XML 47 R12.htm IDEA: XBRL DOCUMENT v3.20.4
Revenue Recognition
 12 Months Ended
Dec. 31, 2020
Revenue from Contract with Customer [Abstract]  
Revenue Recognition Revenue Recognition
Passenger revenue

Passenger revenue is the most significant category in our reported operating revenues, as outlined below:

Year Ended December 31,
(in thousands)202020192018
Scheduled service$435,668 $897,631 $898,653 
Ancillary air-related charges453,545 770,206 621,939 
Co-brand redemptions12,974 15,118 13,109 
Total passenger revenue$902,187 $1,682,955 $1,533,701 

Sales of passenger tickets not yet flown are recorded in air traffic liability. Passenger revenue is recognized when transportation is provided or when ticket voucher breakage occurs, to the extent different from estimated breakage. As of December 31, 2020, approximately 27.9 percent of the air traffic liability balance was related to forward bookings, with the remaining 72.1 percent related to credit vouchers for future travel.

The normal contract term of passenger tickets is 12 months and revenue associated with future travel will principally be recognized within this time frame. $201.0 million of the $250.0 million that was recorded in the air traffic liability balance at December 31, 2019 was recognized into passenger revenue during the 12 months ended December 31, 2020.

In April 2020, the Company announced that credits issued for canceled travel in April through the end of the COVID-19 pandemic will have an extended expiration date of two years from the original booking date. The Company later announced that this extension would also apply to credits issued for cancelled travel in January through March 2020. This change has been considered in estimating the future breakage rate, which represents the value of credit vouchers that are not expected to be redeemed prior to their contractual expiration date.

Co-brand redemptions

In relation to the travel component of the co-branded credit card contract with Bank of America, the Company has a performance obligation to provide cardholders with points to be used for future travel award redemptions. Therefore, consideration received from Bank of America related to the travel component is deferred based on its relative selling price and is recognized into passenger revenue when the points are redeemed and the transportation is provided.

The following table presents the activity of the co-brand point liability as of the dates indicated:
Year Ended December 31,
(in thousands)20202019
Balance at January 1$15,613 $10,708 
Points awarded19,202 20,023 
Points redeemed(12,974)(15,118)
Balance at December 31$21,841 $15,613 

As of December 31, 2020 and 2019, $10.9 million and $11.6 million, respectively, of the current points liability is reflected in accrued liabilities and represents the current estimate of revenue to be recognized in the next 12 months based on historical trends, with the remaining balance reflected in other noncurrent liabilities and expected to be recognized into revenue in periods thereafter.