American Airlines Group has reported revenue of $13.6bn in its third-quarter 2024 financial results – a 1.2% rise over the prior-year quarter.
The US carrier reported a net loss of $149 million, or ($0.23) per share, excluding special items net income was $205 million, or $0.30 per diluted share.
The special items principally included one-time charges resulting from the ratification of a new collective bargaining agreement with the company’s mainline flight attendants.
American’s unit revenue was down 2% year over year, on 3.2% more capacity, while its adjusted EBITDA margin was 11.1%, with an adjusted operating margin of 4.7%.
American’s passenger revenue for the quarter was $12.5bn – up slightly by 0.8% over the same period in 2023, with $202 million from cargo revenue – a 5% gain – and $922 million generated by ancillary sales, a rise of 6%.
Long haul passenger revenue was positive with growth stimulated by strength in the transatlantic and South American services, American’s CEO Robert Isom, shared on an earnings call, noting also that business, premium and loyalty revenue remained strong. Premium revenue rose 8% year on year on a 3% capacity increase. Isom said: “Paid load factor in our premium cabins remains historically high and was up more than four points year over year with strength in both domestic and international.”
Loyalty remains a significant source of revenue. Isom added: “Loyalty revenues were up approximately 5% year over year with Advantage members responsible for 72% of premium cabin revenue. Spending on our co-branded credit cards was up approximately 7% year over year in the third quarter, highlighting the value of America's loyalty program today.”
Unit costs, excluding fuel and special items, rose by 2.8%, which is at the higher end of guidance due to disruption from the CrowdStrike outage and Hurricanes Debby and Helene. Fuel expenses declined 10.4% for the quarter compared to last year at $2.874bn, although labour costs jumped 3.1% to $4.098bn.
Despite the disruption from the IT outage and extreme weather events, American said that it had recovered quickly to deliver strong operational results in the third quarter, including the highest completion factor among US network carriers and delivering the airline’s highest third-quarter load factor since the merger of American and US Airways in 2013.
American ended the third quarter with $11.8 billion of total available liquidity, and noted that it was “on track” to reduce total debt from peak levels by $15 billion by year-end 2025. American reduced its debt burden by approximately $360 million in the third quarter.
American’s aircraft capex costs, including aircraft purchases, engines and pre-delivery payments, is expected to reach $1.7bn by the end of the year. Total capex for the full year is expected to reach $2.6bn - $300 million below guidance provided in July. Next year, American expects aircraft capex to be less than $3bn. American booked a $598 million gain in the third quarter from proceeds from sale-leaseback transactions and other equipment sales. American CFO Devon May confirmed on the earnings call that the airline now expects to take delivery of 17 new aircraft – seven of which are planned to be delivered before the end of the year. Between 2026 and 2030, May said that the airline expected to spend “between $3bn and $3.5bn per year” on aircraft capex.
American noted that capacity for next two years may be impacted by the reconfiguration programme for its 777-300 fleet, which will begin from 2025. The reconfigurations as well as the introduction of 737-9 and A321XLRs fitted with flagship suites, will increase American’s premium offering to match demand.
Based on present demand trends, the current fuel price forecast and excluding the impact of special items, American said that it expects its fourth-quarter 2024 adjusted earnings per diluted share to be between $0.25 and $0.50. American has raised its full-year outlook, with adjusted earnings per diluted share expected to be between $1.35 and $1.60.
“The American Airlines team continues to focus on running a reliable operation and managing costs across the airline,” said Isom. “We have taken aggressive action to reset our sales and distribution strategy and reengage the business travel community, which we’re confident will improve our revenue performance over time.”
In an earnings call presentation, American confirmed that its reengineering of the business was “on track” to deliver $400 million in cost savings and more than $300 million in working capital improvements this year.