American Airlines closed 2025 with record revenues but a sharply muted profit profile after a prolonged government shutdown weighed heavily on domestic demand in November and December, masking what management described as improving underlying revenue trends and an accelerating premium-led recovery entering 2026.
The carrier reported record fourth-quarter revenue of $14.0 billion and record full-year revenue of $54.6 billion, but said the shutdown reduced fourth-quarter revenue by approximately $325 million, with the bulk of the impact concentrated in the domestic entity. American posted GAAP net income of $99 million in Q4 and $111 million for the full year, while adjusted net income (excluding special items) was $106 million in Q4 and $237 million for 2025.
Despite the disruption, American said year-over-year passenger unit revenue performance improved sequentially versus the third quarter across each international entity. Domestic passenger unit revenue declined 2.5% year-over-year in the quarter, though the airline stressed that excluding the shutdown impact, domestic passenger unit revenue would have been positive.
American repeatedly pointed to premium demand as its clearest strength. The airline said premium unit revenue outperformed main cabin in the fourth quarter, with CFO Devon May adding that premium unit revenue outpaced main cabin by seven points year-over-year. Corporate demand was also highlighted, with May stating managed corporate revenue rose 12% year-over-year.
After “softer-than-expected” bookings late in the fourth quarter, American said bookings strengthened materially in January. Management described systemwide revenue intakes for the first three weeks of 2026 as up double digits year-over-year, driven by premium cabins and corporate channels. Based on these trends, the company expects solidly positive first-quarter unit revenue for the domestic entity and systemwide, with Q1 total revenue guided to grow 7%-10% year-over-year.
CEO Robert Isom framed the moment as the start of a multi-year commercial reset finally showing through, as American enters its centennial year aiming to position itself “as a premium global airline.”
American’s fleet narrative is increasingly anchored around premium seating growth – driven both by new deliveries and major cabin retrofit programmes.
For 2026, the airline expects to take delivery of 55 new aircraft, with total capital expenditures of $4.0–$4.5 billion. Within that plan, management called out 10 additional A321XLR deliveries and the “full utilisation” of 11 premium Boeing 787-9s. These aircraft – alongside widebody retrofit work – are positioned as the core engine of premium growth through the remainder of the decade.
On the retrofit side, American said its Boeing 777-300ER retrofit has started, with customers expected to see a 20% increase in premium seats as the modified aircraft enter service “this year and next.” Further retrofits are planned for the 777-200ER, and narrowbody programmes covering the A319 and A320 fleets.
Management reiterated that, combining the order book and retrofit activity, American expects premium seating growth to run at nearly twice the rate of main cabin seats over coming years. Isom also said the airline expects lie-flat seats to increase by more than 50% by 2030, and noted that premium offerings represent about half of total revenue, underscoring the carrier’s deliberate pivot toward higher-yield segments.
The airline also restated its long-term fleet objective to grow the international-capable fleet from 139 aircraft today to 200 by the end of the decade, supporting additional long-haul and premium deployment.
American positioned product investment as both revenue strategy and competitive differentiation.
The company highlighted the Flagship Suite product introduced in June 2025, stating it has delivered leading customer satisfaction since entering service and will expand across the international-capable fleet, including new 787-9 and A321XLR aircraft as well as retrofitted 777 aircraft.
On the ground, American pointed to its “most extensive” premium lounge network and announced further investment in Flagship and Admirals Club lounges, including previously opened and planned new locations. Inflight, American began rolling out complimentary high-speed satellite Wi-Fi for AAdvantage members starting this month, sponsored by AT&T, across narrow-body aircraft, dual-class regional jets and new premium 787-9s.
While American described January demand as strong, guidance is tempered by a major operational disruption. The company said Winter Storm Fern has resulted in more than 9,000 flight cancellations to date, calling it the largest weather-related operational disruption in its history. For Q1, American incorporated a 1.5-point reduction to capacity, an estimated $150–$200 million negative revenue impact, and an approximately 1.5-point increase in CASM-ex.
In parallel, American outlined operational initiatives intended to support reliability and revenue, particularly at its largest hub. The carrier is moving Dallas/Fort Worth (DFW) to a 13-bank structure, aimed at improving connection opportunities, reducing delays and improving recovery during irregular operations. Management said the change is expected to support more on-time performance, fewer delays, and a smoother customer journey.
American’s financing message was centred on deleveraging and liquidity.
The company reported it reduced total debt by $2.1 billion in 2025, ending the year with $36.5 billion of total debt and $30.7 billion of net debt. Total available liquidity stood at $9.2 billion, comprising cash, short-term investments and undrawn revolving credit and other facilities.
At the midpoint of guidance, American expects to reach less than $35 billion in total debt in 2026, hitting its stated debt target a year earlier than previously planned. The airline guided to more than $2 billion of free cash flow in 2026, framing this as both a funding source for product investments and the driver of continued balance sheet improvement.
Loyalty remains a pillar of American’s revenue strategy and financing outlook.
American said AAdvantage enrolments rose 7% year-over-year, marking the highest annual enrolment level in its history, while co-branded credit card spending increased 8% year-over-year in 2025. During Q4, the airline transitioned inflight and airport credit card acquisition channels to Citi as part of an expanded partnership that became exclusive at the start of 2026.
Management described the Citi relationship as a long-term value lever, with 2026 focus shifting to card conversions and continued growth in acquisition and spend. The airline also linked AAdvantage membership to revenue quality, citing the programme’s role in premium and flown revenue performance.
For 2026, American guided to adjusted EPS of $1.70–$2.70, while Q1 is expected to show an adjusted loss per diluted share of ($0.10) to ($0.50), reflecting Fern-related impacts and seasonal weakness. The carrier guided Q1 ASMs up 3%–5%, and indicated that capacity growth through summer is expected to be similar, with flexibility thereafter based on competitive and demand conditions—implying a mid-single-digit growth profile for the full year.
While the company characterised its full-year guide as appropriately cautious given weather uncertainty and macro assumptions, management signalled upside if January booking strength persists.