10q10k10q10k.net

What changed in American Airlines Group Inc.'s 10-K — 2024 vs 2025

vs

Paragraph-level year-over-year comparison of American Airlines Group Inc.'s 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+601 added−632 removedSource: 10-K (2026-02-18) vs 10-K (2025-02-19)

Top changes in American Airlines Group Inc.'s 2025 10-K

601 paragraphs added · 632 removed · 477 edited across 9 sections

Item 1. Business

Business — how the company describes what it does

103 edited+36 added−28 removed45 unchanged
Biggest changeThe following table shows our domestic airline employee groups that are represented by unions: Union Class or Craft Employees (1) Contract Amendable Date Mainline: Allied Pilots Association (APA) Pilots 14,350 2027 Association of Professional Flight Attendants (APFA) Flight Attendants 25,520 2029 Airline Customer Service Employee Association – Communications Workers of America and International Brotherhood of Teamsters (CWA-IBT) Passenger Service 13,680 2029 Transport Workers Union and International Association of Machinists & Aerospace Workers (TWU-IAM Association) Mechanics and Related 12,980 2027 TWU-IAM Association Fleet Service 19,520 2027 TWU-IAM Association Stock Clerks 2,060 2027 TWU-IAM Association Flight Simulator Engineers 150 2025 TWU-IAM Association Maintenance Control Technicians 190 2027 TWU-IAM Association Maintenance Training Instructors 100 2027 Professional Airline Flight Control Association (PAFCA) Dispatchers 550 2025 Transport Workers Union (TWU) Flight Crew Training Instructors 370 2025 Envoy: Air Line Pilots Associations (ALPA) Pilots 2,120 2029 Association of Flight Attendants-CWA (AFA) Flight Attendants 2,020 2026 TWU Ground School Instructors 10 2027 TWU Mechanics and Related 1,290 2027 TWU Stock Clerks 130 2027 TWU Simulator Instructors 20 2026 TWU Fleet Service 4,170 2026 TWU Dispatchers 80 2025 Communications Workers of America (CWA) Passenger Service 7,340 2026 Piedmont: ALPA Pilots 730 2029 AFA Flight Attendants 360 2026 International Brotherhood of Teamsters (IBT) Mechanics and Related 520 2026 IBT Stock Clerks 60 2026 CWA Fleet and Passenger Service 7,010 2023 IBT Dispatchers 40 2025 ALPA Flight Crew Training Instructors 60 2029 14 Table of Contents Union Class or Craft Employees (1) Contract Amendable Date PSA: ALPA Pilots 1,710 2028 AFA Flight Attendants 1,370 2023 International Association of Machinists & Aerospace Workers (IAM) Mechanics and Related 710 2027 TWU Dispatchers 50 2024 ALPA Flight Crew Training Instructors 60 2028 (1) Represents approximate number of active employees as of December 31, 2024.
Biggest changeThe following table shows our domestic airline employee groups that are represented by unions: Union Class or Craft Employees (1) Contract Amendable Date Mainline: Allied Pilots Association (APA) Pilots 14,970 2027 Association of Professional Flight Attendants (APFA) Flight Attendants 26,400 2029 Airline Customer Service Employee Association – Communications Workers of America and International Brotherhood of Teamsters (CWA-IBT) Passenger Service 13,030 2029 Transport Workers Union and International Association of Machinists & Aerospace Workers (TWU-IAM Association) Mechanics and Related 13,040 2027 TWU-IAM Association Fleet Service 19,460 2027 TWU-IAM Association Stock Clerks 2,090 2027 TWU-IAM Association Flight Simulator Engineers 150 2030 TWU-IAM Association Maintenance Control Technicians 190 2027 TWU-IAM Association Maintenance Training Instructors 100 2027 Professional Airline Flight Control Association (PAFCA) Dispatchers 570 2025 Transport Workers Union (TWU) Flight Crew Training Instructors 350 2031 13 Table of Contents Union Class or Craft Employees (1) Contract Amendable Date Envoy: Air Line Pilots Associations (ALPA) Pilots 2,330 2029 Association of Flight Attendants-CWA (AFA) Flight Attendants 2,350 2026 TWU Ground School Instructors 10 2027 TWU Mechanics and Related 1,370 2027 TWU Stock Clerks 140 2027 TWU Simulator Instructors 20 2026 TWU Fleet Service 4,300 2026 TWU Dispatchers 90 2025 Communications Workers of America (CWA) Passenger Service 7,730 2026 Piedmont: ALPA Pilots 840 2029 AFA Flight Attendants 400 2026 International Brotherhood of Teamsters (IBT) Mechanics and Related 540 2026 IBT Stock Clerks 70 2026 CWA Fleet and Passenger Service 6,750 2023 IBT Dispatchers 40 2029 PSA: ALPA Pilots 1,930 2028 AFA Flight Attendants 1,370 2023 International Association of Machinists & Aerospace Workers (IAM) Mechanics and Related 780 2027 IAM Stock Clerks 160 N/A (2) TWU Flight Crew Training Instructors 50 N/A (2) TWU Dispatchers 60 2027 (1) Represents approximate number of active employees as of December 31, 2025.
Joint Business Agreements and Other Cooperation Agreements American has established a transatlantic joint business with British Airways, Aer Lingus, Iberia and Finnair, a transpacific joint business with Japan Airlines and a joint business covering Australia and New Zealand with Qantas.
Joint Business Agreements and Other Cooperation Agreements American has established a transatlantic joint business with British Airways, Aer Lingus, Iberia and Finnair, a transpacific joint business with Japan Airlines and a joint business covering Australia and New Zealand with Qantas Airways.
In order to improve access to domestic and foreign markets, we have arrangements with other airlines including through the one world Alliance, other cooperation agreements, joint business agreements and marketing relationships, as further discussed herein. On all of our routes, pricing decisions are affected, in large part, by the need to meet competition from other airlines.
In order to improve access to domestic and foreign markets, we have arrangements with other airlines including through the one world Alliance, joint business agreements and other cooperation agreements and marketing relationships, as further discussed herein. On all of our routes, pricing decisions are affected, in large part, by the need to meet competition from other airlines.
Our internal recognition programs give team members and customers the opportunity to show their appreciation for a job well done, including through our Nonstop Thanks program whereby team members can award each other points for exceptional service or as an expression of gratitude. Recognition points earned through the recognition program can be redeemed for items in an online catalog.
Our internal recognition programs give team members and customers the opportunity to show their appreciation for a job well done, including through our Nonstop Thanks program whereby team members can award each other points for exceptional service or as an expression of gratitude. Recognition points earned through the Nonstop Thanks program can be redeemed for items in an online catalog.
Continued periods of high volatility in fuel costs, increased fuel prices or significant disruptions in the supply of aircraft fuel could have a significant negative impact on consumer demand, our operating results and liquidity .” Seasonality and Other Factors Due to the greater demand for air travel during the summer months, revenues in the airline industry exhibit seasonal patterns based on the peak travel periods.
Continued periods of high volatility in fuel costs, increased fuel prices or significant disruptions in the supply of aircraft fuel could have a significant negative impact on consumer demand, our operating results and liquidity .” Seasonality and Other Factors Due to the greater demand for air travel during summer months, revenues in the airline industry exhibit seasonal patterns based on peak travel periods.
The UK also adopted a SAF mandate for aviation fuel suppliers, starting January 1, 2025, with minimum requirements that increase linearly from 2% in 2025, to 10% in 2030 and 22% in 2040.
The UK also adopted a SAF mandate for aviation fuel suppliers, starting January 1, 2025, with minimum requirements that increase linearly from 2% in 2025, to 10% in 2030 and to 22% in 2040.
Between cities that require a connection, where the major airlines compete via their respective hubs, competition is significant. In addition, we face competition on some of our connecting routes from airlines operating point-to-point service on such routes. We also compete with all-cargo and charter airlines and, particularly on shorter segments, ground and rail transportation.
Between cities that require a connection, where the major airlines compete via their respective hubs, competition is significant. In addition, we face competition on some of our connecting routes from airlines operating point-to-point service. We also compete with all-cargo and charter airlines and, particularly on shorter segments, ground and rail transportation.
Status members can enjoy additional travel benefits of the AAdvantage program, including complimentary upgrades, checked bags, and Preferred and Main Cabin Extra seats, as well as priority check-in, security, boarding and baggage delivery when traveling on American, any one world Alliance airline or select partner airlines.
Status members can enjoy additional travel benefits of the AAdvantage program, including complimentary upgrades, checked bags, and Preferred and Main Cabin Extra seats, as well as priority check-in, security, boarding and baggage delivery when traveling on American, American Eagle, any one world Alliance airline or select partner airlines.
The operational complexity of our business requires a diverse team of personnel trained and experienced in a variety of technical areas such as flight operations, ground operations, safety and maintenance, customer service and airline scheduling and planning. Fostering a culture where our team members feel supported to take care of our customers is critical to our success.
The operational complexity of our business requires a team of personnel trained and experienced in a variety of technical areas such as flight operations, ground operations, safety and maintenance, customer service and airline scheduling and planning. Fostering a culture where our team members feel supported to take care of our customers is critical to our success.
These marketing agreements vary in scope and are intended to provide enhanced customer choice by means of an expanded network with reciprocal loyalty program participation, but do not involve the same level of cooperation as our joint businesses or strategic alliances.
These marketing agreements vary in scope and are intended to provide enhanced customer choice by means of an expanded network with loyalty program participation, but do not involve the same level of cooperation as our joint businesses or strategic alliances.
On most of our domestic nonstop routes, we face competing service from other domestic airlines, including major network airlines, low-cost carriers and ultra-low-cost carriers such as Alaska Airlines, Allegiant Air, Delta Air Lines, Frontier Airlines, Hawaiian Airlines, JetBlue, Southwest Airlines, Spirit Airlines and United Airlines.
On most of our domestic nonstop routes, we face competing service from other domestic airlines, including major network airlines, low-cost carriers and ultra-low-cost carriers such as Alaska Airlines, Allegiant Air, Delta Air Lines, Frontier Airlines, Hawaiian Airlines, JetBlue Airways, Southwest Airlines, Spirit Airlines and United Airlines.
As part of EPA and state regulations of storm water management, several U.S. airport authorities are trying to limit discharges of deicing fluid into the environment, which can include requiring airlines to help build or reconfigure airport deicing facilities.
As part of EPA and state regulations of storm water management, several U.S. airport authorities are trying to limit permitted discharges of deicing fluid into the environment, which can include requiring airlines to help build or reconfigure airport deicing facilities.
FAA requirements cover, among other things, required technology and necessary onboard equipment; systems, procedures and training necessary to ensure the continuous airworthiness of our fleet of aircraft; safety measures and equipment; crew scheduling limitations and experience requirements; and many other technical aspects of airline operations.
FAA requirements cover, among other things, required technology and necessary onboard equipment; systems, procedures and training necessary to ensure the continuous airworthiness of our aircraft; safety measures and equipment; crew scheduling limitations and experience requirements; and many other technical aspects of airline operations.
Our approach to safety is guided by our Federal Aviation Administration (FAA)-approved safety management systems (SMS), an organization-wide approach to identifying and managing risk. Each SMS is comprised of four components: Safety Policy, Safety Assurance, Safety Risk Management and Safety Promotion.
Our approach to safety is guided by our Federal Aviation Administration (FAA)-approved safety management systems (SMS), an organization-wide approach to identifying and managing risk. Each SMS is comprised of four components: Safety Policy, Safety Risk Management (SRM), Safety Assurance and Safety Promotion.
The efficiency, reliability and capacity of the ATC network has a significant impact on our costs and on the timeliness of our operations. The U.S. Postal Service has jurisdiction over certain aspects of the transportation of mail and related services.
The efficiency, reliability and capacity of the ATC network have a significant impact on our costs and on the timeliness of our operations. The U.S. Postal Service has jurisdiction over certain aspects of the transportation of mail and related services.
Approximately 9% of our 2024 total revenue passenger miles flown were from award travel. See Part II, Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations – “ Critical Accounting Policies and Estimate s” for more information on our loyalty program. Industry Competition Domestic The markets in which we operate are highly competitive.
Approximately 9% of our 2025 total revenue passenger miles flown were from award travel. See Part II, Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations – “ Critical Accounting Policies and Estimate s” for more information on our loyalty program. Industry Competition Domestic The markets in which we operate are highly competitive.
Risk Factors – “ We rely on third-party distribution channels and must effectively manage the costs, rights and functionality of these channels .” Member of oneworld Alliance American is a founding member of the one world Alliance, which currently includes Alaska Airlines, British Airways, Cathay Pacific, Finnair, Iberia, Japan Airlines, Malaysia Airlines, Qantas Airways (Qantas), Qatar Airways, Royal Air Maroc, Royal Jordanian Airlines and SriLankan Airlines.
Risk Factors – “ We rely on third-party distribution channels and must effectively manage the costs, rights and functionality of these channels .” Member of oneworld Alliance American is a founding member of the one world Alliance, which currently includes Alaska Airlines, British Airways, Cathay Pacific, Fiji Airways, Finnair, Iberia, Japan Airlines, Malaysia Airlines, Oman Air, Qantas Airways, Qatar Airways, Royal Air Maroc, Royal Jordanian Airlines and SriLankan Airlines.
See Part I, Item 2. Properties for further discussion of our mainline and regional aircraft and “Regional” below for further discussion of our regional operations. American is a founding member of the one world ® Alliance, which brings together a global network of 13 world-class member airlines and their affiliates, working together to provide a superior and seamless travel experience.
See Part I, Item 2. Properties for further discussion of our mainline and regional aircraft and “Regional” below for further discussion of our regional operations. American is a founding member of the one world ® Alliance, which brings together a global network of 15 world-class member airlines and their affiliates, working together to provide a superior and seamless travel experience.
Distribution and Marketing Agreements Passengers can purchase tickets for travel on American through several distribution channels, including our website ( www.aa.com ), our mobile app and our reservations centers, and through third-party distribution channels, including conventional travel agents, travel management companies and online travel agents (e.g., Expedia, including its booking sites Orbitz and Travelocity, and Booking Holdings, including its booking sites Kayak and Priceline).
Distribution and Marketing Agreements Passengers can purchase tickets for travel on American and American Eagle through several distribution channels, including our website ( www.aa.com ), our mobile app and our reservations centers, and through third-party distribution channels, including conventional travel agents, travel management companies and online travel agents (OTAs) (e.g., Expedia, including its booking sites Orbitz and Travelocity, and Booking Holdings, including its booking sites Kayak and Priceline).
In anticipation of both the exit of the United Kingdom (UK) from the European Union (EU), commonly referred to as Brexit, and the expiry of the EC commitments in July 2020, the United Kingdom Competition and Markets Authority (CMA), in October 2018, opened an investigation into the transatlantic joint business.
In anticipation of both the exit of the United Kingdom (UK) from the European Union (EU), commonly referred to as Brexit, and the expiration of the EC commitments in July 2020, the United Kingdom Competition and Markets Authority (CMA), in October 2018, opened an investigation into the transatlantic joint business.
The Antitrust Division of the Department of Justice, along with the DOT in certain instances, have jurisdiction over airline antitrust matters. The FAA similarly exercises safety oversight and regulates most operational matters of our business, including how we operate and maintain our aircraft.
The Antitrust Division of the Department of Justice, along with the DOT in certain instances, has jurisdiction over airline antitrust matters. The FAA similarly exercises safety oversight and regulates most operational matters of our business, including how we operate and maintain our aircraft.
In addition, these agreements provide that we either reimburse or pay 100% of certain variable costs, such as airport landing fees, fuel and passenger liability insurance. Cargo Our cargo division provides a wide range of freight and mail services, with facilities and interline connections available across the globe.
In addition, these agreements provide that we either reimburse or pay 100% of certain variable costs, such as airport landing fees, fuel and passenger liability insurance. 8 Table of Contents Cargo Our cargo division provides a wide range of freight and mail services, with facilities and interline connections available across the globe.
Other countries have adopted or are considering adoption of SAF blending mandates. U.S. Emissions Standards for Aircraft Engines In January 2021, the EPA adopted GHG emission standards for new aircraft engines, aligning with the 2017 ICAO aircraft engine GHG emission standards. Similar to the ICAO standards, the EPA’s standards do not apply retroactively to engines on in-service aircraft.
Other countries have adopted, or are considering adopting, similar SAF blending mandates. U.S. Emissions Standards for Aircraft Engines In January 2021, the EPA adopted GHG emission standards for new aircraft engines, aligning with the 2017 ICAO aircraft engine GHG emission standards. Similar to the ICAO standards, the EPA’s standards do not apply retroactively to engines on in-service aircraft.
The SEC also maintains a website that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC at www.sec.gov . 20 Table of Contents
The SEC also maintains a website that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC at www.sec.gov . 21 Table of Contents
Therefore, our quarterly results of operations are not necessarily indicative of operating results for the entire year, and historical operating results in a quarterly or annual period are not necessarily indicative of future operating results. 15 Table of Contents Domestic and Global Regulatory Landscape General Airlines are subject to extensive domestic and international regulatory requirements. Domestically, the U.S.
Therefore, our quarterly results of operations are not necessarily indicative of operating results for the entire year, and historical operating results in a quarterly or annual period are not necessarily indicative of future operating results. Domestic and Global Regulatory Landscape General Airlines are subject to extensive domestic and international regulatory requirements. Domestically, the U.S.
The CORSIA program is being implemented in three phases: a pilot phase that ran from 2021 through 2023, followed by a first phase of the program that began in 2024 through 2026 and a second phase beginning in 2027 through 2035. ICAO member countries are expected to enact legislation to implement CORSIA.
The CORSIA program is being implemented in three phases: a pilot phase that ran from 2021 through 2023, followed by a first phase covering 2024 through 2026 and a second phase beginning in 2027 through 2035. ICAO member countries are expected to enact legislation to implement CORSIA.
The following table shows annual aircraft fuel consumption and costs, including taxes, for our mainline and regional operations for 2024 and 2023 (gallons and aircraft fuel expense in millions).
The following table shows annual aircraft fuel consumption and costs, including taxes, for our mainline and regional operations for 2025 and 2024 (gallons and aircraft fuel expense in millions).
Members also earn mileage credits by using the services of more than 1,000 non-flight partners, such as our co-branded credit cards, certain hotel and car rental companies and shopping and dining partners.
Members also earn mileage credits and Loyalty Points by using the services of more than 1,000 non-flight partners, such as our co-branded credit cards, certain hotel, car rental and cruise companies and shopping and dining partners.
Among our wholly-owned regional subsidiaries, Piedmont fleet and passenger service and PSA flight attendants and dispatchers have agreements that are now amendable and we are engaged in negotiations. For more discussion, see Part I, Item 1A.
Among our wholly-owned regional subsidiaries, Envoy dispatchers, Piedmont fleet and passenger service and PSA flight attendants have CBAs that are now amendable and we are engaged in negotiations. For more discussion, see Part I, Item 1A.
Our Culture We seek to hire the best and brightest and to create a workplace where all perspectives and experiences are welcomed, valued and encouraged and where every individual, regardless of their national origin, religion, race, gender, sexual orientation or background, not only knows they belong, but that they can thrive at our company.
Our Culture We seek to create a workplace where all perspectives and experiences are welcomed, valued and encouraged and where every individual, regardless of their national origin, religion, race, gender, sexual orientation or background, not only knows they belong, but that they can thrive at our company.
Management’s Discussion and Analysis of Financial Condition and Results of Operations – “2024 Financial Overview,” “AAG’s Results of Operations” and “American’s Results of Operations” for further discussion of AAG’s and American’s operating results and operating performance.
Management’s Discussion and Analysis of Financial Condition and Results of Operations – “2025 Financial Overview,” “AAG’s Results of Operations” and “American’s Results of Operations” for further discussion of AAG’s and American’s operating results and operating performance.
Competition has also been increasing from low-cost airlines executing international long-haul expansion strategies, a trend we expect to continue, in particular with the planned introduction of long-range narrowbody aircraft in the coming years.
Competition has also been increasing from low-cost airlines executing international long-haul expansion strategies, a trend we expect to continue, in particular with the introduction of long-range narrowbody aircraft.
Additionally, our pilots and other employees are subject to rigorous certification standards, and our pilots and other crew members must adhere to flight time and rest requirements. The FAA also controls the national airspace system, including operational rules and fees for air traffic control (ATC) services.
Additionally, our pilots and other employees are subject to rigorous certification standards, and our pilots and other crew members must adhere to flight time and rest requirements. 16 Table of Contents The FAA also controls the national airspace system, including operational rules and fees for air traffic control (ATC) services.
Based on our 2025 forecasted mainline and regional fuel consumption, we estimate that a one cent per gallon increase in the price of aircraft fuel would increase our 2025 annual fuel expense by approximately $45 million.
Based on our 2026 forecasted mainline and regional fuel consumption, we estimate that a one cent per gallon increase in the price of aircraft fuel would increase our 2026 annual fuel expense by approximately $50 million.
Our regional carriers are an integral component of our operating network. We rely heavily on regional carriers to serve small markets and also to drive connecting traffic to our hubs from markets that are not economical for us to serve with larger, mainline aircraft. In addition, regional carriers offer complementary service in many of our mainline markets.
We rely heavily on regional carriers to serve small markets and also to drive connecting traffic to our hubs from markets that are not economical for us to serve with larger mainline aircraft. In addition, regional carriers offer complementary service in many of our mainline markets.
The TSA is responsible for the security of the nation’s transportation systems. The TSA’s requirements for aviation security include, among other things, screening of passengers, baggage, cargo, mail, employees and vendors; carriage of federal air marshals at no charge; and continuous background checks of all employees and vendor employees with access to secure areas of airports.
The TSA’s requirements for aviation security include, among other things, screening of passengers, baggage, cargo, mail, employees and vendors; carriage of federal air marshals at no charge; and continuous background checks of all employees and vendor employees with access to secure areas of airports.
Mileage credits can be redeemed for travel and upgraded experiences on American and participating airlines, access to our Admirals Club ® and Flagship Lounges ® , or for other non-flight awards, such as car rentals and hotels, from our program partners.
Mileage credits can be redeemed for travel and upgraded experiences on American and participating airlines, access to our Admirals Club ® and Flagship Lounges ® , or for other non-flight awards, such as car rentals, hotel stays, cruises and retail goods from our program partners.
For each year from 2021 through 2032, CORSIA requires airlines to compensate for the rate of growth of GHG emissions of the aviation sector, relative to a predetermined ICAO baseline. ICAO originally defined the baseline as the average emissions from covered flights in 2019 and 2020.
For each year from 2021 through 2032, CORSIA requires airlines to compensate for the growth of carbon dioxide (CO 2 ) emissions from the aviation sector, relative to a predetermined ICAO baseline. ICAO originally defined the baseline as the average emissions from covered flights in 2019 and 2020.
Risk Factors – “The loss of key personnel who we depend on to operate our business, or the inability to attract, develop and retain additional qualified personnel could adversely affect our business.” Labor Relations Labor relations in the air transportation industry are regulated under the Railway Labor Act (RLA), which vests in the National Mediation Board (NMB) certain functions with respect to disputes between airlines and labor unions relating to union representation and CBAs.
Risk Factors – “The loss of key personnel whom we depend on to operate our business, or the inability to attract, develop and retain additional qualified personnel could adversely affect our business.” Labor Relations Labor relations in the air transportation industry are governed by the Railway Labor Act (RLA), which grants the National Mediation Board (NMB) with certain functions with respect to disputes between airlines and labor unions, including those relating to union representation and CBAs.
Program rules, partners, special offers, awards and requisite mileage levels for awards are subject to change. During 2024, our members redeemed approximately 15 million awards, including travel redemptions for flights and upgrades on American and other air carriers, as well as redemption of car and hotel awards, club memberships and merchandise, among others.
Program rules, partners, special offers, awards and requisite mileage levels for awards are subject to change. 10 Table of Contents During 2025, our members redeemed approximately 18 million awards, including travel redemptions for flights and upgrades on American, American Eagle and other air carriers, as well as redemption of car and hotel awards, club memberships and merchandise, among others.
All American Eagle carriers use logos, service marks, aircraft paint schemes and uniforms similar to those of our mainline operations. In 2024, 54 million passengers boarded our regional flights, approximately 45% of whom connected to or from our mainline flights.
All American Eagle carriers use logos, service marks, aircraft paint schemes and uniforms similar to those of our mainline operations. In 2025, 57 million passengers boarded our regional flights, approximately 42% of whom connected to or from our mainline flights.
The one world Alliance links the networks of member carriers and their respective affiliates to enhance customer service and provide smooth connections to the destinations served by the alliance, including linking member carriers’ loyalty programs and providing reciprocal access to the carriers’ airport lounge facilities.
Hawaiian Airlines is expected to join the one world Alliance in 2026. The one world Alliance links the networks of member carriers and their respective affiliates to enhance customer service and provide smooth connections to the destinations served by the alliance, including linking member carriers’ loyalty programs and providing reciprocal access to the carriers’ airport lounge facilities.
As of December 31, 2024, we had approximately 133,300 active full-time equivalent employees, approximately 87% of whom were represented by various labor unions responsible for negotiating the collective bargaining agreements (CBAs) governing their compensation and job duties, among other things.
As of December 31, 2025, we had approximately 139,100 active full-time equivalent employees, approximately 86% of whom were represented by various labor unions responsible for negotiating the collective bargaining agreements (CBAs) governing their compensation and job duties, among other things.
The AAdvantage program in general, and our co-branded credit card programs in particular, are material assets of our business and have become increasingly important to our company over time. In December 2024, we announced a 10-year agreement with Citibank N.A. (Citi) to become the exclusive issuer of the AAdvantage co-branded credit card portfolio in the U.S. starting in 2026.
The AAdvantage program in general, and our co-branded credit card programs in particular, are material assets of our business and have become increasingly important to our company over time. Starting in 2026, Citibank N.A. (Citi) became the exclusive issuer of the AAdvantage co-branded credit card portfolio in the U.S.
Pursuant to the Clean Air Act, the FAA issued a final rule in February 2024 to implement these standards, introducing new fuel efficiency certification regulations. These regulations apply to airplanes manufactured after January 1, 2028, as well as to uncertified large business and commercial jet aircrafts. The new requirements took effect in April 2024.
Pursuant to the Clean Air Act, the FAA issued a final rule in February 2024 to implement these standards, introducing new fuel efficiency certification regulations. These regulations, which took effect in April 2024, apply to airplanes manufactured after January 1, 2028, as well as to uncertified large business and commercial jet aircraft. Given announcements and actions by the U.S.
In 2024, mainline and regional salaries, wages and benefits were our largest expense and represented 36% of our total operating expenses.
In 2025, mainline and regional salaries, wages and benefits were our largest expense and represented 38% of our total operating expenses.
In 2024, we served approximately 21,000 unique origin and destination pairs, transporting over 1.0 billion pounds of time-sensitive freight and mail across our network.
In 2025, we served over 20,000 unique origin and destination pairs, transporting approximately 1.0 billion pounds of time-sensitive freight and mail throughout our network.
Availability of SEC Reports A copy of this Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and amendments to those reports are available free of charge on our website as soon as reasonably practicable after we electronically file such material with, or furnish it to, the SEC.
None of the information or contents of our website or social media postings is incorporated into this Annual Report on Form 10-K. 20 Table of Contents Availability of SEC Reports A copy of this Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and amendments to those reports are available free of charge on our website as soon as reasonably practicable after we electronically file such material with, or furnish it to, the SEC.
We may not be successful in attracting, developing or retaining key personnel or other highly qualified personnel. In addition, competition for skilled personnel has intensified and may continue to intensify if overall industry capacity continues to increase and/or we were to incur attrition at levels higher than we have historically. For more discussion, see Part I, Item 1A.
In addition, competition for skilled personnel has intensified and may continue to intensify if overall industry capacity continues to increase and/or we were to incur attrition at levels higher than we have historically. For more discussion, see Part I, Item 1A.
Regional Our regional carriers provide scheduled air transportation under the brand name “American Eagle.” The American Eagle carriers include our wholly-owned regional carriers Envoy Air Inc. (Envoy), PSA and Piedmont, as well as third-party regional carriers including Republic Airways Inc. (Republic), SkyWest Airlines, Inc. (SkyWest) and Air Wisconsin Airlines LLC (Air Wisconsin).
Regional Our regional carriers provide scheduled air transportation under the brand name “American Eagle.” The American Eagle carriers include our wholly-owned regional carriers Envoy Air Inc. (Envoy), PSA and Piedmont, as well as third-party regional carriers including Republic Airways Inc. (Republic) and SkyWest Airlines, Inc. (SkyWest). Our regional carriers are an integral component of our operating network.
During 2024 and 2023, cash payments from co-branded credit card and other partners were $6.1 billion and $5.2 billion, respectively, an increase of 17% year-over-year. Cash remuneration in 2024 included a one-time cash payment related to the new co-branded credit card agreement announced in December 2024.
Cash payments from co-branded credit card and other partners were $6.2 billion and $6.1 billion during 2025 and 2024, respectively. Cash remuneration in 2024 included a one-time cash payment related to the new co-branded credit card agreement announced in December 2024.
European GHG Emissions Regulations On May 16, 2023, revisions to the EU Emissions Trading System (EU ETS) were published in the Official Journal of the EU. Under these revisions, the allocation of emissions allowances currently granted for free to aircraft operators under the EU ETS will be phased out by 2026.
European GHG Emissions Regulations On May 16, 2023, revisions to the EU Emissions Trading System (EU ETS) were published in the Official Journal of the EU. Under these revisions, the allocation of free emissions allowances to aircraft operators was phased out by the end of 2025.
AAG was formed in 1982, under the name AMR Corporation (AMR), as the parent company of American, which was founded in 1934. AAG’s and American’s principal executive offices are located at 1 Skyview Drive, Fort Worth, Texas 76155 and their telephone number is 682-278-9000.
AAG was formed in 1982, under the name AMR Corporation (AMR), as the parent company of American, which was founded in 1934, with roots tracing back to an air mail carrier in the Midwestern United States in 1926. AAG’s and American’s principal executive offices are located at 1 Skyview Drive, Fort Worth, Texas 76155 and their telephone number is 682-278-9000.
Year Gallons Average Price per Gallon Aircraft Fuel Expense Percent of Total Operating Expenses 2024 4,391 $2.60 $11,418 22% 2023 4,140 $2.96 $12,257 25% As of December 31, 2024, we did not have any fuel hedging contracts outstanding to hedge our fuel consumption.
Year Gallons Average Price per Gallon Aircraft Fuel Expense Percent of Total Operating Expenses 2025 4,488 $2.39 $10,718 20% 2024 4,391 $2.60 $11,418 22% As of December 31, 2025, we did not have any fuel hedging contracts outstanding to hedge our fuel consumption.
We control marketing, scheduling, ticketing, pricing and seat inventories. In return, we agree to pay predetermined fees to these airlines for operating an agreed-upon number of aircraft, without regard to the number of passengers on board.
In return, we agree to pay predetermined fees to these airlines for operating an agreed-upon number of aircraft, without regard to the number of passengers on board.
This requires fuel suppliers to, over the course of each year, blend minimum shares of SAF with petroleum jet fuel prior to the fuel’s delivery to aircraft operators at EU airports, starting from January 1, 2025. The minimum requirements are 2% in 2025, 6% in 2030, 20% in 2035, 34% in 2040, 42% in 2045 and 70% in 2050.
This regulation requires fuel suppliers to blend minimum shares of SAF with petroleum jet fuel in the fuel delivered to aircraft operators at EU airports. The minimum requirements are 2% from 2025, 6% from 2030, 20% from 2035, 34% from 2040, 42% from 2045 and 70% from 2050.
A specific proportion of the fuel mix (1.2% in 2030, 2% in 2032, 5% in 2035 and progressively reaching 35% in 2050) must comprise synthetic fuels such as e-kerosene.
A specific proportion of the fuel mix (an average of 1.2% in 19 Table of Contents 2030-2031, an average of 2% in 2032-2034, a minimum of 5% from 2035 and progressively reaching a minimum of 35% from 2050) must comprise synthetic fuels such as e-kerosene.
For more information on our approach to climate change, see our 2023 Sustainability Report on our website www . aa.com available under “Environmental, Social and Governance.” None of the information or contents under our 19 Table of Contents “Environmental, Social and Governance” page, 2023 Sustainability Report, or our website are incorporated into this Annual Report on Form 10-K.
For more information on our approach to climate change, see our 2024 Sustainability Report on our website www . aa.com available under “Sustainability.” None of the information or contents under our “Sustainability” page, 2024 Sustainability Report, or our website are incorporated into this Annual Report on Form 10-K.
Existing law also permits domestic local airport authorities to implement procedures and impose restrictions designed to abate noise, provided such procedures and restrictions do not unreasonably interfere with interstate or foreign commerce or the national transportation system.
Existing law also permits domestic local airport authorities to implement procedures and impose restrictions designed to abate noise, provided such procedures and restrictions do not unreasonably interfere with interstate or foreign commerce or the national transportation system. In some instances, these restrictions have caused curtailments in service or increases in operating costs.
We anticipate that the ongoing costs of those activities will not materially affect our operations. We employ an environmental management system that provides a systematic approach for monitoring changes to and compliance with environmental regulations, and for managing a broad range of environmental issues, including air emissions, hazardous waste, underground tanks, and aircraft water quality.
We employ an environmental management system that provides a systematic approach for monitoring changes to and compliance with environmental regulations, and for managing a broad range of environmental issues, including air emissions, hazardous waste, underground tanks, and aircraft water quality.
In September 2020 and April 2022, the CMA adopted interim measures that effectively extend the EC commitments until March 2026 in light of the uncertainty and other impacts resulting from the COVID-19 pandemic.
In September 2020 and April 2022, the CMA adopted interim measures that extend the EC commitments until March 2026 in light of the uncertainty and other impacts resulting from the COVID-19 pandemic. In August 2025, the CMA accepted binding commitments and closed the case. The commitments will replace the prior interim measures.
The UK SAF mandate policy includes blending targets for e-kerosene and a cap, starting in 2027, on the amount of SAF made from waste fats and oils that fuel suppliers may use to reach the annual blending targets.
The UK SAF mandate policy includes separate targets for e-kerosene (referred to under the obligation as power-to-liquid fuels), which start from 2028, and a cap, starting in 2027, on the amount of SAF made from hydrotreated fats and oils that fuel suppliers may use to reach the annual blending targets.
Funding for a portion of CBP operations is provided by a combination of fees collected by airlines. Our international service further requires us to comply with host government civil aviation security regimes and foreign border control authorities. Environmental Matters Environmental Regulation The airline industry is subject to various environmental laws and regulations in the U.S. and other countries.
Funding for a portion of CBP operations is provided by a combination of fees collected by airlines. Our international service further requires us to comply with host government civil aviation security regimes and foreign border control authorities.
As of December 31, 2024, in addition to the relationships described above, American had codeshare, marketing and/or loyalty program relationships with Air Tahiti Nui, Cathay Pacific, China Southern Airlines Company Limited (China Southern Airlines), Etihad Airways, Fiji Airways, GOL Linhas Aéreas Inteligentes S.A.
As of December 31, 2025, in addition to the relationships described above, American had codeshare, marketing and/or loyalty program relationships with Air Tahiti Nui, China Southern Airlines Company Limited (China Southern Airlines), Etihad Airways, GOL Linhas Aéreas Inteligentes S.A. (GOL), Gulf Air, Hawaiian Airlines, IndiGo, JetSMART, Jetstar, Jetstar Japan, Korean Air Lines, Philippine Airlines, Porter Airlines and Vueling Airlines.
The UK and Switzerland have similar emissions trading schemes that often align with the EU ETS; our compliance cost would further increase if both countries decided to follow the EU in extending their regulation of GHG emissions from aviation. In 2023, the EU enacted the ReFuelEU Aviation initiative to create a SAF blending mandate for aviation fuel suppliers.
The UK and Switzerland have similar emissions trading schemes that often align with the EU ETS; our compliance costs would further increase if both countries followed the EU in extending the scope of their regulation of GHG emissions from aviation. The EU’s ReFuelEU Aviation initiative, which creates a SAF blending mandate for aviation fuel suppliers, took effect January 1, 2025.
We continue to focus on enhancements that enable us to better serve our customers, including expanding our digital offerings, which provide greater efficiency, increased accuracy, 24/7 access to search schedules, and the ability to check availability, retrieve rates and make bookings.
We continue to focus on enhancements that enable us to better serve our customers, including moving to a new facility at London Heathrow Airport (LHR) to support further growth in this key market and expanding our digital offerings, which provide greater efficiency, increased accuracy, 24/7 access to search schedules, and the ability for our customers to check availability, retrieve rates and make bookings.
In some instances, these restrictions have caused curtailments in service or increases in operating costs. 16 Table of Contents Airline Fares, Taxes and User Fees Airlines are permitted to establish their own domestic fares without governmental regulation. The DOT maintains authority over certain international fares, rates and charges, but only applies this authority on a limited basis.
Airline Fares, Taxes and User Fees Airlines are permitted to establish their own domestic fares without governmental regulation. The DOT maintains authority over certain international fares, rates and charges, but only applies this authority on a limited basis.
Global and Domestic Regulation Related to Climate Change Climate change-related regulatory activity and developments may adversely affect our business and financial results by requiring us to adapt to rapidly evolving domestic and international regulations and to achieve emission reductions before cost-effective technologies are available, for example, through requirements to make capital investments to purchase specific types of equipment or technologies, purchase carbon offset credits or incur additional costs related to our emissions.
Global and Domestic Regulation Related to Climate Change Climate change-related regulatory activity and developments may adversely affect our business and financial results by requiring us to adapt to rapidly evolving domestic and international regulations and to achieve GHG emission reductions before cost-effective technologies are available.
In January 2025, we announced a wind-down of our relationship with Air Wisconsin, which we expect to conclude in the second quarter of 2025. 8 Table of Contents Our regional carrier arrangements are principally in the form of capacity purchase agreements with our third-party regional partners and similar arrangements with our wholly-owned affiliates which provide that all revenues, including passenger, in-flight, ancillary, mail and freight revenues, go to us.
Our regional carrier arrangements are principally in the form of capacity purchase agreements with our third-party regional partners and similar arrangements with our wholly-owned affiliates which provide that all revenues, including passenger, in-flight, ancillary, mail and freight revenues, go to us. We control marketing, scheduling, ticketing, pricing and seat inventories.
Risk Factors – “ Union disputes, employee strikes and other labor-related disruptions may adversely affect our operations and financial performance .” Aircraft Fuel Our operations and financial results are materially affected by the availability and price of aircraft fuel, which represents one of the largest single cost items in our business.
Aircraft Fuel Our operations and financial results are materially affected by the availability and price of aircraft fuel, which represents one of the largest single cost items in our business.
Should the EU decide to extend the EU ETS to all departing flights from the EEA, there could be serious repercussions for our business and our industry and our compliance costs would likely be significant.
Should the EU expand the EU ETS scope, there could be serious repercussions for our business and the broader industry, and our costs to comply with the EU ETS would likely be significant.
AAdvantage members enjoy exclusive benefits and earn AAdvantage mileage credits (miles) for flying on eligible tickets on American, any one world Alliance airline or other partner airlines.
AAdvantage ® Program Our AAdvantage program was established to enhance passenger loyalty by offering benefits and rewards to travelers for their continued patronage with American and our partners. AAdvantage members enjoy exclusive benefits and earn AAdvantage mileage credits (miles) for flying on eligible tickets on American, American Eagle, any one world Alliance airline or other partner airlines.
We also announced over 20 new or expanded routes for customers to explore in 2025, including to trans-Atlantic destinations such as Milan, Rome, Venice and Naples in Italy and Athens, Greece. As of December 31, 2024, we operated 977 mainline aircraft supported by our wholly-owned regional airline subsidiaries and third-party regional carriers, which together operated an additional 585 regional aircraft.
We also announced over 20 new routes for customers to explore in 2026, including our first trans-Atlantic route to be flown by the Airbus A321XLR from New York to Edinburgh, Scotland. As of December 31, 2025, we operated 1,013 mainline aircraft supported by our wholly-owned regional airline subsidiaries and third-party regional carriers, which together operated an additional 567 regional aircraft.
The potential effects on our business of these requirements are uncertain, and there is uncertainty with regard to how the EU and UK SAF mandates will be implemented, the extent to which the relevant governments will adopt policies such as flexibility mechanisms for suppliers (e.g., book and claim) and revenue certainty programs for SAF producers.
There is also uncertainty regarding how the EU and UK may implement the SAF mandates, including, the extent to which the relevant governments will change their existing policies or adopt new policies such as flexibility mechanisms for suppliers (e.g., book and claim) and revenue certainty programs for SAF producers.
Environmental Protection Agency (EPA) and other federal agencies promulgate regulations that affect our operations. In addition to these federal activities, various states have been delegated certain authorities under these aforementioned federal statutes. Many state and local governments have adopted environmental laws and regulations that are similar to or stricter than the federal requirements.
Additionally, various states have been delegated certain authorities under these aforementioned federal statutes, and many state and local governments have adopted environmental laws and regulations that mirror or are more stringent than federal requirements.
In 2024, our team members were recognized by customers, peers and company leaders approximately three million times and more than 1,300 peer nominations were submitted for the annual Circle of Excellence, the highest honor that we bestow upon our team members for their career achievements. 13 Table of Contents Our future success depends in large part on our ability to attract, develop and retain highly qualified management, technical and other personnel.
In 2025, our team members were recognized by customers, peers and company leaders approximately three million times. Additionally, approximately 1,000 peer nominations were submitted for the annual Circle of Excellence, the highest honor that we bestow upon our team members for their career achievements.
Further, various foreign airport authorities impose slot, noise and curfew restrictions at their local airports. 17 Table of Contents Security All aspects of civil aviation and border security in the U.S. affecting U.S. carriers are controlled or regulated by the federal government through the Transportation Security Administration (TSA) and the U.S. Customs and Border Protection (CBP).
Security All aspects of civil aviation and border security in the U.S. affecting U.S. carriers are controlled or regulated by the federal government through the Transportation Security Administration (TSA) and the U.S. Customs and Border Protection (CBP). The TSA is responsible for the security of the nation’s transportation systems.
The Safety Assurance component of our SMS specifies how we use data and conduct quality assurance and internal oversight to validate the effectiveness of risk controls and the performance of the SMS.
We employ SRM whenever there is a change to our processes, procedures or operations, such as the delivery of new aircraft. The Safety Assurance component specifies how we validate the effectiveness of risk controls and the performance of the SMS using data to conduct quality assurance and internal oversight.
Among other things, these regulations govern how our fares are displayed online, required customer disclosures, access by disabled passengers, handling of long onboard flight delays and reporting of mishandled bags.
Among other things, these regulations govern how our fares are displayed online, required customer disclosures, access by disabled passengers, handling of long onboard flight delays and reporting of mishandled bags. On September 4, 2025, the U.S. Government released its Unified Agenda of Regulatory and Deregulatory Actions, outlining planned priorities, timelines and policy directions across federal agencies.
Competitive Pay and Comprehensive Benefits We seek to offer competitive pay, comprehensive benefits and a wide variety of resources designed to support the physical, behavioral and financial well-being of our team members and their families, including medical coverage that is intended to be affordable and flexible along with healthcare navigation and support tools.
We believe in: • Hiring, engaging and retaining the best and the brightest talent for growth; • Delivering excellence in our operations to serve and expand our global markets; • Striving to have our teams build connections and trust with all who fly with us; and • Driving industry innovation to build competitive advantages. 12 Table of Contents Competitive Pay and Comprehensive Benefits We seek to offer competitive pay, comprehensive benefits and a wide variety of resources designed to support the physical, behavioral and financial well-being of our team members and their families, including medical coverage that is intended to be affordable and flexible along with healthcare navigation and support tools.

… 87 more changes not shown on this page.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

223 edited+52 added−83 removed202 unchanged
Biggest changeNational Airspace System (the ATC system); • increases in costs of safety, security and environmental measures or costs of complying with new or more onerous consumer protection laws or regulations; • increases in costs related to meeting our climate goals or obligations, including in respect of the costs to be incurred to migrate to increased use of SAF in lieu of conventional aviation fuel; • outbreaks of diseases or other public health or safety concerns that affect travel behavior, such as occurred during the COVID-19 pandemic; and • adverse weather and natural disasters, including increases in frequency, severity or duration of such disasters, and related costs caused by more severe weather due to climate change.
Biggest changeNational Airspace System (the ATC system), including due to a government shutdown; • increases in costs of safety, security and environmental measures or costs of complying with new or more onerous consumer protection laws or regulations; • increases in costs related to meeting our stated climate goals or obligations, including costs incurred to migrate to increase use of SAF in lieu of conventional aviation fuel; • disruptions in global trade relations, such as increased tariffs or other trade barriers, that could create additional costs, new supply chain risks or a decrease in the demand for international air travel; • increases in compliance burdens and costs associated with new and emerging national security regulations, including regulations related to access to certain categories of personal information; • outbreaks of diseases or other public health or safety concerns that affect travel behavior, such as occurred during the COVID-19 pandemic; and 24 Table of Contents • adverse weather and natural disasters, including increases in frequency, severity or duration of such disasters, and related costs caused by more severe weather due to climate change.
While both the DOT and TSA are actively reviewing these operations, if they ultimately allow scheduled passenger service in any form under Part 135 and the actions of existing or future carriers using that business model, including those described above, it could adversely impact our business, financial condition and results of operations.
While both the DOT and the TSA are actively reviewing these operations, if they ultimately allow scheduled passenger service in any form under Part 135 and the actions of existing or future carriers using that business model, including those described above, it could adversely impact our business, financial condition and results of operations.
American has established a transatlantic joint business with British Airways, Aer Lingus, Iberia and Finnair, a transpacific joint business with Japan Airlines and a joint business relating to Australia and New Zealand with Qantas.
American has established a transatlantic joint business with British Airways, Aer Lingus, Iberia and Finnair, a transpacific joint business with Japan Airlines and a joint business relating to Australia and New Zealand with Qantas Airways.
In the event that the SAF is not delivered on schedule or in sufficient volumes, there can be no assurance that we will be able to source a supply of SAF sufficient to meet our stated goals, or that we will be able to do so on favorable economic terms.
In the event that SAF is not delivered on schedule or in sufficient volumes, there can be no assurance that we will be able to source a supply of SAF sufficient to meet our stated goals, or that we will be able to do so on favorable economic terms.
Even though we believe we and our third party service providers are generally in compliance with applicable laws, rules and regulations relating to AI, privacy and data security, the regulatory environment is increasingly challenging as AI, data privacy and cybersecurity laws, rules, regulations, industry standards and other requirements are continually developing.
Even though we believe we and our third-party service providers are generally in compliance with applicable laws, rules and regulations relating to AI, data privacy and security, the regulatory environment is increasingly challenging as AI, data privacy and cybersecurity laws, rules, regulations, industry standards and other requirements are continually developing.
These requirements can be issued with little or no notice, or can otherwise impact our ability to efficiently or fully utilize our aircraft, and in some instances have resulted in the temporary and prolonged grounding of aircraft or engine types altogether including, for example, the March 2019 grounding of all Boeing 737 MAX Family aircraft, which was not lifted in the United States until November 2020, the January 2024 grounding of 737-9 MAX aircraft (a model that we do not operate), and the significant limitations imposed on the use of Pratt & Whitney GTF aircraft engines on certain Airbus aircraft (an engine that we do not use in our fleet), or otherwise caused substantial disruption and resulted in material costs to us and lost revenues.
These requirements can be issued with little or no notice, or can otherwise impact our ability to efficiently or fully utilize our aircraft, and in some instances have resulted in the temporary or prolonged grounding of aircraft or engine types altogether including, for example, the March 2019 grounding of all Boeing 737 MAX Family aircraft, which was not lifted in the United States until November 2020, the January 2024 grounding of 737-9 MAX aircraft (a model we do not operate), and the significant limitations imposed on the use of Pratt & Whitney GTF aircraft engines on certain Airbus aircraft (an engine we do not use in our fleet), or otherwise caused substantial disruption and resulted in material costs to us and lost revenues.
While our priority is to migrate an increasing portion of our customers to our modern, direct distribution channels in lieu of third party channels, we continue to rely on third-party distribution channels, including those provided by or through global distribution systems (GDSs) (e.g., Amadeus, Sabre and Travelport), conventional travel agents, travel management companies and online travel agents (OTAs) (e.g., Expedia, including its booking sites Orbitz and Travelocity, and Booking Holdings, including its booking sites Kayak and Priceline), to distribute a significant portion of our airline tickets, and we expect in the future to continue to rely on these channels.
While our priority is to migrate an increasing portion of our customers to our modern, direct distribution channels in lieu of third party channels, we continue to rely on third-party distribution channels, including those provided by or through global distribution systems (GDSs) (e.g., Amadeus, Sabre and Travelport), conventional travel agents, travel management companies and OTAs (e.g., Expedia, including its booking sites Orbitz and Travelocity, and Booking Holdings, including its booking sites Kayak and Priceline), to distribute a significant portion of our airline tickets, and we expect in the future to continue to rely on these channels.
If any carriers with which we partner or in which we hold an equity stake were to cease trading or be declared insolvent, we could lose the value of any such investment or experience significant operational disruption. These events could have a material adverse effect on our business, results of operations and financial condition.
If any other carriers with which we partner or in which we hold an equity stake were to cease trading or be declared insolvent, we could lose the value of any such investment or experience significant operational disruption. These events could have a material adverse effect on our business, results of operations and financial condition.
We are at risk of adverse publicity stemming from any public incident involving our company, our people or our brand, particularly given the ease with which individuals can now capture and rapidly disseminate information via social media. Such an incident could involve the actual or alleged behavior of any of our employees, contractors or passengers.
We are at risk of adverse publicity from any public incident involving our company, our people or our brand, particularly given the ease with which individuals can now capture and rapidly disseminate information via social media. Such an incident could involve the actual or alleged behavior of any of our employees, contractors or passengers.
Finally, the potential acute and chronic physical effects of climate change, such as increased frequency and severity of storms, floods, fires, sea-level rise, excessive heat, longer-term changes in weather patterns and other climate-related events, could affect our operations, infrastructure and financial results as well as the safety of our team members.
Finally, the potential acute and chronic physical effects of climate change, such as increased frequency and severity of storms, floods, fires, sea-level rise, excessive heat, longer-term changes in weather patterns and other climate-related events, could affect our operations, infrastructure and financial results as well as the safety of our customers and team members.
We have significant amounts of indebtedness and other financial obligations, including pension obligations, obligations to make future payments on flight equipment and property leases related to airport and other facilities, and substantial non-cancelable obligations under aircraft and related spare engine purchase agreements. Moreover, currently a very significant portion of our assets are pledged to secure our indebtedness.
We have significant amounts of indebtedness and other financial obligations, including obligations to make future payments on flight equipment and property leases related to airport and other facilities, and substantial non-cancelable obligations under aircraft and related spare engine purchase agreements. Moreover, currently a very significant portion of our assets are pledged to secure our indebtedness.
The imposition of holdback requirements, up to and including 100% of relevant advanced ticket sales, would materially reduce our liquidity. Likewise, other of our commercial agreements contain provisions that allow counterparties to impose less-favorable terms, including the acceleration of amounts due, in the event of material adverse changes in our financial condition.
The imposition of holdback requirements, up to and including 100% of relevant advanced ticket sales, would materially reduce our liquidity. Likewise, some of our other commercial agreements contain provisions that allow counterparties to impose less-favorable terms, including the acceleration of amounts due, in the event of material adverse changes in our financial condition.
In July 2010, in connection with a regulatory review related to our transatlantic joint business, we provided certain commitments to the EC regarding, among other things, the availability of take-off and landing slots at LHR or LGW airports. The commitments accepted by the EC were binding for 10 years.
In July 2010, in connection with a regulatory review related to our transatlantic joint business, we provided certain commitments to the EC regarding, among other things, the availability of take-off and landing slots at LHR or LGW. The commitments accepted by the EC were binding for 10 years.
The rapid evolution of AI, including proposed government regulation, may require significant resources to develop, test and maintain our AI technologies and services to ensure compliance and minimize adverse impacts. Any limitations or failures relating to any of the foregoing could result in reputational damage, legal liabilities or loss of customer confidence.
The rapid evolution of AI, including existing and proposed government regulation, may require significant resources to develop, test and maintain our AI technologies and services to ensure compliance and minimize adverse impacts. Any limitations or failures relating to any of the foregoing could result in reputational damage, legal liabilities or loss of customer confidence.
Additionally, certain of the products and services that we purchase, including certain of our aircraft and related parts, are sourced from suppliers located outside the U.S., and the imposition of new tariffs, or any increase in existing tariffs, by the U.S. government in respect of the importation of such products could materially increase the amounts we pay for them.
Additionally, certain products and services we purchase, including certain of our aircraft and related parts, are sourced from suppliers located outside the U.S., and the imposition of new tariffs, or any increase in existing tariffs, by the U.S. government in respect of the importation of such products could materially increase the amounts we pay for them.
For example, they may: • make it more difficult for us to satisfy our obligations under our indebtedness; • limit our ability to obtain additional funding for working capital, capital expenditures, acquisitions, investments and general corporate purposes, and adversely affect the terms on which such funding can be obtained; • require us to dedicate a substantial portion of our liquidity or cash flow from operations to payments on our indebtedness and other obligations, thereby reducing the funds available for other purposes; • make us more vulnerable to economic downturns, industry conditions and catastrophic external events, particularly relative to competitors with lower relative levels of financial leverage; • significantly constrain our ability to respond, or respond quickly, to unexpected disruptions in our own operations, the U.S. or global economies, or the businesses in which we operate, or to take advantage of opportunities that would improve our business, operations, or competitive position versus other airlines; • limit our ability to withstand competitive pressures and reduce our flexibility in responding to changing business and economic conditions; • bear interest at floating rates, subjecting us to volatility in interest expenses as interest rates fluctuate; • contain financial covenants, including the requirement to maintain an aggregate of at least $2.0 billion of unrestricted cash and cash equivalents and amounts available to be drawn under revolving credit facilities, as well as collateral coverage ratios and peak debt service coverage ratios; • impact availability of borrowings under revolving lines of credit; and • contain restrictive covenants that could, among other things: ◦ limit our ability to merge, consolidate, sell assets, incur additional indebtedness, issue preferred stock, make investments and/or pay dividends; and ◦ if breached, result in an event of default under our other indebtedness.
For example, they may: • make it more difficult for us to satisfy our obligations under our indebtedness; 22 Table of Contents • limit our ability to obtain additional funding for working capital, capital expenditures, acquisitions, investments and general corporate purposes, and adversely affect the terms on which such funding can be obtained; • require us to dedicate a substantial portion of our liquidity or cash flow from operations to payments on our indebtedness and other obligations, thereby reducing the funds available for investment in our business and other purposes; • make us more vulnerable to economic downturns, industry conditions and catastrophic external events, particularly relative to competitors with lower relative levels of financial leverage; • significantly constrain our ability to respond, or respond quickly, to unexpected disruptions in our own operations, the U.S. or global economies, or the businesses in which we operate, or to take advantage of opportunities that would improve our business, operations, or competitive position versus other airlines; • limit our ability to withstand competitive pressures and reduce our flexibility in responding to changing business and economic conditions; • bear interest at floating rates, subjecting us to volatility in interest expenses as interest rates fluctuate; • contain financial covenants, including the requirement to maintain an aggregate of at least $2.0 billion of unrestricted cash and cash equivalents and amounts available to be drawn under revolving credit facilities, as well as collateral coverage ratios and peak debt service coverage ratios; • impact availability of borrowings under revolving lines of credit; and • contain restrictive covenants that could, among other things: ◦ limit our ability to merge, consolidate, sell assets, incur additional indebtedness, issue preferred stock, make investments and/or pay dividends; and ◦ if breached, result in an event of default under our other indebtedness.
Further, as distribution technology changes, we will need to continue to update our technology by acquiring new technology from third parties, building the functionality ourselves, or a combination, which in any event will likely entail significant technological and commercial risk and involve potentially material investments.
Further, as distribution technology changes, we will need to continue to update our technology by acquiring new technology from third parties, building the functionality ourselves, or a combination thereof, which in any event will likely entail significant technological and commercial risk and involve potentially material investments.
Operational impacts, such as more frequent or widespread flight cancellations, could result in loss of revenue. We could incur significant costs to improve the climate resiliency of our infrastructure and otherwise prepare for, respond to, and mitigate such physical effects of climate change.
Operational impacts, such as more frequent or widespread flight cancellations, could result in loss of revenue. We could incur significant costs to improve the climate resiliency of our infrastructure and operations and otherwise prepare for, respond to, and mitigate such physical effects of climate change.
For example, there has been bipartisan legislation proposed in Congress called the Credit Card Competition Act designed to increase credit card transaction routing options for merchants which, if enacted, could result in a reduction of the fees levied on credit card transactions.
For example, there has been bipartisan legislation proposed in Congress called the Credit Card Competition Act designed to increase credit card transaction routing options for merchants which, if enacted, could result in a material reduction of the fees levied on credit card transactions.
Should protectionist governmental policies, such as increased tariff or other trade barriers, travel limitations and other regulatory actions, have the effect of reducing global commercial activity, the result could be a material decrease in the demand for international air travel.
Should protectionist governmental policies, such as tariff or other trade barriers, travel limitations and other regulatory actions, have the effect of reducing global commercial activity, the result could be a material decrease in the demand for international air travel.
Our current international activities and prospects have been, and in the future could be, adversely affected by government policies, reversals or delays in the opening of foreign markets, increased competition in international markets, the performance of our alliance, joint business and codeshare partners in a given market, exchange controls or other restrictions on repatriation of funds, currency and political risks (including changes in exchange rates and currency devaluations), environmental regulation, increases in taxes and fees and changes in international governmental regulation of our operations, including the inability to obtain or retain needed route authorities and/or slots, and new or evolved policies related to consumer protections.
Our current international activities and prospects have been, and in the future could be, adversely affected by government policies, reversals or delays in the opening of foreign markets, increased competition in international markets, the performance of our alliance, joint business and codeshare partners in a given market, exchange controls or other restrictions on repatriation of funds, currency and political risks (including changes in exchange rates and currency devaluations), environmental regulation, increases in taxes and fees and changes in international governmental regulation of our operations, including the inability to obtain or retain needed route authorities and/or slots, and new or evolved policies related to consumer protection policies.
Our international service exposes us to foreign economies and the potential for reduced demand when any foreign country we serve suffers adverse local economic conditions or if governments restrict commercial air service to or from any of these markets.
Our international service exposes us to foreign economies and the potential for reduced demand when any foreign country we serve suffers adverse local economic conditions or if governments restrict commercial air services to or from any of these markets.
In addition, we source a portion of our aircraft, aircraft engines and parts from outside the U.S., and any additional tariffs imposed may lead to higher costs, negatively affect our supply chains and adversely affect our business and results of operations.
In addition, we source a portion of our aircraft, aircraft engines and parts from outside the U.S., and any tariffs imposed may lead to higher costs, negatively affect our supply chains and adversely affect our business and results of operations.
To secure future SAF supply, we have entered into multiple agreements for the purchase of future SAF production, and we continue to engage with producers regarding potential future SAF purchases, which may include investments and other commitments to support these producers.
To secure SAF supply, we have entered into multiple agreements for the purchase of current and future SAF production, and we continue to engage with producers regarding potential future SAF purchases, which may include investments and other commitments to support these producers.
Our ability to provide service can also be impaired at airports where the airport gates and other facilities are currently inadequate to accommodate all of the service that we would like to provide, or where we have no access to gates at all.
Our ability to provide service can also be impaired at airports where the airport gates and other facilities are inadequate to accommodate all of the service that we would like to provide, or where we have no access to gates at all.
In addition, competition for skilled personnel has intensified and may continue to intensify if overall industry capacity continues to increase and/or we were to incur attrition at levels higher than we have historically.
In addition, competition for skilled personnel has intensified and may continue to intensify if overall industry capacity continues to increase and/or we were to incur attrition at levels higher than we have incurred historically.
Such combination or collaboration is not limited to the U.S., but could include further transactions among international carriers in Europe and elsewhere that result in broader networks offered by rival airlines.
Such combination or collaboration is not limited to the U.S. but could include transactions among international carriers in Europe and elsewhere that result in broader networks offered by rival airlines.
Significant cybersecurity incidents involving us, our third-party service providers, or one of our AAdvantage partners or other business partners, have in the past and may in the future result in a range of potentially material negative consequences for us, including unauthorized access to, disclosure, modification, misuse, loss or destruction of company systems or data; theft of sensitive, regulated or confidential data, such as personal information or our intellectual property; the loss of functionality of critical systems through ransomware, denial of service or other cyberattacks; a diminished ability to retain or attract new customers; a deterioration in our relationships with business partners and other third parties; interruptions or failures in our payment related systems; and business delays, service or system disruptions, damage to equipment and injury to persons or property.
Significant cybersecurity incidents involving us, our third-party service providers, or one of our AAdvantage partners or other business partners, have in the past and may in the future result in a range of potentially material negative consequences for us, including unauthorized access to, disclosure, modification, misuse, loss or destruction of company systems or data; theft of sensitive, regulated or confidential data, such as personal information or our intellectual property; the loss of functionality of critical systems through ransomware, denial of service or other cyberattacks; a diminished ability to retain or attract new customers; a deterioration in our relationships with business partners and other third parties; interruptions or failures in our technology systems; and business delays, service or system disruptions, damage to equipment and injury to persons or property.
Failure to update the ATC system and the substantial costs that may be imposed on airlines, including ourselves, to fund a modernized ATC system may have a material adverse effect on our business.
Failure to update the ATC system and the substantial costs that may be imposed on airlines, including ourselves, to fully fund a modernized ATC system may have a material adverse effect on our business.
Diverse threat actors, such as state-sponsored organizations, opportunistic hackers and hacktivists, as well as diverse attack vectors such as social engineering/phishing, use of AI techniques such as deepfakes, malware (including ransomware), malfeasance by insiders, human or technological error, denial of service attacks or exploitation of vulnerabilities, threaten the confidentiality, integrity, and availability of our and our third party service providers’ information systems, personal information and confidential information.
Diverse threat actors, such as state-sponsored organizations, opportunistic hackers and hacktivists, as well as diverse attack vectors such as social engineering/phishing, use of AI techniques such as deepfakes, malware (including ransomware), malfeasance by insiders, human or technological error, denial of service attacks or exploitation of vulnerabilities, threaten the confidentiality, integrity, and availability of our and our third party service providers’ and business partners’ information systems, personal information and confidential information.
Southeast and on the Gulf Coast where a significant portion of domestic 32 Table of Contents refining capacity is located), terrorism, political disruptions, disputes, or armed conflicts involving oil-producing countries or impacting global trade routes, changes in production levels of individual nations or associations of oil-producing states, economic sanctions imposed against oil-producing countries or specific industry participants, changes in fuel-related governmental policy, the strength of the U.S. dollar against foreign currencies, changes in the cost to transport or store petroleum products and any related staffing or transportation equipment shortages, changes in access to petroleum product pipelines and terminals, speculation in the energy futures markets, changes in aircraft fuel production capacity, unplanned interruptions or disruption of production at refineries, environmental concerns and other unpredictable events, may result in fuel supply shortages, variations in the applicable crack spread, distribution challenges, additional fuel price volatility and cost increases in the future.
Southeast and on the Gulf Coast where a significant portion of domestic refining capacity is located), terrorism, political disruptions, disputes, or armed conflicts involving oil-producing countries or impacting global trade routes, changes in production levels of individual nations or associations of oil-producing states, economic sanctions imposed against oil-producing countries or specific industry participants, changes in fuel-related governmental policy, the strength of the U.S. dollar against foreign currencies, changes in the cost to refine, transport or store petroleum products and any related staffing or transportation equipment shortages, changes in access to petroleum product pipelines and terminals, speculation in the energy futures markets, changes in aircraft fuel production capacity, unplanned interruptions or disruption of production at refineries, environmental concerns and other unpredictable events, may result in fuel supply shortages, variations in the applicable crack spread, distribution challenges, additional fuel price volatility and cost increases in the future.
We have liability for investigation and remediation costs at various domestic sites, although such costs currently are not expected to have a material adverse effect on our business. Governmental authorities in the U.S. and abroad are increasingly focused on potential contamination resulting from the use of certain chemicals, most notably per- and polyfluoroalkyl, substances (PFAS).
We have liability for investigation and remediation costs at various domestic sites, although such costs currently are not expected to have a material adverse effect on our business. Governmental authorities in the U.S. and abroad (including in the EU) are increasingly focused on potential contamination resulting from the use of certain chemicals, most notably per- and polyfluoroalkyl substances (PFAS).
AI also presents emerging ethical issues, and if our use of AI becomes controversial, we may experience brand or reputational harm, competitive harm or legal liability. For example, with the increased use of artificial intelligence and social media, adverse publicity, even if unfounded, can be disseminated quickly and broadly without context, making it increasingly difficult for us to effectively respond.
AI also presents emerging ethical issues, and if our use of AI becomes controversial, we may experience brand or reputational harm, competitive harm or legal liability. For example, with the increased use of AI and social media, adverse publicity, even if unfounded, can be disseminated quickly and broadly without context, making it increasingly difficult for us to effectively respond.
In certain instances, other air carriers are operating scheduled service with a business model that relies on the FAA Part 135, a regulatory environment that is generally less stringent than the rules applicable to our airline and similar airlines that operate under FAA Part 121 and which provides those airlines certain competitive advantages that Part 121 airlines cannot replicate.
In certain instances, other air carriers operate scheduled service with a business model that relies on FAA Part 135, a regulatory environment that is generally less stringent than the rules applicable to our airline and similar airlines that operate under FAA Part 121, and which provides those airlines certain competitive advantages that Part 121 airlines cannot replicate.
In particular, the COVID-19 pandemic severely impacted the demand for international travel for a prolonged period, and resulted in the imposition of significant governmental restrictions on commercial air service to or from certain regions. We responded by temporarily suspending a significant portion of our long-haul international flights and delaying the introduction of certain new long-haul international routes.
For example, the COVID-19 pandemic severely impacted the demand for international travel for a prolonged period, and resulted in the imposition of significant governmental restrictions on commercial air service to or from certain regions. We responded by temporarily suspending a significant portion of our long-haul international flights and delaying the introduction of certain new long-haul international routes.
For example, we maintain certain letters of credit as well as insurance- and surety-related agreements under which counterparties may require collateral, including cash collateral. The loss of key personnel who we depend on to operate our business, or the inability to attract, develop and retain additional qualified personnel could adversely affect our business.
For example, we maintain certain letters of credit as well as insurance- and surety-related agreements under which counterparties may require collateral, including cash collateral. The loss of key personnel whom we depend on to operate our business, or the inability to attract, develop and retain additional qualified personnel could adversely affect our business.
Additionally, growing recognition among consumers of the dangers of climate change may mean some customers choose to fly less frequently or fly on an airline they perceive as operating in a manner that produces fewer GHG emissions. Business customers may choose to use alternatives to travel, such as virtual meetings and workspaces.
Additionally, growing recognition among consumers of the risks of climate change may mean some customers choose to fly less frequently or fly on an airline they perceive as operating in a manner that produces fewer GHG emissions. Business customers may choose to use alternatives to travel, such as virtual meetings and workspaces.
These agreements are generally subject to termination after notice by the third-party service provider. We are also at risk should one of these service providers cease operations, and there is no guarantee that we could replace these providers on a timely basis with comparably priced providers, or at all.
These agreements are generally subject to termination after notice by the third-party service provider. We are also at risk should one of these service providers cease operations temporarily or permanently, and there is no guarantee that we could replace these providers on a timely basis with comparably priced providers, or at all.
Additionally, such credit card processing companies may require cash or other collateral reserves to be established. These holdback requirements can be implemented at the discretion of the credit card processing companies upon the occurrence of specific events, including material adverse changes in our financial condition or the triggering of a liquidity covenant.
Additionally, those credit card processing companies may require cash or other collateral reserves to be established. These holdback requirements can be implemented at the discretion of the credit card processing companies upon the occurrence of specific events, including material adverse changes in our financial condition or the triggering of a liquidity covenant.
There can be no assurance that any mitigating actions we take in response will be sufficient to avert a deterioration in our business, financial condition and results of operations. As a result of these or other conditions beyond our control, our results of operations could be volatile and subject to rapid and unexpected change.
There can be no assurance that any mitigating actions we take in response will be sufficient to avert a deterioration in our business, financial condition and results of operations. As a result of these or other conditions beyond our control, our results of operations could be volatile and subject to rapid and unexpected changes.
See “ We rely heavily on technology and automated systems, including artificial intelligence (AI), to operate our business, and any failure of these technologies or systems could harm our business, results of operations and financial condition.” The FAA also exercises comprehensive regulatory authority over nearly all technical aspects of our operations.
See “ We rely heavily on technology and automated systems, including AI, to operate our business and any failure of these technologies or systems could harm our business, results of operations and financial condition.” The FAA also exercises comprehensive regulatory authority over nearly all technical aspects of our operations.
Similarly, we depend on the ability of our key commercial partners, including AAdvantage partners, other business partners, our regional carriers, distribution partners and technology vendors, to conduct their businesses in a manner that complies with applicable security standards and assures their ability to perform on a timely basis.
Similarly, we depend on the ability of our key commercial partners, including AAdvantage partners, other business partners, our regional carriers, distribution partners and technology vendors, to conduct their businesses in a manner that complies with applicable security standards and ensures their ability to perform on a timely basis.
Disruptions to capital markets, shortages of pilots, mechanics and other skilled personnel and adverse economic conditions in general have subjected certain of these third-party regional operators to significant financial pressures, which have in the past and may in the future lead to bankruptcies among these operators.
Disruptions to capital markets, labor difficulties, shortages of pilots, mechanics and other skilled personnel and adverse economic conditions in general have subjected certain of these third-party regional operators to significant financial pressures, which have in the past and may in the future lead to bankruptcies among these operators.
Our current policy is not to enter into transactions to hedge our fuel consumption, although we review this policy from time to time based on market conditions and other factors. Accordingly, as of December 31, 2024, we did not have any fuel hedging contracts outstanding to hedge our fuel consumption.
Our current policy is not to enter into transactions to hedge our fuel consumption, although we review this policy from time to time based on market conditions and other factors. Accordingly, as of December 31, 2025, we did not have any fuel hedging contracts outstanding to hedge our fuel consumption.
Depending on numerous factors applicable at the time we seek capital, many of which are out of our control, such as the state of the domestic and global economies, the capital and credit markets’ view of our prospects and the airline industry in general, and the general availability of debt and equity capital, the financing or other capital resources that we will need may not be available to us, or may be available only on onerous terms and conditions.
Depending on numerous factors applicable at the time we seek capital, many of which are out of our control, such as the state of the domestic and global economies, the capital and credit markets’ view of our prospects and the airline industry in general, prevailing interest rates, and the general availability of debt and equity capital, the financing or other capital resources that we will need may not be available to us, or may be available only on onerous terms and conditions.
Our competitors include other major domestic airlines and foreign, regional and new entrant airlines, as well as joint ventures formed by some of these airlines, many of which have greater financial or other resources and/or lower cost structures than ours, as well as other forms of transportation, such as rail and private automobiles or alternatives to 24 Table of Contents commuting or business travel including remote or flexible working policies and communication alternatives such as videoconferencing.
Our competitors include other major domestic airlines and foreign, regional and new entrant airlines, as well as joint ventures formed by some of these airlines, many of which have greater financial or other resources and/or lower cost structures than ours, as well as other forms of transportation, such as rail and private automobiles or alternatives to commuting or business travel including remote or flexible working policies and communication alternatives such as videoconferencing.
Other mergers and other forms of airline partnerships, including regulatory approvals such as antitrust immunity grants, may take place and may not involve us as a participant, or could result in unforeseen impacts on the industry generally and our company in particular.
Other mergers and other forms of airline partnerships, including regulatory approvals such as antitrust immunity grants, may take place and may not involve us, or could result in unforeseen impacts on the industry generally and our company in particular.
In addition, we have used certain of our branding and AAdvantage program intellectual property as collateral for various financings, including the AAdvantage Financing, which contain covenants that impose restrictions on the use of such intellectual property and, in the case of the AAdvantage Financing, on certain amendments or changes to our AAdvantage program.
In addition, we use certain of our branding and intellectual property as collateral for various financings, including the AAdvantage Financing, which contain covenants that impose restrictions on the use of such intellectual property and, in the case of the AAdvantage Financing, on certain amendments or changes to our AAdvantage program.
Quantitative and Qualitative Disclosures About Market Risk – “Aircraft Fuel.” In addition, as part of our emissions reduction goals, we and other airlines have publicly announced long-term targets for the increased use of SAF in our fleet.
Quantitative and Qualitative Disclosures About Market Risk – “Aircraft Fuel.” In addition, as part of our emissions reduction goals, we and other airlines have publicly announced long-term targets for the increased use of SAF in our operation.
There has also been a noticeable uptick in class actions in the U.S. wherein plaintiffs have utilized a variety of laws, including state wiretapping laws, in relation to companies’ use of tracking technologies, such as cookies and pixels.
There has also been a noticeable increase in class actions in the U.S. wherein plaintiffs have utilized a variety of laws, including state wiretapping laws, in relation to companies’ use of tracking technologies, such as cookies and pixels.
Our operations at these airports generally require the allocation of slots or similar regulatory authority. In addition to slot restrictions, operations at DCA and LGA are also limited based on a so-called “perimeter rule” which generally limits the stage length of the flights that can be operated from those airports to 1,250 and 1,500 miles, respectively.
Our operations at these airports generally require the allocation of slots or similar regulatory authority. In 45 Table of Contents addition to slot restrictions, operations at DCA and LGA are also limited based on a so-called “perimeter rule” which generally limits the stage length of the flights that can be operated from those airports to 1,250 and 1,500 miles, respectively.
A significant interruption or disruption in service at one of our hubs, gateways or other airports where we have a significant presence, resulting from air traffic control delays, weather conditions, natural disasters, growth constraints, performance by third-party service providers (such as electric utility or telecommunications providers), failure of computer systems, disruptions at airport facilities or other key facilities used by us to manage our operations (including as a result of social or environmental activism), labor relations, power supplies, fuel supplies, terrorist activities, or otherwise could result in the cancellation or delay of a significant portion of our flights and, as a result, could have a severe impact on our business, results of operations and financial condition.
A significant interruption or disruption in service at one of our hubs, gateways or other airports where we have a significant presence, resulting from air traffic control delays, weather conditions, natural disasters, cybersecurity incidents, growth constraints, performance by third-party service providers (such as electric utility or telecommunications providers), failure of computer systems, disruptions at airport facilities and equipment or other key facilities used by us to manage our operations (including as a result of social or environmental activism), labor relations, power supplies, fuel supplies, terrorist activities, or other reasons could result in the cancellation or delay of a significant portion of our flights and, as a result, could have a severe impact on our business, results of operations and financial condition.
DOT consumer rules, and rules promulgated by certain analogous agencies in other countries we serve, dictate procedures for many aspects of our customer’s journey, including at the time of ticket purchase, at the airport and onboard the aircraft.
DOT consumer rules, and rules promulgated by certain comparable agencies in other countries we serve, dictate procedures for many aspects of our customer’s journey, including at the time of ticket purchase, at the airport and onboard the aircraft.
In addition, we have used certain assets from our AAdvantage program as collateral for the AAdvantage Financing (defined in the accompanying notes to the consolidated financial statements to this Annual Report on Form 10-K), which contains covenants that impose restrictions on certain amendments or changes to certain of our AAdvantage program agreements provided as collateral under the AAdvantage Financing and other aspects of the AAdvantage program.
In addition, we have used certain assets from 26 Table of Contents our AAdvantage program as collateral for the AAdvantage Financing (defined in the accompanying notes to the consolidated financial statements to this Annual Report on Form 10-K), which contains covenants that impose restrictions on certain amendments or changes to certain of our AAdvantage program agreements provided as collateral under the AAdvantage Financing and other aspects of the AAdvantage program.
An important part of our strategy to expand our network has been to initiate or expand our commercial relationships with other airlines, such as by entering into global alliance, joint business and codeshare relationships, and, in certain instances, including China Southern Airlines, GOL and JetSMART, by making an equity investment in another airline in connection with initiating or expanding such a commercial relationship.
An important part of our strategy to expand our network has been to initiate or expand our commercial relationships with other airlines, such as by entering into global alliance, joint business and codeshare relationships, and, in certain instances, including China Southern Airlines, GOL and JetSMART, by agreeing to make an equity investment in another airline in connection with initiating or expanding such a commercial relationship.
In addition, the governments of foreign countries in which we operate impose on U.S. airlines, including us, various fees and taxes, and these assessments have been increasing in number and amount in recent years. Moreover, we are obligated to collect a federal excise tax, commonly referred to as the “ticket tax,” on domestic and international air transportation.
In addition, the governments of foreign countries in which we operate impose on U.S. airlines, including us, various fees and taxes, and these assessments have been increasing in number and amount. Moreover, we are obligated to collect a federal excise tax, commonly referred to as the “ticket tax,” on domestic and certain international air transportation.
Additionally, there is a risk of system failures, disruptions or vulnerabilities compromising the confidentiality of personal data and intellectual property, or the integrity or availability of training content, input content and prompts, as well as generated content, including disinformation and deepfakes.
Further, there is a risk of system failures, disruptions or vulnerabilities compromising the confidentiality of personal data and intellectual property, or the integrity or availability of training content, input content and prompts, as well as generated content, including disinformation and deepfakes.
In anticipation of both the exit of the UK from the EU, commonly referred to as Brexit, and the expiry of the EC commitments in July 2020, the CMA, in October 2018, opened an investigation into the transatlantic joint business.
In anticipation of both the exit of the UK from the EU, commonly referred to as Brexit, and the expiration of the EC commitments in July 2020, the CMA, in October 2018, opened an investigation into the transatlantic joint business.
Bilateral and multilateral agreements among the U.S. and various foreign governments of countries we serve but which are not covered by an open skies treaty are subject to periodic renegotiation.
In addition, bilateral and multilateral agreements among the U.S. and various foreign governments of countries we serve but which are not covered by an open skies treaty are subject to periodic renegotiation.
We are subject to a number of increasingly stringent federal, state, local and foreign laws, regulations and ordinances relating to the protection of human health and the environment and noise reduction, including those relating to emissions to the air, discharges to land and surface and subsurface waters, safe drinking water, and the management of hazardous substances, oils and waste materials.
We are subject to a number of increasingly stringent federal, state, local and foreign laws, regulations and ordinances relating to the protection of human health and the environment and noise reduction, including those relating to emissions 42 Table of Contents to the air, discharges to land and surface and subsurface waters, safe drinking water, and the management of hazardous substances, oils and waste materials.
Due to our reliance on third parties to provide these essential services, we are subject to the risk of disruptions to their operations, which has in the past and may in the future result from many of the same risk factors disclosed in this report, such as the impact of adverse economic conditions, the inability of third parties to hire or retain skilled personnel, including in particular pilots and mechanics, and other risk factors, such as an out-of-court or bankruptcy restructuring of any of our regional operators.
Due to our reliance on third parties to provide these essential services, we are subject to the risk of disruptions to their operations, which has in the past and may in the future result from many of the same risk factors disclosed in this report, such as the impact of adverse economic conditions, the inability of third parties to hire or retain skilled personnel, and other risk factors, such as an out-of-court or bankruptcy restructuring of any of our regional operators.
Because of the amount of fuel needed to operate our business, even a relatively small increase or decrease in the price of fuel can have a material effect on our operating results and liquidity.
Because of the very large amount of fuel needed to operate our business, even a relatively small increase or decrease in the price of fuel can have a material effect on our operating results and liquidity.
Any litigation, claims or enforcement actions to which we are or become a party could potentially result in substantial monetary damages or fines, 43 Table of Contents and negative reputational impacts that cause us to lose existing or future customers, which could materially adversely affect our business, results of operations and financial condition.
Any litigation, claims or enforcement actions to which we are or become a party could potentially result in substantial monetary damages or fines, and negative reputational impacts that cause us to lose existing or future customers, which could materially adversely affect our business, results of operations and financial condition.
We face competition in forming and maintaining these commercial relationships since there are a limited number of potential arrangements and other airlines are looking to enter into similar relationships, and our inability to form or maintain these relationships, or inability to form as many of these relationships as our competitors, may have an adverse effect on our business.
We face competition in forming and maintaining these commercial relationships since there are a limited number of potential 35 Table of Contents arrangements and other airlines are looking to enter into similar relationships, and our inability to form or maintain these relationships, or inability to form as many of these relationships as our competitors, may have an adverse effect on our business.
We can provide no 31 Table of Contents assurance that a material impairment loss of tangible or intangible assets will not occur in a future period; we have previously incurred significant impairment charges associated with our decision to retire certain aircraft as a result of the severe decline in demand for air travel due to the COVID-19 pandemic, and the risk of future material impairments remains uncertain.
We can provide no assurance that a material impairment loss of tangible or intangible assets will not occur in a future period; for example, we have previously incurred significant impairment charges associated with our decision to retire certain aircraft as a result of the severe decline in demand for air travel due to the COVID-19 pandemic, and the risk of future material impairments remains uncertain.
Any new or enhanced requirements resulting from the FAA Authorization Renewal, including any new fees, costs we may be required to incur to comply with new rules and compensation or other penalties we may be required to pay for violations of such rules, have the potential to increase our costs or adversely impact our operation.
Any new or enhanced requirements resulting from the FAA Authorization Renewal, including any new fees, costs we may be required to incur to comply with new rules and compensation or other penalties we may be required to pay for violations of such rules, have the potential to increase our 37 Table of Contents costs or adversely impact our operation.
The ATC system’s inability to manage existing travel demand, including due to significant staffing shortages, has led government agencies to implement short-term capacity constraints during peak travel periods or adverse weather conditions in certain markets, resulting in delays and disruptions of air traffic.
The ATC system’s inability to manage existing travel demand, including due to staffing shortages, has led government agencies to implement short-term capacity constraints during peak travel periods or adverse weather conditions in certain markets, causing delays and disruptions of air traffic.
Our business plan contemplates continued significant investments related to our fleet, improving the experience of our customers and updating our facilities. Significant capital resources will be required to execute this plan.
Our business plan contemplates continued significant investments related to our fleet, improving the experience of our customers, updating our facilities and deploying technology. Significant capital resources will be required to execute this plan.
To the extent the interest rates applicable to our floating rate debt remain elevated or increase, our interest expense will increase, in which event we may have difficulties making interest payments and funding our other fixed costs, and our available cash flow for general corporate requirements may be adversely affected.
To the extent the interest rates applicable to our floating rate debt increase, our interest expense will increase, in which event we may have difficulties making interest payments and funding our other fixed costs, and our available cash flow for general corporate requirements may be adversely affected.
In addition, any such incident, accident, catastrophe or action involving our personnel, one of our aircraft (or personnel and aircraft of our regional operators and our codeshare partners), or a type of aircraft in our fleet could create an adverse public perception, which could harm our reputation, result in air travelers being reluctant to fly on our aircraft or those of our regional operators or codeshare partners, and adversely impact our business, results of operations and financial condition.
In addition, any such future incident, accident, catastrophe or action involving our personnel, one of our aircraft (or personnel and aircraft of our regional operators, marketing alliance, joint business and codeshare partners), or a type of aircraft in our fleet could create an adverse public perception, which could harm our reputation, result in air travelers being reluctant to fly on our aircraft or those of our regional operators, marketing alliance, joint business or codeshare partners, and adversely impact our business, results of operations and financial condition.
During periods of reduced demand for air travel, such as during the COVID-19 pandemic, we presently and may in the future rely on exemptions granted by applicable authorities from the requirement that we continuously use certain slots, gates and routes or risk having such operating rights revoked, and depending on the applicable authority these exemptions can vary in the way they are structured and applied.
During periods of reduced demand for air travel, we presently and may in the future rely on exemptions granted by applicable authorities from the requirement that we continuously use certain slots, gates and routes or risk having such operating rights revoked, and depending on the applicable authority these exemptions can vary in the way they are structured and applied.
At times in the past, we were not able to increase our fares to offset fully the effect of increases in fuel costs, and we may not be able to do so in the future. Our aviation fuel purchase contracts generally do not provide meaningful price protection against increases in fuel costs.
At times in the past, we were not able to increase our fares to offset fully the effect of increases in fuel costs, and we may not be able to do so in the future. 36 Table of Contents Our aviation fuel purchase contracts generally do not provide meaningful price protection against increases in fuel costs.
We may also experience delivery delays with respect to components or equipment that we have contracted to 40 Table of Contents purchase from third-party suppliers (so-called “buyer-furnished equipment”) and required for the outfitting of our aircraft.
We may also experience delivery delays with respect to components or equipment that we have contracted to purchase from third-party suppliers (so-called “buyer-furnished equipment”) and required for the outfitting of our aircraft.
If our financial condition worsens, provisions in our credit card processing and other commercial agreements may adversely affect our liquidity. We have agreements with companies that process customer credit card transactions for the sale of air travel and other services.
I f our financial condition worsens, provisions in our credit card processing and other commercial agreements may adversely affect our liquidity. We have agreements with companies that process customer credit card transactions for the sale of air travel and other services.
The development of generative AI technologies is complex, with practical and competitive challenges in achieving desired accuracy, efficiency and reliability. Generative AI training content, algorithms, models, software and other related systems may have limitations, including biases, errors or inability to process or restrict certain data types or scenarios.
Additionally, the development of generative AI technologies is complex, with practical and competitive challenges in achieving desired accuracy, efficiency and reliability. Generative AI training 31 Table of Contents content, algorithms, models, software and other related systems may have limitations, including biases, errors or inability to process or restrict certain data types or scenarios.
The market price of AAG common stock has fluctuated substantially in the past, and may fluctuate substantially in the future, due to a variety of factors, many of which are beyond our control, including: • the effects of external events, such as global health epidemics, on our business or the U.S. and global economies; • macro-economic conditions, including the price of fuel; • changes in market values of airline companies as well as general market conditions; • our operating and financial results failing to meet the expectations of securities analysts or investors; • changes in financial estimates or recommendations by securities analysts; • changes in our level of outstanding indebtedness and other obligations; • changes in our credit ratings; • material announcements by us or our competitors; 47 Table of Contents • expectations regarding any future capital deployment program, including share repurchase programs and any future dividend payments that may be declared by our Board of Directors, or any subsequent determination to cease repurchasing stock or paying dividends; • new regulatory pronouncements and changes in regulatory guidelines; • general and industry-specific economic conditions; • changes in our key personnel; • inclusion of our common stock in broad market indexes favored by passive investors; • investor preferences to invest in certain sectors, including large technology companies in lieu of industrial or transportation companies; • public or private sales of a substantial number of shares of AAG common stock or issuances of AAG common stock upon the exercise or conversion of restricted stock unit awards, stock appreciation rights, or other securities that may be issued from time to time, including warrants we have issued in connection with our receipt of funds under the Coronavirus Aid, Relief, and Economic Security Act (CARES Act), Subtitle A of Title IV of Division N of the Consolidated Appropriations Act, 2021 (the PSP Extension Law) and the American Rescue Plan Act of 2021 (ARP); • increases or decreases in reported holdings by insiders or other significant stockholders; • fluctuations in trading volume; and • technical factors in the public trading market for our stock that may produce price movements that may or may not comport with macro, industry or company-specific fundamentals, including, without limitation, the sentiment of retail investors (including as may be expressed on financial trading and other social media sites), the amount and status of short interest in our securities, access to margin debt, trading in options and other derivatives on our common stock and any related hedging and other technical trading factors.
The market price of AAG common stock has fluctuated substantially in the past, and may fluctuate substantially in the future, due to a variety of factors, many of which are beyond our control, including: • the effects of external events, such as global health epidemics, on our business or the U.S. and global economies; • macro-economic conditions, including the price of fuel; • changes in market values of airline companies as well as general market conditions; • our operating and financial results failing to meet the expectations of securities analysts or investors; • changes in financial estimates or recommendations by securities analysts; • changes in our level of outstanding indebtedness and other obligations; • changes in our credit ratings; • material announcements by us or our competitors; • new regulatory pronouncements and changes in regulatory guidelines; • general and industry-specific economic conditions; • changes in our key personnel; • inclusion of our common stock in broad market indexes favored by passive investors; • investor preferences to invest in certain sectors, including large technology companies in lieu of industrial or transportation companies; • public or private sales of a substantial number of shares of AAG common stock or issuances of AAG common stock upon the exercise or conversion of restricted stock unit awards, stock appreciation rights, or other securities that may be issued from time to time, including warrants we have issued in connection with our receipt of funds under the Coronavirus Aid, Relief, and Economic Security Act (CARES Act), Subtitle A of Title IV of Division N of the Consolidated Appropriations Act, 2021 (the PSP Extension Law) and the American Rescue Plan Act of 2021 (ARP); 47 Table of Contents • increases or decreases in reported holdings by insiders or other significant stockholders; • fluctuations in trading volume; and • technical factors in the public trading market for our stock that may produce price movements that may or may not comport with macro, industry or company-specific fundamentals, including, without limitation, the sentiment of retail investors (including as may be expressed on financial trading and other social media sites), the amount and status of short interest in our securities, access to margin debt, trading in options and other derivatives on our common stock and any related hedging and other technical trading factors.
Should partners not make available enough inventory within their cabins for 26 Table of Contents our members, the attractiveness of our program may be decreased, potentially impacting customer loyalty and program revenue. We may also be impacted by regulations affecting certain of our major commercial partners, including our co-branded credit card partners or our loyalty program.
Should partners not make available enough inventory within their cabins for our members, the attractiveness of our program may be decreased, potentially impacting customer loyalty and program revenue. We may also be impacted by regulations affecting certain of our major commercial partners, including our co-branded credit card partner, or our loyalty program.
Certain existing or potential future agreements pertain to SAF production from facilities that are planned but not yet financed, and which may utilize technology that has not been proven at commercial scale. There is no assurance that these facilities will be built or that they will meet contracted production timelines and volumes.
Certain existing or potential future agreements pertain to SAF production from facilities that are planned but not yet financed and may utilize technology that has not been proven on a commercial scale. There is no assurance that these facilities will be built or that they will meet contracted production timelines and volumes.
Furthermore, our efforts to regain travel revenue share, including corporate and travel agency revenue share, may not succeed and competitive pressures and shifts in corporate travel preferences could impede our ability to recapture this revenue, negatively affecting our business strategy and financial results. We will need to obtain sufficient financing or other capital to operate successfully.
Furthermore, our efforts to increase travel revenue share, including corporate and travel agency revenue share, may not succeed and competitive pressures and shifts in corporate travel preferences could impede our ability to grow this revenue, negatively affecting our business strategy and financial results. We will need to obtain sufficient financing or other capital to operate successfully.
These agreements allow these credit card processing companies, under certain conditions (including, with respect to certain agreements, our failure to maintain certain levels of liquidity), to hold an amount of our cash (referred to as a holdback) equal to some or all of the advance ticket sales that have been processed by that credit card processor, but for which we have not yet provided the air transportation.
These agreements allow these credit card processing companies, under certain conditions (including, for certain agreements, our failure to maintain certain levels of liquidity), to hold an amount of our cash (referred to as a holdback) equal to some or all of the advance ticket sales that have been processed by that credit card processor, but for which we 23 Table of Contents have not yet provided the air transportation.

… 278 more changes not shown on this page.

Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

7 edited+0 added−2 removed8 unchanged
Biggest changeOur cybersecurity risk management program includes: • risk assessments designed to help identify material cybersecurity risks to our critical systems, information, and our broader enterprise information technology environment; • a cybersecurity team principally responsible for managing our (1) cybersecurity risk assessment processes, (2) security controls, (3) vulnerability management program and (4) detection and response to cybersecurity incidents; • the use of external service providers, where appropriate, to assess, test or otherwise assist with aspects of our security controls; 50 Table of Contents • policies, procedures and standards that are utilized to outline expectations, guidelines and best practices for managing cybersecurity risks; • cybersecurity awareness training for our employees, incident response personnel and senior management; • a cybersecurity incident response plan that includes procedures for responding to cybersecurity incidents; and • a third-party risk management process for critical information technology service providers, suppliers, and vendors.
Biggest changeOur cybersecurity risk management program includes: • risk assessments designed to help identify material risks from cybersecurity threats to our critical systems, information, and our broader enterprise information technology environment; • a cybersecurity team principally responsible for managing our (1) cybersecurity risk assessment processes, (2) security controls, (3) vulnerability management program and (4) detection and response to cybersecurity incidents; • the use of external service providers, where appropriate, to assess, test or otherwise assist with aspects of our security controls; • policies, procedures and standards that are utilized to outline expectations, guidelines and best practices for managing cybersecurity risks; • cybersecurity awareness training for our employees, incident response personnel and senior management; • a cybersecurity incident response plan that (1) includes procedures for responding to cybersecurity incidents and (2) is periodically tested through exercises; and • a third-party risk management process for critical information technology service providers, suppliers, and vendors. 50 Table of Contents We are constantly assessing our environment for cybersecurity threats, and we face risks from cybersecurity threats that, if realized, are reasonably likely to materially affect us, including our operations, business strategy, results of operations or financial condition.
The Audit Committee oversees management’s implementation of our cybersecurity risk management program. The Audit Committee receives quarterly reports from management on our cybersecurity risks. In addition, management updates the Audit Committee, as necessary, regarding any material cybersecurity incidents, as well as certain incidents with lesser impact potential.
In turn, the Audit Committee oversees management’s implementation of our cybersecurity risk management program. The Audit Committee receives quarterly reports from management on our cybersecurity risks. In addition, management updates the Audit Committee, as necessary, regarding any material cybersecurity incidents, as well as certain incidents with lesser impact potential.
Risk Factors – “ Evolving data privacy requirements (in particular, compliance with applicable federal, state and foreign laws relating to handling of personal information about individuals) could increase our costs, and any significant data privacy incident could disrupt our operations, harm our reputation, expose us to legal risks and otherwise materially adversely affect our business, results of operations and financial condition. ” Cybersecurity Governance Our Board of Directors consider cybersecurity risk as part of its risk oversight function and has delegated to the Audit Committee oversight of cybersecurity and other information technology risks.
Risk Factors – “ Evolving data privacy requirements (in particular, compliance with applicable federal, state and foreign laws relating to handling of personal information about individuals) could increase our costs, and any significant data privacy incident could disrupt our operations, harm our reputation, expose us to legal risks and otherwise materially adversely affect our business, results of operations and financial condition. ” Cybersecurity Governance Our Board of Directors considers cybersecurity risk as part of its risk oversight function and has delegated to the Audit Committee oversight of cybersecurity and other information technology risks.
The Audit Committee reports to the full Board of Directors regarding its activities, including those related to cybersecurity. The full Board of Directors also receives periodic briefings from management on our cyber risk management program.
The Audit Committee reports to the full Board of Directors regarding its activities, including those related to cybersecurity. The full Board of Directors also receives periodic briefings from management on our cybersecurity risk management program.
Board of Directors members receive presentations on cybersecurity topics from a combination of our CDIO, CISO, Deputy General Counsel, internal security staff, external counsel or external experts, as part of the Board of Director’s continuing education on topics that impact public companies.
Board of Director members receive presentations on cybersecurity topics from a combination of our CDIO, CISO, Deputy General Counsel – Chief Privacy and Data Protection Officer, internal security staff, external counsel or external experts, as part of the Board of Director’s continuing education on topics that impact public companies.
Our management team, including our CDIO, CISO, Vice President and Deputy General Counsel – Chief Privacy and Data Protection Officer and additional members of the ECRG are responsible for assessing and managing our material risks from cybersecurity threats.
Our management team, including our CDIO, CISO, Deputy General Counsel – Chief Privacy and Data Protection Officer and additional members of the ECRG are responsible for assessing and managing our material risks from cybersecurity threats. The team has primary responsibility for our overall cybersecurity risk management program and supervises both our internal cybersecurity personnel and our retained external cybersecurity consultants.
Additionally, certain leaders and personnel within the cybersecurity organization hold industry certifications, such as Certified Information Systems Security Professional or Certified Information Security Manager.
Collectively, our management team has extensive information technology experience, as well as cybersecurity incident response, compliance, oversight, and program management experience. Additionally, certain leaders and personnel within the cybersecurity organization hold industry certifications, such as Certified Information Systems Security Professional or Certified Information Security Manager.
Removed
We are constantly assessing our environment for cybersecurity threats, and we face risks from cybersecurity threats that, if realized, are reasonably likely to materially affect us, including our operations, business strategy, results of operations or financial condition.
Removed
The team has primary responsibility for our overall cybersecurity risk management program and supervises both our internal cybersecurity personnel and our retained external cybersecurity consultants. Collectively, our management team has extensive information technology experience, as well as cybersecurity incident response, compliance, oversight, and program management experience.

Item 2. Properties

Properties — owned and leased real estate

7 edited+1 added−1 removed5 unchanged
Biggest changeMainline As of December 31, 2024, American’s mainline fleet consisted of the following aircraft: Average Seating Capacity Average Age (Years) Owned Leased Total Airbus A319 128 20.7 21 112 133 Airbus A320 150 23.7 11 37 48 Airbus A321 184 12.4 164 54 218 Airbus A321neo 195 3.9 48 35 83 Boeing 737-800 172 15.1 136 167 303 Boeing 737-8 MAX 172 3.8 33 33 66 Boeing 777-200ER 273 24.0 44 3 47 Boeing 777-300ER 304 10.8 18 2 20 Boeing 787-8 234 6.1 20 17 37 Boeing 787-9 285 7.2 17 5 22 Total 13.8 512 465 977 Regional As of December 31, 2024, the fleet of our wholly-owned and third-party regional carriers operating as American Eagle consisted of the following aircraft: Average Seating Capacity Owned Leased Owned or Leased by Third Party Regional Carrier Total Operating Regional Carrier Number of Aircraft Operated Bombardier CRJ 200 50 — — 40 40 Air Wisconsin 40 Bombardier CRJ 700 65 57 4 71 132 SkyWest 71 PSA 61 Total 132 Bombardier CRJ 900 (1) 76 80 — — 80 PSA 80 Embraer 170 65 6 37 3 46 Envoy 43 Republic 3 Total 46 Embraer 175 76 124 — 96 220 Envoy 124 Republic 76 SkyWest 20 Total 220 Embraer 145 (1) 50 67 — — 67 Piedmont 67 Total 334 41 210 585 585 52 Table of Contents (1) Excluded from the total operating aircraft count above are seven regional aircraft in temporary storage as follows: five owned Embraer 145 and two owned Bombardier CRJ 900.
Biggest changeMainline As of December 31, 2025, American’s mainline fleet consisted of the following aircraft: Average Seating Capacity Average Age (Years) Owned Leased Total Airbus A319 128 21.7 21 111 132 Airbus A320 150 24.7 12 36 48 Airbus A321 184 13.4 164 54 218 Airbus A321neo 195 4.8 49 35 84 Airbus A321XLR (1) 155 0.1 2 — 2 Boeing 737-800 172 16.1 138 165 303 Boeing 737-8 MAX 172 3.7 56 33 89 Boeing 777-200ER 273 25.0 44 3 47 Boeing 777-300ER 304 11.8 18 2 20 Boeing 787-8 234 7.1 20 17 37 Boeing 787-9 271 5.6 23 10 33 Total 14.3 547 466 1,013 (1) Excluded from the total operating aircraft count above are three owned Airbus A321XLR held in temporary storage as of December 31, 2025. 52 Table of Contents Regional As of December 31, 2025, the fleet of our wholly-owned and third-party regional carriers operating as American Eagle consisted of the following aircraft: Average Seating Capacity Owned Leased Owned or Leased by Third Party Regional Carrier Total Operating Regional Carrier Number of Aircraft Operated Bombardier CRJ700 65 57 3 62 122 SkyWest 62 PSA 60 Total 122 Bombardier CRJ900 (1) 76 86 — — 86 PSA 86 Embraer E170 65 6 37 13 56 Envoy 43 Republic 13 Total 56 Embraer E175 76 136 — 96 232 Envoy 136 Republic 76 SkyWest 20 Total 232 Embraer ERJ145 50 71 — — 71 Piedmont 71 Total 356 40 171 567 567 (1) Excluded from the total operating aircraft count above are four owned Bombardier CRJ900 held in temporary storage as of December 31, 2025.
LEGAL PROCEEDINGS See Note 11 to AAG’s Consolidated Financial Statements in Part II, Item 8A and Note 10 to American’s Consolidated Financial Statements in Part II, Item 8B for information on legal proceedings. ITEM 4. MINE SAFETY DISCLOSURES Not applicable. 53 Table of Contents PART II
LEGAL PROCEEDINGS See Note 11 to AAG’s Consolidated Financial Statements in Part II, Item 8A and Note 10 to American’s Consolidated Financial Statements in Part II, Item 8B for information on legal proceedings. ITEM 4. MINE SAFETY DISCLOSURES Not applicable. 54 Table of Contents PART II
Management’s Discussion and Analysis of Financial Condition and Results of Operations. Actual delivery dates are subject to change, which could be material, based on various potential factors including production delays by the manufacturer and regulatory concerns. In addition, we have committed to purchase 12 used Bombardier CRJ 900 aircraft which are scheduled to be delivered from 2025 through 2026.
Management’s Discussion and Analysis of Financial Condition and Results of Operations. Actual delivery dates are subject to change, which could be material, based on various potential factors, including production delays by the equipment manufacturers and regulatory concerns. In addition, we have committed to purchase four used Bombardier CRJ900 aircraft which are scheduled to be delivered in 2026.
We also have agreements for 52 spare engines to be delivered in 2025 and beyond. We intend to finance future aircraft deliveries and option exercises using long-term debt.
We also have agreements for 47 spare engines to be delivered in 2026 and beyond. 53 Table of Contents We intend to finance future aircraft deliveries and option exercises using long-term debt.
Aircraft and Engine Purchase Commitments As of December 31, 2024, we had definitive purchase agreements for the acquisition of the following new aircraft (1) : 2025 2026 2027 2028 and Thereafter Total Airbus A320neo Family 7 28 35 78 148 Boeing 737 MAX Family 14 23 — 115 152 787 Family 8 4 8 10 30 Embraer 175 14 18 15 45 92 Total 43 73 58 248 422 (1) Delivery schedule represents our best estimate as of the date of this report as described in footnote (e) to the “ Contractual Obligations ” table in Part II, Item 7.
Aircraft and Engine Purchase Commitments As of December 31, 2025, we had definitive purchase agreements for the acquisition of the following new aircraft (1) : 2026 2027 2028 2029 and Thereafter Total Airbus A320 Family 20 21 39 75 155 Boeing 737 Family 14 — — 115 129 787 Family 1 3 5 10 19 Embraer E175 20 13 17 30 80 Total 55 37 61 230 383 (1) Delivery schedule represents our best estimate as of the date of this report as described in footnote (e) to the “ Contractual Obligations ” table in Part II, Item 7.
As of December 31, 2024, American Eagle operated 585 regional aircraft. During 2024, we increased our regional fleet by 29 aircraft, including the addition of 32 regional aircraft and net of 27 regional aircraft returned to service from temporary storage, offset by the return of 30 regional aircraft to third-party regional carriers.
During 2025, we decreased our regional fleet by 18 aircraft, including the return of 50 regional aircraft to third-party regional carriers and a lessor, offset by the addition of 30 regional aircraft and net of two regional aircraft returned to service from temporary storage.
ITEM 2. PROPERTIES Flight Equipment As of December 31, 2024, American operated a mainline fleet of 977 aircraft. During 2024, American accepted delivery of 12 mainline aircraft including seven Boeing 737-8 MAX and five Airbus A321neo. We are supported by our wholly-owned and third-party regional carriers that fly under capacity purchase agreements operating as American Eagle.
We are supported by our wholly-owned and third-party regional carriers that fly under capacity purchase agreements operating as American Eagle. As of December 31, 2025, American Eagle operated 567 regional aircraft.
Removed
In the fourth quarter of 2024, we decided to permanently park 43 Embraer 145 aircraft that were previously being held in temporary storage.
Added
ITEM 2. PROPERTIES Flight Equipment As of December 31, 2025, American operated a mainline fleet of 1,013 aircraft. During 2025, American accepted delivery of 40 mainline aircraft including 23 Boeing 737-8 MAX, 11 Boeing 787-9, five Airbus A321XLR and one Airbus A321neo and returned one leased mainline aircraft.

Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

2 edited+0 added−0 removed0 unchanged
Biggest changeItem 4. Mine Safety Disclosures 53 PART II Item 5. Market for American Airlines Group’s Common Stock, Related Stockholder Matters and Issuer Purchases of Equity Securities 54 Item 6. Selected Consolidated Financial Data 57 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 61 Item 7A. Quantitative and Qualitative Disclosures About Market Risk 78 Item 8A.
Biggest changeItem 4. Mine Safety Disclosures 54 PART II Item 5. Market for American Airlines Group’s Common Stock, Related Stockholder Matters and Issuer Purchases of Equity Securities 55 Item 6. Selected Consolidated Financial Data 58 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 62 Item 7A. Quantitative and Qualitative Disclosures About Market Risk 79 Item 8A.
Consolidated Financial Statements and Supplementary Data of American Airlines Group Inc. 80 Item 8B. Consolidated Financial Statements and Supplementary Data of American Airlines, Inc. 125
Consolidated Financial Statements and Supplementary Data of American Airlines Group Inc. 81 Item 8B. Consolidated Financial Statements and Supplementary Data of American Airlines, Inc. 126

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

10 edited+1 added−1 removed5 unchanged
Biggest changeRisk Factors – “ If we decide to make repurchases of or pay dividends on our common stock, we cannot guarantee that we will continue to do so or that such a capital deployment program will enhance long-term stockholder value. ” 55 Table of Contents Ownership Restrictions AAG’s Certificate of Incorporation and Bylaws provide that, consistent with the requirements of Subtitle VII of Title 49 of the United States Code, as amended (the Aviation Act), any persons or entities who are not a “citizen of the United States” (as defined under the Aviation Act and administrative interpretations issued by the DOT, its predecessors and successors, from time to time), including any agent, trustee or representative of such persons or entities (a non-citizen), shall not, in the aggregate, own (beneficially or of record) and/or control more than (a) 24.9% of the aggregate votes of all of our outstanding equity securities or (b) 49.0% of our outstanding equity securities.
Biggest changeAny future determination to enter into a share repurchase program will be at the discretion of the Board of Directors, subject to applicable legal limitations, and will depend upon our results of operations, financial condition, contractual restrictions and other factors deemed relevant by the Board of Directors. 56 Table of Contents Ownership Restrictions AAG’s Certificate of Incorporation, as amended, and Fifth Amended and Restated Bylaws (Bylaws) provide that, consistent with the requirements of Subtitle VII of Title 49 of the United States Code, as amended (the Aviation Act), any persons or entities who are not a “citizen of the United States” (as defined under the Aviation Act and administrative interpretations issued by the DOT, its predecessors and successors, from time to time), including any agent, trustee or representative of such persons or entities (a non-citizen), shall not, in the aggregate, own (beneficially or of record) and/or control more than (a) 24.9% of the aggregate votes of all of our outstanding equity securities or (b) 49.0% of our outstanding equity securities.
Risk Factors – “AAG’s Certificate of Incorporation, Bylaws and Tax Benefit Preservation Plan include provisions that limit voting and acquisition and disposition of our equity interests and specify an exclusive forum for certain stockholder disputes” and “ Our ability to utilize our NOLs and other carryforwards may be limited.” Also see AAG’s Certification of Incorporation and Bylaws, which are filed as Exhibits 3.1, 3.2 and 3.3 hereto, for the full text of the foregoing restrictions and AAG’s Description of the Registrants’ Securities Registered Pursuant to Section 12 of the Securities Exchange Act of 1934, which is filed as Exhibit 4.1 hereto, for a more detailed description. 56 Table of Contents
Risk Factors – “AAG’s Certificate of Incorporation, Bylaws and Tax Benefit Preservation Plan include provisions that limit voting and acquisition and disposition of our equity interests and specify an exclusive forum for certain stockholder disputes” and “ Our ability to utilize our NOLs and other carryforwards may be limited.” Also see AAG’s Certification of Incorporation and Bylaws, which are filed as Exhibits 3.1, 3.2 and 3.3 hereto, for the full text of the foregoing restrictions and AAG’s Description of the Registrants’ Securities Registered Pursuant to Section 12 of the Securities Exchange Act of 1934, which is filed as Exhibit 4.1 hereto, for a more detailed description. 57 Table of Contents
We are not obligated to continue a dividend for any fixed period, and the payment of dividends may be suspended or discontinued again at any time at our discretion and without prior notice. 54 Table of Contents Stock Performance Graph The following stock performance graph and related information shall not be deemed “soliciting material” or “filed” with the SEC, nor shall such information be incorporated by reference into any future filings under the Securities Act of 1933 or the Exchange Act, each as amended, except to the extent that we specifically incorporate it by reference into such filing.
We are not obligated to continue a dividend for any fixed period, and the payment of dividends may be suspended or discontinued again at any time at our discretion and without prior notice. 55 Table of Contents Stock Performance Graph The following stock performance graph and related information shall not be deemed “soliciting material” or “filed” with the SEC, nor shall such information be incorporated by reference into any future filings under the Securities Act of 1933 or the Exchange Act, each as amended, except to the extent that we specifically incorporate it by reference into such filing.
Dividends on Common Stock There were no cash dividend payments during the years ended December 31, 2024 and 2023. If we determine to make any dividends in the future, such dividends that may be declared and paid from time to time will be subject to market and economic conditions, applicable legal requirements and other relevant factors.
Dividends on Common Stock There were no cash dividend payments during the years ended December 31, 2025 and 2024. If we determine to make any dividends in the future, such dividends that may be declared and paid from time to time will be subject to market and economic conditions, applicable legal requirements and other relevant factors.
The comparison assumes $100 was invested on December 31, 2019 in our common stock and in each of the foregoing indices and assumes that all dividends were reinvested. The stock performance shown on the following graph represents historical stock performance and is not necessarily indicative of future stock price performance. 12/31/2019 12/31/2020 12/31/2021 12/31/2022 12/31/2023 12/31/2024 American Airlines Group Inc.
The comparison assumes $100 was invested on December 31, 2020 in our common stock and in each of the foregoing indices and assumes that all dividends were reinvested. The stock performance shown on the following graph represents historical stock performance and is not necessarily indicative of future stock price performance. 12/31/2020 12/31/2021 12/31/2022 12/31/2023 12/31/2024 12/31/2025 American Airlines Group Inc.
Information on securities authorized for issuance under our equity compensation plans will be set forth in our Proxy Statement for the 2025 Annual Meeting of Stockholders of American Airlines Group Inc. (the Proxy Statement) under the caption “Equity Compensation Plan Information” and is incorporated by reference into this Annual Report on Form 10-K.
Information on securities authorized for issuance under our equity compensation plans will be set forth in our Proxy Statement for the 2026 Annual Meeting of Stockholders of American Airlines Group Inc. (the Proxy Statement) under the caption “Equity Compensation Plan Information” and is incorporated by reference into this Annual Report on Form 10-K.
The following stock performance graph compares the cumulative total stockholder returns during the period from December 31, 2019 to December 31, 2024 of our common stock to the New York Stock Exchange (NYSE) ARCA Airline Index and the Standard and Poor’s Financial Services, LLC (S&P) 500 Stock Index.
The following stock performance graph compares the cumulative total stockholder returns during the period from December 31, 2020 to December 31, 2025 of our common stock to the New York Stock Exchange (NYSE) ARCA Airline Index and the Standard and Poor’s Financial Services, LLC (S&P) 500 Stock Index.
As of February 14, 2025, there were approximately 52,000 holders of record of our common stock. However, because many of the shares of our common stock are held by brokers and other institutions on behalf of stockholders, we believe there are substantially more beneficial holders of our common stock than record holders.
As of February 13, 2026, there were approximately 51,000 holders of record of our common stock. However, because many of the shares of our common stock are held by brokers and other institutions on behalf of stockholders, we believe there are substantially more beneficial holders of our common stock than record holders.
The Tax Benefit Preservation Plan was subsequently ratified by our stockholders at the 2022 Annual Meeting of Stockholders of AAG. AAG entered into Amendment No. 1 to the Tax Benefit Preservation Plan to extend the expiration date to October 29, 2027, subject to approval by stockholders by October 29, 2025.
AAG entered into Amendment No. 1 to the Tax Benefit Preservation Plan to extend the expiration date to October 29, 2027 and the amendment was approved by stockholders at the 2025 Annual Meeting of Stockholders of AAG on June 11, 2025.
(AAL) $ 100 $ 55 $ 63 $ 45 $ 48 $ 61 NYSE ARCA Airline Index (XAL) 100 76 74 48 62 61 S&P 500 Index (GSPC) 100 116 148 119 148 182 Purchases of Equity Securities by the Issuer and Affiliated Purchasers No repurchases of AAG common stock were made in 2024 or 2023.
(AAL) $ 100 $ 114 $ 81 $ 87 $ 111 $ 97 NYSE ARCA Airline Index (XAL) 100 98 64 82 81 85 S&P 500 Index (GSPC) 100 127 102 127 157 182 Purchases of Equity Securities by the Issuer and Affiliated Purchasers No repurchases of AAG common stock were made in 2025 or 2024.
Removed
Any future determination to enter into a share repurchase program will be at the discretion of the Board of Directors, subject to applicable legal limitations, and will depend upon our results of operations, financial condition, contractual restrictions and other factors deemed relevant by the Board of Directors. See Part I, Item 1A.
Added
The Tax Benefit Preservation Plan was subsequently ratified by our stockholders at the 2022 Annual Meeting of Stockholders of AAG.

Item 6. [Reserved]

Selected Financial Data — reserved (removed by SEC in 2021)

12 edited+1 added−3 removed6 unchanged
Biggest changeYear Ended December 31, 2024 2023 (In millions) Components of Total Special Items, Net: (1) Labor contract expenses (2) $ 605 $ 989 A330 fleet-related adjustments (3) (42) — Severance expenses 13 23 Other operating special items, net 34 (41) Mainline operating special items, net 610 971 Regional operating special items, net (4) 33 8 Operating special items, net 643 979 Debt refinancing and extinguishment (5) 16 280 Mark-to-market adjustments on equity investments, net (6) 8 82 Nonoperating special items, net 24 362 Pre-tax special items, net $ 667 $ 1,341 Reconciliation of Pre-Tax Income Excluding Net Special Items: Pre-tax income – GAAP $ 1,154 $ 1,121 Adjusted for: Pre-tax special items, net 667 1,341 Pre-tax income excluding net special items $ 1,821 $ 2,462 Reconciliation of Net Income Excluding Net Special Items: Net income – GAAP $ 846 $ 822 Adjusted for: Total special items, net 667 1,341 Adjusted for: Net tax effect of net special items (151) (304) Net income excluding net special items $ 1,362 $ 1,859 (1) See Note 2 to AAG’s Consolidated Financial Statements in Part II, Item 8A for further information on net special items.
Biggest changeYear Ended December 31, 2025 2024 (In millions) Components of Special Items, Net: (1) Litigation reserve adjustments $ 77 $ — Labor contract expenses (2) 31 605 Severance expenses 44 13 A330 fleet-related adjustments (3) — (42) Other operating special items, net 7 34 Mainline operating special items, net 159 610 Regional operating special items, net (4) 3 33 Operating special items, net 162 643 Mark-to-market adjustments on equity investments, net (5) (40) 8 Debt refinancing and extinguishment 22 16 Other nonoperating special items, net 18 — Nonoperating special items, net — 24 Pre-tax special items, net $ 162 $ 667 Reconciliation of Pre-Tax Income Excluding Net Special Items: Pre-tax income – GAAP $ 190 $ 1,154 Adjusted for: Pre-tax special items, net 162 667 Pre-tax income excluding net special items $ 352 $ 1,821 Reconciliation of Net Income Excluding Net Special Items: Net income – GAAP $ 111 $ 846 Adjusted for: Pre-tax special items, net 162 667 Adjusted for: Net tax effect of net special items (36) (151) Net income excluding net special items $ 237 $ 1,362 (1) See Note 2 to AAG’s Consolidated Financial Statements in Part II, Item 8A for further information on net special items.
ITEM 6. SELECTED CONSOLIDATED FINANCIAL DATA Selected Consolidated Financial Data of AAG The selected consolidated financial data presented below under the captions “Consolidated Statements of Operations data” and “Consolidated Balance Sheet data” for the years ended and as of December 31, 2024, 2023 and 2022, are derived from AAG’s audited consolidated financial statements.
ITEM 6. SELECTED CONSOLIDATED FINANCIAL DATA Selected Consolidated Financial Data of AAG The selected consolidated financial data presented below under the captions “Consolidated Statements of Operations data” and “Consolidated Balance Sheet data” for the years ended and as of December 31, 2025, 2024 and 2023, are derived from AAG’s audited consolidated financial statements.
Management uses these non-GAAP financial measures to evaluate our current operating performance and to allow for period-to-period comparisons. As net special items may vary from period-to-period in nature and amount, the adjustment to exclude net special items allows management an additional tool to understand our core operating performance.
Management uses these non-GAAP financial measures to evaluate our current operating performance and to allow for period-to-period comparisons. As net special items may vary from period-to-period in nature and amount, the adjustment to exclude net special items provides management with an additional tool to understand our core operating performance.
See Note 8 to American's Consolidated Financial Statements in Part II, Item 8B for further information on pension and postretirement benefits. 60 Table of Contents
See Note 8 to American's Consolidated Financial Statements in Part II, Item 8B for further information on pension and postretirement benefits. 61 Table of Contents
We are providing a reconciliation of reported non-GAAP financial measures to their comparable financial measures on a GAAP basis. 57 Table of Contents The following table presents the components of our total net special items and the reconciliation of pre-tax income and net income (GAAP measures) to pre-tax income excluding net special items and net income excluding net special items (non-GAAP measures).
We are providing a reconciliation of reported non-GAAP financial measures to their comparable financial measures on a GAAP basis. 58 Table of Contents The following table presents the components of our net special items and the reconciliation of pre-tax income and net income (GAAP measures) to pre-tax income excluding net special items and net income excluding net special items (non-GAAP measures).
The adjustment to exclude net special items and fuel allows management an additional tool to understand and analyze our non-fuel costs and core operating performance. Amounts may not recalculate due to rounding.
The adjustment to exclude net special items and fuel provides management with an additional tool to understand and analyze our non-fuel costs and core operating performance. Amounts may not recalculate due to rounding.
Year Ended December 31, 2024 2023 2022 (In millions) Consolidated Statements of Operations data: Total operating revenues $ 54,204 $ 52,784 $ 48,965 Total operating expenses 51,550 49,715 47,312 Operating income 2,654 3,069 1,653 Net income 1,262 1,188 338 Consolidated Balance Sheet data (at end of period): Total assets $ 68,755 $ 69,074 $ 70,324 Debt and finance leases 25,736 27,675 30,422 Pension and postretirement obligations (1) 2,262 3,148 2,900 Operating lease liabilities 7,008 7,708 7,961 Stockholder’s equity 8,234 6,577 5,593 (1) Substantially all defined benefit pension plans were frozen effective November 1, 2012.
Year Ended December 31, 2025 2024 2023 (In millions) Consolidated Statements of Operations data: Total operating revenues $ 54,626 $ 54,204 $ 52,784 Total operating expenses 53,115 51,550 49,715 Operating income 1,511 2,654 3,069 Net income 564 1,262 1,188 Consolidated Balance Sheet data (at end of period): Total assets $ 70,247 $ 68,755 $ 69,074 Debt and finance leases 25,259 25,736 27,675 Pension and postretirement obligations (1) 1,678 2,262 3,148 Operating lease liabilities 6,908 7,008 7,708 Stockholder’s equity 9,028 8,234 6,577 (1) Substantially all defined benefit pension plans were frozen effective November 1, 2012.
Year Ended December 31, 2024 2023 Reconciliation of CASM Excluding Net Special Items and Fuel: (In millions) Total operating expenses – GAAP $ 51,597 $ 49,754 Operating net special items (1) : Mainline operating special items, net (610) (971) Regional operating special items, net (33) (8) Aircraft fuel and related taxes (11,418) (12,257) Total operating expenses, excluding net special items and fuel $ 39,536 $ 36,518 (In millions) Total Available Seat Miles (ASM) 292,948 277,723 (In cents) CASM 17.61 17.92 Operating net special items per ASM (1) : Mainline operating special items, net (0.21) (0.35) Regional operating special items, net (0.01) — Aircraft fuel and related taxes per ASM (3.90) (4.41) CASM, excluding net special items and fuel 13.50 13.15 (1) See Note 2 to AAG’s Consolidated Financial Statements in Part II, Item 8A for further information on net special items. 59 Table of Contents Selected Consolidated Financial Data of American The selected consolidated financial data presented below under the captions “Consolidated Statements of Operations data” and “Consolidated Balance Sheet data” for the years ended and as of December 31, 2024, 2023 and 2022, are derived from American’s audited consolidated financial statements.
Year Ended December 31, 2025 2024 Reconciliation of CASM Excluding Net Special Items and Fuel: (In millions) Total operating expenses – GAAP $ 53,166 $ 51,597 Operating net special items (1) : Mainline operating special items, net (159) (610) Regional operating special items, net (3) (33) Aircraft fuel and related taxes (10,718) (11,418) Total operating expenses, excluding net special items and fuel $ 42,286 $ 39,536 (In millions) Total Available Seat Miles (ASM) 299,411 292,948 (In cents) CASM 17.76 17.61 Operating net special items per ASM (1) : Mainline operating special items, net (0.05) (0.21) Regional operating special items, net — (0.01) Aircraft fuel and related taxes per ASM (3.58) (3.90) CASM, excluding net special items and fuel 14.12 13.50 (1) See Note 2 to AAG’s Consolidated Financial Statements in Part II, Item 8A for further information on net special items. 60 Table of Contents Selected Consolidated Financial Data of American The selected consolidated financial data presented below under the captions “Consolidated Statements of Operations data” and “Consolidated Balance Sheet data” for the years ended and as of December 31, 2025, 2024 and 2023, are derived from American’s audited consolidated financial statements.
Year Ended December 31, 2024 2023 2022 (In millions, except share and per share amounts) Consolidated Statements of Operations data: Total operating revenues $ 54,211 $ 52,788 $ 48,971 Total operating expenses 51,597 49,754 47,364 Operating income 2,614 3,034 1,607 Net income 846 822 127 Earnings per common share: Basic $ 1.29 $ 1.26 $ 0.20 Diluted 1.24 1.21 0.19 Shares used for computation (in thousands): Basic 656,996 653,612 650,345 Diluted 721,300 719,669 655,122 Consolidated Balance Sheet data (at end of period): Total assets $ 61,783 $ 63,058 $ 64,716 Debt and finance leases 30,476 32,902 35,663 Pension and postretirement obligations (1) 2,275 3,171 2,926 Operating lease liabilities 7,068 7,761 8,024 Stockholders’ deficit (3,977) (5,202) (5,799) (1) Substantially all defined benefit pension plans were frozen effective November 1, 2012.
Year Ended December 31, 2025 2024 2023 (In millions, except share and per share amounts) Consolidated Statements of Operations data: Total operating revenues $ 54,633 $ 54,211 $ 52,788 Total operating expenses 53,166 51,597 49,754 Operating income 1,467 2,614 3,034 Net income 111 846 822 Earnings per common share: Basic $ 0.17 $ 1.29 $ 1.26 Diluted 0.17 1.24 1.21 Weighted average shares outstanding (in thousands): Basic 659,964 656,996 653,612 Diluted 661,052 721,300 719,669 Consolidated Balance Sheet data (at end of period): Total assets $ 61,774 $ 61,783 $ 63,058 Debt and finance leases 29,007 30,476 32,902 Pension and postretirement obligations (1) 1,680 2,275 3,171 Operating lease liabilities 6,963 7,068 7,761 Stockholders’ deficit (3,727) (3,977) (5,202) (1) Substantially all defined benefit pension plans were frozen effective November 1, 2012.
(3) We retired our Airbus A330 fleet in 2020 as a result of the decline in demand for air travel due to the COVID-19 pandemic.
These aircraft were previously retired in 2020 as a result of the decline in demand for air travel due to the COVID-19 pandemic.
(2) Labor contract expenses for 2024 related to one-time charges resulting from the ratification of new CBAs with our mainline flight attendants and passenger service team members, including one-time payments and adjustments to vacation accruals resulting from pay rate increases.
Labor contract expenses for 2024 included one-time charges resulting from the ratifications of new CBAs with our mainline flight attendants and passenger service team members, including one-time payments and adjustments to vacation accruals resulting from pay rate increases. (3) In 2024, we entered into a sales agreement for certain Airbus A330 aircraft, resulting in a $42 million gain.
(4) Regional operating special items, net for 2024 included a $33 million non-cash write down of regional aircraft resulting from the decision to permanently park 43 Embraer 145 aircraft.
(4) Regional operating special items, net for 2024 included a $33 million non-cash write down of regional aircraft resulting from the decision to permanently park 43 Embraer ERJ145 aircraft. 59 Table of Contents (5) Mark-to-market adjustments on equity investments, net included net unrealized gains and losses associated with certain equity investments.
Removed
Labor contract expenses for 2023 related to one-time charges resulting from the ratification of a new CBA with our mainline pilots, including a one-time payment of $754 million as well as adjustments to other benefit-related items of $235 million.
Added
(2) Labor contract expenses for 2025 included a one-time charge resulting from adjustments to vacation accruals due to pay rate increases effective January 1, 2025, following the ratification of the contract extension in the fourth quarter of 2024 with our mainline maintenance and fleet service team members.
Removed
In 2022, we recorded a non-cash impairment charge to write down the carrying value of our retired Airbus A330 fleet to their then estimated fair value due to the market conditions for certain used aircraft, and in 2024, we entered into a sales agreement for our remaining Airbus A330 aircraft, resulting in a $42 million gain.
Removed
(5) Debt refinancing and extinguishment costs in 2023 primarily included cash charges for premiums paid in connection with the early repayment of debt. 58 Table of Contents (6) Mark-to-market adjustments on equity investments, net included net unrealized gains and losses associated with certain equity investments.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

106 edited+32 added−37 removed44 unchanged
Biggest changeDuring 2024, we completed the following financing transactions (see Note 4 to AAG’s Consolidated Financial Statements in Part II, Item 8A for further information): • entered into a revolving credit facility that provides for borrowing capacity of up to $350 million, maturing in March 2027 with an option to extend for an additional year; • amended the 2013, 2014 and 2023 Credit Agreements to reduce the applicable interest rate margins, and terminated all revolving commitments under the April 2016 Credit Agreement, increasing overall available revolving credit capacity from $2.8 billion to $2.9 billion, maturing in June 2029; • amended the 2013 and 2023 Term Loan Facilities to reduce the applicable interest rate margins; • prepaid in full $487 million of the outstanding principal amount of the 3.75% senior notes due 2025 (3.75% Senior Notes); • prepaid $263 million toward portions of the outstanding principal amounts of the 10.75% senior secured IP notes (the IP Notes) and the 10.75% senior secured LGA/DCA notes (LGA/DCA Notes); • issued $684 million of enhanced equipment trust certificates (EETCs) in connection with the financing of certain aircraft that had been previously delivered; and • issued $990 million of equipment loans and other notes payable in connection with the financing of certain aircraft.
Biggest changeDuring 2025, we completed the following financing transactions (see Notes 1, 4 and 11 to AAG’s Consolidated Financial Statements in Part II, Item 8A for further information): • amended the AAdvantage term loan credit and guaranty agreement to reduce the applicable interest rate margin and to reduce the scheduled quarterly principal amortization amount; • issued $1.0 billion of incremental term loans pursuant to the AAdvantage term loan credit guaranty agreement (2025 AAdvantage Term Loan Facility), as amended; • prepaid $487 million of the outstanding principal amounts of certain equipment notes issued under enhanced equipment trust certificates (EETCs); • increased the aggregate revolving commitments under the 2013, 2014 and 2023 Revolving Facilities from approximately $2.9 billion to $3.0 billion; • received $432 million of gross proceeds pursuant to special facility revenue bonds issued by the Tulsa Municipal Airport Trust (TMAT), of which a portion was used to fund the redemption of other bonds related to TMAT and the remaining amount will be used to finance the cost of improvements at American’s overhaul and maintenance base at Tulsa International Airport; • prepaid in full $937 million of the outstanding principal amounts of the 10.75% senior secured IP notes (the IP Notes) and the 10.75% senior secured LGA/DCA notes (LGA/DCA Notes and together with the IP Notes, the 10.75% Senior Secured Notes); • borrowed $629 million under a senior unsecured short-term term loan facility due in January 2026; • received approximately $978 million in proceeds from EETCs; • received $840 million in net proceeds from fuel financing transactions; and • issued $1.2 billion of equipment loans and other notes payable in connection with the financing of certain aircraft.
These cash outflows were offset in part by $819 million in net sales of short-term investments and $654 million of proceeds from sale-leaseback transactions and sale of property and equipment, which primarily related to the modernization of Terminals 4 and 5 at LAX.
These cash outflows were offset in part by $819 million in net sales of short-term investments and $654 million of proceeds from sale-leaseback transactions and sale of property and equipment, which primarily related to the modernization of Terminals 4 and 5 at LAX.
These cash outflows were offset in part by $1.7 billion of proceeds from issuance of long-term debt, consisting of $990 million from the issuance of equipment loans and other notes payable and $684 million from the issuance of EETCs in connection with the financing of certain aircraft that had previously been delivered.
These cash outflows were offset in part by $1.7 billion of proceeds from issuance of long-term debt, consisting of $990 million from the issuance of equipment loans and other notes payable and $684 million from the issuance of EETCs in connection with the financing of certain aircraft that had previously been delivered.
Similarly, in the case of the spare engine EETCs, the trusts allow American to use its existing pool of spare engines to raise financing under a single facility.
Similarly, in the case of spare engine EETCs, the trusts allow American to use its existing pool of spare engines to raise financing under a single facility.
Continued periods of high volatility in fuel costs, increased fuel prices or significant disruptions in the supply of aircraft fuel could have a significant negative impact on consumer demand, our operating results and liquidity.” Other Costs We remain committed to actively managing our cost structure, which we believe is necessary in an industry in which economic prospects are heavily dependent upon two variables we cannot control: general economic conditions and the price of fuel.
Continued periods of high volatility in fuel costs, increased fuel prices or significant disruptions in the supply of aircraft fuel could have a significant negative impact on consumer demand, our operating results and liquidity.” Other Costs We remain committed to actively managing our cost structure, which we believe is necessary in an industry whose economic prospects are heavily dependent upon two variables we cannot control: general economic conditions and the price of fuel.
For instance, an economic downturn or general global instability caused by military actions, terrorism, disease outbreaks, natural disasters or other causes could reduce the demand for air travel, which would reduce the amount of cash generated by operations. See Part I, Item 1A. Risk Factors – “Downturns in economic conditions could adversely affect our business” for additional discussion.
For instance, an economic downturn or general global instability caused by governmental actions, military actions, terrorism, disease outbreaks, natural disasters or other causes could reduce the demand for air travel, which would reduce the amount of cash generated by operations. See Part I, Item 1A. Risk Factors – “Downturns in economic conditions could adversely affect our business” for additional discussion.
Loyalty Revenue We currently operate the loyalty program, AAdvantage. This program awards mileage credits to passengers who fly on American, any one world airline or other partner airlines, or by using the services of other program participants, such as our co-branded credit cards, and certain hotels and car rental companies.
Loyalty Revenue We currently operate the loyalty program, AAdvantage. This program awards mileage credits to passengers who fly on American, American Eagle, any one world airline or other partner airlines, or by using the services of other program participants, such as our co-branded credit cards, and certain hotels and car rental companies.
An increase in costs, either due to an increase in borrowing costs caused by a reduction in credit ratings or a general increase in interest rates, or due to an increase in the cost of fuel, maintenance, aircraft, aircraft engines or parts, could decrease the amount of cash available to cover cash contractual obligations.
An increase in costs, either due to an increase in borrowing costs caused by a reduction in credit ratings or a general increase in interest rates, due to an increase in the cost of fuel, maintenance, aircraft, aircraft engines or parts, or due to an increase in tariffs, could decrease the amount of cash available to cover cash contractual obligations.
Going forward, depending on market conditions, our cash position and other considerations, we may continue to take such actions, and the amounts involved may be material. 75 Table of Contents OTHER INFORMATION Basis of Presentation See Note 1 to each of AAG’s and American’s Consolidated Financial Statements in Part II, Items 8A and 8B, respectively, for information regarding the basis of presentation.
Going forward, depending on market conditions, our cash position and other considerations, we may continue to take such actions, and the amounts involved may be material. 76 Table of Contents OTHER INFORMATION Basis of Presentation See Note 1 to each of AAG’s and American’s Consolidated Financial Statements in Part II, Items 8A and 8B, respectively, for information regarding the basis of presentation.
Pass-Through Trusts American currently has 292 owned aircraft and 60 owned spare aircraft engines, which in each case were financed with EETCs issued by pass-through trusts. These trusts are off-balance sheet entities, the primary purpose of which is to finance the acquisition of flight equipment or to permit issuance of debt backed by existing flight equipment.
Pass-Through Trusts American currently has 280 owned aircraft and 60 owned spare aircraft engines, which in each case were financed with EETCs issued by pass-through trusts. These trusts are off-balance sheet entities, the primary purpose of which is to finance the acquisition of flight equipment or to permit issuance of debt backed by existing flight equipment.
See Note 6 to AAG’s Consolidated Financial Statements in Part II, Item 8A for additional information on income taxes. American’s Results of Operations For a comparison of the 2023 to 2022 reporting periods, see Part II, Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations – “ American’s Results of Operations” of American’s 2023 Form 10-K.
See Note 6 to AAG’s Consolidated Financial Statements in Part II, Item 8A for additional information on income taxes. American’s Results of Operations For a comparison of the 2024 to 2023 reporting periods, see Part II, Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations – “ American’s Results of Operations” of American’s 2024 Form 10-K.
As of December 31, 2024, we did not have any fuel hedging contracts outstanding to hedge our fuel consumption. Our current policy is not to enter into transactions to hedge our fuel consumption, although we review this policy from time to time based on market conditions and other factors.
As of December 31, 2025, we did not have any fuel hedging contracts outstanding to hedge our fuel consumption. Our current policy is not to enter into transactions to hedge our fuel consumption, although we review this policy from time to time based on market conditions and other factors.
Certain Covenants Our debt agreements contain customary terms and conditions as well as various affirmative, negative and financial covenants that, among other things, may restrict the ability of us and our subsidiaries to incur additional indebtedness, pay dividends or repurchase stock.
Certain Covenants Our debt agreements contain customary terms and conditions as well as various affirmative, negative and financial covenants that, among other things, may restrict our ability and that of our subsidiaries to incur additional indebtedness, pay dividends or repurchase stock.
Management’s Discussion and Analysis of Financial Condition and Results of Operations – “ AAG’s Results of Operations” of our 2023 Form 10-K. Operating Statistics The table below sets forth selected operating data for the years ended December 31, 2024 and 2023.
Management’s Discussion and Analysis of Financial Condition and Results of Operations – “ AAG’s Results of Operations” of our 2024 Form 10-K. Operating Statistics The table below sets forth selected operating data for the years ended December 31, 2025 and 2024.
This update is effective for annual periods beginning after December 15, 2026 and interim periods within annual periods beginning after December 15, 2027, and early adoption is permitted. We are currently evaluating how the adoption of this standard will impact our disclosures.
This update is effective for annual periods beginning after December 15, 2026 and interim periods within annual periods beginning after December 15, 2027, and early adoption is permitted. We are currently evaluating how the adoption of this standard may impact our disclosures.
Ticket and other related sales for transportation that has not yet been provided are initially deferred and recorded as air traffic liability on our consolidated balance sheets. The air traffic liability principally represents tickets sold for future travel on American and partner airlines. The contract duration of passenger tickets is generally one year. The majority of tickets sold are nonrefundable.
Ticket and other related sales for transportation that has not yet been provided are initially deferred and recorded as air traffic liability on our consolidated balance sheets. The air traffic liability principally represents tickets sold for future travel on American, American Eagle and partner airlines. The contract duration of passenger tickets is generally one year.
A small percentage of tickets, some of which are partially used tickets, expire unused. The estimate for tickets expected to expire unused is generally based on an analysis of our historical data and other current applicable factors such as policy changes.
The majority of tickets sold are nonrefundable. A small percentage of tickets, some of which are partially used tickets, expire unused. The estimate for tickets expected to expire unused is generally based on an analysis of our historical data and other current applicable factors such as policy changes.
The letters of credit and surety bonds that are subject to expiration will expire on various dates through 2037. 73 Table of Contents Contractual Obligations The following table provides details of our estimated material cash requirements from contractual obligations as of December 31, 2024 (in millions).
The letters of credit and surety bonds that are subject to expiration will expire on various dates through 2037. 74 Table of Contents Contractual Obligations The following table provides details of our estimated material cash requirements from contractual obligations as of December 31, 2025 (in millions).
As of December 31, 2024, our weighted average discount rate assumptions were 5.7% and 5.6% for our pension and retiree medical and other postretirement benefits obligations, respectively. When establishing the discount rate to measure our obligations, we match high quality corporate bonds available in the marketplace whose cash flows approximate our projected benefit disbursements.
As of December 31, 2025, our weighted average discount rate assumptions were 5.5% and 5.3% for our pension and retiree medical and other postretirement benefits obligations, respectively. When establishing the discount rate to measure our obligations, we match high quality corporate bonds available in the marketplace whose cash flows approximate our projected benefit disbursements.
In 2024, other nonoperating income, net included $113 million of non-service related pension and other postretirement benefit plan income, offset in part by $48 million of foreign currency losses and $24 million of net special charges primarily for debt refinancings and extinguishments and mark-to-market net unrealized losses associated with certain equity investments.
In 2024, other nonoperating income, net included $113 million of non-service related pension and other postretirement benefit plan income, offset in part by $48 million of foreign currency losses, $24 million of net special charges primarily for debt refinancings and extinguishments and mark-to-market net unrealized losses associated with certain equity investments and $24 million of net losses related to our equity investments accounted for under the equity method.
Lowering the expected long-term rate of return on plan assets by 50 basis points would increase estimated 2025 pension expense and retiree medical and other postretirement benefits expense by approximately $60 million and $1 million, respectively. 77 Table of Contents Annually, we review and revise certain economic and demographic assumptions including the pension and retiree medical and other postretirement benefits discount rates, health care costs and certain other retirement assumptions.
Lowering the expected long-term rate of return on plan assets by 50 basis points would increase estimated 2026 pension expense by approximately $60 million. 78 Table of Contents Annually, we review and revise certain economic and demographic assumptions including the pension and retiree medical and other postretirement benefits discount rates, health care costs and certain other retirement assumptions.
For the year ended December 31, 2024, a hypothetical 10% increase in the estimated selling price of mileage credits would have decreased revenues by approximately $140 million as a result of additional amounts deferred from passenger ticket sales to be recognized in future periods. 76 Table of Contents Mileage credits sold to co-branded credit cards and other partners We sell mileage credits to participating airline partners and non-airline business partners, including our co-branded credit card partners, under contracts with remaining terms generally from one to 10 years as of December 31, 2024.
For the year ended December 31, 2025, a hypothetical 10% increase in the estimated selling price of mileage credits would have decreased revenues by approximately $155 million primarily as a result of additional amounts deferred from passenger ticket sales to be recognized in future periods. 77 Table of Contents Mileage credits sold to co-branded credit card and other partners We sell mileage credits to participating airline partners and non-airline business partners, including our co-branded credit card partner, under contracts with remaining terms generally from one to 10 years as of December 31, 2025.
For the year ended December 31, 2024, a hypothetical 10% increase in our estimate of mileage credits not expected to be redeemed would have increased revenues by approximately $135 million.
For the year ended December 31, 2025, a hypothetical 10% increase in our estimate of mileage credits not expected to be redeemed would have increased revenues by approximately $140 million.
Our principal investing activities in 2024 included $2.7 billion of capital expenditures, which primarily related to the purchase of 16 Embraer 175 aircraft, six Boeing 737-8 MAX aircraft, four Airbus A321neo aircraft, four Boeing 737-800 aircraft lease repurchases, two Bombardier CRJ 900 aircraft, one Airbus A320 aircraft lease repurchase, 48 aircraft engines and aircraft purchase deposits.
Our principal investing activities in 2024 included $2.7 billion of capital expenditures, which primarily related to the purchase of 16 Embraer E175 aircraft, six Boeing 737 MAX aircraft, four Airbus A321neo aircraft , four Boeing 737-800 aircraft lease repurchases, two Bombardier CRJ900 aircraft, one Airbus A320 aircraft lease repurchase, 48 aircraft engines and aircraft purchase deposits.
American’s principal investing activities in 2024 included $2.6 billion of capital expenditures, which primarily related to the purchase of 16 Embraer 175 aircraft, six Boeing 737-8 MAX aircraft, four Airbus A321neo aircraft, four Boeing 737-800 aircraft lease repurchases, two Bombardier CRJ 900 aircraft, one Airbus A320 aircraft lease repurchase, 48 aircraft engines and aircraft purchase deposits.
American’s principal investing activities in 2024 included $2.6 billion of capital expenditures, which primarily related to the purchase of 16 Embraer E175 aircraft, six Boeing 737 MAX aircraft, four Airbus A321neo aircraft , four Boeing 737-800 aircraft lease repurchases, two Bombardier CRJ900 aircraft, one Airbus A320 aircraft lease repurchase, 48 aircraft engines and aircraft purchase deposits.
However, the equipment notes issued to the trusts are direct obligations of American and, in certain instances, have been guaranteed by AAG. As of December 31, 2024, $7.3 billion associated with these mortgage financings is reflected as debt in the accompanying consolidated balance sheet.
However, the equipment notes issued to the trusts are direct obligations of American and, in certain instances, have been guaranteed by AAG. As of December 31, 2025, $6.9 billion associated with these mortgage financings is reflected as debt in the accompanying consolidated balance sheet.
(b) Amounts represent contractual amounts due. Excludes $300 million and $5 million of unamortized debt discount, premium and issuance costs as of December 31, 2024 for American and AAG Parent, respectively. (c) For variable-rate debt, future interest obligations are estimated using the current forward rates at December 31, 2024.
(b) Amounts represent contractual amounts due. Excludes $313 million and $1 million of unamortized debt discount, premium and issuance costs as of December 31, 2025 for American and AAG Parent, respectively. (c) For variable-rate debt, future interest obligations are estimated using the current forward rates at December 31, 2025.
ASU 2024-03: Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-04) Disaggregation of Income Statement Expenses This standard enhances transparency in reporting by requiring disaggregation of certain costs and expenses in the notes to financial statements.
Recent Accounting Pronouncements Accounting Standards Update (ASU) 2024-03: Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-04) Disaggregation of Income Statement Expenses This standard enhances transparency in reporting by requiring disaggregation of certain costs and expenses in the notes to financial statements.
Letters of Credit and Other We provide financial assurance, such as letters of credit and surety bonds, primarily to support projected workers’ compensation obligations and airport commitments. As of December 31, 2024, we had $343 million of letters of credit and surety bonds securing various obligations, of which $98 million is collateralized with our restricted cash.
Letters of Credit and Other We provide financial assurance, such as letters of credit and surety bonds, primarily to support projected workers’ compensation obligations and airport commitments. As of December 31, 2025, we had $412 million of letters of credit and surety bonds securing various obligations, of which $97 million is collateralized with our restricted cash.
Lowering the discount rate by 50 basis points as of December 31, 2024 would increase our pension and retiree medical and other postretirement benefits obligations by approximately $645 million and $35 million, respectively, and decrease estimated 2025 pension and retiree medical and other postretirement benefits expense by approximately $10 million and $1 million, respectively.
Lowering the discount rate by 50 basis points as of December 31, 2025 would increase our pension and retiree medical and other postretirement benefits obligations by approximately $635 million and $40 million, respectively, and decrease estimated 2026 pension and retiree medical and other postretirement benefits expense by approximately $10 million and $1 million, respectively.
In 2024, we continued to focus on our reengineering the business initiatives through the use of digital solutions, process enhancements and procurement transformation. We will continue to invest in reengineering our business in 2025 and beyond to build an even more efficient airline and continue to manage costs while delivering a better experience for our customers and team.
Additionally, we continue to focus on initiatives to reengineer our business through the use of digital solutions, process enhancements and procurement transformation and we intend to continue to invest in reengineering our business through 2026 and beyond to build an even more efficient airline and continue to manage costs while delivering a better experience for our customers and team.
Selected Consolidated Financial Data – “Reconciliation of GAAP to Non-GAAP Financial Measures” and Note 2 to AAG’s Consolidated Financial Statements in Part II, Item 8A for details on the components of pre-tax net special items. Pre-Tax Income and Net Income Pre-tax income and net income were $1.2 billion and $846 million, respectively, in 2024.
Selected Consolidated Financial Data – “Reconciliation of GAAP to Non-GAAP Financial Measures” and Note 2 to AAG’s Consolidated Financial Statements in Part II, Item 8A for details on the components of pre-tax net special items. Pre-Tax Income and Net Income Pre-tax income and net income were $190 million and $111 million, respectively, in 2025.
Our principal financing activities in 2024 included $4.5 billion in debt and finance lease repayments, consisting of $3.7 billion in scheduled repayments and the early repayments of $487 million of the outstanding principal amount of the 3.75% Senior Notes and $263 million toward portions of the outstanding principal amounts of the IP Notes and LGA/DCA Notes.
Our principal financing activities in 2024 included $4.5 billion in long-term debt and finance lease repayments, consisting of $3.7 billion in scheduled repayments and the early repayments of $487 million of the outstanding principal amount of the 3.75% Senior Notes and $263 million toward portions of the outstanding principal amounts of the 10.75% Senior Secured Notes.
See Note 5 to American’s Consolidated Financial Statements in Part II, Item 8B for additional information on income taxes. Liquidity and Capital Resources Liquidity At December 31, 2024, AAG had $10.3 billion in total available liquidity and $732 million in restricted cash and short-term investments.
See Note 5 to American’s Consolidated Financial Statements in Part II, Item 8B for additional information on income taxes. Liquidity and Capital Resources Liquidity At December 31, 2025, AAG had $9.2 billion in total available liquidity and $735 million in restricted cash and short-term investments.
Income Taxes In 2024, we recorded an income tax provision of $308 million with an effective rate of approximately 27%, which was substantially non-cash. Substantially all of our income before income taxes is attributable to the United States.
Income Taxes In 2025, we recorded an income tax provision of $79 million with an effective rate of approximately 41.2%, which was substantially non-cash. Substantially all of our income before income taxes is attributable to the United States.
At December 31, 2024, we had approximately $12.9 billion of gross federal NOLs and $5.9 billion of other carryforwards available to reduce future federal taxable income, of which $2.6 billion will expire beginning in 2033 if unused and $16.2 billion can be carried forward indefinitely.
At December 31, 2025, we had approximately $11.9 billion of gross federal NOLs and $6.0 billion of other carryforwards available to reduce future federal taxable income, of which $1.6 billion will expire beginning in 2033 if unused and $16.3 billion can be carried forward indefinitely.
The expected rate of return on plan assets is based upon an evaluation of our historical trends and experience, taking into account current and expected market conditions and our target asset allocation of 35% U.S. fixed income securities, 22% U.S. stocks, 24% private investments, 14% developed international stocks and 5% emerging market stocks.
The expected rate of return on plan assets is based upon an evaluation of our historical trends and experience, taking into account current and expected market conditions and our target asset allocation of 45% U.S. fixed income securities, 18% U.S. stocks, 25% private investments, 9% international developed market stocks and 3% emerging market stocks.
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS 2024 Financial Overview The selected financial data presented below is derived from AAG’s audited consolidated financial statements included in Part II, Item 8A of this report and should be read in conjunction with those financial statements and the related notes thereto.
AAG’s 2025 Financial Results The selected financial data presented below is derived from AAG’s audited consolidated financial statements included in Part II, Item 8A of this report and should be read in conjunction with those financial statements and the related notes thereto.
Excluding the effects of pre-tax net special items, pre-tax income was $1.8 billion and $2.5 billion in 2024 and 2023, respectively. The year-over-year decrease in our pre-tax income excluding pre-tax net special items was principally driven by certain operating expenses as mentioned above, offset in part by increases in passenger revenue and lower costs for aircraft fuel and related taxes.
Excluding the effects of pre-tax net special items, pre-tax income was $352 million and $1.8 billion in 2025 and 2024, respectively. The year-over-year decrease in our pre-tax income excluding pre-tax net special items was principally driven by certain operating expenses as mentioned above, offset in part by lower costs for aircraft fuel and related taxes and higher revenues.
This decrease was primarily driven by a 12.2% decrease in the average price per gallon of aircraft fuel including related taxes to $2.60 in 2024 from $2.96 in 2023, offset in part by a 6.1% increase in gallons of fuel consumed due to increased capacity.
This decrease was primarily driven by an 8.2% decrease in the average price per gallon of aircraft fuel including related taxes to $2.39 in 2025 from $2.60 in 2024, offset in part by a 2.2% increase in gallons of fuel consumed due to increased capacity.
AAG American Debt Note 4 Note 3 Leases Note 5 Note 4 Employee Benefit Plans Note 9 Note 8 Commitments, Contingencies and Guarantees Note 11 Note 10 72 Table of Contents Off-Balance Sheet Arrangements An off-balance sheet arrangement is any transaction, agreement or other contractual arrangement involving an unconsolidated entity under which a company has (1) made guarantees, (2) a retained or a contingent interest in transferred assets, (3) an obligation under derivative instruments classified as equity or (4) any obligation arising out of a material variable interest in an unconsolidated entity that provides financing, liquidity, market risk or credit risk support to us, or that engages in leasing, hedging or research and development arrangements with us.
AAG American Debt Note 4 Note 3 Leases Note 5 Note 4 Employee Benefit Plans Note 9 Note 8 Commitments, Contingencies and Guarantees Note 11 Note 10 Off-Balance Sheet Arrangements An off-balance sheet arrangement is any transaction, agreement or other contractual arrangement involving an unconsolidated entity under which a company has (1) made guarantees, (2) a retained or a contingent interest in transferred assets, (3) an obligation under derivative instruments classified as equity or (4) any obligation arising out of a material variable interest in an unconsolidated entity that provides financing, liquidity, market risk or credit risk support to us, or that engages in leasing, hedging or research and development arrangements with us. 73 Table of Contents We have no off-balance sheet arrangements of the types described in the first three categories above that we believe may have a material current or future effect on financial condition, liquidity or results of operations.
The net effect of changing these assumptions for the pension plans resulted in a decrease of $699 million in the projected benefit obligation at December 31, 2024. The net effect of changing these assumptions for retiree medical and other postretirement benefits plans resulted in a decrease of $65 million in the accumulated postretirement benefit obligation at December 31, 2024.
The net effect of changing these assumptions for the pension plans resulted in an increase of $238 million in the projected benefit obligation at December 31, 2025. The net effect of changing these assumptions for retiree medical and other postretirement benefits plans resulted in a decrease of $10 million in the accumulated postretirement benefit obligation at December 31, 2025.
We also had approximately $5.2 billion of NOL carryforwards to reduce future state taxable income at December 31, 2024, which will expire in taxable years 2024 through 2044 if unused. In 2023, we recorded an income tax provision of $299 million at an effective rate of approximately 27%, which was substantially non-cash.
We also had approximately $5.0 billion of NOL carryforwards to reduce future state taxable income at December 31, 2025, which will expire in taxable years 2025 through 2045 if unused. In 2024, we recorded an income tax provision of $308 million at an effective rate of approximately 26.7%, which was substantially non-cash.
American also had approximately $5.0 billion of NOL carryforwards to reduce future state taxable income at December 31, 2024, which will expire in taxable years 2024 through 2044 if unused. In 2023, American recorded an income tax provision of $394 million at an effective rate of approximately 25%, which was substantially non-cash.
American also had approximately $4.7 billion of NOL carryforwards to reduce future state taxable income at December 31, 2025, which will expire in taxable years 2025 through 2045 if unused. In 2024, American recorded an income tax provision of $426 million at an effective rate of approximately 25.2%, which was substantially non-cash.
Consideration received from the sale of mileage credits is predominantly variable and payment terms typically are within 30 days subsequent to the month of mileage sale. Sales of mileage credits to non-airline business partners are comprised of two components, transportation and marketing.
Consideration received from the sale of mileage credits is predominantly variable and payment terms typically are within 30 days subsequent to the month of mileage sale. Sales of mileage credits to co-branded credit card and non-airline business partners are comprised of two revenue elements: a transportation component and a marketing component.
Additional detail regarding our available liquidity is provided in the table below (in millions): AAG American December 31, December 31, 2024 2023 2024 2023 Cash $ 804 $ 578 $ 795 $ 567 Short-term investments 6,180 7,000 6,177 6,998 Undrawn facilities 3,289 2,862 3,289 2,862 Total available liquidity $ 10,273 $ 10,440 $ 10,261 $ 10,427 In the ordinary course of our business, we or our affiliates may, at any time and from time to time, seek to prepay, retire or repurchase our outstanding debt through cash purchases and/or exchanges for equity or debt, in open-market purchases, privately negotiated transactions or otherwise.
Additional detail regarding our available liquidity is provided in the table below (in millions): AAG American December 31, December 31, 2025 2024 2025 2024 Cash $ 954 $ 804 $ 936 $ 795 Short-term investments 4,882 6,180 4,880 6,177 Undrawn facilities 3,397 3,289 3,397 3,289 Total available liquidity $ 9,233 $ 10,273 $ 9,213 $ 10,261 In the ordinary course of our business, we or our affiliates may, at any time and from time to time, seek to prepay, retire or repurchase our outstanding debt through cash purchases and/or exchanges for equity or debt, in open-market purchases, privately negotiated transactions or otherwise.
As of January 1, 2025, our expected rate of return on plan assets is 7.75%.
As of January 1, 2026, our expected rate of return on plan assets is 7.3%.
At December 31, 2024, American had approximately $12.8 billion of gross federal NOLs and $4.2 billion of other carryforwards available to reduce future federal taxable income, of which $2.9 billion will expire beginning in 2033 if unused and $14.1 billion can be carried forward indefinitely.
At December 31, 2025, American had approximately $11.7 billion of gross federal NOLs and $3.8 billion of other carryforwards available to reduce future federal taxable income, of which $1.8 billion will expire beginning in 2033 if unused and $13.7 billion can be carried forward indefinitely.
A significant portion of our debt financing agreements contain covenants requiring us to maintain an aggregate of at least $2.0 billion of unrestricted cash and cash equivalents and amounts available to be drawn under revolving credit facilities and/or contain covenants requiring us to meet certain loan to value, collateral coverage and/or peak debt service coverage ratios.
Additionally, a significant portion of our debt financing agreements contain covenants requiring us to maintain an aggregate of at least $2.0 billion of unrestricted cash and cash equivalents and amounts available to be drawn under revolving credit facilities.
(d) Includes $7.3 billion of future principal payments and $883 million of future interest payments as of December 31, 2024, related to EETCs associated with mortgage financings of certain aircraft and spare engines. (e) See Part I, Item 2.
(d) Includes $6.9 billion of future principal payments and $1.0 billion of future interest payments as of December 31, 2025, related to EETCs associated with mortgage financings of certain aircraft and spare engines. (e) See Part I, Item 2.
Selected Consolidated Financial Data – “Reconciliation of GAAP to Non-GAAP Financial Measures.” 62 Table of Contents Liquidity As of December 31, 2024, we had $10.3 billion in total available liquidity, consisting of $7.0 billion in unrestricted cash and short-term investments and $3.3 billion in total undrawn capacity under revolving credit and other short-term facilities.
Selected Consolidated Financial Data – “Reconciliation of GAAP to Non-GAAP Financial Measures.” Liquidity As of December 31, 2025, we had $9.2 billion in total available liquidity, consisting of $5.8 billion in unrestricted cash and short-term investments and $3.4 billion in total undrawn capacity under revolving credit and other facilities.
Year Ended December 31, Increase (Decrease) 2024 2023 Revenue passenger miles (millions) (a) 248,795 231,926 7.3% Available seat miles (millions) (b) 292,948 277,723 5.5% Passenger load factor (percent) (c) 84.9 83.5 1.4pts Yield (cents) (d) 19.93 20.92 (4.7)% Passenger revenue per available seat mile (cents) (e) 16.93 17.47 (3.1)% Total revenue per available seat mile (cents) (f) 18.51 19.01 (2.6)% Fuel consumption (gallons in millions) 4,391 4,140 6.1% Average aircraft fuel price including related taxes (dollars per gallon) 2.60 2.96 (12.2)% Total operating cost per available seat mile (cents) (g) 17.61 17.92 (1.7)% Aircraft at end of period (h) 1,562 1,521 2.7% Full-time equivalent employees at end of period 133,300 132,100 0.9% (a) Revenue passenger mile (RPM) – A basic measure of sales volume.
Year Ended December 31, Increase (Decrease) 2025 2024 Revenue passenger miles (millions) (a) 250,294 248,795 0.6% Available seat miles (millions) (b) 299,411 292,948 2.2% Passenger load factor (percent) (c) 83.6 84.9 (1.3)pts Yield (cents) (d) 19.83 19.93 (0.5)% Passenger revenue per available seat mile (cents) (e) 16.58 16.93 (2.0)% Total revenue per available seat mile (cents) (f) 18.25 18.51 (1.4)% Fuel consumption (gallons in millions) 4,488 4,391 2.2% Average aircraft fuel price including related taxes (dollars per gallon) 2.39 2.60 (8.2)% Total operating cost per available seat mile (cents) (g) 17.76 17.61 0.8% Aircraft at end of period (h) 1,580 1,562 1.2% Full-time equivalent employees at end of period 139,100 133,300 4.4% (a) Revenue passenger mile (RPM) – A basic measure of sales volume.
This was driven primarily by increases in passenger revenue, lower costs for aircraft fuel and related taxes and decreases in pre-tax net special items, offset in part by increases in certain operating expenses including salaries, wages and benefits, maintenance, materials and repairs and certain other operating expenses.
This decrease was driven primarily by increases in certain operating expenses including salaries, wages and benefits, regional expenses and other operating expenses, offset in part by lower costs for aircraft fuel and related taxes, a decrease in pre-tax net special items and higher revenues.
Regional expenses increased $390 million, or 8.4%, in 2024 from 2023 primarily due to an increase in regional flight operations and costs at American’s regional carriers.
Regional expenses increased $397 million, or 7.9%, in 2025 from 2024 primarily due to an increase in regional flight operations and costs at American’s regional carriers.
The amendments in this update are effective for annual periods beginning after December 15, 2024, and early adoption is permitted. We are currently evaluating how the adoption of this standard will impact our income tax disclosures.
The amendments in this update are effective for interim and annual periods beginning after December 15, 2027, and early adoption is permitted. We are currently evaluating how the adoption of this standard may impact our consolidated financial statements.
(g) Represents minimum pension contributions and expected contributions to our retiree medical and other post-retirement plans based on actuarially determined estimates as of December 31, 2024 and is based on estimated payments through 2034. In January 2025, American made $221 million of required pension contributions.
(g) Represents minimum pension contributions and expected contributions to our retiree medical and other post-retirement plans based on actuarially determined estimates as of December 31, 2025 and is based on estimated payments through 2035. In January 2026, we made required contributions of $236 million and a supplemental contribution of $50 million to our defined benefit pension plans.
Mileage credits can be redeemed for travel on American and other participating partner airlines, as well as non-air travel awards such as hotels and rental cars. For mileage credits earned by AAdvantage program members, we apply the deferred revenue method.
Mileage credits can be redeemed for travel on American, American Eagle and other participating partner airlines, as well as for other non-air travel awards such as car rentals, hotel stays, cruises and retail goods from program partners. For mileage credits earned by AAdvantage program members, we apply the deferred revenue method.
Our 2024 CASM excluding net special items and fuel was 13.50 cents, an increase of 2.6%, from 13.15 cents in 2023, which was primarily driven by higher costs for salaries, wages and benefits and maintenance, materials and repairs. For a reconciliation of total operating CASM to total operating CASM excluding net special items and fuel, see Part II, Item 6.
Our 2025 CASM excluding net special items and fuel was 14.12 cents, an increase of 4.6%, from 13.50 cents in 2024, which was primarily driven by higher costs for salaries, wages and benefits, regional expenses and other operating expenses. 63 Table of Contents For a reconciliation of total operating CASM to total operating CASM excluding net special items and fuel, see Part II, Item 6.
Our total revenue per available seat mile (TRASM) was 18.51 cents in 2024, a 2.6% decrease as compared to 19.01 cents in 2023. Fuel In 2024, aircraft fuel expense totaled $11.4 billion, a decrease of $839 million, or 6.8%, as compared to 2023.
Our total revenue per available seat mile (TRASM) was 18.25 cents in 2025, a 1.4% decrease as compared to 18.51 cents in 2024. Fuel In 2025, aircraft fuel expense totaled $10.7 billion, a decrease of $700 million, or 6.1%, as compared to 2024.
Our 2024 CASM was 17.61 cents, a decrease of 1.7%, from 17.92 cents in 2023. This decrease in CASM was primarily driven by lower aircraft fuel costs as well as a decrease in mainline operating special items, net, offset in part by higher costs for salaries, wages and benefits and maintenance, materials and repairs.
Our 2025 CASM was 17.76 cents, an increase of 0.8%, from 17.61 cents in 2024. This increase in CASM was primarily driven by higher costs for salaries, wages and benefits, regional expenses and other operating expenses, offset in part by lower aircraft fuel costs as well as a decrease in mainline operating special items, net.
The Bombardier CRJ 700 aircraft operated by PSA was en route to Washington, D.C. from Wichita, Kansas when it was involved in a midair collision near Ronald Reagan Washington National Airport.
American Eagle Flight 5342 On January 29, 2025, American Eagle flight 5342 was involved in a fatal accident in Washington, D.C. The Bombardier CRJ700 aircraft operated by PSA was en route to Washington, D.C. from Wichita, Kansas when it was involved in a midair collision near Ronald Reagan Washington National Airport.
Maintenance, materials and repairs increased $529 million, or 16.2%, in 2024 from 2023 primarily due to increased costs for engine overhauls, component part repairs and airframe heavy checks driven by higher volume and cost of materials.
Maintenance, materials and repairs increased $50 million, or 1.3%, in 2025 from 2024 primarily due to increased costs for airframe heavy checks and component part repairs driven by higher volume, offset in part by a decrease in the volume of engine overhauls.
Maintenance, materials and repairs increased $529 million, or 16.2%, in 2024 from 2023 primarily due to increased costs for engine overhauls, component part repairs and airframe heavy checks driven by higher volume and cost of materials.
Maintenance, materials and repairs increased $50 million, or 1.3%, in 2025 from 2024 primarily due to increased costs for airframe heavy checks and component part repairs driven by higher volume, offset in part by a decrease in the volume of engine overhauls.
Income Taxes American is a member of AAG’s consolidated federal and certain state income tax returns. In 2024, American recorded an income tax provision of $426 million with an effective rate of approximately 25%, which was substantially non-cash. Substantially all of American’s income before income taxes is attributable to the United States.
In 2025, American recorded an income tax provision of $197 million with an effective rate of approximately 25.9%, which was substantially non-cash. Substantially all of American’s income before income taxes is attributable to the United States.
We allocate the consideration received from these sales of mileage credits based on the relative selling price of each product or service delivered. Our most significant mileage credit partner agreements are our co-branded credit card agreements with Citi and Barclaycard US. We identified two revenue elements in these co-branded credit card agreements: the transportation component and the marketing component.
We allocate the consideration received from these sales of mileage credits based on the relative selling price of each product or service delivered. Our most significant mileage credit partner agreement is our co-branded credit card agreement with Citi.
Other operating revenue increased $357 million, or 10.3%, in 2024 as compared to 2023, driven primarily by higher revenue associated with our loyalty program. During 2024 and 2023, cash payments from co-branded credit card and other partners were $6.1 billion and $5.2 billion, respectively, an increase of 17% year-over-year.
Government in the fourth quarter of 2025. Other operating revenue increased $330 million, or 8.7%, in 2025 as compared to 2024, driven primarily by higher revenue associated with our loyalty program. During 2025 and 2024, cash payments from co-branded credit card and other partners were $6.2 billion and $6.1 billion, respectively.
In 2024, other nonoperating income, net included $113 million of non-service related pension and other postretirement benefit plan income, offset in part by $47 million of foreign currency losses and $24 million of net special charges primarily for debt refinancings and extinguishments and mark-to-market net unrealized losses associated with certain equity investments. 69 Table of Contents In 2023, other nonoperating expense, net primarily included $362 million of net special charges principally associated with debt refinancings and extinguishments and mark-to-market net unrealized losses associated with certain equity investments, offset in part by $33 million of non-service related pension and other postretirement benefit plan income.
In 2024, other nonoperating income, net included $113 million of non-service related pension and other postretirement benefit plan income, offset in part by $47 million of foreign currency losses, $24 million of net special charges primarily for debt refinancings and extinguishments and mark-to-market net unrealized losses associated with certain equity investments and $24 million of net losses related to American’s equity investments accounted for under the equity method. 70 Table of Contents Income Taxes American is a member of AAG’s consolidated federal and certain state income tax returns.
This compares to 2023 pre-tax income and net income of $1.1 billion and $822 million, respectively. Pre-tax income on a GAAP basis increased slightly in 2024 as compared to 2023.
This compares to 2024 pre-tax income and net income of $1.2 billion and $846 million, respectively. 62 Table of Contents Pre-tax income on a GAAP basis decreased in 2025 as compared to 2024.
(h) Includes aircraft owned and leased by American as well as aircraft operated by third-party regional carriers under capacity purchase agreements. Excluded from the aircraft count above are seven regional aircraft in temporary storage as of December 31, 2024 as follows: five Embraer 145 and two Bombardier CRJ 900.
(h) Includes aircraft owned and leased by American as well as aircraft operated by third-party regional carriers under capacity purchase agreements. Excluded from the aircraft count above as of December 31, 2025 are three Airbus A321XLR mainline aircraft and four Bombardier CRJ900 regional aircraft held in temporary storage.
Excluding this net increase in receivables from related parties, American’s operating cash flows increased $320 million compared to 2023 due to sustained profitability and net changes in working capital. Investing Activities American’s net cash used in investing activities was $909 million and $449 million in 2024 and 2023, respectively.
Excluding this net increase in receivables from related parties, American’s operating cash flows decreased $877 million compared to 2024 due to lower profitability and net changes in working capital. 72 Table of Contents Investing Activities American’s net cash used in investing activities was $1.8 billion and $909 million in 2025 and 2024, respectively.
Operating Revenues Year Ended December 31, Increase (Decrease) Percent Increase (Decrease) 2024 2023 (In millions, except percentage changes) Passenger $ 49,586 $ 48,512 $ 1,074 2.2 Cargo 804 812 (8) (0.9) Other 3,821 3,464 357 10.3 Total operating revenues $ 54,211 $ 52,788 $ 1,423 2.7 64 Table of Contents This table presents our passenger revenue and the year-over-year change in certain operating statistics: Increase (Decrease) vs.
Operating Revenues Year Ended December 31, Increase Percent Increase 2025 2024 (In millions, except percentage changes) Passenger $ 49,643 $ 49,586 $ 57 0.1 Cargo 839 804 35 4.3 Other 4,151 3,821 330 8.7 Total operating revenues $ 54,633 $ 54,211 $ 422 0.8 65 Table of Contents This table presents our passenger revenue and the year-over-year change in certain operating statistics: Increase (Decrease) vs.
American’s principal financing activities in 2024 included $4.0 billion in debt and finance lease repayments, consisting of $3.7 billion in scheduled repayments and the early repayment of $263 million toward portions of the outstanding principal amounts of the IP Notes and LGA/DCA Notes.
Additionally, American had $840 million in net proceeds from fuel financing transactions. American’s principal financing activities in 2024 included $4.0 billion in long-term debt and finance lease repayments, consisting of $3.7 billion in scheduled repayments and the early repayment of $263 million toward portions of the outstanding principal amounts of the 10.75% Senior Secured Notes.
Other operating expenses increased $423 million, or 7.0%, in 2024 from 2023 primarily driven by the increase in flight operations, including increased costs for onboard food and catering, crew travel, ground and cargo handling, passenger accommodation and airport lounge operations, as well as certain general and administrative expenses.
Higher credit card fees driven by higher rates also contributed to the increase in selling expenses. Other operating expenses increased $419 million, or 6.5%, in 2025 from 2024 primarily driven by increased costs for crew travel, onboard food and catering, ground and cargo handling, and airport lounge operations, as well as certain general and administrative expenses.
Operating Special Items, Net Year Ended December 31, 2024 2023 (In millions) Labor contract expenses (1) $ 605 $ 989 A330 fleet-related adjustments (2) (42) — Severance expenses 13 23 Other operating special items, net 34 (41) Mainline operating special items, net 610 971 Regional operating special items, net (3) 33 8 Operating special items, net $ 643 $ 979 (1) Labor contract expenses for 2024 related to one-time charges resulting from the ratification of new CBAs with our mainline flight attendants and passenger service team members, including one-time payments and adjustments to vacation accruals resulting from pay rate increases.
Operating Special Items, Net Year Ended December 31, 2025 2024 (In millions) Litigation reserve adjustments $ 77 $ — Labor contract expenses (1) 31 605 Severance expenses 44 13 A330 fleet-related adjustments (2) — (42) Other operating special items, net 7 34 Mainline operating special items, net 159 610 Regional operating special items, net (3) 3 33 Operating special items, net $ 162 $ 643 (1) Labor contract expenses for 2025 included a one-time charge resulting from adjustments to vacation accruals due to pay rate increases effective January 1, 2025, following the ratification of the contract extension in the fourth quarter of 2024 with our mainline maintenance and fleet service team members.
(3) Regional operating special items, net for 2024 included a $33 million non-cash write down of regional aircraft resulting from the decision to permanently park 43 Embraer 145 aircraft.
These aircraft were previously retired in 2020 as a result of the decline in demand for air travel due to the COVID-19 pandemic. (3) Regional operating special items, net for 2024 included a $33 million non-cash write down of regional aircraft resulting from the decision to permanently park 43 Embraer ERJ145 aircraft.
The transportation component represents the estimated selling price of future travel awards and is determined using the same equivalent ticket value approach described above. The portion of each mileage credit sold attributable to transportation is initially deferred and then recognized in passenger revenue when mileage credits are redeemed and transportation is provided.
The portion of each mileage credit sold attributable to transportation is initially deferred and then recognized in passenger revenue when mileage credits are redeemed and transportation is provided.
Operating Expenses Year Ended December 31, Increase (Decrease) Percent Increase (Decrease) 2024 2023 (In millions, except percentage changes) Aircraft fuel and related taxes $ 11,418 $ 12,257 $ (839) (6.8) Salaries, wages and benefits 16,021 14,580 1,441 9.9 Regional expenses 5,042 4,643 399 8.6 Maintenance, materials and repairs 3,794 3,265 529 16.2 Other rent and landing fees 3,303 2,928 375 12.8 Aircraft rent 1,242 1,369 (127) (9.2) Selling expenses 1,812 1,799 13 0.7 Depreciation and amortization 1,926 1,936 (10) (0.5) Mainline operating special items, net 610 971 (361) (37.2) Other 6,429 6,006 423 7.0 Total operating expenses $ 51,597 $ 49,754 $ 1,843 3.7 Additional detail regarding changes in our operating expenses is as follows: Aircraft fuel and related taxes decreased $839 million, or 6.8%, in 2024 from 2023 primarily due to a 12.2% decrease in the average price per gallon of aircraft fuel including related taxes to $2.60 in 2024 from $2.96 in 2023, offset in part by a 6.1% increase in gallons of fuel consumed due to increased capacity.
Operating Expenses Year Ended December 31, Increase (Decrease) Percent Increase (Decrease) 2025 2024 (In millions, except percentage changes) Aircraft fuel and related taxes $ 10,718 $ 11,418 $ (700) (6.1) Salaries, wages and benefits 17,566 16,021 1,545 9.6 Regional expenses 5,448 5,042 406 8.1 Maintenance, materials and repairs 3,844 3,794 50 1.3 Other rent and landing fees 3,476 3,303 173 5.2 Aircraft rent 1,220 1,242 (22) (1.8) Selling expenses 1,997 1,812 185 10.2 Depreciation and amortization 1,890 1,926 (36) (1.9) Mainline operating special items, net 159 610 (451) (73.9) Other 6,848 6,429 419 6.5 Total operating expenses $ 53,166 $ 51,597 $ 1,569 3.0 Aircraft fuel and related taxes decreased $700 million, or 6.1%, in 2025 from 2024 primarily due to an 8.2% decrease in the average price per gallon of aircraft fuel including related taxes to $2.39 in 2025 from $2.60 in 2024, offset in part by a 2.2% increase in gallons of fuel consumed due to increased capacity.
These cash outflows were offset in part by $1.5 billion in net sales of short-term investments and $230 million of proceeds from the sale of property and equipment and sale-leaseback transactions. Financing Activities American’s net cash used in financing activities was $2.3 billion and $3.2 billion in 2024 and 2023, respectively.
These cash outflows were offset in part by $1.3 billion in net sales of short-term investments and $343 million in proceeds from sale-leaseback transactions and sale of property and equipment, which primarily related to the modernization of Terminals 4 and 5 at LAX and sale of certain of American’s A330 aircraft.
These cash outflows were offset in part by $1.5 billion in net sales of short-term investments and $230 million of proceeds from the sale of property and equipment and sale-leaseback transactions. Financing Activities Our net cash used in financing activities was $2.8 billion and $3.2 billion in 2024 and 2023, respectively.
These cash outflows were offset in part by $1.3 billion in net sales of short-term investments and $344 million in proceeds from sale-leaseback transactions and sale of property and equipment, which primarily related to the modernization of Terminals 4 and 5 at LAX and sale of certain of our A330 aircraft.
Year Ended December 31, Increase (Decrease) Percent Increase (Decrease) 2024 2023 (In millions, except percentage changes) Passenger revenue $ 49,586 $ 48,512 $ 1,074 2.2 Cargo revenue 804 812 (8) (0.9) Other operating revenue 3,821 3,464 357 10.3 Total operating revenues 54,211 52,788 1,423 2.7 Aircraft fuel and related taxes 11,418 12,257 (839) (6.8) Salaries, wages and benefits 16,021 14,580 1,441 9.9 Total operating expenses 51,597 49,754 1,843 3.7 Operating income 2,614 3,034 (420) (13.9) Pre-tax income 1,154 1,121 33 2.9 Income tax provision 308 299 9 2.9 Net income 846 822 24 2.9 Pre-tax income – GAAP $ 1,154 $ 1,121 $ 33 2.9 Adjusted for: pre-tax net special items (1) 667 1,341 (674) (50.2) Pre-tax income excluding net special items $ 1,821 $ 2,462 $ (641) (26.0) (1) See Part II, Item 6.
Year Ended December 31, Increase (Decrease) Percent Increase (Decrease) 2025 2024 (In millions, except percentage changes) Passenger revenue $ 49,643 $ 49,586 $ 57 0.1 Cargo revenue 839 804 35 4.3 Other operating revenue 4,151 3,821 330 8.7 Total operating revenues 54,633 54,211 422 0.8 Aircraft fuel and related taxes 10,718 11,418 (700) (6.1) Salaries, wages and benefits 17,566 16,021 1,545 9.6 Total operating expenses 53,166 51,597 1,569 3.0 Operating income 1,467 2,614 (1,147) (43.9) Pre-tax income 190 1,154 (964) (83.6) Income tax provision 79 308 (229) (74.7) Net income 111 846 (735) (86.8) Pre-tax income – GAAP $ 190 $ 1,154 $ (964) (83.6) Adjusted for: pre-tax net special items (1) 162 667 (505) (75.7) Pre-tax income excluding net special items $ 352 $ 1,821 $ (1,469) (80.7) (1) See Part II, Item 6.

… 95 more changes not shown on this page.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

7 edited+1 added−0 removed8 unchanged
Biggest changeInterest Our earnings and cash flow are affected by changes in interest rates due to the impact those changes have on our interest expense from variable-rate debt instruments and our interest income from short-term, interest-bearing investments. Our largest exposure with respect to variable-rate debt comes from changes in the relevant benchmark rate underlying such debt financings, principally SOFR.
Biggest changeInterest Our earnings and cash flow are affected by changes in interest rates due to the impact those changes have on our interest expense from variable-rate debt instruments and our interest income from short-term, interest-bearing investments.
Based on our 2025 forecasted fuel consumption, we estimate that a one cent per gallon increase in the price of aircraft fuel would increase our 2025 annual fuel expense by approximately $45 million. Foreign Currency We are exposed to the effect of foreign exchange rate fluctuations on the U.S. dollar value of foreign currency-denominated transactions.
Based on our 2026 forecasted fuel consumption, we estimate that a one cent per gallon increase in the price of aircraft fuel would increase our 2026 annual fuel expense by approximately $50 million. Foreign Currency We are exposed to the effect of foreign exchange rate fluctuations on the U.S. dollar value of foreign currency-denominated transactions.
We estimate a uniform 10% strengthening in the value of the U.S. dollar from 2024 levels relative to each of the currencies in which we have foreign currency exposure would have resulted in a decrease in pre-tax income of approximately $150 million for the year ended December 31, 2024.
We estimate a uniform 10% strengthening in the value of the U.S. dollar from 2025 levels relative to each of the currencies in which we have foreign currency exposure would have resulted in a decrease in pre-tax income of approximately $140 million for the year ended December 31, 2025.
If annual interest rates increase 100 basis points, based on our December 31, 2024 variable-rate debt and short-term investments balances, annual interest expense on variable-rate debt would increase by approximately $100 million and annual interest income on short-term investments would increase by approximately $70 million.
If annual interest rates increase 100 basis points, based on our December 31, 2025 variable-rate debt and short-term investments balances, annual interest expense on variable-rate debt would increase by approximately $130 million and annual interest income on short-term investments would increase by approximately $60 million.
Market prices for aircraft fuel have fluctuated substantially over the past several years and prices continue to be highly volatile, with market spot prices ranging from a low of approximately $1.91 per gallon to a high of approximately $4.40 per gallon during the period from January 1, 2022 to December 31, 2024. 78 Table of Contents As of December 31, 2024, we did not have any fuel hedging contracts outstanding to hedge our fuel consumption.
Market prices for aircraft fuel have fluctuated substantially over the past several years and prices continue to be highly volatile, with market spot prices ranging from a low of approximately $1.83 per gallon to a high of approximately $3.82 per gallon during the period from January 1, 2023 to December 31, 2025. 79 Table of Contents As of December 31, 2025, we did not have any fuel hedging contracts outstanding to hedge our fuel consumption.
Additionally, the fair value of fixed-rate debt would have decreased by approximately $540 million for AAG and $370 million for American. 79 Table of Contents
Additionally, the fair value of fixed-rate debt would have decreased by approximately $410 million for AAG and $320 million for American. 80 Table of Contents
Variable-rate debt instruments represented 30% of our total long-term debt as of December 31, 2024. We currently do not have an interest rate hedge program to hedge our exposure to floating interest rates on our variable-rate debt obligations.
We currently do not have an interest rate hedge program to hedge our exposure to floating interest rates on our variable-rate debt obligations.
Added
Our largest exposure with respect to variable-rate debt comes from changes in the relevant benchmark rate underlying such debt financings, principally the Secured Overnight Financing Rate (SOFR). Variable-rate debt instruments represented 47% of our total long-term debt as of December 31, 2025.

Other AAL 10-K year-over-year comparisons