American Airlines has reported a record profit during the fourth quarter of 2024, recording a GAAP net income of $590 million, compared to $19 million during the same quarter a year prior. The Texas-based carrier also reported a full-year profit of $846 million, in comparison to $822 million reported for the previous financial year.
However, the airline's shares fell on the back of a wider loss per share outlook in the first quarter of 2025, compared to its competitors. The airline is anticipating an adjusted loss per share of around 20 to 40 cents for the quarter. In addition, adjusted earnings per share for the full year is expected to be between $1.70 and $2.70.
In the company's earnings call American’s CFO Devon May said: " In the first quarter, though, we are seeing unit costs up high-single-digits. It's a handful of things. We have less capacity in the first quarter than we did a year ago. That starts to change as we grow capacity in the last three quarters of the year.
The company expects first quarter revenue in 2025 to increase by 3–5%, and around 4.5% and 7.5% for the full year. In addition, capacity for the first quarter of the year is expected to be flat to down 2% compared to first quarter 2024. This is driven by lower capacity in the off-peak months of January and February, the company said.
May continued: “We have a ton of regional capacity coming online. As you know that's higher cost capacity than the mainline capacity. It's actually driving average gauge to be down 4% to 5% in the first quarter year-over-year. Stage length is down as well. And then of course, the labour agreements that were signed in the back half of last year weren't in our base for this year. So we see a lot of cost pressure in the first quarter.
“It eases throughout the year. We feel we're incredibly well-positioned as we get into 2026. And we know we run the business as efficiently as anybody.”
When asked during an earnings call, American’s CEO Robert Isom confirmed that American’s capacity had been impacted by OEM delays but noted that the airline was “fortunate” to rely on a fleet with strong utilisation. “We probably took delivery of 15 or 20 fewer airplanes than we expected. We still met our capacity guidance for the year,” Isom said.
For the fourth quarter 2024, American Airlines recorded revenues of $13.7bn, and full year revenues amounting to $54.2bn. For the fourth quarter, the airline’s adjusted EBITDA margin was 14.9% and adjusted operating margin was 8.4% — its best December quarter margin since 2017.
Despite profit gains, American had an operating income of $2.6bn in the year, a 13.9% decrease compared to 2023.
Pre-tax income totalled $795 million for the quarter, a significant jump from $32 million recorded in the final quarter of 2023. The airline said this positive financial performance was due to actions it took to “adjust capacity, combined with continued demand strength.”
TD Cowen analysts Tom Fitzgerald and Helane Becker commented: “American reported a robust set of fourth-quarter results, but investors will likely focus on the guidance given the high bar set by peers this earnings season. All revenue streams in the December quarter came in above our estimates.”
During the fourth quarter, Americans revenue grew by 4.6% on 2.5% higher capacity, compared to 2023, which was noted as being at the high end of the airline’s December guidance. Isom noted during an earnings call that passenger revenue strength over the quarter was “broad-based". Isom also stated that although passenger unit revenue on operations to Latin America was down compared to the same quarter of the previous year, unit revenues in this sector are expected to be “positive” during the first quarter of 2025.
The company expects its first XLR delivery later in 2025. The airline has an order for 50 of the aircraft and expects to receive 40 of them through 2029. In addition, the company intends to expand its long-haul capability fleet from around 125 aircraft to nearly 200 aircraft by 2029. The additional 75 aircraft includes the XLR deliveries.
Strengthening the airline’s balance sheet remained a priority, with American generating “record” free cash flow during the year, totalling $2.2 bn. This enabled further strengthening of its balance sheet. In the fourth quarter of 2024, American achieved its total debt reduction goal of $15bn from peak levels in mid-2021, one year ahead of schedule. The company stated that it “remains focused on debt reduction” as it works towards its stated credit ratings goal of BB.
American ended the year with $10.3bn of total available liquidity, comprising cash and short-term investments, plus undrawn capacity under revolving credit and other facilities.
During 2024, American Airlines took delivery of 20 new aircraft and 10 used aircraft, resulting in $1.9bn of aircraft capital expenditure. Total capital expenditure for 2024 amounted to $2.7bn. The airline expects to take delivery of 40–50 new aircraft in 2025 based on its current expectations for deliveries.
Its 2025 aircraft capital expenditure, which also includes used aircraft purchases, spare engines, and net PDPs, is expected to range between $2-$2.5bn.
Looking ahead, American is poised to grow its long-haul fleet from approximately 125 aircraft to nearly 200 aircraft by 2029.
Elsewhere during the 12-month period American ratified a contract extension with its mechanics and fleet service team members in October, providing the airline with labour cost certainty through to 2027. The airline also entered a ten-year agreement with Citi to become the issuer of its Advantage co-branded credit card portfolio in the US, which the airline expects will drive “substantial incremental value” over the lifetime of the agreement.