Revenue

3 Months Ended

Mar. 31, 2023

Revenue from Contract with Customer [Abstract]

REVENUE

REVENUE

Passenger Revenues

The Company’s contracts with its Customers primarily consist of its tickets sold, which are initially deferred as Air traffic liability. Passenger revenue associated with tickets is recognized when the performance obligation to the Customer is satisfied, which is primarily when travel is provided.

Revenue is categorized by revenue source as the Company believes it best depicts the nature, amount, timing, and uncertainty of revenue and cash flow. The following table provides the components of Passenger revenue recognized for the three months ended March 31, 2023 and 2022:

	Three months ended March 31,
(in millions)	2023		2022
Passenger non-loyalty	$	4,082	$	3,364
Passenger loyalty - air transportation	825		624
Passenger ancillary sold separately	198		147
Total passenger revenues	$	5,105	$	4,135

As of March 31, 2023, and December 31, 2022, the components of Air traffic liability, including contract liabilities based on tickets sold and unused flight credits available to the Customer, both of which are net of recorded breakage, and loyalty points available for redemption, within the unaudited Condensed Consolidated Balance Sheet were as follows:

	Balance as of
(in millions)	March 31, 2023		December 31, 2022
Air traffic liability - passenger travel and ancillary passenger services	$	4,007	$	3,061
Air traffic liability - loyalty program	5,190		5,189
Total Air traffic liability	$	9,197	$	8,250

The balance in Air traffic liability - passenger travel and ancillary passenger services also includes flight credits not currently associated with a ticket that can be applied by Customers towards the purchase of future travel. These flight credits are typically created as a result of a prior ticket cancellation or exchange, and are reflected net of associated breakage. Rollforwards of the Company's Air traffic liability - loyalty program for the three months ended March 31, 2023 and 2022 were as follows (in millions):

	Three months ended March 31,
	2023		2022
Air traffic liability - loyalty program - beginning balance	$	5,189	$	4,789
Amounts deferred associated with points awarded	846		736
Revenue recognized from points redeemed - Passenger	(825)		(624)
Revenue recognized from points redeemed - Other	(20)		(17)
Air traffic liability - loyalty program - ending balance	$	5,190	$	4,884

Air traffic liability includes consideration received for ticket and loyalty related performance obligations which have not been satisfied as of a given date. Rollforwards of the amounts included in Air traffic liability as of March 31, 2023 and 2022 were as follows (in millions):

	Air traffic liability
Balance at December 31, 2022	$	8,250
Current period sales (passenger travel, ancillary services, flight loyalty, and partner loyalty)	6,072
Revenue from amounts included in contract liability opening balances	(2,568)
Revenue from current period sales	(2,557)
Balance at March 31, 2023	$	9,197

	Air traffic liability
Balance at December 31, 2021	$	7,725
Current period sales (passenger travel, ancillary services, flight loyalty, and partner loyalty)	5,038
Revenue from amounts included in contract liability opening balances	(1,881)
Revenue from current period sales	(2,272)
Balance at March 31, 2022	$	8,610

On July 28, 2022, the Company announced that all existing Customer flight credits as of that date, as well as any future flight credits issued, will no longer expire and will thus remain redeemable by Customers. Flight credits for non-refundable fares will be issued as long as the flight is cancelled more than 10 minutes prior to the scheduled departure. As the Company continues to believe that a portion of Customer flight credits issued after July 28, 2022, will not be redeemed, it continues to estimate and record breakage associated with such amounts. The amount of

Customer flight credits represents approximately 7 percent and 9 percent of the total Air traffic liability balance at March 31, 2023, and December 31, 2022, respectively.The Company recognized revenue related to the marketing, advertising, and other travel-related benefits of the revenue associated with various loyalty partner agreements including, but not limited to, the Agreement with Chase, within Other operating revenues. For the three months ended March 31, 2023 and 2022, the Company recognized $521 million and $486 million, respectively.