Executive Summary

Record fourth-quarter revenue of $13.66B with adjusted diluted EPS of $0.86, above the high end of December guidance; unit revenue inflected positive (+2% YoY), and adjusted operating margin expanded to 8.4% .
Geographic mix: Domestic (+3.5% revenue), Atlantic (flat, but PRASM +11.5%), Pacific (+39.4%), offset by Latin America (-0.7%); total TRASM +2.0% YoY as fuel prices fell to $2.34/gal .
Balance sheet progress: achieved >$15B total debt reduction from mid-2021 peak a year early; year-end total available liquidity $10.3B; record FY2024 free cash flow of $2.2B .
2025 outlook: Q1 adjusted EPS loss ($0.20)-($0.40), FY adjusted EPS $1.70–$2.70, revenue growth +4.5%–+7.5%, non-fuel unit cost up mid-single digits; management targets total debt < $35B by 2027 and >$2B FCF in 2025 .
Catalyst set-up: continued recovery in indirect/corporate channels, expanded Citi co-brand partnership (exclusive issuer starting 2026) with 2024 partner cash remuneration of $6.1B; one-time Q4 cash payment had no revenue/EPS impact .

What Went Well and What Went Wrong

What Went Well

Unit revenue inflected positive: TRASM +2.0% YoY; adjusted operating margin 8.4% and adjusted EBITDA margin 14.9% in Q4 .
Network performance: AAL led U.S. network carriers in YoY Domestic, Atlantic, Pacific, and total passenger unit revenue; premium revenue up ~8% with paid premium load factors +3 pts YoY .
Balance sheet and cash: record FY free cash flow of $2.2B, total debt reduced by >$15B from peak ahead of schedule; net debt at lowest since 2015 .
- Quote: “We generated record free cash flow of $2.2 billion in 2024… reduced our total debt by more than $15 billion from peak levels… a full year ahead of schedule.” — CEO Robert Isom .

What Went Wrong

Non-fuel unit cost pressure: Q4 CASM ex fuel and specials +5.7% YoY; Q1 2025 non-fuel unit costs expected up high-single digits on mix (regional up ~17% ASMs), lower capacity, and new CBAs .
Latin America softness: short-haul Latin unit revenue down YoY in Q4; Latin passenger revenue -0.7% YoY, with yield -3.9% .
Continued recovery needed in indirect/corporate: management still ~below historical share entering Q4 (though improving), with full restoration targeted by end-2025 .
- Analyst concerns focused on CASM trajectory vs RASM progression and margin trends across hubs .

Financial Results

Consolidated Performance vs Prior Quarters

Metric	Q2 2024	Q3 2024	Q4 2024
Revenue ($USD Millions)	$14,334	$13,600	$13,660
Diluted EPS (Adjusted)	$1.09	$0.30	$0.86
Operating Margin (Reported)	9.7%	4.7% (Adjusted OM provided; reported OM not disclosed in transcript)	8.3%
Operating Margin (Adjusted)	9.7%	4.7%	8.4%
Pre-Tax Margin (Reported)	7.2%	N/A	5.8%
Pre-Tax Margin (Adjusted)	7.3%	N/A	5.9%

Notes: Adjusted EPS and adjusted margins are non-GAAP. See company reconciliations .

YoY Q4 Income Statement Highlights

Metric	Q4 2023	Q4 2024
Total Operating Revenues ($USD Millions)	$13,062	$13,660
Operating Income ($USD Millions)	$656	$1,134
Net Income ($USD Millions)	$19	$590
Diluted EPS ($USD)	$0.03	$0.84
Operating Margin (Reported)	5.0%	8.3%
Operating Margin (Adjusted)	5.1%	8.4%
Pre-Tax Margin (Reported)	0.2%	5.8%
Pre-Tax Margin (Adjusted)	2.0%	5.9%

Segment/Geographic Revenue (Passenger)

Region	Q4 2023 ($USD Millions)	Q4 2024 ($USD Millions)	YoY Change
Domestic	$8,744	$9,051	+3.5%
Latin America	$1,674	$1,662	-0.7%
Atlantic	$1,330	$1,324	-0.5%
Pacific	$262	$365	+39.4%

Key Operating KPIs

KPI	Q4 2023	Q4 2024
Passenger Load Factor (%)	83.6	84.9
Total Revenue per ASM (TRASM, cents)	18.72	19.10
Passenger Revenue per ASM (PRASM, cents)	17.21	17.34
Yield (cents)	20.59	20.44
Fuel Price ($/gal)	3.06	2.34
CASM ex Fuel & Specials (cents)	13.24	13.99

Versus Estimates

S&P Global EPS/Revenue consensus for Q4 2024 was unavailable to retrieve at time of analysis; company reported adjusted EPS of $0.86, noted “above the high end of… guidance” issued in early December .
Values from S&P Global could not be fetched due to access limits; therefore, estimate comparisons are not provided.

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Adjusted EPS (diluted)	Q4 2024	$0.25–$0.50 (as guided in Oct)	Actual: $0.86	Beat vs guidance (above high end)
Adjusted EPS (diluted)	Q1 2025	N/A	($0.20)–($0.40)	New outlook (loss)
Adjusted EPS (diluted)	FY 2025	N/A	$1.70–$2.70	New outlook
Revenue Growth	Q1 2025	N/A	+3% to +5% YoY	New outlook
Revenue Growth	FY 2025	N/A	+4.5% to +7.5% YoY	New outlook
Capacity (ASMs)	Q1 2025	N/A	Flat to -2% YoY; regional ASMs +~17%, mainline -2% to -3%	New outlook
Capacity (ASMs)	FY 2025	Low single-digit (prior commentary)	Low single-digit (confirmed)	Maintained
Non-fuel Unit Cost	Q1 2025	N/A	Up high-single digits YoY; easing sequentially	New outlook
Non-fuel Unit Cost	FY 2025	N/A	Up mid-single digits YoY	New outlook
Free Cash Flow	FY 2024	$1.0–$1.5B (Q3 update)	Actual: $2.2B (record)	Raised/beat
Free Cash Flow	FY 2025	N/A	>$2B	New outlook
Total Debt Target	By 2028	< $35B by YE 2028	< $35B by YE 2027	Pulled forward

Earnings Call Themes & Trends

Topic	Previous Mentions (Q2 2024)	Previous Mentions (Q3 2024)	Current Period (Q4 2024)	Trend
Sales & Distribution Strategy	Aggressive reorientation; restored agency content; renegotiating contracts	Indirect share bottomed ~11% below historical; improving to ~7% below; new TMC agreements underway	On track to fully restore indirect share by end-2025; broad recovery momentum in corporate/agency	Improving
Loyalty & Co-brand Cards	Expanded AAdvantage Business; content parity	Credit card spend +7% YoY; program growth	New 10-year exclusive Citi agreement; 2024 partner cash $6.1B; one-time payment in Q4; expected ~10% annual growth from 2026	Strengthening
Operational Reliability	Best-ever July completion; resilient operations	Led network peers in completion factor in Q3	Ranked second in Q4 among top 4 carriers in completion/on-time departures; continued investment	High, sustained
Regional Trends (RASM)	Atlantic strength; Latin pressure	Long-haul positive; short-haul Latin improved sequentially	Domestic, Atlantic, Pacific led YoY unit revenue; short-haul Latin expected to turn positive in Q1	Mixed → Improving
Cost/Unit Cost	CASMx tracking +2–3% FY; efficiencies	CASMx Q4 +4–6% YoY; FY +2–3%	Q1 non-fuel unit cost up high-single digits; FY mid-single digits; improvement through year	Near-term pressure, easing
Fleet & CapEx	2024 total CapEx ~$2.6B; 2025 aircraft CapEx < $3B (earlier view)	2025 capacity low-single digits; utilization lever	2025 aircraft CapEx $2.0–$2.5B; total CapEx $3.0–$3.5B; 40–50 deliveries; int’l fleet to ~200 by 2029	Balanced investment
Tech & AI	Ongoing tech investment	Efficiency focus; AI opportunities described	IT/Tech Ops modernization; >$200M incremental 2025 cost savings; app redesign; WiFi expansion	Building

Management Commentary

Strategic focus: “We’re focused on delivering results… record free cash flow of $2.2B in 2024… reduced our total debt by more than $15B from peak levels… ahead of schedule.” — Robert Isom .
Commercial recovery: “Momentum in recovering revenue from indirect channels continued… new contracts with agency partners… corporate customers… forward bookings show strength.” — Robert Isom .
2025 outlook & capital allocation: “We ended the year with total debt of $38.6B and net debt of $31.6B… committing to reduce total debt to < $35B by end of 2027.” — Devon May .
Cost path: “Nonfuel unit costs up high-single digits in Q1, easing to low single digits by year-end; FY mid-single digits… >$200M incremental cost savings in 2025.” — Devon May .
Product/international growth: “Introduce flagship suite on 787-9 and A321 XLR later this year; grow long-haul fleet from ~125 to nearly 200 by 2029.” — Robert Isom .

Q&A Highlights

Indirect/corporate recovery: Management expects full restoration of indirect share by end-2025; new agreements with ~30 key TMCs/agencies; corporate discount economics adjusted to competitive levels and accretive .
CASM/RASM progression: Q1 cost pressures from capacity mix and CBAs; sequential cost improvement; RASM expected to remain constructive; EPS midpoint $2.20 for FY2025 .
Hub/network performance: Largest schedules ever in DFW/CLT, improving New York performance; Philadelphia/Chicago benefiting from regional restoration; LA supported via Alaska partnership .
Co-brand economics: 2026 exclusivity with Citi; ramp in 2025 via minimums/new accounts; partner payments expected to grow ~10% annually starting 2026 .
Fleet strategy: Preference for simplified fleet (A320 family, 737; 787 wide-bodies); 777-300 refresh with flagship suites; XLR count ~40 by 2029 .

Estimates Context

S&P Global Wall Street consensus EPS and revenue estimates for Q4 2024 were unavailable to retrieve at time of analysis due to data access limits; comparisons to consensus are not provided.
Company-referenced comparison: Adjusted diluted EPS of $0.86 was “above the high end” of AAL’s own guidance issued in early December; Q4 unit revenue +2% YoY .

Key Takeaways for Investors

Positive inflection and margin expansion: TRASM +2% YoY with adjusted OM 8.4% signals improved revenue quality and execution; Q4 delivered ahead of guidance .
Balance sheet de-risking: Early achievement of >$15B debt reduction and record FCF increase flexibility for 2025 and supports path to BB credit rating .
2025 setup: Near-term CASM headwinds (mix, labor) should ease sequentially; capacity balanced; revenue growth guided +4.5%–+7.5%; target adjusted EPS $1.70–$2.70 .
Corporate/agency channel recovery: Contracting and content restoration provide upside to unit revenue and premium mix as share normalizes through 2025 .
Product-led premium expansion: Flagship suites and WiFi upgrades, plus loyalty monetization, support premium yields and ancillary growth; Pacific/Atlantic momentum complements domestic .
Watch Latin normalization: Short-haul Latin unit revenue down YoY but expected to turn positive in Q1; track unit revenue trends by region .
Monitoring points: Q1 loss range ($0.20)–($0.40) and CASM progression, indirect share trajectory, Citi ramp in 2025 ahead of 2026 exclusivity .

Sources: Company press release and financial tables, Q4 2024 earnings call transcript, and prior quarter materials .

American Airlines Group Inc. (AAL)·Q4 2024 Earnings Summary