American Airlines Q4: Earnings Beat, Debt Milestone, Lackluster Guidance And More

American Airlines Group Inc. AAL stock plunged after the company reported fourth-quarter 2024 results and weak outlook.

The airline’s operating revenue grew 4.6% year-over-year to $13.66 billion, beating the consensus of $13.395 billion. The revenue increase was fueled by capacity adjustments and demand strength.

The adjusted operating margin stood at 8.4% compared to 5.1% a year ago. The company reported adjusted EPS of $0.86, up from $0.29 a year ago, above the consensus of $0.64.

The company generated an operating cash flow of $3.983 billion for fiscal 2024, up from $3.803 billion a year ago, and a free cash flow of ~$2.201 billion. The company ended the year with $10.3 billion in available liquidity.

In the fourth quarter of 2024, American Airlines met its $15 billion debt reduction target from mid-2021 peak levels, achieving the goal a year earlier than planned.

Revenue passenger miles increased by 4.0%, Available seat miles were up by 2.5%, and the passenger load factor for the quarter was 84.9% compared to 83.6% in the same quarter last year.

The average aircraft fuel price, including related taxes (dollars per gallon), fell 23.5% YoY to $2.34, and the operating cost per ASM reduced by 1.5%.

Related: American Airlines Charts Are Bullish: Can Q4 Earnings Keep The Altitude?

During the quarter, American Airlines announced an exclusive 10-year co-branded credit card partnership with Citi, aimed at providing enhanced value for AAdvantage and Citi-branded cardholders.

“We continue to run a reliable operation, and we are reengineering the business to build an even more efficient airline. That, coupled with our commercial actions, resulted in strong financial performance in the fourth quarter. As we look ahead to this year, American remains well-positioned because of the strength of our network, loyalty and co-branded credit card programs, fleet and operational reliability, and the tremendous work of our team,” commented American’s CEO Robert Isom.

Q1 Guidance: American Airlines expects adjusted EPS loss to be between $0.20 to $0.40 versus a $0.04 loss estimate and adjusted operating margin of ~ flat to 1%.

AAL expects first-quarter revenue to increase 3%- 5% year over year and total capacity to be ~flat to -2%.

2025 Guidance: American Airlines expects an adjusted EPS of $1.70 to $2.70 versus the consensus of $2.42. It expects revenue growth of 4.5% to 7.5%.

Price Action: AAL shares are trading lower by 5.57% at $17.62 premarket at the last check Thursday.

Photo via Shutterstock.