Recently we’ve seen both Delta Air Lines and United Airlines report their impressive 2024 financial results, and paint a rosy picture of 2025, predicting it will be the best year in history for the two companies. Well, now American Airlines has revealed its 2024 financial results and has issued its 2025 forecast, and it’s a very different story…
In this post:
American Airlines’ disappointing financial results & forecast
American Airlines has revealed the details of its 2024 financials, and it was… an okay year by American’s (low) standards? In terms of full year 2024 financial results:
- American had operating revenue of $54.2 billion, a 2.7% increase compared to the $52.8 billion operating revenue in 2023
- American had operating income of $2.6 billion, a 13.9% decrease compared to the $3.0 billion operating income in 2023
- American had net income of $846 million, a 2.9% increase compared to the $822 million net income in 2023
- American had passenger revenue per available seat mile of 16.93 cents, a 3.1% decrease compared to 17.47 cents in 2023
- American had cost per available seat mile of 17.61 cents, a 1.7% decrease compared to 17.92 cents in 2023
- American had earnings per share of $1.24, a 2.5% increase compared to the $1.21 earnings per share in 2023
2024 was a year with record revenue for American. The carrier’s net income was marginally higher than in 2023. Prior to that, American lost money in 2020 through 2022. What’s wild is that American’s net income is so much smaller than it was in 2014 through 2019 (and in the years prior to that, American was losing money). Just to show how far the airline has fallen, in 2015, American reported a net income of $7.6 billion.
While Delta and United recently reported that they expected the first quarter of 2025 to exceed expectations, that’s not the case at American. Instead, American expects first quarter losses per share of $0.20-0.40, which is more of a loss than investors anticipated. Nonetheless, the airline expects full year earnings per year of $1.70 to $2.70.
Here’s what American CEO Robert 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.”
How much longer will American Airlines’ board be asleep?
I’ve said it a million times before, and I’ll say it again. I don’t understand how American Airlines’ current management team is still in power. This seems like borderline negligence on the part of the company’s board. How can you watch an airline underperform quarter after quarter, and just not do anything?
The thing is, it’s not like American is executing some amazing vision right now, and is asking investors to give the company more time for the results to catch up. Instead, the airline just keeps underperforming its peers, and everyone is acting like that’s just fine and dandy.
As I’ve often said, airline executives have tough jobs, and they always have to sell Wall Street on what a good investment airlines are, even though they aren’t (at least in the long run). I’m reminded of how in 2017, former American CEO Doug Parker said that the airline would never lose money again, and he claimed that even in a bad year, the airline should earn around $3 billion in profits. That sure didn’t age well, did it?
While all airlines are tough businesses, you can’t help but notice the contrast in direction between American and United, with Scott Kirby now at the helm at United. He has brought United into Delta’s league, and has left American in the dust. You don’t have to be a genius to figure out that American is underperforming peers, and has zero momentum.
Bottom line
American Airlines has reported its 2024 financial results and 2025 outlook, and unsurprisingly, the airline is greatly lagging its rivals. I don’t think anyone will be surprised by these results. The only thing I can’t wrap my head around is how the current management team seems to have such job security…
What do you make of American’s continued underperformance?
It's crazy how American, Delta, and United are so similar in revenue (billions USD):
1st Half 2024 - AA: 24.7 Delta: 25 United: 25
2nd Half 2024 - AA: 29.5 Delta: 36.6 United: 32.1
Total 2024 - AA: 54.2 Delta: 61.6 United: 571.1
They're also similar in passenger miles. With their income and scale being the same, it suggests that AA isn't operating as efficiently as the others. This is odd because...
It's crazy how American, Delta, and United are so similar in revenue (billions USD):
1st Half 2024 - AA: 24.7 Delta: 25 United: 25
2nd Half 2024 - AA: 29.5 Delta: 36.6 United: 32.1
Total 2024 - AA: 54.2 Delta: 61.6 United: 571.1
They're also similar in passenger miles. With their income and scale being the same, it suggests that AA isn't operating as efficiently as the others. This is odd because AA is notorious for prioritizing efficiency. Maybe their inefficiency resides in large scale, systemic decisions instead of everyday, ground-level decisions.
AA continues to delay investment in planes and return to competitive markets until it pays down its debt. Not sure I agree with the strategy, but until the debt gets in order, AA can't match DL and UA's financials. On the bright side, the debt is much more under control: Q2 2024 leverage ratio, '23-'24 noncurrent liabilities, '23-'24 interest expense:
- AA: 6.1x (~$46.2B -> ~$41.8B); ~$2.1B -> ~$1.9B
- DL: 2.2x (~$36.1B ->...
AA continues to delay investment in planes and return to competitive markets until it pays down its debt. Not sure I agree with the strategy, but until the debt gets in order, AA can't match DL and UA's financials. On the bright side, the debt is much more under control: Q2 2024 leverage ratio, '23-'24 noncurrent liabilities, '23-'24 interest expense:
- AA: 6.1x (~$46.2B -> ~$41.8B); ~$2.1B -> ~$1.9B
- DL: 2.2x (~$36.1B -> ~$33.4B); ~$0.8B -> ~$0.7B
- UA: 2.1x (~$39.6B -> ~$38.1B); ~$1.9B -> ~$1.6B
The interest expenses explains ~$300M in the net income gap vs UA and ~$1.2B vs Delta. If you look at the headline financials for FY24:
- AA: $50.9B passenger rev.; 16.93 PRASM (18.51 TRASM) vs 17.61 CASM
- DL: $50.9B passenger rev.; 17.65 PRASM (19.76 TRASM) vs 19.30 CASM
- UA: $51.8B passenger rev.; 16.66 PRASM (18.34 TRASM) vs 16.70 CASM
The results are far more competitive. All 3 need the loyalty program revenue as they marginally lose $ purely flying. We'll see what happens in 2-3 years once AA's debt is back in line with its competitors.
UA will have an increase in CASM soon w/ the labor negotiations but will get an increase in TRASM w/ the Chase deal which may cancel out (tbd). DL has historically been the best managed financially, but let's see if they can find low hanging fruit to lower costs / increase rev. b/c UA is fast catching up.
“It is not the critic who counts: not the man who points out how the strong man stumbles or where the doer of deeds could have done better. The credit belongs to the man who is actually in the arena, whose face is marred by dust and sweat and blood, who strives valiantly, who errs and comes up short again and again, because there is no effort without error or shortcoming, but who knows the...
“It is not the critic who counts: not the man who points out how the strong man stumbles or where the doer of deeds could have done better. The credit belongs to the man who is actually in the arena, whose face is marred by dust and sweat and blood, who strives valiantly, who errs and comes up short again and again, because there is no effort without error or shortcoming, but who knows the great enthusiasms, the great devotions, who spends himself in a worthy cause; who, at the best, knows, in the end, the triumph of high achievement, and who, at the worst, if he fails, at least he fails while daring greatly, so that his place shall never be with those cold and timid souls who knew neither victory nor defeat.” — Theodore Roosevelt
This is unnecessarily dramatic given the context. American is not some striving David up against Goliaths — they're a rudderless company largely devoid of meaningful strategy (except for Vasu's ill-fated NDC pursuit which continues to pay negative dividends quarters after he was booted). Both UA/DL are knowing victory, AA's choice to only know defeat is a completely voluntary one.
What a joke AA has become unless you either want or need to fly to the IAG hubs like LHR or through AA's hubs on a regular basis.
AA's network planning is headed by Brian Znotins. The evolution of AA's network (routes and schedule) over the past few years has undermined my relationship as a customer. Where I had been a CK for years, I now fly one route with them and it's solely paid with points. Nothing more.
Look at AA's capital structure. They are levered 6x vs. United at 2.5x and Delta around 2.5x.
Any extra cash AA generates goes straight into paying down their debt, they are paying $2B a year in interest expense at current levels, $1.5B in net interest since they are getting some bank account income as well. That is nearly 60% of their operating income going to interest payments!! Anything left over is trying to pay...
Look at AA's capital structure. They are levered 6x vs. United at 2.5x and Delta around 2.5x.
Any extra cash AA generates goes straight into paying down their debt, they are paying $2B a year in interest expense at current levels, $1.5B in net interest since they are getting some bank account income as well. That is nearly 60% of their operating income going to interest payments!! Anything left over is trying to pay down principal early. Almsot any extra cash immediately sent to debt investors!!!
Compare to United's net interest around 20% of their operating income.
It's cliche to say but AA's capital structure is strangling them slowly and not giving them the capital to invest more back into the business.
It's a combination of reasons some of which are difficult to fix or out of the airline's control. Fixing some of the airline's issues will cost money that at least for the short term would depress financial results even more.
for those that want to think that Scott Kirby was "liberated from AA" so he could do great things at UA, many of the strategies that AA stumbles over today are ones over which Kirby was directly responsible for at AA.
He is smart enough to have learned from his mistakes at AA, HP and US but to think that he isn't responsible for parts of what are problems for AA is patently false.
And, it will take years to recover from the initiatives of the wunderkind Vasu Raja.
which mistakes specifically, Tim?
Scott Kirby isn't god but you clearly have no idea what you're talking about.
he was directly responsible for American’s network and many of its fleet strategies, including its product
Well we all know how Ben’s first class flight from LHR-MIA went even though it was last minute.
Despite the Boeing delays you’d have to deliberately be deferring delivery of aircraft at this point. Zero progress toward new product as well.
2/ Sounds like American reached out to Trump already for assistance. Trump mentioned in Davos one of the largest airlines in the world reached out to him about being ripped off in the EU and with online reservation channels.
Makes you wonder what's going on indeed. I haven't flown them in several years, as whenever I'm looking for business class fares to DFW from the UK, they're wicked pricey and I always opt for another carrier. I'd be happy to fly them -- particularly even more so once their new business class cabin becomes available on their London route to try out; however, for me, things haven't ever aligned for me to fly them...
Makes you wonder what's going on indeed. I haven't flown them in several years, as whenever I'm looking for business class fares to DFW from the UK, they're wicked pricey and I always opt for another carrier. I'd be happy to fly them -- particularly even more so once their new business class cabin becomes available on their London route to try out; however, for me, things haven't ever aligned for me to fly them in recent years, as other airlines have been priced more competitively when I'm looking for business class flights.
As long as they're a decently competent airline and do not change their AAdvantage program and redemption much, I'm not too worried. Their award chart is what keeps me loyal at the end of the day.
no company gives away more than they have to. AA is using its loyalty program to buy business travel which it cannot get via paid fares.
DL has the "stingiest" loyalty program because it gets the business revenue that AA and UA dream about.
While I do not disagree with you, it helps folks like me who are restricted to an AA hub, but who also want simple and affordable premium class travel with a consistent amount of points needed for a partner redemption. This is from me who came from a former DL hub.
It's been sad to see AA become a seasonal 49 state domestic airline at ORD (Sorry I'm not transiting DFW). They have waived the white flag at ORD and have ceded business to United.
I'm OWE from CX. So whenever I fly to the US and need domestic sectors, (usually F or J as I have luggage), I always look at AA first, One World and all. But the website restricts "country of origin" credit cards from most of Southeast Asia. (NO Thailand, Philippines, Vietnam; only Singapore is listed.) They used to have a General Sales Agent two years ago, but even they are gone now. Of course not...
I'm OWE from CX. So whenever I fly to the US and need domestic sectors, (usually F or J as I have luggage), I always look at AA first, One World and all. But the website restricts "country of origin" credit cards from most of Southeast Asia. (NO Thailand, Philippines, Vietnam; only Singapore is listed.) They used to have a General Sales Agent two years ago, but even they are gone now. Of course not a problem purchasing any type of tickets on DL or UA! I know the overseas market is small by comparison, but this is an odd omission for an airline not doing well -- low-hanging fruit, no? No surprise then that AA is an under performer.
If their network works for you, take a look at Alaska, which is also in oneworld. Generally a nicer airline to fly with than American :-P
Project Oasis
The irony and hubris of them sacking Vasa without realizing he was a symptom of the incompetence at the top, not a cause. Fingers crossed if they ever do wake up and clear out the ELT, they leave AAdvantage mostly alone. It's still the only reason for me to do business with AA.
AA is the underperformer in the industry and it is what is fueling a big part of DL and UA's profits.
AA does not provide a high quality product either in terms of reliability or airport experience or network.
AA made its strategy to compete for connecting domestic passengers and yet that is a market that can easily be replicated and DL and UA are competing well for those passengers, esp. DL which...
AA is the underperformer in the industry and it is what is fueling a big part of DL and UA's profits.
AA does not provide a high quality product either in terms of reliability or airport experience or network.
AA made its strategy to compete for connecting domestic passengers and yet that is a market that can easily be replicated and DL and UA are competing well for those passengers, esp. DL which already has a far stronger domestic network than UA.
AA cannot compete in the largest local markets which is why DL focused so much attention during covid in building NYC and LAX and UA is doing it at ORD. AA tried to build AUS which was a failure and is now pushing way too many passengers through CLT than the airport can handle and that is the best competitor for ATL - but a pretty poor one.
AA's unions know the company will underperform so asked for and got big increases which is a big reason for the drag on AA's costs and profits.
Unlike WN, there is no quick turnaround which is why hedge funds don't want to take on AA.
IF WN can turn itself around, which I think they will in 2025, AA will be the big drag of the big 4.
"AA does not provide a high quality product either in terms of reliability or airport experience or network."
Your dreams are one thing. Facts are another
1. wifi on every mainline plane? AA? yes. Delta? no.
2. Wifi that works globally? AA? Yes. Delta? no.
3. All aisle access on all widebodies? AA? Yes. Delta? no.
4. Business class lounges? AA? for years now. Delta? Catching up to AA
5....
"AA does not provide a high quality product either in terms of reliability or airport experience or network."
Your dreams are one thing. Facts are another
1. wifi on every mainline plane? AA? yes. Delta? no.
2. Wifi that works globally? AA? Yes. Delta? no.
3. All aisle access on all widebodies? AA? Yes. Delta? no.
4. Business class lounges? AA? for years now. Delta? Catching up to AA
5. Network? more destinations in the US and globally than DL and that's excluding Alaska's network which AA customers can use with ease and have their loyalty and status rewarded.
But keep trying.
There are MANY things AA does poorly and does well. But, the Delta court jester trying to talk about areas where Delta is woefully behind AA? give me a break.
@Maxpower, and AA could be significantly worse and yet the Oneworld factor would still make it my defacto airline. being able to fly Cathay, Qantas, Qatar, Finnair, Japan airlines... the quality of lounges, the crystal clear benefits, free luggage... Skyteam seems to add insult to the injury of the Delta loyalty program.
@MaxPower - Fully agree, and will add that the high quality oneworld partners and the oneworld lounge access policy (including FL for AA) is what keeps me loyal to AA. Delta doesn't have a lot of high-quality partners beyond AF/KL, and the SkyTeam lounge access policy is abysmal compared to oneworld's.
no, Max, you clearly pick out the outliers of each category and ignore the reality of the majority including that AA has no intention of matching DL's product offering, unlike DL now or UA intends to be.
DL has FREE high speed WiFi on 650 narrowbodies now; it is installed on all widebodies except the A350s. DL will turn it on for all of its mainline fleet this year. AA and UA have ZERO aircraft...
no, Max, you clearly pick out the outliers of each category and ignore the reality of the majority including that AA has no intention of matching DL's product offering, unlike DL now or UA intends to be.
DL has FREE high speed WiFi on 650 narrowbodies now; it is installed on all widebodies except the A350s. DL will turn it on for all of its mainline fleet this year. AA and UA have ZERO aircraft with free high speed WIFI today.
DL's ex-Latam 350s are in mods; most are not even flying right now.
Delta One lounges will be in at least 4 airports by the end of the year. SkyClubs have always been a higher quality lounge than AA or UA's standard lounges Tell me how many standard AA and UA lounges have showers as SC's have.
a few dozen additional airports at most doesn't change the calculus.
It is you that can't stand to admit that AA has an unworkable business plan but you keep trying to find the speck in someone else's eye because the log is too much to remove from your own
Many regular Admirals Clubs have showers (ORD, JFK, LGA, MIA, DFW, LAX, EZE). Probably others I’m missing.
thanks for reinforcing that all my points are still valid and accurate.
"It is you that can't stand to admit that AA has an unworkable business plan but you keep trying to find the speck in someone else's eye because the log is too much to remove from your own"
lol. the Tim Dunn go-to... can't respond to the facts so accuse them of "not being able to admit" something that i've already stated......
thanks for reinforcing that all my points are still valid and accurate.
"It is you that can't stand to admit that AA has an unworkable business plan but you keep trying to find the speck in someone else's eye because the log is too much to remove from your own"
lol. the Tim Dunn go-to... can't respond to the facts so accuse them of "not being able to admit" something that i've already stated... that AA does many things poorly.
You just have nothing to say in reply since DL purposefully flies planes around with no wifi, no all aisle access, is ten years late to the lounge game and significantly fewer network destinations than AA and especially against oneworld in the US and globally.
Keep dreaming. It's all you have. AA does plenty of things wrong. You just don't seem to know why delta is profitable to the extent they are (hint hint. Delta explicitly say its a credit card deal and monopoly hubs as much as you seem to hate what Delta themselves say).
"Delta One lounges will be in at least 4 airports by the end of the year. SkyClubs have always been a higher quality lounge than AA or UA's standard lounges Tell me how many standard AA and UA lounges have showers as SC's have."
lol. What? Your answer to Delta's decades-late entry to the business class lounge game is to ask me how many Admirals clubs have showers? lol. Plenty do and I'm certainly not going to go count for you with such an incredibly lame counter. Any time I've wanted to shower at an AC, a shower has been there. You're probably the only one who cares though you sure are whistling a new tune than before when you said no one cares about showers at the new Delta One lounges
I’m no Delta apologist, but I’m not sure I agree with all the points above.
1&2 — Delta offers free WiFi on a majority of its domestic fleet. Not sure the exact percentage, but I’ve had free WiFi on virtually all my domestic Delta flights over the last year (excepting one Delta Connection flight). AA charges for WiFi and as far as I know has no plans to make it free. I think anyone...
I’m no Delta apologist, but I’m not sure I agree with all the points above.
1&2 — Delta offers free WiFi on a majority of its domestic fleet. Not sure the exact percentage, but I’ve had free WiFi on virtually all my domestic Delta flights over the last year (excepting one Delta Connection flight). AA charges for WiFi and as far as I know has no plans to make it free. I think anyone who isn’t expensing their WiFi would agree that Delta wins in this category.
3. Delta has all-aisle access on their widebodies with the exception of a handful A350s they inherited from LATAM. And those are in the process of being retrofitted. Very misleading point here. (If anything, maybe AA could learn something from Delta about acquiring widebodies second-hand — would certainly help address their widebody shortage.)
4. AA has 4 Flagship lounges, plus a joint business lounge with BA at JFK. Delta has 3 Delta One lounges, with a 4th opening this summer in Seattle. Have you been to a Delta One lounge? AA certainly beat Delta to the punch in opening business class lounges, but the quality is not comparable — Delta One lounges blow Flagship lounges out of the water.
5. AA does have a more expansive domestic network than Delta, but it’s arguably worse in the sense that you generally have to be routed through DFW, CLT or PHX. As an NYC-based flier, I’m astonished at how much AA has retreated from JFK/LGA, LAX and ORD.
Internationally, AA is definitely stronger in Central and South America. Delta is unquestionably stronger in Europe (AA basically just flies people to London and then adds a smattering of routes to some other cities). Neither carrier is great to Asia or Australia. Delta is better to Africa.