XML 60 R37.htm IDEA: XBRL DOCUMENT

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

12 Months Ended

Dec. 31, 2023

Organization Basis of Presentation and Summary of Significant Accounting Policies [Line Items]

The table below provides a summary of the financial assistance received and the promissory notes and the warrants issued under each program (in millions, except exercise price amounts):


Program	Closing Date	PSP Financial Assistance		Promissory Notes (1)		PSP Warrants		Total		Warrants Issued (Shares) (2)	Exercise Price of Warrants
PSP1	April 20, 2020	$	4,138	$	1,757	$	63	$	5,958	14.0	$	12.51
PSP2	January 15, 2021	2,427		1,030		76		3,533		6.6	15.66
PSP3	April 23, 2021	2,290		959		46		3,295		4.4	21.75
Total		$	8,855	$	3,746	$	185	$	12,786	25.0

(1)See Note 4 for further information on the promissory notes issued.

(2)The payroll support program warrants (PSP Warrants) are subject to certain anti-dilution provisions, do not have any voting rights and are freely transferable, with registration rights. Each warrant expires on the fifth anniversary of the date of issuance, with expiration dates ranging from April 2025 to June 2026, and will be exercisable either through net share settlement or cash, at our option. The warrants were issued solely as compensation to the U.S. Government related to entry into the PSP Agreements. No separate proceeds (apart from the financial assistance described below) were received upon issuance of the warrants or will be received upon exercise thereof.

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 – 15 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, 2023 and 2022 (in millions):


	December 31,
	2023		2022
Domestic airport slots	$	365	$	365
Customer relationships	300		300
Marketing agreements	105		105
Tradenames	35		35
Airport gate leasehold rights	137		137
Accumulated amortization	(834)		(827)
Total	$	108	$	115

Schedule of Future Amortization Expense

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


2024	$	7
2025	7
2026	6
2027	6
2028	6
2029 and thereafter	76
Total	$	108

Disaggregation of Revenue

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


	Year Ended December 31,
	2023		2022		2021
Passenger revenue:
Passenger travel	$	44,914	$	41,425	$	23,896
Loyalty revenue - travel (1)	3,598		3,143		2,167
Total passenger revenue	48,512		44,568		26,063
Cargo	812		1,233		1,314
Other:
Loyalty revenue - marketing services	2,929		2,657		2,166
Other revenue	535		513		339
Total other revenue	3,464		3,170		2,505
Total operating revenues	$	52,788	$	48,971	$	29,882

(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. See “Loyalty Revenue” below for further discussion on these mileage credits.

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


	Year Ended December 31,
	2023		2022		2021
Domestic	$	34,592	$	32,911	$	21,453
Latin America	6,719		6,150		3,506
Atlantic	6,205		5,070		965
Pacific	996		437		139
Total passenger revenue	$	48,512	$	44,568	$	26,063

Schedule of Contract Balances


	December 31,
	2023		2022
	(In millions)
Loyalty program liability	$	9,327	$	9,145
Air traffic liability	6,200		6,745
Total	$	15,527	$	15,890

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


Balance at December 31, 2022	$	9,145
Deferral of revenue	3,810
Recognition of revenue (1)	(3,628)
Balance at December 31, 2023 (2)	$	9,327

(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 mileage credits that were part of the loyalty program deferred revenue balance at the beginning of the period, as well as mileage credits 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 24 months or if the AAdvantage member is the primary holder of a co-branded credit card. As of December 31, 2023, our current loyalty program liability was $3.5 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.

American Airlines, Inc.

Organization Basis of Presentation and Summary of Significant Accounting Policies [Line Items]

Schedule of Payroll Support Program

The table below provides a summary of the financial assistance received and the promissory notes and the warrants issued under each program (in millions, except exercise price amounts):


Program	Closing Date	PSP Financial Assistance		Promissory Notes (1)		PSP Warrants		Total		Warrants Issued (Shares) (2)	Exercise Price of Warrants
PSP1	April 20, 2020	$	4,138	$	1,757	$	63	$	5,958	14.0	$	12.51
PSP2	January 15, 2021	2,427		1,030		76		3,533		6.6	15.66
PSP3	April 23, 2021	2,290		959		46		3,295		4.4	21.75
Total		$	8,855	$	3,746	$	185	$	12,786	25.0

(1)As partial compensation to the U.S. Government for the provision of financial assistance under the PSP Agreements, AAG issued promissory notes to Treasury (PSP1 Promissory Note, PSP2 Promissory Note and PSP3 Promissory Note, collectively the PSP Promissory Notes), in the aggregate principal sum of $3.7 billion which provides for the guarantee of AAG’s obligations under the PSP Promissory Notes by the Subsidiaries.

(2)The payroll support program warrants (PSP Warrants) are subject to certain anti-dilution provisions, do not have any voting rights and are freely transferable, with registration rights. Each warrant expires on the fifth anniversary of the date of issuance, with expiration dates ranging from April 2025 to June 2026, and will be exercisable either through net share settlement or cash, at AAG’s option. The warrants were issued solely as compensation to the U.S. Government related to entry into the PSP Agreements. No separate proceeds (apart from the financial assistance described below) were received upon issuance of the warrants or will be received upon exercise thereof.

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 – 15 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, 2023 and 2022 (in millions):


	December 31,
	2023		2022
Domestic airport slots	$	365	$	365
Customer relationships	300		300
Marketing agreements	105		105
Tradenames	35		35
Airport gate leasehold rights	137		137
Accumulated amortization	(834)		(827)
Total	$	108	$	115

Schedule of Future Amortization Expense

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


2024	$	7
2025	7
2026	6
2027	6
2028	6
2029 and thereafter	76
Total	$	108

Disaggregation of Revenue

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


	Year Ended December 31,
	2023		2022		2021
Passenger revenue:
Passenger travel	$	44,914	$	41,425	$	23,896
Loyalty revenue - travel (1)	3,598		3,143		2,167
Total passenger revenue	48,512		44,568		26,063
Cargo	812		1,233		1,314
Other:
Loyalty revenue - marketing services	2,929		2,657		2,166
Other revenue	531		507		337
Total other revenue	3,460		3,164		2,503
Total operating revenues	$	52,784	$	48,965	$	29,880

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


	Year Ended December 31,
	2023		2022		2021
Domestic	$	34,592	$	32,911	$	21,453
Latin America	6,719		6,150		3,506
Atlantic	6,205		5,070		965
Pacific	996		437		139
Total passenger revenue	$	48,512	$	44,568	$	26,063

Schedule of Contract Balances


	December 31,
	2023		2022
	(In millions)
Loyalty program liability	$	9,327	$	9,145
Air traffic liability	6,200		6,745
Total	$	15,527	$	15,890

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


Balance at December 31, 2022	$	9,145
Deferral of revenue	3,810
Recognition of revenue (1)	(3,628)
Balance at December 31, 2023 (2)	$	9,327

(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 24 months or if the AAdvantage member is the primary holder of a co-branded credit card. As of December 31, 2023, American’s current loyalty program liability was $3.5 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.