AAL - Earnings call 4 2023 | American Airlines Group Inc.

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Thank you for standing by, and welcome to American Airlines Group's Fourth Quarter and Full Year 2023 Earnings Conference Call. [Operator Instructions]. 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, VP of Investor Relations and Corporate Development. Please go ahead.

Scott Long

Latif. you, Thank welcome and and American Group Airlines Good Year to XXXX Quarter Full Earnings Fourth morning, the Conference Call.

in year with with remarks, addition outlining our call the overview and call question fourth get A full the details Q&A many On as going Robert with in questions the senior an prepared and plans call prepared in Robert operating morning have our also will for we by questions Devon the for one outlook and To this possible, we'll to our one executives Isom; are and the followed and performance, of will quarter CFO, of number our May. session. the our media. room Devon please follow-up. follow from as our to other remarks, analyst limit forward. After questions, CEO, start open yourself the

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

your our is call to our subsequently. date, website. The the be the non-GAAP interest A measures included giving webcast of press you on for will Relations are exclude found the Thank impact items. also Robert obligation we information the as information this today's call be A our undertake financial reconciliation the with and can the joining In that, morning. section which us Investor which earnings certain of to call of over to numbers discussing the financial of CEO, of this in morning update measures turn in you this we And addition, is morning, website. and be this for release no on archived I'll we'll those Isom. unusual GAAP

Robert Isom

and incredible American $XXX Thanks, the for running good the adjusted our balance pretax we're operation, profitability airline. $X.X profit initiatives, reliability, a by year, everyone. Today, American the through customers approximately that care our commercial more Scott, want while managing flow reported strength and reduction. This their sheet for of. even revenue for prioritize for quarter of and we'll continued deliver morning, efficient network, and debt an through strengthening to costs, continue the our and our proud million our to cash year, driven of to We're record accountability product work XXXX Airlines building fourth for strong producing driving at an billion our by and thank demand free fantastic and our historically team. I execution incremental full team resilient

on our focused our agreements. remain continue labor of also taking make progress We and on team care to

members weeks and life Our contract few the by last new our the of IBP, Reach quality finalized has the is as improvements. pay represented ensure well ago, the CWA negotiations in third quarter year. customer as with as commitment increased APA quickly for team A team peers. We team service a did their in same possible and paid industry deals as we giving been consistent. our

the of top with negotiate to deal the continue will our with goal shared reaching APFA, pay that of a the flight attendants the We at industry.

we revenue rewards approximately to program. have driven revenue and our begun seen trends cards revenue. of growth acquired value for our we record AAdvantage year in bookings further domestically, account recovery part strong is We our our international. restore travel from potential our XXXX. revenues entities. co-brand about forward. by record businesses. as as levels. business and encouraged revenues We're our from hubs greatest year, the more system of have strong results. Now business the continued rollout excited start product and by enabled growing customers. customers and greatest in growth between program, the both a the by produced regional domestic financial medium-sized to year capacity fourth about continue fueled full More also let's for by These robust from travel business see travel. Domestic XXXX of X/X seeing also travel of We approximately represent number ever, demand in XXXX, $XX we're our be trends going billion, our expect quarter customers partnership and AAdvantage we credit opportunity came We're Demand small- see very revenue to of in who talk the AAdvantage to our in customers of and In and our strength numbers upside of remains revenue at normalize we AAdvantage XX% upsell record loyalty across among XX% ended balanced supportability. This source than the

was are our They than than XX outlets. experience those lower to In in products XX% expenses to valuable likely our XX% best individual customers doing to XXXX, to better provide Over access year, shopping more enable selling have the were and encouraged lower. to a content our recommend results. Customers the traditional shop points us by to higher we strategy very direct our at purchasing American made changes more and so We're past while are and have directly XXXX, enjoyable with revenue American the service who more give traveler. customer distribution improved expense.

significant moving Our continue fleet, will network program and travel rewards to drive forward. value

will cash us free to position Our limited capital to continue near-term requirements flow. generate

and holiday The over We rate record quarter the lowest fourth the for cancellations achieve to carriers produced continues first a U.S. now our departure completion ranked operational and during any the network in regional year American year, team among American factor since to [ of performance ever including the full XXXX season. Turning in Airlines merger. the ] the number industry-leading mainline completion best with operation. on-time and results. in factor busy our

on best the led exceptional and fourth and of collaboration to All to to to the excellence operation more full network our record American this quarter service past performance has We'll thanks years. We're year. No the operated deliver airline strong for in that continue X.X our entire the operational history, focus scores and in a across build likelihood on recommend than customers. over reliably running organization.

our year financial for results year. and share full turn and I'll the fourth quarter rest of Now it outlook to to about the over Devon more

Devon May

Thank for to sheet you, American for unit delivered team Airlines Robert, our driven items, contract members. In per cost better full quarter the team income this results. In early our special quarter operation a we and performance. to and year, for adjusted diluted excluding thank net fantastic $XXX and a guidance customer our by operational or strengthen earnings new continuing share service million earnings for outstanding quarter, for of reported fuel we action the of customers. result balance above year, we fourth ex performance the fourth the finalized strong our We and and net you further to the took produce $X.XX

revenue, For results January, last produced guidance and unit the full in we including line stated provided capacity with we earnings the year, and production, per delivered on our CASMx objectives on share.

XX.X% XXXX, American of $XX of items, revenue flow special generated margin an the margin full X.X%. $X.X more or generated operating per fourth billion. earnings cash produced full share $X.X $XX we free of and year we importantly, quarter, billion than net We the net billion. of of generated Excluding adjusted record of year, adjusted income $X.XX and EBITDA approximately revenue diluted for billion. In In was adjusted an

EBITDA margin X.X%. adjusted an XX%, we and Our produced adjusted was margin of operating

strength was Our in point of the fourth strong midpoint our previous higher slightly Unit capacity our in resulted the overtime midpoint better down interrupted in revenue end expense. the resulting than X.X% the and items was and This of low was the and our nearly Unit in outcome driven more costs, lower above special fuel, that guidance line prior range. guidance, lower by for X.X% net the trip with of of up pay quarter year-over-year, our premium guidance range. part year-over-year. year-over-year, was X.X% operational in excluding performance operation, quarter capacity X

Turning our to now fleet.

year, We XX XXX the X, X over aircraft. we aircraft delivery to decade This CapEx due to past expect decade. this aircraft, new took MAX delivery made have X we mainline modest AXXXneo investments XXX-X and take requirements XX new including of the aircraft. mainline we XXXX, of XX In fleet

non-aircraft XXXX approximately to XXXX million. billion expected aircraft is $XXX to our Our be be $X.X CapEx CapEx is approximately expected and

young replacement manufacturers have and aircraft with the this discussions fleet, of age into for we our needs. to have XXXXs. Due continue We deliver aircraft modest later to the to decade additional very

result, to sheet. As CapEx we has a free A for allowed significant XXXX expect capital $X.X with than year requirements, flow in low billion progress per the average along cash relatively through production from XXXX. aircraft our strengthening balance less

now we and total peak $XX total $XX.X billion have of the debt And reduction billion We towards peak total XXXX XX% expect from is by goal. reduced have by to from this levels way approximately levels debt of billion approximately reduced $XX year, by end over the which in XXXX. in our debt

outlook the to for on Now XXXX.

industry-leading prior in deliver we capacity expect TRASM and Based assumptions, experience. this possible asset down year-over-year. enabled current Our reengineer enhancing reliability utilization be ensure X% to our new customer will the the our will year, grow did we be on continue than deliveries. while aircraft improved Consistent to as expectations, to to more we'll This plan year-over-year mid-single finally run be by year producing to year growth capacity full with to business and XXXX. in airline efficiently we we as to digits focus flat be This XXXX.

bargain up XXXX. XXXX to year, guidance For in and early CASMx XXXX. due year-over-year cost expect the with CASMx X.X% we to versus flight reflects attendants XXXX, X.X% to be X.X agreements pressure approximately in an our ratified unit of points collective agreement approximately This anticipated full

use be in Our the year digital deliver and our is result this through full we our and utilization of expect X%, million solutions, improving ability to asset processes to to due focus savings XXXX, cost to more reengineering X% transforming and up unit $XXX operating efficiently to expect cost approximately we procurement. on aircraft utilization. In achieve

last months our opportunity to improving experience. while spent more and developing We and member team be customer business productive the have to sizing the plans reengineer the XX

over of adjusted opportunities Using excited $X.XX the are Investor expect and about to flow Day. This diluted midpoint we these greater we we at billion. in between year, per are $X.XX. more spend forecasting produce and We detail discussing guidance, time cash of the production $X share will free early earnings our results, upcoming of that

quarter, Looking first at to down the TRASM to year-over-year. more approximately we X.X% on X.X% X.X% X.X% be to expect capacity

Recall our We to the of X% have not quarter did impact XXXX. expect pilot first agreement be CASMx approximately accrued new up to in quarter that first we the cost year-over-year. of X%

year Our year-over-year CASMx the pilot improved performance lap increases. the as throughout agreement we

fuel quarter between $X.XX and the fuel between current forecast, and in on adjusted adjusted X% for share first $X.XX per forecast assumes current Our X% first an of per the price and operating a between loss Based assumptions and gallon. $X.XX. quarter we price an expect margin our of and of demand $X.XX produce to

beyond. Airlines in and unlock we on the delivering We progress and to remain team with additional the results American XXXX, pleased has in value made focused XXXX are

to Robert back for Now remarks. closing

Robert Isom

We Airlines do, American clear I delivered have operational X going to to financial profitable, and team we commitment role what made and you moved reliable our of results. Thanks, we to The produce ago, a Devon. made the made happen. a When we in CEO years team into be continues way. to it it and big all and outstanding are

we plans what Moving will control. can on to forward, our continue we execute and control

to momentum. done team of but see our on build and Our opportunities there's business our in tremendous our leverage much continue front us a the reengineer more significant work, We network airline. more operational fleet we efficient to to build as has and

flow. us Day Investor March our to to enable please more the We at free will for analyst generate All sharing much line open sustainable of now And this look cash forward questions. operator, X. on

Operator

[Operator Instructions].

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

Michael Linenberg

have I geography believe quarter, did a going was to geography [indiscernible] it's out add in to well. the differentiate to that going Can a beach of you working between quarter like distinction, guess sort you some sort have outperforming called know that that's -- more follow-up that the there well. a quick on There challenging Vasu, you're America that, And long were color were a international as related region that? look you the near -- March other? even be region. I and markets one a haul I Any as capacity last maybe strong America underperformed region very involves quarter, that to were is indicate markets in. did Latin a I and of there. then the into Obviously, that X-part the December I question that, is it maybe Latin to guess,

Vasu Raja

between it's One actually is things No, question. and we short-haul There's long-haul marginal clarify. and RASM a great Mike. between call actually year-over-year also Absolutely, the X difference Latin it, to the difference as and profitability. America

I'll So first. the and -- do second one

a Miami America. We've drive Latin of Miami -- larger South we schedule also in December, America lot profitable], it seen hub. much [ the ever our in flew was able over so been going First, with to that to efficiency of we've

we more long. And both so short is it's important in term, see thing near-term the do in and challenging near while trends, some revenue

As plus entirety business, we fly by we look of at our a turns short-haul markets positive the basically the QX, end anyway Latin QX. can of together short-haul narrow-body the domestic where

as near improving of see and long-haul through more -- trends as term we too, really related do in move see the we we course the So with the year. the market, issues

Michael Linenberg

Okay. just bankruptcy. table? they looks a may How Or Brazil that about that's TBD? we and Great. investment your relationship XXXX, you Latin second America, for there? even are in your my should in the for that some investments is partner additional your not think And file like When potentially about on in on think I in including CapEx maybe down Or potential that GOL? then

Vasu Raja

answer least let but offer Mike, about quite there's that yet, probably this a not to lot me at we're this. going

network, the last First, massive partnership take really might value our that what be case. always, service of action through our a the a in is of them partnership and program customer no they true. And that we the whatever no foremost and to is choose We're see our our and region, connectivity, and source we our will quality AAdvantage our with benefit matter course for for I'll commercial say them base. thing tremendously whatever of hold or to network happen customers compromise the else might GOL

partnerships. but foremost, prepared we're partnerships eventualities, all So for our are and first commercial

Operator

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

Scott Group

Thanks.

so you're RASM that far of this so the we've Overall, you come between So flat saying. guys -- you some to others some RASM? airlines of down seen flat the other year. are explains How guide to are are and maybe what on guys guiding what positive the to thoughts Any difference

Robert Isom

we Look, is This on we happen. see But based Robert. to obviously our tremendous build we is what think demand. plan going

it's said, American other going kind to actually if Now carriers that accrue that to are of as benefit, seeing well.

beneficiaries have I be overall whether economic the well the adjustments as any assumptions performance so if to that, that look, are reason, for And in we're no on based U.S. there that doubt capacity to demand or be going our as

Unknown Executive

add. I'll Scott, And only Yes.

this performance. much right QX. can And QX see so margin as that taking at company coming are started, in. our we the same it or is you is into as rate capacity has change get Our year focus now, out in as But there's revenues in that the growth we

domestic our we same anticipated RASM continue. the we to will international As earlier, margin-focused. mentioned in QX we lot in of and we're But positive always, year-over-year with a expect first And business. RASM exit as and I short-haul strength

Scott Group

domestic positive the So of right? QX, Is so I'm the guide by RASM you're understanding for inflect that quarter. RASM to within expecting just your end

Vasu Raja

Correct.

Scott Group

include just full year want expectations the your [indiscernible]? then to for clarify, so -- Okay. does just guide And

Robert Isom

Yes, have [indiscernible]. it a does

Operator

comes Goldman of next O'Brien line the Catherine from Our question Sachs. of

Catherine O'Brien

in for Congrats that's debt XXXX Devon like should Maybe preferred whatever you March, we'll EBITDA right sure about flow we to cash on debt net appropriate thinking billion of leverage And tracking free I'm on your or over towards target one any expected? debt is. $X schedule. term? thoughts long-term ahead for the your metric first. in what's progress the total high-level goal. short or go with level reduction more currently in of hear the Seems want but where the What's be

Devon May

question, Catie. for Thanks the

next pretty months focused XX now. the are on right We

So to debt we billion total as in XXXX. expect down remarks, end we by reduction prepared $XX the mentioned of be the

improvement we XXXX. billion XXXX. $X.X where end from debt target billion about So by of end at were the a of the still of have for We $XX total reduction

we last we start smoothing progress billion really debt debt over towers we've yes, made smoothed to now. of feel have made good the XXXX, March, we're sheet. the the paydown of Through great years, reduction we longer-term the Day really some get forward. the significantly we in and due we'll XXXX. at goals our $X lot $XX also So Investor our and billion had as about we're in where a proud for tower, balance total more proud of the feel At still out of going have that debt refinancings, debt about talk We really about of couple the over in progress and we target

Catherine O'Brien

of already provide. with Got expect could you domestic Asia to it. you, perform domestic maybe but more us the love told through quarter, can down short-haul guide And underlying different of Understand of with run then turning just if details on in dig Pac, that about little X.X% X.X%. Vasu, to how LATAM, to regions a Transatlantic, revenue at whatever end would unit positive XQ you the the you just kind I

Vasu Raja

to. sure, Yes, happy

-- QX, our so we is the system to we in by turn domestic market. the by the much over should be maybe of In XX% ASMs Caribbean. short-haul And of end and will domestic short-haul this us, that quarter. for weighted capacity positive anticipate our the Looking saying will start I

things. for influences RASM turning positive. In flat slightly lot regions other will we seeing And we schedules much flat a we to this haul, by than what we're down maybe performance at we see improving any Trans-Pacific haul beyond, in yet of long-haul year-over-year, and certainly, long short QX end encouraged of more all But into those very point. and those that trends. numbers changes are again, capacity see across Latin with effectively coming see more entities as But So March and those move transatlantic year-over-year. region probably

Operator

of line Jamie from Securities. comes question next the Baker JPMorgan of Our

Jamie Baker

Vasu. for couple A

on First, profitability. models. the do a about dead maximum we Northeast quarter horse pain your that's demand unwind us behind question. specific the guide seasonality, give as unwind, think what But the the I not geographic to you're going know alliance you considering in from being And experienced? perhaps anticipate

what York think the the about you are at and to want however Just drag Boston, contributing or point New largest least it?

Vasu Raja

the worst in us. That happened is Jamie, behind QX. Well,

York, these you and fact, in a refer prior which commentary made York to marketplace, slot and our I on thing on calls. press customer has post-pandemic base New whole either In New others world. a better. portfolio the is I'd The now or in It changed New the serves York lot this that the

to doing led performance unlike partnerships we've growth York is New we in the better. And Our continued what had see share. origination there,

the to enrolling that AAdvantage is never for market and New in in card, new it and prior largest credit had York NEA. our the both customers been

open we behind the us. open are full where to So is for -- stop. our to But worst we're right period, that now, any partnership is better certainly we're for customers, certainly

Jamie Baker

incremental further -- today mean, enough cost effort? on blended spoken make you and all terms I And it seeing about think changes advantage to in we though, or Perfect. you robust corporate we've that of it what the then of is Or recovery corporate travel made take without yield that past, adjustments? about is the and network any I and phenomenon. simply pricing When that to need you're recovery, you've in

Vasu Raja

at Jamie, our it's speaks a strategy. maybe question. And large great distribution that one to

first, And that. so let me and to at hit speak that large I'll

travel recommend We with Internet. That's them we simple. this give you or more more our at of to customers. We're to revenue, in XX% X% the expenses up customers is AAdvantage said. up lowest a whether AAdvantage efficiently, that's what And revenue them in see change we from the are demand. or higher. First, X and our buying seat, servicing. customers, the to but corporate at echo content content, XX% miles. X% selling product has look points travel are liking best But scores from revenue that we through better best of all can what Robert That's what flexibility more customers fundability, who producing see revenue really is down or agencies the we're [indiscernible] changes, have that of for we're year-over-year. our more. About premium We our our what it's are more expenses And a as of more strategically, sell our management coming it, how comes of to that. XX% the been I'll likelihood

unmanaged that's unmanaged we to down So QX The business X:X businesses plus on exit that business business say managed higher traffic flat almost with all covered really on which it's XX% that, double-click a is ratio recovery. to impact Within on further. that managed yields. with XXX% We and business -- versus meaningful, right? business a managed

as customers it is, easy Internet. to we consume So to forward, need make foremost, to lean for through realized have into the through this. What further our first our this go going and we're actually, we content we

too. because invite the the all do and great this Internet-based to who in the for So the us channels. And We're amount is restricting it for we're great going non of the going that offer join customers, out to Internet. travel we and for we shop all customers distribution. world capabilities better through and Internet to are should mileage for them roll of servicing agencies through going start of this we servicing be selling to more And managers travel

that around our of helping the to are All really audience targeted financial ship. incentives

we've been what actually we've very encouraged by So seen.

And similar we to our performance is year pandemic period. now have to optimize. in I opportunity exit was rousing clearly, think what relative it the ahead, the in

Operator

Thank you.

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

David Vernon

of ] in basic of into give in sense affecting in is sort segment are tapping more down what the and of fare premium? you growth now. are bios some ladder happening Can of premium kind of color of premium where that lucrative topic around give movements of a the Just sales or right how business process sort the us product the and how us you [ the some revenue? up On growth

Vasu Raja

Thanks, David. I'll where up This I is pick Vasu it left it and off. right

a I think easier around give focused content that you I are to why can point it just we probably AAdvantage understand for fact customers. so makes selling -- creating more

actually within through that see that strategies and shop from basic want which our app. Gap] them, and so we but distribution more almost we to actually coming more of can is revenue many So year-over-year, growth all our about that indeed of up if XX% up of coming is that's you look year-over-year. is go at sell its our that, higher. and system economy changed for because deliver commission this who that product. Last in coming and dealings we not it ways we X% customers And us year, last what year. [Audio is And right why thing. What's are here is than customers travel product now, base just a ], year. then to up dot-com is of We reintroduced and year-over-year number it basic corporate [ something It's critical management been it took out more XX% programs. interesting included We actually XX% buy its and where the But who is XX%

a from we great far being as risky see opportunity.

David Vernon

of and how -- radialization we how the that's fare then the understand Anything Does something we capacity like think -- follow-up, operator American capacity impact about to help negative you us impact unbundled might out And the a up on of let's could classes? uniform of as an it of, or maybe changes is product? -- the basic in more pulling would ladder. just industry, different sort really the is being thinking Okay. contemplated as the you fare that of do be margin Or us about margin concentrated in for some should in capacity helpful. tell down market say, the how your that some impact be a lower in

Vasu Raja

that at -- going business look, if earlier. there's mean, do on I Well, a like not all all basic, supply-demand-driven entry-level advantage. products product. fare less our no base have It's them and point whole to is is products, businesses. competitive odious for not actually for joint we that signed customers it us, us, buy make to of things Robert with clear customers And are it have will economy demand. so about a back large, and and for if travel there's supply, But one is The gets AAdvantage. mentioned I for think up door impact And product of in it. experience, our that's the

Robert Isom

us may that this way. David, technology I just is whatever to come -- want which we've enable react to built add to one here, to other thing Is our

have be look, It make product as customers it. can to receive in react incredibly to can may the to to to seen nimble So the also way unable very case and American the right And past, a goal the we carriers you changed. want be not sure they in done our is a now. that said, Vasu deliver way even quickly. That's has is that

So whatever will competitive own and our be We've happens or the in the We've product it to got marketplace. the developing to having it's ready. us be technology. whether got super compete

Operator

question next comes Please go ahead, our to Cunningham Research. go next line Melius from of Conor. I'll question. Our of Conor the

of Morgan of from Ravi the line Our Stanley. comes question Shanker next

Unknown Analyst

on about X I the probably one Investor is in for what know is around great. curious was new long-term My the during would financial it's This really investors I event, color question And first you is the Day hear targets, guys Catherine event the around weeks, just Just any revenue whether have initiatives? expect years. can which to be Robbie. in few a hosted

Robert Isom

Catherine, about fundamentals put we're the look, on really the excited company the well. funding worked And really we the doing Day. of Investor hard to focus

We're about debt. to strengthening the to with our lot a we've do done our and that potential to fleet. All about that spot what of even talking want times, a talk the now terms to done And that the on to about our ultimately, returning talk in of sheet we Vasu talk work we to efficiently. know about deliver We're even balance program. we're about on we -- the talked all can reliability, company a next. our doing And profitability, everything be better down how paying we've all network horizon, our going in going of that a loyalty what's great You mentioned number really today, lot by benefits within has customers. partnerships, we've more

see of is One look, you'll things Americans -- airline. that a changed it's the

We shareholders. focus and producing on ultimately our free have flow cash a rewarding

can't I that. of about tell to you So more all wait

Unknown Analyst

as quick sure follow-up. the with shift the but in anything I MAX early, curious you you any seen due a the January issue probably if if was grounding it's Just too wasn't with had I carriers. seen data. other know share I just to in had

Robert Isom

for add of that. been Now month to Vasu year. but isn't month January a it's never strong some the the Look, us, -- it's can color busiest

of business. it's all I industry. And XXs. for so about know size the we'll similar And overall the of Airlines that material think the probably that that rest American is, while number not load when I'm for are sure It's the there you the the there's benefit. factors and of in open carriers seats

Operator

Thank you.

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

Duane Pfennigwerth

advanced bookings to here. speak beyond XQ you Can Vasu. with start Maybe

further versus into last as the commentary just if real a maybe what on it's could booking lengthening. we peak curve you this like book on And Just time little comment curious, periods? look you any domestic if looks have it's year, international out if yields shorter you had when this surge

Vasu Raja

even long is say it's by revenues we encouraged. Right Yes. basis as we up let's sometimes call the strong a see booking it's a last and as market, it's that is of curve long same There the a saw is last largely which the really right -- with start year, too the that's of XX-day and really in we're X we're capacity question. to continuing, more revenue yet. outside sometimes But by line What see period. year. XX-day and now we're taking on entity, post-Easter summer short-haul from the just particularly market would as within a shift, haul, see Look, as we're in the Thanks by that outside moderate we what the traffic. entity thing seeing and impactful selling we're was inside domestic to flat curve for the rates yields, range. March it, the as points long-haul I now, early encouraged in most range we book And But year.

Duane Pfennigwerth

thought you I actually more You would. than said

follow-up Just there. a

going long the commentary yields? holding serve Are a bit? book haul, or any are backwards we we On on

Vasu Raja

Yes.

So it's far, though. we're holding go serve a still to way and long

Operator

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

Andrew Didora

the So Robert, on just operations.

You've your want at you be obviously sort strides bigger the picture have to thoughts seems made a you kind of really Or on like to helping plan? now so far? CASM. what some of America point and 'XX? want 'XX great What's it's is any certainly into Investor are post built what maintaining I at where operationally next but your get pandemic, thunder from don't here to steal Day, just

Robert Isom

Andrew, look, we're team of thanks. really accomplished. what Well, proud they've and the

You over think XX the about American most year. the reliable over months, last Airlines the last country carrier in being the

tell and best what claim it. that that. But you're about reliable. fewer a bit can I'll it And the more not taken more baseline So schedule do over take nobody to I how to reliable little that costs talk David proud right we're way going All we to they We we bear. now out rework most run a that's do just Seymour thinks to flew an and really mic going technology you, a bring And we can airline the want to of efficiently. or can canceled we're forward. he about of are hand like we did, the is more the can there. But David? flights, stop to things

David Seymour

It great into in thank it was Yes. I'd really, efficiently as optimally a of we year, complexities you but in better than solve operation, we're quickly of 'XX much investing more before. then ever of What and have is have we tell more and a and has technology XXXX. what No, is super beyond. we're our to where of understanding the Robert, you. And foundation headed and proud the Robert said, again, done team the

see we of we ever is had relationship efficiently future our and to we So better, and the with our IT than what just more lot do starting, our in a team to opportunity partnering before. do have

Andrew Didora

Got was pretty already bookings just with these go? of the Where it. through can coming question, And far new follow-up distribution been the NDC you XX% my think call rollout? discussion growing Vasu, thus And the this what your strategy. I XX% to interesting. with high. then have channels do the a pains lot of regards seems thought on

Vasu Raja

Yes. Thanks I'll for this in the it way. question. Look, answer

little We even have through the transition growth. which channels, enthusiastic not we're technology. has how strictly coming owned that It's Internet-based XX% a our percent XX-plus our rate coming happened. quickly is just of been that just greatest Within is and surprised similarly through

what demand. So and best say, expenses and the strategically, the distribute best That's to through the lowest first, will going It's customers our we're the give servicing. I Internet. them we how fares

So at real the just us. to becomes XXXX number to partners many we retailing in is issue XXX. to use transition want And our of some with Internet point, the the continue as

we've seen So XXX. encouraged ultimately, [indiscernible]. We're by really it becomes what

Operator

Thank you.

comes question the of Syth Raymond Savi next line of Our James. from

Savanthi Syth

on year? on there's between what up side, difference the regional you're Asia. and a curious mix, domestic domestic about and kind improvement between bit And if the kind if of of expecting then follow side, Just about growth in the in LatAm trends Atlantic a the this just mix international was to commentary growth can I international. you talk balanced and like little on if

Vasu Raja

like mix just not Airlines industry the talking And as capacity I mix? the Sure. understand, It's about something. you're capacity American

Savanthi Syth

That's right.

Vasu Raja

Correct.

the with look, we about, at our XX-XX we carrier. through year, will, much all large, course Okay. Well, about that Increasingly, talked consistent pretty roughly of XX a short-haul, long-haul be the the about owned regional utilization split growth continued improved is and XX-XX thing haul are haul. of our short we wholly will about Certainly, that enthusiastic most the long between maybe be jets.

of turns to be months correlated to bringing more ahead, and back domestic In how that still fact, in we know -- jets so and to there. is we RASM starting good to utilization weeks the us look XX% positive as as directly much have regional

of by see So will mean, that's goes of all, America Transatlantic and which I of the now. followed summer, There's where But footprint there long demand tends a really can highest lot Pacific. to opportunity fly. probably a in our be the chunk difference schedule then our last And not haul, of right kind the when Latin in to that's is. out in you be big it actually

Savanthi Syth

helpful. That's kind first might, of just if and the economy And lastly, I of basic the discussion.

you're can On booked if those you class seeing kind what the if you're you're load factor, the about trends? the seeing talk side, of kind revenue what any And wondering premium seeing on -- of fresh there? just

Vasu Raja

Yes. of are comes content, premium are of points customers Look, and non-AAdvantage customers. from XX% revenue buying of which XX our that AAdvantage customers points XX

give customers. Premium book their in who at are really, to lot have our say make in content some up revenues our XX factors capacity is system content our for large, buying load people periods we I'd -- highest that commercial of factors continued is. program premium opportunity continue much every see approaching to Premium And way are do. And load So of is are and premium XX%. to are premium to XX% across the who endeavoring join levels we're real [indiscernible] much a those so do people pretty improvements people great what at to are who close Advanced there. there -- our reserve

Operator

Thank you.

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

Conor Cunningham

Hi, everyone. me? Can you hear

Robert Isom

you, Conor. Go got ahead. We've

Conor Cunningham

that. about Sorry

to we terms terms this to XXXX of from in trajectory kind what a that lot your of capacity -- you in From Just haven't it's head and guys. the of heard year that? But for beyond obviously slowing. standpoint, need XXXX, add count about hit maybe industry do you

Robert Isom

Yes.

this For than a past. year, higher lot what is less we've in certainly the done it

be X% headcount. going more are to We bringing on about

is where call last year. what reduction we're somewhere more but a where X,XXX And a So it we'll sign this of heads at year, from with X,XXX big around it's were just little or we well. as we're in year, digits and XXXX. grow hired looking going -- head grow ahead a to But count about to by efficiencies probably bit We X%. the airline mid-single this

Conor Cunningham

actually a a Okay. about heard lot maintenance lot of a carriers. theme guys. Perfect. you that's from the And And major other from been haven't like headwinds we

a just forward? going but last into mitigate lot specifically then kind doing call So year, normalize -- you lot XXXX. of headwinds? grew realize And to any what those seeing a does I out are of are meaningful guys you that it

Unknown Executive

it's step done a it. is address just on a expect over maintenance we'll up engine did team in-house David's up, areas just then start to of in we out versus XXXX. the headwinds This have our we being or bit. one to But bit where 'XX P&L overhauls Yes. -- close expense a lot say and be about of have [indiscernible] where year David. and 'XX of that maybe in has it there how up depending been great on turn I'll and talk $X.X variability to Robert P&L year. want some XXXX 'XX was We the many big doing work was less end something a and this billion. I up to of it to the so, do little is But

to So I'll it hand over them.

Robert Isom

Yes.

start. just I'll So

done bringing dependent be that maintenance to than are of I of as we've going resources well new well, on think at over But aircraft I industry only is look going for outside whole the decade by really in to one not increase constrained. a is solely we maintenance because greatly. are things that positioned, we're increase, the past have incredibly that needs the anyone. remember where what capabilities more American as that not

we and that that's commercial use. going even mechanics of for overhauls. else to We a engine about things that a I more even we're anybody And more be that to to constrained than XX,XXX talk resource. a at more capacity that David One look can do aviation, good we're going really I the make have us think strategic American and David? to going take to to advantage know them is we as already have put sure of

David Seymour

year engine with getting Robert and checks to efficient how maintenance. talked is have lot cycles lot we maintenance both effort manage and and a going of that here, and normal Devon of of Yes, do, ways of more we run into a this lot that about, we we a that that heavy XXXX these that focus have we Yes, that emphasis Robert. into checks but on past got lot in there's

As really Robert get to with resources done. about, we talked good work control longer-term that have

the here going that and to in confident be we're that cost future. of the able reduce get So some near we're to very efficiencies

Operator

Global. Our of next question comes from Daniel Seaport the of line McKenzie

Daniel McKenzie

My are technology questions here. as well on X

revenue the of What this to does of what portion the of on XX% percent today? XX% aa.com. revenue And So up exactly? the percent was or bookings represent XXX% going

Vasu Raja

is let say -- would me I What first clarify.

XX% buying is XXXX, going advantage. base a premium at our So that is our bookings a which probably from of bit $XX XX% XX% the Of are back are basis, revenue actually intakes we're customer those intake. premium to look a go a we flexibility that. a closer non-advantage of of it's when little And seat. little total as million customers or is those that, our greater our digital Separately XX% through from channels. north premium It's coming of in. came content, are revenue revenue around our On about

Daniel McKenzie

respect and where what of American an maybe Yes. kind of That's of transition bigger then that second longer-term cloud. with could is ultimately is and on helpful. potential -- I'm to between? somewhere savings, millions hundreds savings represent tens to or cost it wondering the And to is the at question the a really in annual cost relates on question that millions, So transition rate? run it

Vasu Raja

about Day. others a we which look to in start great or me more But one Devon on one, talking as maybe pick Investor our is forward let actually this Dan, this up. can

as as you've the laid promising of of entirety out. the the is one is, operating tech-first by company no This with but biggest mindset. initiatives, as it a are We many means

So more to come soon.

Robert Isom

add be Vas, more will faster, facilitator that, And I'll work all kind just that of product a delivering look, to efficiently.

the that's mindset. of so And kind

talk discrete -- bring item. to a together not not we it March we're as about I'd as all just get X. it We'll rather So

Operator

the from Our Instructions] first Journal. Sider Alison of comes question line Street [Operator of Wall

Alison Sider

what is in of your wondering confidence was Boeing's leadership? level current I

Robert Isom

Ali. Look, quick a of things. couple

XXX-XXXs. all We're for current MAX huge X them on the are not Boeing's does First issues we're producing. Boeing fly though, customer, and American and a aircraft. just those off, Airlines dependent some of around

Gap] [Audio

come We're number accountable. over going get of together hold the them track. been the back act all needs on it a of dealing to time, of who and Boeing their unacceptable. together issues Boeing to period is also going years recent needs the no now, is, they've to right with that to but And get matter back

Alison Sider

night deliveries sense at for And do that, think to have the American? announced on impact last Boeing? for you limits FAA the to the production mean you MAX, I any expect that makes do that

Robert Isom

Plain So look, quality encourage track on we will to Boeing simple. and do to produce a get and can they back product. everything that

a we fleet aircraft. over us, now of have For X,XXX right

take say the acceptance this has aircraft seriously. we on that horizon And American done more for than history. So though, don't run already taken We've as production Airlines, new recent on we very well, to in process I'll in that years. anticipate are issues. But that very, nobody aircraft and MAX likely this I Xs next for are in year. XX have any These

act back fly. in go, We encourage on the make is to people place And ready sure Boeing property to track. on together, we their American's to comes the of as ready I teams have to get to right that get what said before,

Operator

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

Mary Schlangenstein

follow up on that. to Just

to them at them any new looking Do even expand MAX. to right about that as the officials federal are steps continue at would taking then OEMs something Or maybe taking on right lines said that now? Boeing? requirements going wondering Is the doing also to they've order? And having potential that they in production different, think talk see about that Boeing, occurring and stronger see steps? to placing the if at all impact right other like you Boeing from you are may the you you the narrowbody things this order a year you think As are

Robert Isom

the questions. for thanks Mary, So

Let me just start with this first. Administrative Whitaker.

is us, very confident hold And States, do. job confidence person they world, United We the throughout and end, what aviation that's the form will he in. safest of the in very, aviation especially of accountable right the I'm think to right have approach. Look, the transportation. but it's Boeing that He all I for incredible now, the that for right

We have way. that Boeing keep equation. be a has commitment to to and that it of part

of claims a is a that Now needs have again, at lot aircraft getting out been the more for the talking growth in as get we've air up we -- X,XXX Airlines we utilization about we take that look American future is of. back could aircraft, and

operator ] we're world's fleet of fortunate that to from of perspective. We're So the largest [ also the fortunate be aircraft. Airbus

to need Boeing long an over We be got So do their together. look, act that's to running get we enough They've job. It's We successful airline. and what need quality run. the OEMs hard product, need we all to demand. their

Mary Schlangenstein

Boeing ultimate So at reflect can you will narrow-body comment on whether decision what's going your on on a order?

Robert Isom

look, of to the you going right bringing American We'll sure product new aircraft whatever we it. aircraft, is to take purchased, from name safe whether sleep make acquisition sure on that factory floor. -- very something off we're take seriously, is we're to make take Embraer, going reliable, right incredibly from be very the it that, Boeing, new get-go and Airbus, that we and the seriously That's

Operator

from of line Josephs of CNBC. Our next the Leslie question comes

Leslie Josephs

as another a impact because it's Boeing of of other see and the of another? personally change or question, discounts providing that could do blocking anything production at that Are compensation, the your permanent else that any And FAA or And oversight whether then you been given cash issue you just is kind increasing form issue any one deliveries? after just Boeing? further

Robert Isom

has front, in that protected aviation aircraft the of with had had quality XX said to that we've against. more American And last sure new commercial on taken make we years. really that were anyone Leslie, deal over Airlines I've to we've the history look, as before, issues than

it from aircraft a whatever process And so manufacturer, any sure very with we're from that are to I'll perspective, that, that ensure that the we Boeing, dedicated people they come to into ready meet resources acceptance specifications at to and are to our fleet. robust going our that leave when have Then right go make have that especially we we they and take and that.

Operator

Isom of conclude closing I remarks. Q&A for would the call. like to Sir? conference the portion Robert turn now to That back does our

Robert Isom

an sure The a and be pandemic, recovering today, I've demand that terms going all to for how of the we're the said summer, product. year exceptional we're expect as are we spring us demand going capacity earlier But demand to [indiscernible]. to and strong. still from we that have progress. It's year continue think, of to see time the of Thanks, exceptional cash the team very pandemic, for and Latif. Look, I'm another We've us established restored another really as year airline profitability. the was done. year. from industry year They've building proud the really was of us. record -- got XXXX what We've a has flow of year reliability. back It in produced leader making I last and We free for even in be

that that we I'm Day building forward, the how and soon. our at we of of and and producing down in we'll customers, talk are American, and we the look next showing folks on that have X March everybody -- taking take and care we that interested care As very and making talking have shareholders. Investor in our for changed a with of our reward about mindset team platform sitting sure talking also on we future More on month,

Operator

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

disconnect. now may You

American Airlines (AAL) 25 Jan 242023 Q4 Earnings call transcript