v3.26.3
Revenue Recognition
 9 Months Ended
Sep. 30, 2026
Revenue from Contract with Customer [Abstract]  
Revenue Recognition Revenue Recognition
As of September 30, 2026 and December 31, 2025, the Company’s air traffic liability balance was $500 million and $361 million, respectively, which includes amounts classified as other long-term liabilities on the Company’s condensed consolidated balance sheets. During the nine months ended September 30, 2026, 94% 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 September 30, 2026 and December 31, 2025, $81 million and $75 million, respectively, was related to unearned membership fees.
During the nine months ended September 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 is being 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 September 30,Nine Months Ended September 30,
2026202520262025
Passenger revenues:
Fare$665 $330 $1,727 $1,028 
Non-fare passenger revenues:
Service fees281 234 717 720 
Baggage239 178 688 569 
Seat selection91 78 262 228 
Other51 34 120 91 
Total non-fare passenger revenue662 524 1,787 1,608 
Total passenger revenues1,327 854 3,514 2,636 
Other revenues28 32 112 91 
Total operating revenues$1,355 $886 $3,626 $2,727 
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 September 30,Nine Months Ended September 30,
2026202520262025
Domestic$1,300 $841 $3,463 $2,583 
Latin America55 45 163 144 
Total operating revenues$1,355 $886 $3,626 $2,727 
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.