TLDR
- American Airlines reported record Q3 revenue of $13.7 billion, beating analyst expectations of $13.63 billion despite posting a net loss of $0.17 per share.
- The company exceeded analyst estimates with its loss per share coming in better than the expected $0.28 loss, driving a positive stock response with shares rising over 5% in pre-market trading.
- Total debt decreased by $1.2 billion during the quarter as part of the company’s plan to reduce total debt below $35 billion by year-end 2027 from the current $36.8 billion.
- AAdvantage loyalty program membership grew 7% year-to-date, following a 17% increase from 2023 to 2024, helping drive demand for premium products and services.
- The airline projects Q4 capacity and revenue growth of 3% to 5% with an adjusted operating margin between 5% and 7%, expecting adjusted earnings of $0.45 to $0.75 per share.
American Airlines posted record third-quarter revenue of $13.7 billion on October 23, marking the highest quarterly revenue in company history. The figure came in above analyst forecasts of $13.63 billion.
Despite the revenue milestone, the carrier reported a net loss of $0.17 per diluted share for the quarter. The loss applied to both GAAP and adjusted figures excluding special items.
Wall Street had braced for worse. Analysts expected a loss of $0.28 per share, making the actual results a beat by 11 cents.
Investors responded positively to the better-than-expected performance. The stock jumped 5.46% in pre-market trading to $12.75.
American Airlines Group Inc., AAL
The airline generated over $1 billion in free cash flow for the full year. This cash generation supported the company’s ongoing debt reduction efforts.
Total debt fell by $1.2 billion during the quarter. The balance sheet now shows $36.8 billion in total debt as of September 30, 2025.
That total breaks down into $28.7 billion in debt and finance leases, $7.3 billion in operating lease liabilities, and $721 million in pension obligations. After accounting for $6.9 billion in cash and short-term investments, net debt stands at $29.9 billion.
Premium Services Drive Growth
The AAdvantage loyalty program continues gaining traction. Active accounts increased 7% year-to-date compared to 2024.
This follows a 17% year-to-date increase from 2023 to 2024. The loyalty program is driving additional demand for premium products and services.
American Airlines highlighted its Flagship Suite product, which leads widebody aircraft in customer satisfaction. The premium experience will expand to Airbus A321 XLRs, Boeing 777-300, and Boeing 777-200 aircraft.
The carrier operates more premium lounges than any other U.S. airline. Plans include opening two new Flagship lounges in Miami and Charlotte.
Additional premium enhancements include upgraded amenity kits, new champagne and coffee partnerships, and improved food and beverage offerings. The company is betting on premium travelers to boost margins.
Debt Reduction Remains Priority
Management reiterated its commitment to reduce total debt below $35 billion by year-end 2027. This represents a decrease from the current $36.8 billion level.
The company maintains approximately $14 billion in unencumbered assets. It also has over $11 billion of additional first-lien borrowings available under existing financing arrangements.
American Airlines operates the youngest fleet among U.S. network carriers. This provides a competitive advantage with a moderate capital expenditure profile.
Capital spending is projected to increase in coming years, primarily driven by aircraft investments. The young fleet age helps keep maintenance costs in check.
Fourth Quarter Outlook
For Q4 2025, American Airlines projects total capacity and revenue growth of 3% to 5% compared to 2024. The company expects an adjusted operating margin between 5% and 7%.
Adjusted earnings per diluted share are forecast at $0.45 to $0.75 for the fourth quarter. Full year 2025 adjusted earnings are projected between $0.65 and $0.95 per share.
CEO Robert Isom emphasized the strength of premium travel despite economic uncertainty. He stated the company remains focused on growing margins and increasing profitability.
The stock has fallen 28.88% year-to-date despite the Q3 beat. Average daily trading volume sits at 74 million shares with a current market cap of $8.15 billion.
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