American Airlines Group Inc. (American Airlines) today reported its first quarter 2022 financial results, including:
- First-quarter revenue of $8.9 billion, representing a recovery to 84% of comparable period revenue in 2019.
- First-quarter net loss of $1.6 billion, or ($2.52) per share. Excluding net special items1, first-quarter net loss of $1.5 billion, or ($2.32) per share.
- Company was profitable excluding net special items in March and expects to be profitable in the second quarter based on the current demand trends and fuel price forecast.
- Ended the first quarter with $15.5 billion of total available liquidity.
- Company continues to execute on its plan to pay down approximately $15 billion of debt by the end of 2025.
“Our priorities for this year are clear: Run a reliable operation and return to profitability,” said American’s CEO Robert Isom. “The outstanding progress we’ve made is only possible because of the amazing efforts of the American Airlines team and we’re optimistic about the continued recovery in the second quarter and beyond. The demand environment is very strong, and as a result, we expect to be profitable in the second quarter based on our current fuel price assumptions. The work we have accomplished over the past two years — simplifying our fleet, modernizing our facilities, fine-tuning our network, developing new partnerships, rolling out new tools for customers and team members, and hiring thousands of new team members — has us very well-positioned as the industry continues to rebound.”
Running a reliable operation
In the first quarter, American led major U.S. airlines in on-time departures and finished a close second in on-time arrivals while flying a schedule that was considerably larger than its closest competitor as measured by available seat miles. Additionally, American delivered its best-ever combined mainline and regional completion factor for the month of March.
The airline has taken steps to ensure it is prepared to deliver for customers during the busy summer travel season. The airline’s summer preparations began last year as demand returned and American has 12,000 more team members in place to support the operation this summer than the summer of 2021.
Returning to profitability
American produced revenues of $8.9 billion in the first quarter, including industry-leading passenger revenues of $7.8 billion, and cargo revenues of $364 million. The airline also produced record sales in March, and it was the first month since the onset of the pandemic that total revenue was above 2019 levels.
Demand for domestic business travel has steadily improved as offices have reopened and travel restrictions have been lifted. Revenue from small- to medium-size businesses and customers traveling for a mix of business and leisure remains very strong and is approaching a full recovery, and corporate bookings are the highest they have been since the start of the pandemic. Demand for international travel has also picked up considerably as travel restrictions have been lifted in certain parts of the world.
American’s continued progress on the path to profitability is driven by the strength of its global network and creating value for customers through consistency, simplicity and transparency. American is proud to offer customers the largest network of any U.S. airline this summer, with an average of more than 5,800 peak daily departures.
Liquidity and balance sheet
American ended the first quarter with $15.5 billion of total available liquidity. Deleveraging its balance sheet remains a top priority for American, and the company is committed to significant debt reduction in the years ahead. The company remains on track to reduce overall debt levels by $15 billion by the end of 2025. In the first quarter, the Company completed $317 million of open market repurchases of its $750 million unsecured senior notes maturing in June. To date, American has reduced its overall debt by $4.1 billion from peak levels in the second quarter of 2021. Additionally, the airline has cost-effective financing in place for all aircraft deliveries through the third quarter of 2022 and is beginning to evaluate financing options for the fourth quarter of 2022 and first half of 2023.
Guidance and investor update
American will continue to match its forward capacity with observed bookings trends. Based on current trends, the company expects its second-quarter capacity to be approximately 92% to 94% of what it was in the second quarter of 2019. American expects its second-quarter total revenue to be 6% to 8% higher than the second quarter of 2019.
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.
1The company recognized $160 million of pre-tax net special items in the first quarter of 2022, which principally included a non-cash impairment charge to write down the carrying value of the company’s retired Airbus A330 fleet to the estimated fair value due to current market conditions for certain used aircraft. The company retired its Airbus A330 fleet in 2020 as a result of the decline in demand for air travel due to the COVID-19 pandemic.