It’s airline earnings season, for Q1 2025 results. As usual, Delta was first to report its results, followed by United. American has now become the latest airline to report its results, and they’re more or less as expected.
In this post:
American reports $473 million first quarter loss
For Q1 2025, American has reported a net loss of $473 million, on revenue of $12.6 billion. As a point of comparison, for Q1 2024, American had a net loss of $312 million, on revenue of $12.6 billion. As usual, airlines like to focus on positive aspects of their performance, so American highlights that:
- Unit revenue was up by 0.7% compared to the same quarter last year, and international unit revenue was up 2.9%, thanks to strong premium demand
- American has tried to continue restoring revenue for business travel and other sales channels, but claims that efforts there were offset by a number of factors, including economic uncertainty and the crash of American Eagle flight 5342
- American notes that AAdvantage enrollments were up 6% year-over-year, with spending on co-branded credit cards up 8%
American is also withdrawing its full-year guidance at this time, given the level of economic uncertainty. The airline states it will issue updated guidance once the economic outlook becomes clearer.
Here’s how American CEO Robert Isom described these results:
“The actions American has taken over the past several years to refresh our fleet, manage costs and strengthen our balance sheet position us well for the uncertainty our industry is facing. The resiliency of the American Airlines team, combined with the investments we have made to differentiate our network, product and customer experience, give us extreme confidence in our ability to navigate the current environment and deliver strong results for the long term.”
American is obviously a distant third to Delta & United
There aren’t really any surprises here with American’s financial results. As time goes on, we’re increasingly seeing Delta and United be in one league when it comes to financial performance, and American being in another league.
It’s standard for American to lose money in the first quarter, but then still turn a modest profit at the end of the year, thanks to strong second and third quarter results. Given everything going on in the world at the moment, I’d say there’s very little about American’s results that are particularly noteworthy.
The biggest story right now is the future uncertainty, given the tariff wars, the stock market tanking, and the weakening US Dollar, which have an impact on both the cost and revenue side.
Bottom line
American has reported its Q1 2025 financial results, and the airline had a substantial operating loss. Unlike with Delta and United, this is normal for American, but then the carrier reports significant profits in the second and third quarter, which typically make the airline profitable on an annual basis.
American has withdrawn its guidance for the full year, given the level of uncertainty we’re seeing right now. I suspect Q2 and Q3 will be much more interesting earnings seasons for airlines, as they increasingly deal with the impacts of what we’re seeing right now.
What do you make of American’s Q1 2025 results, and outlook?
The above mentions AAdvantage once in revenue and twice in expenses. Since most airlines don’t make money actually flying PAX, a break down of the credit card and loyalty program would be in order since it’s the true profit center for most airlines.
I would imagine the airlines would fight this level of disclosure tooth and nail.
AA is suffering from bad decision making. Parking the A330s and PMAA 757s and not realizing their mistake early on. Thus the airline is missing out on lucrative premium travel.
Deciding they could de-emphasize corporate travel agencies and that business travelers would book direct on aa.com because the schedule was so "compelling."
Not stepping up quick enough to do at least some modest upgrades to their dumpy PMUS clubs. Still trapped in a 1984 time...
AA is suffering from bad decision making. Parking the A330s and PMAA 757s and not realizing their mistake early on. Thus the airline is missing out on lucrative premium travel.
Deciding they could de-emphasize corporate travel agencies and that business travelers would book direct on aa.com because the schedule was so "compelling."
Not stepping up quick enough to do at least some modest upgrades to their dumpy PMUS clubs. Still trapped in a 1984 time warp.
None of this will be easy to turnaround. So far management seems to just want to hum right along. Any changes will be minimal because anything more would cost $$$.
As a follower of this platform, I only share my insight as one who confirms corporate travel for a U S based company.
Is it just me, or has anybody noticed that many European hotels are dropping their nightly rates for June and July bookings ahead?
Since early last month, hotel prices for Greece, Italy, Spain have all dropped by about 20% since the "predicted" surge in U S inbound travellers was expected...
As a follower of this platform, I only share my insight as one who confirms corporate travel for a U S based company.
Is it just me, or has anybody noticed that many European hotels are dropping their nightly rates for June and July bookings ahead?
Since early last month, hotel prices for Greece, Italy, Spain have all dropped by about 20% since the "predicted" surge in U S inbound travellers was expected to take off.
The much hyped New York - Catania nonstop is mostly empty for the summer ahead.
Premium Economy cabins as well are still open with reduced pricing from earlier this year.
How can you expect a strong 2nd and 3rd quarter when everyone is expecting downturn and reduction in travel. Contradictory statements to me, but hey... what do I know...
@ Justin Dev -- Summer profitability comes largely from strong transatlantic demand, and US carriers are suggesting there's not much slowdown there, as of now, uncertainty or not. It feels like many Americans will spend their last dime to visit Europe in summer...
Not to mention the kind of tourist that go to Europe, particularly the ones that buy premium tickets are part of the Teams/Zoom class. People that don't struggle against inflation, have in demand jobs and generally short of some kind of war want their big time overseas vacation. Camping in a tent in a state park ain't gonna due it.
Ain't gonna due it?
Dew it?
@Ben Schlappig
The "Americans will spend their last dime..." is an interesting view as I may fall into this category myself this year. Usually, I steer clear of European visits in the summer unless there are family obligations. This year however, I am planning to visit Paris around July 4th weekend, assuming flights cooperate and there are material reductions in J and F. So perhaps you are right. We'll see...
There is a fly in the ointment though. AA's income from the transatlantic JV will be impacted by BA, EI, IB, AY customers not wanting to fly to the US because of what's being reported as a hostile Border Protection regime.
As a person who lives in Dallas, it's very sad to see a common, prevalent thread:
AA sucks - why?? Poor leadership under Isom.
Dallas Cowboys suck - why?? Poor ownership/leadership under Jerry Jones.
Southwest Airlines suck - why?? Poor leadership - did not used to be that way.
Dallas Mavs suck - why?? Poor ownership/leadership.
Can some good leaders/owners please move to Dallas and help this hell-hole city and its homegrown institutions???
Why would anyone move to Dallas when Fort Worth and Houston are so much better ;)
Rasu Raja dismantled AA's business sales unit and decommissioned AirPass. It will take time -- a long time -- to undo the damage that has been wrought. Pundits can say what they want about this or that. But, recovering from Rasu Raja's initiatives is a key hurdle for AA.
I already know what's gonna happen. Isom's gonna blame it all on the economy and the crash and escape accountability once again.
Funny how you make it sound like it's all bad news for AA. Only to show how that's not the case at all, the stock is up 1.8%
@ Jd -- I'm not sure how I made it sound like bad news? And yeah, the stock is up a little bit because American investors have very low expectations. American's market cap is $6.2 billion. United's market cap is $22.4 billion. That should tell you all you need to know.
I just don't want to fly on garbage seats cramped like sardines. I always look at other airlines first and American when the flight times on Delta and United don't work for me. Unfortunately flying out of DFW my hand is forced most of the time.
Gia, please be advised that BA fly out of DFW if you need to escape so badly? …. :-)
Apologies, I have the devil in me presently.
BA has suspended its LHR-DFW service for the summer. AA has added an additional flight making 5 nonstops on their metal.
Lurker, just in case you hadn’t noticed, I was being sarcastic. However, I am sure that someone else will be grateful for your advice.
Aa leadership sucks, that is all. Yet the board doesn't even change them. Need to fire them all
I’m flying AA JFK/SFO next week in business for under 30,000 miles.
UA and DL commanded at least 80,000 miles for the same route and class of service.
AA can’t charge much for its routes because its years and years of despicable customer service, all over the country, caught up to them.
How can AA improve? Simple. Give every customer a survey after each flight with the headshot of every GA and FA who worked that flight. Terminate the bottom 20% as well as anyone who receives more than 4 negative reviews from ExecPlat and Concierge Key passengers.
I assume you are familiar with "A fish rots from the head down"?
I am sure there are easily a bad 20%+ of front line employees, but the bottom line is, it is called "leadership" for a reason. Clearly AA's leadership is not doing its job. It is not an excuse, just a fact.
@SEM: the morons in management ignored the customer satisfaction component because it wasn’t immediately quantifiable in terms of the bottom line.
It’s quantifiable now.
You are being too charitable SEM. That poster has only just heard that saying.
I agree that AA's leadership is not doing its job, but yet they continue to fail upwards while being competitively compensated. Such is corporate life the world over,sadly.
One has to ask the very obvious question Arps …. Why would anyone who boasts about earning $6m/annum, lower themselves into an AA, J seat on any route?
Aero, I promise you I won’t be in the top 10 passengers on that flight by either income or net worth.
Arps, thank you for your consideration of my question, one can only conclude that there are more desperate AA passengers talking your flight than expected.
Probably not in the top 90% if you were honest.
AA's Flagship Business is miles ahead of every competitor in the US.
Er, no, although the AA Flagship Lounges are not bad.
But imagine if foreign airlines could operate US domestic routes. Would any US airlines survive?
Tom, one has to admire your observation about foreign airlines operating U.S. domestic routes.
One quite obnoxious Irishman would certainly spoil the party.
Ryanair put their aircraft down in some very dubious locations, pull the passengers legs at every opportunity and still the punters by tickets to fly his airline.
Extra, as far as the World Rankings are concerned, American Airlines is only ranked No: 78/100. AA’s main competitors DL & UA are well ahead of AA at 21 & 42 respectively. Even Alaska and jetBlue are ranked above AA. Sorry if I have burst your balloon.
1. This is exactly why Delta can command prices of 800,000 miles for a business class flight from JFK to Milan or Frankfurt, while Emirates or Singapore only 10% of that. Or is it not.
2. For JFK/SFO, I think AA F would be comparable to Polaris or Delta One. Definitely not AA’s business class… And JFK-SFO for 30k… yeah I see those, always a 6am JFK departure or the last flight of the day which arrives in SF after 3am ET… No, thank you ☠️