The company produced its best-ever fourth-quarter and full-year completion factor, with the lowest number of cancellations annually since the merger in 2013.
American Airlines Group Inc. reported its fourth-quarter and full-year 2023 financial results, including:
- Record full-year revenue of approximately $53 billion.
- GAAP fourth-quarter and full-year net income of $19 million and $822 million, or $0.03 and $1.21 per diluted share, respectively.
- Excluding net special items1, fourth-quarter and full-year net income of $192 million and $1.9 billion, or $0.29 and $2.65 per diluted share, respectively.
- Achieved best-ever fourth-quarter and full-year completion factor.
- Generated GAAP operating cash flow of $3.8 billion and the airline’s highest full-year free cash flow2 of $1.8 billion.
- Reduced total debt3 by $3.2 billion in 2023. The company is more than 75% of the way to its 2025 total debt reduction goal.
“The American Airlines team produced an exceptionally strong performance in 2023,” said American’s CEO Robert Isom. “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.”
Operational reliability
American and its regional partners operated nearly 2 million flights in 2023, with an average load factor of 83.5%.
The airline’s strong operational momentum continued through the holiday travel period. American achieved its best-ever completion factor and on-time departures as well as its lowest mishandled baggage rate over the holidays.
Financial performance
For the full year, American produced record revenue of nearly $53 billion. In the fourth quarter, the company generated revenue of more than $13 billion and an operating margin of 5.0% on a GAAP basis. Excluding the impact of net special items1, American produced an operating margin of 5.1% in the fourth quarter, exceeding the high end of the company’s prior guidance. These results were driven by continued strong demand for American’s product, record revenue from its travel rewards program, strong operational performance and effective cost control.
Liquidity and balance sheet
Strengthening the balance sheet remains a top priority for the company. American reduced total debt3 by more than $500 million in the fourth quarter and by approximately $3.2 billion in 2023. The company is more than 75% of the way to its goal of reducing total debt3 by $15 billion by the end of 2025. As of Dec. 31, 2023, American had reduced its total debt3 by approximately $11.4 billion from peak levels in mid-2021.
The company ended the year with approximately $10.4 billion of total available liquidity, comprised of cash and short-term investments plus undrawn capacity under revolving and other short-term credit facilities.
Guidance and investor update
Based on present demand trends and the current fuel price forecast and excluding the impact of special items4, the company expects its first-quarter 2024 adjusted loss per diluted share4 to be between ($0.15) and ($0.35). American expects its full-year 2024 adjusted earnings per diluted share4 to be between $2.25 and $3.25.
American Airlines welcomes tentative approval to start nonstop service from New York
Also, American Airlines welcomes tentative approval from the United States Department of Transportation (DOT) to begin nonstop service between New York (JFK) and Tokyo Haneda Airport (HND). American will be the only U.S. carrier operating service between JFK and Tokyo, complementing the existing service operated by its joint business partner Japan Airlines.
“American looks forward to beginning nonstop service to Tokyo’s Haneda Airport from JFK,” said American’s CEO Robert Isom. “We are grateful to the DOT and thankful to our partner Japan Airlines for supporting our application. Together, we are well-positioned to offer customers a comprehensive network between two of the most robust economies in the world. This new service will add nearly 200,000 additional round-trip seats annually between the U.S. and Japan, offering customers more ways to conduct business in the global marketplace or connect with family and friends.”
American plans to begin nonstop service to HND in the coming months. The new JFK–HND service will be American’s fourth daily nonstop flight to HND, joining existing daily service from Dallas-Fort Worth (DFW) and two daily flights from Los Angeles (LAX).
“American thanks the DOT for tentatively approving our application to operate the only nonstop U.S. carrier service between JFK and Haneda Airport,” said Molly Wilkinson, American’s Vice President of Regulatory and International Government Affairs. “We appreciate the strong bipartisan support from elected officials in New York, including U.S. Senate Majority Leader Schumer, U.S. Congressman Meeks, U.S. House Democratic Leader Jeffries, U.S. Congressman LaLota, U.S. Congressman D’Esposito, New York City Mayor Adams, Governor Hochul, New York State Assembly Speaker Heastie, New York State Senate Majority Leader Stewart-Cousins, and Queens Borough President Richards throughout the application process.”
American’s new service complements existing services between JFK and HND operated by Japan Airlines, providing customers with more options and convenient flight schedules throughout the day.
- The company recognized $173 million of net special items in the fourth quarter after the effect of taxes, which principally included $216 million of nonoperating net special items for charges associated with debt extinguishments and mark-to-market net unrealized losses on certain equity investments. The company recognized $1.0 billion of net special items in 2023 after the effect of taxes, which included operating net special items of $979 million principally related to one-time charges resulting from the ratification of a new collective bargaining agreement with American’s mainline pilots, as well as nonoperating net special items of $362 million for charges associated with debt extinguishments and mark-to-market net unrealized losses on certain equity investments.
- Please see the accompanying notes for the company’s definition of free cash flow, a non-GAAP measure.
- All references to total debt include debt, finance and operating lease liabilities and pension obligations.
- Adjusted earnings per diluted share guidance excludes the impact of net special items. The company is unable to reconcile certain forward-looking information to GAAP as the nature or amount of net special items cannot be determined at this time.
Vicky is the co-founder of TravelDailyNews Media Network where she is the Editor-in Chief. She is also responsible for the daily operation and the financial policy. She holds a Bachelor's degree in Tourism Business Administration from the Technical University of Athens and a Master in Business Administration (MBA) from the University of Wales.
She has many years of both academic and industrial experience within the travel industry. She has written/edited numerous articles in various tourism magazines.
