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…
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?
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