Revenue recognition
Passenger revenues:
Revenues from the air transportation of passengers are recognized at the earlier of when the service is provided or when the non-refundable ticket expires at the date of the scheduled travel.
Ticket sales for future flights are initially recognized as liabilities under the caption unearned transportation revenue and, once the transportation service is provided by the Company or when the non-refundable ticket expires at the date of the scheduled travel, the earned revenue is recognized as passenger ticket revenues and the unearned transportation revenue is reduced by the same amount. All of the Company’s tickets are non-refundable and are subject to change upon a payment of a fee. Additionally, the Company does not operate a frequent flier program.
Non-ticket revenues:
The most significant non-ticket revenues include revenues generated from: (i) air travel-related services (ii) revenues from non-air travel-related services and (iii) cargo services.
Air travel-related services include but are not limited to fees charged for excess baggage, bookings through the call center or third-party agencies, advanced seat selection, itinerary changes, charters and airport passenger facility charges for no-show tickets. They are recognized as revenue when the related service is provided by the Company.
Revenues from non-air travel-related services include commissions charged to third parties for the sale of hotel rooms, trip insurance and rental cars. They are recognized as revenue at the time the service is provided. Additionally, services not directly related to air transportation include VClub membership fees and the sale of advertising to third parties. VClub membership fees are recognized as revenues over the term of the membership. Revenue from the sale of advertising is recognized over the period in which the service is provided.
Revenues from cargo services are recognized when the cargo transportation is provided (upon delivery of the cargo to the destination).
The breakdown of the Company’s non-ticket revenues for the years ended December 31, 2017, 2016 and 2015 is as follows:
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For the years ended December 31, |
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2017 |
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2016 |
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2015 |
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Air travel-related services |
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Ps. |
6,293,747 |
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Ps. |
5,055,836 |
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Ps. |
3,418,654 |
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Non-air travel-related services |
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589,338 |
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494,864 |
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441,393 |
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Cargo |
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170,973 |
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171,621 |
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189,292 |
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Total non-ticket revenues |
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Ps. |
7,054,058 |
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Ps. |
5,722,321 |
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Ps. |
4,049,339 |
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