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FLEET TRANSITION | 9 Months Ended
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Sep. 30, 2023
Property, Plant and Equipment [Abstract] |
Fleet Transition and Related Activities Disclosure | FLEET TRANSITION In the first quarter of 2022, the Company announced plans to accelerate the transition of its mainline operations to an all-Boeing 737 fleet. It also announced plans to transition its regional operations to an all-Embraer fleet. The removal of all A320 and Q400 aircraft from operating service was completed in January 2023. The removal of all A321neo aircraft from operating service was completed in September 2023. At September 30, 2023, Alaska had reached agreements with multiple lessors to exit its ten A321neo operating leases and purchase the aircraft. Three aircraft purchases closed by September 30, 2023. Subsequent to quarter end, Alaska finalized an agreement to sell the ten aircraft to American Airlines. The remaining seven purchases and all sales to American Airlines are expected to occur in the fourth quarter of 2023 and first quarter of 2024. As a result of the new agreements, the operating leases associated with the seven aircraft that were not purchased by September 30, 2023 were considered modified, and upon evaluation were reclassified as finance leases. Valuation of Long-Lived Assets The Company reviews its long-lived assets for impairment whenever events or circumstances indicate that the total carrying value of an asset or asset group may not be recoverable. In the second quarter, the Company performed an impairment analysis for the A321neo fleet and recorded an impairment charge of $156 million. In the third quarter, the Company determined there was additional impairment related to the A321neo fleet due to new purchase activity in the period. The Company estimated the fair market value for the A321neo aircraft using available market price information with adjustments based on quantitative and qualitative considerations. Based on this fair market value, the Company recorded an impairment charge of $123 million, reflecting the amount by which carrying value exceeded fair value of the aircraft. This charge is included within Special items - fleet transition and other in the condensed consolidated statements of operations. Other Fleet Related Disclosure The ten A321neo aircraft that have been removed from operating service are classified as Assets held for sale in the condensed consolidated balance sheets as of September 30, 2023. Seven of these aircraft are classified as finance leases, whose lease liabilities are reflected within Current portion of long-term debt and finance leases and total $452 million as of September 30, 2023. Interest expense associated with the finance leases of $8 million for the third quarter of 2023 was recognized within Special items - net non-operating in the condensed consolidated statements of operations. Special charges were also recognized during the three and nine months ended September 30, 2023 for other fleet transition costs, including accelerated aircraft ownership expenses, certain aircraft maintenance work performed as a result of the fleet retirements, adjustments to estimated costs to return the A320 fleet, and penalty rent for Airbus aircraft which have not yet been returned to the lessor as of the lease expiration date. The following table summarizes our special charges for fleet transition costs for the three and nine months ended September 30, 2023 and 2022:
|  | Three Months Ended September 30, |  | Nine Months Ended September 30,
(in millions) |  | 2023 |  | 2022 |  | 2023 |  | 2022
Impairment of long-lived assets(a) |  | $ | 120 |  |  | $ | — |  |  | $ | 271 |  |  | $ | 70 |
Other fleet transition costs |  | 36 |  |  | 155 |  |  | 84 |  |  | 306 |
Special items - fleet transition and other |  | $ | 156 |  |  | $ | 155 |  |  | $ | 355 |  |  | $ | 376 |
Special items - fleet transition and other [Table Text Block] | The following table summarizes our special charges for fleet transition costs for the three and nine months ended September 30, 2023 and 2022:
|  | Three Months Ended September 30, |  | Nine Months Ended September 30,
(in millions) |  | 2023 |  | 2022 |  | 2023 |  | 2022
Impairment of long-lived assets(a) |  | $ | 120 |  |  | $ | — |  |  | $ | 271 |  |  | $ | 70 |
Other fleet transition costs |  | 36 |  |  | 155 |  |  | 84 |  |  | 306 |
Special items - fleet transition and other |  | $ | 156 |  |  | $ | 155 |  |  | $ | 355 |  |  | $ | 376 |

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- Definition The entire disclosure for restructuring and related activities. Description of restructuring activities such as exit and disposal activities, include facts and circumstances leading to the plan, the expected plan completion date, the major types of costs associated with the plan activities, total expected costs, the accrual balance at the end of the period, and the periods over which the remaining accrual will be settled. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Topic 420 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 1 -Subparagraph (b)(2) -Publisher FASB -URI https://asc.fasb.org//1943274/2147482017/420-10-50-1 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Topic 420 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 1 -Subparagraph (a) -Publisher FASB -URI https://asc.fasb.org//1943274/2147482017/420-10-50-1 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Topic 420 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org//420/tableOfContent Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Topic 420 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 1 -Subparagraph (e) -Publisher FASB -URI https://asc.fasb.org//1943274/2147482017/420-10-50-1 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Topic 420 -SubTopic 10 -Name Accounting Standards Codification -Section S99 -Paragraph 2 -Subparagraph (SAB Topic 5.P.4(e)) -Publisher FASB -URI https://asc.fasb.org//1943274/2147479823/420-10-S99-2 + Details
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