Leases

12 Months Ended

Dec. 31, 2019

Lessee, Lease, Description [Line Items]

Leases

Leases

We lease certain aircraft and engines, including aircraft under capacity purchase agreements. As of December 31, 2019, we had 636 leased aircraft, with remaining terms ranging from less than one year to 12 years.

At each airport where we conduct flight operations, we have agreements, generally with a governmental unit or authority, for the use of passenger, operations and baggage handling space as well as runways and taxiways. These agreements, particularly in the U.S., often contain provisions for periodic adjustments to rates and charges applicable under such agreements. These rates and charges also vary with our level of operations and the operations of the airport. Because of the variable nature of these rates, these leases are not recorded on our balance sheet as a ROU asset or a lease liability. Additionally, at our hub locations and in certain other cities we serve, we lease administrative offices, catering, cargo, training, maintenance and other facilities.

The components of lease expense were as follows (in millions):

	Year Ended December 31,
	2019		2018
Operating lease cost	$	2,027	$	1,907
Finance lease cost:
Amortization of assets	79		78
Interest on lease liabilities	43		48
Variable lease cost	2,558		2,353
Total net lease cost	$	4,707	$	4,386

Included in the table above is $236 million and $226 million of operating lease cost under our capacity purchase agreement with Republic for the years ended December 31, 2019 and 2018, respectively. We hold a 25% equity interest in Republic Holdings, the parent company of Republic.

Supplemental balance sheet information related to leases was as follows (in millions, except lease term and discount rate):

	December 31,
	2019			2018
Operating leases:
Operating lease ROU assets	$	8,737		$	9,151
Current operating lease liabilities	$	1,708		$	1,654
Noncurrent operating lease liabilities	7,421			7,902
Total operating lease liabilities	$	9,129		$	9,556
Finance leases:
Property and equipment, at cost	$	954		$	936
Accumulated amortization	(447		)	(391		)
Property and equipment, net	$	507		$	545
Current finance lease liabilities	$	112		$	81
Noncurrent finance lease liabilities	558			613
Total finance lease liabilities	$	670		$	694
Weighted average remaining lease term (in years):
Operating leases	7.4			7.6
Finance leases	6.2			7.4
Weighted average discount rate:
Operating leases	4.7		%	4.6		%
Finance leases	6.2		%	6.5		%

Supplemental cash flow and other information related to leases was as follows (in millions):

	Year Ended December 31,
	2019		2018
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	2,013	$	1,931
Operating cash flows from finance leases	43		48
Financing cash flows from finance leases	83		78
Non-cash transactions:
ROU assets acquired through operating leases	1,145		1,292
Operating lease conversion to finance lease	41		—
Property and equipment acquired through finance leases	20		—
Gain on sale leaseback transactions, net	107		59

Maturities of lease liabilities were as follows (in millions):

	December 31, 2019
	Operating Leases			Finance Leases
2020	$	1,990		$	153
2021	1,817			128
2022	1,620			132
2023	1,429			110
2024	1,030			116
2025 and thereafter	3,276			171
Total lease payments	11,162			810
Less: Imputed interest	(2,033		)	(140		)
Total lease obligations	9,129			670
Less: Current obligations	(1,708		)	(112		)
Long-term lease obligations	$	7,421		$	558

As of December 31, 2019, we have additional operating lease commitments that have not yet commenced of approximately $2.0 billion for 22 787-8 aircraft to be delivered in 2020 and 2021 with lease terms of 10 years.

Leases

Leases

We lease certain aircraft and engines, including aircraft under capacity purchase agreements. As of December 31, 2019, we had 636 leased aircraft, with remaining terms ranging from less than one year to 12 years.

At each airport where we conduct flight operations, we have agreements, generally with a governmental unit or authority, for the use of passenger, operations and baggage handling space as well as runways and taxiways. These agreements, particularly in the U.S., often contain provisions for periodic adjustments to rates and charges applicable under such agreements. These rates and charges also vary with our level of operations and the operations of the airport. Because of the variable nature of these rates, these leases are not recorded on our balance sheet as a ROU asset or a lease liability. Additionally, at our hub locations and in certain other cities we serve, we lease administrative offices, catering, cargo, training, maintenance and other facilities.

The components of lease expense were as follows (in millions):

	Year Ended December 31,
	2019		2018
Operating lease cost	$	2,027	$	1,907
Finance lease cost:
Amortization of assets	79		78
Interest on lease liabilities	43		48
Variable lease cost	2,558		2,353
Total net lease cost	$	4,707	$	4,386

Included in the table above is $236 million and $226 million of operating lease cost under our capacity purchase agreement with Republic for the years ended December 31, 2019 and 2018, respectively. We hold a 25% equity interest in Republic Holdings, the parent company of Republic.

Supplemental balance sheet information related to leases was as follows (in millions, except lease term and discount rate):

	December 31,
	2019			2018
Operating leases:
Operating lease ROU assets	$	8,737		$	9,151
Current operating lease liabilities	$	1,708		$	1,654
Noncurrent operating lease liabilities	7,421			7,902
Total operating lease liabilities	$	9,129		$	9,556
Finance leases:
Property and equipment, at cost	$	954		$	936
Accumulated amortization	(447		)	(391		)
Property and equipment, net	$	507		$	545
Current finance lease liabilities	$	112		$	81
Noncurrent finance lease liabilities	558			613
Total finance lease liabilities	$	670		$	694
Weighted average remaining lease term (in years):
Operating leases	7.4			7.6
Finance leases	6.2			7.4
Weighted average discount rate:
Operating leases	4.7		%	4.6		%
Finance leases	6.2		%	6.5		%

Supplemental cash flow and other information related to leases was as follows (in millions):

	Year Ended December 31,
	2019		2018
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	2,013	$	1,931
Operating cash flows from finance leases	43		48
Financing cash flows from finance leases	83		78
Non-cash transactions:
ROU assets acquired through operating leases	1,145		1,292
Operating lease conversion to finance lease	41		—
Property and equipment acquired through finance leases	20		—
Gain on sale leaseback transactions, net	107		59

Maturities of lease liabilities were as follows (in millions):

	December 31, 2019
	Operating Leases			Finance Leases
2020	$	1,990		$	153
2021	1,817			128
2022	1,620			132
2023	1,429			110
2024	1,030			116
2025 and thereafter	3,276			171
Total lease payments	11,162			810
Less: Imputed interest	(2,033		)	(140		)
Total lease obligations	9,129			670
Less: Current obligations	(1,708		)	(112		)
Long-term lease obligations	$	7,421		$	558

As of December 31, 2019, we have additional operating lease commitments that have not yet commenced of approximately $2.0 billion for 22 787-8 aircraft to be delivered in 2020 and 2021 with lease terms of 10 years.

American Airlines, Inc. [Member]

Lessee, Lease, Description [Line Items]

Leases

Leases

American leases certain aircraft and engines, including aircraft under capacity purchase agreements. As of December 31, 2019, American had 636 leased aircraft, with remaining terms ranging from less than one year to 12 years.

At each airport where American conducts flight operations, American has agreements, generally with a governmental unit or authority, for the use of passenger, operations and baggage handling space as well as runways and taxiways. These agreements, particularly in the U.S., often contain provisions for periodic adjustments to rates and charges applicable under such agreements. These rates and charges also vary with American’s level of operations and the operations of the airport. Because of the variable nature of these rates, these leases are not recorded on American’s balance sheet as a ROU asset or a lease liability. Additionally, at American’s hub locations and in certain other cities it serves, American leases administrative offices, catering, cargo, training, maintenance and other facilities.

The components of lease expense were as follows (in millions):

	Year Ended December 31,
	2019		2018
Operating lease cost	$	2,012	$	1,889
Finance lease cost:
Amortization of assets	79		78
Interest on lease liabilities	43		48
Variable lease cost	2,542		2,353
Total net lease cost	$	4,676	$	4,368

Included in the table above is $236 million and $226 million of operating lease cost under American’s capacity purchase agreement with Republic for the years ended December 31, 2019 and 2018, respectively. American holds a 25% equity interest in Republic Holdings, the parent company of Republic.

Supplemental balance sheet information related to leases was as follows (in millions, except lease term and discount rate):

	December 31,
	2019			2018
Operating leases:
Operating lease ROU assets	$	8,694		$	9,094
Current operating lease liabilities	$	1,695		$	1,639
Noncurrent operating lease liabilities	7,388			7,857
Total operating lease liabilities	$	9,083		$	9,496
Finance leases:
Property and equipment, at cost	$	954		$	936
Accumulated amortization	(447		)	(391		)
Property and equipment, net	$	507		$	545
Current finance lease liabilities	$	112		$	81
Noncurrent finance lease liabilities	558			613
Total finance lease liabilities	$	670		$	694
Weighted average remaining lease term (in years):
Operating leases	7.4			7.6
Finance leases	6.2			7.4
Weighted average discount rate:
Operating leases	4.7		%	4.6		%
Finance leases	6.2		%	6.5		%

Supplemental cash flow and other information related to leases was as follows (in millions):

	Year Ended December 31,
	2019		2018
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	1,996	$	1,914
Operating cash flows from finance leases	43		48
Financing cash flows from finance leases	83		78
Non-cash transactions:
ROU assets acquired through operating leases	1,144		1,258
Operating lease conversion to finance lease	41		—
Property and equipment acquired through finance leases	20		—
Gain on sale leaseback transactions, net	107		59

Maturities of lease liabilities were as follows (in millions):

	December 31, 2019
	Operating Leases			Finance Leases
2020	$	1,974		$	153
2021	1,804			128
2022	1,608			132
2023	1,423			110
2024	1,028			116
2025 and thereafter	3,268			171
Total lease payments	11,105			810
Less: Imputed interest	(2,022		)	(140		)
Total lease obligations	9,083			670
Less: Current obligations	(1,695		)	(112		)
Long-term lease obligations	$	7,388		$	558

As of December 31, 2019, American has additional operating lease commitments that have not yet commenced of approximately $2.0 billion for 22 787-8 aircraft to be delivered in 2020 and 2021 with lease terms of 10 years.

Leases

Leases

American leases certain aircraft and engines, including aircraft under capacity purchase agreements. As of December 31, 2019, American had 636 leased aircraft, with remaining terms ranging from less than one year to 12 years.

At each airport where American conducts flight operations, American has agreements, generally with a governmental unit or authority, for the use of passenger, operations and baggage handling space as well as runways and taxiways. These agreements, particularly in the U.S., often contain provisions for periodic adjustments to rates and charges applicable under such agreements. These rates and charges also vary with American’s level of operations and the operations of the airport. Because of the variable nature of these rates, these leases are not recorded on American’s balance sheet as a ROU asset or a lease liability. Additionally, at American’s hub locations and in certain other cities it serves, American leases administrative offices, catering, cargo, training, maintenance and other facilities.

The components of lease expense were as follows (in millions):

	Year Ended December 31,
	2019		2018
Operating lease cost	$	2,012	$	1,889
Finance lease cost:
Amortization of assets	79		78
Interest on lease liabilities	43		48
Variable lease cost	2,542		2,353
Total net lease cost	$	4,676	$	4,368

Included in the table above is $236 million and $226 million of operating lease cost under American’s capacity purchase agreement with Republic for the years ended December 31, 2019 and 2018, respectively. American holds a 25% equity interest in Republic Holdings, the parent company of Republic.

Supplemental balance sheet information related to leases was as follows (in millions, except lease term and discount rate):

	December 31,
	2019			2018
Operating leases:
Operating lease ROU assets	$	8,694		$	9,094
Current operating lease liabilities	$	1,695		$	1,639
Noncurrent operating lease liabilities	7,388			7,857
Total operating lease liabilities	$	9,083		$	9,496
Finance leases:
Property and equipment, at cost	$	954		$	936
Accumulated amortization	(447		)	(391		)
Property and equipment, net	$	507		$	545
Current finance lease liabilities	$	112		$	81
Noncurrent finance lease liabilities	558			613
Total finance lease liabilities	$	670		$	694
Weighted average remaining lease term (in years):
Operating leases	7.4			7.6
Finance leases	6.2			7.4
Weighted average discount rate:
Operating leases	4.7		%	4.6		%
Finance leases	6.2		%	6.5		%

Supplemental cash flow and other information related to leases was as follows (in millions):

	Year Ended December 31,
	2019		2018
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	1,996	$	1,914
Operating cash flows from finance leases	43		48
Financing cash flows from finance leases	83		78
Non-cash transactions:
ROU assets acquired through operating leases	1,144		1,258
Operating lease conversion to finance lease	41		—
Property and equipment acquired through finance leases	20		—
Gain on sale leaseback transactions, net	107		59

Maturities of lease liabilities were as follows (in millions):

	December 31, 2019
	Operating Leases			Finance Leases
2020	$	1,974		$	153
2021	1,804			128
2022	1,608			132
2023	1,423			110
2024	1,028			116
2025 and thereafter	3,268			171
Total lease payments	11,105			810
Less: Imputed interest	(2,022		)	(140		)
Total lease obligations	9,083			670
Less: Current obligations	(1,695		)	(112		)
Long-term lease obligations	$	7,388		$	558

As of December 31, 2019, American has additional operating lease commitments that have not yet commenced of approximately $2.0 billion for 22 787-8 aircraft to be delivered in 2020 and 2021 with lease terms of 10 years.