XML 48 R20.htm IDEA: XBRL DOCUMENT
v3.25.4

Commitments and Contingencies | 12 Months Ended
--- | ---
Dec. 31, 2025
Commitments and Contingencies Disclosure [Abstract] |
Commitments and Contingencies | Commitments and Contingencies Flight Equipment Commitments As of December 31, 2025, the Company’s firm aircraft and engine purchase orders consisted of the following:
| A320neo |  | A321neo |  | Total Aircraft(a) |  | Engines
Year Ending |  |  |  |  |  |  |
2026 | 8 |  |  | 16 |  |  | 24 |  |  | 2 |
2027 | 8 |  |  | 26 |  |  | 34 |  |  | 3 |
2028 | 4 |  |  | 30 |  |  | 34 |  |  | 2 |
2029 | — |  |  | 36 |  |  | 36 |  |  | 5 |
2030 | — |  |  | 28 |  |  | 28 |  |  | — |
Thereafter | — |  |  | 12 |  |  | 12 |  |  | 9 |
Total | 20 |  |  | 148 |  |  | 168 |  |  | 21 |
___________________ (a) While the schedule presented above reflects the contractual delivery dates as of December 31, 2025, the Company continues to experience delays in the deliveries of Airbus aircraft which may persist in future periods. The Company is party to certain aircraft and engine purchase agreements that provide for, among other things, varying purchase incentives. These purchase incentives are allocated proportionally by aircraft or engine type over the remaining aircraft or engines to be delivered so that each aircraft’s or engine’s capitalized cost upon induction would be equal. Therefore, as cash paid for deliveries is greater than the capitalized cost due to the allocation of these purchase incentives, a deferred purchase incentive is recognized, which will ultimately be offset by future deliveries of aircraft or engines with lower cash payments than their associated capitalized cost. As of December 31, 2025 and 2024, the Company had $81 million and $95 million, respectively, of deferred purchase incentives recognized within other assets on the Company’s consolidated balance sheets. As of December 31, 2025 and 2024, the Company had $52 million and less than $1 million, respectively, of deferred purchase incentives recognized within other long-term liabilities on the Company’s consolidated balance sheets. In July 2025, the Company executed an agreement with Pratt & Whitney to have their PW1100 Geared Turbo Fan (“GTF”) engines power 91 Airbus A321neo aircraft, with the first of these aircraft scheduled for delivery in the fourth quarter of 2026. This agreement also includes a long-term service contract for engine maintenance. As of December 31, 2025, purchase commitments for these aircraft and engines, including estim ated amounts for contractual price escalations and PDPs, consisted of the following (in millions):
| Total
Year Ending |
2026 | $ | 1,426 |
2027 | 2,093 |
2028 | 2,133 |
2029 | 2,374 |
2030 | 1,821 |
Thereafter | 943 |
Total | $ | 10,790 |
Litigation and Other Contingencies The Company is subject to commercial litigation claims and to administrative and regulatory proceedings and reviews that may be asserted or maintained from time to time. During 2023, the DOT sent the Company a request for information to assist in its investigation into whether the Company cared for its customers as required by law during Winter Storm Elliott, which caused significant operational disruptions and spanned from December 21, 2022 to January 2, 2023, including providing adequate customer service assistance, prompt flight status notifications, and proper and timely refunds. The DOT has closed the investigation related to 2023 with no financial impact to the Company. The Company will continue to fully cooperate with any requests from the DOT. Following a federal excise tax audit by the Internal Revenue Service covering the first quarter of 2021 to the second quarter of 2023, in June 2025, the Company received a revised preliminary assessment in the amount of $133 million related to the applicability of federal excise tax to certain optional ancillary products and services. The Company established an estimated liability for certain fees subject to the assessment where it believes a loss for this matter is probable and reasonably estimable. The Company is contesting the updated assessment. The Company could be subject to further excise tax assessments. The Company regularly evaluates the status of such matters to assess whether a loss is probable and reasonably estimable in determining whether an accrual is appropriate. Further, in determining whether disclosure is appropriate, the Company evaluates each matter to assess if there is at least a reasonable possibility that a loss or additional losses may have been incurred and whether an estimate of possible loss or range of loss can be made. The ultimate outcome of legal actions is unpredictable and can be subject to significant uncertainties, and it is difficult to determine whether any loss is probable or even possible. Additionally, it is also difficult to estimate the amount of loss and there may be matters for which a loss is probable or reasonably possible but not currently estimable. Thus, actual losses may be in excess of any recorded liability or the range of reasonably possible loss. The Company believes the ultimate outcome of any potential lawsuits, proceedings and reviews will likely not, individually or in the aggregate, have a material adverse effect on its consolidated financial position, liquidity or results of operations and that the Company’s current accruals cover matters where loss is deemed probable and can be reasonably estimated. In situations where the Company may be a plaintiff and receives, or expects to receive, a favorable ruling related to litigation, the Company follows the accounting standards codification guidance for gain contingencies. The Company does not recognize a gain contingency within its consolidated financial statements prior to the settlement of the underlying events or contingencies associated with the gain contingency. As a result, the consideration related to a gain contingency is recorded in the Company’s consolidated financial statements during the period in which all underlying events or contingencies are resolved and the gain is realized. During the year ended December 31, 2024, the Company agreed to settlement with a former aircraft lessor regarding a breach of contract claim in exchange for the Company’s receipt of $40 million in damages. The settlement amount is final and may not be appealed further by either party. For the year ended December 31, 2024, the $40 million was recognized within other operating expenses on the Company’s consolidated statements of operations. Employees The Company has seven union-represented employee groups that together represented approximately 86% of all employees as of December 31, 2025. The table below sets forth the Company’s employee groups and status of the collective bargaining agreements as of December 31, 2025:
|  |  |  |  |  | Percentage of Workforce
Employee Group |  | Representative |  | Amendable Date (a) |  | December 31, 2025
Pilots |  | Air Line Pilots Association (“ALPA”) |  | January 2024(b) |  | 29%
Flight Attendants |  | Association of Flight Attendants (“AFA-CWA”) |  | May 2024(c) |  | 48%
Aircraft Technicians |  | International Brotherhood of Teamsters (“IBT”) |  | May 2025(d) |  | 6%
Aircraft Appearance Agents |  | IBT |  | July 2030 |  | 1%
Dispatchers |  | Transport Workers Union (“TWU”) |  | August 2028 |  | 1%
Material Specialists |  | IBT |  | November 2030(e) |  | 1%
Maintenance Controllers |  | IBT |  | December 2030(f) |  | <1%
__________________ (a)Subject to standard early opener provisions. (b)ALPA filed for mediation through the National Mediation Board (the “NMB”) in January 2024, and the parties are meeting regularly as part of the mediation process. Pursuant to the U.S. Railway Labor Act (the “RLA”), the parties continue to be bound by the existing agreements as negotiations continue. (c)AFA-CWA filed for mediation through the NMB in October 2024, and the parties are meeting monthly as part of the mediation process, with the first meeting held in February 2025. Pursuant to the RLA, the parties continue to be bound by the existing agreements as negotiations continue. (d)The Company’s collective bargaining agreements with its aircraft technicians, represented by IBT, were still amendable as of December 31, 2025. Pursuant to the United States Railway Labor Act (the “RLA”), the parties continue to be bound by the existing agreements as negotiations continue. (e)Effective as of November 7, 2025, a new five-year agreement with the Company’s material specialists was executed. (f)Effective as of December 10, 2025, a new five-year agreement with the Company’s maintenance controllers was executed. The Company is self-insured for health care claims, subject to a stop-loss policy, for eligible participating employees and qualified dependent medical and dental claims, subject to deductibles and limitations. The Company’s liabilities for claims incurred but not reported are determined based on an estimate of the ultimate aggregate liability for claims incurred. The estimate is calculated from actual claim rates and adjusted periodically as necessary. The Company had accrued $7 million and $6 million for health care claims estimated to be incurred but not yet paid as of December 31, 2025 and 2024, respectively, which are included as a component of other current liabilities on the Company’s consolidated balance sheets. General Indemnifications The Company has various leases with respect to real property as well as various agreements among airlines relating to fuel consortia or fuel farms at airports. Under some of these contracts, the Company is party to joint and several liability regarding environmental damages. Under others, where the Company is a member of an LLC or other entity that contracts directly with the airport operator, liabilities are borne through the fuel consortia structure. The Company’s aircraft, services, equipment lease and sale and financing agreements typically contain provisions requiring the Company, as the lessee, obligor or recipient of services, to indemnify the other parties to those agreements, including certain of those parties’ related persons, against virtually any liabilities that might arise from the use or operation of the aircraft or such other equipment. The Company believes that its insurance would cover most of its exposure to liabilities and related indemnities associated with the commercial real estate leases and aircraft, services, equipment lease and sale and financing agreements described above. Certain of the Company’s aircraft and other financing transactions include provisions that require payments to preserve an expected economic return to the lenders if that economic return is diminished due to certain changes in law or regulations. In certain of these financing transactions and other agreements, the Company also bears the risk of certain changes in tax laws that would subject payments to non-U.S. entities to withholding taxes. Certain of these indemnities survive the length of the related financing or lease. The Company cannot reasonably estimate the potential future payments under the indemnities and related provisions described above because it cannot predict (i) when and under what circumstances these provisions may be triggered, and (ii) the amount that would be payable if the provisions were triggered because the amounts would be based on facts and circumstances existing at such time.

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

X
- Definition The entire disclosure for commitments and contingencies. + References Reference 1: http://www.xbrl.org/2009/role/commonPracticeRef -Topic 405 -SubTopic 30 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org/405-30/tableOfContent Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Topic 440 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 4 -Subparagraph (a) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482648/440-10-50-4 Reference 3: http://www.xbrl.org/2009/role/commonPracticeRef -Topic 450 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org/450/tableOfContent Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Topic 954 -SubTopic 440 -Name Accounting Standards Codification -Section 50 -Paragraph 1 -Subparagraph (a) -Publisher FASB -URI https://asc.fasb.org/1943274/2147478522/954-440-50-1 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Topic 440 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 4 -Subparagraph (c) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482648/440-10-50-4 Reference 6: http://fasb.org/us-gaap/role/ref/legacyRef -Topic 440 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org/440/tableOfContent + Details
Name: | us-gaap_CommitmentsAndContingenciesDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration