Leases

12 Months Ended

Dec. 31, 2021

Lessee, Lease, Description [Line Items]

Leases

Leases

We lease certain aircraft and engines, including aircraft under capacity purchase agreements. As of December 31, 2021, we operated 696 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 consolidated balance sheets 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,
	2021		2020		2019
Operating lease cost	$	2,012	$	1,957	$	2,027
Finance lease cost:
Amortization of assets	107		92		79
Interest on lease liabilities	44		38		43
Variable lease cost	2,471		1,801		2,558
Total net lease cost	$	4,634	$	3,888	$	4,707

Included in the table above is $190 million, $172 million and $236 million of operating lease cost under our capacity purchase agreement with Republic for the years ended December 31, 2021, 2020 and 2019, respectively. We hold a 25% equity interest in Republic Holdings, the parent company of Republic.

Additionally, not included in the table above, we recognized $109 million in cash special charges in 2020 related to the impairment of ROU assets and lease return costs resulting from our decision to retire certain leased aircraft earlier than planned driven by the severe decline in air travel due to the COVID-19 pandemic.

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

	December 31,
	2021			2020
Operating leases:
Operating lease ROU assets	$	7,850		$	8,039
Current operating lease liabilities	$	1,507		$	1,651
Noncurrent operating lease liabilities	6,610			6,777
Total operating lease liabilities	$	8,117		$	8,428
Finance leases:
Property and equipment, at cost	$	1,201		$	1,021
Accumulated amortization	(653)			(539)
Property and equipment, net	$	548		$	482
Current finance lease liabilities	$	174		$	100
Noncurrent finance lease liabilities	563			472
Total finance lease liabilities	$	737		$	572
Weighted average remaining lease term (in years):
Operating leases	7.6			7.4
Finance leases	4.6			5.4
Weighted average discount rate:
Operating leases	6.3		%	5.6		%
Finance leases	6.1		%	6.3		%

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

	Year Ended December 31,
	2021		2020		2019
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	2,053	$	2,028	$	2,013
Operating cash flows from finance leases	37		39		43
Financing cash flows from finance leases	126		114		83
Non-cash transactions:
ROU assets acquired through operating leases	1,386		917		1,145
Property and equipment acquired through finance leases	180		11		20
Operating lease conversion to finance lease	102		5		41
Gain on sale leaseback transactions, net	25		107		107

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

	December 31, 2021
	Operating Leases		Finance Leases
2022	$	1,929	$	215
2023	1,791		183
2024	1,410		180
2025	1,039		113
2026	762		87
2027 and thereafter	3,614		77
Total lease payments	10,545		855
Less: Imputed interest	(2,428)		(118)
Total lease obligations	8,117		737
Less: Current obligations	(1,507)		(174)
Long-term lease obligations	$	6,610	$	563

As of December 31, 2021, we had additional operating lease commitments that have not yet commenced of approximately $1.8 billion for 18 Boeing 787 Family aircraft scheduled to be delivered in 2022 through 2024 with lease terms of 10 years.

Leases

Leases

We lease certain aircraft and engines, including aircraft under capacity purchase agreements. As of December 31, 2021, we operated 696 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 consolidated balance sheets 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,
	2021		2020		2019
Operating lease cost	$	2,012	$	1,957	$	2,027
Finance lease cost:
Amortization of assets	107		92		79
Interest on lease liabilities	44		38		43
Variable lease cost	2,471		1,801		2,558
Total net lease cost	$	4,634	$	3,888	$	4,707

Included in the table above is $190 million, $172 million and $236 million of operating lease cost under our capacity purchase agreement with Republic for the years ended December 31, 2021, 2020 and 2019, respectively. We hold a 25% equity interest in Republic Holdings, the parent company of Republic.

Additionally, not included in the table above, we recognized $109 million in cash special charges in 2020 related to the impairment of ROU assets and lease return costs resulting from our decision to retire certain leased aircraft earlier than planned driven by the severe decline in air travel due to the COVID-19 pandemic.

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

	December 31,
	2021			2020
Operating leases:
Operating lease ROU assets	$	7,850		$	8,039
Current operating lease liabilities	$	1,507		$	1,651
Noncurrent operating lease liabilities	6,610			6,777
Total operating lease liabilities	$	8,117		$	8,428
Finance leases:
Property and equipment, at cost	$	1,201		$	1,021
Accumulated amortization	(653)			(539)
Property and equipment, net	$	548		$	482
Current finance lease liabilities	$	174		$	100
Noncurrent finance lease liabilities	563			472
Total finance lease liabilities	$	737		$	572
Weighted average remaining lease term (in years):
Operating leases	7.6			7.4
Finance leases	4.6			5.4
Weighted average discount rate:
Operating leases	6.3		%	5.6		%
Finance leases	6.1		%	6.3		%

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

	Year Ended December 31,
	2021		2020		2019
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	2,053	$	2,028	$	2,013
Operating cash flows from finance leases	37		39		43
Financing cash flows from finance leases	126		114		83
Non-cash transactions:
ROU assets acquired through operating leases	1,386		917		1,145
Property and equipment acquired through finance leases	180		11		20
Operating lease conversion to finance lease	102		5		41
Gain on sale leaseback transactions, net	25		107		107

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

	December 31, 2021
	Operating Leases		Finance Leases
2022	$	1,929	$	215
2023	1,791		183
2024	1,410		180
2025	1,039		113
2026	762		87
2027 and thereafter	3,614		77
Total lease payments	10,545		855
Less: Imputed interest	(2,428)		(118)
Total lease obligations	8,117		737
Less: Current obligations	(1,507)		(174)
Long-term lease obligations	$	6,610	$	563

As of December 31, 2021, we had additional operating lease commitments that have not yet commenced of approximately $1.8 billion for 18 Boeing 787 Family aircraft scheduled to be delivered in 2022 through 2024 with lease terms of 10 years.

American Airlines, Inc.

Lessee, Lease, Description [Line Items]

Leases

Leases

American leases certain aircraft and engines, including aircraft under capacity purchase agreements. As of December 31, 2021, American operated 696 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 consolidated balance sheets 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,
	2021		2020		2019
Operating lease cost	$	1,998	$	1,943	$	2,012
Finance lease cost:
Amortization of assets	107		92		79
Interest on lease liabilities	44		38		43
Variable lease cost	2,461		1,786		2,542
Total net lease cost	$	4,610	$	3,859	$	4,676

Included in the table above is $190 million, $172 million and $236 million of operating lease cost under American’s capacity purchase agreement with Republic for the years ended December 31, 2021, 2020 and 2019, respectively. American holds a 25% equity interest in Republic Holdings, the parent company of Republic.

Additionally, not included in the table above, American recognized $109 million in cash special charges in 2020 related to the impairment of ROU assets and lease return costs resulting from its decision to retire certain leased aircraft earlier than planned driven by the severe decline in air travel due to the COVID-19 pandemic.

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

	December 31,
	2021			2020
Operating leases:
Operating lease ROU assets	$	7,810		$	7,994
Current operating lease liabilities	$	1,496		$	1,641
Noncurrent operating lease liabilities	6,578			6,739
Total operating lease liabilities	$	8,074		$	8,380
Finance leases:
Property and equipment, at cost	$	1,201		$	1,021
Accumulated amortization	(653)			(539)
Property and equipment, net	$	548		$	482
Current finance lease liabilities	$	174		$	100
Noncurrent finance lease liabilities	563			472
Total finance lease liabilities	$	737		$	572
Weighted average remaining lease term (in years):
Operating leases	7.6			7.4
Finance leases	4.6			5.4
Weighted average discount rate:
Operating leases	6.2		%	5.6		%
Finance leases	6.1		%	6.3		%

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

	Year Ended December 31,
	2021		2020		2019
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	2,040	$	2,015	$	1,996
Operating cash flows from finance leases	37		39		43
Financing cash flows from finance leases	126		114		83
Non-cash transactions:
ROU assets acquired through operating leases	1,381		898		1,144
Property and equipment acquired through finance leases	180		11		20
Operating lease conversion to finance lease	102		5		41
Gain on sale leaseback transactions, net	25		107		107

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

	December 31, 2021
	Operating Leases		Finance Leases
2022	$	1,912	$	215
2023	1,777		183
2024	1,398		180
2025	1,032		113
2026	757		87
2027 and thereafter	3,600		77
Total lease payments	10,476		855
Less: Imputed interest	(2,402)		(118)
Total lease obligations	8,074		737
Less: Current obligations	(1,496)		(174)
Long-term lease obligations	$	6,578	$	563

As of December 31, 2021, American had additional operating lease commitments that have not yet commenced of approximately $1.8 billion for 18 Boeing 787 Family aircraft scheduled to be delivered in 2022 through 2024 with lease terms of 10 years.

Leases

Leases

American leases certain aircraft and engines, including aircraft under capacity purchase agreements. As of December 31, 2021, American operated 696 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 consolidated balance sheets 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,
	2021		2020		2019
Operating lease cost	$	1,998	$	1,943	$	2,012
Finance lease cost:
Amortization of assets	107		92		79
Interest on lease liabilities	44		38		43
Variable lease cost	2,461		1,786		2,542
Total net lease cost	$	4,610	$	3,859	$	4,676

Included in the table above is $190 million, $172 million and $236 million of operating lease cost under American’s capacity purchase agreement with Republic for the years ended December 31, 2021, 2020 and 2019, respectively. American holds a 25% equity interest in Republic Holdings, the parent company of Republic.

Additionally, not included in the table above, American recognized $109 million in cash special charges in 2020 related to the impairment of ROU assets and lease return costs resulting from its decision to retire certain leased aircraft earlier than planned driven by the severe decline in air travel due to the COVID-19 pandemic.

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

	December 31,
	2021			2020
Operating leases:
Operating lease ROU assets	$	7,810		$	7,994
Current operating lease liabilities	$	1,496		$	1,641
Noncurrent operating lease liabilities	6,578			6,739
Total operating lease liabilities	$	8,074		$	8,380
Finance leases:
Property and equipment, at cost	$	1,201		$	1,021
Accumulated amortization	(653)			(539)
Property and equipment, net	$	548		$	482
Current finance lease liabilities	$	174		$	100
Noncurrent finance lease liabilities	563			472
Total finance lease liabilities	$	737		$	572
Weighted average remaining lease term (in years):
Operating leases	7.6			7.4
Finance leases	4.6			5.4
Weighted average discount rate:
Operating leases	6.2		%	5.6		%
Finance leases	6.1		%	6.3		%

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

	Year Ended December 31,
	2021		2020		2019
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	2,040	$	2,015	$	1,996
Operating cash flows from finance leases	37		39		43
Financing cash flows from finance leases	126		114		83
Non-cash transactions:
ROU assets acquired through operating leases	1,381		898		1,144
Property and equipment acquired through finance leases	180		11		20
Operating lease conversion to finance lease	102		5		41
Gain on sale leaseback transactions, net	25		107		107

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

	December 31, 2021
	Operating Leases		Finance Leases
2022	$	1,912	$	215
2023	1,777		183
2024	1,398		180
2025	1,032		113
2026	757		87
2027 and thereafter	3,600		77
Total lease payments	10,476		855
Less: Imputed interest	(2,402)		(118)
Total lease obligations	8,074		737
Less: Current obligations	(1,496)		(174)
Long-term lease obligations	$	6,578	$	563

As of December 31, 2021, American had additional operating lease commitments that have not yet commenced of approximately $1.8 billion for 18 Boeing 787 Family aircraft scheduled to be delivered in 2022 through 2024 with lease terms of 10 years.