Earnings call transcript Q2 2023

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Operator

Thank you for standing by, and welcome to American Airlines Group's Second Quarter 2023 Earnings Call. At this time, all participants are in a listen-only mode. After the speaker presentation, there will be a question-and-answer session. [Operator Instructions]

I would now like to hand the call over to Scott Long, Vice President of Investor Relations and Corporate Development. ahead. go Please

Scott Long

Good Airlines Atif. and to welcome Thank second morning, quarter American Group call. XXXX the you, everyone earnings conference

call of room our for prepared with senior executives Robert CFO, this Q&A in have other May, the the also Devon number CEO, our Isom; session. remarks, a and the are our and On we morning

and our we Robert our followed follow-up. the will plans Devon questions details one on going performance. to remarks, second our will and outlook follow start outline in the media. call this will prepared yourself for open and many morning analyst by After And To the questions with an as overview as the limit will quarter question call of possible, please questions forward. with from one get operating

results Form must ended statements begin of and costs, actual this these our revenues, projected. found state today's we concerning including These call Information be forecast can press from expectations statements, to and future the before for but today, as our those plans. XXXX. contains of earnings represent uncertainties statements fleet that numerous forward-looking Now risks events, uncertainties future could of predictions capacity and well and our as that in was risks morning release June about issued XX, XX-Q quarter some differ cause we

information this date, obligation is we archived also of webcast on as of the the to Relations of the can numbers Investor no on this exclude in the which call release, website. this those which financial morning section A GAAP impact you is our morning, our undertake we'll items. update subsequently. on addition, The be website. giving measures will certain information unusual A be we're discussing the press to In reconciliation and today's non-GAAP be financial earnings of found included call the measures of

CEO, I'll to the Thank you morning. call And and that, this our for Robert for us Isom. with turn interest your over joining

Robert Isom

Thanks, everyone. Scott, morning, and good

is summer well American underway, Airlines firing the team and is cylinders. The on all

the year on foundation balance have would at and in the year, on continue is past strengthening strong the we we remain said over focused build Everything focus That we results. have the have up laid do We showing sheet. we to our done. reliability, start profitability, our of accountability and

Our quarterly operation is start of strong profitability earnings And latest of reliable for told marking reported approximately the airline. high the pre-tax the our of running levels. returning range, performing second the $X.X profit. billion at earnings on At These that morning, hinged this a EPS historically quarter. well guidance fifth recovery, consecutive adjusted we above end our to were we you

American our strong done we operation continues which has of to very the a because team in an positioned years. evolving well hard are in work recent in run environment

tied profitability leading sustained rewards our operation. is Our program network and to

We have way, and our reliable in reward a tremendous network customers efficient a using and and for we it. operate we

driven in by the financial a the Now, demand strength results. revenue into in summer. produced across was history. with company's highest entities international let's revenue billion our quarterly second broad-based leading travel particular more about $XX.X of quarter, our talk total This for the demand all We in

the structural have changes airline enhance Throughout travel our to and experiences success. made we customers' the recovery, position for

on and flying. fleet flexible more We nimble our have create more profitable our that simplified and most harmonized a focused network to is

positioned of is where future. the in now very which the on are some Phoenix More network, is to our is to hubs Charlotte, the the for Sunbelt largest positioned region, have moved located. uniquely are and demographic which strength U.S. our DFW, capitalize people American changes well and Miami

complement provides and across global the flying. are hubs country, and a them service network great smaller connect partnerships Our our our our towns strong regional to with own to

able offer are U.S. we comprehensive result, carrier. the As of customers most a network any to

We continue preferences. to evolving our to customers' our offerings adapt

want taking are to do they them meeting and business. want customers where they to go to where We

We advantage program credit servicing portfolio. through are more and of our engagement and in our card channels our customers direct driving

program and it carriers, largest Rewards the to among the is U.S. Travel Our network grow. continues

terrific making fleet. utilization are progress training our We improving in mainline our and and pilots both of regional the

Our young business sheet. to near-term fleet and to our CapEx in requirements cash balance us enable free reinvest the strengthen low flow generate and

it Now continued Airlines second with an completion XX%. operated of operational team factor X.X nearly achieved has strong record average year, past turning the the delivered operations. over quarter factor. as the flights The load American We to results approximately quarter we million in and

in quarter, with combined summer strong our The weekend XX second also a team Day of period the Memorial In the more ever. mainline year schedule momentum delivered our record has completion our peak factor delivering Memorial largest operating started days we same The zero into Day while canceled July. mainline weekend ago. continued

levels traffic July We seen we we're on best our since care in Day American, operation At XXXX. control. we delivered taking of the what Independence of can history, focused haven't with holiday

Our busy purposeful us and technology our travel in up approach summer set fleet our and team, season for beyond. with to planning, success investments has along during the

hand remainder second And now about Devon more over it the who for I'll our quarter of results share the the and to outlook will year.

Devon May

Thank Robert. you,

performance has quarter. results. our which guidance on solid again, Airlines of dedication in the team helping Once strong financial the is delivered we to produce and focus operational for The resulted American second

special $X.X diluted adjusted Excluding share income of items, second billion earnings net net quarter per reported or $X.XX. of we

resulting in revenues in May. and margin our end forecast. performance quarter provided guidance production remained strong of outperformed slightly of and the strong, Our higher CASM for that the than operating high better EPS resulted ex an performance our capacity midpoint in operational Unit the

billion the ever margin $X.X performance mentioned, quarter produced record income American resulting adjusted quarter, X% up highest year-over-year. revenue in $XX.X second of of of nearly billion in Robert operating led As second adjusted revenue a to our This XX.X%. operating

international strong up was a XX.X% XXXX X.X% on down revenue X.X% Unit capacity. revenue versus X.X%, was revenue historically down year-over-year. the more unit Domestic quarter in unit while just was

slightly initial quarter, capacity for cost range guidance unit items better X.X% production and Our of strong driven the fuel, net due up special was our operational by than the planned higher our midpoint performance. year-over-year. to That's than excluding

I few fleet. on updating minutes our you spend want a to

young and and the enhanced the of differentiates and during XXXX provides network fleet Our our improved network result are from the U.S. we and flexibility, from experience. pursued simplified accelerated benefits pandemic. peers an efficiency to XXXX American customer These refleeting

We rate are pleased time and as when fleet supply at in as we interest challenged chain a our low today. the environment it is a wasn't built

deliveries We to delivered expect new the XX take the of XXXX, aircraft all took which half of and in more first aircraft year-end. by expect XX In to mainline are XX year delivery now we financed. be

new regional of We're fleet, XXX to Embraer into aircraft have used fourth our this agreements service regional Bombardier CRJ further excited these purchase bolster XXX starting to and entered we that For seven and year. aircraft to aircraft the will into quarter be seven this quarter, connectivity. in delivered our

delivery billion. guidance along latest and our the new purchase and Boeing our used approximately commitments, to is aircraft on with Airbus, XXXX be $X.X regional from now CapEx Based expected aircraft

be our $XXX expected to billion CapEx $X.X XXXX is billion. $X CapEx We anticipate million. between approximately still non-aircraft total to and be Our

likely CapEx our to years per average of our age review needs limited. continually through the the medium very and fleet the replacement to of the our plans. expect for aircraft, and young we next year. Therefore, are decade XXXX, beyond $X.X approximately several long-term end aircraft Looking fleet Due we billion

and is the nice end metrics sheet. recognized. to to the Moving step This goal by upgraded of it's Fitch credit credit Americans XXXX, towards of balance Yesterday, rating. our the our being see progress first BB

We continue to maintain strong liquidity.

cash operating flow billion. the we of In quarter, nearly generated second $X.X

investing million, quarterly net billion. flow resulting adjusted Our flow approximately was $X.X cash $XXX of free in cash

billion the six and cash the expect $X cash flow full We the year be second flow billion. of quarter We approximately have of produced year with months total of billion $X.X liquidity. to free available ended approximately in first $XX.X free

continue on of the in by our resulted improvement liquidity in debt million. combined strengthening with debt debt in reducing the total a quarter. We second the net make reduction, in approximately $XXX progress $XXX during second million This quarter balance decrease by to sheet

We debt approximately $XX by from XXXX, the total debt in significant XXXX. our of progress end debt peak towards $X.X by by have which is billion goal total reducing now reduced billion levels of

of debt be approximately XXXX. our $XX expect peak in XXXX, we to billion levels lower end than total the debt By

times, Importantly, we ended is the lower end debt-to-EBITDA X.X it net which than of was second at the of quarter ratio with a XXXX.

July what demand, small- encouraged International in Now in We the saw the year-over-year by from we demand turning to and are performance, lead continue and we third in Xth business revenue period remain of booked with enterprises. way to for strong, and holiday medium-sized continue to entities our notably line and quarter Bookings are we terms for load the constructive guidance. of saw a see record factors environment. domestic XXXX.

comparison. unfold, to environment the continues in unit increasingly XXXX recovery strong represents difficult revenue the As an

third we be As X% to expect a on quarter X.X% to more to capacity. result, X% year-over-year down TRASM X.X%

We third to be X% quarter to expect year-over-year. X% up CASM-ex

Our third diluted to and and excluding $X.XX $X.XX current price $X.XX, share in between the and of per of current gallon. quarter fuel special of our per $X.XX and items. forecast adjusted third fuel Based the operating expect earnings assumes adjusted for between we margin X% a XX% price and quarter demand on between produce forecast, and

is X% expect capacity than full continue that we the higher For to year, to produce XXXX. X% to

We now are continues revenue low our and expect up up for with full to year to TRASM unit capacity year-over-year. for on be provided we earnings forecast expectations year our versus initial all our full consistent to call. the digits be guidance January X% single Our XXXX. Notably, X% CASM-ex CASM-ex

further environment full full changed. positive guidance. $X.XX. on XX X% estimate adjusted XX% a $X. a between to between and assumptions, has of our $X and and to cost for we fuel expect fuel our Based of update The now from said, pay between the operating initial demand are gallon, in. full adjusted year reduction produce our we That $X.XX and expect and year EPS margin expense operating per highlights We year

Airlines progress We are believe team of is American made, we more us. the there has opportunity of but proud very the ahead

even XXXX on beyond. unlocking We will XXXX delivering continue and focus in to and value more in

it now to Robert for I'll turn remarks. back closing

Robert Isom

Thanks, Devon.

reliable Airlines team January, operation. We're strong and earnings on full growth, commitments. and free guidance flow, on reduction back meaningful we in is the driving a provided deliver importantly, delivering our to American year The track cash debt record on

executing We that are on plan.

tremendous excited our reliable, an at profitable that our about progress to I continue later long-term team Day our to deliver. this know on share sheet balance will our strengthening Investor to and making to wait can't are the about and and We more tell strategy campus. We're sharing longer-term priorities We more business the incredibly Fort at American more. We're updating you that on about and strategic you excited time. our look of Worth forward year future

Operator, questions. line please open the for analyst

Operator

JPMorgan. of Baker Jamie of line the from comes question first Our Instructions] [Operator

Your Jamie. question please,

Jamie Baker

was morning, heard good assume that's everybody. Hi, me. All I but PMorgan I

So enthusiastically EMEA. year last the Vasu, spoke you about

You you outpaced had assume admitted model shouldn't reverses. York all New York But being But the been did, you that, this model appears And were York to finally I it it challenge meaningful system. RASM margin decades. that for doesn't a forward? point if hub. admit now reverts drag earnings my why New by I'll New a seeing from

Vasu Raja

morning, Jamie. and thanks question. Good the Hi for

a First, being the drag. it I would it's say unfortunate clarity, for is that And NEA full we anticipate terminated. don't margin

the commitment York New changed. Northeast to customers and specific in Our the hasn't

NEA we really things. However, rise the point circumstances major changed. the in have time, gave two one At to with struggled that

day the York One, with the match our is business was demand market. trip that New in of slot majority on didn't short-haul demand for holding

Mid-Continental, Our are recovered level, market. to Transatlantic business portfolio changed. its matched those hasn't and greater. but Short-haul demand better historical markets that's much Well, other slot is Transcontinental

change before. And material so from a that's

has advantaged any and expense changed. in also New Through base, employment changes, co-locating fleet and to But York what other our number partners carrier especially are York. materially expenses any Kennedy in our JFK of is New

is We and what the customers was preserve having So, it's very that experience flying continued broader very been on. margin we'll network of a see share York get our much forward, don't plan expect more, practical with certainly means was originating before. for our to unfortunate the more we continue much that there American much us for that a go than Airlines. we've It what us. intention but as that we trajectory matter City And go is New that customers

NEA been the rise. rise. seen card enrollments Credit And so we've that. spending has NEA in to the rise, continues continue continue acquisitions program since far, to Advantage to announced,

one to might don't another change So though our this is chapter closed, outlook. but expect we open, financial material any

Jamie Baker

you you for Okay. adjusted guide, Very full the last can lots Devon, And flow in helpful. the tell year there include recognizing side, CASM year guide moving the that then, And pilots? cash on the retro you're full cost pay the are does labor us time assuming? pieces of your also accruals

Devon May

Yes.

cash that part is pilot the include with So our that retro the of we our on does was part flow, the have or pay that of it today. tentative agreement

or we talked X, new an agreed were we last we'll part which in rates that time, and May accrual starting wages agreement for in May As benefits about is, hope we to the August, as expect agreement accruing the at have of the the -- quarter, agreement ratify tentative what and associated to with that are agreement. we here principle in go the will on

Jamie Baker

Okay. gentlemen. Very you, Thank clear.

Operator

Thank you.

line Vernon of next the David Our question Bernstein. comes of from

David. open, is line Your

David Vernon

Good Hi. morning, guys.

sort the you demand does performance. And back the out from of team kind guidance huge a guide. a bit is and the to that in guidance of you're framework had laying here? your guys So pretty about earnings for the just you year. how your deceleration for us material imply good. beat the out The little you You behind Can to Robert level Devon, we're XQ you It XQ XQ. on your here is half from question delivering talk of for hearing you're laying first a the executing, thinking cost on

are really back of understand of something year, You in keeping it just the decelerating you you the half? haven't here I'm here of is trying kind like the couple quarters. to beginning a the or of where in missed in that's just there kind said bar guys

Robert Isom

as facilitated for David, question. really set producing Look, operating our the is out focused actually reliability on profitability clearly we've our and reliability thanks that.

As It's is economy the demand our we look, the us, a that for there's our at see involved. it strong. course strong, year, of certainly actually the that midpoint quarter. we indicative year a look take over of of the guide raised full seasonality you'll is belief And by

at reported and and the to anything of coming. stay course feel over same we add want the that? But about at Devon, year, to results the this we and time, do the course, to we're going the positive looking really that what's you we're And

Devon May

good we're costs No, capacity levels. the our to objectives for I points. the same going set year unit at guide in produce, increase our going to earnings we We're first started and think the year place of we the we've really EPS what full and about with half number. year. produce we're to in accomplished happy and We it [$X The $X.XX], upping did have our the really that to feel

David Vernon

Okay. domestic little And then you talk a of maybe if in bit about here sort outlook XQ. could the the

guide the the of There's think, lot in capacity moving kind short-haul for I are little market. and fair on kind what market domestic? of domestic concern, deceleration Can the more think, kind got, embedding XQ You've in I -- seeing a international trends growth you're about elaborate and sequentially. travel what a XX% into in domestic how of you're of bit you

Vasu Raja

Sure thing. This is Vasu.

large. at say I'll look, First,

especially domestic We encouraged haul. the and by demand of see, we short overall in remain continue level to

at percentage its air even revenue to relationship travel of GDP, a their as GDP regain continue domestic revenue, retained of If demand. spend relationship to look former percentage you a as certainly

just to to due is But is to About for of a And we to is see a things. some due XQ second Everything to the domestic, point that our of operational And out you important really recovery the the another quarter. sequential in to is normal to XQ changes shift. due us, seasonality. point really this outperformance return is lot unique calendar else it's there a note really look change unfold. in continuing pretty as

see how us, we look it don't lose fact, you yet you demand far of to as at XXXX in have or or a now. base unfolded. versus strange just And the when for things like like As it that, deceleration some recoveries where comparisons

world RASMs For to still higher. but producing underlying recovery very the little of us, demand has XX% fall, still an we in a comps airline a into bit to and are the anything will The the as XXXX flying we're vagaries There's than the we year-over-year more owing short-haul get be just is in -- are date strange, airline business. that the strong. a XX% where

David Vernon

you that. for right. All Thank

Operator

you. Thank

from Our Scott the comes of Research. line next question Group Wolfe of

Scott? please, question Your

Scott Group

Good Hi. Thanks. morning.

hopefully, my third hear go the lost to voice. back I I me. quarter just But Sorry, can to you want guide.

what's more So from we've that? just XX%, about seen color us never think go margins X% down QX X XX% just -- to help X any to to from QX to driving points to

Robert Isom

Hi Scott. on seen well. been a quarter-to-quarter on both recovery, not Again, tack we've The smooth comparison it year. our I'll at over results looking of Vasu's comments as exactly We're course as Devon's the the basis. has to and

a produce it's of indicated morning. we we by on the at look those those. again, to moving can guide results. As us, our as depend take proud us year, EPS this really And We're you up did

Scott Group

then we know Okay. there think I you losing forward impact don't we And -- is earnings any from the to we But it assuming like just where any to go clarify, sounds earnings losing there which impact NEA, going -- NEA? from are is back were.

Robert Isom

Scott, impact. anticipating we're not any earnings

Scott Group

Okay. you, Great. right. All Thank guys.

Operator

you. Thank

line from Melius next comes question Cunningham Conor Our Research. the of of

Conor. open, is line Your

Conor Cunningham

Not a Hi, itineraries blended everyone. travelers this Thank talk for quarter. or lot the on blended of you time.

just -- now? level that in Thank because XXXX. of half on back And maybe just in it's your the us large corporate is you. thinking set how you're curious you Just base on could about

Vasu Raja

blended is for our of the the We've travel, style exactly now. a question. less seen mix And stuff. runs is now. how This right. novelty XX% you're leisure a business Hi. of This quarters of just style thanks several base, Vasu and It's for travel, XX% XX% part

managed to for It between quarters been there. business, XX% a now. looks roughly the into that's pretty Certainly, our future. pretty consistent be That's what X:X several within travel says. unmanaged that's furthermore, and forward going split there's the travel And book consistent

commentary. now. why actually This that's So, is no the operates business how

Conor Cunningham

And corporate, thinking just sorry? about where you're

Vasu Raja

to of corporate style and for there's were seen clarify Look, pretty first has I'll by customers recovered that's buy about don't companies that XX% centrally. they levels. then there's And their that centrally we travel business, been managed, their -- buy it all, there's -- we two within it's that, historical their or centrally, travel much talk on seen tend to and individuals and that now. we've plateaued trips. business this. travel those who corporations talk man And about When large people they of several manage quarters groups, fly We've

in demand unmanaged grow business And their regained total XXXX the system. continues to However, have our revenues system. indeed, composition really in

to the So prepared adjust on change stuff Should to no business demand. encouraged we accordingly. But is change, than we're experiencing. been go any remain things different and we've forward outlook

Conor Cunningham

then a the market, environment on of curious just the think the And that's been the in you. the about back you LCCs just ULCCs and in lot Okay. and capacity XXXX. you in I'm domestic how as back competitive now in hubs. right your on landscape hit have ramp of half the Thank half competitive view

Vasu Raja

competitive look, the you. very actually favorably. And thank we landscape Hi, view

well. Our more than network proposition any to really origin markets And have network. airline our and customers done is that and destination markets destination creating we and origin unique other more

we've in that deliver we our the really is located for really Heathrow really We and with comments a That's of in places outsized roughly been continue XX% to Latin where Robert's to lot Sunbelt of America network do in seen. airline the customers. network financial the London And that value that well. are progress

our out something but any growth, we encouraged. markets. of Latin but of will the XX% fly markets are chase come performance not seen there, those where capacity Take because largest of rates. short-haul favorable XX%, American our in We've do we number there, like fall market we're to share, this those competitors because while marginal in, enough schedule winter remain the trends And see industry and

Conor Cunningham

Thank you.

Operator

Thank you.

line next of TD from of Cowen. Our the Becker question comes Helane

please, Your question Helane.

Helane Becker

much. Thanks very

on say Robert, to talk I your that CNBC this morning pilots hi, the correctly, I United I on heard thought you for hear time. contract. meeting about that So, Thanks you're team. the matching with them it Did they any to let to have and contract now? you vote the changes do B, you reject adjust Or that And you they're and can want on vote might voting A? make?

Robert Isom

of something we What now, able I'm on matter products, terms thanks Helane, the APA Look, to in -- that of morning and going to. I in is to with for are work we're question. discussions we're with a how deliver that's that be to of something right actually to we fact. said them, proud as our this Hi have committed and really

more sit or voted or we're can to Look, the to the wages can that is is to to basis that matching on fit something their to that United out. it's they But going not going that out still time something those timely committed we're wages. got figure with figure down proposing. a whether match We've be into that's to TA if take

Helane Becker

minute. for Thanks Okay. just gears shifting then And a clarification. that for

a shifted been guys right, I'm kind you talk You York are your who's my operation Scores? competitors wondering, also you really have yourselves? seeing that somebody shift of see great Promoter flying. your Net don't from know, what you seeing? share are to any past, in any about in seeing delivering can are it Philadelphia. of as And I Can customers just quarters, three I least And to from at for the New

Robert Isom

ridiculous our bringing to that weather, thanks up. and Chief Helane, from for done just the we've including It's done relentless Operating year. this Officer. Well, It's and last We've training by And just adding in Seymour, a knowledge. there, every heat out over team the performing. David today, tremendous day, is focus. led they're our everything new proud work it We're of really

put back better. place, to going to I or make we're going we when anticipate and go the crews. better aircraft tools our awry, things in get have really And that that's be that And whether that quick been things to we have to sure continue. necessary

we and and evident. have That between will out. is that, what something Of recommend likelihood scores customers the really reliability continue ever Net have course, to that super into want that seen. play confidence I best that relationship to Promoter Scores is translates that great that And are

Helane Becker

helpful. That’s really you. Thank

Operator

Thank you.

Barclays. Our next comes question Brandon of of the Oglenski from line

Your question please. Brandon.

Brandon Oglenski

thanks to taking but unwind And think international back question. to my capacity connectivity it at you have like Vasu, own not JetBlue I the because was come morning for Good a on the bit your of part network. historically. NEA you've does domestic look a added lot that and quite I of want JFK, of of answer

So, can strategy long-haul out forward? what JFK to you talk looks the of like going

Vasu Raja

for Yes. that and for One issues Look, Brandon. in Thanks the the other York. the New really had had was question, expenses that New operating was we were two the long-haul there support huge out amount of we we just connectivity York had our Kennedy. of

As to has materially hubs and go earlier, it's in that's York base our City. than any things more just with operator in this also we've other I lower reduce to and lot But meaningful low-cost a line New expense not is of what it. mentioned our to where, other done --

when look the got by product and our there weren't to for factor as those was that's our being actually outcome NEA experience you settled go to great points of recover, who customers But the have partners. out on XX them is things roughly, who at actually, markets XX and load Look, roughly before. international a generated flights, international

York when actually that's can we there. NEA factor New of we of originating such and a load and larger very can there demand, partnership both City the why we've reduction Our the really that before. had customer That's believe expense within got the some that base was changes that couple the that's now amount onboard replace we we a go lot than especially ourselves, what a make we small

Brandon Oglenski

future Devon, I you business, maybe be I your Do billion it around than might for out competitors purchases to mentioned that's billion I you of a given $X.X $X quick bit the could think that appreciate strategically, guess of aircraft that spending response. one be And more in correctly. think annually, some a if that? I in especially right the heard level the reinvestment because

Devon May

we'll where now on capital decade. and $X.X different between a the needs we any was have billion think don't XXXX the have the replacement Yes, the Hi of average around we competitors our of Brandon. we aircraft are so end good of somewhere part and probably is than comment And decade. fleet beyond for

to aircraft a you're required we older competitors lot who CapEx when is our investing for us, seeing of is to fleet some them. there's from network investment of the for in and So requirements. are aircraft replacement just grow have And that the grow airline. just an airplanes, again, an What it other growth

Brandon Oglenski

Thank you.

Operator

Thank you.

question next line Pfennigwerth the from of of Our Duane comes ISI. Evercore

Your please, Duane. question

Duane Pfennigwerth

you staffing -- today? some you really do Hi, that wish on talk about you you there? kind just good to And think wind-down where think allowing biggest morning. that could a do I'm leave adds. fleet. but you ask see bit be another you for bigger we'll Maybe question, off-line. of little are to NEA Like I the or circumstances invest can mentioned you Where regional fleet at What tempted is moment? your the gap constraint are

Robert Isom

Thanks, Duane.

places. kind biggest things structure to a back I add do. that, a our all narrow-bodies Vasu at of the Look, would regional the and that just a industry look fits at and works that take to hub American, our of fleet couple things. the opportunity and probably I air. up though, think It It's of how wants to with larger right number you we're most getting away. going needs in need our Just in fully interesting as our especially

small a hub markets only And spoke great what already. more commercial adding our aircraft the is those and proposition system to by further

perspective we to we see not body levels. able are into for to an a and narrow as grow out you'll an able only appropriate replace a the be So that us take we look rate a also to eye future, have from upgauge make ourselves at demand sure protect that but

Duane Pfennigwerth

of geography and transatlantic to maybe remind peers? versus questions. Europe relative taking Thanks. contrast us it's fine Southern kind of my too United? Delta And maybe Thanks point, And in a your some follow-up, for just you you the then just exposure could differences could your for but of the

Robert Isom

and capital into is, lot that much other us, Barcelona Southern are. and Look, our for just heavily first not at things is what and them. foremost, it And in our the us, sometimes areas the as that European so London, to style airlines Europe in large call flying of which concentration asking speak get East and But this Thanks lumped for such a season point, content India. more Athens, like much for than or probably really other Rome or things large trans-Atlantic Middle as is Madrid. of and we so market I'll reporting

a years So other year. over to fly work our the the do We international for restructure to to markets, marginal nothing year earlier last marginal really the and of used actually the months to nine flights and point, network. a with we airplane they really lot lot of had further three for to we've the really done months several to Devon's of

the our took gone. we've the that years last that from So to is of are gone losses bottom and and capacity go it we gone three is foundation, X% rebuild used the with fleet it goes

full make moderate are building to things good And so adding is year growth a point, just sense we're use and now Devon's capital. of what back aircraft of that really

Duane Pfennigwerth

you. Thank Okay.

Operator

you. Thank

America. of of Bank line comes next Didora Andrew Our question the from of

please, question Your Andrew.

Andrew Didora

everyone. good Hi, morning,

do rules? want in terms it First from wanted pay and clear share on included what's beginning to outlook you rates just profit also I was in there. a TA? the Does I clear step-up for work in X Just sure factor what to is question, CASM Or include in in the year. Devon, be May make just step-up this your of

Devon May

Yes.

of have go rates end starting higher to the May August, pay at sharing. including it, included guide benefits right from the And have of in point, our now, is July. the that Pay the we X and then hope So what's ratification all And tentative rates with we'll agreement. in along through that profit

Andrew Didora

build-out of thinking kind Got I then think and know how any it. you but And both you're domestic thoughts networks. the your you it's when international XXXX, capacity about way -- early just about Robert, on, continued the of and on initial

growth. year Thank -- and you. domestic and you could how think the Just curious be about you could most entity which just between think international growing next

Robert Isom

have, of in I'd mid-single-digit you based year. have now, is next that Andrew. -- fleet Thanks, stages. growth tell it's on for that Right kind anticipated the would the planning But we're what we we

Now, lot on dependencies that. a there's of

and we be off, fleet up to back fully, that able pilots. first So get regional to have requires our

hasn't to -- thing of a been of actually flying as achieve have out the airframe we utilization getting dependent more to the have get final record manufacturers to the aircraft Their deliver. would kind on of terms is whole. And They're level we're to in great. also better. we be able We've that track bit a little of

how pretty see it we'll point. shakes that's to good probably fruition, that And a if comes guess So all out. this at

Andrew Didora

Got you. it. Thank

Operator

Thank you.

Our Deutsche next line the of of question Bank. comes Michael from Linenberg

Michael. Your open, is line

Michael Linenberg

your congrats from guess, I everyone the strategy, of with on sort X-notch the your morning, indirect. here. piece. good and just two on direct Vasu, the corporate upgrade rollout early I questions to unmanaged caught of I versus Hi, Fitch. two versus managed guess distribution any new one, learnings

divided. evenly more probably were they historically, back go we if think I

us. So it Whatever tell there. and seems have a bit shift there's you like follow-up. I a of then can Thanks, a

Vasu Raja

it really be an changes was with Hi. Thanks which might and all, his of really when Robert talked lens, Look, first remarks. Mike. simple wondering all of asked. selling a question. distribution done about in opening excellent It's our are I

able want by American that. expectations are. our what customers very it experience shop and everything make We oriented possible been has indeed our as Airlines. above with their self-service and as to has been It to has probably eye-opening around And for best easy to performed be

simplest to this. way like The it is

divide you customers the revenue for cohort of of of are the all our of members In who quarter, into by the are AAdvantage customers, not total them human, If can not AAdvantage and from program. indeed, are the members who program X%. those actual X%, those program, numbers two those grew that who groups, but bell you take travel the their AAdvantage

also customers, revenues attachment our what what a Amongst the level XX%. our expected, but things: really encouraged actually we for above transactions X% of of their high is customers all certainly by there's -- by who grew three every for their are we're first, we by advantaged and Advantage had That customers.

of $X.XX card. revenue bring credit on dollar bring primarily about flight a every revenue of they they branded in, in other For

something we've actually originated fees lower sale booking service. advantage are in customers. But Two, a the we're and paying agency some reason, just our XX% at It's in calls to amongst of XX% our and reservations less like is materially not found things what is travel of cost to that for commissions like is, that. to bookings and go unable

that see from So there's a savings it. implicit we lot of

these the encouraged And are the in a really our prefer they out have up. to direct. importantly, most themselves by fly And network durability tend They to we times year. customers last sell where who and more tend already into of demand. use it's to is They what most These maybe see us bookings They customers' unique. fall. we're coming importantly,

we're this, to through changes. going will app accelerate direct revenues continue of of currently end and what online dot-com. the roughly our We service XX% we're taking year, our to channels. customers to actually grow. encouraged or going to be will anticipate in our by XXX% through So our By that the of XX% the sell, able We're we

We'll features as that time fare also this new But where us. of to out available aren't our from through experience increasingly for for we'll able technology content roll less customers traditional they're get make that technology. distribution over and quality less looking happens, those

Michael Linenberg

look even response. of I forward And you JetBlue question, LaGuardia. it that it presence like next the significant second schedules, at year, then in well, a Awesome to look does sort as of Great. my still guess, maintaining is summer is to when I up just in

schedules a TBD. than them my placeholder -- And so slots pre-NEA? just LaGuardia smaller and Or what presumably, in you maintain maybe you to are still will had question. that's is answering for those and Thanks those that presence lease to continue

Robert Isom

is fact, how process Yes, Priya can. soon American Mike. down slots of in how transfer as in as Airlines wind here We're determining right Counsel. we TBD we of the NEA a of lot And most the all now. to A to that notably Aiyar back our General is still

Michael Linenberg

Great. Very good. Thank you.

Operator

Thank you. and comes Ladies answers. of and Instructions] gentlemen, we Wall will the Our from Alison first now move line questions Sider to Street of question media Journal. [Operator

please question, Your Alison.

Alison Sider

more deal? so could other to costly much deal and back the a the go pay if Do Thanks sense boost to be how pilot much. have yet adjustments of have rates Hi. and match United you the you

Robert Isom

very at looking vast is has of life one wages, and indoor for improvements. now. adjustments some of I Devon. that significant are know that? right any while an do be on in close required Look, The majority TA. We're our to not I'm Devon, that the working things TA, was quality compensation may amount. United have idea you there it's do be that supposedly in And their would what on there

Devon May

have what for. improvements but the right to through other where now. more a material. And really match have agreement. or with Robert done percent is our in higher on is be detail focused on trying work Obviously, we We're our to to our pilots. Yes. what But working we're mentioned United items attentive wages And are close, earlier, the what significant we APA with think of agreement the can wages than tenant we we might now we if for that the get we're couple some some as right get numbers see

Alison Sider

about bit but this of with heat for seeing or Thanks. impact about Robert, how and kind ways dealing customers you of you're just I in seeing morning, if operational little you're crazy a talked this and changes that different earlier country, things that? guess, the curious of we're any parts if Great. any from there's crew thinking for this And requires

Robert Isom

harder and longer. mean, machinery, great really they're Ali, and heat it's people. David and country, like something more we're that impacts have facing help hi I me. Look, Seymour on hard to is And our it the certainly, also that aircraft, the So, this here records, the year are I these in they're any and run

have great in weather in hot DFW and hubs, experience with places even as Charlotte like Miami Phoenix Fortunately, well. dealing and we

So to we're put that them we longer use throughout the having place. in all year. employing those just practices more and We're often

things on conditioned things sure we've the a precautionary lot that of like more summer give just our basis into just We that the because of of on trends we're couple at seen. that work air I'll prepared for heck of jet put bridges. done a a making examples we've

to as gate, that get sure them cool aircraft want a as keep we those as can So soon air to aircraft possible. as to pulls make an up to we

now, Our our work preventative really we're team power things but Those systems because off. able APUs, seeing the when those are all maintenance prone break right that times the are that the to engines done. that good during has to big of little are are engines results like

have carts the going as really sun and like the we're break available there our making our sure get And and we heat go to it's air and they the from appropriate making drinks to as team things you'll when board to see that forward. team electrolyte is are aircraft with sure we're seriously, that members, well, are taking on only us that ice whether this have out a conditioning ramp that we or members,

Alison Sider

Thank you.

Operator

Thank you.

question News. next of the Mary Schlangenstein line Bloomberg Our of from comes

Mary? question Your please,

Mary Schlangenstein

quick their have use do slots two for their those take questions. leasing prohibited for just had to on I morning. Good you own own Hi. JetBlue flight? to Vasu, you slots, So from second is them those the LaGuardia to any are You the pilot slots back? on you whole the reopening in you changes circumstances. are can't it And lease to under limiting Or are question to discussion? contract them pay? talks, my just

Vasu Raja

handle handle the -- So I can I'll both.

regard going off, Look, anything that First to gates in or things that routes to that. slots or relates time. like or out figure over to we're

leave I pilots, pilots. sitting down I'll that. And at in So then regard as mentioned, it to we're with our our

sure taking how we That's a real interest they're care of. in We making been discussions. viewed all that have

care can quickly. get goes. My the And we're long so, that we'll is taking make we hope that going And over something that pretty to are see what, pilots no of. matter done how our run, sure

Mary Schlangenstein

you. Thank

Operator

you. Thank

ahead, Please go from comes Leslie. question line Josephs CNBC. Leslie the next of Our of

Leslie Josephs

for my Hi, question. everyone. taking Thanks

premium sure pilot you correctly, seeing Just on matching that want rates. clear Thank for seeing, I on to question loads ton and the especially And of of to just And leisure a buy-ups on international that. contract. the in curious from you're I you understand then then business kind economy you I sure to what higher to and second premium are class. we're make committing -- just just We make a want United didn't just are paid you cabins. premium that guys. in hear

Robert Isom

one, Vasu first one. Leslie, handle can the the second and handle I'll

Just, intent -- our and the we're pilots look, aware the our again, that agreement that of to in your in has match question, working wages tentative is regard signed. APA with to United we're the

Vasu Raja

the Leslie, do in continued And but see Yes. style we noted recovery, through premium to fares. it cabin all we've -- we've strength

system are across seats premium up Our about total the X% year-over-year.

premium Our notably, across of so. or it's for We've consistent London, our total were XX% about example. our And pretty grown revenues up markets all seats premium in XX% year-over-year. about

much And Our at the we're are others. of time industry back we're But encouraged on different XX%. the and that's uniquely into over up by from when so adding are a premium trajectory revenues encouraged, is London. we that

and for For first the our venture joint in our the for in our unit of performance full partners, revenue history, the quarter Trans-Atlantic time outperform will any both year.

complemented more and It's ahead. see strength. So do we distribution that see opportunity strategies, we our by

Leslie Josephs

with and in And the down showing report down then just falloff TRASM one that any quick coming fares When of seeing or coming of get follow-up. the in kind are the summer inflation U.S. you are bookings airfares the either out season, you

Vasu Raja

Nothing beyond seasonality, historical Leslie.

Leslie Josephs

Thanks.

Operator

you. Thank

Our of of next The question from comes the line David Koenig Press. Associated

please Your David? question,

David Koenig

raise couple APA people to other need you contracts my plan their which or APA hear name. deal, Robert, to I APA, profitable, X.X this the of billion, percentage should previous had or talked with the you higher add remain a cover contracts and still it's to didn't I points. at you've is matching fares? about United and expect TA going Do guess the Thanks. do me. fares the Okay. valued

Robert Isom

profitable question. business. a for to time, we're run over thanks Look, going David, the

that pay very way to a will benefit a and So but our our to ways to do offering also to and ultimately, care our possible revenue worthwhile members, offer team do to compelling going of can as more customers find to compelling we will that have we try product sure product customers. that take We're going make customers. everything higher in cost for that efficient a to as it take really to offer we be to can

David Koenig

other Any areas Okay revenue besides for fares?

Robert Isom

in the what beyond already None call. about we've spoken

David Koenig

Thanks. Sure.

Robert Isom

of that really reliably, we network those benefit and are incredible customers into from can We're everything make and front. to got sure to tap that proud flying really an on We're industry-leading able do we've rewards program. that going we're our that

David Koenig

Thank you. right. All

Operator

Thank to portion Q&A conference for call. you. closing remarks. concludes the Robert of Sir? turn I That to would this back the now Isom like

Robert Isom

Hey focus second Atif, Look, on close balance quarter I'll us continue to thanks so just you much. results. strengthening sheet. relentless point to hold And can accountable And the I'll profitability just for this out way. reliability, our and

last terms In no than of the over reliability, American one has year. better Airlines been

profitability, this expectations of is commercial all beat offerings quarter registering our terms our In just second of proof that analyst really are with customers.

anticipate Fitch sheet. doing upgrade would we strengthen that run that you indicative profits, the balance is, on can produce and right strengthening This X-notch front. again, You today you things, we're further from your reliably,

All for Thank our working. are much. at of us very together, get outstanding quarter you back positive efforts it going it. second We're proof is to that this

Operator

This concludes conference today's participating. for call. you Thank

disconnect. You may now

American Airlines (AAL) 20 Jul 232023 Q2 Earnings call transcript