American Airlines Narrows Q3 Loss, Full-Year Profit Dips

TL;DR

**AAL's Q3 loss narrowed, but the nine-month profit plunge signals underlying challenges that could ground investor optimism.**

AI Summary

American Airlines Group Inc. reported a net loss of $114 million for the three months ended September 30, 2025, an improvement from the $149 million net loss in the same period of 2024. For the nine months ended September 30, 2025, the company posted a net income of $12 million, a significant decrease from $256 million in the prior year. Total operating revenues slightly increased to $13,691 million for the quarter, up from $13,647 million in Q3 2024, driven by a rise in cargo and other revenues, despite a slight dip in passenger revenue from $12,523 million to $12,471 million. Operating expenses remained relatively stable at $13,540 million for the quarter, compared to $13,558 million in Q3 2024, with a notable decrease in aircraft fuel and related taxes by $107 million. Salaries, wages, and benefits increased by $363 million to $4,461 million for the quarter. The company adjusted the estimated useful lives of its mainline and regional aircraft by three years, effective January 1, 2025, and reduced salvage values from 10% to 5% of original cost, which did not materially impact depreciation expense. American Airlines also issued $400 million in special facility revenue bonds in May 2025 to finance improvements at the Tulsa Maintenance Base.

Why It Matters

For investors, the narrowing Q3 net loss to $114 million is a positive signal, but the substantial drop in nine-month net income from $256 million to $12 million raises concerns about sustained profitability and operational efficiency in a competitive airline market. Employees will note the significant increase in salaries, wages, and benefits, indicating potential labor cost pressures or increased staffing. Customers could see impacts from the ongoing investments in the Tulsa Maintenance Base, potentially leading to improved maintenance and reliability. The broader market will watch how American Airlines manages its high debt levels and adapts to fluctuating fuel costs and intense competition from rivals like Delta and United, especially with strategic investments in infrastructure and fleet management changes.

Risk Assessment

Risk Level: medium — The company reported a net loss of $114 million for Q3 2025 and a significant drop in nine-month net income to $12 million from $256 million in 2024, indicating profitability challenges. While total operating revenues saw a slight increase, the high level of debt and other obligations, as highlighted in the forward-looking statements, coupled with increasing salaries, wages, and benefits ($4,461 million in Q3 2025 vs. $4,098 million in Q3 2024), present ongoing financial risks.

Analyst Insight

Investors should closely monitor American Airlines' ability to improve its net income in subsequent quarters and manage its substantial debt load. Evaluate the impact of increased labor costs and fuel price volatility on future earnings. Consider a 'hold' position until clearer signs of sustained profitability and debt reduction emerge.

Financial Highlights

revenue

$13,691M

operating Margin

1.1%

net Income

$12M

eps

$0.02

cash Position

$835M

revenue Growth

+0.33%

Revenue Breakdown

Key Numbers

• $114M — Net Loss (Q3 2025) (Improved from $149M net loss in Q3 2024)
• $12M — Net Income (9 Months 2025) (Significant decrease from $256M in 9 months 2024)
• $13.69B — Total Operating Revenues (Q3 2025) (Slight increase from $13.65B in Q3 2024)
• $4.46B — Salaries, Wages & Benefits (Q3 2025) (Increased from $4.10B in Q3 2024)
• $2.77B — Aircraft Fuel & Related Taxes (Q3 2025) (Decreased from $2.87B in Q3 2024)
• $400M — Special Facility Revenue Bonds (Issued in May 2025 for Tulsa Maintenance Base improvements)
• 660,086,495 — Common Stock Shares Outstanding (As of October 17, 2025)
• 3 years — Aircraft Useful Life Adjustment (Extended for mainline and regional aircraft, effective Jan 1, 2025)
• 5% — Salvage Value Reduction (Reduced from 10% for most aircraft assets)
• $3,373M — Net Cash from Operating Activities (9 Months 2025) (Decreased from $3,585M in 9 months 2024)

Key Players & Entities

• AMERICAN AIRLINES GROUP INC. (company) — registrant for 10-Q filing
• AMERICAN AIRLINES, INC. (company) — wholly-owned subsidiary of AAG
• Tulsa Municipal Airport Trust (company) — issuer of special facility revenue bonds for American Airlines
• $114 million (dollar_amount) — net loss for three months ended September 30, 2025
• $149 million (dollar_amount) — net loss for three months ended September 30, 2024
• $12 million (dollar_amount) — net income for nine months ended September 30, 2025
• $256 million (dollar_amount) — net income for nine months ended September 30, 2024
• $13,691 million (dollar_amount) — total operating revenues for three months ended September 30, 2025
• $4,461 million (dollar_amount) — salaries, wages and benefits for three months ended September 30, 2025
• $400 million (dollar_amount) — aggregate principal amount of special facility revenue bonds issued by TMAT in May 2025

FAQ

Risk Factors

• Aircraft Maintenance and Depreciation Changes [medium — operational]: The company adjusted the estimated useful lives of its mainline and regional aircraft by three years and reduced salvage values from 10% to 5%. While this did not materially impact depreciation expense for the current period, significant future changes or unforeseen issues with aircraft maintenance could impact financial results.
• Increased Salaries, Wages, and Benefits [medium — financial]: Salaries, wages, and benefits increased by $363 million to $4,461 million for the quarter compared to $4,098 million in Q3 2024. This significant rise in labor costs puts pressure on operating margins if not offset by revenue growth or cost efficiencies elsewhere.
• Net Loss and Decreased Nine-Month Income [high — financial]: American Airlines reported a net loss of $114 million for Q3 2025, an improvement from the $149 million loss in Q3 2024. However, the nine-month net income significantly decreased to $12 million from $256 million in the prior year, indicating a challenging profitability trend.
• Debt Financing for Infrastructure [low — financial]: The company issued $400 million in special facility revenue bonds to finance improvements at the Tulsa Maintenance Base. While necessary for operations, this adds to the company's debt obligations and interest expense.
• Fluctuating Fuel Prices [high — market]: Aircraft fuel and related taxes decreased by $107 million to $2,767 million in Q3 2025 from $2,874 million in Q3 2024. However, fuel costs remain a significant operating expense and are subject to market volatility, posing a risk to profitability.
• Regulatory Compliance [medium — regulatory]: As a major airline, American Airlines is subject to extensive regulations from bodies like the FAA and DOT. Changes in safety standards, environmental regulations, or operational requirements could lead to increased compliance costs or operational disruptions.

Industry Context

The airline industry continues to navigate a complex environment characterized by fluctuating fuel prices, labor cost pressures, and evolving passenger demand. While cargo revenues show strength, passenger revenue has seen a slight dip, indicating a mixed demand environment. Major carriers are investing in fleet modernization and infrastructure, often through debt financing, to maintain competitiveness and operational efficiency.

Regulatory Implications

American Airlines operates under stringent regulatory oversight from aviation authorities. Potential changes in safety, environmental, or labor regulations could impose additional compliance costs or operational constraints. The company's financial health and operational stability are critical for maintaining its operating certificates and market position.

What Investors Should Do

1. Monitor operating expense trends, particularly salaries, wages, and benefits.
2. Analyze the impact of the aircraft useful life and salvage value adjustments.
3. Evaluate the sustainability of revenue drivers, especially cargo and other revenues.
4. Assess the company's debt management strategy, including new bond issuances.

Key Dates

• 2025-01-01: Aircraft Useful Life and Salvage Value Adjustment — Effective date for extending aircraft useful lives by 3 years and reducing salvage values, impacting depreciation calculations going forward.
• 2025-05-01: Issuance of Special Facility Revenue Bonds — Raised $400 million to finance improvements at the Tulsa Maintenance Base, impacting the company's debt structure.
• 2025-09-30: End of Third Quarter — Reporting period for the Q3 2025 financial results, showing a net loss of $114 million and total operating revenues of $13,691 million.
• 2025-10-17: Common Stock Shares Outstanding Date — As of this date, 660,086,495 common shares were outstanding, relevant for per-share calculations.

Glossary

Special items, net

These are significant, unusual, or infrequent items that are separately disclosed to provide a clearer view of the company's ongoing operational performance. (The reduction in special items from $554M in Q3 2024 to $7M in Q3 2025 significantly contributed to the improved net loss for the quarter.)

Operating income

Profitability derived from a company's core business operations before accounting for interest, taxes, and other non-operating expenses. (Operating income increased to $151M in Q3 2025 from $89M in Q3 2024, indicating improved performance from core flight operations.)

Weighted average shares outstanding

The average number of shares outstanding over a period, used to calculate earnings per share (EPS). Diluted EPS considers the impact of all potential common shares. (The weighted average basic shares outstanding increased slightly to 660,358,000 in Q3 2025 from 657,424,000 in Q3 2024, impacting the EPS calculation.)

Other comprehensive income (loss)

Unrealized gains or losses that are not included in net income but are reported separately, such as changes in pension obligations or investment valuations. (The company reported $15M in other comprehensive income for Q3 2025, a slight decrease from $23M in Q3 2024.)

Year-Over-Year Comparison

Compared to the prior year's third quarter, American Airlines Group Inc. reported a narrower net loss of $114 million versus $149 million, driven by stable total operating revenues of $13,691 million. However, the nine-month performance shows a significant decline in net income, falling to $12 million from $256 million, indicating profitability challenges over a longer period. Operating expenses remained largely consistent, with a notable decrease in fuel costs offset by a substantial increase in salaries, wages, and benefits.

Key Financial Figures

• $0.01 — ange on which registered Common Stock, $0.01 par value per share AAL The Nasdaq Gl

Filing Documents

• aal-20250930.htm (10-Q) — 2307KB
• ex311q32510q.htm (EX-31.1) — 10KB
• ex312q32510q.htm (EX-31.2) — 10KB
• ex313q32510q.htm (EX-31.3) — 10KB
• ex314q32510q.htm (EX-31.4) — 10KB
• ex321q32510q.htm (EX-32.1) — 7KB
• ex322q32510q.htm (EX-32.2) — 6KB
• 0000006201-25-000052.txt ( ) — 11086KB
• aal-20250930.xsd (EX-101.SCH) — 56KB
• aal-20250930_cal.xml (EX-101.CAL) — 73KB
• aal-20250930_def.xml (EX-101.DEF) — 558KB
• aal-20250930_lab.xml (EX-101.LAB) — 652KB
• aal-20250930_pre.xml (EX-101.PRE) — 670KB
• aal-20250930_htm.xml (XML) — 1806KB

: FINANCIAL INFORMATION

PART I: FINANCIAL INFORMATION

Condensed Consolidated Financial Statements of American Airlines Group Inc

Item 1A. Condensed Consolidated Financial Statements of American Airlines Group Inc. 5 Condensed Consolidated Statements of Operations 5 Condensed Consolidated Statements of Comprehensive Income (Loss) 6 Condensed Consolidated Balance Sheets 7 Condensed Consolidated Statements of Cash Flows 8 Condensed Consolidated Statements of Stockholders' Deficit 9 Notes to the Condensed Consolidated Financial Statements 11

Condensed Consolidated Financial Statements of American Airlines, Inc

Item 1B. Condensed Consolidated Financial Statements of American Airlines, Inc. 24 Condensed Consolidated Statements of Operations 24 Condensed Consolidated Statements of Comprehensive Income (Loss) 25 Condensed Consolidated Balance Sheets 26 Condensed Consolidated Statements of Cash Flows 27 Condensed Consolidated Statements of Stockholder's Equity 28 Notes to the Condensed Consolidated Financial Statements 29

Management's Discussion and Analysis of Financial Condition and Results of Operations

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 41

Quantitative and Qualitative Disclosures About Market Risk

Item 3. Quantitative and Qualitative Disclosures About Market Risk 61

Controls and Procedures

Item 4. Controls and Procedures 62

: OTHER INFORMATION

PART II: OTHER INFORMATION

Legal Proceedings

Item 1. Legal Proceedings 63

Risk Factors

Item 1A. Risk Factors 63

Other Information

Item 5. Other Information 63

Exhibits

Item 6. Exhibits 64

SIGNATURES

SIGNATURES 65 1 General This report is filed by American Airlines Group Inc. (AAG) and its wholly-owned subsidiary American Airlines, Inc. (American). References in this report to "we," "us," "our," the "Company" and similar terms refer to AAG and its consolidated subsidiaries. References in this report to "mainline" refer to the operations of American only and exclude regional operations. Capitalized terms used but not defined herein shall have the meanings given to them in our annual report on Form 10-K for the year ended December 31, 2024 (2024 Form 10-K). Note Concerning Forward-Looking Statements Certain of the statements contained in this report should be considered forward-looking statements within the meaning of the Securities Act of 1933, as amended (the Securities Act), the Securities Exchange Act of 1934, as amended (the Exchange Act), and the Private Securities Litigation Reform Act of 1995. These forward-looking statements may be identified by words such as "may," "will," "expect," "intend," "anticipate," "believe," "estimate," "plan," "project," "could," "should," "would," "continue," "seek," "target," "guidance," "outlook," "if current trends continue," "optimistic," "forecast" and other similar words. Such statements include, but are not limited to, statements about our plans, objectives, expectations, intentions, estimates and strategies for the future, and other statements that are not historical facts. These forward-looking statements are based on our current objectives, beliefs and expectations, and they are subject to significant risks and uncertainties that may cause actual results and financial position and timing of certain events to differ materially from the information in the forward-looking statements. These risks and uncertainties include, but are not limited to: downturns in economic conditions; our inability to obtain sufficient financing or other capital to operate successfully; our high level of debt and other obligations;

: FINANCIAL INFORMATION

PART I: FINANCIAL INFORMATION This report on Form 10-Q is filed by both AAG and American and includes the Condensed Consolidated Financial Statements of each company in Item 1A and Item 1B, respectively. 4 Table of Contents

CONDENSED CONSOLIDATED FINANCIAL STATEMENTS OF AMERICAN AIRLINES GROUP INC

ITEM 1A. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS OF AMERICAN AIRLINES GROUP INC. AMERICAN AIRLINES GROUP INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (In millions, except share and per share amounts)(Unaudited) Three Months Ended September 30, Nine Months Ended September 30, 2025 2024 2025 2024 Operating revenues: Passenger $ 12,471 $ 12,523 $ 36,985 $ 37,184 Cargo 212 202 612 584 Other 1,008 922 3,037 2,783 Total operating revenues 13,691 13,647 40,634 40,551 Operating expenses: Aircraft fuel and related taxes 2,767 2,874 8,017 8,916 Salaries, wages and benefits 4,461 4,098 13,065 11,917 Regional expenses 1,370 1,264 4,053 3,733 Maintenance, materials and repairs 1,028 989 2,876 2,823 Other rent and landing fees 906 861 2,627 2,514 Aircraft rent 310 303 910 945 Selling expenses 483 468 1,467 1,331 Depreciation and amortization 474 479 1,418 1,424 Special items, net 7 554 125 625 Other 1,734 1,668 5,061 4,843 Total operating expenses 13,540 13,558 39,619 39,071 Operating income 151 89 1,015 1,480 Nonoperating income (expense): Interest income 90 117 285 363 Interest expense, net ( 432 ) ( 480 ) ( 1,294 ) ( 1,464 ) Other income (expense), net 49 18 42 ( 20 ) Total nonoperating expense, net ( 293 ) ( 345 ) ( 967 ) ( 1,121 ) Income (loss) before income taxes ( 142 ) ( 256 ) 48 359 Income tax provision (benefit) ( 28 ) ( 107 ) 36 103 Net income (loss) $ ( 114 ) $ ( 149 ) $ 12 $ 256 Earnings (loss) per common share: Basic $ ( 0.17 ) $ ( 0.23 ) $ 0.02 $ 0.39 Diluted $ ( 0.17 ) $ ( 0.23 ) $ 0.02 $ 0.39 Weighted average shares outstanding (in thousands): Basic 660,358 657,424 659,788 656,745 Diluted 660,358 657,424 660,784 658,775 See accompanying notes to condensed consolidated financial statements. 5 Table of Contents AMERICAN AIRLINES GROUP INC. CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (In millions)(Unaudited) Three Months Ended September 30, Nine Months Ended September 30, 2025 2024

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