American Airlines Group Inc. (NASDAQ: AAL) unveiled its financial results for the third quarter of 2023, showcasing a mix of record-breaking achievements and strategic financial decisions.
The airline reported a record third-quarter revenue of approximately $13.5 billion. Despite a GAAP third-quarter net loss of $545 million, or ($0.83) per diluted share, when excluding net special items, the net income stands at $263 million or $0.38 per diluted share.
One of the highlights of the report was the airline’s record third-quarter completion factor, which was the best among U.S. network carriers. By the end of the third quarter, the company boasted about $13.5 billion in total available liquidity. Furthermore, American Airlines managed to reduce its total debt by $1.4 billion during this period.
The company’s financial performance was further acknowledged by Fitch, Moody’s, and Standard & Poor’s, all of which upgraded American Airlines’ credit rating in the third quarter.
CEO Robert Isom expressed his satisfaction with the results, stating, “The American Airlines team continues to produce strong results. 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.”
Operational Reliability During the third quarter, American Airlines demonstrated operational excellence, especially during the peak travel period in the summer. The airline operated over 515,000 flights with an average load factor of 84%. Their commitment to operational reliability is evident in their plans for the upcoming holiday travel season.
Financial Highlights The record third-quarter revenues were driven by a resilient demand environment, bolstered by the airline’s co-brand credit card and travel rewards program. The company also witnessed growth in corporate and government revenue, along with continued strength in unmanaged business travel demand and revenue.
Liquidity and Debt Management American Airlines has been proactive in strengthening its balance sheet. The company is on track with its goal of reducing total debt by $15 billion by 2025, having already reduced it by approximately $10.9 billion since mid-2021.
Future Outlook Based on current demand trends and fuel price forecasts, American Airlines anticipates its fourth-quarter 2023 adjusted operating margin to range between 2% to 4%. The projected full-year 2023 adjusted operating margin is expected to be around 7%.
