is the borrower, United typically agrees to reimburse lenders for any reduced returns with respect to the loans due to any change in capital requirements and, in the case of loans with respect to which the interest rate is based on the London Interbank Offered Rate (LIBOR) or the Secured Overnight Financing Rate (SOFR), for certain other increased costs that the lenders incur in carrying these loans as a result of any change in law, subject, in most cases, to obligations of the lenders to take certain limited steps to mitigate the requirement for, or the amount of, such increased costs. At June 30, 2023, the Company had $11.6 billion of floating rate debt with remaining terms of up to approximately 12 years that are subject to these increased cost provisions. In several financing transactions involving loans or leases from non-U.S. entities, with remaining terms of up to approximately 12 years and an aggregate balance of $8.5 billion, the Company bears the risk of any change in tax laws that would subject loan or lease payments thereunder to non-U.S. entities to withholding taxes, subject to customary exclusions. Labor. As of June 30, 2023, the Company had approximately 99,800 employees, of whom approximately 83% were represented by various U.S. labor organizations. In January 2023, United and the International Brotherhood of Teamsters ratified an extension to its labor contract covering the Company's more than 8,000 technicians and related employees. The agreement becomes amendable in December 2024 and includes a one-year early opener that allows for bargaining on a successor agreement to begin in December 2023. On May 1, 2023, the Company and the International Association of Machinists & Aerospace Workers ("IAM") ratified five contracts covering nearly 30,000 IAM-represented fleet service, passenger service, storekeepers, maintenance instructors and fleet technical instructors and related employees. The Company recorded a one-time $48 million expense in conjunction with the ratification. Negotiations will continue for agreements to cover security guards in California and central load planners. The ratified agreements are effective through 2025. In July 2023, the Company reached an Agreement in Principle ("AIP") with its employees represented by the Air Line Pilots Association ("ALPA") regarding a contract that became amendable in January 2019. The AIP includes numerous work rule changes and pay rate increases during the four-year term. The agreement also includes a provision for a one-time payment upon ratification. In the three and six months ended June 30, 2023, the Company recorded $765 million of expenses associated with this AIP relating to wages for 2022 and prior years.

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