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American Airlines’ (AAL - Free Report) first-quarter 2025 loss (excluding 13 cents from non-recurring items) of 59 cents per share was narrower than the Zacks Consensus Estimate of a loss of 69 cents. In the year-ago quarter, AAL reported a loss of 34 cents per share. Operating revenues of $12.55 billion edged past the Zacks Consensus Estimate of $12.52 billion but decreased 0.2% year over year.
Passenger revenues, accounting for 90.8% of the top line, decreased 0.6% year over year to $11.4 billion. The metric was just shy of our estimate of $11.5 billion. Passenger revenues were hurt by the slowdown in domestic leisure demand due to tariff woes. Cargo revenues increased 1.1% to $189 million. The metric surpassed our estimate of $171.7 million. Other revenues increased 5% to $971 million, which surpassed our expectation of $891.6 million.
American Airlines Price, Consensus and EPS Surprise
Total revenue per available seat miles (a key measure of unit revenues) increased to 17.95 cents from 17.83 cents recorded a year ago. Passenger revenue per available seat miles increased 0.3% to 16.3 cents. However, the figure was lower than our expectation of 16.5 cents. Consolidated yield increased 1.4% to 20.21 cents, ahead of our estimate of 19.69 cents.
Consolidated traffic (measured in revenue passenger miles) decreased 1.9% year over year. Capacity (measured in average seat miles) contracted 0.9%. The move to trim capacity is aimed at protecting margins and avoiding lowering fares. Consolidated load factor (percentage of seats filled by passengers) decreased 0.9 points to 80.6%. The figure for the load factor was lower than our expectation of 83.8%.
Total operating costs (on a reported basis) inched up 2% year over year to $12.8 billion, with expenses on salaries, wages and benefits growing 9.2% to $4.2 billion. The labor deal, inked with its pilots in 2023, contributed to this increase. Expenses on aircraft fuel and taxes decreased 13.2% to $2.6 billion. Average fuel price per gallon (including related taxes) decreased to $2.48 from $2.86 a year ago.
Consolidated operating costs per available seat mile (excluding fuel and special items) increased 7.8% to 14.54 cents. The actual figure was a tad more than our estimate of 14.38 cents. Fuel gallon consumption was flat at $1.04 billion in the first quarter of 2025.
American Airlines, currently carrying a Zacks Rank #5 (Strong Sell), exited the quarter with $10.8 billion of total available liquidity.
Owing to the tariff-induced uncertainty, AAL withdrew its 2025 financial guidance. Management stated that it would provide an update later in the year as visibility improves.
Delta Air Lines (DAL - Free Report) , while kicking off the first-quarter 2025 earnings season on April 9, had also withdrawn its outlook for 2025 due to the uncertainty. (See the Zacks Earnings Calendar to stay ahead of market-making news.)
Like AAL, DAL’s management also said that it would provide an update later in the year on improvement in visibility.
Another key player in the Zacks Transportation-Airline industry, United Airlines (UAL - Free Report) , offered a dual outlook for 2025 due to the prevalent uncertainty. In a stabilized environment, UAL expects 2025 adjusted EPS between $11.50 and $13.50. For a recessionary environment, UAL expects 2025 adjusted EPS between $7 and $9.
AAL's Q2 Outlook
For the second quarter of 2025, management expects total revenues to be down 2% to up 1% from the second quarter of 2024 actuals. System capacity is estimated to be up 2-4% from second-quarter 2024 levels. Cost per available seat miles (adjusted) in the June quarter is expected to increase in the 3-5% range from second-quarter 2024 actuals. AAL expects its second-quarter adjusted operating margin to be in the 6-8.5% range. The effective tax rate for the June quarter is expected to be 27%. AAL expects a earnings per share to be between 50 cents and $1 in the second quarter of 2025. The Zacks Consensus Estimate is currently pegged at 96 cents per share, above the mid-point of the guided range.
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AAL Reports Narrower-Than-Expected Q1 Loss, Withdraws FY25 View
American Airlines’ (AAL - Free Report) first-quarter 2025 loss (excluding 13 cents from non-recurring items) of 59 cents per share was narrower than the Zacks Consensus Estimate of a loss of 69 cents. In the year-ago quarter, AAL reported a loss of 34 cents per share. Operating revenues of $12.55 billion edged past the Zacks Consensus Estimate of $12.52 billion but decreased 0.2% year over year.
Passenger revenues, accounting for 90.8% of the top line, decreased 0.6% year over year to $11.4 billion. The metric was just shy of our estimate of $11.5 billion. Passenger revenues were hurt by the slowdown in domestic leisure demand due to tariff woes. Cargo revenues increased 1.1% to $189 million. The metric surpassed our estimate of $171.7 million. Other revenues increased 5% to $971 million, which surpassed our expectation of $891.6 million.
American Airlines Price, Consensus and EPS Surprise
American Airlines price-consensus-eps-surprise-chart | American Airlines Quote
Total revenue per available seat miles (a key measure of unit revenues) increased to 17.95 cents from 17.83 cents recorded a year ago. Passenger revenue per available seat miles increased 0.3% to 16.3 cents. However, the figure was lower than our expectation of 16.5 cents. Consolidated yield increased 1.4% to 20.21 cents, ahead of our estimate of 19.69 cents.
Consolidated traffic (measured in revenue passenger miles) decreased 1.9% year over year. Capacity (measured in average seat miles) contracted 0.9%. The move to trim capacity is aimed at protecting margins and avoiding lowering fares. Consolidated load factor (percentage of seats filled by passengers) decreased 0.9 points to 80.6%. The figure for the load factor was lower than our expectation of 83.8%.
Total operating costs (on a reported basis) inched up 2% year over year to $12.8 billion, with expenses on salaries, wages and benefits growing 9.2% to $4.2 billion. The labor deal, inked with its pilots in 2023, contributed to this increase. Expenses on aircraft fuel and taxes decreased 13.2% to $2.6 billion. Average fuel price per gallon (including related taxes) decreased to $2.48 from $2.86 a year ago.
Consolidated operating costs per available seat mile (excluding fuel and special items) increased 7.8% to 14.54 cents. The actual figure was a tad more than our estimate of 14.38 cents. Fuel gallon consumption was flat at $1.04 billion in the first quarter of 2025.
American Airlines, currently carrying a Zacks Rank #5 (Strong Sell), exited the quarter with $10.8 billion of total available liquidity.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Owing to the tariff-induced uncertainty, AAL withdrew its 2025 financial guidance. Management stated that it would provide an update later in the year as visibility improves.
Delta Air Lines (DAL - Free Report) , while kicking off the first-quarter 2025 earnings season on April 9, had also withdrawn its outlook for 2025 due to the uncertainty. (See the Zacks Earnings Calendar to stay ahead of market-making news.)
Like AAL, DAL’s management also said that it would provide an update later in the year on improvement in visibility.
Another key player in the Zacks Transportation-Airline industry, United Airlines (UAL - Free Report) , offered a dual outlook for 2025 due to the prevalent uncertainty. In a stabilized environment, UAL expects 2025 adjusted EPS between $11.50 and $13.50. For a recessionary environment, UAL expects 2025 adjusted EPS between $7 and $9.
AAL's Q2 Outlook
For the second quarter of 2025, management expects total revenues to be down 2% to up 1% from the second quarter of 2024 actuals. System capacity is estimated to be up 2-4% from second-quarter 2024 levels. Cost per available seat miles (adjusted) in the June quarter is expected to increase in the 3-5% range from second-quarter 2024 actuals. AAL expects its second-quarter adjusted operating margin to be in the 6-8.5% range. The effective tax rate for the June quarter is expected to be 27%. AAL expects a earnings per share to be between 50 cents and $1 in the second quarter of 2025. The Zacks Consensus Estimate is currently pegged at 96 cents per share, above the mid-point of the guided range.