American Airlines (American) and its regional partners operated 476,000 flights in the first quarter 2023, with a load factor of 80%. This resulted in revenues of US$12.2 billion for the quarter, a first-quarter record and an increase of 37% compared to Q1 2022 on 9.2% more capacity.
American produced an operating margin of 3.6% on a GAAP basis and 3.7% excluding the impact of net special items and net income of US$10 million in the first quarter on a GAAP basis. Domestic and short-haul international revenues continued to perform positively, and the carrier saw noticeable strength in long-haul international demand and yield performance so far this year. American will make a profit-sharing payment to its team members – the first time in three years. The carrier has added approximately US$211 million to its profit-sharing pool and will be paid to team members in May.
American generated record operating and free cash flow of US$3.3 billion and US$3.0 billion, respectively, in the first quarter. The company reduced total debt by more than US$850 million in the quarter.
Strengthening the balance sheet continues to be a top priority, and the company is approximately 60% of the way to its goal of reducing total debt by US$15 billion by the end of 2025. As of March 31, 2023, American had reduced its total debt by more than US$9 billion from peak levels in the second quarter of 2021. The company ended the quarter with approximately US$14.4 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 demand trends and the current fuel price forecast and excluding the impact of special items, the company expects its second-quarter 2023 adjusted earnings per diluted share to be between US$1.40. American continues to expect its full-year 2023 adjusted earnings per diluted share to be between US$2.50 and US$3.50. The company’s forecasts include the estimated impact of anticipated new labour agreements.
