Q2 2024 American Airlines Group Inc Earnings Call Transcript
Key Points
- American Airlines Group Inc (AAL) reported an adjusted pre-tax profit of $1 billion for the second quarter, driven by record quarterly revenue of $14.3 billion.
- Premium revenue increased by 9% year-over-year, with strong demand for premium products and high paid load factors in premium cabins.
- The AAdvantage loyalty program continues to grow, with loyalty revenues up approximately 8% year-over-year and significant increases in co-branded credit card spending.
- Operational resilience was demonstrated despite severe weather conditions and a global CrowdStrike outage, with the airline recovering swiftly and maintaining high completion factors.
- The company reached a tentative agreement on a new contract with the Association of Professional Flight Attendants, promising immediate financial and quality of life improvements for flight attendants.
- Domestic revenue performance was weaker than expected due to an imbalance in supply and demand, leading to higher discounting activity.
- The previous sales and distribution strategy negatively impacted revenue and earnings, with an estimated $750 million impact in the first six months of the year.
- Unit revenue was down 5.6% year-over-year in the second quarter, with domestic pricing down 6.4% year-over-year.
- The company lowered its full-year operating margin guidance to between 3.5% and 5.5%, reflecting ongoing challenges in the domestic market and the impact of the previous sales strategy.
- Capacity growth plans were adjusted downwards, with third-quarter capacity expected to be lower than in the same period in 2019, indicating a cautious approach to aligning growth with demand.
Thank you for standing by, and welcome to American Airlines Group Second Quarter 2024 earnings conference call. (Operator Instructions) I would now like to hand the call over to Scott Long, VP of Investor Relations and Corporate Development. Please go ahead.
Thank you, Latif. Good morning, and welcome to the American Airlines Group Second Quarter 2024 earnings conference call. On the call with prepared remarks, we have our CEO Robert Isom; and our CFO, Devon May. In addition to our Vice Chair, Steve Johnson, we have a number of other senior executives in the room this morning for the Q&A session.
Robert will start the call with an overview of our performance, and Devon will follow with details on the second quarter in addition to outlining our operating plans and outlook going forward. After our prepared remarks, we'll open the call for analyst questions followed by questions from the media. To get on as many questions as possible, please limit
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