Transactions with Related Parties (American Airlines, Inc. [Member])

3 Months Ended

Mar. 31, 2015

American Airlines, Inc. [Member]

Transactions with Related Parties

11. Transactions with Related Parties

The following represents the net payables to (receivables from) related parties (in millions):

	March 31, 2015			December 31, 2014
American Airlines Group Parent	$	284		$	40
US Airways Group, Inc.		(281	)		320
Envoy Aviation Group (1) and other subsidiaries		2,165			2,203
Total	$	2,168		$	2,563

⁽¹⁾  The net payable to AAG’s wholly-owned regional airline operating under the brand name of American Eagle consists principally of amounts due under regional capacity purchase agreements.

Frequent Flyer Program

In the first quarter of 2015, the US Airways Dividend Miles frequent flyer program was merged into American’s AAdvantage program. Accordingly, as of March 31, 2015, the related frequent flyer deferred revenue and incremental cost liability for the Dividend Miles program has been transferred to American with a corresponding intercompany receivable from US Airways recorded by American. No gain or loss was incurred from the transaction as the liabilities were transferred at their respective net book values. American’s intercompany receivable associated with the transfer of this obligation will be settled by US Airways through future redemptions by AAdvantage members on US Airways operated flights.

Allocated Expenses

Until American and US Airways are merged into one legal entity, revenue and expenses will continue to be recorded by each entity based on either specific identification of the related transaction where applicable or appropriate allocations based on metrics that are systematic and rational. The operating expenses of American reflect allocated expenses for certain services shared with US Airways. These allocated expenses include certain selling expenses, certain airport operating expenses at co-located airports, information technology expenses and corporate management and support functions. Shared selling expenses have been allocated primarily based on the passenger revenue of each respective carrier. Shared airport operating expenses have been allocated based on American’s and US Airways’ respective departures at those airports. Shared other expenses have been allocated primarily based on American’s and US Airways’ respective available seat miles (ASMs). Total net expense allocated from American to US Airways was $172 million for the quarter ended March 31, 2015. There were no material allocations recorded during the first quarter of 2014.