On October 19, 2023, American Airlines Group Inc (AAL, Financial) released its third-quarter 2023 financial results. The company reported a record third-quarter revenue of approximately $13.5 billion. Despite a GAAP net loss of $545 million, or ($0.83) per diluted share, the company showed strong operational performance and reduced total debt by $1.4 billion in the third quarter.
Financial Performance
American Airlines Group Inc (AAL, Financial) produced record third-quarter revenues of approximately $13.5 billion, driven by a resilient demand environment and record-setting co-brand credit card and travel rewards program revenue. The company saw year-over-year growth in corporate and government revenue in the third quarter and continued strength in demand and revenue from unmanaged business travel. In the third quarter, the company produced an operating margin of (1.7%) and net loss of $545 million on a GAAP basis. Excluding net special items, American produced an operating margin of 5.4% and net income of $263 million in the third quarter, exceeding the high end of the company's prior guidance.
Liquidity and Balance Sheet
American reduced total debt by $1.4 billion in the third quarter. Strengthening the balance sheet continues to be a top priority, and the company is more than 70% of the way to its goal of reducing total debt by $15 billion by the end of 2025. As of Sept. 30, 2023, American had reduced its total debt by approximately $10.9 billion from peak levels in mid-2021. The company's commitment to strengthening its balance sheet is being recognized, with Fitch, Moody's and Standard & Poor's each upgrading the company's credit rating in the third quarter. The company ended the quarter with approximately $13.5 billion of total available liquidity.
Operational Performance
American delivered a strong operation in the third quarter, including a record-setting performance during the peak travel period this summer. The company operated more than 515,000 flights in the third quarter with an average load factor of 84%. The company produced its best-ever third-quarter completion factor and the best completion factor among U.S. network carriers.
Looking Ahead
Based on demand trends and the current fuel price forecast and excluding the impact of special items, the company expects its fourth-quarter 2023 adjusted operating margin to be 2% to 4%. American now expects its full-year 2023 adjusted operating margin to be approximately 7%.
