v3.26.1
Revenue Recognition
 6 Months Ended
Jun. 30, 2026
Revenue from Contract with Customer [Abstract]  
Revenue Recognition Revenue Recognition
As of June 30, 2026 and December 31, 2025, the Company’s air traffic liability balance was $512 million and $361 million, respectively, which includes amounts classified as other long-term liabilities on the Company’s condensed consolidated balance sheets. During the six months ended June 30, 2026, 88% of the air traffic liability as of December 31, 2025 was recognized as passenger revenue within the Company’s condensed consolidated
statements of operations. Of the air traffic liability balances as of June 30, 2026 and December 31, 2025, $83 million and $75 million, respectively, was related to unearned membership fees.
During the three months ended June 30, 2026, the Company received $175 million of prepaid loyalty program consideration. The upfront payment is included within frequent flyer liabilities, other current and long-term liabilities on the Company’s condensed consolidated balance sheets and will be recognized over the duration of the program in passenger and other revenues based on the nature of the separate performance obligations.
Operating revenues are comprised of passenger revenues, which includes fare and non-fare passenger revenues, and other revenues. Disaggregated operating revenues are as follows (in millions):
Three Months Ended June 30,Six Months Ended June 30,
2026202520262025
Passenger revenues:
Fare$613 $348 $1,062 $698 
Non-fare passenger revenues:
Service fees266 252 436 486 
Baggage234 186 449 391 
Seat selection88 81 171 150 
Other34 31 69 57 
Total non-fare passenger revenue622 550 1,125 1,084 
Total passenger revenues1,235 898 2,187 1,782 
Other revenues44 31 84 59 
Total operating revenues$1,279 $929 $2,271 $1,841 
The Company is managed as a single business unit that provides air transportation for passengers. Operating revenues by principal geographic region, as defined by the U.S. Department of Transportation (the “DOT”), are as follows (in millions):
Three Months Ended June 30,Six Months Ended June 30,
2026202520262025
Domestic$1,219 $874 $2,163 $1,742 
Latin America60 55 108 99 
Total operating revenues$1,279 $929 $2,271 $1,841 
The Company attributes operating revenues by geographic region based upon the origin and destination of each passenger flight segment. The Company’s tangible assets consist primarily of flight equipment, which are mobile across geographic markets. Accordingly, assets are not allocated to specific geographic regions.