AAL Reports Narrower-Than-Expected Q1 Loss, Withdraws FY25 View

Core Insights - American Airlines (AAL) reported a narrower loss of 59 cents per share for Q1 2025, compared to the Zacks Consensus Estimate of a loss of 69 cents, but wider than a loss of 34 cents per share in the same quarter last year [1] - Operating revenues reached $12.55 billion, slightly exceeding the Zacks Consensus Estimate of $12.52 billion, but reflecting a 0.2% year-over-year decline [1] Revenue Breakdown - Passenger revenues, which constitute 90.8% of total revenues, decreased by 0.6% year-over-year to $11.4 billion, falling short of the estimate of $11.5 billion due to a slowdown in domestic leisure demand [2] - Cargo revenues increased by 1.1% to $189 million, surpassing the estimate of $171.7 million [2] - Other revenues rose by 5% to $971 million, exceeding expectations of $891.6 million [2] Key Metrics - Total revenue per available seat mile increased to 17.95 cents from 17.83 cents year-over-year [3] - Passenger revenue per available seat mile increased by 0.3% to 16.3 cents, but was below the expected 16.5 cents [3] - Consolidated yield increased by 1.4% to 20.21 cents, ahead of the estimate of 19.69 cents [3] Capacity and Traffic - Consolidated traffic decreased by 1.9% year-over-year, while capacity contracted by 0.9% [4] - The consolidated load factor decreased by 0.9 points to 80.6%, which was lower than the expected 83.8% [4] Operating Costs - Total operating costs increased by 2% year-over-year to $12.8 billion, with salaries, wages, and benefits rising by 9.2% to $4.2 billion due to a labor deal with pilots [5] - Aircraft fuel and tax expenses decreased by 13.2% to $2.6 billion, with the average fuel price per gallon dropping to $2.48 from $2.86 a year ago [5] Future Outlook - AAL withdrew its 2025 financial guidance due to tariff-induced uncertainty, with plans to provide an update later in the year [7] - For Q2 2025, AAL expects total revenues to decline by 2% to increase by 1% compared to Q2 2024, with system capacity estimated to rise by 2-4% [9] - The company anticipates an adjusted operating margin of 6-8.5% for Q2 2025, with earnings per share projected between 50 cents and $1 [9]