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Fair Value Measurements (Tables)
 9 Months Ended
Sep. 30, 2016
Fair Value Disclosures [Abstract]  
Assets and liabilities measured at fair value on a recurring basis
The following tables present the Company’s assets and liabilities that are measured at fair value on a recurring basis at September 30, 2016, and December 31, 2015:

 
 
 
 
Fair value measurements at reporting date using:
 
 
 
 
Quoted prices in
active markets
for identical assets
 
Significant
other observable
inputs
 
Significant
unobservable
inputs
Description
 
September 30, 2016
 
(Level 1)
 
(Level 2)
 
(Level 3)
Assets
 
(in millions)
Cash equivalents
 
 
 
 
 
 
 
 
Cash equivalents (a)
 
$
1,706

 
$
1,706

 
$
—

 
$
—

Commercial paper
 
250

 
—

 
250

 
—

Certificates of deposit
 
10

 
—

 
10

 
—

Short-term investments:
 
 
 
 
 
 
 
 
Treasury bills
 
1,198

 
1,198

 
—

 
—

Certificates of deposit
 
282

 
—

 
282

 
—

Interest rate derivatives (see Note 3)
 
13

 
—

 
13

 
—

Fuel derivatives:
 
 
 
 
 
 
 
 
Swap contracts (b)
 
8

 
—

 
8

 
—

Swap contracts (c)
 
173

 
—

 
173

 
—

Option contracts (b)
 
16

 
—

 
—

 
16

Option contracts (c)
 
400

 
—

 
—

 
400

Other available-for-sale securities
 
96

 
80

 
—

 
16

Total assets
 
$
4,152

 
$
2,984

 
$
736

 
$
432

Liabilities
 
 
 
 
 
 
 
 
Fuel derivatives:
 
 
 
 
 
 
 
 
Swap contracts (b)
 
$
(2
)
 
$
—

 
$
(2
)
 
$
—

Swap contracts (c)
 
(220
)
 
—

 
(220
)
 
—

Option contracts (b)
 
(5
)
 
—

 
—

 
(5
)
     Option contracts (c)
 
(1,092
)
 
—

 
—

 
(1,092
)
Interest rate derivatives (see Note 3)
 
(36
)
 
—

 
(36
)
 
—

Total liabilities
 
$
(1,355
)
 
$
—

 
$
(258
)
 
$
(1,097
)
(a) Cash equivalents are primarily composed of money market investments.
(b) In the unaudited Condensed Consolidated Balance Sheet amounts are presented as a net asset. See Note 3.
(c) In the unaudited Condensed Consolidated Balance Sheet amounts are presented as a net liability. See Note 3.

 
 
 
 
Fair value measurements at reporting date using:
 
 
 
 
Quoted prices in
active markets
for identical assets
 
Significant
other observable
inputs
 
Significant
unobservable
inputs
Description
 
December 31, 2015
 
(Level 1)
 
(Level 2)
 
(Level 3)
Assets
 
(in millions)
Cash equivalents
 
 
 
 
 
 
 
 
Cash equivalents (a)
 
$
1,337

 
$
1,337

 
$
—

 
$
—

Commercial paper
 
200

 
—

 
200

 
—

Certificates of deposit
 
13

 
—

 
13

 
—

Eurodollar time deposits
 
33

 
—

 
33

 
—

Short-term investments:
 
 
 
 
 
 
 
 
Treasury bills
 
1,248

 
1,248

 
—

 
—

Certificates of deposit
 
220

 
—

 
220

 
—

Interest rate derivatives (see Note 3)
 
2

 
—

 
2

 
—

Fuel derivatives:
 
 
 
 
 
 
 
 
Swap contracts (b)
 
38

 
—

 
38

 
—

Swap contracts (c)
 
931

 
—

 
931

 
—

Option contracts (b)
 
10

 
—

 
—

 
10

Option contracts (c)
 
956

 
—

 
—

 
956

Other available-for-sale securities
 
93

 
66

 
—

 
27

Total assets
 
$
5,081

 
$
2,651

 
$
1,437

 
$
993

Liabilities
 
 
 
 
 
 
 
 
Fuel derivatives:
 
 
 
 
 
 
 
 
Swap contracts (c)
 
$
(774
)
 
$
—

 
$
(774
)
 
$
—

Option contracts (b)
 
(26
)
 
—

 
—

 
(26
)
Option contracts (c)
 
(2,616
)
 
—

 
—

 
(2,616
)
Interest rate derivatives (see Note 3)
 
(49
)
 
—

 
(49
)
 
—

Total liabilities
 
$
(3,465
)
 
$
—

 
$
(823
)
 
$
(2,642
)
(a) Cash equivalents are primarily composed of money market investments.
(b) In the unaudited Consolidated Balance Sheet amounts are presented as a net asset. See Note 3.
(c) In the unaudited Consolidated Balance Sheet amounts are presented as a net liability. See Note 3.
Fair Value Assets And Liabilities Measured On Recurring Basis Unobservable Input Reconciliation
The following tables present the Company’s activity for items measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the three and nine months ended September 30, 2016:

 
Fair value measurements using significant
unobservable inputs (Level 3)
 
Fuel
derivatives
 
Other
securities
 
 
(in millions)
 
 
Total
Balance at June 30, 2016
$
(907
)
 
$
26

 
$
(881
)
Total gains (losses) (realized or unrealized)
 

 
 

 
 

Included in earnings
(46
)
 
—

 
(46
)
Included in other comprehensive income
(31
)
 
3

 
(28
)
Purchases
61

(a)
—

 
61

Sales
(4
)
(a)
(13
)
 
(17
)
Settlements
246

 
—

 
246

Balance at September 30, 2016
$
(681
)
 
$
16

 
$
(665
)
The amount of total losses for the period
  included in earnings attributable to the
  change in unrealized gains or losses relating
  to option contracts still held at September 30,
  2016.
$
(20
)
 
$
—

 
$
(20
)
(a) The purchase and sale of fuel derivatives are recorded gross based on the structure of the derivative instrument and whether a contract with multiple derivatives is purchased as a single instrument or separate instruments.
 
Fair value measurements using significant
unobservable inputs (Level 3)
 
Fuel
derivatives
 
Other
securities
 
 
(in millions)
 
 
Total
Balance at December 31, 2015
$
(1,676
)
 
$
27

 
$
(1,649
)
Total gains (realized or unrealized)
 

 
 

 
 

Included in earnings
128

 
—

 
128

Included in other comprehensive income
104

 
2

 
106

Purchases
191

(a)
—

 
191

Sales
(61
)
(a)
(13
)
 
(74
)
Settlements
633

 
—

 
633

Balance at September 30, 2016
$
(681
)
 
$
16

 
$
(665
)
The amount of total gains for the period
  included in earnings attributable to the
  change in unrealized gains or losses relating
  to option contracts still held at September 30,
  2016.
$
95

 
$
—

 
$
95

(a) The purchase and sale of fuel derivatives are recorded gross based on the structure of the derivative instrument and whether a contract with multiple derivatives is purchased as a single instrument or separate instruments.
Fair Value Valuation Techniques
The following table presents a range of the unobservable inputs utilized in the fair value measurements of the Company’s fuel derivatives classified as Level 3 at September 30, 2016:

Quantitative information about Level 3 fair value measurements
 
Valuation technique
Unobservable input
Period (by year)
Range
Fuel derivatives
Option model
Implied volatility
Fourth quarter 2016
20-35%
 
 
 
2017
27-38%
 
 
 
2018
21-32%
Fair value, by Balance Sheet Grouping
The carrying amounts and estimated fair values of the Company’s long-term debt (including current maturities), as well as the applicable fair value hierarchy tier, at September 30, 2016, are presented in the table below. The fair values of the Company’s publicly held long-term debt are determined based on inputs that are readily available in public markets or can be derived from information available in publicly quoted markets; therefore, the Company has categorized these agreements as Level 2. Debt under seven of the Company’s debt agreements is not publicly held. The Company has determined the estimated fair value of this debt to be Level 3, as certain inputs used to determine the fair value of these agreements are unobservable. The Company utilizes indicative pricing from counterparties and a discounted cash flow method to estimate the fair value of the Level 3 items.

(in millions)
 Carrying value
 
Estimated fair value
 
Fair value level hierarchy
5.25% Convertible Senior Notes due November 2016
$
110

 
$
301

 
Level 2
5.75% Notes due December 2016
302

 
304

 
Level 2
5.125% Notes due 2017
303

 
308

 
Level 2
French Credit Agreements due 2018 - 1.96%
19

 
19

 
Level 3
Fixed-rate 737 Aircraft Notes payable through 2018 - 7.03%
9

 
10

 
Level 3
2.75% Notes due 2019
307

 
316

 
Level 2
Term Loan Agreement due 2019 - 6.315%
115

 
117

 
Level 3
Term Loan Agreement due 2019 - 4.84%
28

 
29

 
Level 3
2.65% Notes due 2020
507

 
521

 
Level 2
Term Loan Agreement due 2020 - 5.223%
296

 
291

 
Level 3
Floating-rate 737 Aircraft Notes payable through 2020
217

 
213

 
Level 3
Term Loan Agreements payable through 2021 - 7.94%
20

 
22

 
Level 3
Pass Through Certificates due 2022 - 6.24%
324

 
362

 
Level 2
7.375% Debentures due 2027
130

 
161

 
Level 2