REVENUE FROM CONTRACTS WITH CUSTOMERS

3 Months Ended

Mar. 31, 2020

Ticket revenue is recorded as Passenger revenue, and represents the primary source of the Company's revenue. Also included in Passenger revenue are passenger ancillary revenues, such as bag fees, on-board food and beverage, ticket change fees, and certain revenue from the frequent flyer program. Mileage Plan other revenue includes brand and marketing revenue from the Company's co-branded credit card and other partners and certain interline frequent flyer revenue, net of commissions. Cargo and other revenue includes freight and mail revenue, and to a lesser extent, other ancillary revenue products such as lounge membership and certain commissions.

The Company disaggregates revenue by segment in Note 9. The details within the Company’s statements of operations, segment disclosures, and in this footnote depict the nature, amount, timing and uncertainty of revenue and how cash flows are affected by economic and other factors.

Passenger Ticket and Ancillary Services Revenue

Passenger revenue recognized in the condensed consolidated statements of operations (in millions):


	Three Months Ended March 31,
	2020		2019
Passenger ticket revenue, including ticket breakage and net of taxes and fees	$	1,213	$	1,439
Passenger ancillary revenue	116		124
Mileage Plan passenger revenue	152		153
Total Passenger revenue	$	1,481	$	1,716

Mileage Plan™ Loyalty Program

Mileage Plan™ revenue included in the condensed consolidated statements of operations (in millions):


	Three Months Ended March 31,
	2020		2019
Passenger revenue	$	152	$	153
Mileage Plan other revenue	109		110
Total Mileage Plan revenue	$	261	$	263

Cargo and Other

Cargo and other revenue included in the condensed consolidated statements of operations (in millions):


	Three Months Ended March 31,
	2020		2019
Cargo revenue	$	24	$	30
Other revenue	22		20
Total Cargo and other revenue	$	46	$	50

Air Traffic Liability and Deferred Revenue

Passenger ticket and ancillary services liabilities

The Company recognized Passenger revenue of $489 million and $474 million from the prior year-end air traffic liability balance for the three months ended March 31, 2020 and 2019.

Given the ongoing reduction in demand for air travel stemming from the COVID-19 pandemic, the Company has observed unprecedented declines in advance bookings and associated cash receipts. The Company also saw significant cancellations beginning in March 2020, which has led to cash refunds or the issuance of credits for future travel. At March 31, 2020, such credits, which are included in the air traffic liability balance totaled $402 million, net of breakage. In April 2020, the Company announced updated expiration terms for these credits, extending to July 2021. At this time, the Company is unable to estimate how and when the air traffic liability will be recognized in earnings given ongoing uncertainty around the return in demand for air travel.

Mileage Plan^TM assets and liabilities

The Company records a receivable for amounts due from the bank partner and from other partners as mileage credits are sold until the payments are collected. Consistent with the significant cancellation activity outlined above, the Company saw a substantial number of redeposits in March. Given the uncertainty around the return in demand for air travel, the Company is unable to determine how and when mileage credits will be recognized in earnings. The Company had $88 million of such receivables as of March 31, 2020 and $105 million as of December 31, 2019.

The table below presents a roll forward of the total frequent flyer liability (in millions):


	Three Months Ended March 31,
	2020		2019
Total Deferred Revenue balance at January 1	$	1,990	$	1,874
Travel miles and companion certificate redemption - Passenger revenue	(152)		(153)
Miles redeemed on partner airlines - Other revenue	(22)		(28)
Increase in liability for mileage credits issued	207		222
Total Deferred Revenue balance at March 31	$	2,023	$	1,915