XML 59 R15.htm IDEA: XBRL DOCUMENT
v3.24.2.u1

Operating Leases | 6 Months Ended
--- | ---
Jun. 30, 2024
Leases [Abstract] |
Operating Leases | Operating Leases Aircraft As of June 30, 2024, the Company leased 148 aircraft with remaining terms ranging from 8 months to 12 years, all of which are under operating leases and are included within operating lease right-of-use assets and operating lease liabilities on the Company’s condensed consolidated balance sheets. In addition, as of June 30, 2024, the Company leased 33 spare engines which are all under operating leases, with the remaining term ranging from one month to 12 years. As of June 30, 2024, the lease rates for 10 of the engines depend on usage-based metrics which are variable and, as such, these leases are not recorded on the Company’s condensed consolidated balance sheets as operating lease right-of-use assets or as operating lease liabilities. During the three and six months ended June 30, 2024 and 2023, the Company executed sale-leaseback transactions with third-party lessors for six, twelve, one and four new Airbus A320neo family aircraft, respectively. The Company did not enter into any direct leases during the three and six months ended June 30, 2024 and entered into two and five direct leases for new Airbus A320neo family aircraft during the three and six months ended June 30, 2023, respectively. Additionally, the Company completed sale-leaseback transactions for two, two, one and two engines during the three and six months ended June 30, 2024 and 2023, respectively. All of the leases from the sale-leaseback transactions are accounted for as operating leases. The Company recognized sale-leaseback gain transactions of $77 million, $148 million, $17 million and $57 million during the three and six months ended June 30, 2024 and 2023, respectively, which are included as a component of other operating expenses within the Company’s condensed consolidated statements of operations. Aircraft Rent Expense and Maintenance Obligations During the three and six months ended June 30, 2024 and 2023, aircraft rent expense was $147 million, $306 million, $148 million and $279 million, respectively. Aircraft rent expense includes supplemental rent, which is made up of maintenance-related reserves and probable lease return condition obligations. Supplemental rent expense (benefit) for maintenance-related reserves was $(7) million for each of the three and six months ended June 30, 2024, and $(2) million for each of the three and six months ended June 30, 2023. The portion of supplemental rent expense related to probable lease return condition obligations was $1 million, $14 million, $22 million and $24 million for the three and six months ended June 30, 2024 and 2023, respectively. As of June 30, 2024 and December 31, 2023, the Company’s total leased aircraft return cost liability was $31 million and $26 million, respectively, which are reflected in other current liabilities and other long-term liabilities within the Company’s condensed consolidated balance sheets. During the three months ended June 30, 2024, the Company reached an agreement with one of its aircraft lessors which eliminated requirements to pay maintenance reserves held as collateral in advance of the Company’s required performance of major maintenance activities on its aircraft leases. As a result of the agreement, the lessor disbursed back to the Company previously paid aircraft maintenance deposits of approximately $104 million, resulting in the Company no longer having any aircraft maintenance deposits with any of its lessors as of June 30, 2024. During the three months ended June 30, 2024, the Company extended the term for certain aircraft operating leases that were slated to expire between 2025 and 2027. For the three and six months ended June 30, 2024, the Company recorded a benefit of $11 million and $14 million, respectively, to aircraft rent in the Company’s condensed consolidated statements of operations related to previously accrued lease return costs that were variable in nature and associated with the anticipated utilization and condition of the airframes and engines at the original return date. Given the extension of these aircraft operating leases, such variable return costs are no longer probable of occurring. During the six months ended June 30, 2023, the Company extended the term for certain aircraft operating leases that were slated to expire in the fourth quarter of 2023. For the six months ended June 30, 2023, the Company recorded an $18 million benefit to aircraft rent in the Company’s condensed consolidated statement of operations related to previously accrued lease return costs that were variable in nature and associated with the anticipated utilization and condition of the airframes and engines at the original return date. Given the extension of these aircraft operating leases, such variable return costs are no longer probable of occurring. Airport Facilities The Company’s facility leases are primarily for space at approximately 100 airports, primarily in the United States. These leases are classified as operating leases and reflect the use of airport terminals, ticket counters, office space and maintenance facilities. Generally, this space is leased from government agencies that control the use of the airport. The majority of these leases are short-term in nature and renew on an evergreen basis. For these leases, the contractual term is used as the lease term. As of June 30, 2024, the remaining lease terms vary from one month to 10 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, and because of the variable nature of the rates, these leases are not recorded on the Company’s condensed consolidated balance sheets as right-of-use assets and lease liabilities. Other Ground Property and Equipment The Company leases certain other assets such as flight training equipment, building space, and various other equipment. Certain of the Company’s leases for other assets are deemed to contain fixed rental payments and, as such, are classified as operating leases and are recorded on the Company’s condensed consolidated balance sheets as a right-of-use asset and liability. The remaining lease terms ranged from one month to eight years as of June 30, 2024. Lease Costs The table below presents certain information related to lease costs for operating leases during the three and six months ended June 30, 2024 and 2023 (in millions):
| Three Months Ended June 30, |  | Six Months Ended June 30,
| 2024 |  | 2023 |  | 2024 |  | 2023
Operating lease cost(a) | $ | 155 |  |  | $ | 131 |  |  | $ | 302 |  |  | $ | 258 |
Variable lease cost(a) | 94 |  |  | 70 |  |  | 173 |  |  | 144 |
Total lease costs | $ | 249 |  |  | $ | 201 |  |  | $ | 475 |  |  | $ | 402 |
_________________ (a) Expenses are included within aircraft rent, station operations, maintenance, materials and repairs and other operating within the Company’s condensed consolidated statements of operations. During the three and six months ended June 30, 2024 and 2023, the Company acquired, through new or modified operating leases, operating lease assets totaling $571 million, $826 million, $107 million and $338 million, respectively, which are included in operating lease right-of-use assets on the Company’s condensed consolidated balance sheets. During the three and six months ended June 30, 2024 and 2023, the Company paid cash of $155 million, $302 million, $130 million and $257 million, respectively, for amounts included in the measurement of lease liabilities.

X
- References No definition available. + Details
Name: | us-gaap_LeasesAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition The entire disclosure for operating leases of lessee. Includes, but is not limited to, description of operating lease and maturity analysis of operating lease liability. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Topic 842 -SubTopic 20 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org/842-20/tableOfContent + Details
Name: | us-gaap_LesseeOperatingLeasesTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration