Revenue Recognition (Tables)

3 Months Ended

Mar. 31, 2022

Entity Information [Line Items]

Disaggregation of Revenue

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

	Three Months Ended March 31,
	2022		2021
Passenger revenue:
Passenger travel	$	7,213	$	2,893
Loyalty revenue - travel (1)	605		286
Total passenger revenue	7,818		3,179
Cargo	364		315
Other:
Loyalty revenue - marketing services (2)	596		457
Other revenue	121		57
Total other revenue	717		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,
	2022		2021
Domestic	$	6,060	$	2,655
Latin America	1,227		482
Atlantic	466		22
Pacific	65		20
Total passenger revenue	$	7,818	$	3,179

Schedule of Contract Liabilities

	March 31, 2022		December 31, 2021
	(In millions)
Loyalty program liability	$	9,304	$	9,135
Air traffic liability	8,346		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 revenue	791
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.

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 March 31,
	2022		2021
Passenger revenue:
Passenger travel	$	7,213	$	2,893
Loyalty revenue - travel (1)	605		286
Total passenger revenue	7,818		3,179
Cargo	364		315
Other:
Loyalty revenue - marketing services (2)	596		457
Other revenue	118		57
Total other revenue	714		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,
	2022		2021
Domestic	$	6,060	$	2,655
Latin America	1,227		482
Atlantic	466		22
Pacific	65		20
Total passenger revenue	$	7,818	$	3,179

Schedule of Contract Liabilities

	March 31, 2022		December 31, 2021
	(In millions)
Loyalty program liability	$	9,304	$	9,135
Air traffic liability	8,346		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 revenue	791
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.