REVENUE FROM CONTRACTS WITH CUSTOMERS

6 Months Ended

Jun. 30, 2023

Revenue Recognition [Abstract]

REVENUE FROM CONTRACTS WITH CUSTOMERS

REVENUE

Ticket revenue is recorded as Passenger revenue, and represents the primary source of the Company's revenue. Also included in Passenger revenue is passenger ancillary revenue such as bag fees, on-board food and beverage, and certain revenue from the frequent flyer program. Mileage Plan other revenue includes brand and marketing revenue from the co-branded credit card and other partners, and certain interline frequent flyer revenue, net of commissions. Cargo and other revenue includes freight and mail revenue, and to a lesser extent, other ancillary revenue products such as lounge membership and certain commissions.

The Company disaggregates revenue by segment in Note 10. The level of detail within the Company’s condensed consolidated statements of operations, segment disclosures, and in this footnote depict the nature, amount, timing, and uncertainty of revenue and how cash flows are affected by economic and other factors.

Passenger Ticket and Ancillary Services Revenue

Passenger revenue recognized in the condensed consolidated statements of operations (in millions):

	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
Passenger ticket revenue, net of taxes and fees	$	2,207	$	2,052	$	3,855	$	3,284
Passenger ancillary revenue	123		119		227		210
Mileage Plan passenger revenue	268		247		500		435
Total Passenger revenue	$	2,598	$	2,418	$	4,582	$	3,929

Mileage Plan Loyalty Program

Mileage Plan revenue included in the condensed consolidated statements of operations (in millions):

	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
Passenger revenue	$	268	$	247	$	500	$	435
Mileage Plan other revenue	170		175		324		287
Total Mileage Plan revenue	$	438	$	422	$	824	$	722

Cargo and Other Revenue

Cargo and other revenue included in the condensed consolidated statements of operations (in millions):

	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
Cargo revenue	$	39	$	36	$	68	$	65
Other revenue	31		29		60		58
Total Cargo and other revenue	$	70	$	65	$	128	$	123

Air Traffic Liability and Deferred Revenue

Passenger ticket and ancillary services liabilities

The Company recognized Passenger revenue of $103 million and $132 million from the prior year-end air traffic liability balance for the three months ended June 30, 2023 and 2022, and $588 million and $522 million from the prior year-end air traffic liability balance for the six months ended June 30, 2023 and 2022.

Mileage Plan assets and liabilities

The Company records a receivable for amounts due from the affinity card partner and from other partners as mileage credits are sold until the payments are collected. The Company had $96 million of such receivables as of June 30, 2023 and $83 million as of December 31, 2022.

The table below presents a roll forward of the total frequent flyer liability (in millions):

	Six Months Ended June 30,
	2023		2022
Total Deferred Revenue balance at January 1	$	2,497	$	2,358
Travel miles and companion certificate redemption - Passenger revenue	(470)		(409)
Miles redeemed on partner airlines - Other revenue	(52)		(26)
Increase in liability for mileage credits issued	602		518
Total Deferred Revenue balance at June 30	$	2,577	$	2,441