Leases
American leases certain aircraft and engines, including aircraft under capacity purchase agreements. As of December 31, 2025, American operated 677 leased aircraft, including 171 aircraft leased under capacity purchase agreements, with remaining terms ranging from less than one year to approximately 13 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, |
| 2025 | | 2024 | | 2023 |
| Operating lease cost | $ | 1,683 | | | $ | 1,828 | | | $ | 1,992 | |
| Finance lease cost: | | | | | |
| Amortization of assets | 123 | | | 125 | | | 119 | |
| Interest on lease liabilities | 48 | | | 39 | | | 44 | |
| Variable lease cost | 3,382 | | | 3,059 | | | 2,703 | |
| Total net lease cost | $ | 5,236 | | | $ | 5,051 | | | $ | 4,858 | |
Included in the table above are $248 million, $225 million and $274 million of lease costs under American’s capacity purchase agreement with Republic for the years ended December 31, 2025, 2024 and 2023, respectively. American holds a 20.8% 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, |
| 2025 | | 2024 |
| Operating leases: | | | |
| Operating lease ROU assets | $ | 7,038 | | | $ | 7,274 | |
| | | |
| Current operating lease liabilities | $ | 1,048 | | | $ | 1,082 | |
| Noncurrent operating lease liabilities | 5,860 | | | 5,926 | |
| Total operating lease liabilities | $ | 6,908 | | | $ | 7,008 | |
| | | |
| Finance leases: | | | |
| Property and equipment, at cost | $ | 1,412 | | | $ | 1,604 | |
| Accumulated amortization | (640) | | | (924) | |
| Property and equipment, net | $ | 772 | | | $ | 680 | |
| | | |
| Current finance lease liabilities | $ | 114 | | | $ | 132 | |
| Noncurrent finance lease liabilities | 610 | | | 531 | |
| Total finance lease liabilities | $ | 724 | | | $ | 663 | |
| | | |
| Weighted average remaining lease term (in years): | | | |
| Operating leases | 8.4 | | 8.2 |
| Finance leases | 7.8 | | 7.4 |
| | | |
| Weighted average discount rate: | | | |
| Operating leases | 7.3 | % | | 7.5 | % |
| Finance leases | 7.1 | % | | 7.0 | % |
Supplemental cash flow and other information related to leases was as follows (in millions):
| | | | | | | | | | | | | | | | | |
| Year Ended December 31, |
| 2025 | | 2024 | | 2023 |
| Cash paid for amounts included in the measurement of lease liabilities: | | | | | |
| Operating cash flows from operating leases | $ | 1,633 | | | $ | 1,810 | | | $ | 2,011 | |
| Operating cash flows from finance leases | 48 | | | 40 | | | 47 | |
| Financing cash flows from finance leases | 120 | | | 145 | | | 255 | |
| | | | | |
| Gain (loss) on sale leaseback transactions, net | (13) | | | 76 | | | 12 | |
Maturities of lease liabilities were as follows (in millions):
| | | | | | | | | | | |
| December 31, 2025 |
| Operating Leases | | Finance Leases |
| 2026 | $ | 1,487 | | | $ | 161 | |
| 2027 | 1,358 | | | 152 | |
| 2028 | 1,238 | | | 110 | |
| 2029 | 1,131 | | | 102 | |
| 2030 | 948 | | | 100 | |
| 2031 and thereafter | 2,987 | | | 310 | |
| Total lease payments | 9,149 | | | 935 | |
| Less: Imputed interest | (2,241) | | | (211) | |
| Total lease obligations | 6,908 | | | 724 | |
| Less: Current obligations | (1,048) | | | (114) | |
| Long-term lease obligations | $ | 5,860 | | | $ | 610 | |