American Airlines Group Inc. (NASDAQ: AAL) reported its third-quarter 2023 financial results, including record revenue of $13.5 billion.
Here’s the brief:
- Record third-quarter revenue of approximately $13.5 billion.
- GAAP third-quarter net loss of $545 million, or ($0.83) per diluted share.
- Excluding net special items1, third-quarter net income of $263 million, or $0.38 per diluted share.
- Record third-quarter completion factor, best among U.S. network carriers.
- Ended the third quarter with approximately $13.5 billion of total available liquidity.
- Reduced total debt by $1.4 billion in the third quarter.
- Credit rating was upgraded by Fitch, Moody’s, and Standard & Poor’s during the third quarter.
“The American Airlines team continues to produce strong results,” said American’s CEO Robert Isom. “Our team is delivering record-setting reliability and operational performance. We are executing on our plans and remain well-positioned for the future, supported by the strength of our network, our young and modern fleet, and our outstanding team.”
American Airlines Operated 515,000 Flights in Q3 with an Average Load Factor of 84%
American Airlines performed well during the third quarter, especially during the busy summer travel period. They successfully operated over 515,000 flights, with an average load factor of 84%. Furthermore, the company achieved its highest-ever completion factor for a third quarter, surpassing other major US network carriers. American Airlines is determined to continue this positive momentum and provide customers with a reliable travel experience, especially during the upcoming holiday season.
Resilient Demand Contributes to American Airlines Revenue
American reported record revenues of approximately $13.5 billion during the third quarter. This performance was mainly driven by strong demand and the impressive success of their co-brand credit card and travel rewards program. The company experienced growth in corporate and government revenue and continued strength in unmanaged business travel.
However, when looking at the financial figures, American’s operating margin was at (1.7%), and the airline incurred a net loss of $545 million on a GAAP basis. Nonetheless, after excluding net special items, its operating margin stood at 5.4%, achieving a net income of $263 million. These results surpassed the company’s earlier guidance, reflecting the airline’s ability to bounce back despite challenges.
American Reduces Debt by $1.4 Billion
American Airlines reduced its total debt by $1.4 billion in the third quarter. The airline’s ongoing priority is to strengthen its balance sheet. It expects to reduce total debt by $15 billion by the end of 2025. American has already reduced debt by approximately $10.9 billion as of September 30, 2023.
At the end of the quarter, the company had a total available liquidity of around $13.5 billion, which includes cash, short-term investments, and undrawn capacity under revolving and other short-term credit facilities.
Full Year Margin of 7% Expected
In anticipation of market trends and considering the projected fuel cost, the company estimates that its adjusted operating margin for the fourth quarter of 2023 will range from 2% to 4%. Moreover, American Airlines now forecasts that its adjusted operating margin for 2023 will be approximately 7%.