AAL - Earnings call transcript Q4 2024 | American Airlines Group Inc.

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Operator

Thank you for standing by, and welcome to American Airlines Group's Fourth Quarter and Full Year 2024 Earnings Conference Call. [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

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

CFO, On we the May. our have remarks, Devon our CEO, call Robert Isom; with prepared and

and Vice to the addition addition senior plans by outlook follow our analyst Q&A performance, and in possible, To overview operating other year the outlining full remarks, limit session. Robert Chair, In as start in fourth and questions media. details our followed Steve please we on going call number question executives our X for have morning prepared get yourself our this follow-up. we questions, will many of the and X in questions with Johnson, the room the will Devon of forward. a the call quarter After an to from will as open for with to

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

Relations the our be release, of unusual financial numbers can GAAP we'll earnings addition, non-GAAP to measures, those items. in the website. found of in which is In certain of impact press included Investor be measures financial reconciliation section exclude which discussing A the the

as this are will for information on to today's joining Thank this us The and of update obligation your interest this of is the date, morning. giving morning webcast our website. also information we archived no and the for on call undertake you we call subsequently. A be you

turn the I'll CEO, that, Isom. with to our Robert call And over

Robert Isom

pretax and end $XXX share American or Thanks, early adjusted everyone. adjusted we an of profit of Earlier high fourth quarter above diluted guidance the Scott, today, in million issued the per morning, December. good of $X.XX, reported a earnings

we or adjusted customers. profit and adjusted For earnings hard of pretax for per share reported an American for year operation an dedication to $X.XX. I a thank $X.X their safe billion a continued year, and diluted of delivering to for full resiliency, the Airlines team our work and great the reliable want

have at I results. As focused delivering previously, said on American, we're

notable XXXX, a out of closed achieved we milestones. number we As

and all certainty extension ratification the of our in fleet a With providing through groups, have our with XXXX. labor members cost October, work of place agreements multiyear in with contract mechanics now largest service we team

portfolio card value over unlocking will credit which in incremental life the while the we expected. XX-year for co-branded of agreement million of even the United than delivered We nearly through our We of million agreement $XXX nearly $XXX to reengineering AAdvantage Citi to the announced become American drive expect more more a members. with the new initiatives, value value AAdvantage substantial States, exclusive issuer

year debt from We flow total our report ahead have I'm by in $X.X record as initial than generated that debt our And schedule. goal billion more the reduction we reduced a of free mid-XXXX, of of $XX XXXX. cash XXXX, levels end excited of billion in achieving to peak full

evidence to committed are these do, the still is clear and achieving Airlines our that stated accomplishments there's much team objectives. delivering work results While to American

the guidance. X% year-over-year grew our and X.X% revenue quarter, X.X% Total performance. end quarter on in the positive capacity of in This fourth our year-over-year. high higher unit December revenue to resulted above our on Now inflecting up

network carriers. passenger throughout quarter, revenue American's Pacific total Domestic, led year-over-year fourth unit and the Passenger In Atlantic, U.S. strength was broad-based. quarter revenue the fourth results

the trends down While we we to the This in the short-haul we're encouraged year. see positive performance a early year-over-year first taken, unit Latin by is the we and basis, revenue quarter. of Latin in strong on the revenue was be result expect unit actions year-over-year have

evidenced year. product last Demand and performance. business, was strength the continued managed as quarter, American's the ahead premium remains see the we by of for strong look strength our and continue X improvement business a we into yield as year-over-year, In revenue points of revenue X% up to new fourth loyalty versus sequential quarter,

the Paid revenues with high In Premium of premium was premium load year-over-year. our approximately revenue. domestic responsible remains members cabins quarter, cabin and AAdvantage in revenue up both and factor in up points loyalty were with strength increased approximately historically year-over-year, for fourth X international. X% year-over-year, XX% XX%

of value is AAdvantage. cards for of a program. acknowledged year for history. industry-leading rewards year-over-year record up more American that a our the Spending value was program was an record the earning Throughout had and any year, members quarter, have to providing the customers our burning further program than with we is fourth enroll frequently X.X% members. credit proud its XXXX as on highlighting travel in best year loyalty the our the miles in in co-branded number

new we committed providing our new later aircraft and We're state-of-the-art XXX-X Airbus flagship to customers. experience, Finally, especially XLR excited remain our introduce to for customer Boeing suite leading a year. premium this AXXX our on

international X next long-haul to of our expect course aircraft approximately today the XXX XXXX. years, grow in the fleet from capable aircraft we nearly to Over XXX

the our led in and this in lounge we're introducing lounge the to American on ninth premium open summer lounges, Philadelphia, the which marks track Additionally, way fifth flagship across has system. premium

we And our we're regional on been the automation American and improving was high-speed quarter, airline as customer to other entertainment has we fourth first satellite the aircraft aircraft. on overwhelmingly more In introduced mainline to installation offer WiFi on the our domestic fleet. offer began streaming feedback process, to positive. WiFi boarding a boarding proud December, any high-speed airline. first In step than of dual-class the

of retrofitted the fleet will expect this end entire We by the be year.

to priorities, and the mobile easier provide we'll self-service our it one process on for to more have top Additionally, our more these is of navigate customers. initiatives in share we're months to in options customer-focused of our and Building the app, ahead. making redesigning

in indirect as in to exit recovering remain revenue from share channels continued revenue and quarter, from we channels indirect restore track year. fully on the this Momentum we fourth our

Our of indirect flown driven the which revenue share focus revenue recovery corporate was share, sequential has primary efforts. gains in improvement by been our

strength first bookings forward continue to quarter. the Importantly, show into

corporate we serve most recovering our As customers. year, new We've in of agencies completed we're contracts indirect in agreements agency our new with and continue leisure agreed our that with position enter to to serve profitable new leisure share partners customers the that channels. all the

markets. important reworked and strategy Additionally, these a share customers these and and with corporate restored those restore in by for agreements customers. share affected we've our foundation strong most us our provides that in reviewed continue and our hub the travelers those largely with to business distribution to for steps Completing previous channels compete of

and excited customer enabled The more service AAdvantage. for year, Last grow deliver co-branded the in a we took had strength products steps members, has exclusive we're to portfolio we Citi. agreement a continue that to credit and card with In American further to issuer partner Citi December, with AAdvantage the become optimize to XX-year of years. U.S. card XX us and announced the to partnership to has partnership AAdvantage Citi millions with of first-class than of

were other XXXX. agreement. cards of onetime includes card received XX% Our new XXXX related The $X.X credit fourth quarter amount in an partners billion, cash cash XXXX co-branded from a credit payment increase and our the versus to

from announcement, we of the As and annually. at XXXX, we co-branded grow our in approximately other begin to expect to cash time payments the enable partners disclosed by agreement, card set credit the XX% will

we pretax $XX will billion income cash annual compared partners approximately from XXXX. benefit annual payments and by other expect As credit card to co-branded approaches billion, $X.X

to Our expanded provide Citi with exciting customers. benefits new value more will and our partnership unlock

we have teams making turned forward year. agreement to the over With announcements look and completed, building business coming the exciting the several toward the

airline team, in of a delivered Turning continue another And operating our are the that Thanks results show part DNA. recovery we now part rapid of the of the of disruptions strong business. resiliency to to Airlines we Operational and American American, quarter environment. operational despite are difficult operation. our to resiliency

on-time American U.S. carriers. in and quarter, the fourth among X ranked second largest the completion factor In departures

we best ever passengers. For merger, since carrying of our factor our year, volume largest the completion the achieved second

further Looking drive our ahead, it continued investment reliability in resiliency. and supports improvements the operation will in the technology and that operating

capable we've of. the closing, in this That a will achieved objectives are and performance XXXX, what shows serve quarter and our In number well in fourth foundation of have in airline us this XXXX. team built we momentum and important what the

in a Southern Before to over moment Devon, I to the turn devastating by to like the I'd California. wildfires take acknowledge those impacted call

donated packages have families to and Our we've relief communities. Cross those American efforts, million the more $X.X funds support Angeles members to out firefighters members to in Los American's Red supplies donated team than AAdvantage and area. the care in to hearts and and go

And XXXX. for fourth with to I'll turn year our outlook about and over that, our Devon quarter share more results to financial it and full

Devon May

Robert. you, Thank

$XX.X with reported million quarter revenue share billion, record year-over-year, or fuel per items, quarter unit X.X% unit Excluding net $XXX quarter diluted adjusted of fourth year-over-year. Fourth net up excluding up and we items, of was produced net special year-over-year. up special a fourth X.X% X% revenue earnings of income We cost, $X.XX.

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

business the Most exceeding million driven due achieved nearly better goal technology initiatives, million. we management $XXX workforce the by from utilization process asset improved savings. reengineering to our our in along improvements of and implementation, of XXXX, In with procurement value and nearly XXXX was $XXX savings by

million possible as which the working experience. free drive enhancing the cash performance. and We We XXXX efficiently of $XXX airline also our focused capital release, running helped on remain customer had our expectations nearly as flow while cash exceeded

fleet. billion. new XXXX, XX aircraft in resulting of took delivery at to billion aircraft Total In for used in came CapEx. our $X.X XXXX and we of $X.X XX aircraft, Moving CapEx

in expect between to also CapEx, engines used billion billion, be $X.X and Looking of XX billion. spare aircraft expectation take to to is aircraft ahead, delivery XXXX our $X $X.X is XX to XXXX. aircraft CapEx for new on expected Based our between $X PDPs, net deliveries, and our purchases, billion and which current includes and total new we expected be

CapEx of continue expect averaging to for decade. $X of CapEx forward, with moving levels billion remainder the $X.X the and billion moderate between We aircraft

free of available billion $XX.X produced total billion. of with XXXX record liquidity flow ended and cash We $X.X

quarter, of prepaid X fourth strategically with and year net the ended debt debt net since billion, maturities lowest $XXX of our billion $XX.X We debt term level the total $XX.X we loans. near-term million and XXXX. repriced of of During debt

in we schedule. With reduction peak our these $XX levels goal mid-XXXX ahead from a achieved billion of year debt total of actions, full

stated our delivered remain this toward and to BB. have our strengthen sheet total committed credit on XXXX. to goal to thrilled of commitment rating by to we we year-end continuing are as billion $XX reducing less we We Previously, on focused debt balance work than

XXXX. We by are goal the achieve now to of committing end that

quarter, Now in expect January of by March. lower and This the which In for we growth capacity to XXXX. be X% to X%, capacity followed off-peak year-over-year. in on outlook down the down in the X% to flat are X% months first the driven by peak approximately February, period combined to is of capacity travel

continue We capacity digits, be line prior guidance. full and single to in expect to growth economic with up year our expected low

markets Our restored growth northern our historical in to that focused in in schedule on our fully primarily yet are is not hubs. levels, XXXX improving

rates year-over-year between We growth to balanced fairly expect be operations. capacity and domestic our international

demand will and flexible to which the remain operate. competitive we will environment capacity adjust in response in We and

revenue X% for first X%. driven demand. with X.X% expect with expect to XXXX. revenue demand year, revenue And constructive by of supply strong up This line for in industry the we our expected to versus recapture, to is full X.X% product indirect a and approximately We be continued quarter growth backdrop

year-over-year. growth are will to in the be capacity cost the regional first agreements X%. as high approximately that will nonfuel be were driven reached quarter, mainline reduction the XX% is mix and to XXXX. up down digits new quarter full up First by the unit be and return that X% of expected year-over-year collective utilization, single In bargaining capacity, we to costs unit half ASMs This capacity in of the second

low unit the digits from year. costs on expect of first quarter sequentially we to labor improve agreements we year, timing our and in the throughout the the shape exit Based the single to digits high single as of capacity,

majority of full the unit with digits growth cost coming and nonfuel we benefits. to For up year-over-year, mid-single large cost be higher salaries year, a expect the from

ease. our agreements As will we certainty from look to we the out bargaining collective rate and XXXX, have our new labor in pressure costs

benefits and ASM inside in expect our of per growth inflation. We our that XXXX, of salaries will year-over-year be well

Through utilization on focus to than workforce continue XXXX. become procurement more We to savings million efficient cost $XXX we in efficient. incremental management, expect business and of transformation, reengineering asset best-in-class more the

transformation tech million continuing flat we expect costs. productively with $XXX optimize and mainline full-time are working our modernize multiyear employee we and This workforce than in IT operations to capital in approximately Additionally, in improve investing to a ops We additional more improvements. technology, utilize staffing organizations year, anticipate counts XXXX. to also staying our

our demand on current and quarter approximately forecast, a Based we price assumptions $X.XX diluted to of fuel first per loss $X.XX expect share.

adjusted full of we approximately earnings $X.XX. year, the share deliver per $X.XX For diluted expecting are to to

are in free another flow billion cash cash expect year currently year. for more full We of XXXX flow generation the and forecasting $X of than record free

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

Robert Isom

Thanks, Devon.

cash remain our growing and to continuing margins, free XXXX, strengthen March our start sustainable targets focus: As long-term we generating balance we sheet. outlined flow last the

will for progress and priorities achieving long-term the of built our last we've year our continue targets. the further back in momentum this half Our toward year

XXXX, operate continue In to partnerships. sharpen on efficiently plan experience, our our customer both with strengthen safe airline through our as to we a network, and fresh at service organically operations, and focus look reliable and we deliver product take and the our excellence

Our strengthen an and will American. our December important announcement allow further us milestone with program and awards co-branded ecosystem. enhance to travel card Citi credit AAdvantage leading for was It

reengineer revenue we'll business priorities, All as that initiatives, value airline. by And our will us continue sales build the of our including know to on and deliver work of we'll commitments, to significant a delivering efficient restoration our these we more allow distribution core our our on We the for potential. unlock shareholders.

Operator, questions. please for open the line

Operator

Catherine. of line the From Instructions] [Operator

Catherine O'Brien

revenue growth your XQ for single-digit go know assumptions year for So better X% use could improvement low full guidance. industry growth the over about X% exactly capacity the on your underlying capacity versus X%, the you going talk the grows I wondering the But really accelerates means about RASM indirect what just your year just we in that means And year. But outlook in can don't that than if and year. guide? case? base understand what I like

Robert Isom

track can X-month our for had we speak and traction recovering for expectations you it look revenue is We capacity, anything what Catherine, can progress add we've on as about and thanks. good take really on I'll suggests he our notes start period. to from the We're a as Devon the as that we made got feel we've Steve lost. indirect thinks look, recovery in take short and important see can well. And marketplace. a we a in bookings, at that forward really

great we have year. fully going we're that recover I as the So through to confidence move

we're a just outside channels, outperform. also revenue believe even that and I'd think then note And perspective, also performance this, that of from we indirect that to we perform poised

improving results, quarter fourth economy improve our Devon? environment is going faster I think than competitors. an I in others' in it the saw but where and we're assumptions, largest to our speak can't You to that

Devon May

think on big quarterly quarters down numbers. moves should The the any probably capacity X% quarter don't about neighborhood in that which the for year. be terms remaining be you to capacity there's which guided midpoint ASM gets the up We first I low all And will quarter, of to single-digit X% in per Yes. capacity, in of X%.

Stephen Johnson

you of just -- asked I'll upside with up our potential base from case. follow just I'll Steve. X. is this Catherine, about sources offer

the that chance Robert's faster there's end distribution sales than we of decent restore and think -- XXXX. I and restore distribution sales First, that our could a revenue by

an that's upside. think I

revenue our we're think ultimately, point third fourth And I and on the I quarter fourth would Second, and judged the shows to we're of. by the everything going both results. be certainly capable quarter, what you quarter, to especially

just then The agreement doesn't point And finally, new I'd start to agreement until our with Citi. XXXX.

provide I focus co-brand And year. so think is our during then. upside that the on the is But underway we could that -- get until that, to won't a in probably effort start there ramp-up to growth revenue there

Catherine O'Brien

the Devon, color, That's for great. for one more Steve. Thanks you. maybe additional

now capital mentioned medium-term more allocation factor that thinking in to hit that to As XXXX you do you've you XXXX? Understanding gating you're longer-term deleveraging then how what's the But the credit BB between speak reached debt about consider And to you and rating. your to have shareholder can goal, goal. goal returns?

Devon May

are we achieving and another by billion remains We've still have here proud out start, focus billion or to the our sheet. But to set at $XX of around the achieved X to really that $XX goal Well, balance set total years $X XXXX. we early. a do ago X it down point, we goal to year this improving debt another near-term billion, on

we'll So more improve free cash we balance and in reinvesting talk that. continue allocation the back we'll We'll to come capital to focus and on business. priorities. as other focus And about continue on sheet, flow improve the

Operator

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

next to the go We'll question.

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

Scott Group

So low Devon, you the RASM It big high seem the in year. single a the singles out CASM implies I doesn't year from towards ending start throughout guidance to going laid think year. deceleration like

So just like the like basis talk on like throughout you of the a can price/cost you how about progression net trending year? see

Devon May

the talking little some seeing cost the first right by more we pressure year. I'll we about because now just in Well, rest bit than quarter are of performance, are our during the start a

last doing drive to I'm cost to years. So our performance about is efficiencies. are the the reengineer more several excited business we what of and over start, really the company proud

and our really really into a operation, operations for making is a efficient more this, better think delivering think The I nice leaning we're we're technology. operation customers. team investments I in

digits. single high of up It's costs unit seeing are we though, a quarter first things. the handful In

That quarters in first last of we change did a capacity X than we grow the as the less starts have to in year. ago. the quarter year We capacity

regional ton coming a online. have of We capacity

higher you the As know, capacity mainline capacity. that's cost than

length It's of down in base weren't And signed actually our the X% the gauge then, first X% quarter half in to as driving year. average of to that year Stage course, this agreements last in year-over-year. well. were be for down the is back labor

XXXX. a efficiently lot get We of incredibly cost as know year. the we see business we quarter; throughout well in the we So the as first feel into anybody. we're we positioned pressure as eases run it And

to there's guided side, margin midpoint the improvement year-over-year. $X.XX. show any outsized don't I think EPS of quarter On margin that We've

seeing are quarter see you're versus performed X XXXX. really we a how improvement we any going we So -- in pop materially think what nice don't but year-over-year, I to EPS performed versus

Scott Group

Okay. And maybe then you progression throughout that sustain color? the in regional QX, RASM up Just QX, term? see QX, just in regionally can you in the about out talk RASM just how playing was and itself like transatlantic any of near can XX% then

Robert Isom

Atlantic, Scott, just I'd Well, and also Pacific, the year-over-year strong fourth in which the so had board, improvement, led our overall, to for performance in then we well. that. point as thanks it we competitors. led network terms of domestic, across quarter And

we the look going absolutely I into to year, have to buying continued dollar at impact strong domestically. summer. this is on this Europe a an see strength take As And and travel

So we to across robust break to board. the demand into getting look I peak periods, we summer, as and take March, a the of spring our look and some see

to traffic to performance. some in. be as of for win do we're able behind premium Steve be are terms additive the of as going I about to And being in even that and better better well our things going sales also that something mentioned even talked potential that think We've

we in So like see what overall, year about we operate this confident and environment. and the can how really

Operator

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

Jamie Baker

at I was on I best We've had margin widening? Obviously, to throughout calls was your never quite bottom and lowest in, the margin between between moving to, range. hubs Saw gap on Would pieces or hubs an performing and your moment. discussed the and these United yesterday but it performance that asked in you gap top be guess, many for or I in the it's American's years. range interesting think X the narrowed statistic XX of that some time, worst about of a comment hubs and its that improving relative whether lot person willing

Robert Isom

that that, to I'll and can fleet regional Steve XXXX, And in back secret Devon our no our we fully to portion and fleet. I that in. have we've start, add feel regional it's we're network of have our is supported large network, going deployed. a our build by had great Look,

are support there. to hubs capacity to think, going ready last that's fill network out to of we've that, the some in is to what I frankly, put And got a do But better way. the different the and, quite willing

of to DCA, in now going ever performance hoped. its to in we've the schedules see ever bigger peak the you're been going that Miami talked laggard a be some the had in and And So like it's work of been. be than DFW that the largest about we that places Chicago. had out levels will back Charlotte, coming had we're doing pandemic, to we is getting which

we the see improving. across So board, performance

we that LaGuardia, coast, largest Some in I'd a capacity. run nice schedules this to in results of the points Angeles. the where as we've really the look our we've and out of in out we're pandemic, terms in I as put made we changes since closed the that schedule weaker believe, say Los fourth that we York network, the New the in quarter, take just that seeing

can that that we going perspective, we have And I will so York be hope New forward. that have performance. maintain believe considerably and something that improved And from our that I confidence

partner, from that we that's Angeles, But One World some Airlines, perspective, partner really we front, look to continuing on capacity and Los In do with where Alaska are well there that that progress. restrictions. forward one our

mentioned, should coasts that And historically DFW, where to ranks, getting as DCA, into the it is strong. well. Philadelphia been Phoenix now known getting take Chicago. performed at you've I on you Charlotte, have be. has focus and look the when DCA American, So back a then and always got we've back a

Jamie Baker

your I Robert, you, accounts. think on or you conference in spending corporate which efforts you half when think were I was mentioned And And then know time a reconcile while you, actually with I September, don't if XX% or helpful. said you publicly last And I precisely that I if described that in remarks effort trends that you of just But metaphorical. like recovery makes exactly confused that sound your managed and behind from American the is right was here. is just way Is the interpretation? I the by of you. prepared guess, sort effort reconciliation meant it you saw on the to at That's where most I'm have corporate X. front how on

Robert Isom

away. revenue don't to contracts speed well. That that, up forget, Look, set It's we're of I from of enlisted not is I work I bodes of had are for a these doesn't led right will foundational off. me will our don't Jamie. say, I of the up agencies for up And paying corporate Johnson, commercial amount amount time, Thanks, the certainly give over enormous if to Steve learning ton We're absolutely in issues and that, XX% And And I my talking a resting work believe, by with credit that time, to spend a in. our well was team, to as past associated show put the customers and that they future. of period time But strategy. the know our considerable sure on in that I that. making it's effort. be

where are things don't why feel Steve, headed? spend some you progress you and time So about about talking how

Stephen Johnson

saying that. let about by good And start I Jamie. feel the and me team Sure,

end again, the a remarks second that to he's said, ago, we're commitment As and, buyback fully just opening his on to of share achieve XXXX. made recover our in Robert track

As mean. of if process, kind not linear it's I said we know beat it's I what you'll I a But earlier, event-driven, think and that. can

share. was with Robert's the Bernstein, around just apology referred on share. when an engagement had the at partners an strategy, about We said share. here the impact of into abandoning old in an our that impact tour, he had that quarter, EDIFACT saw what third in were the comments talking on The impact restoration we to content third had that Robert The that is sometimes quarter, on

the you of work different, fourth quarter over that of been might fourth for have the the The accounts -- for bit last non-acceleration X -- this was and a but little in that lots maybe done the course months. quarter, looking

counterparty. fourth was quarter by partners task It an making our arduous kind agreements all community. infrastructure. of But new the in actually task, of the was indirect It's with counterparty

was it you during period of during going those on, partners Indeed, stronger lot see were even of didn't share a understandably, sent that of we messages so negotiating, time. us While some negotiations. shift our

But we as earlier, And XX customers with our all economics was who ultimately impacted important our most and Robert old modified it now strategy. have were TMCs agencies. the significant of we've corporate and new said successful, the agreements for of by

agreements move with agencies TMCs that equilibrium share reestablish incentives even existed than say, American. indeed, more business as we the And X are to XXXX. And partners the to of say and the those airlines the beginning the our frequently, and incentives better create X. And agreements real at to real create

first of big So to going and drivers the I are expect share be agreements those shift second in quarter.

see progress. you'll continued so And

Operator

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

Conor Cunningham

now? me hear you Can everyone. Hi,

Robert Isom

you We've Conor. Go Conor. got ahead,

Conor Cunningham

out all so -- use Someday I'm to to someday trying this how just Can you how figure this. -- out phone. use I'll I'll figure to this take

understand You sound to end like suggests your And sequentially But then as corporate full like what the low just just a trying regains like the there's from upside you so that just well you get year-over-year any main year. heard assuming as earnings. indirect from share part the today in stuff, guidance year better. seems conservative costs It throughout really I'm loyalty heard decline others improving -- at and we've from and bit that better here? doesn't cabin the are little seems a we've what given It just far. just

to bit better. understand a Just it trying little

Robert Isom

we and can know see We've first, forecast Devon strength of that, start, given their and know we in on our models. significant told in We don't only I'll the in, what add growth that we there's especially see based performance are Look, right revenue now. unit putting Conor, think into terms revenues. can in again, that we capacity we you here. others what what is, continued putting we're

is outperformance a of industry, I to if there the show continue because think Now that I we'll the better performance as in that overall we've said, been doing. things

versus my your the that's others to in making. terms questions how want Devon, of So anything are is add? assumptions comment forecast what you about

Devon May

to outcomes say, than that, we what do is range just guide but of is I'll amount there still feel midpoint risk a or better There's and hope That's at level. earnings. on of things than nice achieve. we of put what our really midpoint seek more We that. versus is think because in there obviously did $X.XX. we like fuel about and to now, midpoint a that's exceed volatility some up variability to in right good we XXXX. we in it's Yes. We'd year-over-year guide, the improvement, XX% But macro the a economic some like the

Conor Cunningham

Citi That's or Okay. little Citi, the on And the better. just helpful. contract, I'm bit to then that renegotiation, understand a trying

I economics and a 'XX. in change think So that volume 'XX. component there's the in spend-related But

like 'XX contribution can you for that that evolves that. it over change to so will about how bridge the there's from So just the how of evolve, that It surprise, 'XX? just seems to again help earnings just -- potential contribution,

Stephen Johnson

Sure.

question. the Let me understand if I see

Is those overperform of existing that Our new business the agreement to. helpful? committed minimums XXXX. into Citi Barclays that accounts ramp-up Those, we expect for on part new includes have them as and to and

Conor Cunningham

Yes. No, much. thank -- very that's you

Operator

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

Ravi Shanker

start on with the wanted I commentary. a just corporate follow-up to normalization

unpack the share bit said compare where adjusted that once you -- was economics to accounts before, business the of I corporate the you biggest there. for you the just more? that is little that it Can does normalized? now of some the a profitability How or think

Stephen Johnson

evolved adjustments, last our we the the Well, with customers last the talked this on Sure. over the earnings our We course business call. about months. or corporate of X X

are experience flights like allowing macro favors our apply. consistent for this what agents set we not corporate of certain to customers, completely corporate changes reestablishing advantages that but change that in of had to, Some employees, do we corporate the a with travel or that with and certain cases, waivers call book rules traveling experience, made, tickets general unique

was, So think, some that very I helpful. of

a the of an uncompetitive across discounting had impacted the is I discounts for system former kind But corporations board, as for by we level. that to, who anyone of that, one-size-fits-all strategy, part think, created that, reduced

about And to course and Those them. so ones their were change strategy, that, we the came up the impacted XX% able our customers. were over and that corporate of -- the of contracts

the So gone customers, is those economics with those revenue the competitive. more with agreements, are negotiated better and them, with bit established that cases, accretive. worked more past, with respect consistent -- little going and them from all In discounting, a to even be back, those very with we've to

Robert Isom

highly be is things expense Yes. some the bringing the said we of on And going company. sales little point that a again, to impact back I X impact this sales think less going all this, talk about we've and a that of and to when of Steve, cost than doing, CASM. is beneficial team we're the potential to overall But be

Ravi Shanker

versus on you you about think But you time? we obviously, monetize if a a you how That's maybe WiFi, do enter guys hear. new as cabins, great upgraded new kind screens premium of as screens the like planes. explanation. ability mentioned But is kind which maybe Great. of kind a those of era to helpful to will, seats, bring-your-own-device over and of guys And follow-up, have

Robert Isom

say can part of that one Ravi, more time? So I question? that missed you that

Ravi Shanker

guys having or kind either time? monetize bring-your-own-device other of service ability impact the So that seats, new of, kind you kind integrated to versus one as we on does over your screen premium sell a think of of premium the do versus enter era question kind of a how was about cabins, screens

Robert Isom

No.

that for of thanks me talk question. that our the let some that's going of the on flagship suite, coming things XXX about going XXX-Xs anticipate Ravi, We're And XLRs. and product really the to introduction be we pleased to announce So the regarding new and forward.

aircraft screens, is and in And in terms going let's long things seats, and latest cabins they the from have access And are, one of the one of haul. the are streaming to the customers, WiFi our international perspective, in entertainment. is things those to to those sure that of addition especially premium face any make that that we're you'll note international it,

So those to equipped. aircraft are be going fully

overall. and our come adding in that technology and You'll XXX-XXXs with see that with as reconfigurations seating that, in seat the flagship we're to well. will on doing Same more that premium terms suites latest offering of back

satellite-based we that perspective, the by everything have from on will we that said they the of fly. domestic offer Now a we've initiative so a in our access note part sure that aircraft WiFi larger of that you'll all on streaming it jets, end satellite-based our And will that as this WiFi, a smallest we're have installed WiFi regional the really can't making interested while year. regional customers to year our WiFi, of have

allows once comprehensive some that, got us of do you've with to that kind offerings. different approach, And that

hear of the you'll in especially the care year highest tier. more partnerships in that we even can our you'll see of how customers, well, us more of progresses And So from better as those terms relationships. are terms take as and

we Apple with and just that industry go. something will the that where is start relationship is Plus things anticipate Our really of record-setting,

Operator

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

Duane Pfennigwerth

transitioned Northern your in expand over of comment back, what transitioned much what you're of versus basically your on inning like has caught footprint hubs footprint and Can your that attention. kind how in hub on now talk you much Just to how maybe build-out, about your our looks JetBlue, of pre-pandemic? and that Northern

Robert Isom

X be capacity. off. points the to on. the number believe, added elaborate results and offered can the in right largest to We're way, nice putting note DCA. focus just is we're And going schedules, And largest we're by of Steve LaGuardia I'll indicative both that, and with But back start, further. and LaGuardia the that's I'll seeing I that seats of And Duane, really that our pandemic. DCA since

Chicago. had been the given of that difficult holds Philadelphia, aircraft. pull-down same of terms had us In been the And regional most one markets true the of for for that

aircraft As and Philadelphia regional Chicago. the going lift, of are we be beneficiaries to that restore our

of we I quite where think to size I know the getting don't were. we're Philadelphia, Steve, to close In Philadelphia but compared to back prior times,

Stephen Johnson

have Philadelphia Yes, intention size and the the was prepandemic. or more same less it as that's to

Duane Pfennigwerth

have XQ How and do but you competitive versus if to were That's helpful. measure capacity. I share, you see an seeing just metric know on you a maybe And XQ? what maybe in that in don't then early on XQ read you how

Robert Isom

this. focused that and that we strengths Duane, the take the Look, advantage We're So assets start capacity, making I'll the competitive margins, it's with all extent have. on drives that sure important and it on of we're important, we but to focused -- it's profitability.

that, supply going keeping accordingly. what's on on the but one in we're of focused is And an we're in going difficulties good aircraft. obviously thing since track we is there any the adjust we've and with new to the we of if terms spent, we marketplace. $XX deliveries aircraft despite fly, the So in fleet the built impact that that The up, that about places throughout, of billion merger, chain have plus

find we youngest expansion. We coming very have big fleet. in to We that anticipate should any conditions retirements the have we warrant this a fleet economic don't ability up. And flex the fashion

profitability to as growth an we moderate of XXXX. If based we'll adjustment, So this with you'll demand get be warrant on see for and go. ready and us into stages XXXX expectations out latter year,

Stephen Johnson

time an that, that growth the places I'd add most in growth competitive departures recognize possible. extent we And ASM I'd as growth have on you're based asking also in our we're the channels at that that, and comparison, to grow, the just to look most question competitive and just going

-- don't So that perfect it's the comparing. for is measure know ASM I

Operator

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

Michael Linenberg

fleet Two sort related here. questions of

by presumably, XXX fleet, XLRs point? that Just on that's XXX in will comment you how in to growing have the international And point from number. many time, XXX At that that on your AXXXneo fleet XXXX. your at in

Devon May

neos XXX And XLRs to in expect XX we that Or is the XX have XX, that point. point. at sorry, that Yes, at number.

Michael Linenberg

as is then think makes And fleet it to procure widebodies. the and your about both start wide-bodies and just OEMs. Right. sense fleets know getting my we -- I from we old, more question, I and narrow-bodies ability procure economically, know and second aging to specifically,

the aircraft, from do X to with that the the guys or at your MAXs do we or replacement where that. for about different this a probably your XXX widebody well wide-bodies helped point You and within whether decade? different you later It's out from you it's to with when OEM the decision think procure XXXneos. Are families same even OEMs,

Robert Isom

fleet in We're fortunately we've order of XXX largest And and operators of start, out got being family We've terms XXX aircraft. can others at in. fleet. we're chime of of Thanks, Mike. the MAX And XXs. of the this world's the I our delivered. I'll are where Xs, really MAX largest those We're world's the one aircraft. like operator got for the

pilots, greatly there in it. an in kind benefit Now having it's what the It different simplifies think our from really with catering, aircraft flight about of you efficiency one our we're a dozen doing. perspective, not supply maintenance, fleets types: chain, flavor, these engine right? large helpful our attendants, our We're our out servicing

and same love our forward. from then know The to model. workhorse as We customers go XXX we the as the We philosophy a perspective, that well. had it the and Xs love Xs that real we be wide-body are going

this XXX-XXX the flagship starting at out. do We've else. of the time, a we XXXs, a be coming And time. some reconfigure getting are fleet benefit going for the the to going suites year, look to ramp a time. in make the is to And see they're be take be XXX-XXXs we got If refresh. going to point or at decision Those for whether in about a long something we'll some

you we fleet by that having we're in on in mindful And with Airbus, with as we're great flexibility well. of benefits that types And the contact get range also fleet depending with demand. gives a simplified contact we're and Boeing and

is that's of any from competitors. the we're starting a true, about is it comment our fact of fleet the than matter But And just spot the better makes older, your getting for much time.

have Devon to provide, anticipated run, has level especially that ability this and the off of growth very capital around and retirement, older keep to our modest. long As aircraft is we if said, it is hold virtually the the any want, over we spending growth

real a XXXX range is a capital to we in low XXXX beyond. out spending. and terms spot billion $X.X a look So type of take as

more delivery like see So invest have have and in kind as of talking these the lowest difficulty up. I to really of age with double least average days, have where those and are that their at than about we the in, our coming We at. of fleet. I retirements already that expenditures, for don't others are aircraft numbers we're capital And fleet

Operator

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

Brandon Oglenski

still Day, because Robert, think, in in lot so much I obviously, share defense. front going it articulate you've But strategy guess year, obviously, just the a today? you corporate I maybe back. American's talked how I does Investor observing feels step here, year. in like When that since guess with you're has that last if past But mean, an especially into I about but offensive back, strategy? I'm changed transition you And the getting a of commercial forward would zone of March then

Robert Isom

a And everything we're Day margins, take of Thanks to out -- by as cash grown set that get we're other well that job us for to record an nice up and of has our we're But up not we've we the sheet that to balance position. said, grow about that especially free flow we so produced, not done that airline back from commitments, question. that do efficiency because I perspective. I'm stand Devon And margins. we've worried that Investor done the in like side getting of believe don't that I and them. this as set the look going a different I it's we not very haven't just a a you equation because to really production puts perspective. cost issues, combine future,

we absolutely focus going of about you and to year going to can time see spend experience forward, this monetize. as and customer way talked American terms a improving you we on more a I've that in look energy take lot fleet, in are our a our

are we new a it's that be whether built to that Philadelphia lounges, fleets, on, already add we're of going complement foundation to perspective, across a from up to have the that I have. launch catch which introducing to WiFi think So ultra-premium all establishment others trying we satellite

it's in domestic we and a where aircraft our on seating it's premium so of or whether XXX-Xs and that have just the collection we're product product -- XXX-Xs regional and the or This new strong, the whether XLRs, suites flagship others in be that going have, aircraft XXXs of we E-XXXs. rest that upgraded. the of to both terms whether can't older fleet, terms the of they're you'll the it's see the and And XXXs, getting touch the

the feel pieces have really And place to the of puzzle all like so we off. in I take

we've we the American's selling are in got in set got and in of those telling of the the U.S. biggest and look business got We've putting that market a world around world Heathrow markets when Now you story our partners But and Tokyo. better. best to think the got about biggest markets. forward. we here in some the London momentum work lot as We've together an enviable largest do the in position the best

Brandon Oglenski

lot about appreciate I agreements any a these then, that simplified talked and that fleet labor the just new you in offsets But potentially that, there productivity cost in Devon, know Robert headwinds And is this the Robert. context especially of I discussing? year. was

Devon May

agreements the to related offsets labor necessarily Not themselves.

right were offsets technologies. lot the the efficiency think a on just and work and in investing I of fine, is

in our year work last that that's all million million investments that they But to our generated some business value. about, in making the organization This net think meaningful making of shop, ops our the reengineering we doing. couple about efforts to talked are tech going we've dollars. that in As we're $XXX a digitalize hundred of year, generate we're really we're IT

where pay comes back to So XXXX, I than look really think calendar perform better in going But look profile delivery. this I we're back necessarily cost good, all investments It it anybody over to look several feel always we year. I I've think the out I the said, making. we is unit years, doesn't cost last great about when to

I business That's a more business we we a we're we're run think efficient right going those efficient So seeing necessarily not year from now we anything But are today. running agreements. are and were after going agreements. in what labor more a in to labor not the now than

Operator

Sider Instructions] Our will At time, first we Wall Journal. you. question Thank taking the [Operator line Alison of from media. be from comes of Street questions this

Alison Sider

are after safety to from terms Curious, concerned you're asking about the of of the impacts differently last anything week, FAA kind of you and operational breakup sort Starship And it those? in there do the how launches? how handles is space

Robert Isom

thanks the that FAA. impacted. in on question. for are aerospace impact contact We're given doubt, especially our And network, have no and Ali, do constant issues launches Well, the an with DOT

take that place. effort been, to I of Officer. impactful do our the with we what I've want we what than So it's the we as he'll things -- terms that think of what Operating add Dave, to here, in closely. sure Chief day is got you that -- is David better time do, ever and tell coordinate Seymour And least we make to launches try do they one that anything? work they're is you any of coordination

David Seymour

Yes.

the the coordination them mindful right said, think, we as with coordination we're side very that -- been the in holding that locking that. the said to for how things their executed on and think do, I and you out zone better, diversions that on be to to with aircraft air Robert to those of continue our Robert, FAA in with traffic ground, has had recovered we us and it terms the but strategy them. But well. disruptive in now work was of have just we never they And is going And containment right I launch. it's FAA going to a but launches

Alison Sider

it. differently want air change done sort safety be or know you looking perspective? terms anything of space you're do of to anything in for or of the launches I closed And timing future perimeter to mean, or there is Got you a launches the from the for

Robert Isom

for years review the work now, We're right to continue actually that I of we're lot several They've see. that. continuing of done of waiting surface that. a going their over manage the don't see last But on FA still to to different anything the

adjust continue with of see we that we're their I situation, to But the if we to But So have think and as review going they them. and to as get past. not work need we'll then we need -- back impacted plans. in were

Operator

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

Mary Schlangenstein

shift your you're something I demanding? wanted Or It's I'm that going about premium, that? what on just behind what's to that that for been the about talking forward. ask wondering the on IFE? approach in -- consumers competitive pressure, responsible was are Devon, IFE what's

Robert Isom

you something. just have Mary, might mistaken

our IFE our smallest XLRs, satellite-based The seatback to aircraft, will for WiFi, the of except regional those entertainment be case in terms strategy, the international-based equipped wide-body In on of our the our rest of take XXX or will fleet in-flight care of jets. have customers.

Mary Schlangenstein

But IFE on wrong Or Right. currently international I on that? don't wide-bodies? am your have you

Robert Isom

IFE We our aircraft. currently on have international-based

Mary Schlangenstein

you. Thank

airlines? issues and affecting Sorry faster was, that to past the ATC, FAA Trump the step potentially up about I of administration wanted issues operations that. you either or trying make terms from administration changes other in the the ask to foresee the to of the And what them question ATC, hiring with than change changes had the

Robert Isom

industry. does is credit it industry as as They some the to support administration earlier administration, It's the the and response commerce. Well, the comments, Trump strong of said that to why and to think reaction. in to I was they first in that COVID did the I the administration and provided is aviation Trump importance certainly And recognize the as quick the the during today. first really reason President Trump that go

tax in a Now on investing growth serviced control. jamming on next, We and at ultimately, aircraft for to think of I the that we've and the do that in keep industry. to there's lot look skies takes be can't a there's we it I what customers can't regard hope our address air efficiency for time But in terms in in fly, efficiently. we know do into of believe it's imperative put to that airlines, on traffic that we is the it way got more because huge that the possible a

plenty actually XX longer be different that. So it overall There's Washington handle reason technology for There's to that can perspective. York sky. from helpful in would room lot New years that system. to aircraft to fly Chicago did control be to we today, or a equipped to the New it also, perform no of a ago. in than are York And from and There's an our deploying takes

that take It's So confidence lot type to got great do. we're investment. be of able engage we've to have a that that of But the going to will work work on.

with benefit as that And cognizant just well, that. I'll that also issues them the can regulatory the we'll and the working that say last be will is and both believe thing our very closely of on customers airlines be I administration

I'm future. about So the very very, optimistic

Operator

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

Leslie Josephs

internally? Just considering what the the industry was DEI. that culture plan says have stands. you Any ordering FAA you Airlines government at Trump to is And how administration extending government. about any they're American with that concerns do curious American that DEI within the lead review federal and the there and about are website to the changes doing? changes I Airlines federal said I the DEI the where see has foundational

Robert Isom

at the members hiring possibly the into can't on places that, a just customers, company. XXX,XXX-plus to anything best bring going of the all always days at say of We serve speak and the we backgrounds I had that peak team can I'll American, XXX,XXX-plus on throughout FAA. world. philosophy customers, we've

work have the all team XXX,XXX parts members globe. We that of in

and journey, care customers and be way as our headed. profitable going going and front that, that take of forward, in of in are for for life's American to better here factor to That's going go efforts is to airline. be that focused we're for take people customers center, caring our it's a looking that care and for team our and on that's to our better guiding and do Our on our we is where ways members, beneficial

Operator

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

Robert Isom

flow just Latif. to the like interest a industry the was And take down to terms laid reiterate us for important place important make last over restore that everybody's fourth incredibly this not only of achieve which to cash take for was years. and It today. in milestones. outperform to I important advantage year-over-year. It for revenue some in also challenges in time that we're put to we've was built us of we've record several sure as everything us appreciate but to quarter we airline in revenue us of Thanks, quarter we've things our I'd on, sheet is production about strong our as balance that been expand taken that performance, company of that the a lot to the other this advantage free and possible. in doing excited that And that upon

so our I'll best to in reiterate commitment to our And our them fashion, commitment the to and possible also customers, care reiterate of take our investors. then

We American American XXXX, outperform. to what look are our is we And XXXX strengthen margins, take into further right as there's now. a tremendous and intent sustainable into a cash and going of in continuing balance flow, to sheet. on at poised our producing look of When performance growing doing free amount upside you we're out capable

Thank you for time. your

Operator

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

now disconnect. may You

American Airlines (AAL) 23 Jan 252024 Q4 Earnings call transcript