Commitments and Contingencies

9 Months Ended

Sep. 30, 2019

Commitments and Contingencies Disclosure [Abstract]

Commitments. As of September 30, 2019, United had firm commitments and options to purchase aircraft from The Boeing Company ("Boeing"), Airbus S.A.S. ("Airbus") and Embraer S.A. ("Embraer") presented in the table below:



		Scheduled Aircraft Deliveries
Aircraft Type	Number of Firm Commitments (a)	Last Three Months of 2019	2020	After 2020
Airbus A350	45	—	—	45
Boeing 737 MAX	171	16	28	127
Boeing 777-300ER	4	2	2	—
Boeing 787	18	2	15	1
Embraer E175	29	9	20	—
(a) United also has options and purchase rights for additional aircraft.

The aircraft listed in the table above are scheduled for delivery through 2027. To the extent the Company and the aircraft manufacturers with whom the Company has existing orders for new aircraft agree to modify the contracts governing those orders, the amount and timing of the Company's future capital commitments could change. United also has agreements to purchase 20 used Airbus A319 aircraft with expected delivery dates through 2022 and 20 used Boeing 737-700 aircraft with expected delivery dates in 2019 through 2021.

On March 13, 2019, the Federal Aviation Administration issued an emergency order prohibiting the operation of Boeing 737 MAX series airplanes by U.S. certificated operators (the "FAA Order"). As a result, the Company grounded all 14 Boeing 737 MAX 9 aircraft in its fleet. Prior to the grounding, the Company operated approximately 50 flights a day on these aircraft, and expected, given the anticipated delivery schedule, to operate approximately 110 flights a day by the end of the year. The FAA Order also resulted in Boeing suspending delivery of new Boeing 737 MAX series aircraft. The extent of the delay to the scheduled deliveries of the 737 MAX aircraft included in the table above is expected to be impacted by the length of time the FAA Order remains in place, Boeing's production rate and the pace at which Boeing can deliver aircraft following the lifting of the FAA Order, among other factors.

During the third quarter of 2018, United entered into an agreement with the lessor of 54 Embraer ERJ 145 aircraft to purchase those aircraft in 2019. As of September 30, 2019, United had purchased 36 of those aircraft.

The table below summarizes United's commitments as of September 30, 2019, which include aircraft and related spare engines, aircraft improvements and all non-aircraft capital commitments (in billions):



Last three months of 2019	$	1.5
2020 (a)	6.1
2021	3.8
2022	2.9
2023	2.3
After 2023	7.0
	$	23.6

(a) Commitments for 2020 are expected to be higher than other years displayed in the table above due to the large number of wide-body aircraft deliveries (17 new aircraft) scheduled in that year. Amounts are not adjusted for any potential changes in the delivery schedule of the Boeing 737 MAX aircraft.

Regional CPAs. The table below summarizes the Company's expected future payments through the end of the terms of our CPAs, excluding aircraft ownership costs and variable pass-through costs such as fuel and landing fees, among others (in billions):



Last three months of 2019	$	0.6
2020	2.2
2021	2.1
2022	1.8
2023	1.1
After 2023	4.5
	$	12.3

Guarantees. As of September 30, 2019, United is the guarantor of approximately $1.9 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 balance sheet with the associated expense recorded on a straight-line basis resulting in ratable accrual of the lease obligation over the expected lease term. The obligations associated with these tax-exempt special facilities revenue bonds are included in our lease commitments disclosed in Note 9 of this report. All of these bonds are due between 2020 and 2038.

In connection with funding the BRW Loan Agreement, the Company entered into an agreement with Kingsland, pursuant to which, in return for Kingsland's pledge of its 144.8 million shares of AVH common stock (having an implied value equivalent to 18.1 million ADRs) and its consent to Synergy's pledge of its AVH common stock to United under the BRW Loan Agreement and related agreements, United (1) granted to Kingsland the right to put its shares of AVH common stock to United at market price on the fifth anniversary of the BRW Loan Agreement, and (2) guaranteed Synergy's obligation to pay Kingsland the difference (which amount, if paid by United, will increase United's secured loan to Synergy by such amount) if the market price of AVH common stock on the fifth anniversary is less than $12 per ADR on the NYSE, for an aggregate maximum possible combined put payment and guarantee amount on the fifth anniversary of $217 million. In 2018, the Company recorded a liability of $31 million for the fair value of its guarantee to loan additional funds to Synergy if required. Any such additional loans to Synergy would be collateralized by BRW's shares of AVH stock and other collateral. A completed foreclosure of that collateral, as described in Note 7 of this report, might accelerate the exercise of the put option described above.

On October 4, 2019, United and Kingsland delivered to AVH a commitment to provide AVH at least a $250 million senior secured convertible loan (of which United’s portion would be a maximum of $150 million), which $250 million will become fully binding on United and Kingsland subject to the satisfaction of certain conditions, including the successful completion of AVH's debt restructuring plan.

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, 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 September 30, 2019, the Company had $3.4 billion of floating rate debt with remaining terms of up to 11 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 11 years and an aggregate balance of $3.1 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.

As of September 30, 2019, United is the guarantor of $136 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 above for the Company's debt, and the Company would potentially be responsible for those costs under the guarantees.

Labor Negotiations. As of September 30, 2019, the Company had approximately 95,000 employees, of whom approximately 84% were represented by various U.S. labor organizations. On February 1, 2019, the collective bargaining agreement with the Air Line Pilots Association ("ALPA"), the labor union representing United's pilots, became amendable. The Company and ALPA are in negotiations for an amended agreement. The Company and UNITE HERE, the labor union representing United's Catering Operations employees, started negotiations for a first collective bargaining agreement in March 2019.