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Revenue Recognition (Tables)

6 Months Ended

Jun. 30, 2020

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



	Three Months Ended June 30,				Six Months Ended June 30,
	2020		2019		2020		2019
Passenger revenue:
Passenger travel	$	1,006	$	10,217	$	8,085	$	18,989
Loyalty revenue - travel ⁽¹⁾	102		794		703		1,680
Total passenger revenue	1,108		11,011		8,788		20,669
Cargo	130		221		277		439
Other:
Loyalty revenue - marketing services	356		594		927		1,172
Other revenue	28		134		145		264
Total other revenue	384		728		1,072		1,436
Total operating revenues	$	1,622	$	11,960	$	10,137	$	22,544


⁽¹⁾	Loyalty revenue included in passenger revenue is principally comprised of mileage credit redemptions, which were earned from travel or co-branded credit card and other partners.

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



	Three Months Ended June 30,				Six Months Ended June 30,
	2020		2019		2020		2019
Domestic	$	1,026	$	8,009	$	6,806	$	15,235
Latin America	34		1,241		1,214		2,612
Atlantic	42		1,407		565		2,080
Pacific	6		354		203		742
Total passenger revenue	$	1,108	$	11,011	$	8,788	$	20,669

Schedule of Contract Liabilities



	June 30, 2020		December 31, 2019
	(In millions)
Loyalty program liability	$	8,962	$	8,615
Air traffic liability	5,119		4,808
Total	$	14,081	$	13,423

The balance of the loyalty program liability fluctuates based on seasonal patterns, which impact the volume of mileage credits issued through travel or sold to co-branded credit card and other partners (deferral of revenue) and mileage credits redeemed (recognition of revenue). Changes in loyalty program liability are as follows (in millions):



Balance at December 31, 2019	$	8,615
Deferral of revenue	1,149
Recognition of revenue ⁽¹⁾	(802		)
Balance at June 30, 2020 ⁽²⁾	$	8,962

⁽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 generally do not expire as long as that AAdvantage member has any type of qualifying activity at least every 18 months. As of June 30, 2020, our current loyalty program liability was $2.4 billion and represents our current estimate of revenue expected to be recognized in the next 12 months based on historical trends, with the balance reflected in long-term loyalty program liability expected to be recognized as revenue in periods thereafter. Given the inherent uncertainty of the current operating environment due to COVID-19, we will continue to monitor redemption patterns and may adjust our estimates in the future.

American Airlines, Inc. [Member]

Entity Information [Line Items]

Disaggregation of Revenue

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



	Three Months Ended June 30,				Six Months Ended June 30,
	2020		2019		2020		2019
Passenger revenue:
Passenger travel	$	1,006	$	10,217	$	8,085	$	18,989
Loyalty revenue - travel ⁽¹⁾	102		794		703		1,680
Total passenger revenue	1,108		11,011		8,788		20,669
Cargo	130		221		277		439
Other:
Loyalty revenue - marketing services	356		594		927		1,172
Other revenue	28		132		144		259
Total other revenue	384		726		1,071		1,431
Total operating revenues	$	1,622	$	11,958	$	10,136	$	22,539


⁽¹⁾	Loyalty revenue included in passenger revenue is principally comprised of mileage credit redemptions, which were earned from travel or co-branded credit card and other partners.

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



	Three Months Ended June 30,				Six Months Ended June 30,
	2020		2019		2020		2019
Domestic	$	1,026	$	8,009	$	6,806	$	15,235
Latin America	34		1,241		1,214		2,612
Atlantic	42		1,407		565		2,080
Pacific	6		354		203		742
Total passenger revenue	$	1,108	$	11,011	$	8,788	$	20,669

Schedule of Contract Liabilities



	June 30, 2020		December 31, 2019
	(In millions)
Loyalty program liability	$	8,962	$	8,615
Air traffic liability	5,119		4,808
Total	$	14,081	$	13,423



Balance at December 31, 2019	$	8,615
Deferral of revenue	1,149
Recognition of revenue ⁽¹⁾	(802		)
Balance at June 30, 2020 ⁽²⁾	$	8,962

⁽¹⁾

⁽²⁾

Mileage credits can be redeemed at any time and generally do not expire as long as that AAdvantage member has any type of qualifying activity at least every 18 months. As of June 30, 2020, American's current loyalty program liability was $2.4 billion and represents American's current estimate of revenue expected to be recognized in the next 12 months based on historical trends, with the balance reflected in long-term loyalty program liability expected to be recognized as revenue in periods thereafter. Given the inherent uncertainty of the current operating environment due to COVID-19, American will continue to monitor redemption patterns and may adjust its estimates in the future.