American Airlines Misses on Q4 Earnings & Revenues, Expects Loss in Q1

Core Insights - American Airlines (AAL) reported fourth-quarter 2025 earnings of 16 cents per share, missing the Zacks Consensus Estimate of 38 cents, and down from 86 cents in the same quarter last year [1] - Operating revenues reached $14 billion, slightly below the Zacks Consensus Estimate of $14.1 billion, but up 2.5% year-over-year; the prolonged government shutdown negatively impacted revenues by approximately $325 million [1][12] Revenue Breakdown - Passenger revenues, which constitute 90.4% of total revenues, increased by 2.1% year-over-year to $12.7 billion, just short of the estimate of $12.8 billion [2] - Cargo revenues rose by 2.8% to $226 million, falling short of the estimate of $233 million [2] - Other revenues increased by 7.4% to $1.1 billion, aligning with expectations [2] Key Metrics - Total revenue per available seat mile decreased to 18.8 cents from 19.1 cents year-over-year; passenger revenue per available seat mile decreased by 2% to 17 cents, below the expected 17.17 cents [3] - Consolidated traffic increased by 1.5% year-over-year, while capacity expanded by 4.2%; however, the consolidated load factor decreased by 2.2 points to 82.7%, lower than the expected 85.2% [4] Cost Analysis - Total operating costs rose by 8.2% year-over-year to $13.5 billion, with salaries, wages, and benefits increasing by 9.7% to $4.5 billion, influenced by a labor deal with pilots [5] - Aircraft fuel and tax expenses increased by 8% to $2.7 billion, with the average fuel price per gallon rising to $2.42 from $2.34 a year ago [5] - Consolidated operating costs per available seat mile (excluding fuel and special items) increased by 3.7% to 14.51 cents, exceeding the estimate of 14.39 cents [6] Future Guidance - AAL anticipates that the ongoing Winter Storm Fern will negatively impact Q1 2026 revenues by $150-$200 million and increase non-fuel unit costs by around 1.5 points [7] - The company expects capacity in Q1 2026 to rise by 3-5% compared to Q1 2025, with total revenues projected to increase by 7-10% year-over-year [8] - AAL forecasts a loss per share of 10 to 50 cents for Q1 2026, with the Zacks Consensus Estimate at a loss of 28 cents per share [8] - For the full year 2026, AAL expects earnings per share in the range of $1.7 to $2.7, with a consensus estimate of $2.01 per share, below the midpoint of the guided range [9]