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Revenue Recognition
 9 Months Ended
Sep. 30, 2020
Revenue from Contract with Customer [Abstract]  
Revenue Recognition REVENUE RECOGNITION
Passenger Revenue

Passenger revenue is primarily composed of passenger ticket sales, loyalty travel awards and travel-related services performed in conjunction with a passenger’s flight.
Three Months Ended September 30,
Nine Months Ended September 30,
(in millions)2020201920202019
Ticket$1,634 $10,029 $8,712 $27,986 
Loyalty travel awards143 732 731 2,174 
Travel-related services161 649 742 1,872 
Total passenger revenue$1,938 $11,410 $10,185 $32,032 

Ticket. We defer sales of passenger tickets to be flown by us or that we sell on behalf of other airlines in air traffic liability. Passenger revenue is recognized when we provide transportation or when ticket breakage occurs. For tickets that we sell on behalf of other airlines, we reduce the air traffic liability when consideration is remitted to those airlines. The air traffic liability primarily includes sales of passenger tickets to be flown in the future and credits which can be applied as payment toward the cost of a ticket. The credits are typically issued as a result of ticket cancellations prior to their expiration dates.
The air traffic liability typically increases during the winter and spring months as advanced ticket sales grow prior to the summer peak travel season and decreases during the summer and fall months. However, the current reduction in demand for air travel due to the COVID-19 pandemic has resulted in an unprecedented low level of advance bookings and the associated cash received, as well as significant ticket cancellations which led to issuance of cash refunds or credits to customers. The total value of cash refunds, excluding taxes and related fees, issued to customers during the three and nine months ended September 30, 2020 was approximately $650 million and $2.8 billion, respectively.

Prior to April 2020, passenger tickets sold and credits issued were generally valid for one year from the date of original ticket issuance. During the current year, we announced the extension of expiration on certain tickets and travel credits through December 2022. The air traffic liability classified as noncurrent as of September 30, 2020 represents our current estimate of tickets and credits to be used or refunded beyond one year, while the balance classified as current represents our current estimate of tickets and credits to be used or refunded within one year. We will continue to monitor our customers' travel behavior and may adjust our estimates in the future.

We recognized approximately $3.0 billion in passenger revenue during the nine months ended September 30, 2020 that was recorded in our air traffic liability balance at December 31, 2019. Due to the uncertainty around the return of demand for air travel, we are unable to estimate the amount of the December 31, 2019 air traffic liability that will be recognized in earnings compared to amounts that will be refunded to customers or issued as a credit for future travel through the end of 2020.

Other Revenue
Three Months Ended September 30,
Nine Months Ended September 30,
(in millions)2020201920202019
Ancillary businesses and refinery$572 $291 $1,185 $990 
Loyalty program343 485 1,086 1,443 
Miscellaneous67 185 263 536 
Total other revenue$982 $961 $2,534 $2,969 

Ancillary Businesses and Refinery. Ancillary businesses and refinery includes aircraft maintenance services we provide to third parties, our vacation wholesale operations and refinery sales to third parties.

Loyalty Program. Our SkyMiles loyalty program generates customer loyalty by rewarding customers with incentives to travel on Delta. This program allows customers to earn mileage credits ("miles") by flying on Delta, Delta Connection and other airlines that participate in the loyalty program. When traveling, customers earn miles based on the passenger's loyalty program status and ticket price. Customers can also earn miles through participating companies such as credit card companies, hotels, car rental agencies and ridesharing companies. Miles are redeemable by customers in future periods for air travel on Delta and other participating airlines, membership in our Sky Club and other program awards. To facilitate transactions with participating companies, we sell miles to non-airline businesses, customers and other airlines. Our most significant contract to sell miles relates to our co-brand credit card relationship with American Express. During the nine months ended September 30, 2020 and 2019, total cash sales from marketing agreements related to our loyalty program were $2.2 billion and $3.1 billion, respectively, which are allocated to travel and other performance obligations.

In September 2020, we raised $9.0 billion through the issuance of notes and entry into a term loan facility, each secured by certain assets related to our SkyMiles program. See Note 7, "Debt" for further discussion of these transactions.

Current Activity of the Loyalty Program. Miles are combined in one homogeneous pool and are not separately identifiable. As such, the revenue is comprised of miles that were part of the loyalty program deferred revenue balance at the beginning of the period as well as miles that were issued during the period.
The table below presents the activity of the current and noncurrent loyalty program deferred revenue and includes miles earned through travel and miles sold to participating companies, which are primarily through marketing agreements.
(in millions)20202019
Balance at January 1$6,728 $6,641 
Miles earned1,132 2,352 
Travel miles redeemed(731)(2,175)
Non-travel miles redeemed(40)(122)
Balance at September 30
$7,089 $6,696 

The timing of mile redemptions can vary widely; however, the majority of new miles have historically been redeemed within two years. The loyalty program deferred revenue classified as a current liability represents our current estimate of revenue expected to be recognized in the next 12 months based on projected redemptions, while the balance classified as a noncurrent liability represents our current estimate of revenue expected to be recognized beyond 12 months. As a result of the COVID-19 pandemic, a larger portion of mile redemptions is projected to occur beyond 12 months and is therefore reflected as a noncurrent liability as of September 30, 2020. We will continue to monitor redemptions as the situation evolves.

Revenue by Geographic Region

Operating revenue for the airline segment is recognized in a specific geographic region based on the origin, flight path and destination of each flight segment. A significant portion of the refinery's revenues typically consists of fuel sales to support the airline, which is eliminated in the Condensed Consolidated Financial Statements. The remaining operating revenue for the refinery segment is included in the domestic region. Our passenger and operating revenue by geographic region is summarized in the following tables:
Passenger Revenue
Three Months Ended September 30,
Nine Months Ended September 30,
(in millions)2020201920202019
Domestic$1,647 $7,985 $7,812 $22,819 
Atlantic132 2,062 1,014 5,009 
Latin America97 673 879 2,287 
Pacific62 690 480 1,917 
Total$1,938 $11,410 $10,185 $32,032 

Operating Revenue
Three Months Ended September 30,
Nine Months Ended September 30,
(in millions)2020201920202019
Domestic$2,585 $8,665 $10,116 $24,990 
Atlantic240 2,338 1,353 5,754 
Latin America126 747 1,015 2,547 
Pacific111 810 638 2,277 
Total$3,062 $12,560 $13,122 $35,568