American Airlines Group Inc. (NASDAQ:AAL) on Thursday reported second-quarter 2025 earnings and revenue that surpassed Wall Street expectations, offering a strong performance despite persistent industry headwinds.
However, the company issued a cautious forecast for the third quarter and narrowed its full-year guidance, citing ongoing uncertainty in travel demand.
The airline reported an adjusted earnings per share of 95 cents, beating the consensus estimate of 77 cents. Revenue for the quarter rose slightly to $14.39 billion, edging past analyst expectations of $14.3 billion.
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On a GAAP basis, American posted net income of $599 million, or 91 cents per share, highlighting operational strength despite economic pressures and weather-related disruptions across its network.
American said the results were driven by strong international and premium cabin performance, growth in its loyalty program, and disciplined cost management.
Passenger unit revenue in Atlantic markets climbed 5% from the year-ago quarter, while co-branded credit card spending rose 6%. The company also saw a 7% increase in AAdvantage loyalty program enrollments.
The company generated $3.42 billion in operating cash flow through the first half of the year and reported $2.48 billion in free cash flow, helping bring its total available liquidity to $12 billion at the end of the quarter. Total debt stood at $38 billion, with net debt of $29 billion.
CEO Robert Isom said the airline is well-positioned to navigate current volatility due to its modernized fleet, loyalty initiatives, and a strengthened balance sheet.
American noted that disruptive weather events in key hubs impacted operations during the quarter, though the airline said it maintained reliability amid a 36% increase in such incidents.
The company recently introduced new loyalty features, including the ability to use miles for upgrades, and expanded premium offerings such as its Flagship Suite inflight experience and Flagship Lounge in Miami.
American Airlines reported modest growth in core operational metrics for the second quarter of 2025, with available seat miles (ASM) rising 3.2% year-over-year and revenue passenger miles (RPM) up 0.9%, signaling steady demand and strategic capacity increases.
However, the passenger load factor declined by 1.9 percentage points to 84.7%, indicating slightly lower aircraft occupancy amid expanded service levels.
The carrier saw some pricing pressure, as passenger yield dipped 1.5% to 19.96 cents, and passenger revenue per ASM fell 3.6% year-over-year. Despite the decline in unit revenue, American benefited from a 15.3% drop in average fuel prices, helping reduce overall operating cost per ASM (CASM) by 0.8%, with CASM ex-fuel and special items rising 3.4%.
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