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Revenue from contract with customers

12 Months Ended

Dec. 31, 2020

7.	Revenue from contract with customers

7.1	Revenue disaggregation

Operating revenues are comprised of passenger revenues, cargo and mail, and other operating revenues. The following table shows disaggregated operating revenues for the years ended as December 31, 2020, 2019 and 2018.


	2020		2019		2018
Passenger revenue
Passenger revenue	$	752,050	$	2,581,179	$	2,567,316
Miles redeemed		8,544		31,426		20,073

		760,594		2,612,605		2,587,389

Cargo and mail revenue		21,002		62,460		62,483

Other operating revenue
Frequent flyer program—marketing services		15,452		22,170		16,291
Other operating revenue		3,955		10,173		11,464

		19,407		32,343		27,755

	$	801,003	$	2,707,408	$	2,677,627

7.2	Contract balances

The significant contract liabilities are comprised of ticket sales for transportation that has not yet been provided, recorded as “Air traffic liability” and outstanding loyalty program miles that may be redeemed for future travel, recorded as “Frequent flyer deferred revenue”.

The table below presents the changes in air traffic liability:


	2020			2019
Balance at beginning of year	$	497,374		$	471,676
Sales		887,004			2,878,814
Revenue recognition		(700,406	)		(2,355,626	)
Tax recognition		(113,473	)		(404,732	)
Reimbursements		(82,910	)		(45,396	)
Interline tickets		(15,056	)		(35,272	)
Other		(1,838	)		(12,090	)

Balance at end of year	$	470,695		$	497,374

The contract duration of passenger tickets is one year. Accordingly, any revenue associated with tickets sold for future travel dates will be recognized within twelve months. In response to

Covid-19,

the Company is extending the ticket expiration date up to December 2021, only for tickets purchased on or before December 31, 2020 and with original travel dates ending on or before December 31, 2020.

The table below presents the activity of the current and

non-current

frequent flyer liability:


	2020			2019
Balance at beginning of year	$	80,326		$	67,814
Deferred of revenue		19,431			43,938
Recognition of revenue		(8,544	)		(31,426	)

Balance at end of year	$	91,213		$	80,326


Current		16,041			35,120
Non-current		75,172			45,206

	$	91,213		$	80,326

Contract assets are reflected as account receivable. See note 10.

7.3	Segment reporting

The Company’s business activities are conducted as one operating segment – Air transportation (that includes cargo and mail revenue), the reporting results of which are regularly reviewed by management for purposes of analyzing its performance and making decisions about resource allocations.

Information concerning operating revenue by geographic area for the period ended December 31 is as follows:


	2020		2019		2018
North America	$	233,039	$	857,002	$	826,529
South America		281,008		975,530		1,076,507
Central America		246,727		740,358		648,747
Caribbean		20,822		102,175		98,089

	$	781,596	$	2,675,065	$	2,649,872

The Company attributes revenue to the geographic areas based on point of sales. Our tangible assets and capital expenditures consist primarily of flight and related ground support equipment, which is mobile across geographic markets and, therefore, has not been allocated.