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Revenue Recognition
 6 Months Ended
Jun. 30, 2023
Revenue Recognition [Abstract]  
Revenue Recognition Revenue Recognition
Passenger Revenue

Passenger revenue is the most significant category in the Company's reported operating revenues, as outlined below:
Three Months Ended June 30,Six Months Ended June 30,
(in thousands)2023202220232022
Scheduled service$319,338 $297,343 $631,065 $521,196 
Ancillary air-related charges309,735 283,551 593,637 513,016 
Loyalty redemptions13,674 11,710 27,321 22,354 
Total passenger revenue$642,747 $592,604 $1,252,023 $1,056,566 

Sales of passenger tickets not yet flown are recorded in air traffic liability. Passenger revenue is recognized when the underlying service is provided. As of June 30, 2023, the air traffic liability balance was $411.1 million, of which approximately $357.4 million was related to forward bookings, with the remaining $53.7 million related to credit vouchers for future travel.

The normal contract term of passenger tickets is 12 months and passenger revenue associated with future travel will principally be recognized within this time frame. Of the $379.5 million that was recorded in the air traffic liability balance as of December 31, 2022, approximately 85.3 percent was recognized into passenger revenue during the six months ended June 30, 2023.

In 2020, the Company announced that credit vouchers issued for canceled travel beginning in January 2020 would have an extended expiration date of two years from the original booking date. This policy continued for vouchers issued through June 30, 2021. Effective July 1, 2021, vouchers issued have an expiration date of one year from the original booking date.

The Company periodically evaluates the estimated amount of credit vouchers expected to expire unused and any adjustment is removed from air traffic liability and included in passenger revenue in the period in which the evaluation is complete. Estimates of passenger revenue to be recognized from air traffic liability for credit voucher breakage may be subject to variability and differ from historical experience due to the change in contract duration and uncertainty regarding demand for future air travel.

Loyalty redemptions

In relation to the travel component of the Allways® Allegiant 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 underlying service is provided. Similarly, in relation to the Allways Rewards program, points earned through the program are deferred based on the stand-alone selling price and recognized into passenger revenue when the points are redeemed and the underlying service is provided.

The following table presents the activity of the point liability for the periods indicated:
Six Months Ended June 30,
(in thousands)20232022
Points balance at January 1$56,541 $40,490 
Points awarded (deferral of revenue)35,625 35,821 
Points redeemed (recognition of revenue)(27,321)(22,354)
Points balance at June 30$64,845 $53,957 
The current portion of the loyalty program liability represents the estimate of revenue to be recognized in the next 12 months based on historical trends, with the remaining balance reflected in noncurrent liabilities expected to be recognized into revenue in periods thereafter.