Revenue

6 Months Ended

Jun. 30, 2023

Revenue from Contract with Customer [Abstract]

REVENUE

REVENUE

Revenue by Geography. The table below presents the Company's operating revenue by principal geographic region (as defined by the U.S. Department of Transportation) (in millions):

	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
Domestic (U.S. and Canada)	$	8,417	$	7,819	$	15,584	$	12,905
Atlantic (including Europe, Africa, India and Middle East destinations)	3,229		2,481		5,061		3,570
Latin America	1,273		1,195		2,589		2,104
Pacific	1,259		617		2,373		1,099
Total	$	14,178	$	12,112	$	25,607	$	19,678

Advance Ticket Sales. The Company defers amounts related to future travel in its Advance ticket sales liability account. All tickets sold at any given point in time have travel dates through the next 12 months. The Company's Advance ticket sales liability also includes credits issued to customers for future flights ("FFCs") and electronic travel certificates ("ETCs"), primarily for ticket cancellations, which can be applied towards a purchase of a new ticket. FFCs and ETCs are valid up to one year from the date of issuance; however, all credits issued on or before December 31, 2022 have been extended to December 31, 2023.

The Company estimates the value of Advance ticket sales that will expire unused ("breakage") and recognizes revenue in proportion to the usage of the related tickets. To determine breakage, the Company uses its historical experience with expired tickets and certificates and other facts, such as recent aging trends, program changes and modifications that could affect the ultimate expiration patterns. Changes in our estimates of FFCs and ETCs that may expire unused could have a material impact on revenue. Changes in estimates of breakage are recognized prospectively in proportion to the remaining usage of the related tickets.

In the six months ended June 30, 2023 and 2022, the Company recognized approximately $4.6 billion and $2.6 billion, respectively, of passenger revenue for tickets that were included in Advance ticket sales at the beginning of those periods.

Ancillary Fees. The Company charges fees, separately from ticket sales, for certain ancillary services that are directly related to passengers' travel, such as baggage fees, premium seat fees, inflight amenity fees and other ticket-related fees. These ancillary fees are part of the travel performance obligation and, as such, are recognized as passenger revenue when the travel occurs. The Company recorded $1.0 billion and $1.9 billion of ancillary fees within passenger revenue in the three and six months ended

June 30, 2023, respectively. The Company recorded $0.9 billion and $1.5 billion of ancillary fees within passenger revenue in the three and six months ended June 30, 2022, respectively.

Frequent Flyer Accounting. The table below presents a roll forward of Frequent flyer deferred revenue (in millions):

	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
Total Frequent flyer deferred revenue - beginning balance	$	6,860	$	6,417	$	6,675	$	6,282
Total miles awarded	902		666		1,649		1,143
Travel miles redeemed	(712)		(566)		(1,243)		(888)
Non-travel miles redeemed	(26)		(22)		(57)		(42)
Total Frequent flyer deferred revenue - ending balance	$	7,024	$	6,495	$	7,024	$	6,495

In the three and six months ended June 30, 2023, the Company recognized, in Other operating revenue, $0.7 billion and $1.3 billion, respectively, related to the marketing, advertising, non-travel miles redeemed (net of related costs) and other travel-related benefits of the mileage revenue associated with our various partner agreements including, but not limited to, our JPMorgan Chase Bank, N.A. MileagePlus co-brand agreement. The Company recognized $0.6 billion and $1.1 billion, respectively, in the three and six months ended June 30, 2022, related to those agreements. The portion related to the MileagePlus miles awarded of the total amounts received from our various partner agreements is deferred and presented in the table above as an increase to the Frequent flyer deferred revenue. We determine the current portion of that account based on expected redemptions in the next 12 months.