If you follow the US airline industry, you know that among the “big three” carriers, Delta is the most profitable, followed by United, followed by American. American has today released its 2025 full-year results, and the difference in profitability continues to grow, as the company’s leadership is seemingly running out of empty promises it can make.
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American reports $111 million profit for 2025, an 87% decline
American has today reported its 2025 full-year results, and they’re pretty brutal, at least competitively:
- The company had net income of $111 million, down 87% compared to $846 million the previous year
- The company had total operating revenue of $54.6 billion, up 0.8% compared to $54.2 billion the previous year
- The company had total operating expenses of $53.2 billion, up 3% compared to $51.6 billion the previous year
- The company had passenger load factor of 83.6%, down 1.3% compared to 84.9% the previous year
- The company had total revenue per available seat mile of 18.25 cents, down 1.4% compared to 18.51 cents the previous year
Admittedly 2025 was a tougher year for airlines than 2024, given all the economic uncertainty in the first half of the year. The issue is that American was already so greatly lagging Delta and United, so when things take a turn for the worse, you don’t want to be in American’s position. As a point of comparison, Delta’s net income for 2025 was $5 billion, while United’s was $3.4 billion.
The only positive news here (which is sending American’s stock up) is that the airline has positive projections for 2026. For the full year, the airline is expecting adjusted earnings per diluted share of $1.70-2.70.
In the first quarter of 2026 (compared to the same quarter of 2025), the airline is expecting available seat miles to be up 3-5%, total revenue to be up 7-10%, cost per available seat mile to be up 3-5%, and an adjusted loss of $0.10-0.50 per share.
I can’t help but think that American is very much making “best case scenario” projections here. While it’s important for CEOs of publicly traded companies to be somewhat reliable in terms of the narrative they tell, airline executives have a bit of flexibility nowadays, given how many outside events can impact airline performance.
American doesn’t really have a narrative for fixing things
It’s kind of amazing how American still sort of lacks a narrative for fixing things. Regarding the 2025 results, here’s what American CEO Robert Isom had to say:
“American Airlines is positioned for significant upside in 2026 and beyond. We have built a strong foundation, and we look forward to taking advantage of the investments we have made in our customer experience, network, fleet, partnerships and loyalty program. The strategy we have in place will put American in the right position as we celebrate our centennial and embark on our next 100 years as a premium global airline.”
The airline has been around for 100 years, and it’s still working on “building a strong foundation,” and it “looks forward to taking advantage of the investments that have been made.” This is basically the same type of story we’ve heard year after year. It’s never what has been meaningfully accomplished, but instead, how it positions the carrier better for the future.
When American reported its 2024 earnings results (a year ago), here’s what Isom had to say:
“The American Airlines team achieved a number of important objectives in 2024. 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.”
What about the year before that? Well, here’s what Isom had to say about 2023 earnings results:
“The American Airlines team produced an exceptionally strong performance in 2023. We are delivering on our commitments and remain well-positioned for the future, supported by the strength of our network and travel rewards program, our young and simplified fleet, our operational reliability, and our outstanding team. As we look forward, we remain focused on delivering a reliable operation for our customers and reengineering the business to build an even more efficient airline.”
American is essentially arguing that it has a lot of upside because of the extent to which it’s investing in a premium customer experience, though it’s not in any way clear how this will set American apart from Delta or United, or allow the airline to win market share.
The airline also argues that it’s maximizing the power of its network and fleet, and how it “operates the strongest network in the U.S.,” “with eight hubs in the 10 largest metropolitan areas.” Essentially, the airline claims that everything that has been done will suddenly improve things, but it hasn’t worked in the past, so it’s not clear how it’s supposed to work in the future.
For that matter, one certainly wonders how American’s profitability will be impacted by the battle it’s having with United in Chicago, where United CEO Scott Kirby is predicting that American will lose $1 billion over the course of the year. We’ll see how that plays out, but that doesn’t exactly suggest that increased profitability is on the horizon.
Of course when looking at the paltry $111 million profit, one can’t help but be reminded of how in 2017, former American CEO Doug Parker said that the airline would never lose money again, and even in a bad year, the airline should earn around $3 billion in profits. That sure didn’t age well, did it?
I continue to think that while Isom is a nice guy, he’s not the person who can turn the airline around. American needs a hard reset, with all employees rallying behind a new vision. Isom has simply lost (or maybe never had?) the support of frontline workers, and he’s not doing much to inspire them, it seems (and the 0.3% profit sharing they’re getting certainly won’t help).
Bottom line
American has reported its 2025 financial results, and the airline had a net profit of $111 million, down 87% compared to the previous year. For that matter, American’s profits were 2% as big as Delta’s, as the airline reported earnings of $5 billion.
Unfortunately American lagging both Delta and United with financial performance is nothing new. While the airline expects that 2026 will be a better year, we saw similar projections in 2025, and that didn’t work out so well.
Unfortunately American just doesn’t have much of a narrative here as to how things will improve, other than emphasizing how it’s premium, its network, and its reliability, even though those are all three areas where American arguably lags Delta and United.
What do you make of American’s 2025 financial results?
The problem is that management has made strategic decisions based around the belief that people only care about the price and the schedule. And the blunder to retire too many widebody aircrafts.
Digging out of this hole will take years and probably new management with a vision.
Isom has to go bring a new CEO.
He certainly didn't deserve the $34 million compensation back in 2023...
They need much better marketing. Can't just throw around some pictures of a couple new planes that most people will never fly on and expect that is going to turn things around. And they of course need to execute better operationally.
Being premium also means competing in premium markets. Engaging in a turf war in Chicago may be costly but at least shows they have a little bit of fight in them. But they...
They need much better marketing. Can't just throw around some pictures of a couple new planes that most people will never fly on and expect that is going to turn things around. And they of course need to execute better operationally.
Being premium also means competing in premium markets. Engaging in a turf war in Chicago may be costly but at least shows they have a little bit of fight in them. But they have to do better in places like NYC if they want to drive CC spend.
More MCE?
You said it! I suspect their math showed that they give it away for free to loyalty members more than people buy it, which led them to the conclusion that they don't need it on their premium configured planes because what they really want to do is push their loyalty members to buy PE, because their loyalty members are their best source of revenue.
The problem is that's a two way street, and it's pretty...
You said it! I suspect their math showed that they give it away for free to loyalty members more than people buy it, which led them to the conclusion that they don't need it on their premium configured planes because what they really want to do is push their loyalty members to buy PE, because their loyalty members are their best source of revenue.
The problem is that's a two way street, and it's pretty easy to walk across the street to DL or UA and find plenty of extra legroom seating and a status match. It's not like they're flying their new premium planes only in AA fortress hubs, so far it's the XLR between JFK and LAX and the 787Ps from ORD and JFK (in addition to DFW and PHL).
People have choices! You have to incentivize loyalty members to remain with the program. MCE seating matters in that analysis! The value of AA miles, especially with AA partners, is the biggest benefit of the program by far (those oneworld first class lounges are pretty nice also). The value of AA's product itself? Middling at best.
Why does AA keep talking about their network like it's some huge advantage? It's not like I'm struggling for other options domestically, and they have huge gaps in their international network
What concrete steps can they take? When I fly the US3, I can’t really tell them apart.
Install domestic economy IFE + fight for market share in New York + get Alaska and Cathay in the TPAC JV
I like MDR's ideas! IFE FTW.
The fact that AA is not fighting for market share in NY is just baffling. Who knows what will happen with B6/UA but right now UA is stuck on the other side of the river in Newark and there's a lane to chip away at DL - will be inch by inch for sure, but provide more competition! Can't still be smarting about the death of the NEA and licking wounds - have to move on and execute your own business plan.
American doesn't need to make money. Most of their employees are getting paid well, have nice benefits and AA has great airport hubs and lounges. The need to make money for an airline their size is a useless talking point.
that signs good in socialism but the money has to come from somewhere to actually pay the people that provide the capital that AA uses to generate revenue and pay its people.
For years, AA has had negative stockholder equity (meaning it has a stockholders deficit) which means the company has no value; at the end of 2025, it was in the hole to the tune of $3.7 billion.
The only people that benefit from...
that signs good in socialism but the money has to come from somewhere to actually pay the people that provide the capital that AA uses to generate revenue and pay its people.
For years, AA has had negative stockholder equity (meaning it has a stockholders deficit) which means the company has no value; at the end of 2025, it was in the hole to the tune of $3.7 billion.
The only people that benefit from AA's continued operation is the 125k employees and the banks that make money on the $30 billion in debt that AA carries.
Tim, Tim, Tim... keep lickin' those tasty boots!!
Is this post a joke or can anyone be that clueless? AA is a public listed company controlled shareholders whose only interest in holding AA shares is to make money either by dividends or stock appreciation both of which directly result from profits.
Why though?The CC income are weakening?
Probably. These are 'credit cards with wings' after all.
It is also noteworthy that AA's load factor in the 4th quarter fell by 2 points; they haven't said why but operational issues have got to be a factor.
AA is now in the 5th day of double digit percentages of cancellations with AA having already cancelled 25% of its mainline flights including 15% of DFW and 10% of CLT. They simply cannot get their network restarted. There are people that are buying tickets on...
It is also noteworthy that AA's load factor in the 4th quarter fell by 2 points; they haven't said why but operational issues have got to be a factor.
AA is now in the 5th day of double digit percentages of cancellations with AA having already cancelled 25% of its mainline flights including 15% of DFW and 10% of CLT. They simply cannot get their network restarted. There are people that are buying tickets on other airlines to get home and will not fly AA again if AA doesn't give those passengers' tickets to other carriers.
The competitive attack between AA and UA will take a toll on both airlines; the real issue is that AA cannot make progress in fixing the company as long as it is tied up in competitive battles.
Let's also not forget that AA has post covid contracts w/ all of its labor groups while AA does not.
Trying to argue about AA's vulnerability when UA will take a labor cost hit is an apples to oranges comparison, at best.
B6 also reported it is losing money. The US airline industry is still very vulnerable.
The only airline that is making good money and is not facing major strategic challenges is DL while WN is likely to take the "most improved for 2026 award"
You almost made it without referencing Delta once, but you had to fumble it in the last paragraph.
He can’t. It’s a mental illness. Hope he gets treatment.
you do realize that Ben, accurately referenced DL in the article. You can't talk about how well any airline does financially without talking about their position in the industry as a whole.
We know full well that you don't like comparisons but the fact that AA made a tiny fraction of what DL made while DL flew less ASMs speaks volumes about the fact that AA's business plan is not working.
"We know full well that you don't like comparisons"
who is we? Are you with a group of fellow Delta enthusiasts?
WN is, right now, making the same mistakes that got AA into this position. Their long term prospects are bleak.
let's see what WN reports but I doubt their prospects are as grim as AA's. WN is well into its turnaround plan, something AA can't even seem to articulate, as Ben notes
LOAD FACTOR... knew I'd see that on here.
@Tim,
"The only airline that is making good money and is not facing major strategic challenges is DL"
cough "AS in Seattle" cough
@dtw
Now now
AA (maybe) losing money now in chicago for a historically quite profitable hub and essential Midwest hub…? Well, that’s just bad strategy by AA and the prospects are grim. But just to be clear, delta will triumph in all this regardless.
But delta in Seattle? Well being half the size there of AS and unprofitable with no room to grow, at all, vs Alaska? Well, that’s just good and necessary strategy...
@dtw
Now now
AA (maybe) losing money now in chicago for a historically quite profitable hub and essential Midwest hub…? Well, that’s just bad strategy by AA and the prospects are grim. But just to be clear, delta will triumph in all this regardless.
But delta in Seattle? Well being half the size there of AS and unprofitable with no room to grow, at all, vs Alaska? Well, that’s just good and necessary strategy and investors should be expected to foot the losses since it’s for delta
;)
I think they are in trouble, especially since the massive fare war with Chicago is going to hurt margins dramatically. They need to focus on improving their product/adding more premium seats/expand internationally, rather than put in so much extra capacity in a market that doesn’t need it.
Chicago is one of their smaller stations, the massive "fare war" doesn't affect their bottom line much at all.
It's similar to how DL can subsidize BOS and SEA vs competitors because those are very small operations compared to their core hubs.
Isom said it is AA's 3rd largest hub.
Smaller is relative. Yes, it’ll be smaller than DFW/CLT, but they are scheduled to run 500+ flights out of ORD this summer. To put into perspective, that is more departures than all of Delta’s hubs except for Atlanta.
Delta’s Seattle and Boston hubs are much smaller in the 200ish range. Boston might even be smaller than 200.
"The only positive news here (which is sending American’s stock up) is that the airline has positive projections for 2026."
I'll never understand the stock market. Loons.
The $846M profit figure from 2024 was largely funded by the Citi deal renewal. This was a one time payment and is misleading to characterize profits being down 87% by lack of this payment.
There was nothing in 2024 of an increase from citi. That extra revenue doesn’t kick in till this year. Also the citi deal was announced I think in early 2025… regardless 2024 and 2025 did not get increased revenue from Citibank deal. Only 2026
Every aircraft ready to fly every morning.