REVENUE FROM CONTRACTS WITH CUSTOMERS

9 Months Ended

Sep. 30, 2023

Revenue Recognition [Abstract]

REVENUE FROM CONTRACTS WITH CUSTOMERS

REVENUE

Ticket revenue is recorded as Passenger revenue, and represents the primary source of the Company's revenue. Also included in Passenger revenue is passenger ancillary revenue such as bag fees, on-board food and beverage, and certain revenue from the frequent flyer program. Mileage Plan other revenue includes brand and marketing revenue from the 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 10. The level of detail within the Company’s condensed consolidated 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 September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Passenger ticket revenue, net of taxes and fees	$	2,226	$	2,252	$	6,081	$	5,536
Passenger ancillary revenue	135		127		362		337
Mileage Plan passenger revenue	257		236		757		671
Total Passenger revenue	$	2,618	$	2,615	$	7,200	$	6,544

Mileage Plan Loyalty Program

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

	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Passenger revenue	$	257	$	236	$	757	$	671
Mileage Plan other revenue	159		146		483		433
Total Mileage Plan revenue	$	416	$	382	$	1,240	$	1,104

Cargo and Other Revenue

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

	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Cargo revenue	$	29	$	37	$	97	$	102
Other revenue	33		30		93		88
Total Cargo and other revenue	$	62	$	67	$	190	$	190

Air Traffic Liability and Deferred Revenue

Passenger ticket and ancillary services liabilities

The Company recognized Passenger revenue of $33 million and $65 million from the prior year-end air traffic liability balance for the three months ended September 30, 2023 and 2022, and $621 million and $587 million from the prior year-end air traffic liability balance for the nine months ended September 30, 2023 and 2022.

Mileage Plan assets and liabilities

The Company records a receivable for amounts due from the affinity card partner and from other partners as mileage credits are sold until the payments are collected. The Company had $91 million of such receivables as of September 30, 2023 and $83 million as of December 31, 2022.

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

	Nine Months Ended September 30,
	2023		2022
Total Deferred Revenue balance at January 1	$	2,497	$	2,358
Travel miles and companion certificate redemption - Passenger revenue	(712)		(632)
Miles redeemed on partner airlines - Other revenue	(86)		(45)
Increase in liability for mileage credits issued	900		800
Total Deferred Revenue balance at September 30	$	2,599	$	2,481