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Fair Value Measurements
 6 Months Ended
Jun. 30, 2012
Fair Value Disclosures [Abstract]  
Fair Value Disclosures [Text Block]
FAIR VALUE MEASUREMENTS

Assets (Liabilities) Measured at Fair Value on a Recurring Basis
(in millions)
June 30,
2012
Level 1
Level 2
Level 3
Cash equivalents
$
2,243

$
2,243

$
—

$
—

Short-term investments
959

959

—

—

Restricted cash equivalents and investments
382

382

—

—

Long-term investments
196

83

24

89

Hedge derivatives, net
 
 
 
 
Fuel hedge contracts
(253
)
28

(281
)
—

Interest rate contracts
(78
)
—

(78
)
—

Foreign currency exchange contracts
(6
)
—

(6
)
—


(in millions)
December 31, 2011
Level 1
Level 2
Level 3
Cash equivalents
$
2,357

$
2,357

$
—

$
—

Short-term investments
958

958

—

—

Restricted cash equivalents and investments
341

341

—

—

Long-term investments
188

55

24

109

Hedge derivatives, net
 
 
 
 
Fuel hedge contracts
70

—

70

—

Interest rate contracts
(91
)
—

(91
)
—

Foreign currency exchange contracts
(89
)
—

(89
)
—



Cash Equivalents, Short-term Investments and Restricted Cash Equivalents and Investments. Cash equivalents and short-term investments generally consist of money market funds and treasury bills. Restricted cash equivalents and investments are primarily held to meet certain projected self-insurance obligations and generally consist of money market funds and time deposits. These investments are recorded at cost, which approximates fair value. Fair value is based on the market approach using prices and other relevant information generated by market transactions involving identical or comparable assets.

Long-term Investments. Our long-term investments are classified in other noncurrent assets and comprised of equity investments in GOL and Aeroméxico, auction rate securities and other long-term investments.

Hedge Derivatives. Our derivative contracts are generally negotiated with counterparties without going through a public exchange. Accordingly, our fair value assessments give consideration to the risk of counterparty default (as well as our own credit risk).

•
Fuel Derivatives. Our fuel hedge portfolio consists of call options; put options; combinations of two or more call options and put options; swap contracts; and futures contracts. The products underlying the hedge contracts include heating oil, crude oil, jet fuel and diesel fuel, as these commodities are highly correlated with the price of jet fuel that we consume. Option contracts are valued under the income approach using option pricing models based on data either readily observable in public markets, derived from public markets or provided by counterparties who regularly trade in public markets. Volatilities used in these valuations ranged from 14% to 44% depending on the maturity dates, underlying commodities and strike prices of the option contracts. Swap contracts are valued under the income approach using a discounted cash flow model based on data either readily observable or derived from public markets. Discount rates used in these valuations vary with the maturity dates of the respective contracts and are based on LIBOR. Futures contracts and options on futures contracts are traded on a public exchange and are valued based on quoted market prices.

•
Interest Rate Derivatives. Our interest rate derivatives consist of swap contracts and are valued primarily based on data readily observable in public markets.

•
Foreign Currency Derivatives. Our foreign currency derivatives consist of Japanese yen and Canadian dollar forward contracts and are valued based on data readily observable in public markets.