American reports third quarter net income of $483 million

American Airlines issued this financial report for the third quarter:

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

  • Third-quarter net income of $483 million, or $0.69 per diluted share. Excluding net special items1, third-quarter net income of $478 million, or $0.69 per diluted share.
  • Record quarterly revenue of $13.5 billion, which represents a 13% increase over the same period in 2019, despite flying 9.6% less capacity.
  • Ended the third quarter with $14.3 billion of total available liquidity, more than double the total available liquidity at year-end 2019.
  • Company continues to execute on its plan to pay down approximately $15 billion of total debt2 by the end of 2025.

“The American Airlines team continues to deliver on our goals of running a reliable operation and returning to profitability,” said American’s CEO Robert Isom. “Demand remains strong and it’s clear that customers in the U.S. and other parts of the world continue to value air travel and the ability to reconnect post-pandemic. American has the youngest, most fuel-efficient fleet among U.S. network carriers and we are well-positioned for the future because of the incredible efforts of our team.”

Running a reliable operation

In the third 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, with an average load factor of 85.3%, which is 6.6 points higher than the third quarter of 2021. Despite a challenging operating environment — with hurricanes in Florida and the Caribbean and flooding in Dallas-Fort Worth — American restored its operating reliability to pre-pandemic levels in the third quarter. American has delivered a record on-time arrival rate and completion factor so far in October and expects to carry this momentum through the upcoming holiday season and beyond.

American is proud to offer customers the largest network of any U.S. airline, with an expected average of more than 5,100 daily departures for the remainder of the year.

Returning to profitability

American produced revenues of $13.5 billion in the third quarter, a 13% increase versus 2019 and a record for any quarter in company history. This record revenue was achieved while flying 9.6% less capacity than the same period in 2019. The company produced an operating margin excluding net special items of 7.2% in the quarter.

Demand for domestic and short-haul international travel remains very strong and the airline expects further improvement in demand for long-haul international travel as travel restrictions and testing requirements are lifted around the globe.

Liquidity and balance sheet

American ended the third quarter with $14.3 billion of total available liquidity, comprising of cash and short-term investments plus undrawn capacity under revolving and other credit facilities. Total debt reduction continues to be a top priority and the company remains on track to reduce total debt levels by $15 billion by the end of 2025.

In the third quarter, the company made approximately $380 million in scheduled debt and finance lease payments. As of Sept. 30, 2022, American had reduced its total debt by $5.6 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 fourth-quarter total revenue to be 11% to 13% higher versus the fourth quarter of 2019 on 5% to 7% lower capacity. With these demand trends and the current fuel price forecast and excluding the impact of special items, the company expects to produce an operating margin3 of between 5.5% and 7.5% in the fourth quarter. Based on today’s guidance, American expects its fourth-quarter 2022 earnings per diluted share excluding net special items3 to be between $0.50 and $0.70.

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 $18 million of pre-tax net special credits in the third quarter of 2022, which principally included $57 million of nonoperating special credits for mark-to-market net unrealized gains associated with certain equity investments, offset in part by $39 million of operating net special charges.

2 All references to total debt include debt, finance leases, operating lease liability and pension obligations.

3 Operating margin and earnings per diluted share guidance excludes the impact of net special items. The company is unable to reconcile certain forward-looking projections to GAAP as the nature or amount of net special items cannot be determined at this time.

Top Copyright Photo: American Airlines Boeing 737-823 WL N962NN (msn 33331) CLT (Jay Selman). Image: 404198.

American Airlines aircraft photo gallery (Boeing):