American Airlines Group reports second quarter net income of $476 million

American Airlines Boeing 787-9 Dreamliner N832AA (msn 40638) ZRH (Rolf Wallner). Image: 958263.

American Airlines Group Inc. today reported its second-quarter 2022 financial results, including:

  • Second-quarter net income of $476 million, or $0.68 per diluted share. Excluding net special items1, second-quarter net income of $533 million, or $0.76 per diluted share.
  • Record second-quarter revenue of $13.4 billion, which represents a 12.2% increase over the same period in 2019, despite flying 8.5% less capacity.
  • Ended the second quarter with $15.6 billion of total available liquidity.
  • Company continues to execute on its plan to pay down approximately $15 billion of total debt2 by the end of 2025.

“We are very pleased to report a quarterly profit, excluding net special items, for the first time since the start of the pandemic, driven by the strong demand environment and the hard work of our team,” said American’s CEO Robert Isom. “The American Airlines team has stepped up to meet the surge in demand for air travel while running a reliable operation in very challenging conditions. We are encouraged by the trends we’re seeing across the business, and we remain well-positioned for the continued recovery.”

Running a reliable operation

In the second quarter, American flew a schedule that was more than 25% larger than its closest competitor as measured by total departures. American and its regional partners operated more than 500,000 flights in the quarter, an 8% increase over the second quarter of 2021, with an average load factor of 87%, which is 10 points higher than the second quarter of 2021. Despite a challenging operating environment in June, American’s on-time departure rate, on-time arrival rate and completion factor for the second quarter of 2022 were each improved versus the second quarter of 2019.

American is proud to offer customers the youngest fleet among U.S. network carriers and the largest network of any U.S. airline, with an expected average of more than 5,400 daily departures for the remainder of the summer.

Returning to profitability

American produced revenues of $13.4 billion in the second quarter, a 12.2% increase versus 2019 and a record for any quarter in company history. This record revenue was achieved while flying 8.5% less capacity than the same period in 2019, and there remains significant revenue potential going forward to the extent business and international travel improve further.

Domestic leisure travel remains very strong and surpassed 2019 levels in the second quarter and American also saw improvements in corporate and government revenue in the quarter. Demand for international travel also improved steadily during the second quarter and the company expects this to continue following the lifting of the COVID-19 testing requirement for inbound travel to the U.S.

Liquidity and balance sheet

American ended the second quarter with $15.6 billion of total available liquidity. Total debt reduction continues to be a top priority and the company remains on track to reduce overall debt levels by $15 billion by the end of 2025.

In the second quarter, the company made $1.0 billion in scheduled debt and finance lease payments, including paying off the remaining $433 million outstanding balance of its $750 million unsecured senior notes that matured in June. To date, American has reduced its overall debt by $5.2 billion from peak levels in the second quarter of 2021.

Guidance and investor update

American will continue to match its forward capacity with the resources required to support its operation. Based on current trends, the company expects its third-quarter total revenue to be 10% to 12% higher versus the third quarter of 2019 on 8% to 10% lower capacity. Based on these demand trends and the current fuel price forecast, the company expects to be profitable in the third quarter.

Notes

See the accompanying notes in the financial tables section of this press release for further explanation, including a reconciliation of all GAAP to non-GAAP financial information.

1 The company recognized $84 million of pre-tax net special items in the second quarter of 2022, which principally included mark-to-market net unrealized losses associated with certain equity investments.

2 Total debt includes debt, finance leases, operating lease liability and pension obligations.

Top Copyright Photo: American Airlines Boeing 787-9 Dreamliner N832AA (msn 40638) ZRH (Rolf Wallner). Image: 958263.

American Airlines aircraft photo gallery (Boeing):