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Revenue Recognition (Tables)

3 Months Ended

Mar. 31, 2020

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



	Three Months Ended March 31,
	2020		2019
Passenger revenue:
Passenger travel	$	7,079	$	8,772
Loyalty revenue - travel ⁽¹⁾	602		886
Total passenger revenue	7,681		9,658
Cargo	147		218
Other:
Loyalty revenue - marketing services	571		578
Other revenue	116		130
Total other revenue	687		708
Total operating revenues	$	8,515	$	10,584


⁽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 March 31,
	2020		2019
Domestic	$	5,780	$	7,226
Latin America	1,180		1,371
Atlantic	523		673
Pacific	198		388
Total passenger revenue	$	7,681	$	9,658

Schedule of Contract Liabilities



	March 31, 2020		December 31, 2019
	(In millions)
Loyalty program liability	$	8,851	$	8,615
Air traffic liability	5,473		4,808
Total	$	14,324	$	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	887
Recognition of revenue ⁽¹⁾	(651		)
Balance at March 31, 2020 ⁽²⁾	$	8,851

⁽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 March 31, 2020, our current loyalty program liability was $3.1 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 March 31,
	2020		2019
Passenger revenue:
Passenger travel	$	7,079	$	8,772
Loyalty revenue - travel ⁽¹⁾	602		886
Total passenger revenue	7,681		9,658
Cargo	147		218
Other:
Loyalty revenue - marketing services	571		578
Other revenue	115		127
Total other revenue	686		705
Total operating revenues	$	8,514	$	10,581


⁽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 March 31,
	2020		2019
Domestic	$	5,780	$	7,226
Latin America	1,180		1,371
Atlantic	523		673
Pacific	198		388
Total passenger revenue	$	7,681	$	9,658

Schedule of Contract Liabilities



	March 31, 2020		December 31, 2019
	(In millions)
Loyalty program liability	$	8,851	$	8,615
Air traffic liability	5,473		4,808
Total	$	14,324	$	13,423



Balance at December 31, 2019	$	8,615
Deferral of revenue	887
Recognition of revenue ⁽¹⁾	(651		)
Balance at March 31, 2020 ⁽²⁾	$	8,851

⁽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 March 31, 2020, American's current loyalty program liability was $3.1 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.