American Airlines Releases Q1 2023 Financials

DALLAS — American Airlines (AA) has released its financial results for the first quarter of 2023, reporting a strong operational and financial performance. In this post, we will provide an overview of the results, including revenue growth, net income, operating cash flow, free cash flow, liquidity, balance sheet, and more.

American generated a record first-quarter revenue of US$12.2bn, representing a year-over-year increase of 37%. The company produced revenues at 9.2% more capacity and delivered a strong operational performance during the quarter, with an average load factor of 80.0%.

The airline's domestic and short-haul international revenue continues to perform well, while the airline has seen significant strength in long-haul international demand and yield performance this year.

The carrier's net income was US$10m on a GAAP basis, or US$33m excluding net special items. The earnings per diluted share were US$0.02 or US$0.05, respectively.

The company's CEO, Robert Isom, expressed satisfaction with the company's financial results for the quarter, stating that the AA team delivered on the company's financial guidance, resulting in a first-quarter profit for the first time in four years.

Operational Performance

American Airlines generated a record operating cash flow of US$3.3bn and a record free cash flow of US$3.0bn in the first quarter. These results are a testament to the carrier's strong operational and financial performance during the quarter.

American Airlines outperformed the industry in on-time departures for the quarter, ranking first among the nine largest U.S. carriers. The carrier and its regional partners operated more than 476,000 flights in the first quarter, with 13 mainline, 11 regionals, and five combined mainline and regional zero-cancellation days, a significant improvement over the same period last year. The carrier's completion factor and controllable completion factor were their best ever in the first quarter.

American Airlines made a profit-sharing payment to its team members for the first time in three years. The company accrued approximately US$211m to its profit-sharing pool, which was measured as the 12-month period ended March 31, 2023, and was paid to team members in May. The company also reiterated its full-year 2023 adjusted earnings per diluted share target of US$2.50 to $3.50.

American Airlines reduced total debt by more than US$850m in the first quarter, bringing the company approximately 60% of the way to its goal of reducing total debt by US$15bn by the end of 2025. As of March 31, 2023, the carrier had reduced its total debt by more than US$9bn from peak levels in the second quarter of 2021.

Strengthening the balance sheet continues to be a top priority for the company, and it ended the quarter with approximately US$14.4bn of total available liquidity, comprised of cash and short-term investments plus undrawn capacity under revolving and other short-term credit facilities.

Featured image: Boeing 777-200 American Airlines N779AN. Photo: Davide Calabresi/Airways