DOCUMENT AND ENTITY INFORMATION - shares	9 Months Ended
DOCUMENT AND ENTITY INFORMATION - shares	Sep. 30, 2017	Oct. 31, 2017
Document and Entity Information [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Sep. 30, 2017
Document Fiscal Year Focus	2017
Document Fiscal Period Focus	Q3
Entity Registrant Name	ALASKA AIR GROUP, INC.
Entity Central Index Key	0000766421
Current Fiscal Year End Date	--12-31
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding		123,044,897

CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Millions	Sep. 30, 2017	Dec. 31, 2016
Current Assets
Cash and cash equivalents	$ 144	$ 328
Marketable securities	1,596	1,252
Total cash and marketable securities	1,740	1,580
Receivables—net	301	302
Inventories and supplies—net	57	47
Prepaid expenses and other current assets	116	121
Total Current Assets	2,214	2,050
Property and Equipment
Aircraft and other flight equipment	7,590	6,947
Other property and equipment	1,187	1,103
Deposits for future flight equipment	531	545
Property and Equipment Total	9,308	8,595
Less accumulated depreciation and amortization	3,078	2,929
Total Property and Equipment—Net	6,230	5,666
Goodwill	1,934	1,934
Intangible assets	135	143
Other noncurrent assets	226	169
Other Assets	2,295	2,246
Total Assets	10,739	9,962
Current Liabilities
Accounts payable	97	92
Accrued wages, vacation and payroll taxes	345	397
Air traffic liability	1,103	849
Other accrued liabilities	886	878
Current portion of long-term debt	334	319
Total Current Liabilities	2,765	2,535
Long-Term Debt, Net of Current Portion	2,367	2,645
Other Liabilities and Credits
Deferred income taxes	682	463
Deferred revenue	682	640
Obligation for pension and postretirement medical benefits	323	331
Other liabilities	429	417
Other Liabilities and Credits Totals	2,116	1,851
Commitments and Contingencies
Shareholders' Equity
Preferred stock, $0.01 par value, Authorized: 5,000,000 shares, none issued or outstanding	0	0
Common stock, $0.01 par value, Authorized: 400,000,000 shares, Issued: 2017 - 129,860,836 shares; 2016 - 129,189,634 shares, Outstanding: 2017 - 123,387,158 shares; 2016 - 123,328,051 shares	1	1
Capital in excess of par value	156	110
Treasury stock (common), at cost: 2017 - 6,473,678 shares; 2016 - 5,861,583 shares	(494)	(443)
Accumulated other comprehensive loss	(289)	(305)
Retained earnings	4,117	3,568
Total Shareholders' Equity	3,491	2,931
Total Liabilities and Shareholders' Equity	$ 10,739	$ 9,962

CONDENSED CONSOLIDATED BALANCE SHEETS (PARENTHETICALS) - $ / shares	Sep. 30, 2017	Dec. 31, 2016
Stockholders' Equity:
Preferred Stock, par value (usd per share)	$ 0.01	$ 0.01
Preferred stock, shares authorized (shares)	5,000,000	5,000,000
Preferred stock, shares issued (shares)	0	0
Preferred stock, shares outstanding (shares)	0	0
Common stock, par value (usd per share)	$ 0.01	$ 0.01
Common stock, shares authorized (shares)	400,000,000	200,000,000
Common stock, shares issued (shares)	129,860,836	129,189,634
Common stock, shares outstanding (shares)	123,387,158	123,328,051
Treasury Stock, Shares (shares)	6,473,678	5,861,583

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2017	Sep. 30, 2016
Operating Revenues
Passenger, Mainline	$ 1,562	$ 1,073	$ 4,390	$ 3,036
Passenger, Regional	262	249	725	682
Total passenger revenue	1,824	1,322	5,115	3,718
Freight and mail	32	31	88	82
Other—net	264	213	768	607
Total Operating Revenues	2,120	1,566	5,971	4,407
Operating Expenses
Wages and benefits	475	340	1,392	1,008
Variable incentive pay	40	31	98	95
Aircraft fuel, including hedging gains and losses	368	225	1,051	593
Aircraft maintenance	88	64	271	197
Aircraft rent	70	25	204	80
Landing fees and other rentals	124	89	338	232
Contracted services	76	63	234	183
Selling expenses	91	58	269	162
Depreciation and amortization	95	101	275	281
Food and beverage service	50	31	145	93
Third-party regional carrier expense	30	25	84	72
Special items—merger-related costs	24	22	88	36
Other	150	92	424	267
Total Operating Expenses	1,681	1,166	4,873	3,299
Operating Income	439	400	1,098	1,108
Nonoperating Income (Expense)
Interest income	9	7	25	20
Interest expense	(26)	(11)	(77)	(33)
Interest capitalized	5	6	13	21
Other—net	0	0	(1)	(2)
Nonoperating Income (Expense) Total	(12)	2	(40)	6
Income before income tax	427	402	1,058	1,114
Income tax expense	161	146	397	414
Net Income	$ 266	$ 256	$ 661	$ 700
Basic Earnings Per Share (usd per share)	$ 2.15	$ 2.08	$ 5.35	$ 5.66
Diluted Earnings Per Share (usd per share)	$ 2.14	$ 2.07	$ 5.31	$ 5.63
Shares used for computation:
Basic shares (shares)	123,467	123,149	123,501	123,648
Diluted shares (shares)	124,220	123,833	124,341	124,393
Cash dividend declared per share (usd per share)	$ 0.3	$ 0.275	$ 0.9	$ 0.825

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE OPERATIONS - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2017	Sep. 30, 2016
Statement of Comprehensive Income [Abstract]
Net Income	$ 266	$ 256	$ 661	$ 700
Related to marketable securities:
Unrealized holding gain (loss) arising during the period	1	(2)	5	17
Reclassification of (gain) loss into Other—net nonoperating income (expense)	(1)	0	0	(1)
Income tax effect	0	0	(2)	(6)
Total	0	(2)	3	10
Related to employee benefit plans:
Reclassification of net pension expense into Wages and benefits	5	5	16	15
Income tax effect	(2)	(1)	(5)	(5)
Total	3	4	11	10
Related to interest rate derivative instruments:
Unrealized holding gain (loss) arising during the period	0	1	(2)	(6)
Reclassification of (gain) loss into Aircraft rent	2	1	4	4
Income tax effect	(1)	(1)	(1)	1
Total	1	1	1	(1)
Other Comprehensive Income	4	3	15	19
Comprehensive Income	$ 270	$ 259	$ 676	$ 719

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Millions	9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016
Cash flows from operating activities:
Net Income	$ 661	$ 700
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	275	281
Stock-based compensation and other	43	19
Changes in certain assets and liabilities:
Changes in deferred tax provision	217	47
Increase in air traffic liability	254	116
Increase in deferred revenue	46	60
Other—net	(139)	(17)
Net cash provided by operating activities	1,357	1,206
Property and equipment additions:
Aircraft and aircraft purchase deposits	(679)	(408)
Other flight equipment	(70)	(35)
Other property and equipment	(92)	(66)
Total property and equipment additions, including capitalized interest	(841)	(509)
Purchases of marketable securities	(1,408)	(775)
Sales and maturities of marketable securities	1,069	638
Other investing activities	38	5
Net cash used in investing activities	(1,142)	(641)
Cash flows from financing activities:
Proceeds from issuance of debt	0	1,546
Long-term debt payments	(265)	(93)
Common stock repurchases	(50)	(193)
Dividends paid	(111)	(102)
Other financing activities	27	22
Net cash provided (used) by financing activities	(399)	1,180
Net increase (decrease) in cash and cash equivalents	(184)	1,745
Cash and cash equivalents at beginning of year	328	73
Cash and cash equivalents at end of the period	144	1,818
Cash paid during the period for:
Interest (net of amount capitalized)	68	12
Income taxes	$ 129	$ 321

GENERAL AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES	9 Months Ended
GENERAL AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES	Sep. 30, 2017
Accounting Policies [Abstract]
GENERAL AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES	GENERAL AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Organization and Basis of Presentation The condensed consolidated financial statements include the accounts of Air Group, and its primary subsidiaries, Alaska, Horizon, McGee Air Services and, starting December 14, 2016, Virgin America. The Company conducts substantially all of its operations through these subsidiaries. All significant intercompany balances and transactions have been eliminated. These financial statements have been prepared in accordance with accounting principles generally accepted in the United States ("GAAP") for interim financial information. Consistent with these requirements, this Form 10-Q does not include all the information required by GAAP for complete financial statements. It should be read in conjunction with the consolidated financial statements and accompanying notes in the Form 10-K for the year ended December 31, 2016. In the opinion of management, all adjustments have been made that are necessary to fairly present the Company’s financial position as of September 30, 2017 and the results of operations for the three and nine months ended September 30, 2017 and 2016. Such adjustments were of a normal recurring nature. In preparing these statements, the Company is required to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent liabilities, as well as the reported amounts of revenues and expenses. Due to seasonal variations in the demand for air travel, the volatility of aircraft fuel prices, changes in global economic conditions, changes in the competitive environment and other factors, operating results for the three and nine months ended September 30, 2017 are not necessarily indicative of operating results for the entire year. Recently Issued Accounting Pronouncements In May 2014, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2014-09, "Revenue from Contracts with Customers" (Topic 606), which requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. This comprehensive new standard will replace most existing revenue recognition guidance in U.S. GAAP when it becomes effective. In March 2016, the FASB issued ASU 2016-08, "Revenue from Contracts with Customers (Topic 606), Principal versus Agent Considerations" to clarify the guidance on determining whether the Company is considered the principal or the agent in a revenue transaction where a third party is providing goods or services to a customer. Entities are permitted to use either a full retrospective or cumulative effect transition method, and are required to adopt all parts of the new revenue standard using the same transition method. The new standard is effective for the Company on January 1, 2018. At this time, the Company believes the most significant impact to the financial statements will be to Mileage Plan™ revenues and liabilities. The Company currently uses the incremental cost approach for miles earned through travel. As this approach will be eliminated with the standard, the Company will be required to allocate a portion of the ticket price through a relative selling price model and defer revenue recognition until the ticket is flown or unused mileage credits expire. Additionally, unused companion certificates that were previously recognized at expiration will be subject to advanced breakage under the new standard. The Company estimates a net increase to Mileage Plan deferred revenues of approximately $340 million to $380 million at the time of adoption. The allocated value to miles earned through travel will offset passenger revenue during the period they are issued, rather than recorded using the incremental cost approach. As the program is growing significantly, the Company expects revenue recognized under Topic 606 will be less on an annual basis than current accounting practice. The adoption of the new standard is also expected to result in a change in income statement classification of the majority of ancillary revenues from Other revenue to Passenger revenue. This will affect common industry metrics, such as PRASM and RASM. Certain commission revenue from interline arrangements that were previously offset against related expense will now be classified as Other revenue, which will impact RASM and CASM. Unused ticket revenue that was previously recorded at the time of expiration will now be recorded at the original departure date if that ticket has not been changed or refunded prior to that date, based on estimates of expected expiration. This concept is referred to as ticket breakage. The Company estimates the change in ticket breakage methodology will not have a significant impact on the statements of operations, but will decrease air traffic liability by approximately $70 million to $80 million. The Company continues to evaluate and model the full impact of the standard and will apply the full retrospective transition method. The overall impact to equity as of the beginning of the retroactive reporting period, including the changes discussed above, as well as other less material changes, is expected to be between $160 million and $190 million. In February 2016, the FASB issued ASU 2016-02, "Leases" (Topic 842), which requires lessees to recognize assets and liabilities for leases currently classified as operating leases. Under the new standard, a lessee will recognize a liability on the balance sheet representing the lease payments owed, and a right-of-use-asset representing its right to use the underlying asset for the lease term. For leases with a term of 12 months or less, a lessee is permitted to make an accounting policy election not to recognize lease assets and lease liabilities. At this time, the Company believes the most significant impact to the financial statements will relate to the recording of a right-of-use asset associated with leased aircraft. Other leases, including airports and real estate, equipment, software and other miscellaneous leases continue to be assessed for impact of the ASU. The new standard is effective for the Company on January 1, 2019. Early adoption of the standard is permitted. The Company has determined that it will not early adopt the standard. In March 2016, the FASB issued ASU 2016-09, "Compensation—Stock Compensation" (Topic 718), which simplifies several aspects of accounting for employee share-based payment awards, including the accounting for income taxes, forfeitures and statutory tax withholding requirements, as well as classification in the statement of cash flows. The ASU was adopted prospectively as of January 1, 2017. Prior periods have not been adjusted. The adoption of the standard did not have a material impact on the Company's statements of operations or financial position. In January 2017, the FASB issued ASU 2017-04, "Intangibles—Goodwill and Other" (Topic 350), which eliminates step 2 from the goodwill impairment test. Step 2 measures a goodwill impairment loss by comparing the implied fair value of a reporting unit’s goodwill with the carrying amount of that goodwill. The ASU is effective for the Company beginning January 1, 2019. Early adoption of the standard is permitted. Beginning in fiscal 2017, the Company will be required to perform an impairment test for goodwill arising from its acquisition of Virgin America and has adopted the standard effective January 1, 2017. In March 2017, the FASB issued ASU 2017-07, "Compensation—Retirement Benefits" (Topic 715), which will require the Company to present the service cost component of net periodic benefit cost as Wages and benefits in the statements of operations. All other components of net periodic benefit cost will be required to be presented in Nonoperating income (expense) in the statements of operations. These components will not be eligible for capitalization in assets. The ASU is effective for the Company beginning January 1, 2018. Changes to the statements of operations under the ASU are applicable retrospectively. The adoption of this standard will have no impact on Income before income tax or Net income for the periods subject to retrospective reclassification. See Note 6 for the current components of the Company's net periodic benefit costs. In August 2017, the FASB issued ASU 2017-12, "Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities." The ASU expands the activities that qualify for hedge accounting and simplifies the rules for reporting hedging relationships. The ASU is effective for the Company beginning January 1, 2019. Early adoption is permitted. The Company is currently evaluating the impact and has not yet determined whether it will early adopt.

ACQUISITION OF VIRGIN AMERICA INC.

9 Months Ended

Sep. 30, 2017

Business Combinations [Abstract]

ACQUISITION OF VIRGIN AMERICA INC.

ACQUISITION OF VIRGIN AMERICA

Virgin America

On December 14, 2016, the Company acquired 100% of the outstanding common shares and voting interest of Virgin America for $57 per share, or total cash consideration of $2.6 billion. Virgin America offers scheduled air transportation throughout the United States and Mexico primarily from its hub cities of Los Angeles, San Francisco and, to a lesser extent, Dallas Love Field, to other major business and leisure destinations in North America. The Company believes the acquisition of Virgin America will provide broader national reach and position it to better serve guests living on the West Coast. The combined airline has approximately 1,200 daily departures and leverages Alaska's strength in the Pacific Northwest with Virgin America's strength in California. The Company believes that combining loyalty programs and networks will provide greater benefits for its guests and expand its international partner portfolio, giving guests an even more expansive global reach.

Merger-related costs

The Company incurred pretax merger-related costs of $24 million and $22 million for the three months ended September 30, 2017 and 2016, respectively, and $88 million and $36 million for the nine months ended September 30, 2017 and 2016, respectively. Costs classified as merger-related are directly attributable to merger activities and are recorded as "Special items—merger-related costs" within the statements of operations. The Company expects to continue to incur merger-related costs in the future as the integration continues.

Fair values of the assets acquired and the liabilities assumed

The transaction has been accounted for as a business combination using the acquisition method of accounting, which requires, among other things, assets acquired and liabilities assumed to be recognized on the balance sheet at their fair values as of the acquisition date. As of September 30, 2017 the fair values of property and equipment and certain liabilities, included in other accrued liabilities and other liabilities, goodwill, intangible assets and deferred income taxes have been prepared on a preliminary basis and are subject to further adjustments as the Company completes its analysis. There were no significant fair value adjustments made during the three and nine months ended September 30, 2017. The Company will finalize the amounts recognized by December 14, 2017.

Fair values of the assets acquired and the liabilities assumed as of the acquisition date of December 14, 2016, at September 30, 2017 and December 31, 2016 were as follows (in millions):



	September 30, 2017			December 31, 2016
Cash and cash equivalents	$	645		$	645
Receivables	54			44
Prepaid expenses and other current assets	18			16
Property and equipment—provisional	561			560
Intangible assets—provisional	141			143
Goodwill—provisional	1,934			1,934
Other assets	89			84
Total assets	3,442			3,426

Accounts payable	22			22
Accrued wages, vacation and payroll taxes	54			51
Air traffic liabilities	172			172
Other accrued liabilities—provisional	197			196
Current portion of long-term debt	125			125
Long-term debt, net of current portion	360			360
Deferred income taxes—provisional	(307		)	(304		)
Deferred revenue	126			126
Other liabilities—provisional	97			82
Total liabilities	846			830

Total purchase price	$	2,596		$	2,596

- Definition

The entire disclosure for a business combination (or series of individually immaterial business combinations) completed during the period, including background, timing, and recognized assets and liabilities. The disclosure may include leverage buyout transactions (as applicable).

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+ Details

FAIR VALUE MEASUREMENTS

9 Months Ended

Sep. 30, 2017

Fair Value Disclosures [Abstract]

FAIR VALUE MEASUREMENTS

In determining fair value, there is a three-level hierarchy based on the reliability of the inputs used. Level 1 refers to fair values based on quoted prices in active markets for identical assets or liabilities. Level 2 refers to fair values estimated using significant other observable inputs and Level 3 refers to fair values estimated using significant unobservable inputs.

Fair Value of Financial Instruments on a Recurring Basis

As of September 30, 2017, total cost basis for all marketable securities was $1.6 billion. There were no significant differences between the cost basis and fair value of any individual class of marketable securities.

Fair values of financial instruments on the consolidated balance sheet (in millions):



September 30, 2017	Level 1		Level 2			Total
Assets
Marketable securities
U.S. government and agency securities	$	359	$	—		$	359
Foreign government bonds	—		48			48
Asset-backed securities	—		232			232
Mortgage-backed securities	—		113			113
Corporate notes and bonds	—		828			828
Municipal securities	—		16			16
Total Marketable securities	359		1,237			1,596
Derivative instruments
Fuel hedge call options	—		10			10
Interest rate swap agreements	—		8			8
Total Assets	359		1,255			1,614

Liabilities
Derivative instruments
Interest rate swap agreements	—		(11		)	(11		)
Total Liabilities	—		(11		)	(11		)



December 31, 2016	Level 1		Level 2			Total
Assets
Marketable securities
U.S. government and agency securities	$	287	$	—		$	287
Foreign government bonds	—		36			36
Asset-backed securities	—		138			138
Mortgage-backed securities	—		89			89
Corporate notes and bonds	—		691			691
Municipal securities	—		11			11
Total Marketable securities	287		965			1,252
Derivative instruments
Fuel hedge call options	—		20			20
Total Assets	287		985			1,272

Liabilities
Derivative instruments
Interest rate swap agreements	—		(5		)	(5		)
Total Liabilities	—		(5		)	(5		)

The Company uses the market and income approach to determine the fair value of marketable securities. U.S. government securities are Level 1 as the fair value is based on quoted prices in active markets. Foreign government bonds, asset-backed securities, mortgage-backed securities, corporate notes and bonds, and municipal securities are Level 2 as the fair value is based on standard valuation models that are calculated based on observable inputs such as quoted interest rates, yield curves, credit ratings of the security and other observable market information.

The Company uses the market approach and the income approach to determine the fair value of derivative instruments. The fair value for fuel hedge call options is determined utilizing an option pricing model based on inputs that are readily available in active markets or can be derived from information available in active markets. In addition, the fair value considers the exposure to credit losses in the event of non-performance by counterparties. Interest rate swap agreements are Level 2 as the fair value of these contracts is determined based on the difference between the fixed interest rate in the agreements and the observable LIBOR-based interest forward rates at period end multiplied by the total notional value.

Activity and Maturities for Marketable Securities

Activity for marketable securities (in millions):



	Three Months Ended September 30,				Nine Months Ended September 30,
	2017		2016		2017		2016
Proceeds from sales and maturities	$	528	$	280	$	1,069	$	638

Maturities for marketable securities (in millions):



September 30, 2017	Cost Basis		Fair Value
Due in one year or less	$	193	$	193
Due after one year through five years	1,367		1,367
Due after five years through 10 years	36		36
Due after 10 years	—		—
Total	$	1,596	$	1,596

Management does not believe any unrealized losses represent other-than-temporary impairments based on its evaluation of available information as of September 30, 2017.

Fair Value of Other Financial Instruments

The Company uses the following methods and assumptions to determine the fair value of financial instruments that are not recognized at fair value as described below.

Cash and Cash Equivalents: Carried at amortized cost, which approximates fair value.

Debt: The carrying amount of the Company's variable-rate debt approximates fair value. For fixed-rate debt, the Company uses the income approach to determine the estimated fair value, calculated as the sum of future cash flows discounted at borrowing rates for comparable debt over the weighted life of the outstanding debt. The estimated fair value of the fixed-rate debt is Level 3 as certain inputs used are unobservable.

Fixed-rate debt that is not carried at fair value on the consolidated balance sheet and the estimated fair value of long-term fixed-rate debt is as follows (in millions):



	September 30, 2017		December 31, 2016
Carrying amount	$	1,024	$	1,179
Fair value	1,034		1,199

Assets and Liabilities Measured at Fair Value on Nonrecurring Basis

Certain assets and liabilities are recognized or disclosed at fair value on a nonrecurring basis, including property, plant and equipment, goodwill, and intangible assets. These assets are subject to fair valuation when there is evidence of impairment. No impairment was recognized in the three and nine months ended September 30, 2017 or September 30, 2016.

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

+ References + Details

FREQUENT FLYER PROGRAMS

9 Months Ended

Sep. 30, 2017

FREQUENT FLYER PROGRAMS [Abstract]

FREQUENT FLYER PROGRAMS

Frequent flyer program deferred revenue and liabilities included in the consolidated balance sheets (in millions):



	September 30, 2017		December 31, 2016
Current Liabilities:
Other accrued liabilities	$	509	$	484
Other Liabilities and Credits:
Deferred revenue	682		638
Other liabilities	24		21
Total	$	1,215	$	1,143

Frequent flyer program revenue included in the consolidated statements of operations (in millions):



	Three Months Ended September 30,				Nine Months Ended September 30,
	2017		2016		2017		2016
Passenger revenues	$	94	$	73	$	276	$	215
Other—net revenues	122		107		369		318
Total	$	216	$	180	$	645	$	533

LONG-TERM DEBT

9 Months Ended

Sep. 30, 2017

Debt Disclosure [Abstract]

LONG-TERM DEBT

Long-term debt obligations on the consolidated balance sheet (in millions):



	September 30, 2017			December 31, 2016
Fixed-rate notes payable due through 2028	$	1,024		$	1,179
Variable-rate notes payable due through 2028	1,693			1,803
Less debt issuance costs	(16		)	(18		)
Total debt	2,701			2,964
Less current portion	334			319
Long-term debt, less current portion	$	2,367		$	2,645

Weighted-average fixed-interest rate	4.3		%	4.4		%
Weighted-average variable-interest rate	2.6		%	2.4		%

During the nine months ended September 30, 2017, the Company made debt payments of $265 million.

At September 30, 2017, long-term debt principal payments for the next five years and thereafter are as follows (in millions):



	Total
Remainder of 2017	$	55
2018	350
2019	422
2020	449
2021	422
Thereafter	1,016
Total	$	2,714

Bank Lines of Credit

The Company has three credit facilities with availability totaling $475 million. All three facilities have variable interest rates based on LIBOR plus a specified margin. One credit facility increased from $100 million to $250 million in June 2017. It expires in June 2021 and is secured by aircraft. The second credit facility increased from $52 million to $75 million in September 2017. It expires in September 2018 with a mechanism for annual renewal and is secured by aircraft. The third credit facility increased from $100 million to $150 million in March 2017. It expires in March 2022 and is secured by certain accounts receivable, spare engines, spare parts and ground service equipment. The Company has secured letters of credit against the $75 million facility, but has no plans to borrow using either of the two other facilities. All three credit facilities have a requirement to maintain a minimum unrestricted cash and marketable securities balance of $500 million. The Company is in compliance with this covenant at September 30, 2017.

EMPLOYEE BENEFIT PLANS

9 Months Ended

Sep. 30, 2017

Compensation and Retirement Disclosure [Abstract]

EMPLOYEE BENEFIT PLANS

Net periodic benefit costs for the qualified defined-benefit plans included the following components (in millions):



	Three Months Ended September 30,						Nine Months Ended September 30,
	2017			2016			2017			2016
Service cost	$	10		$	9		$	30		$	27
Interest cost	19			18			55			55
Expected return on assets	(27		)	(27		)	(80		)	(81		)
Amortization of prior service cost (credit)	(1		)	(1		)	(1		)	(1		)
Recognized actuarial loss (gain)	7			7			20			19
Total	$	8		$	6		$	24		$	19

The Company contributed $15 million to the defined-benefit pension plan during the three months ended September 30, 2017.

COMMITMENTS

9 Months Ended

Sep. 30, 2017

Commitments and Contingencies Disclosure [Abstract]

COMMITMENTS

COMMITMENTS AND CONTINGENCIES

Future minimum payments for commitments as of September 30, 2017 (in millions):



	Aircraft Leases		Facility Leases		Aircraft Purchase Commitments		Capacity Purchase Agreements ^(a)		Aircraft Maintenance Deposits		Aircraft Maintenance and Parts Management
Remainder of 2017	$	77	$	34	$	168	$	21	$	15	$	8
2018	342		73		956		118		61		32
2019	344		65		806		151		65		35
2020	317		63		352		158		68		37
2021	280		55		273		165		63		40
Thereafter	1,263		204		355		1,250		90		—
Total	$	2,623	$	494	$	2,910	$	1,863	$	362	$	152


(a)	Includes all non-aircraft lease costs associated with capacity purchase agreements.

Lease Commitments

Aircraft lease commitments include future obligations for all of the Company's operating airlines—Alaska, Virgin America and Horizon, as well as aircraft leases operated by third-parties. At September 30, 2017, the Company had lease contracts for 10 Boeing 737 ("B737") aircraft, 55 Airbus aircraft, 15 Bombardier Q400 aircraft, and 21 Embraer 175 ("E175") with SkyWest Airlines, Inc. ("SkyWest"). The Company has an additional eight scheduled lease deliveries of A321neo aircraft through 2018, as well as 14 scheduled lease deliveries of E175 aircraft through 2018 to be flown by Skywest. All lease contracts have remaining non-cancelable lease terms ranging from 2017 to 2030. The Company has the option to increase capacity flown by SkyWest with eight additional E175 aircraft deliveries in 2020. Options to lease are not reflected in the commitments table above.

Facility lease commitments primarily include airport and terminal facilities and building leases. Total rent expense for aircraft and facility leases was $145 million and $82 million for the three months ended September 30, 2017 and 2016, and $406 million and $226 million for the nine months ended September 30, 2017 and 2016.

Aircraft Purchase Commitments

Aircraft purchase commitments include non-cancelable contractual commitments for aircraft and engines. As of September 30, 2017, the Company had commitments to purchase 48 B737 aircraft (16 B737 NextGen aircraft and 32 B737 MAX aircraft, with deliveries in the remainder of 2017 through 2023) and 23 E175 aircraft with deliveries in 2018 through 2019, which reflects Horizon's deferral of three E175 aircraft from 2017 to 2018. The Company also has cancelable purchase commitments for 30 Airbus A320neo aircraft with deliveries from 2020 through 2022. In addition, the Company has options to purchase 37 B737 aircraft and 30 E175 aircraft. The cancelable purchase commitments and option payments are not reflected in the table above.

Capacity Purchase Agreements ("CPAs")

At September 30, 2017, Alaska had CPAs with three carriers, including the Company's wholly-owned subsidiary, Horizon. Horizon sells 100% of its capacity to Alaska under a CPA with Alaska. In addition, Alaska has CPAs with SkyWest to fly certain routes in the Lower 48 and Canada and with Peninsula Airways, Inc. ("PenAir") to fly certain routes in the state of Alaska. Under these agreements, Alaska pays the carriers an amount which is based on a determination of their cost of operating those flights and other factors intended to approximate market rates for those services. Future payments (excluding Horizon) are based on minimum levels of flying by the third-party carriers, which could differ materially due to variable payments based on actual levels of flying and certain costs associated with operating flights such as fuel.

Aircraft Maintenance Deposits

Virgin America is contractually required to make maintenance deposit payments to aircraft lessors, which represent maintenance reserves made solely to collateralize the lessor for future maintenance events should the Company not perform required maintenance. Most lease agreements provide that maintenance reserves are reimbursable upon completion of the major maintenance event in an amount equal to the lesser of (i) the amount qualified for reimbursement from maintenance reserves held by the lessor associated with the specific major maintenance event or (ii) the qualifying costs related to the specific major maintenance event.

Aircraft Maintenance and Parts Management

Through its acquisition of Virgin America, the Company has a separate maintenance-cost-per-hour contract for management and repair of certain rotable parts to support airframe and engine maintenance and repair. This agreement requires monthly payments based upon utilization, such as flight hours, cycles and age of the aircraft, and, in turn, the agreement transfers certain risks to the third-party service provider. There are minimum payments under this agreement. Accordingly, payments could differ materially based on actual aircraft utilization.

Subsequent to September 30, 2017, Alaska entered into a similar contract for maintenance on its B737-800 aircraft engines. Payments under this agreement are not reflected in the table above.

Contingencies

The Company is a party to routine litigation matters incidental to its business and with respect to which no material liability is expected. Liabilities for litigation related contingencies are recorded when a loss is determined to be probable and estimable.

In 2015, three flight attendants filed a class action lawsuit seeking to represent all Virgin America flight attendants for damages based on alleged violations of California and City of San Francisco wage and hour laws. Plaintiffs received class certification in November 2016. Virgin America filed a motion for summary judgment seeking to dismiss all claims on various federal preemption grounds. In January 2017, the Court denied in part and granted in part Virgin America’s motion. The Company believes the claims in this case are without factual and legal merit and intends to defend this lawsuit.

Management believes the ultimate disposition of these matters is not likely to materially affect the Company's financial position or results of operations. This forward-looking statement is based on management's current understanding of the relevant law and facts, and it is subject to various contingencies, including the potential costs and risks associated with litigation and the actions of arbitrators, judges and juries.

SHAREHOLDERS' EQUITY

9 Months Ended

Sep. 30, 2017

Equity [Abstract]

SHAREHOLDERS' EQUITY

Dividends

During the three months ended September 30, 2017, the Company declared and paid cash dividends of $0.30 per share, or $37 million. During the nine months ended September 30, 2017, the Company declared and paid cash dividends of $0.90 per share, or $111 million.

Common Stock Repurchase

In August 2015, the Board of Directors authorized a $1 billion share repurchase program. The program was paused in the second quarter of 2016 in anticipation of the acquisition of Virgin America. The Company resumed the share repurchase program in the second quarter of 2017. As of September 30, 2017, the Company has repurchased 4.7 million shares for $363 million under this program. Subsequent to September 30, 2017, the Company repurchased an additional 369,182 shares for $25 million.

Share repurchase activity (in millions, except share amounts):



	Three Months Ended September 30,						Nine Months Ended September 30,
	2017			2016			2017			2016
	Shares	Amount		Shares	Amount		Shares	Amount		Shares	Amount
2015 Repurchase Program—$1 billion	355,415	$	28	—	$	—	612,095	$	50	2,594,809	$	193

Accumulated Other Comprehensive Loss

Components of accumulated other comprehensive loss, net of tax (in millions):



	September 30, 2017			December 31, 2016
Marketable securities	$	—		$	(3	)
Employee benefit plans	(287		)	(299		)
Interest rate derivatives	(2		)	(3		)
Total	$	(289	)	$	(305	)

Earnings Per Share ("EPS")

Diluted EPS is calculated by dividing net income by the average number of common shares outstanding plus the number of additional common shares that would have been outstanding assuming the exercise of in-the-money stock options and restricted stock units, using the treasury-stock method. For the three and nine months ended September 30, 2017 and 2016, anti-dilutive shares excluded from the calculation of EPS were not material.

- Definition

The entire disclosure for shareholders' equity comprised of portions attributable to the parent entity and noncontrolling interest, including other comprehensive income. Includes, but is not limited to, balances of common stock, preferred stock, additional paid-in capital, other capital and retained earnings, accumulated balance for each classification of other comprehensive income and amount of comprehensive income.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 310
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-Section S99
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-Publisher FASB
-Name Accounting Standards Codification
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-Section S99
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Reference 7: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
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Reference 8: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
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Reference 13: http://www.xbrl.org/2003/role/presentationRef
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Reference 14: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
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-URI http://asc.fasb.org/extlink&oid=6521494

Reference 15: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
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+ Details

OPERATING SEGMENT INFORMATION

9 Months Ended

Sep. 30, 2017

Segment Reporting [Abstract]

OPERATING SEGMENT INFORMATION

Alaska Air Group has three operating airlines—Alaska, Virgin America and Horizon. Each is regulated by the U.S. Department of Transportation’s Federal Aviation Administration. Alaska has CPAs for regional capacity with Horizon, as well as with third-party carriers SkyWest and PenAir, under which Alaska receives all passenger revenues.

Under U.S. GAAP, operating segments are defined as components of a business for which there is discrete financial information that is regularly assessed by the Chief Operating Decision Maker ("CODM") in making resource allocation decisions. Financial performance for the operating airlines and CPAs is managed and reviewed by the Company's CODM as part of three reportable operating segments:


•	Mainline - includes Alaska's and Virgin America’s scheduled air transportation for passengers and cargo throughout the U.S., and in parts of Canada, Mexico, Costa Rica and Cuba.


•	Regional - includes Horizon's and other third-party carriers’ scheduled air transportation for passengers across a shorter distance network within the U.S. under CPAs. This segment includes the actual revenues and expenses associated with regional flying, as well as an allocation of corporate overhead incurred by Air Group on behalf of the regional operations.


•	Horizon - includes the capacity sold to Alaska under CPA. Expenses include those typically borne by regional airlines such as crew costs, ownership costs and maintenance costs.

The CODM makes resource allocation decisions for these reporting segments based on flight profitability data, aircraft type, route economics and other financial information. The "Consolidating and Other" column reflects parent company activity, consolidating entries and other immaterial business units of the company. The “Air Group Adjusted” column represents a non-GAAP measure that is used by the Company CODM to evaluate performance and allocate resources. Adjustments are further explained below in reconciling to consolidated GAAP results.

Operating segment information is as follows (in millions):



	Three Months Ended September 30, 2017
	Mainline			Regional		Horizon			Consolidating & Other^(a)			Air Group Adjusted^(b)			Special Items^(c)			Consolidated
Operating revenues
Passenger
Mainline	$	1,562		$	—	$	—		$	—		$	1,562		$	—		$	1,562
Regional	—			262		—			—			262			—			262
Total passenger revenues	1,562			262		—			—			1,824			—			1,824
CPA revenues	—			—		112			(112		)	—			—			—
Freight and mail	30			1		1			—			32			—			32
Other—net	242			21		1			—			264			—			264
Total operating revenues	1,834			284		114			(112		)	2,120			—			2,120
Operating expenses
Operating expenses, excluding fuel	1,077			219		105			(112		)	1,289			24			1,313
Economic fuel	328			45		—			—			373			(5		)	368
Total operating expenses	1,405			264		105			(112		)	1,662			19			1,681
Nonoperating income (expense)
Interest income	11			—		—			(2		)	9			—			9
Interest expense	(23		)	—		(4		)	1			(26		)	—			(26		)
Other	5			—		—			—			5			—			5
Total Nonoperating income (expense)	(7		)	—		(4		)	(1		)	(12		)	—			(12		)
Income (loss) before income tax	$	422		$	20	$	5		$	(1	)	$	446		$	(19	)	$	427



	Three Months Ended September 30, 2016
	Mainline		Regional		Horizon		Consolidating & Other^(a)			Air Group Adjusted^(b)		Special Items^(c)		Consolidated
Operating revenues
Passenger
Mainline	$	1,073	$	—	$	—	$	—		$	1,073	$	—	$	1,073
Regional	—		249		—		—			249		—		249
Total passenger revenues	1,073		249		—		—			1,322		—		1,322
CPA revenues	—		—		109		(109		)	—		—		—
Freight and mail	30		1		—		—			31		—		31
Other—net	190		21		1		1			213		—		213
Total operating revenues	1,293		271		110		(108		)	1,566