XML 55 R20.htm IDEA: XBRL DOCUMENT v3.22.1
Revenue Recognition
 3 Months Ended
Mar. 31, 2022
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 March 31,
 20222021
Passenger revenue:
Passenger travel$7,213 $2,893 
Loyalty revenue - travel (1)
605 286 
Total passenger revenue7,818 3,179 
Cargo364 315 
Other:
Loyalty revenue - marketing services (2)
596 457 
Other revenue121 57 
Total other revenue717 514 
Total operating revenues$8,899 $4,008 
(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.
(2)During the three months ended March 31, 2022 and 2021, cash payments from co-branded credit card and other partners were $1.4 billion and $1.0 billion, respectively.
The following is our total passenger revenue by geographic region (in millions):
 Three Months Ended March 31,
 20222021
Domestic$6,060 $2,655 
Latin America1,227 482 
Atlantic
466 22 
Pacific65 20 
Total passenger revenue$7,818 $3,179 
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.
March 31, 2022December 31, 2021
(In millions)
Loyalty program liability$9,304 $9,135 
Air traffic liability8,346 6,087 
Total$17,650 $15,222 
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, 2021$9,135 
Deferral of revenue791 
Recognition of revenue (1)
(622)
Balance at March 31, 2022 (2)
$9,304 
(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 24 months or if the AAdvantage member is the primary holder of a co-brand credit card. As of March 31, 2022, 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 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 the COVID-19 pandemic, 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 three months ended March 31, 2022, $2.6 billion of revenue was recognized in passenger revenue that was included in our air traffic liability at December 31, 2021. In response to the COVID-19 pandemic, we extended the contract duration for certain tickets to September 30, 2022, principally those tickets which were issued in 2020 and 2021. Additionally, tickets to certain international destinations have extended contract duration to December 31, 2022. We also have eliminated change fees for most domestic and international tickets providing more flexibility for customers to change travel plans. Given these changes and the 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 March 31,
 20222021
Passenger revenue:
Passenger travel$7,213 $2,893 
Loyalty revenue - travel (1)
605 286 
Total passenger revenue7,818 3,179 
Cargo364 315 
Other:
Loyalty revenue - marketing services (2)
596 457 
Other revenue118 57 
Total other revenue714 514 
Total operating revenues$8,896 $4,008 
(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.
(2)During the three months ended March 31, 2022 and 2021, cash payments from co-branded credit card and other partners were $1.4 billion and $1.0 billion, respectively.
The following is American's total passenger revenue by geographic region (in millions):
 Three Months Ended March 31,
 20222021
Domestic$6,060 $2,655 
Latin America1,227 482 
Atlantic
466 22 
Pacific65 20 
Total passenger revenue$7,818 $3,179 
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.
March 31, 2022December 31, 2021
(In millions)
Loyalty program liability$9,304 $9,135 
Air traffic liability8,346 6,087 
Total$17,650 $15,222 
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, 2021$9,135 
Deferral of revenue791 
Recognition of revenue (1)
(622)
Balance at March 31, 2022 (2)
$9,304 
(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 24 months or if the AAdvantage member is the primary holder of a co-brand credit card. As of March 31, 2022, 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 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 the COVID-19 pandemic, 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 three months ended March 31, 2022, $2.6 billion of revenue was recognized in passenger revenue that was included in American's air traffic liability at December 31, 2021. In response to the COVID-19 pandemic, American extended the contract duration for certain tickets to September 30, 2022, principally those tickets which were issued in 2020 and 2021. Additionally, tickets to certain international destinations have extended contract duration to December 31, 2022. American also has eliminated change fees for most domestic and international tickets providing more flexibility for customers to change travel plans. Given these changes and the 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 its estimates of refunds may be subject to variability and differ from historical experience.