"Military Background" can mean one of two things...
Normally in the airline industry it means a rated military pilots...the vast majority of ex-military fixed-wing pilots were commissioned officers, who had to complete college even before they joined the military. In this case the answer is "both"...airlines like ex-military pilots, who almost always have a degree anyway.
The exception is many US army helo pilots, who can enter that program without a four-year degree. Helicopter pilots normally cannot get an airline job, but some of them later transition to FW military flying and then on to airlines. But they can't get hired by airlines who require a degree unless they obtain one first.
If you are talking about a generic non-aviation military background, that is generally a positive thing because it shows you can function in an organization with rules, and will show up on time for work in a neat uniform...but it is not a substitute for a degree. All airlines prefer a four-year degree, and most of the better ones require it.