Basis of Presentation and Summary of Significant Accounting Policies (Tables)

12 Months Ended

Dec. 31, 2018

Organization Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items]

Schedule of New Accounting Pronouncements and Changes in Accounting Principles

Impacts to 2017 Results

The effects of the adoption of the New Revenue Standard and New Retirement Standard to our consolidated statement of operations for the twelve months ended December 31, 2017 were as follows (in millions):



				New Revenue Standard								New Retirement Standard
Year Ended December 31, 2017	As Reported			Deferred Revenue Method			Ancillary Revenue Reclassifications			Gross Versus Net Presentation		Reclassifications			As Recast
Operating revenues:
Passenger	$	36,133		$	311		$	2,648		$	39	$	—		$	39,131
Cargo	800			—			42			48		—			890
Other	5,274			—			(2,690		)	17		—			2,601
Total operating revenues	42,207			311			—			104		—			42,622
Total operating expenses	38,149			—			—			104		138			38,391
Operating income	4,058			311			—			—		(138		)	4,231
Total nonoperating expense, net	(974		)	—			—			—		138			(836		)
Income before income taxes	3,084			311			—			—		—			3,395
Income tax provision ⁽¹⁾	1,165			948			—			—		—			2,113
Net income	$	1,919		$	(637	)	$	—		$	—	$	—		$	1,282
Diluted earnings per common share	$	3.90													$	2.61


⁽¹⁾	The adjustment to the 2017 income tax provision includes an $823 million special charge to reduce our deferred tax asset associated with loyalty program liabilities as a result of H.R. 1, the 2017 Tax Cuts and Jobs Act (the 2017 Tax Act), enacted in December 2017 that reduced the federal corporate income tax rate from 35% to 21%.

The effects of the adoption of the New Revenue Standard to our December 31, 2017 consolidated balance sheet were as follows (in millions):



	As Reported		New Revenue Standard			As Recast
Deferred tax asset	$	427	$	1,389		$	1,816
Air traffic liability	3,978		64			4,042
Current loyalty program liability	2,791		330			3,121
Noncurrent loyalty program liability	—		5,701			5,701
Total stockholders’ equity (deficit)	3,926		(4,706		)	(780		)

Impacts to 2016 Results

The effects of the adoption of the New Revenue Standard and New Retirement Standard to our consolidated statement of operations for the twelve months ended December 31, 2016 were as follows (in millions):



				New Revenue Standard								New Retirement Standard
Year Ended December 31, 2016	As Reported			Deferred Revenue Method			Ancillary Revenue Reclassifications			Gross Versus Net Presentation		Reclassifications			As Recast
Operating revenues:
Passenger	$	34,579		$	(147	)	$	2,571		$	42	$	—		$	37,045
Cargo	700			—			36			49		—			785
Other	4,901			—			(2,607		)	18		—			2,312
Total operating revenues	40,180			(147		)	—			109		—			40,142
Total operating expenses	34,896			—			—			109		77			35,082
Operating income	5,284			(147		)	—			—		(77		)	5,060
Total nonoperating expense, net	(985		)	—			—			—		77			(908		)
Income before income taxes	4,299			(147		)	—			—		—			4,152
Income tax provision	1,623			(55		)	—			—		—			1,568
Net income	$	2,676		$	(92	)	$	—		$	—	$	—		$	2,584
Diluted earnings per common share	$	4.81													$	4.65

Schedule of Estimated Useful Lives of Principal Property and Equipment

The estimated useful lives for the principal property and equipment classifications are as follows:



Principal Property and Equipment Classification	Estimated Useful Life
Aircraft, engines and related rotable parts	20 – 30 years
Buildings and improvements	5 – 30 years
Furniture, fixtures and other equipment	3 – 10 years
Capitalized software	5 – 10 years

Schedule of Amortizable Intangible Assets

The following table provides information relating to our amortizable intangible assets as of December 31, 2018 and 2017 (in millions):



	December 31,
	2018			2017
Domestic airport slots	$	365		$	365
Customer relationships	300			300
Marketing agreements	105			105
Tradenames	35			35
Airport gate leasehold rights	137			137
Accumulated amortization	(663		)	(622		)
Total	$	279		$	320

Schedule of Future Amortization Expense

We expect to record annual amortization expense for these intangible assets as follows (in millions):



2019	$	41
2020	41
2021	41
2022	41
2023	7
2024 and thereafter	108
Total	$	279

Disaggregation of Revenue

The following are the significant categories comprising our reported operating revenues (in millions):



	2018		2017		2016
Passenger revenue:
Passenger travel	$	37,457	$	36,152	$	34,278
Loyalty revenue - travel ⁽¹⁾	3,219		2,979		2,767
Total passenger revenue	40,676		39,131		37,045
Cargo	1,013		890		785
Other:
Loyalty revenue - marketing services	2,352		2,124		1,872
Other revenue	500		477		440
Total other revenue	2,852		2,601		2,312
Total operating revenues	$	44,541	$	42,622	$	40,142


⁽¹⁾	Loyalty revenue included in passenger revenue is principally comprised of mileage credit redemptions earned through travel and mileage credits sold to co-branded credit card and other partners. See “Loyalty Revenue” below for further discussion on these mileage credits.

The following is our total passenger revenue by geographic region (in millions):



	2018		2017		2016
Domestic	$	29,573	$	28,749	$	27,202
Latin America	5,125		4,840		4,676
Atlantic	4,376		4,028		3,873
Pacific	1,602		1,514		1,294
Total passenger revenue	$	40,676	$	39,131	$	37,045

Schedule of Contract Balances

Changes in loyalty program liability are as follows (in millions):



Balance at December 31, 2017	$	8,822
Deferral of revenue	3,083
Recognition of revenue ⁽¹⁾	(3,366		)
Balance at December 31, 2018 ⁽²⁾	$	8,539

⁽¹⁾

Principally relates to revenue recognized from the redemption of mileage credits for both air and non-air travel awards. Mileage credits are combined in one homogenous 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.

⁽²⁾

Mileage credits can be redeemed at any time and do not expire as long as that AAdvantage member has any type of qualifying activity at least every 18 months. As of December 31, 2018, our current loyalty program liability was $3.3 billion and represents our current estimate of revenue expected to be recognized in the next twelve months based on historical trends, with the balance reflected in long-term loyalty program liability expected to be recognized as revenue in periods thereafter.



	December 31, 2018		December 31, 2017
	(in millions)
Loyalty program liability	$	8,539	$	8,822
Air traffic liability	4,339		4,042
Total	$	12,878	$	12,864

Components of Regional Expenses

Regional expenses consist of the following (in millions):



	Year Ended December 31,
	2018		2017		2016
Aircraft fuel and related taxes	$	1,843	$	1,382	$	1,109
Salaries, wages and benefits	1,591		1,452		1,333
Capacity purchases from third-party regional carriers ⁽¹⁾	1,431		1,581		1,538
Maintenance, materials and repairs	340		281		345
Other rent and landing fees	610		625		564
Aircraft rent	32		35		36
Selling expenses	369		361		347
Depreciation and amortization	318		315		301
Special items, net	6		22		14
Other	593		492		457
Total regional expenses	$	7,133	$	6,546	$	6,044


⁽¹⁾	In 2018, we recognized $565 million of expense under our capacity purchase agreement with Republic Airline Inc. (Republic). We hold a 25% equity interest in Republic Airways Holdings Inc. (Republic Holdings), the parent company of Republic.

American Airlines, Inc. [Member]

Organization Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items]

Schedule of New Accounting Pronouncements and Changes in Accounting Principles

Impacts to 2017 Results

The effects of the adoption of the New Revenue Standard and New Retirement Standard to American’s consolidated statement of operations for the twelve months ended December 31, 2017 were as follows (in millions):



				New Revenue Standard								New Retirement Standard
Year Ended December 31, 2017	As Reported			Deferred Revenue Method			Ancillary Revenue Reclassifications			Gross Versus Net Presentation		Reclassifications			As Recast
Operating revenues:
Passenger	$	36,133		$	311		$	2,648		$	39	$	—		$	39,131
Cargo	800			—			42			48		—			890
Other	5,262			—			(2,690		)	17		—			2,589
Total operating revenues	42,195			311			—			104		—			42,610
Total operating expenses	38,163			—			—			104		138			38,405
Operating income	4,032			311			—			—		(138		)	4,205
Total nonoperating expense, net	(788		)	—			—			—		138			(650		)
Income before income taxes	3,244			311			—			—		—			3,555
Income tax provision ⁽¹⁾	1,322			948			—			—		—			2,270
Net income	$	1,922		$	(637	)	$	—		$	—	$	—		$	1,285


⁽¹⁾	The adjustment to the 2017 income tax provision includes a $924 million special charge to reduce American’s deferred tax asset associated with loyalty program liabilities as a result of H.R. 1, the 2017 Tax Cuts and Jobs Act (the 2017 Tax Act), enacted in December 2017 that reduced the federal corporate income tax rate from 35% to 21%.

The effects of the adoption of the New Revenue Standard to American’s December 31, 2017 consolidated balance sheet were as follows (in millions):



	As Reported		New Revenue Standard			As Recast
Deferred tax asset	$	682	$	1,389		$	2,071
Air traffic liability	3,978		64			4,042
Current loyalty program liability	2,791		330			3,121
Noncurrent loyalty program liability	—		5,701			5,701
Total stockholders’ equity (deficit)	14,594		(4,706		)	9,888

Impacts to 2016 Results



				New Revenue Standard								New Retirement Standard
Year Ended December 31, 2016	As Reported			Deferred Revenue Method			Ancillary Revenue Reclassifications			Gross Versus Net Presentation		Reclassifications			As Recast
Operating revenues:
Passenger	$	34,579		$	(147	)	$	2,571		$	42	$	—		$	37,045
Cargo	700			—			36			49		—			785
Other	4,884			—			(2,607		)	18		—			2,295
Total operating revenues	40,163			(147		)	—			109		—			40,125
Total operating expenses	34,859			—			—			109		77			35,045
Operating income	5,304			(147		)	—			—		(77		)	5,080
Total nonoperating expense, net	(861		)	—			—			—		77			(784		)
Income before income taxes	4,443			(147		)	—			—		—			4,296
Income tax provision	1,662			(55		)	—			—		—			1,607
Net income	$	2,781		$	(92	)	$	—		$	—	$	—		$	2,689

Schedule of Estimated Useful Lives of Principal Property and Equipment

The estimated useful lives for the principal property and equipment classifications are as follows:



Principal Property and Equipment Classification	Estimated Useful Life
Aircraft, engines and related rotable parts	20 – 30 years
Buildings and improvements	5 – 30 years
Furniture, fixtures and other equipment	3 – 10 years
Capitalized software	5 – 10 years

Schedule of Amortizable Intangible Assets

The following table provides information relating to American’s amortizable intangible assets as of December 31, 2018 and 2017 (in millions):



	December 31,
	2018			2017
Domestic airport slots	$	365		$	365
Customer relationships	300			300
Marketing agreements	105			105
Tradenames	35			35
Airport gate leasehold rights	137			137
Accumulated amortization	(663		)	(622		)
Total	$	279		$	320

Schedule of Future Amortization Expense

American expects to record annual amortization expense for these intangible assets as follows (in millions):



2019	$	41
2020	41
2021	41
2022	41
2023	7
2024 and thereafter	108
Total	$	279

Disaggregation of Revenue

The following are the significant categories comprising American’s reported operating revenues (in millions):



	2018		2017		2016
Passenger revenue:
Passenger travel	$	37,457	$	36,152	$	34,278
Loyalty revenue - travel ⁽¹⁾	3,219		2,979		2,767
Total passenger revenue	40,676		39,131		37,045
Cargo	1,013		890		785
Other:
Loyalty revenue - marketing services	2,352		2,124		1,872
Other revenue	489		465		423
Total other revenue	2,841		2,589		2,295
Total operating revenues	$	44,530	$	42,610	$	40,125


⁽¹⁾	Loyalty revenue included in passenger revenue is principally comprised of mileage credit redemptions earned through travel and mileage credits sold to co-branded credit card and other partners. See “Loyalty Revenue” below for further discussion on these mileage credits.

The following is American’s total passenger revenue by geographic region (in millions):



	2018		2017		2016
Domestic	$	29,573	$	28,749	$	27,202
Latin America	5,125		4,840		4,676
Atlantic	4,376		4,028		3,873
Pacific	1,602		1,514		1,294
Total passenger revenue	$	40,676	$	39,131	$	37,045

Schedule of Contract Balances



	December 31, 2018		December 31, 2017
	(in millions)
Loyalty program liability	$	8,539	$	8,822
Air traffic liability	4,339		4,042
Total	$	12,878	$	12,864

Changes in loyalty program liability are as follows (in millions):



Balance at December 31, 2017	$	8,822
Deferral of revenue	3,083
Recognition of revenue ⁽¹⁾	(3,366		)
Balance at December 31, 2018 ⁽²⁾	$	8,539

⁽¹⁾

⁽²⁾

Mileage credits can be redeemed at any time and do not expire as long as that AAdvantage member has any type of qualifying activity at least every 18 months. As of December 31, 2018, American’s current loyalty program liability was $3.3 billion and represents American’s current estimate of revenue expected to be recognized in the next twelve months based on historical trends, with the balance reflected in long-term loyalty program liability expected to be recognized as revenue in periods thereafter.

Components of Regional Expenses

Regional expenses consist of the following (in millions):



	Year Ended December 31,
	2018		2017		2016
Aircraft fuel and related taxes	$	1,843	$	1,382	$	1,109
Salaries, wages and benefits	338		356		327
Capacity purchases from third-party regional carriers ⁽¹⁾	3,267		3,283		3,186
Maintenance, materials and repairs	8		7		4
Other rent and landing fees	583		602		487
Aircraft rent	27		27		28
Selling expenses	369		361		347
Depreciation and amortization	267		262		237
Special items, net	—		3		13
Other	362		289		271
Total regional expenses	$	7,064	$	6,572	$	6,009


⁽¹⁾	In 2018, American recognized $565 million of expense under its capacity purchase agreement with Republic Airline Inc. (Republic). American holds a 25% equity interest in Republic Airways Holdings Inc. (Republic Holdings), the parent company of Republic.