AAI » Topics » Frequent Flyer Program

These excerpts taken from the AAI 10-K filed Feb 4, 2008.

Frequent Flyer Program

We accrue a liability for the estimated incremental cost of providing free travel for awards earned under our A+ Rewards Program based on awards we expect to be redeemed on us or the contractual rate of expected redemption on other carriers. Incremental cost includes the cost of fuel, catering, and miscellaneous direct costs, but does not include any costs for aircraft ownership, maintenance, labor or overhead allocation. We adjust this liability based on points earned and redeemed, changes in the estimated incremental costs, and changes in the A+ Rewards Program.

We also sell points in our A+ Rewards Program to third parties, such as credit card companies, internet service providers and car rental agencies. Revenue from the sale of points is deferred and recognized as passenger revenue when transportation is expected to be provided, based on estimates of its fair value. The remaining portion, which is the excess of the total sales proceeds over the estimated fair value of the transportation to be provided, is recognized in other revenue at the time of sale. A change to the time period over which the points are used (currently one to two years), the actual redemption activity, or our estimate of the amount or fair value of expected transportation could have a significant impact on our revenue in the year of change as well as future years.

Frequent Flyer Program

STYLE="margin-top:6px;margin-bottom:0px">We accrue a liability for the estimated incremental cost of providing free travel for awards earned under our A+ Rewards Program based on awards we expect to be redeemed
on us or the contractual rate of expected redemption on other carriers. Incremental cost includes the cost of fuel, catering, and miscellaneous direct costs, but does not include any costs for aircraft ownership, maintenance, labor or overhead
allocation. We adjust this liability based on points earned and redeemed, changes in the estimated incremental costs, and changes in the A+ Rewards Program.

SIZE="2">We also sell points in our A+ Rewards Program to third parties, such as credit card companies, internet service providers and car rental agencies. Revenue from the sale of points is deferred and recognized as passenger revenue when
transportation is expected to be provided, based on estimates of its fair value. The remaining portion, which is the excess of the total sales proceeds over the estimated fair value of the transportation to be provided, is recognized in other
revenue at the time of sale. A change to the time period over which the points are used (currently one to two years), the actual redemption activity, or our estimate of the amount or fair value of expected transportation could have a significant
impact on our revenue in the year of change as well as future years.

This excerpt taken from the AAI 10-K filed Aug 9, 2007.

Frequent Flyer Program

We accrue a liability for the estimated incremental cost of providing free travel for awards earned under our A+ Rewards Program based on awards we expect to be redeemed. We adjust this liability based on points earned and redeemed as well as for changes in the estimated incremental costs.

We also sell points in our A+ Rewards Program to third parties, such as credit card companies, internet service providers and car rental agencies. A portion of these point sales is deferred and recognized as passenger revenue when transportation is provided, based on estimates of fair value. The remaining portion, which is the excess of the total sales proceeds over the estimated fair value of the transportation, is recognized as other revenue at the time of sale.

This excerpt taken from the AAI 10-K filed Mar 1, 2007.

Frequent Flyer Program

We accrue a liability for the estimated incremental cost of providing free travel for awards earned under our A+ Rewards Program based on awards we expect to be redeemed. We adjust this liability based on points earned and redeemed as well as for changes in the estimated incremental costs.

We also sell points in our A+ Rewards Program to third parties, such as credit card companies, internet service providers and car rental agencies. A portion of these point sales is deferred and recognized as passenger revenue when transportation is provided, based on estimates of fair value. The remaining portion, which is the excess of the total sales proceeds over the estimated fair value of the transportation, is recognized as other revenue at the time of sale.

This excerpt taken from the AAI 10-K filed Aug 9, 2006.

Frequent Flyer Program

We accrue a liability for the estimated incremental cost of providing free travel for awards earned under our A+ Rewards Program based on awards we expect to be redeemed. We adjust this liability based on points earned and redeemed as well as for changes in the estimated incremental costs.

We also sell points in our A+ Rewards Program to third parties, such as credit card companies, internet service providers and car rental agencies. A portion of these point sales is deferred and recognized as passenger revenue when transportation is provided. The remaining portion, which is the excess of the total sales proceeds over the estimated fair value of the transportation to be provided, is recognized in other revenue at the time of sale.

This excerpt taken from the AAI 10-K filed Mar 9, 2006.

Frequent Flyer Program

We accrue a liability for the estimated incremental cost of providing free travel for awards earned under our A+ Rewards Program based on awards we expect to be redeemed. We adjust this liability based on points earned and redeemed as well as for changes in the estimated incremental costs.

Points under our A+ Rewards Program may also be earned using our branded credit cards. A pro-rated portion of revenue earned from this credit card is deferred, based on estimates of fair value of tickets to be redeemed and recognized as passenger revenue when transportation is likely to be provided. Amounts received in excess of the tickets’ fair values are recognized in income currently.

This excerpt taken from the AAI 10-K filed Mar 15, 2005.

Frequent Flyer Program

 

We accrue a liability for the estimated incremental cost of providing free travel for awards earned under our A+ Rewards Program based on awards we expect to be redeemed. We adjust this liability based on points earned and redeemed as well as for changes in the estimated incremental costs.

 

Points under our A+ Rewards Program may also be earned using our branded credit card. A pro-rated portion of revenue earned from this credit card is deferred and recognized as passenger revenue when transportation is likely to be provided, based on estimates of fair value of tickets to be redeemed. Amounts received in excess of the tickets’ fair values are recognized in income currently.

 

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