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Revenue Recognition
 9 Months Ended
Sep. 30, 2020
Entity Information [Line Items]  
Revenue Recognition Revenue Recognition
Revenue
The following are the significant categories comprising our reported operating revenues (in millions):
 Three Months Ended September 30,Nine Months Ended September 30,
 2020201920202019
Passenger revenue:
Passenger travel$2,407 $10,226 $10,491 $29,215 
Loyalty revenue - travel (1)
133 769 837 2,448 
Total passenger revenue2,540 10,995 11,328 31,663 
Cargo207 208 484 647 
Other:
Loyalty revenue - marketing services389 570 1,317 1,742 
Other revenue37 138 180 403 
Total other revenue426 708 1,497 2,145 
Total operating revenues$3,173 $11,911 $13,309 $34,455 
(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 September 30,Nine Months Ended September 30,
 2020201920202019
Domestic$2,296 $7,814 $9,102 $23,048 
Latin America172 1,218 1,386 3,829 
Atlantic
56 1,596 621 3,677 
Pacific16 367 219 1,109 
Total passenger revenue$2,540 $10,995 $11,328 $31,663 
We attribute passenger revenue by geographic region based upon the origin and destination of each flight segment.
Contract Balances
Our significant contract liabilities are comprised of (1) outstanding loyalty program mileage credits that may be redeemed for future travel and other non-air travel awards, reported as loyalty program liability on the condensed consolidated balance sheets and (2) ticket sales for transportation that has not yet been provided, reported as air traffic liability on the condensed consolidated balance sheets.
September 30, 2020December 31, 2019
(In millions)
Loyalty program liability$9,094 $8,615 
Air traffic liability4,903 4,808 
Total$13,997 $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 revenue1,456 
Recognition of revenue (1)
(977)
Balance at September 30, 2020 (2)
$9,094 
(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. In response to COVID-19, we suspended the expiration of mileage credits through December 31, 2020. As of September 30, 2020, our current loyalty program liability was $2.1 billion and represents our current estimate of revenue expected to be recognized in the next 12 months based on historical as well as projected 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.
The air traffic liability principally represents tickets sold for future travel on American and partner airlines, as well as estimated future refunds and exchanges of tickets sold for past travel. The balance in our air traffic liability also fluctuates with seasonal travel patterns. The contract duration of passenger tickets is generally one year. Accordingly, any revenue associated with tickets sold for future travel will be recognized within 12 months. For the nine months ended September 30, 2020, $2.8 billion of revenue was recognized in passenger revenue that was included in our air traffic liability at December 31, 2019. In response to COVID-19, we extended the contract duration for certain tickets to December 31, 2021, principally those with travel scheduled March 1, 2020 through December 31, 2020. As of September 30, 2020, the air traffic liability included approximately $2.5 billion of travel credits related to these unused tickets for travel prior to September 30, 2020. Accordingly, any revenue associated with these tickets will be recognized within the next 15 months. Given this change in contract duration and uncertainty surrounding the future demand for air travel, our estimates of revenue that will be recognized from the air traffic liability for future flown or unused tickets as well as our estimates of refunds may be subject to variability and differ from historical experience.
American Airlines, Inc.  
Entity Information [Line Items]  
Revenue Recognition Revenue Recognition
Revenue
The following are the significant categories comprising American's reported operating revenues (in millions):
 Three Months Ended September 30,Nine Months Ended September 30,
 2020201920202019
Passenger revenue:
Passenger travel$2,407 $10,226 $10,491 $29,215 
Loyalty revenue - travel (1)
133 769 837 2,448 
Total passenger revenue2,540 10,995 11,328 31,663 
Cargo207 208 484 647 
Other:
Loyalty revenue - marketing services389 570 1,317 1,742 
Other revenue36 137 179 397 
Total other revenue425 707 1,496 2,139 
Total operating revenues$3,172 $11,910 $13,308 $34,449 
(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 September 30,Nine Months Ended September 30,
 2020201920202019
Domestic$2,296 $7,814 $9,102 $23,048 
Latin America172 1,218 1,386 3,829 
Atlantic
56 1,596 621 3,677 
Pacific16 367 219 1,109 
Total passenger revenue$2,540 $10,995 $11,328 $31,663 
American attributes passenger revenue by geographic region based upon the origin and destination of each flight segment.
Contract Balances
American's significant contract liabilities are comprised of (1) outstanding loyalty program mileage credits that may be redeemed for future travel and other non-air travel awards, reported as loyalty program liability on the condensed consolidated balance sheets and (2) ticket sales for transportation that has not yet been provided, reported as air traffic liability on the condensed consolidated balance sheets.
September 30, 2020December 31, 2019
(In millions)
Loyalty program liability$9,094 $8,615 
Air traffic liability4,903 4,808 
Total$13,997 $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 revenue1,456 
Recognition of revenue (1)
(977)
Balance at September 30, 2020 (2)
$9,094 
(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. In response to COVID-19, American suspended the expiration of mileage credits through December 31, 2020. As of September 30, 2020, American's current loyalty program liability was $2.1 billion and represents American's current estimate of revenue expected to be recognized in the next 12 months based on historical as well as projected 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.
The air traffic liability principally represents tickets sold for future travel on American and partner airlines, as well as estimated future refunds and exchanges of tickets sold for past travel. The balance in American's air traffic liability also fluctuates with seasonal travel patterns. The contract duration of passenger tickets is generally one year. Accordingly, any revenue associated with tickets sold for future travel will be recognized within 12 months. For the nine months ended September 30, 2020, $2.8 billion of revenue was recognized in passenger revenue that was included in American's air
traffic liability at December 31, 2019. In response to COVID-19, American extended the contract duration for certain tickets to December 31, 2021, principally those with travel scheduled March 1, 2020 through December 31, 2020. As of September 30, 2020, the air traffic liability included approximately $2.5 billion of travel credits related to these unused tickets for travel prior to September 30, 2020. Accordingly, any revenue associated with these tickets will be recognized within the next 15 months. Given this change in contract duration and uncertainty surrounding the future demand for air travel, American's estimates of revenue that will be recognized from the air traffic liability for future flown or unused tickets as well as American's estimates of refunds may be subject to variability and differ from historical experience.