American Airlines Group Inc

Previous wording

(1)Not meaningful or greater than 100% change.

Current wording

(2)Not meaningful or greater than 100% change.

Previous wording

In the second quarter of 2024, we reported total operating revenues of $14.3 billion, an increase of $279 million, or 2.0%, as compared to the second quarter of 2023. Passenger revenue was $13.2 billion, an increase of $224 million, or 1.7%, as compared to the second quarter of 2023. In the second quarter of 2024, we experienced a 6.3% decrease in passenger yield on an 8.0% capacity growth year-over-year, as measured by available seat miles (ASMs). Load factor was 86.6% for the second quarter of 2024, compared to 86.2% for the second quarter of 2023. This revenue performance reflected weak industry pricing conditions in light of significantly increased industry capacity, as well as softness in customer bookings due in part to certain commercial initiatives that we deployed, many of which were reversed late in the second quarter of 2024.

Current wording

In the third quarter of 2024, we reported total operating revenues of $13.6 billion, an increase of $165 million, or 1.2%, as compared to the third quarter of 2023. Passenger revenue was $12.5 billion and remained relatively flat as compared to the third quarter of 2023. In the third quarter of 2024, we experienced a 5.2% decrease in passenger yield on a 3.2% capacity growth year-over-year, as measured by available seat miles (ASMs). Load factor was 86.6% for the third quarter of 2024, compared to 84.0% for the third quarter of 2023. Our passenger revenue performance improved through the third quarter of 2024 as industry domestic capacity growth decelerated from July 2024. While we continue to see the impact of certain commercial initiatives we had previously deployed, we have made progress to regain our share of revenue lost as we continue to reset these initiatives.

Previous wording

Our total revenue per available seat mile (TRASM) was 19.05 cents in the second quarter of 2024, a 5.6% decrease as compared to 20.18 cents in the second quarter of 2023. This decrease was driven by a 6.3% decrease in passenger yield primarily due to a softer domestic revenue environment.

Current wording

Our total revenue per available seat mile (TRASM) was 18.04 cents in the third quarter of 2024, a 2.0% decrease as compared to 18.40 cents in the third quarter of 2023.

Previous wording

Aircraft fuel expense was $3.1 billion in the second quarter of 2024, which was $338 million, or 12.4%, higher as compared to the second quarter of 2023. This was primarily due to an 8.8% increase in gallons of fuel consumed due to increased capacity and a 3.3% increase in the average price per gallon of aircraft fuel including related taxes to $2.70 in the second quarter of 2024 from $2.62 in the second quarter of 2023.

Current wording

Aircraft fuel and related taxes was $2.9 billion in the third quarter of 2024, which was $335 million, or 10.4%, lower as compared to the third quarter of 2023. This was primarily due to a 14.0% decrease in the average price per gallon of aircraft fuel including related taxes to $2.50 in the third quarter of 2024 from $2.91 in the third quarter of 2023, offset in part by a 4.1% increase in gallons of fuel consumed due to increased capacity.

Previous wording

As of June 30, 2024, we did not have any fuel hedging contracts outstanding to hedge our fuel consumption. Our current policy is not to enter into transactions to hedge our fuel consumption, although we review this policy from time to time based on market conditions and other factors. As such, and assuming we do not enter into any future transactions to hedge our fuel consumption, we will continue to be fully exposed to fluctuations in fuel prices.

Current wording

As of September 30, 2024, we did not have any fuel hedging contracts outstanding to hedge our fuel consumption. Our current policy is not to enter into transactions to hedge our fuel consumption, although we review this policy from time to time based on market conditions and other factors. As such, and assuming we do not enter into any future transactions to hedge our fuel consumption, we will continue to be fully exposed to fluctuations in fuel prices. See Part II, Item 1A. Risk Factors –“Our business is very dependent on the price and availability of aircraft fuel. Continued periods of high volatility in fuel costs, increased fuel prices or significant disruptions in the supply of aircraft fuel could have a significant negative impact on consumer demand, our operating results and liquidity.”

Previous wording

Our 2024 second quarter total operating cost per available seat mile (CASM) was 17.21 cents, an increase of 0.8% from 17.07 cents in the second quarter of 2023.

Current wording

Our 2024 third quarter total operating cost per available seat mile (CASM) was 17.92 cents, a decrease of 4.2% from 18.70 cents in the third quarter of 2023.

Previous wording

As of June 30, 2024, we had $11.7 billion in total available liquidity, consisting of $8.4 billion in unrestricted cash and short-term investments, and $3.3 billion in total undrawn capacity under revolving credit and other facilities.

Current wording

As of September 30, 2024, we had $11.8 billion in total available liquidity, consisting of $8.5 billion in unrestricted cash and short-term investments, and $3.3 billion in total undrawn capacity under revolving credit and other facilities.

Previous wording

During the first six months of 2024, we completed the following financing transactions (see Note 5 to AAG’s Condensed Consolidated Financial Statements in Part I, Item 1A for further information):

Current wording

During the first nine months of 2024, we completed the following financing transactions (see Note 5 to AAG’s Condensed Consolidated Financial Statements in Part I, Item 1A for further information on 2024 financing activities):

Previous wording

•amended the 2023 Term Loan Facility to reduce the applicable interest rate margin; and

Current wording

•amended the 2023 Term Loan Facility to reduce the applicable interest rate margin;

Previous wording

•issued $530 million of equipment loans and other notes payable in connection with the financing of certain aircraft.

Current wording

•issued $571 million of equipment loans and other notes payable in connection with the financing of certain aircraft.

Previous wording

The following table presents the reconciliation of pre-tax income (GAAP measure) to pre-tax income excluding net special items (non-GAAP measure). Management uses this non-GAAP financial measure to evaluate our current operating performance and to allow for period-to-period comparisons. As net special items may vary from period-to-period in nature and amount, the adjustment to exclude net special items allows management an additional tool to understand our core operating performance.

Current wording

The following table presents the reconciliation of pre-tax income (loss) (GAAP measure) to pre-tax income excluding net special items (non-GAAP measure). Management uses this non-GAAP financial measure to evaluate our current operating performance and to allow for period-to-period comparisons. As net special items may vary from period-to-period in nature and amount, the adjustment to exclude net special items allows management an additional tool to understand our core operating performance.

Previous wording

The table below sets forth selected operating data for the three and six months ended June 30, 2024 and 2023. Amounts may not recalculate due to rounding.

Current wording

The table below sets forth selected operating data for the three and nine months ended September 30, 2024 and 2023. Amounts may not recalculate due to rounding.

Previous wording

(h)Includes aircraft owned and leased by American as well as aircraft operated by third-party regional carriers under capacity purchase agreements. Excluded from the aircraft count above are 65 regional aircraft in temporary storage as of June 30, 2024 as follows: 55 Embraer 145, eight Bombardier CRJ 700 and two Embraer 170.

Current wording

(h)Includes aircraft owned and leased by American as well as aircraft operated by third-party regional carriers under capacity purchase agreements. Excluded from the aircraft count above are 52 regional aircraft in temporary storage as of September 30, 2024 as follows: 51 Embraer 145 and one Embraer 170.

Previous wording

Passenger revenue increased $224 million, or 1.7%, in the second quarter of 2024 from the second quarter of 2023. In the second quarter of 2024, we experienced a 6.3% decrease in passenger yield on an 8.0% capacity growth year-over-year, as measured by ASMs. Load factor was 86.6% for the second quarter of 2024, compared to 86.2% for the second quarter of 2023. This revenue performance reflected weak industry pricing conditions in light of significantly increased industry capacity, as well as softness in customer bookings due in part to certain commercial initiatives that we deployed, many of which were reversed late in the second quarter of 2024.

Current wording

Passenger revenue remained relatively flat in the third quarter of 2024 from the third quarter of 2023. In the third quarter of 2024, we experienced a 5.2% decrease in passenger yield on a 3.2% capacity growth year-over-year, as measured by ASMs. Load factor was 86.6% for the third quarter of 2024, compared to 84.0% for the third quarter of 2023. Our passenger revenue performance improved through the third quarter of 2024 as industry domestic capacity growth decelerated from July 2024. While we continue to see the impact of certain commercial initiatives we had previously deployed, we have made progress to regain our share of revenue lost as we continue to reset these initiatives.

Previous wording

Regional expenses increased $115 million, or 10.0%, in the second quarter of 2024 from the second quarter of 2023 primarily due to an increase in regional flight operations at our wholly-owned regional carriers. An increase in the volume of engine overhauls also contributed to higher costs for maintenance, materials and repairs.

Current wording

Regional expenses increased $96 million, or 8.2%, in the third quarter of 2024 from the third quarter of 2023, primarily due to an increase in regional flight operations at our wholly-owned regional carriers and higher maintenance, materials and repair costs driven by an increase in the volume of engine overhauls and airframe heavy checks.

Previous wording

In the second quarter of 2024, other nonoperating income, net primarily included $24 million of non-service related pension and other postretirement benefit plan income, offset in part by $12 million of net special charges.

Current wording

In the third quarter of 2024, other nonoperating income, net primarily included $27 million of non-service related pension and other postretirement benefit plan income and $27 million of net special credits for mark-to-market net unrealized gains associated with certain equity investments, offset in part by $21 million of foreign currency losses.

Previous wording

In the second quarter of 2024, we recorded an income tax provision of $311 million. Substantially all of our income before income taxes is attributable to the United States.

Current wording

In the third quarter of 2024, we recorded an income tax benefit of $107 million. Substantially all of our loss before income taxes is attributable to the United States.

Previous wording

Cargo revenue decreased $38 million, or 9.1%, in the first six months of 2024 from the first six months of 2023 primarily due to a 22.8% decrease in cargo yield driven by increased air freight capacity, offset in part by a 17.7% increase in cargo ton miles.

Current wording

Cargo revenue decreased $29 million, or 4.7%, in the first nine months of 2024 from the first nine months of 2023, primarily due to a 17.2% decrease in cargo yield driven by increased air freight capacity, offset in part by a 15.1% increase in cargo ton miles.

Previous wording

Total operating revenues increased $660 million, or 2.5%, in the first six months of 2024 from the first six months of 2023, driven primarily by the increase in passenger revenue as described above. Our TRASM was 18.46 cents in the first six months of 2024, a 5.3% decrease as compared to 19.49 cents in the first six months of 2023. This decrease was driven by a 6.4% decrease in passenger yield primarily due to a softer domestic revenue environment.

Current wording

Total operating revenues increased $825 million, or 2.1%, in the first nine months of 2024 from the first nine months of 2023, driven primarily by the increase in passenger revenue as described above. Our TRASM was 18.31 cents in the first nine months of 2024, a 4.1% decrease as compared to 19.10 cents in the first nine months of 2023.

Previous wording

Regional expenses increased $174 million, or 7.6%, in the first six months of 2024 from the first six months of 2023 primarily due to an increase in regional flight operations at our wholly-owned regional carriers. An increase in the volume of engine overhauls also contributed to higher costs for maintenance, materials and repairs.

Current wording

Regional expenses increased $270 million, or 7.8%, in the first nine months of 2024 from the first nine months of 2023, primarily due to an increase in regional flight operations at our wholly-owned regional carriers and higher maintenance, materials and repair costs driven by an increase in the volume of engine overhauls and airframe heavy checks.

Previous wording

Maintenance, materials and repairs increased $314 million, or 20.7%, in the first six months of 2024 from the first six months of 2023 primarily due to increased costs for engine overhauls, airframe heavy checks and component part repairs driven by higher volume and flight hours.

Current wording

Maintenance, materials and repairs increased $434 million, or 18.2%, in the first nine months of 2024 from the first nine months of 2023, primarily due to increased costs for engine overhauls, airframe heavy checks and component part repairs driven by higher volume.

Previous wording

In the first six months of 2024, other nonoperating expense, net included $58 million of net special charges primarily for mark-to-market net unrealized losses associated with certain equity investments and $10 million of foreign currency losses, offset in part by $50 million of non-service related pension and other postretirement benefit plan income.

Current wording

In the first nine months of 2024, other nonoperating expense, net included $31 million of foreign currency losses and $30 million of net special charges primarily for mark-to-market net unrealized losses associated with certain equity investments, offset in part by $76 million of non-service related pension and other postretirement benefit plan income.

Previous wording

In the first six months of 2023, other nonoperating expense, net primarily included $45 million of net special charges associated with debt refinancings and extinguishments and mark-to-market net unrealized losses associated with certain equity investments, offset in part by $16 million of non-service related pension and other postretirement benefit plan income.

Current wording

In the first nine months of 2023, other nonoperating expense, net primarily included $146 million of net special charges for debt refinancings and extinguishments and mark-to-market net unrealized losses associated with certain equity investments, offset in part by $32 million of non-service related pension and other postretirement benefit plan income.

Previous wording

In the first six months of 2024, we recorded an income tax provision of $210 million. Substantially all of our income before income taxes is attributable to the United States.

Current wording

In the first nine months of 2024, we recorded an income tax provision of $103 million. Substantially all of our income before income taxes is attributable to the United States.

Previous wording

Other operating revenue increased $57 million, or 6.4%, in the second quarter of 2024 from the second quarter of 2023, driven primarily by higher revenue associated with American’s loyalty program. During the three months ended June 30, 2024 and 2023, cash payments from co-branded credit card and other partners were $1.4 billion and $1.2 billion, respectively.

Current wording

Other operating revenue increased $53 million, or 6.0%, in the third quarter of 2024 from the third quarter of 2023, driven primarily by higher revenue associated with American’s loyalty program. During the three months ended September 30, 2024 and 2023, cash payments from co-branded credit card and other partners were $1.4 billion and $1.3 billion, respectively.

Previous wording

Regional expenses increased $110 million, or 9.6%, in the second quarter of 2024 from the second quarter of 2023 primarily due to an increase in regional flight operations at American’s regional carriers.

Current wording

Regional expenses increased $119 million, or 10.3%, in the third quarter of 2024 from the third quarter of 2023, primarily due to an increase in regional flight operations and costs at American’s regional carriers.

Previous wording

In the second quarter of 2024, other nonoperating income, net primarily included $24 million of non-service related pension and other postretirement benefit plan income, offset in part by $12 million of net special charges.

Current wording

In the third quarter of 2024, other nonoperating income, net primarily included $27 million of non-service related pension and other postretirement benefit plan income and $27 million of net special credits for mark-to-market net unrealized gains associated with certain equity investments, offset in part by $21 million of foreign currency losses.

Previous wording

In the second quarter of 2024, American recorded an income tax provision of $367 million. Substantially all of American’s income before income taxes is attributable to the United States.

Current wording

In the third quarter of 2024, American recorded an income tax benefit of $88 million. Substantially all of American’s income before income taxes is attributable to the United States.

Previous wording

Passenger revenue increased $580 million, or 2.4%, in the first six months of 2024 from the first six months of 2023. In the first six months of 2024, American experienced a decrease in passenger yield on higher capacity growth year-over-year, as measured by ASMs. This revenue performance reflected weak industry pricing conditions in the second quarter of 2024 in light of significantly increased industry capacity, as well as softness in customer bookings due in part to certain commercial initiatives that American deployed, many of which were reversed late in the second quarter of 2024.

Current wording

Passenger revenue increased $682 million, or 1.9%, in the first nine months of 2024 from the first nine months of 2023. In the first nine months of 2024, American experienced a decrease in passenger yield on higher capacity growth year-over-year, as measured by ASMs. American’s passenger revenue performance improved through the first nine months of 2024 as industry domestic capacity growth decelerated from July 2024. While American continues to see the impact of certain commercial initiatives it had previously deployed, American has made progress to regain its share of revenue lost as it continues to reset these initiatives.

Previous wording

Cargo revenue decreased $38 million, or 9.1%, in the first six months of 2024 from the first six months of 2023 primarily due to a decrease in cargo yield driven by increased air freight capacity, offset in part by an increase in cargo ton miles.

Current wording

Cargo revenue decreased $29 million, or 4.7%, in the first nine months of 2024 from the first nine months of 2023, primarily due to a decrease in cargo yield driven by increased air freight capacity, offset in part by an increase in cargo ton miles.

Previous wording

Other operating revenue increased $118 million, or 6.8%, in the first six months of 2024 from the first six months of 2023, driven primarily by higher revenue associated with American’s loyalty program. During the six months ended June 30, 2024 and 2023, cash payments from co-branded credit card and other partners were $3.0 billion and $2.8 billion, respectively.

Current wording

Other operating revenue increased $170 million, or 6.5%, in the first nine months of 2024 from the first nine months of 2023, driven primarily by higher revenue associated with American’s loyalty program. During the nine months ended September 30, 2024 and 2023, cash payments from co-branded credit card and other partners were $4.4 billion and $4.0 billion, respectively.

Previous wording

Regional expenses increased $164 million, or 7.2%, in the first six months of 2024 from the first six months of 2023 primarily due to an increase in regional flight operations at American’s regional carriers.

Current wording

Regional expenses increased $283 million, or 8.2%, in the first nine months of 2024 from the first nine months of 2023, primarily due to an increase in regional flight operations and costs at American’s regional carriers.

Previous wording

Maintenance, materials and repairs increased $314 million, or 20.7%, in the first six months of 2024 from the first six months of 2023 primarily due to increased costs for engine overhauls, airframe heavy checks and component part repairs driven by higher volume and flight hours.

Current wording

Maintenance, materials and repairs increased $434 million, or 18.2%, in the first nine months of 2024 from the first nine months of 2023, primarily due to increased costs for engine overhauls, airframe heavy checks and component part repairs driven by higher volume.

Previous wording

In the first six months of 2024, other nonoperating expense, net included $58 million of net special charges primarily for mark-to-market net unrealized losses associated with certain equity investments and $10 million of foreign currency losses, offset in part by $50 million of non-service related pension and other postretirement benefit plan income.

Current wording

In the first nine months of 2024, other nonoperating expense, net included $31 million of foreign currency losses and $30 million of net special charges primarily for mark-to-market net unrealized losses associated with certain equity investments, offset in part by $75 million of non-service related pension and other postretirement benefit plan income.

Previous wording

In the first six months of 2023, other nonoperating expense, net primarily included $45 million of net special charges associated with debt refinancings and extinguishments and mark-to-market net unrealized losses associated with certain equity investments, offset in part by $16 million of non-service related pension and other postretirement benefit plan income.

Current wording

In the first nine months of 2023, other nonoperating expense, net primarily included $146 million of net special charges for debt refinancings and extinguishments and mark-to-market net unrealized losses associated with certain equity investments, offset in part by $31 million of non-service related pension and other postretirement benefit plan income.

Previous wording

In the first six months of 2024, American recorded an income tax provision of $297 million. Substantially all of American’s income before income taxes is attributable to the United States.

Current wording

In the first nine months of 2024, American recorded an income tax provision of $208 million. Substantially all of American’s income before income taxes is attributable to the United States.

Previous wording

At June 30, 2024, AAG had $11.7 billion in total available liquidity and $875 million in restricted cash and short-term investments. Additional detail regarding our available liquidity is provided in the table below (in millions):

Current wording

At September 30, 2024, AAG had $11.8 billion in total available liquidity and $752 million in restricted cash and short-term investments. Additional detail regarding our available liquidity is provided in the table below (in millions):

Previous wording

Our debt agreements contain customary terms and conditions as well as various affirmative, negative and financial covenants that, among other things, may restrict the ability of us and our subsidiaries to incur additional indebtedness, pay dividends or repurchase stock. Our debt agreements also contain customary change of control provisions, which may require us to repay or redeem such indebtedness upon certain events constituting a change of control under the relevant agreement, in certain cases at a premium. Additionally, certain of our debt financing agreements (including our secured notes, term loans, revolving credit facilities and spare engine enhanced equipment trust certificates (EETCs)) contain loan to value (LTV) or collateral coverage ratio covenants and certain agreements require us to appraise the related collateral annually or semiannually. Pursuant to such agreements, if the applicable LTV or collateral coverage ratio exceeds or falls below a specified threshold, as the case may be, we will be required, as applicable, to pledge additional qualifying collateral (which in some cases may include cash or investment securities), withhold additional cash in certain accounts, or pay down such financing, in whole or in part, or the interest rate for the relevant financing will be increased. Additionally, a significant portion of our debt financing agreements contain covenants requiring us to maintain an aggregate of at least $2.0 billion of unrestricted cash and cash equivalents and amounts available to be drawn under revolving credit facilities, and our 5.50% senior secured notes due 2026, 5.75% senior secured notes due 2029 and AAdvantage Term Loan Facility (collectively, the AAdvantage Financing) contain a peak debt service coverage ratio, pursuant to which failure to comply with a certain threshold may result in early repayment, in whole or in part, of the AAdvantage Financing. As of the most recent applicable measurement dates, we were in compliance with each of the foregoing covenants.

Current wording

Our debt agreements contain customary terms and conditions as well as various affirmative, negative and financial covenants that, among other things, may restrict the ability of us and our subsidiaries to incur additional indebtedness, pay dividends or repurchase stock. Our debt agreements also contain customary change of control provisions, which may require us to repay or redeem such indebtedness upon certain events constituting a change of control under the relevant agreement, in certain cases at a premium. Additionally, certain of our debt financing agreements (including our secured notes, term loans, revolving credit facilities and spare engine EETCs) contain loan to value (LTV) or collateral coverage ratio covenants and certain agreements require us to appraise the related collateral annually or semiannually. Pursuant to such agreements, if the applicable LTV or collateral coverage ratio exceeds or falls below a specified threshold, as the case may be, we will be required, as applicable, to pledge additional qualifying collateral (which in some cases may include cash or investment securities), withhold additional cash in certain accounts, or pay down such financing, in whole or in part, or the interest rate for the relevant financing will be increased. Additionally, a significant portion of our debt financing agreements contain covenants requiring us to maintain an aggregate of at least $2.0 billion of unrestricted cash and cash equivalents and amounts available to be drawn under revolving credit facilities, and our 5.50% senior secured notes due 2026, 5.75% senior secured notes due 2029 and AAdvantage Term Loan Facility (collectively, the AAdvantage Financing) contain a peak debt service coverage ratio, pursuant to which failure to comply with a certain threshold may result in early repayment, in whole or in part, of the AAdvantage Financing. As of the most recent applicable measurement dates, we were in compliance with each of the foregoing covenants.

Previous wording

Our net cash provided by operating activities was $3.3 billion and $5.1 billion for the first six months of 2024 and 2023, respectively, a period-over-period decrease of $1.8 billion. This decrease in operating cash flows from the 2023 period to the 2024 period was primarily due to lower profitability in the first six months of 2024 driven by higher salaries, wages and benefits and maintenance expenses, offset in part by higher revenues. In addition, we contributed $281 million to our defined benefit pension plans in the first six months of 2024 as compared to $68 million in the first six months of 2023.

Current wording

Our net cash provided by operating activities was $3.6 billion and $5.2 billion for the first nine months of 2024 and 2023, respectively, a period-over-period decrease of $1.6 billion. This decrease in operating cash flows from the 2023 period to the 2024 period was due to lower profitability in the first nine months of 2024 and net working capital changes. In addition, we contributed $296 million to our defined benefit pension plans in the first nine months of 2024 as compared to $68 million in the first nine months of 2023.

Previous wording

Our net cash used in investing activities was $1.9 billion and $3.7 billion for the first six months of 2024 and 2023, respectively.

Current wording

Our net cash used in investing activities was $1.8 billion and $2.7 billion for the first nine months of 2024 and 2023, respectively.