American Airlines Group Inc

Previous wording

Pre-tax loss and net loss were $256 million and $149 million, respectively, in the third quarter of 2024. This compares to third quarter of 2023 pre-tax loss and net loss of $690 million and $545 million, respectively. The period-over-period decrease in pre-tax loss on a GAAP basis was principally driven by a decrease in pre-tax net special items and lower costs for aircraft fuel and related taxes, offset in part by increases in certain operating expenses including salaries, wages and benefits, maintenance, materials and repairs and other expenses.

Current wording

The period-over-period increase in pre-tax loss on both a GAAP basis and excluding pre-tax net special items was principally driven by increases in operating expenses including salaries, wages and benefits, regional expenses and certain other operating expenses, offset in part by lower costs for aircraft fuel and related taxes.

Previous 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.

Current wording

Our total revenue per available seat mile (TRASM) was 17.95 cents in the first quarter of 2025, a 0.7% increase as compared to 17.83 cents in the first quarter of 2024.

Previous 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.

Current wording

Aircraft fuel and related taxes was $2.6 billion in the first quarter of 2025, which was $393 million, or 13.2%, lower as compared to the first quarter of 2024. This was primarily due to a 13.3% decrease in the average price per gallon of aircraft fuel including related taxes to $2.48 in the first quarter of 2025 from $2.86 in the first quarter of 2024.

Previous 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.”

Current wording

As of March 31, 2025, 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 I, 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” in our 2024 Form 10-K.

Previous wording

We remain committed to actively managing our cost structure, which we believe is necessary in an industry whose economic prospects are heavily dependent upon two variables we cannot control: general economic conditions and the price of fuel.

Current wording

We remain committed to actively managing our cost structure, which we believe is necessary in an industry whose economic prospects are heavily dependent upon two variables we cannot control: general economic conditions and the price of fuel. We continue to focus on initiatives to reengineer our business through the use of digital solutions, process enhancements and procurement transformation and we intend to continue to invest in reengineering our business through the remainder of 2025 and beyond to build an even more efficient airline and continue to manage costs while delivering a better experience for our customers and team.

Previous wording

Our 2024 third quarter CASM excluding net special items and fuel was 13.39 cents, an increase of 2.8% from 13.02 cents in the third quarter of 2023.

Current wording

Our 2025 first quarter CASM excluding net special items and fuel was 14.54 cents, an increase of 7.8% from 13.49 cents in the first quarter of 2024, which was primarily driven by higher costs for salaries, wages and benefits, regional expenses and certain other operating expenses.

Previous 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.

Current wording

As of March 31, 2025, we had $10.8 billion in total available liquidity, consisting of $7.5 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 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):

Current wording

During the first three months of 2025, 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 2025 financing activities):

Previous wording

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

Current wording

•amended the AAdvantage term loan credit and guaranty agreement to reduce the applicable interest rate margin and reduce the scheduled quarterly principal amortization amount;

Previous 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.

Current wording

The following table presents the reconciliation of pre-tax loss (GAAP measure) to pre-tax loss 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 nine months ended September 30, 2024 and 2023. Amounts may not recalculate due to rounding.

Current wording

The table below sets forth selected operating data for the three months ended March 31, 2025 and 2024. 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 52 regional aircraft in temporary storage as of September 30, 2024 as follows: 51 Embraer 145 and one 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 six regional aircraft in temporary storage as of March 31, 2025 as follows: four Bombardier CRJ 900 and two Embraer 145.

Previous 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.

Current wording

Regional expenses increased $150 million, or 12.5%, in the first quarter of 2025 from the first quarter of 2024, primarily due to an increase in regional flight operations as regional capacity, as measured by ASMs, increased 15.1% in the first quarter of 2025 from the first quarter of 2024. In addition, higher maintenance, materials and repair costs driven by an increase in the volume of engine overhauls and airframe heavy checks also contributed to the increase in regional expenses.

Previous 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.

Current wording

In the first quarter of 2025, other nonoperating expense, net primarily included $48 million of net special charges for mark-to-market net unrealized losses associated with certain equity investments and debt refinancings and extinguishments, as well as $11 million of foreign currency losses, offset in part by $11 million of non-service related pension and other postretirement benefit plan income.

Previous 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.

Current wording

In the first quarter of 2025, we recorded an income tax benefit of $175 million. Substantially all of our loss before income taxes is attributable to the United States.

Previous 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.

Current wording

Other operating revenue increased $45 million, or 4.9%, in the first quarter of 2025 from the first quarter of 2024, driven primarily by higher revenue associated with American’s loyalty program. During the three months ended March 31, 2025 and 2024, cash payments from co-branded credit card and other partners were $1.8 billion and $1.7 billion, respectively.

Previous 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.

Current wording

Regional expenses increased $152 million, or 12.7%, in the first quarter of 2025 from the first quarter of 2024, primarily due to an increase in regional flight operations and costs at American’s regional carriers.

Previous 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.

Current wording

In the first quarter of 2025, other nonoperating expense, net primarily included $48 million of net special charges for mark-to-market net unrealized losses associated with certain equity investments and debt refinancings and extinguishments, as well as $11 million of foreign currency losses, offset in part by $11 million of non-service related pension and other postretirement benefit plan income.

Previous 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.

Current wording

In the first quarter of 2025, American recorded an income tax benefit of $144 million. Substantially all of American’s loss before income taxes is attributable to the United States.

Previous 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):

Current wording

At March 31, 2025, AAG had $10.8 billion in total available liquidity and $647 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 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 our ability and that of 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 used in investing activities was $1.8 billion and $2.7 billion for the first nine months of 2024 and 2023, respectively.

Current wording

Our net cash used in investing activities was $1.2 billion and $1.5 billion for the first quarter of 2025 and 2024, respectively.

Previous wording

Our principal investing activities in the first nine months of 2023 included $1.8 billion of capital expenditures, which primarily related to the purchase of 11 Boeing 737 MAX aircraft, six Embraer 175 aircraft, three used Bombardier CRJ 900 aircraft, two Airbus A321neo aircraft and 22 spare engines. Additionally, we had $1.5 billion in net purchases of short-term investments. These cash outflows were offset in part by $219 million of proceeds from sale-leaseback transactions and sale of property and equipment.

Current wording

Our principal investing activities in the first quarter of 2024 included $824 million of capital expenditures, which primarily related to the purchase of six Embraer 175 aircraft, two Airbus A321neo aircraft, four spare engines and aircraft purchase deposits. Additionally, we had $702 million in net purchases of short-term investments.

Previous wording

Our net cash used in financing activities was $1.5 billion and $2.4 billion for the first nine months of 2024 and 2023, respectively.

Current wording

Our net cash used in financing activities was $1.2 billion and $642 million for the first quarter of 2025 and 2024, respectively.

Previous wording

Our principal financing activities in the first nine months of 2024 included $2.7 billion in scheduled repayments of debt and finance lease obligations. These cash outflows were offset in part by $1.3 billion of proceeds from issuance of long-term debt, consisting of $684 million from the issuance of EETCs in connection with the financing of certain aircraft that had been previously delivered and $571 million from the issuance of equipment loans and other notes payable.

Current wording

Our principal financing activities in the first quarter of 2025 primarily included $1.4 billion in debt and finance lease repayments, consisting of $910 million in scheduled repayments, $308 million of early repayments toward portions of the outstanding principal amounts of the IP Notes and LGA/DCA Notes and $144 million of early repayments for the outstanding principal amount of equipment notes issued under an EETC. These cash outflows were offset in part by $325 million of proceeds from the issuance of long-term debt, primarily from the issuance of equipment loans and other notes payable in connection with the financing of certain aircraft.

Previous wording

American’s net cash used in investing activities was $1.8 billion and $2.6 billion for the first nine months of 2024 and 2023, respectively.

Current wording

American’s net cash used in investing activities was $1.2 billion and $1.5 billion for the first quarter of 2025 and 2024, respectively.

Previous wording

American’s principal investing activities in the first nine months of 2023 included $1.7 billion of capital expenditures, which primarily related to the purchase of 11 Boeing 737 MAX aircraft, six Embraer 175 aircraft, three used Bombardier CRJ 900 aircraft, two Airbus A321neo aircraft and 22 spare engines. Additionally, American had $1.5 billion in net purchases of short-term investments. These cash outflows were offset in part by $219 million of proceeds from sale-leaseback transactions and sale of property and equipment.

Current wording

American’s principal investing activities in the first quarter of 2024 included $815 million of capital expenditures, which primarily related to the purchase of six Embraer 175 aircraft, two Airbus A321neo aircraft, four spare engines and aircraft purchase deposits. Additionally, American had $700 million in net purchases of short-term investments.

Previous wording

American’s net cash used in financing activities was $1.5 billion and $2.4 billion for the first nine months of 2024 and 2023, respectively.

Current wording

American’s net cash used in financing activities was $1.1 billion and $629 million for the first quarter of 2025 and 2024, respectively.

Previous wording

American’s principal financing activities in the first nine months of 2024 included $2.7 billion in scheduled repayments of debt and finance lease obligations. These cash outflows were offset in part by $1.3 billion of proceeds from issuance of long-term debt, consisting of $684 million from the issuance of EETCs in connection with the financing of certain aircraft that had been previously delivered and $571 million from the issuance of equipment loans and other notes payable.

Current wording

American’s principal financing activities in the first quarter of 2025 primarily included $1.4 billion in debt and finance lease repayments, consisting of $909 million in scheduled repayments, $308 million of early repayments toward portions of the outstanding principal amounts of the IP Notes and LGA/DCA Notes and $144 million of early repayments for the outstanding principal amount of equipment notes issued under an EETC. These cash outflows were offset in part by $325 million of proceeds from the issuance of long-term debt, primarily from the issuance of equipment loans and other notes payable in connection with the financing of certain aircraft.

Previous wording

As of September 30, 2024, AAG had $31.4 billion in long-term debt, including current maturities of $5.3 billion. As of September 30, 2024, American had $26.2 billion in long-term debt, including current maturities of $3.8 billion. All material changes in our significant indebtedness since our 2023 Form 10-K are discussed in Note 5 to AAG’s Condensed Consolidated Financial Statements in Part I, Item 1A and Note 4 to American’s Condensed Consolidated Financial Statements in Part I, Item 1B.

Current wording

As of March 31, 2025, AAG had $29.2 billion in long-term debt, including current maturities of $4.6 billion. As of March 31, 2025, American had $24.4 billion in long-term debt, including current maturities of $3.6 billion. All material changes in our significant indebtedness since our 2024 Form 10-K are discussed in Note 5 to AAG’s Condensed Consolidated Financial Statements in Part I, Item 1A and Note 4 to American’s Condensed Consolidated Financial Statements in Part I, Item 1B.

Previous wording

(1)Delivery schedule represents our best estimate as of the date of this report as described in footnote (d) to the“Contractual Obligations” table below. Actual delivery dates are subject to change, which could be material, based on various potential factors including production delays by the manufacturer and regulatory concerns. See Part II, Item 1A. Risk Factors –“We depend on a limited number of suppliers for aircraft, aircraft engines and parts. Delays in scheduled aircraft deliveries, unexpected grounding of aircraft or aircraft engines whether by regulators or by us, or other loss of anticipated fleet capacity, and failure of new aircraft to receive regulatory approval, be produced or otherwise perform as and when expected, adversely impacts our business, results of operations and financial condition.”

Current wording

(1)Delivery schedule represents our best estimate as of the date of this report as described in footnote (d) to the“Contractual Obligations” table below. Actual delivery dates are subject to change, which could be material, based on various potential factors including production delays by the manufacturer and regulatory concerns. See Part I, Item 1A. Risk Factors –“We depend on a limited number of suppliers for aircraft, aircraft engines and parts. Delays in scheduled aircraft deliveries, unexpected grounding of aircraft or aircraft engines whether by regulators or by us, or other loss of anticipated fleet capacity, and failure of new aircraft to receive regulatory approval, be produced or otherwise perform as and when expected, adversely impacts our business, results of operations and financial condition”in our 2024 Form 10-K.

Previous wording

In addition, we have committed to purchase 14 used Bombardier CRJ 900 aircraft which are scheduled to be delivered from 2024 through 2026. We also have agreements for 61 spare engines to be delivered in the fourth quarter of 2024 and beyond. The“Contractual Obligations” table below reflects these commitments.

Current wording

In addition, we have committed to purchase 10 used Bombardier CRJ 900 aircraft which are scheduled to be delivered from the second quarter of 2025 through 2026. We also have agreements for 47 spare engines to be delivered in the second quarter of 2025 and beyond. The“Contractual Obligations” table below reflects these commitments.

Previous wording

(a)Amounts represent contractual amounts due. Excludes $313 million and $7 million of unamortized debt discount, premium and issuance costs as of September 30, 2024 for American and AAG Parent, respectively. For additional information, see Note 5 and Note 4 to AAG’s and American’s Condensed Consolidated Financial Statements in Part I, Items 1A and 1B, respectively.

Current wording

(a)Amounts represent contractual amounts due. Excludes $324 million and $4 million of unamortized debt discount, premium and issuance costs as of March 31, 2025 for American and AAG Parent, respectively. For additional information, see Note 5 and Note 4 to AAG’s and American’s Condensed Consolidated Financial Statements in Part I, Items 1A and 1B, respectively.

Previous wording

(c)Includes $7.6 billion of future principal payments and $948 million of future interest payments as of September 30, 2024, related to EETCs associated with mortgage financings of certain aircraft and spare engines.

Current wording

(c)Includes $6.9 billion of future principal payments and $802 million of future interest payments as of March 31, 2025, related to EETCs associated with mortgage financings of certain aircraft and spare engines.

Previous wording

(d)See “Aircraft and Engine Purchase Commitments” above for additional information about the firm commitment aircraft delivery schedule, in particular the footnotes to the table thereunder as to potential changes to such delivery schedule. Due to uncertainty surrounding the timing of delivery of certain aircraft, the amounts in the table represent our most current estimate based on contractual delivery schedules adjusted for updates and revisions to such schedules communicated to management by the applicable equipment manufacturer. However, the actual delivery schedule may differ, potentially materially, based on various potential factors including production delays by the manufacturer and regulatory concerns. Additionally, the amounts in the table exclude one and four Boeing 787 Family aircraft scheduled to be delivered in 2024 and 2025, respectively, in each case for which we have obtained committed lease financing. This financing is reflected in the operating lease commitments line above.

Current wording

(d)See “Aircraft and Engine Purchase Commitments” above for additional information about the firm commitments for the acquisition of aircraft and engines, including the anticipated aircraft delivery schedule. Due to uncertainty surrounding the timing of delivery of certain aircraft, the amounts in the table represent our most current estimate based on contractual delivery schedules adjusted for updates and revisions to such schedules communicated to management by the applicable equipment manufacturer and certain management assumptions. However, the actual delivery schedule may differ, potentially materially, based on various potential factors including production delays by the manufacturer and regulatory concerns. Additionally, the amounts in the table exclude five Boeing 787 Family aircraft scheduled to be delivered in 2025, for which we have obtained committed lease financing. This financing is reflected in the operating lease commitments line above.

Previous wording

(e)Represents minimum payments under capacity purchase agreements with third-party regional carriers. These commitments are estimates of costs based on assumed minimum levels of flying under the capacity purchase agreements and American’s actual payments could differ materially. Rental payments under operating leases for certain aircraft flown under these capacity purchase agreements are reflected in the operating lease commitments line above.

Current wording

(e)These commitments are estimates of costs based on assumed minimum levels of flying under the capacity purchase agreements and American’s actual payments could differ materially. Rental payments under operating leases for certain aircraft flown under these capacity purchase agreements are reflected in the operating lease commitments line above.

Previous wording

(f)Represents minimum pension contributions based on actuarially determined estimates as of December 31, 2023 and is based on estimated payments through 2033. During the first nine months of 2024, we made required contributions of $284 million and a supplemental contribution of $12 million to our defined benefit pension plans.

Current wording

(f)Represents minimum pension contributions and expected contributions to our retiree medical and other postretirement plans based on actuarially determined estimates as of December 31, 2024 and is based on estimated payments through 2034. During the first three months of 2025, we made required contributions of $222 million to our defined benefit pension plans.

Previous wording

In light of our significant financial commitments related to, among other things, the servicing and amortization of existing debt and equipment leasing arrangements and new flight equipment, we and our subsidiaries will regularly consider, and enter into negotiations related to, capital raising and liability management activity, which may include the entry into leasing transactions and future issuances of, and transactions designed to manage the timing and amount of, secured or unsecured debt obligations or additional equity or equity-linked securities in public or private offerings or otherwise. The cash available from operations (if any) and these sources, however, may not be sufficient to cover our cash obligations because economic factors may reduce the amount of cash generated by operations or increase costs. For instance, an economic downturn or general global instability caused by military actions, terrorism, disease outbreaks (such as the COVID-19 pandemic), natural disasters or other causes could reduce the demand for air travel, which would reduce the amount of cash generated by operations. See Part II, Item 1A. Risk Factors –“Downturns in economic conditions could adversely affect our business”for additional discussion. An increase in costs, either due to an increase in borrowing costs caused by a reduction in credit ratings or a general increase in interest rates, or due to an increase in the cost of fuel, maintenance, aircraft, aircraft engines or parts, could decrease the amount of cash available to cover cash contractual obligations. Moreover, certain of our financing arrangements contain significant minimum cash balance or similar liquidity requirements. As a result, we cannot use all of our available cash to fund operations, capital expenditures and cash obligations without violating these requirements.

Current wording

In light of our significant financial commitments related to, among other things, the servicing and amortization of existing debt and equipment leasing arrangements and new flight equipment, we and our subsidiaries will regularly consider, and enter into negotiations related to, capital raising and liability management activity, which may include the entry into leasing transactions and future issuances of, and transactions designed to manage the timing and amount of, secured or unsecured debt obligations or additional equity or equity-linked securities in public or private offerings or otherwise. The cash available from operations (if any) and these sources, however, may not be sufficient to cover our cash obligations because economic factors may reduce the amount of cash generated by operations or increase costs. For instance, an economic downturn or general global instability caused by governmental actions, military actions, terrorism, disease outbreaks, natural disasters or other causes could reduce the demand for air travel, which would reduce the amount of cash generated by operations. See Part I, Item 1A. Risk Factors –“Downturns in economic conditions could adversely affect our business” in our 2024 Form 10-K for additional discussion. An increase in costs, either due to an increase in borrowing costs caused by a reduction in credit ratings or a general increase in interest rates, due to an increase in the cost of fuel, maintenance, aircraft, aircraft engines or parts, or due to an increase in tariffs, could decrease the amount of cash available to cover cash contractual obligations. Moreover, certain of our financing arrangements contain significant minimum cash balance or similar liquidity requirements. As a result, we cannot use all of our available cash to fund operations, capital expenditures and cash obligations without violating these requirements.

Previous wording

For information regarding our critical accounting policies and estimates, see disclosures in the Consolidated Financial Statements and accompanying notes contained in our 2023 Form 10-K.

Current wording

For information regarding our critical accounting policies and estimates, see Part II, Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations –“Critical Accounting Policies and Estimates” in our 2024 Form 10-K.