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Revenue Recognition (Tables)

9 Months Ended

Sep. 30, 2020

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


	Three Months Ended September 30,						Nine Months Ended September 30,
	2020		2019		2020		2019
Passenger revenue:
Passenger travel	$	2,407	$	10,226	$	10,491	$	29,215
Loyalty revenue - travel ⁽¹⁾	133		769		837		2,448
Total passenger revenue	2,540		10,995		11,328		31,663
Cargo	207		208		484		647
Other:
Loyalty revenue - marketing services	389		570		1,317		1,742
Other revenue	37		138		180		403
Total other revenue	426		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,
	2020		2019		2020		2019
Domestic	$	2,296	$	7,814	$	9,102	$	23,048
Latin America	172		1,218		1,386		3,829
Atlantic	56		1,596		621		3,677
Pacific	16		367		219		1,109
Total passenger revenue	$	2,540	$	10,995	$	11,328	$	31,663

Schedule of Contract Liabilities


	September 30, 2020		December 31, 2019
	(In millions)
Loyalty program liability	$	9,094	$	8,615
Air traffic liability	4,903		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 revenue	1,456
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.

American Airlines, Inc.

Entity Information [Line Items]

Disaggregation of 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,
	2020		2019		2020		2019
Passenger revenue:
Passenger travel	$	2,407	$	10,226	$	10,491	$	29,215
Loyalty revenue - travel ⁽¹⁾	133		769		837		2,448
Total passenger revenue	2,540		10,995		11,328		31,663
Cargo	207		208		484		647
Other:
Loyalty revenue - marketing services	389		570		1,317		1,742
Other revenue	36		137		179		397
Total other revenue	425		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,
	2020		2019		2020		2019
Domestic	$	2,296	$	7,814	$	9,102	$	23,048
Latin America	172		1,218		1,386		3,829
Atlantic	56		1,596		621		3,677
Pacific	16		367		219		1,109
Total passenger revenue	$	2,540	$	10,995	$	11,328	$	31,663

Schedule of Contract Liabilities


	September 30, 2020		December 31, 2019
	(In millions)
Loyalty program liability	$	9,094	$	8,615
Air traffic liability	4,903		4,808
Total	$	13,997	$	13,423


Balance at December 31, 2019	$	8,615
Deferral of revenue	1,456
Recognition of revenue ⁽¹⁾	(977)
Balance at September 30, 2020 ⁽²⁾	$	9,094

(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.