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What changed in American Airlines Group Inc.'s 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of American Airlines Group Inc.'s 2023 and 2024 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 2024 report.

+499 added−474 removedSource: 10-K (2025-02-19) vs 10-K (2024-02-21)

Top changes in American Airlines Group Inc.'s 2024 10-K

499 paragraphs added · 474 removed · 377 edited across 9 sections

Item 1. Business

Business — how the company describes what it does

78 edited+29 added−26 removed69 unchanged
Biggest changeWe are implementing a multiyear strategy focused on embedding DEI throughout our company by: • Hiring, engaging and retaining talent for growth; • Delivering excellence in our operations to serve and expand our global markets; • Striving to have our teams effectively serve the communities we represent; and • Driving innovation to build competitive advantages. 13 Table of Contents In 2023, we received a perfect score on the Disability Equality Index for the eighth consecutive year and were named one of the best places to work for disability inclusion.
Biggest changeWe 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.
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, our reservations centers and 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 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).
Risk Factors – “ Evolving cybersecurity and 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 cybersecurity or 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,” “If we are unable to obtain and maintain adequate facilities and infrastructure throughout our system and, at some airports, adequate slots, we may be unable to operate our existing flight schedule and to expand or change our route network in the future, which may have a material adverse impact on our operations,” “Our business is subject to extensive government regulation, which may result in increases in our costs, disruptions to our operations, limits on our operating flexibility, reductions in the demand for air travel, and competitive disadvantages,” “The airline industry is heavily taxed, ” “We are subject to many forms of environmental and noise regulation and may incur substantial costs as a result,” and “We are subject to risks associated with climate change, including increased regulation of our GHG emissions, changing consumer preferences and the potential for increased impacts of severe weather events on our operations and infrastructure.” Available Information Use of Websites to Disclose Information Our website is located at www.aa.com .
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,” “If we are unable to obtain and maintain adequate facilities and infrastructure throughout our system and, at some airports, adequate slots, we may be unable to operate our existing flight schedule and to expand or change our route network in the future, which may have a material adverse impact on our operations,” “Our business is subject to extensive government regulation, which may result in increases in our costs, disruptions to our operations, limits on our operating flexibility, reductions in the demand for air travel, and competitive disadvantages,” “The airline industry is heavily taxed, ” “We are subject to many forms of environmental and noise regulation and may incur substantial costs as a result,” and “We are subject to risks associated with climate change, including increased regulation of our GHG emissions, changing consumer preferences and the potential for increased impacts of severe weather events on our operations and infrastructure.” Available Information Use of Websites to Disclose Information Our website is located at www.aa.com .
Further, various foreign airport authorities impose 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).
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).
Talent Development We focus on providing our team members the tools, training and resources they need to do their best work. We maintain a suite of programs aimed at helping our people develop the skills and experience they need to succeed in their roles and build rewarding, long-term careers within our company.
Talent Development We focus on providing our team members with the tools, training and resources they need to do their best work. We maintain a suite of programs aimed at helping our people develop the skills and experience they need to succeed in their roles and build rewarding, long-term careers within our company.
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 beginning 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 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.
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 regulation 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 otherwise 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 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.
However, due to the impact of the COVID-19 pandemic on air travel, in June 2020, ICAO removed 2020 from the baseline calculation for the CORSIA pilot phase (2021-2023). In October 2022, ICAO member countries agreed that 85% of 2019 emissions would be used as the baseline for the remainder of CORSIA’s term (2024-2035).
However, due to the effect of the COVID-19 pandemic on air travel, in June 2020, ICAO removed 2020 from the baseline calculation for the CORSIA pilot phase (2021-2023). In October 2022, ICAO member countries agreed that 85% of 2019 emissions would be used as the baseline for the remainder of CORSIA’s term (2024-2035).
Lastly, the Safety Promotion component includes training and raising awareness among team members so that they can spot potential safety events. Customers We fly to close to 350 destinations in the United States and internationally, and we are committed to providing our customers with a world-class travel experience.
Lastly, the Safety Promotion component includes training and raising awareness among team members so that they can spot potential safety events. Customers We fly to over 350 destinations in the United States and internationally, and we are committed to providing our customers with a world-class travel experience.
Among our wholly-owned regional subsidiaries, Piedmont fleet and passenger service and PSA flight attendants have agreements that are now amendable and are engaged in negotiations. For more discussion, see Part I, Item 1A.
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.
Risk Factors – “The loss of key personnel upon whom we depend 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 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.
AAdvantage members qualify for status over a 12-month period beginning on March 1 of each year by earning 10 Table of Contents Loyalty Points, which can be earned through a variety of qualifying travel and non-travel activities, including use of our co-branded credit cards.
AAdvantage members qualify for status over a 12-month period beginning on March 1 of each year by earning Loyalty Points, which can be earned through a variety of qualifying travel and non-travel activities, including use of our co-branded credit cards.
For each year from 2021 through 2032, CORSIA requires airlines to compensate for the rate of growth of GHG emissions of the aviation sector as a whole, relative to a predetermined baseline as determined by ICAO. 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 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.
See “ Distribution and Marketing Agreements ” above for further discussion. Sustainability Operating a sustainable business that has the ability to serve our stakeholders over the long-term is an important part of our strategy.
See “ Distribution and Marketing Agreements ” above for further discussion. 11 Table of Contents Sustainability Operating a sustainable business that has the ability to serve our stakeholders over the long-term is an important part of our strategy.
Management’s Discussion and Analysis of Financial Condition and Results of Operations – “2023 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 – “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.
CORSIA is intended to achieve carbon-neutral growth in the international aviation sector from 2021 until 2035 through the purchase of certain types of carbon offset credits or the use of eligible renewable fuels.
CORSIA is intended to achieve carbon-neutral 18 Table of Contents growth in the international aviation sector from 2021 until 2035 through the purchase of certain types of carbon offset credits or the use of eligible renewable fuels.
Our future costs of CORSIA compliance are uncertain due to the uncertainty with respect to the future growth of covered GHG emissions, the supply and price of CORSIA-eligible carbon offset credits and development of the market for eligible renewable fuels.
Our future costs of CORSIA compliance are uncertain due to the uncertainty in the growth of covered GHG emissions, the supply and price of CORSIA-eligible carbon offset credits and development of the market for eligible renewable fuels.
Environmental Protection Agency (EPA) and other federal agencies may promulgate regulations that have an impact on our operations. In addition to these federal activities, various states have been delegated certain authorities under the aforementioned federal statutes. Many state and local governments have adopted environmental laws and regulations that are similar to or stricter than federal requirements.
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.
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 13 world-class member airlines and their affiliates, working together to provide a superior and seamless travel experience.
We expect to be required to purchase carbon offset credits to comply with CORSIA’s first phase, however, the U.S. government has not yet enacted implementation legislation.
We expect to be required to purchase carbon offset credits to comply with CORSIA’s first phase, but the U.S. government has not enacted implementation legislation.
We also have established a strategic alliance with Alaska Airlines covering certain routes on the West Coast of the United States and a strategic alliance with Qatar Airways covering the Middle East in order to provide customers with improved schedules and network connection opportunities, enhanced loyalty program reciprocity and cooperation in other areas. 9 Table of Contents In July 2010, in connection with a regulatory review related to our transatlantic joint business, we provided certain commitments to the European Commission (EC) regarding, among other things, the availability of take-off and landing slots at London Heathrow (LHR) or London Gatwick (LGW) airports.
We also have established a strategic alliance with Alaska Airlines and a strategic alliance with Qatar Airways in order to provide customers with improved schedules and network connection opportunities, enhanced loyalty program reciprocity and cooperation in other areas. 9 Table of Contents In July 2010, in connection with a regulatory review related to our transatlantic joint business, we provided certain commitments to the European Commission (EC) regarding, among other things, the availability of take-off and landing slots at London Heathrow (LHR) or London Gatwick (LGW) airports.
As of December 31, 2023, in addition to the relationships described above, American had codeshare, marketing and/or loyalty program relationships with Air Tahiti Nui, Cape Air, Cathay Pacific, China Southern Airlines Company Limited (China Southern Airlines), EL AL Israel Airlines, Etihad Airways, Fiji Airways, GOL Linhas Aéreas Inteligentes S.A.
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.
Moreover, on multiple occasions in 2023, the FAA issued slot waivers for New York City area airports as a result of operational challenges arising from air traffic control staffing shortages; those waivers expire in October 2024, and we cannot guarantee that such waivers will be made available to us, or that upon expiration or cancellation of such waivers it will be economical for us to resume prior levels of flying to destinations where we have operated a reduced service.
Moreover, on occasions in 2023 and 2024, the FAA issued slot waivers for New York City area airports as a result of operational challenges arising from ATC staffing shortages; those waivers are now set to expire in October 2025, and we cannot guarantee that such waivers will be made available to us, or that upon expiration or cancellation of such waivers it will be economical for us to resume prior levels of flying to destinations where we have operated a reduced service.
U.S. federal laws that have a particular impact on our operations include the Airport Noise and Capacity Act of 1990, the Clean Air Act, the Resource Conservation and Recovery Act, the Clean Water Act, the Safe Drinking Water Act and the Comprehensive Environmental Response, Compensation and Liability Act. The U.S.
U.S. federal laws with a particular effect on our operations include the Airport Noise and Capacity Act of 1990, the Clean Air Act, the Resource Conservation and Recovery Act, the Clean Water Act, the Safe Drinking Water Act and the Comprehensive Environmental Response, Compensation and Liability Act. The U.S.
As of December 31, 2023, we had approximately 132,100 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, 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.
Domestically, the DOT and the Federal Aviation Administration (FAA) exercise significant regulatory authority over air carriers. The DOT, among other things, oversees and regulates domestic and international codeshare agreements, international route authorities, competition and consumer protection matters including accessibility, the display and sharing of ancillary fee information and refund practices.
Department of Transportation (DOT) and the FAA exercise significant regulatory authority over air carriers. The DOT, among other things, oversees and regulates domestic and international codeshare agreements, international route authorities, competition and consumer protection matters including accessibility, the display and sharing of ancillary fee information and refund practices.
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.
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.
Operations at three major domestic airports we serve (JFK and LGA in New York City, and Ronald Reagan Washington National Airport (DCA) near Washington, D.C.) and many foreign airports we serve (including LHR) are regulated by governmental entities through allocations of slots or similar regulatory mechanisms 16 Table of Contents that limit the rights of carriers to conduct operations at those airports.
Kennedy International Airport (JFK) and LaGuardia Airport (LGA) in New York City, and Ronald Reagan Washington National Airport (DCA) near Washington, D.C.) and many foreign airports we serve (including LHR) are regulated by governmental entities through allocations of slots or similar regulatory mechanisms that limit the rights of carriers to conduct operations at those airports.
Also, see Note 1(m) to each of AAG’s and American’s Consolidated Financial Statements in Part II, Items 8A and 8B, respectively, for passenger revenue by geographic region and Note 13 to AAG’s Consolidated Financial Statements in Part II, Item 8A and Note 12 to American’s Consolidated Financial Statements in Part II, Item 8B for information regarding operating segments.
Also, see Note 1(m) to each of AAG’s and American’s Consolidated Financial Statements in Part II, Items 8A and 8B, respectively, for passenger revenue by geographic region and Note 13 to AAG’s Consolidated Financial Statements in Part II, Item 8A and Note 12 to American’s Consolidated Financial Statements in Part II, Item 8B for segment disclosures.
The EC will also be required to undertake a review in 2026 to determine whether CORSIA is sufficiently delivering on the goals of the Paris Agreement and, to the extent it is determined not to be, would extend the scope of the EU ETS to include all departing flights from the European Economic Area (EEA) (and not just flights within the EEA and flights departing the EEA to the United Kingdom and Switzerland).
In 2026, the EC will also have to undertake a review to determine whether CORSIA is sufficiently delivering on the goals of the Paris Agreement and, to the extent it is determined not to be, extend the scope of the EU ETS to include all departing flights from the European Economic Area (EEA).
Revised underground storage tank regulations issued by the EPA in 2015 have affected certain airport fuel hydrant systems, with modifications of such systems needed in order to comply with applicable portions of the revised regulations.
Revised underground storage tank regulations issued by the EPA in 2015 have affected certain airport fuel hydrant systems, with modifications of those systems needed to comply with the revised regulations.
Such trends may also impact us indirectly by increasing our operating costs, including fuel costs. 18 Table of Contents The Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA) We are subject to the requirements of the CORSIA, an international, market-based emissions reduction program adopted by the International Civil Aviation Organization (ICAO) in 2016.
These trends may also affect us by increasing our operating costs, including fuel costs. The Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA) We are subject to the requirements of the CORSIA, an international, market-based emissions reduction program adopted by the International Civil Aviation Organization (ICAO) in 2016.
The commitments accepted by the EC were binding for 10 years. In anticipation of both the exit of the United Kingdom 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 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.
Funding for the TSA is provided by a combination of air carrier fees, passenger fees and taxpayer funds. The CBP is responsible for securing the nation’s borders by combining customs, immigration and agricultural protection. The CBP regulatory requirements include the transmission of advanced passport data to facilitate the U.S. entry process.
Funding for the TSA is provided by a combination of air carrier fees, passenger fees and taxpayer funds. The CBP is responsible for securing the nation’s borders by combining customs, immigration and agricultural protection. The CBP regulatory requirements include the advanced transmission of reservation records, passport and cargo data to facilitate lawful travel and trade into the U.S.
The 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 14,500 2027 Association of Professional Flight Attendants (APFA) Flight Attendants 24,950 2019 Airline Customer Service Employee Association – Communications Workers of America and International Brotherhood of Teamsters (CWA-IBT) Passenger Service 14,650 2029 Transport Workers Union and International Association of Machinists & Aerospace Workers (TWU-IAM Association) Mechanics and Related 12,350 2025 TWU-IAM Association Fleet Service 19,100 2025 TWU-IAM Association Stock Clerks 2,000 2025 TWU-IAM Association Flight Simulator Engineers 150 2025 TWU-IAM Association Maintenance Control Technicians 190 2025 TWU-IAM Association Maintenance Training Instructors 100 2025 Professional Airline Flight Control Association (PAFCA) Dispatchers 570 2025 Transport Workers Union (TWU) Flight Crew Training Instructors 390 2025 14 Table of Contents Union Class or Craft Employees (1) Contract Amendable Date Envoy: Air Line Pilots Associations (ALPA) Pilots 2,070 2029 Association of Flight Attendants-CWA (AFA) Flight Attendants 1,850 2026 TWU Ground School Instructors 10 2027 TWU Mechanics and Related 1,200 2027 TWU Stock Clerks 130 2027 TWU Simulator Instructors 20 2026 TWU Fleet Service 4,020 2026 TWU Dispatchers 70 2025 Communications Workers of America (CWA) Passenger Service 7,000 2026 Piedmont: ALPA Pilots 640 2029 AFA Flight Attendants 310 2026 International Brotherhood of Teamsters (IBT) Mechanics and Related 470 2026 IBT Stock Clerks 60 2026 CWA Fleet and Passenger Service 6,650 2023 IBT Dispatchers 40 2025 ALPA Flight Crew Training Instructors 70 2029 PSA: ALPA Pilots 1,500 2028 AFA Flight Attendants 1,190 2023 International Association of Machinists & Aerospace Workers (IAM) Mechanics and Related 680 2027 TWU Dispatchers 40 2024 ALPA Flight Crew Training Instructors 80 2028 (1) Represents approximate number of active employees as of December 31, 2023.
The 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.
Oman Air is expected to join the one world Alliance in 2024, and Fiji Airways is a one world connect partner offering select alliance benefits to one world frequent flyers.
Oman Air is expected to join the one world Alliance in 2025. Fiji Airways is currently a one world connect partner offering select alliance benefits to one world frequent flyers and is expected to become a full member of the one world Alliance in 2025.
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.
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.
Year Gallons Average Price per Gallon Aircraft Fuel Expense Percent of Total Operating Expenses 2023 4,140 $2.96 $12,257 25% 2022 3,901 $3.54 $13,791 29% As of December 31, 2023, 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 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.
In addition, AAdvantage members can unlock benefits, rewards and choices before, between and beyond the traditional status tiers with Loyalty Point Rewards. In 2023, we introduced a new business loyalty program, AAdvantage Business, which rewards both eligible companies with AAdvantage miles and their travelers with additional Loyalty Points for booking business travel through our website or mobile app.
In addition, AAdvantage members can unlock benefits, rewards and choices before, between and beyond the traditional status tiers with Loyalty Point Rewards. AAdvantage Business, our business loyalty program, rewards both eligible companies with AAdvantage miles and their travelers with additional Loyalty Points when booking business travel.
Each SMS is comprised of four components: Safety Policy, Safety Assurance, Safety Risk Management and Safety Promotion. Our Safety Policy sets safety objectives while striving to comply with applicable regulatory requirements and laws in the countries where we operate and establishing standards for acceptable operational behaviors.
Our Safety Policy sets safety objectives while striving to comply with applicable regulatory requirements and laws in the countries where we operate and establishing standards for acceptable operational behaviors.
In providing international air transportation, we compete with other U.S. airlines, foreign investor-owned airlines and foreign state-owned or state-affiliated airlines. 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 planned introduction of long-range narrowbody aircraft in the coming years.
Our current strategy for reaching net zero GHG emissions by 2050 is focused on running a more fuel-efficient operation, with more fuel-efficient aircraft, powered by low-carbon fuel.
The vast majority of our direct GHG emissions come from the use of jet fuel in our operations. Our current strategy for reaching net zero GHG emissions by 2050 is focused on running a more fuel-efficient operation, with more fuel-efficient aircraft, powered by low-carbon fuel.
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.
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.
Mileage credits can be redeemed for travel and upgraded experiences on American and participating airlines, membership to our Admirals Club ® , or for other non-flight awards, such as car rentals and hotels, from our program partners. Travel awards are available on all flights operated by American and, subject to capacity-controlled seating, on flights operated by our 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 and hotels, from our program partners.
Achieving our ambitious goals will require significant action and investments by governments, manufacturers and other stakeholders. We are committed to engaging with our stakeholders to seek to advance these initiatives, and we have dedicated resources to advance our own progress. Our Board and Corporate Governance and Public Responsibility Committee receive updates on our climate strategy, progress and key risks regularly.
Achieving our ambitious goals will require significant action and investments by governments, manufacturers and other stakeholders. We are committed to engaging with our stakeholders to seek to advance these initiatives and have dedicated resources to advance our own progress.
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 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.
We employ an environmental management system that provides a systematic approach for compliance with environmental regulations and management of a broad range of environmental issues, including but not limited to air emissions, hazardous waste, underground tanks, and aircraft water quality.
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.
Based on our 2024 forecasted mainline and regional fuel consumption, we estimate that a one cent per gallon increase in the price of aircraft fuel would increase our 2024 annual fuel expense by approximately $45 million. 15 Table of Contents The following table shows annual aircraft fuel consumption and costs, including taxes, for our mainline and regional operations for 2023 and 2022 (gallons and aircraft fuel expense in millions).
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.
A member’s mileage credits generally do not expire if that member has any type of qualifying activity at least once every 24 months or if the AAdvantage member is the primary holder of a co-branded credit card.
Travel awards are available on all flights operated by American and, subject to capacity-controlled seating, on flights operated by our partners. A member’s mileage credits generally do not expire if that member has any type of qualifying activity at least once every 24 months or if the AAdvantage member is the primary holder of a co-branded credit card.
In addition, we face pricing pressures from so-called ultra-low-cost carriers, such as Allegiant Air, Frontier Airlines and Spirit Airlines, which compete in many of the markets in which we operate, with competition from these carriers increasing and new entrants regularly announcing their intention to start up new ultra-low-cost carriers.
In addition, we face pricing pressures from so-called ultra-low-cost carriers, such as Allegiant Air, Frontier Airlines and Spirit Airlines, which compete in many of the markets in which we operate. In addition to price competition, airlines compete for market share by increasing the size of their route system and the number of markets they serve.
In 2023, our team members were recognized by customers, peers and company leaders approximately three million times and more than 1,600 peer nominations were submitted for the annual Circle of Excellence, the highest honor that we bestow upon our team members for their career achievements.
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.
We also compete on the basis of scheduling (frequency and flight times), availability of nonstop flights, on-time performance, type of equipment, cabin configuration, amenities provided to passengers, loyalty programs, the automation of travel agent reservation systems, onboard products, health and safety, sustainability initiatives and other services. 11 Table of Contents International In addition to our extensive domestic service, we provide international service to Canada, Mexico, the Caribbean, Central and South America, Europe, Qatar, China, Japan, Korea, India, Australia and New Zealand.
We also compete on the basis of scheduling (frequency and flight times), availability of nonstop flights, on-time performance, type of equipment, cabin configuration, amenities provided to passengers, loyalty programs, the automation of travel agent reservation systems, onboard products, health and safety, sustainability initiatives and other services.
Additionally in 2023, we were recognized for the sixth consecutive year with the prestigious Five Star rating in The APEX Official Airline Ratings – Global Airline category. This rating is based on verified customer feedback on the overall travel experience. Our People The airline business is labor intensive, and our team members are critical to delivering for our customers.
This rating is based on verified customer feedback on the overall travel experience. Our People The airline business is labor intensive, and our team members are critical to delivering for our customers.
For more information on our approach to climate change, see our 2022 Sustainability Report on our website www . aa.com available under “Environmental, Social and Governance.” None of the information or contents under our “Environmental, Social and Governance” page, 2022 Sustainability Report, or our website are incorporated into this Annual Report on Form 10-K. 19 Table of Contents Impact of Regulatory Requirements on Our Business Regulatory requirements, including but not limited to those discussed above, affect operations and increase operating costs for the airline industry, including our airline subsidiaries, and future regulatory developments may continue to do the same.
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.
Many of our competitors also own or have agreements with regional airlines that provide similar services at their hubs and other locations.
The American Eagle regional carriers increase the number of markets we serve by flying to smaller markets and providing connections at our hubs. Many of our competitors also own or have agreements with regional airlines that provide similar services at their hubs and other locations.
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. In addition, international fares and rates are sometimes subject to the jurisdiction of the governments of the foreign countries which we serve.
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.
All American Eagle carriers use logos, service marks, aircraft paint schemes and uniforms similar to those of our mainline operations.
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.
In 2023, 46 million passengers boarded our regional flights, approximately 45% of whom connected to or from our mainline flights. 8 Table of Contents Our regional carrier arrangements are 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.
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.
AAdvantage ® Program Our AAdvantage program was established to develop 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 mileage credits for flying on eligible tickets on American, any one world Alliance airline or other partner airlines.
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.
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.
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.
In addition, related to the EPA and state regulations pertaining to storm water management, several U.S. airport authorities are actively engaged in efforts to limit discharges of deicing fluid into the environment, often by requiring airlines to participate in the building or reconfiguring of airport deicing facilities.
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.
Emissions Standards for Aircraft Engines In January 2021, the EPA adopted GHG emission standards for new aircraft engines, which are aligned with the 2017 ICAO aircraft engine GHG emission standards. Like the ICAO standards, the final EPA standards for new aircraft engines would not apply retroactively to engines on in-service aircraft.
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.
In addition, 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, and as of 2025, there will be an EU label for the environmental performance of flights, such that airlines may market their flights indicating the expected carbon footprint per passenger.
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.
The environmental laws include those related to responsibility for potential soil and groundwater contamination. We are conducting investigation and remediation activities to address soil and groundwater conditions at several sites, including airports and maintenance bases. We presently anticipate that the ongoing costs of such activities will not have a material impact on our operations.
These or similar regulations could result in increased compliance costs, but at this time we do not expect these costs to be material. The environmental laws include those related to responsibility for potential soil and groundwater contamination. We are conducting investigation and remediation activities to address soil and groundwater conditions at several sites, including airports and maintenance bases.
We have received validation from the Science Based Targets initiative (SBTi) that our 2035 GHG reduction target complies with the criteria in the SBTi’s first aviation pathway. The vast majority of our direct GHG emissions comes from the use of jet fuel in our operations.
Our aim is to achieve net zero GHG emissions by 2050, and we have set an intermediate target to drive progress toward that goal. We have received validation from the Science Based Targets initiative (SBTi) that our 2035 GHG reduction target complies with the criteria in the SBTi’s first aviation pathway.
We continued to rigorously measure and track customer satisfaction through passenger surveys in 2023, efforts that led to further improvements in our operations and the services we provide.
We continued to rigorously measure and track customer satisfaction through passenger surveys in 2024, efforts that led to further improvements in our operations and the services we provide. 12 Table of Contents In 2024, we were recognized for the seventh consecutive year with the prestigious Five Star rating in The APEX Official Airline Ratings – Global Airline category.
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. In 2023, Air Wisconsin began operating scheduled flights under the American Eagle name.
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.
Under our agreements with AAdvantage members and program partners, we reserve the right to change the terms of the AAdvantage program at any time and without notice. Program rules, partners, special offers, awards and requisite mileage levels for awards are subject to change.
Airline Loyalty Program for the second consecutive year based on the ease of earning miles, the value of mileage redemptions and benefits offered by the program. 10 Table of Contents Under our agreements with AAdvantage members and program partners, we reserve the right to change the terms of the AAdvantage program at any time and without notice.
Cargo Our cargo division provides a wide range of freight and mail services, with facilities and interline connections available across the globe. In 2023, we served more than 21,000 unique origin and destination pairs, transporting over 900 million pounds of time-sensitive freight and mail across our network.
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.
During 2023, our members redeemed approximately 13 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. Approximately 8% of our 2023 total revenue passenger miles flown were from award travel. See Part II, Item 7.
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.
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. During 2023 and 2022, cash payments from co-branded credit card and other partners were $5.2 billion and $4.5 billion, respectively.
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.
On November 23, 2022, the EPA also published the final rule for particulate matter emission standards and test procedures for civil aircraft engines, which took effect on December 23, 2022. These or similar regulations could directly or indirectly result in increased compliance costs, but at this time we do not expect these costs to be material.
Additionally, compliance with updated federal and state regulations governing firefighting foams are requiring modifications to the fire suppression systems we operate, as well as those maintained by airports. On November 23, 2022, the EPA also published the final rule for particulate matter emission standards and test procedures for civil aircraft engines, which took effect on December 23, 2022.
Our Chief Executive Officer is responsible for oversight of our climate change strategy. 12 Table of Contents Safety The safety of our customers and team members is a top priority. Our approach to safety is guided by our FAA-approved safety management systems (SMS), an organization-wide approach to identifying and managing risk.
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.
The DOT has also proposed rules requiring refunds for cancellations and significant delays and rules mandating the display of ancillary fees during the initial itinerary search. International International air transportation is subject to extensive government regulation, including aviation agreements between the U.S. and other countries or governmental authorities, such as the EU.
Individual requirements in the final rule have varying implementation timelines, ranging from January 16, 2025 (the effective date of the final rule) to June 17, 2026. International International air transportation is subject to extensive government regulation, including aviation agreements between the U.S. and other countries or governmental authorities, such as the EU.
(GOL), Gulf Air, Hawaiian Airlines, IndiGo, JetSMART, Jetstar, Jetstar Japan, Malaysia Airlines, Philippine Airlines, Royal Air Maroc, Royal Jordanian Airlines, Silver Airways, SriLankan Airlines and Vueling Airlines.
(GOL), Gulf Air, Hawaiian Airlines, IndiGo, JetSMART, Jetstar, Jetstar Japan, Korean Air Lines, Malaysia Airlines, Philippine Airlines, Royal Air Maroc, Royal Jordanian Airlines, SriLankan Airlines and Vueling Airlines. AAdvantage ® Program Our AAdvantage program was established to develop passenger loyalty by offering benefits and rewards to travelers for their continued patronage with American and our partners.
Climate We recognize the challenge of climate change and have set ambitious goals to transition to operating a low-carbon airline over time. Our aim is to achieve net zero GHG emissions by 2050, and we have set an intermediate target to drive progress toward that goal.
In 2024, we returned to the Dow Jones Sustainability World Index for the second consecutive year and to the Dow Jones Sustainability North America Index for the fourth consecutive year. Climate We recognize the challenge of climate change and have set ambitious goals to transition to operating a low-carbon airline over time.
In 2024, we announced new service to Brisbane, Australia and Veracruz, Mexico, as well as additional nonstop service between New York and Tokyo, Japan. As of December 31, 2023, we operated 965 mainline aircraft supported by our regional airline subsidiaries and third-party regional carriers, which together operated an additional 556 regional aircraft. See Part I, Item 2.
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.
Such minimum requirements are 2% in 2025, 6% in 2030, 20% in 2035, 34% in 2040, 42% in 2045 and 70% in 2050.
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.
Removed
In 2023, approximately 211 million passengers boarded our flights.
Added
We provide service to over 350 destinations around the world, and in 2024, over 226 million passengers boarded our flights as we launched more than 50 new routes, including from New York to Tokyo, Dallas/Fort Worth to Brisbane, Philadelphia to Copenhagen and Philadelphia to Nice.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeAdditionally, we face risks associated with allegations or similar claims that our public statements concerning our sustainability efforts and achievements are exaggerated or unsubstantiated, sometimes referred to as “greenwashing,” and could be subject to litigation or regulatory enforcement actions challenging the basis for such statements which could be costly and disruptive, whether or not meritorious. 38 Table of Contents 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.
Biggest changeFinally, 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.
Federal 22 Table of Contents Reserve, the European Central Bank and the Bank of England—undertook a cycle of raising interest rates, which has consequently increased the interest we pay on our floating-rate indebtedness.
Federal Reserve, the European Central Bank and the Bank of England—undertook a cycle of raising interest rates, which has consequently 22 Table of Contents increased the interest we pay on our floating-rate indebtedness.
We have objected to the DOT and TSA that the less stringent Part 135 rules were never intended as a basis for scheduled passenger service and that business model should not be permissible, and the agencies’ review is ongoing.
We have objected to the DOT and the TSA that the less stringent Part 135 rules were never intended as a basis for scheduled passenger service and that business model should not be permissible, and the agencies’ review is ongoing.
Additionally, due to the impact of the COVID-19 pandemic and other economic factors, certain of the NOL carryforwards may expire before we can generate sufficient taxable income to use them. 30 Table of Contents Our ability to use our NOLs and other carryforwards depends on the amount of taxable income generated in future periods.
Additionally, due to the impact of the COVID-19 30 Table of Contents pandemic and other economic factors, certain of the NOL carryforwards may expire before we can generate sufficient taxable income to use them. Our ability to use our NOLs and other carryforwards depends on the amount of taxable income generated in future periods.
The results of our operations, demand for air travel and the manner in which we conduct business each may be affected by changes in law and future actions taken by governmental agencies, including: • changes in law that affect the services that can be offered by airlines in particular markets and at particular airports, or the types of fares offered or fees that can be charged to passengers; • the granting and timing of certain governmental approvals (including antitrust or foreign government approvals) needed for codesharing alliances, joint businesses and other arrangements with other airlines, and the imposition of regulatory investigations or commencement of litigation related to any of the foregoing; • restrictions on competitive practices (for example, court orders, or agency regulations or orders, that would curtail an airline’s ability to respond to a competitor); • the adoption of new passenger security standards or regulations that impact customer service standards; 34 Table of Contents • restrictions on airport operations, such as restrictions on the use of slots at airports or the auction or reallocation of slot rights currently held by us; • the adoption of more restrictive locally-imposed noise restrictions; and • restrictions on travel or special guidelines regarding aircraft occupancy or hygiene in response to outbreaks of illness, such as occurred during the COVID-19 pandemic, including the imposition of preflight testing regimes or vaccination confirmation requirements which have in the past and may in the future have the effect of reducing demand for air travel in the markets where such requirements are imposed.
The results of our operations, demand for air travel and the manner in which we conduct business each may be affected by changes in law and future actions taken by governmental agencies, including: • changes in law that affect the services that can be offered by airlines in particular markets and at particular airports, or the types of fares offered or fees that can be charged to passengers; 34 Table of Contents • the granting and timing of certain governmental approvals (including antitrust or foreign government approvals) needed for codesharing alliances, joint businesses and other arrangements with other airlines, and the imposition of regulatory investigations or commencement of litigation related to any of the foregoing; • restrictions on competitive practices (for example, court orders, or agency regulations or orders, that would curtail an airline’s ability to respond to a competitor); • the adoption of new passenger security standards or regulations that impact customer service standards; • restrictions on airport operations, such as restrictions on the use of slots at airports or the auction or reallocation of slot rights currently held by us; • the adoption of more restrictive locally-imposed noise restrictions; and • restrictions on travel or special guidelines regarding aircraft occupancy or hygiene in response to outbreaks of illness, such as occurred during the COVID-19 pandemic, including the imposition of preflight testing regimes or vaccination confirmation requirements which have in the past and may in the future have the effect of reducing demand for air travel in the markets where such requirements are imposed.
The EU-UK Trade and Cooperation Agreement includes provisions in relation to commercial air service that we expect to be sufficient to sustain our current services under the transatlantic joint business.
The EU-UK Trade and Cooperation Agreement includes provisions in relation to commercial air service that we expect to be sufficient to sustain our current services under the transatlantic joint business.
Currently, industrial production of SAF is small in scale and inadequate to meet growing industry demand, and while additional production capacity is expected to become operational in the coming years, we anticipate that competition for SAF among industry participants will remain intense. As a result, SAF may be significantly more costly than conventional jet fuel.
Currently, industrial production of SAF is small in scale and inadequate to meet growing industry demand, and while additional production capacity is expected to become operational in the coming years, we anticipate that competition for SAF among industry participants will remain intense. As a result, SAF may be significantly more costly than conventional jet fuel.
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 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.
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 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.
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 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.
See also “Our business is subject to extensive government regulation, which may result in increases in our costs, disruptions to our operations, limits on our operating flexibility, reductions in the demand for air travel, and competitive disadvantages.” To the extent alliances formed by our competitors can undertake activities that are not available to us, including as to regulatory approvals, access slots, gates and routes and other matters, our ability to effectively compete may be hindered.
See also “ Our business is subject to extensive government regulation, which may result in increases in our costs, disruptions to our operations, limits on our operating flexibility, reductions in the demand for air travel, and competitive disadvantages.” To the extent alliances formed by our competitors can undertake activities that are not available to us, including as to regulatory approvals, access slots, gates and routes and other matters, our ability to effectively compete may be hindered.
We have liability for investigation and remediation costs at various 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 are increasingly focused on potential contamination resulting from the use of certain chemicals, most notably per- and polyfluoroalkyl, substances (PFAS).
Because the applicability of the exclusive forum provision is limited to the extent permitted by applicable law, we do not intend for the exclusive forum provision to apply to suits brought to enforce any duty or liability created by the Exchange Act or any other claim for which the federal courts have exclusive jurisdiction, and acknowledge that federal courts have concurrent jurisdiction over all suits brought to enforce any duty or liability created by the Securities Act of 1933 (Securities Act).
Because the applicability of the exclusive forum provision is limited to the extent permitted by applicable law, we do not intend for the exclusive forum provision to apply to suits brought to enforce any duty or liability created by the Exchange Act or any other claim for which the federal courts have exclusive jurisdiction, and acknowledge that federal courts have concurrent jurisdiction over all suits brought to enforce any duty or liability created by the Securities Act.
These provisions include, among other things, the following: • advance notice procedures for stockholder proposals to be considered at stockholders’ meetings; • the ability of our Board of Directors to fill vacancies on the board; • a prohibition against stockholders taking action by written consent; • stockholders are restricted from calling a special meeting unless they hold at least 20% of our outstanding shares and follow the procedures provided for in the amended Bylaws; • a requirement that holders of at least 80% of the voting power of the shares entitled to vote in the election of directors approve any amendment of our Bylaws submitted to stockholders for approval; and • super-majority voting requirements to modify or amend specified provisions of our Certificate of Incorporation. 48 Table of Contents These provisions are not intended to prevent a takeover, but are intended to protect and maximize the value of the interests of our stockholders.
These provisions include, among other things, the following: • advance notice procedures for stockholder proposals to be considered at stockholders’ meetings; • the ability of our Board of Directors to fill vacancies on the board; • a prohibition against stockholders taking action by written consent; • stockholders are restricted from calling a special meeting unless they hold at least 20% of our outstanding shares and follow the procedures provided for in the amended Bylaws; • a requirement that holders of at least 80% of the voting power of the shares entitled to vote in the election of directors approve any amendment of our Bylaws submitted to stockholders for approval; and • super-majority voting requirements to modify or amend specified provisions of our Certificate of Incorporation. 49 Table of Contents These provisions are not intended to prevent a takeover, but are intended to protect and maximize the value of the interests of our stockholders.
In connection with the expiration in December 2021 of certain transfer restrictions applicable to substantial shareholders contained in our Certificate of Incorporation, the Board of Directors of AAG adopted a tax benefits preservation plan (the Tax Benefit Preservation Plan) in order to preserve our ability to use our NOLs and certain other tax attributes to reduce potential future income tax obligations.
In connection with the expiration in December 2021 of certain transfer restrictions applicable to substantial shareholders contained in our Certificate of Incorporation, the Board of Directors of AAG adopted a tax benefit preservation plan (the Tax Benefit Preservation Plan) in order to preserve our ability to use our NOLs and certain other tax attributes to reduce potential future income tax obligations.
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 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 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 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; • 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.
To the extent the interest rates applicable to our floating rate debt remain elevated or continue to 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 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.
Products containing PFAS have been used in manufacturing, industrial, and consumer applications over many decades, including those related to aviation. Among other things, recent changes to federal requirements for firefighting foams containing PFAS, as well as related state regulations affecting their use, will require operational changes.
Products containing PFAS have been used in manufacturing, industrial, and consumer applications over many decades, including those related to aviation. Among other things, recent changes to federal requirements for firefighting foams containing PFAS, as well as related state regulations affecting their use, will require operational and infrastructure changes.
On December 23, 2021, the FAA issued a special airworthiness information bulletin (SAIB), in which it indicated that further testing and assessment is needed regarding the effects of 5G on certain aircraft equipped with radar altimeters, which measure the aircraft’s altitude and guide pilots during landings.
In December 2021, the FAA issued a special airworthiness information bulletin (SAIB), in which it indicated that further testing and assessment is needed regarding the effects of 5G on certain aircraft equipped with radar altimeters, which measure the aircraft’s altitude and guide pilots during landings.
Even though we believe we and our third party service providers are generally in compliance with applicable laws, rules and regulations relating to privacy and data security, the regulatory environment is increasingly challenging as 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, 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.
Market for American Airlines Group’s Common Stock, Related Stockholder Matters and Issuer Purchases of Equity Securities - “ Ownership 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.
Market for American Airlines Group’s Common Stock, Related Stockholder Matters and Issuer Purchases of Equity Securities - “ Ownership Restrictions ” and AAG’s Description of the Registrants’ Securities Registered Pursuant to Section 12 of the Exchange Act, which is filed as Exhibit 4.1 hereto.
There has been heightened legislative and regulatory focus on data privacy and cybersecurity in the U.S., EU, U.K., China and elsewhere, particularly with respect to critical infrastructure providers, including those in the transportation sector.
There has been heightened legislative and regulatory focus on AI, data privacy and cybersecurity in the U.S., EU, U.K., China and elsewhere, particularly with respect to critical infrastructure providers, including those in the transportation sector.
We remain in negotiations for other new labor agreements and anticipate that any new contracts we agree to with our labor groups will include material increases in salaries and other benefits, which will significantly increase our labor expense. 27 Table of Contents If we encounter problems with any of our third-party regional operators or third-party service providers, our operations could be adversely affected by a resulting decline in revenue or negative public perception about our services.
We remain in negotiations for other new labor agreements and anticipate that any new contracts we agree to with our labor groups will include increases in salaries and other benefits, which will increase our labor expense. 27 Table of Contents If we encounter problems with any of our third-party regional operators or third-party service providers, our operations could be adversely affected by a resulting decline in revenue or negative public perception about our services.
During periods of reduced demand for air travel, such as during the COVID-19 pandemic, we may 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, 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.
We have limited control, particularly in the short term, over the operation, quality or maintenance of many of the services on which our operations depend and over whether vendors of such services will improve or continue to provide services that are essential to our business. 45 Table of Contents Increases in insurance costs or reductions in insurance coverage may adversely impact our operations and financial results.
We have limited control, particularly in the short term, over the operation, quality or maintenance of many of the services on which our operations depend and over whether vendors of such services will improve or continue to provide services that are essential to our business. 46 Table of Contents Increases in insurance costs or reductions in insurance coverage may adversely impact our operations and financial results.
In certain instances, other air carriers are attempting to 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 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.
As a result, we must comply with a proliferating and fast-evolving set of legal requirements in this area, including substantive data privacy and cybersecurity standards as well as requirements for notifying regulators and affected individuals in the event of a cybersecurity incident. In addition, we are subject to an increasing number of reporting obligations in respect of material cybersecurity incidents.
As a result, we must comply with a proliferating and fast-evolving set of legal requirements in this area, including substantive data privacy and cybersecurity standards as well as requirements for notifying regulators and affected individuals in the event of a cybersecurity incident. In addition, we are subject to an increasing number of reporting obligations in respect of certain cybersecurity incidents.
Our financial performance relative to our key competitors will therefore be influenced significantly by macro-economic conditions in particular regions around the world and the relative exposure of our network to the markets in those regions, including the duration of any declines in demand for 25 Table of Contents travel to specific regions as a result of health emergencies (such as during the COVID-19 pandemic), geopolitical instability or other factors, and the speed with which demand for travel to these regions returns.
Our financial performance relative to our key competitors will therefore be influenced significantly by macro-economic conditions in particular regions around the world and the relative exposure of our network to the markets in those regions, including the duration of any declines in demand for travel to specific regions as a result of health emergencies (such as during the COVID-19 pandemic), geopolitical instability or other factors, and the speed with which demand for travel to these regions returns.
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, 2023, 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, 2024, we did not have any fuel hedging contracts outstanding to hedge our fuel consumption.
We can provide no 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 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.
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.
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.
In 2022 and 2023, in response to rising inflation which coincided with a rapid rebound of economic activity as governments lifted restrictions and economies reopened following the COVID-19 pandemic, central banks around the world—including the U.S.
In response to rising inflation which coincided with a rapid rebound of economic activity as governments lifted restrictions and economies reopened following the COVID-19 pandemic, central banks around the world—including the U.S.
Further, as airlines attempt to restore capacity in line with increased demand for air travel following the height of the COVID-19 pandemic, these third-party operators have experienced difficulties in recruiting and retaining sufficient personnel to operate significantly increased schedules, and have in some instances been required to offer significant increases in pay and other benefits to recruit and retain pilots and other personnel.
Further, as airlines restored capacity in line with increased demand for air travel following the height of the COVID-19 pandemic, these third-party operators experienced difficulties in recruiting and retaining sufficient personnel to operate significantly increased schedules, and have in some instances been required to offer significant increases in pay and other benefits to recruit and retain pilots and other personnel.
A significant number of recent data privacy and cybersecurity incidents, including those involving other large airlines, have resulted in very substantial adverse financial consequences to those companies. A cybersecurity incident could also impact our brand, including that of the AAdvantage program, harm our reputation and adversely impact our relationship with our customers, employees and stockholders.
A significant number of recent data 44 Table of Contents privacy and cybersecurity incidents, including those involving other large airlines, have resulted in very substantial adverse financial consequences to those companies. A cybersecurity incident could also impact our brand, including that of the AAdvantage program, harm our reputation and adversely impact our relationship with our customers, employees and stockholders.
However, there is still risk of future litigation from flight attendants and other work groups involving other types of wage and hour laws in California and other jurisdictions which could seek to implement similar laws.
However, there is still risk of future litigation from flight attendants and other work groups involving other types of wage and hour laws in California and other jurisdictions which have or could seek to implement similar laws.
The foregoing arrangements are important aspects of our international network and we are dependent on the performance and continued cooperation of the other airlines party to those arrangements. On May 19, 2023, the U.S. District Court for the District of Massachusetts issued an order permanently enjoining American and JetBlue from continuing and further implementing the NEA.
The foregoing arrangements are important aspects of our international network and we are dependent on the performance and continued cooperation of the other airlines party to those arrangements. On May 19, 2023, the U.S. District Court for the District of Massachusetts issued an order permanently enjoining American and JetBlue from continuing and further implementing the Northeast Alliance arrangement (NEA).
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.
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.
Delays in scheduled aircraft deliveries, unexpected grounding of aircraft or aircraft engines whether by regulators or by us, or other loss of anticipated fleet capacity, and failure of new aircraft to receive regulatory approval, be produced or otherwise perform as and when expected, may adversely impact our business, results of operations and financial condition.
Delays in scheduled aircraft deliveries, unexpected grounding of aircraft or aircraft engines whether by regulators or by us, or other loss of anticipated fleet capacity, and failure of new aircraft to receive regulatory approval, be produced or otherwise perform as and when expected, adversely impacts our business, results of operations and financial condition.
We face risks associated with Brexit, notably given the extent of our passenger and cargo traffic and that of our joint business partners that flows through LHR in the United Kingdom.
We continue to face risks associated with Brexit, notably given the extent of our passenger and cargo traffic and that of our joint business partners that flows through LHR in the United Kingdom.
Our ability to meet our publicly stated targets is dependent on a number of factors outside our control, including the ability of third parties, such as engine and airframe manufacturers, SAF producers and other industry participants, to timely develop and commercialize these technological solutions.
Our ability to meet our publicly stated targets is dependent on a number of factors outside our control, including but not limited to the ability of third parties, such as engine and airframe manufacturers, SAF producers and other industry participants, to timely develop and commercialize these technological solutions.
Additionally, the COVID-19 pandemic necessitated changes in business practices which may persist. For example, businesses and other travelers may continue to forego air travel in 24 Table of Contents favor of remote or flexible working policies and communication alternatives such as videoconferencing.
Additionally, the COVID-19 pandemic necessitated changes in business practices which may persist. For example, businesses and other travelers may continue to forego air travel in favor of remote or flexible working policies and communication alternatives such as videoconferencing.
Diverse threat actors, such as state-sponsored organizations, opportunistic hackers and hacktivists, as well as diverse attack vectors such as social engineering/phishing, 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’ information systems, personal information and confidential information.
Our collateral to secure loans, in the form of aircraft, spare parts and airport slots, could lose value as customer demand shifts and economies move to low-carbon alternatives, which may increase our financing cost. We have published a number of sustainability-related targets and goals, including with respect to reducing our GHG emissions.
Our collateral to secure loans, in the form of aircraft, airport slots, gates and routes, could lose value as customer demand shifts and economies move to low-carbon alternatives, which may increase our financing cost. We have published a number of sustainability-related targets and goals, including with respect to reducing our GHG emissions.
In addition, open skies agreements, which are now in place with a substantial number of countries around the world, provide international airlines with open access to U.S. markets, potentially subjecting us to increased competition on our international routes.
In addition, “open skies” agreements, which are now in place with a substantial number of countries around the world, provide international airlines with open access to U.S. markets, potentially subjecting us to increased competition on our international routes.
This spending is expected to result in increased costs to airlines and the traveling public that use those facilities as the airports seek to 44 Table of Contents recover their investments through increased rental, landing and other facility costs. In some circumstances, such costs could be imposed by the relevant airport authority without our approval.
This spending is expected to result in increased costs to airlines and the traveling public that use those facilities as the airports seek to recover their investments through increased rental, landing and other facility costs. In some circumstances, such costs could be imposed by the relevant airport authority without our approval.
In addition to the effects of the COVID-19 pandemic, an outbreak of another contagious disease—such as has occurred in the past with the Ebola virus, Middle East Respiratory Syndrome, Severe Acute Respiratory Syndrome, H1N1 influenza virus, avian flu, Zika virus or any other similar illness—if it were to become associated with air travel or persist for an extended period, could materially affect the airline industry and us by reducing revenues and adversely impacting our operations and passengers’ travel behavior.
A potential resurgence of COVID-19, or an outbreak of another contagious disease, such as has occurred in the past with the Ebola virus, Middle East Respiratory Syndrome, Severe Acute Respiratory Syndrome, H1N1 influenza virus, avian flu, Zika virus or any other similar illness, if it were to become associated with air travel or persist for an extended period, could materially affect the airline industry and us by reducing revenues and adversely impacting our operations and passengers’ travel behavior.
Additionally, our AAdvantage program, which is an important element of our sales and marketing programs, faces significant and increasing competition from the loyalty programs offered by other travel companies, as well as from similar loyalty benefits offered by banks and other financial services companies.
Additionally, our AAdvantage program, which is an important element of our business, faces significant and increasing competition from the loyalty programs offered by other travel companies, as well as from similar loyalty benefits offered by banks and other financial services companies.
In light of constraints on existing facilities, there is presently a significant amount of capital spending underway at major airports in the United States, including large projects underway at a number of airports where we have significant operations, such as O’Hare International Airport, Dallas/Fort Worth International Airport and Los Angeles International Airport.
In light of constraints on existing facilities, there is presently a significant amount of capital spending underway at major airports in the United States, including large projects underway at a number of airports where we have significant operations, such as O’Hare International Airport (ORD), Dallas/Fort Worth International Airport, Charlotte Douglas International Airport and Los Angeles International Airport (LAX).
While we and our service providers continue our efforts to meet these standards, new and revised standards may be imposed that may be difficult for us to meet and could increase our costs, and if we are unable to comply with revised standards, we may be subject to fines, restrictions or other liability, which could materially and 42 Table of Contents adversely affect our business.
While we and our service providers continue our efforts to meet these standards, new and revised standards may be imposed that may be difficult for us to meet and could increase our costs, and if we are unable to comply with revised standards, we may be subject to fines, restrictions or other liability, which could materially and adversely affect our business.
In anticipation of both the exit of the United Kingdom 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 expiry of the EC commitments in July 2020, the CMA, in October 2018, opened an investigation into the transatlantic joint business.
As a result of the agreement and a subsequent open skies agreement involving the U.S. and the United Kingdom, which was agreed in anticipation of Brexit, we face increased competition in these markets, including LHR.
As a result of the agreement and a subsequent open skies agreement involving the U.S. and the United Kingdom, which was agreed in anticipation of Brexit, we face increased competition in these markets, 35 Table of Contents including LHR.
In addition, competition from foreign airlines, revenue-sharing 35 Table of Contents joint ventures, joint business agreements, and other alliance arrangements by and among other airlines could impair the value of our business and assets on the open skies routes.
In addition, competition from foreign airlines, revenue-sharing joint ventures, joint business agreements, and other alliance arrangements by and among other airlines could impair the value of our business and assets on the open skies routes.
These goals are often long-term in nature, and in many cases rely on assumptions about the future availability and efficacy of technologies that do not yet exist or are not yet commercially viable.
These goals are often long-term in nature, and in many cases rely on assumptions about the future availability 38 Table of Contents and efficacy of technologies that do not yet exist or are not yet commercially viable.
See “ We rely heavily on technology and automated systems 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 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.
ITEM 1B. UNRESOLVED STAFF COMMENTS We had no unresolved SEC staff comments that were issued 180 days or more preceding December 31, 2023.
ITEM 1B. UNRESOLVED STAFF COMMENTS We had no unresolved SEC staff comments that were issued 180 days or more preceding December 31, 2024.
The existence of a future share repurchase program and any future dividends could cause our stock price to be higher than it would otherwise be and could potentially reduce the market liquidity for our stock.
The existence of a future 48 Table of Contents share repurchase program and any future dividends could cause our stock price to be higher than it would otherwise be and could potentially reduce the market liquidity for our stock.
Southeast and on the Gulf Coast where a significant portion of domestic refining capacity is located), political disruptions 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, 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 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.
Our ability to attract and retain customers is dependent upon, among other things, our ability to offer our customers convenient access to desired markets. Our business could be adversely affected if we are unable to maintain or obtain alliance and marketing relationships with other air carriers in desired markets.
Our ability to attract and retain customers is dependent upon, among other things, our ability to offer our customers 25 Table of Contents convenient access to desired markets. Our business could be adversely affected if we are unable to maintain or obtain alliance and marketing relationships with other air carriers in desired markets.
Regulatory concerns raised by the FAA also previously forced 40 Table of Contents Boeing to suspend deliveries of certain 787 aircraft, temporarily resulting in significant reductions to our planned long-haul flying.
Regulatory concerns raised by the FAA also previously forced Boeing to suspend deliveries of certain 787 aircraft, temporarily resulting in significant reductions to our planned long-haul flying.
More generally, following long periods of underinvestment, there is a trend among airports in the United States to engage in significant, expensive expansion, remodeling and infrastructure improvement projects.
More generally, following long periods of underinvestment, there is a trend among airports in the United States to engage in significant, expensive expansion, 45 Table of Contents remodeling and infrastructure improvement projects.
In addition, as carriers combine through traditional mergers or integrate their operations through other arrangements, their route networks will grow, and that growth will result in greater overlap with our network, which in turn could decrease our overall market share and 26 Table of Contents revenues.
In addition, as carriers combine through traditional mergers or integrate their operations through other arrangements, their route networks will grow, and that growth will result in greater overlap with our network, which in turn could decrease our overall market share and revenues.
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 the COVID-19 pandemic, 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; 46 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 CARES Act, the PSP Extension Law and the 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; 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.
Despite ongoing efforts to maintain and improve the security of our information systems and digital information, individuals, including employees, contractors, and external threat actors, may be able to circumvent the security measures we put in place, and we may be unable to anticipate new techniques used for these attacks and intrusions and implement adequate preventative measures.
Despite ongoing efforts to maintain and improve the security of our information systems and digital information, individuals, including employees, contractors, and external threat actors, may be able to circumvent the security measures we put in place, and we may be unable to anticipate new techniques used for these attacks and intrusions, such as the use of AI applications, and implement adequate preventative measures.
Our business, results of operations and financial condition have been and will continue to be affected by many changing economic, geopolitical, commercial, regulatory and other conditions beyond our control, including, among others: • actual or potential changes in international, national, regional and local economic, business and financial conditions, including recession, inflation and higher interest rates; • the occurrence of wars, conflicts, terrorist attacks and geopolitical instability; • changes in consumer preferences, perceptions, spending patterns and demographic trends; • changes in the competitive environment due to industry consolidation, changes in airline alliance affiliations and other factors; • delays in scheduled aircraft deliveries, unexpected grounding of aircraft or aircraft engines whether by regulators or by us, or other loss of anticipated fleet capacity, and failure of new aircraft to receive regulatory approval, be produced or otherwise perform as and when expected; • actual or potential disruptions to the U.S.
Our business, results of operations and financial condition have been and will continue to be affected by many changing economic, geopolitical, commercial, regulatory and other conditions beyond our control, including, among others: • actual or potential changes in international, national, regional and local economic, business and financial conditions, including recession, inflation and elevated interest rates; • the occurrence of wars or other conflicts and escalations thereof, terrorist attacks and geopolitical instability; • changes in consumer disposable income, preferences, perceptions, spending patterns and demographic trends; • changes in the competitive environment due to industry consolidation, changes in airline alliance affiliations, changes in our commercial strategy or that of our competitors and other factors; • delays in scheduled aircraft deliveries, unexpected grounding of aircraft or aircraft engines whether by regulators or by us, or other loss of anticipated fleet capacity, and failure of new aircraft or aircraft-related equipment to receive regulatory approval, be produced or otherwise perform as and when expected; • actual or potential disruptions to the U.S.
In the last several years, Congress and state and local governments have passed laws and regulatory initiatives, and the DOT, the FAA, the TSA and several of their respective international counterparts have issued regulations and a number of other directives that affect the airline industry.
In the last several years, Congress and state and local governments have passed laws and regulatory initiatives, and the DOT, the FAA, the TSA, the Centers for Disease Control and several of their respective international counterparts have issued regulations and a number of other directives that affect the airline industry.
We also had approximately $5.5 billion of NOL carryforwards to reduce future state taxable income at December 31, 2023, which will expire in taxable years 2023 through 2043 if unused. Our NOL carryforwards are subject to adjustment on audit by the Internal Revenue Service and the respective state taxing authorities.
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. Our NOL carryforwards are subject to adjustment on audit by the Internal Revenue Service and the respective state taxing authorities.
Such fluctuations in foreign currencies, including devaluations, cannot be predicted by us and can significantly affect the value of our assets located outside the United States. These conditions, as well as any further delays, devaluations or imposition of more stringent repatriation restrictions, may materially adversely affect our business, results of operations and financial condition.
Such fluctuations in foreign currencies, including devaluations, cannot be predicted by us and can significantly affect the value of our assets located outside the United States. These conditions, devaluations or imposition of more stringent repatriation restrictions, may materially adversely affect our business, results of operations and financial condition.
Armed conflicts in or affecting international markets we serve could also adversely impact our business by, among other things, depressing demand for travel to certain regions or requiring us to suspend air service to certain destinations.
Armed conflicts in or affecting international markets we serve could also adversely impact our 37 Table of Contents business by, among other things, depressing demand for travel to certain regions or requiring us to suspend air service to certain destinations.
W e rely heavily on technology and automated systems to operate our business, and any failure of these technologies or systems could harm our business, results of operations and financial condition. We are highly dependent on existing and emerging technology and automated systems to operate our business.
W e 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. We are highly dependent on existing and emerging technology and automated systems, including AI, to operate our business.
As of December 31, 2023, approximately 87% of our employees were represented for collective bargaining purposes by labor unions, and 34% were covered by CBAs that are currently amendable or that will become amendable within one year.
As of December 31, 2024, approximately 87% of our employees were represented for collective bargaining purposes by labor unions, and 6% were covered by CBAs that are currently amendable or that will become amendable within one year.
Due to the limited number of suppliers, constraints on production capacity, large order books and long production lead times, manufacturers may face challenges in timely fulfilling our aircraft on order, and we may face competition from other carriers in securing an adequate supply of aircraft in the future.
Due to the limited number of suppliers, constraints on production capacity, large order books and long production lead times, manufacturers have faced and are expected to continue to face challenges in timely fulfilling our aircraft on order, and we may face competition from other carriers in securing an adequate supply of aircraft in the future.
Additionally, the implementation of these initiatives may create logistical challenges that could harm the operational performance of our airline or result in decreased demand.
Additionally, 29 Table of Contents the implementation of these initiatives may create logistical challenges that could harm the operational performance of our airline or result in decreased demand.
National Airspace System (the ATC system); • increases in costs of safety, security and environmental measures; • 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 • 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.
National 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.
Similarly, we cannot predict actions that may be taken by our competitors in response to changes in fuel prices. 32 Table of Contents We cannot predict the future availability, price volatility or cost of aircraft fuel. Natural disasters (including hurricanes or similar events in the U.S.
Similarly, we cannot predict actions that may be taken by our competitors in response to changes in fuel prices. We cannot predict the future availability, price volatility or cost of aircraft fuel, weather-related events, natural disasters (including hurricanes or similar events in the U.S.
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 $1.32 per gallon to a high of approximately $4.40 per gallon during the period from January 1, 2021 to December 31, 2023.
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.
Our reputation or brand image could be adversely impacted by, among other things, any failure to maintain high ethical, social and environmental sustainability practices for all of our operations and activities, our impact on the environment, public pressure from investors or policy groups to change our policies, such as movements to institute a “living wage,” customer perceptions of our advertising campaigns, sponsorship arrangements or marketing programs, customer perceptions of our use of social media, including greenwashing concerns regarding our advertising campaigns and marketing programs related to our sustainability 28 Table of Contents initiatives, or customer perceptions of statements made by us, our employees and executives, agents or other third parties.
Our reputation or brand image could be adversely impacted by, among other things, any failure to maintain high ethical, social and environmental sustainability practices for all of our operations and activities, our impact on the environment, public pressure from investors or policy groups to change our policies, such as movements to institute a “living wage,” customer perceptions of our advertising campaigns, sponsorship arrangements or marketing programs, customer perceptions of our use of social media, customer concerns in the nature of “greenwashing” allegations that may surround any of our advertising campaigns, marketing programs or commercial offerings related to our sustainability initiatives, or customer perceptions of statements made by us, our 28 Table of Contents employees and executives, agents or other third parties.
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. 23 Table of Contents The loss of key personnel upon whom we depend 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 who we depend on to operate our business, or the inability to attract, develop and retain additional qualified personnel could adversely affect our business.
Further restrictions are set forth in our Tax Benefit Preservation Plan, which was filed as Exhibit 4.1 to AAG’s Current Report on Form 8-K filed on December 22, 2021.
Further restrictions are set forth in our Tax Benefit Preservation Plan, which was filed as Exhibit 4.1 to AAG’s Current Report on Form 8-K filed on December 22, 2021 and amendments to the Tax Benefit Preservation Plan, filed as Exhibit 4.1 to AAG’s Current Report on Form 8-K filed on November 1, 2024.
Our failure to comply with such requirements has in the past and may in the future result in fines and other enforcement actions by the FAA or other regulators.
Our failure to comply 33 Table of Contents with such requirements has in the past and may in the future result in fines and other enforcement actions by the FAA or other regulators.
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 is more sustainable to the climate. Business customers may choose to use alternatives to travel, such as virtual meetings and workspaces.
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.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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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 IT 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; 49 Table of Contents • 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 includes procedures for responding to cybersecurity incidents; and • a third-party risk management process for critical IT service providers, suppliers, and vendors.
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.
Risk Factors – “ Evolving cybersecurity and 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 cybersecurity or 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 (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 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.
The Committee oversees management’s implementation of our cybersecurity risk management program. The Committee receives quarterly reports from management on our cybersecurity risks. In addition, management updates the Committee, as necessary, regarding any material cybersecurity incidents, as well as certain incidents with lesser impact potential.
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.
The 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 cyber risk management program.
Our management team supervises efforts to prevent, detect, mitigate, and remediate cybersecurity risks and incidents through various means, which may include briefings from internal security personnel; threat intelligence and other various sources including external consultants engaged by us. 50 Table of Contents
Our management team supervises efforts to prevent, detect, mitigate, and remediate cybersecurity risks and incidents through various means, which may include briefings from internal security personnel; threat intelligence and other various sources including external consultants engaged by us. 51 Table of Contents
Our management team, including our CDIO, CISO, Vice President and Deputy General Counsel – Chief Privacy and Data Protection Officer, Vice President of Infrastructure and Operations 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, 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.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeMainline As of December 31, 2023, American’s mainline fleet consisted of the following aircraft: Average Seating Capacity Average Age (Years) Owned Leased Total Airbus A319 128 19.7 21 112 133 Airbus A320 150 22.7 10 38 48 Airbus A321 184 11.4 164 54 218 Airbus A321neo 195 2.9 43 35 78 Boeing 737-800 172 14.1 132 171 303 Boeing 737-8 MAX 172 3.2 26 33 59 Boeing 777-200ER 273 23.0 44 3 47 Boeing 777-300ER 304 9.8 18 2 20 Boeing 787-8 234 5.1 20 17 37 Boeing 787-9 285 6.2 17 5 22 Total 12.9 495 470 965 Regional As of December 31, 2023, 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 (1) 65 50 — 90 140 SkyWest 90 PSA 50 Total 140 Bombardier CRJ 900 (1) 76 74 — — 74 PSA 74 Embraer 170 (1) 65 6 23 5 34 Envoy 29 Republic 5 Total 34 Embraer 175 76 108 — 102 210 Envoy 108 Republic 82 SkyWest 20 Total 210 Embraer 145 (1) 50 58 — — 58 Piedmont 58 Total 296 23 237 556 556 51 Table of Contents (1) Excluded from the total operating aircraft count above are 77 regional aircraft that are being held in temporary storage as follows: 57 owned Embraer 145, seven owned and four leased Bombardier CRJ 700, six owned Bombardier CRJ 900 and three leased Embraer 170.
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.
We lease or have built on leased property our headquarters and training facilities in Fort Worth, Texas, our principal overhaul and maintenance base in Tulsa, Oklahoma, our regional reservation offices, and administrative offices throughout the U.S. and abroad. 52 Table of Contents ITEM 3.
We lease or have built on leased property our headquarters and training facilities in Fort Worth, Texas, our principal overhaul and maintenance base in Tulsa, Oklahoma, our regional reservation offices, and administrative offices throughout the U.S. and abroad. ITEM 3.
Aircraft and Engine Purchase Commitments As of December 31, 2023, we had definitive purchase agreements for the acquisition of the following new aircraft (1) : 2024 2025 2026 2027 2028 2029 and Thereafter Total Airbus A320neo Family 3 21 35 5 — — 64 Boeing 737 MAX Family 20 33 21 — — — 74 787 Family 6 5 4 5 5 5 30 Embraer 175 12 — — — — — 12 Total 41 59 60 10 5 5 180 (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, 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.
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. As of December 31, 2023, we had committed to purchase two used Airbus A321neo aircraft which were delivered in January 2024.
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.
Risk Factors – “We will need to obtain sufficient financing or other capital to operate successfully” for additional discussion. 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 additional information on aircraft and engine acquisition commitments.
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 additional information on aircraft and engine acquisition commitments.
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, 2023, American Eagle operated 556 regional aircraft.
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.
During 2023, we increased our regional fleet by a net of 20 aircraft, including the addition of 83 regional aircraft, the return of 55 regional aircraft to third-party regional carriers and temporarily parking eight regional aircraft.
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.
Removed
ITEM 2. PROPERTIES Flight Equipment As of December 31, 2023, American operated a mainline fleet of 965 aircraft. During 2023, American accepted delivery of 31 mainline aircraft including 17 Boeing 737-8 MAX, 10 Airbus A321neo and four Boeing 787-8 aircraft and returned nine mainline aircraft to service from temporary storage.
Added
In the fourth quarter of 2024, we decided to permanently park 43 Embraer 145 aircraft that were previously being held in temporary storage.
Removed
We had also committed to purchasing six used Embraer 175 aircraft, which are currently flown under a capacity purchase agreement with a third-party regional carrier and which are already included in our aircraft count. We also have agreements for 44 spare engines to be delivered in 2024 and beyond.
Added
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.
Removed
We have financing commitments in place for all aircraft scheduled to be delivered in 2024, except for three Airbus A320neo Family aircraft and two Embraer 175 aircraft.
Removed
Our ability to draw on the financing commitments we have in place is subject to (1) the satisfaction of various terms and conditions including, in some cases, on our acquisition of the aircraft by a certain date and (2) the performance by the relevant financing counterparty of its obligations thereunder. See Part I, Item 1A.

Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

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Biggest changeConsolidated Financial Statements and Supplementary Data of American Airlines Group Inc. 80 Item 8B. Consolidated Financial Statements and Supplementary Data of American Airlines, Inc. 126
Biggest changeConsolidated Financial Statements and Supplementary Data of American Airlines Group Inc. 80 Item 8B. Consolidated Financial Statements and Supplementary Data of American Airlines, Inc. 125

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

7 edited+2 added−4 removed7 unchanged
Biggest changeThe Tax Benefit Preservation Plan was subsequently ratified by our stockholders at the 2022 Annual Meeting of Stockholders of AAG. The Tax Benefit Preservation Plan is designed to reduce the likelihood that we experience an "ownership change” for purposes of Section 382 by deterring certain acquisitions of AAG common stock.
Biggest changeThe Tax Benefit Preservation Plan is designed to reduce the likelihood that we experience an "ownership change” for purposes of Section 382 by deterring certain acquisitions of AAG common stock. There is no assurance, however, that the deterrent mechanism will be effective, and such acquisitions may still occur.
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, 3.3 and 3.4 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. 56 Table of Contents
The comparison assumes $100 was invested on December 31, 2018 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. 12/31/2018 12/31/2019 12/31/2020 12/31/2021 12/31/2022 12/31/2023 American Airlines Group Inc.
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.
Information on securities authorized for issuance under our equity compensation plans will be set forth in our Proxy Statement for the 2024 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 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.
The following stock performance graph compares the cumulative total stockholder returns during the period from December 31, 2018 to December 31, 2023 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, 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.
As of February 16, 2024, there were approximately 54,000 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 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.
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, 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.
Removed
Dividends on Common Stock There were no cash dividend payments during the years ended December 31, 2023 and 2022. In connection with our receipt of financial assistance under PSP1, PSP2 and PSP3, we agreed not to pay dividends on AAG common stock through September 30, 2022, when this restriction expired.
Added
(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.
Removed
(AAL) $ 100 $ 91 $ 50 $ 57 $ 40 $ 44 NYSE ARCA Airline Index (XAL) 100 121 92 90 58 75 S&P 500 Index (GSPC) 100 129 150 190 153 190 Purchases of Equity Securities by the Issuer and Affiliated Purchasers The remaining authority under our most recent $2.0 billion share repurchase program expired in December 2020, and in connection with our receipt of financial assistance under PSP1, PSP2 and PSP3, we agreed not to repurchase shares of AAG common stock through September 30, 2022, when this restriction expired.
Added
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.
Removed
No repurchases of AAG common stock were made in 2023 or 2022 following the lapse of these restrictions. As of December 31, 2023, the Board of Directors of AAG had not authorized another share repurchase program.
Removed
There is no assurance, however, that the deterrent mechanism will be effective, and such acquisitions may still occur.

Item 6. [Reserved]

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

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Biggest changeYear Ended December 31, 2023 2022 (In millions) Components of Total Special Items, Net: (1) Labor contract expenses (2) $ 989 $ — Severance expenses (3) 23 — Fleet impairment (4) — 149 Litigation reserve adjustments — 37 Other operating special items, net (41) 7 Mainline operating special items, net 971 193 Regional operating special items, net 8 5 Operating special items, net 979 198 Debt refinancing and extinguishment (5) 280 3 Mark-to-market adjustments on equity investments, net (6) 82 71 Nonoperating special items, net 362 74 Pre-tax special items, net 1,341 272 Income tax special items, net — (9) Total special items, net $ 1,341 $ 263 Reconciliation of Pre-Tax Income Excluding Net Special Items: Pre-tax income – GAAP $ 1,121 $ 186 Adjusted for: Pre-tax special items, net 1,341 272 Pre-tax income excluding net special items $ 2,462 $ 458 Reconciliation of Net Income Excluding Net Special Items: Net income – GAAP $ 822 $ 127 Adjusted for: Total special items, net 1,341 263 Adjusted for: Net tax effect of net special items (304) (62) Net income excluding net special items $ 1,859 $ 328 (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, 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.
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, 2023, 2022 and 2021, 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, 2024, 2023 and 2022, are derived from AAG’s audited consolidated financial statements.
Year Ended December 31, 2023 2022 2021 (In millions) Consolidated Statements of Operations data: Total operating revenues $ 52,784 $ 48,965 $ 29,880 Total operating expenses 49,715 47,312 30,841 Operating income (loss) 3,069 1,653 (961) Net income (loss) 1,188 338 (1,777) Consolidated Balance Sheet data (at end of period): Total assets $ 69,074 $ 70,324 $ 71,145 Debt and finance leases 27,675 30,422 32,094 Pension and postretirement obligations (1) 3,148 2,900 5,117 Operating lease liabilities 7,708 7,961 8,074 Stockholder’s equity 6,577 5,593 3,826 (1) Substantially all defined benefit pension plans were frozen effective November 1, 2012.
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, 2023 2022 2021 (In millions, except share and per share amounts) Consolidated Statements of Operations data: Total operating revenues $ 52,788 $ 48,971 $ 29,882 Total operating expenses 49,754 47,364 30,941 Operating income (loss) 3,034 1,607 (1,059) Net income (loss) 822 127 (1,993) Earnings (loss) per common share: Basic $ 1.26 $ 0.20 $ (3.09) Diluted 1.21 0.19 (3.09) Shares used for computation (in thousands): Basic 653,612 650,345 644,015 Diluted 719,669 655,122 644,015 Consolidated Balance Sheet data (at end of period): Total assets $ 63,058 $ 64,716 $ 66,467 Debt and finance leases 32,902 35,663 38,060 Pension and postretirement obligations (1) 3,171 2,926 5,150 Operating lease liabilities 7,761 8,024 8,117 Stockholders’ deficit (5,202) (5,799) (7,340) (1) Substantially all defined benefit pension plans were frozen effective November 1, 2012.
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, 2023 2022 Reconciliation of CASM Excluding Net Special Items and Fuel: (In millions) Total operating expenses – GAAP $ 49,754 $ 47,364 Operating net special items (1) : Mainline operating special items, net (971) (193) Regional operating special items, net (8) (5) Aircraft fuel and related taxes (12,257) (13,791) Total operating expenses, excluding net special items and fuel $ 36,518 $ 33,375 (In millions) Total Available Seat Miles (ASM) 277,723 260,226 (In cents) CASM 17.92 18.20 Operating net special items per ASM (1) : Mainline operating special items, net (0.35) (0.07) Regional operating special items, net — — Aircraft fuel and related taxes per ASM (4.41) (5.30) CASM, excluding net special items and fuel 13.15 12.83 (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, 2023, 2022 and 2021, are derived from American’s audited consolidated financial statements.
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.
(2) Labor contract expenses relate to one-time charges resulting from the ratification of a new collective bargaining agreement with our mainline pilots, including a one-time payment of $754 million as well as adjustments to other benefit-related items of $235 million. (3) Severance expenses included costs associated with headcount reductions in certain corporate functions.
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.
(4) Fleet impairment included a non-cash impairment charge to write down the carrying value of our retired Airbus A330 fleet to the estimated fair value due to the market conditions for certain used aircraft. 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.
(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.
(5) Debt refinancing and extinguishment costs in 2023 primarily included cash charges for premiums paid in connection with the early repayment of debt.
(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.
See Note 4 to AAG’s Consolidated Financial Statements in Part II, Item 8A for further information. 58 Table of Contents (6) Mark-to-market adjustments on equity investments, net included net unrealized gains and losses associated with certain equity investments. See Note 8 to AAG’s Consolidated Financial Statements in Part II, Item 8A for further information related to our equity investments.
See Note 8 to AAG’s Consolidated Financial Statements in Part II, Item 8A for further information related to our equity investments.
Added
(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.
Added
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.
Added
(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.

Item 7. Management's Discussion & Analysis

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

104 edited+30 added−19 removed53 unchanged
Biggest changeDuring 2023, we completed the following financing transactions (see Note 4 to AAG’s Consolidated Financial Statements in Part II, Item 8A for further information): • refinanced approximately $1.8 billion in aggregate principal amount of term loans outstanding under the 2013 Term Loan Facility (the 2013 Term Loan Facility Refinancing) through the combination of (i) the issuance of $750 million in aggregate principal amount of 7.25% senior secured notes due 2028 (the 7.25% Senior Secured Notes) and (ii) the entry into the Seventh Amendment to the 2013 Credit Agreement, pursuant to which the maturity of $1.0 billion in term loans under the 2013 Term Loan Facility was extended to February 2028 from June 2025; • extended the maturity of certain commitments under the 2013 Revolving Facility, 2014 Revolving Facility and April 2016 Revolving Facility to October 2026; • issued $1.0 billion aggregate principal amount of 8.50% senior secured notes due 2029 (the 8.50% Senior Secured Notes) in a private offering and entered into the 2023 Credit Agreement that provides for a term loan facility (the 2023 Term Loan Facility) in an aggregate principal amount of $1.1 billion.
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.
The net proceeds of the 8.50% Senior Secured Notes, together with net proceeds from borrowings under the 2023 Term Loan Facility and cash on hand, were used to redeem all of the outstanding 11.75% Senior Secured Notes.
The net proceeds of the 8.50% Senior Secured Notes, together with net proceeds from borrowings under the 2023 Term Loan Facility and cash on hand, were used to redeem all of the outstanding 11.75% Senior Secured Notes.
Due to uncertainty surrounding the timing of delivery of certain aircraft, the amounts in the table represent our most current estimate based on contractual delivery schedules adjusted for updates and revisions to such schedules communicated to management by the applicable equipment manufacturer.
Due to uncertainty surrounding the timing of delivery of certain aircraft, the amounts in the table represent our most current estimate based on contractual delivery schedules adjusted for updates and revisions to such schedules communicated to management by the applicable equipment manufacturer and certain management assumptions.
Consideration received from the sale of mileage credits is 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 non-airline business partners are comprised of two components, transportation and marketing.
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.
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.
However, the actual delivery schedule may differ, potentially materially, based on various potential factors including production delays by the manufacturer and regulatory concerns. Additionally, the amounts in the table exclude five Boeing 787 Family 74 Table of Contents aircraft scheduled to be delivered in 2024, for which we have obtained committed lease financing.
However, the actual delivery schedule may differ, potentially materially, based on various potential factors including production delays by the manufacturer and regulatory concerns. Additionally, the amounts in the table exclude five 74 Table of Contents Boeing 787 Family aircraft scheduled to be delivered in 2025, for which we have obtained committed lease financing.
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.
(2) 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.
American retired its Airbus A330 fleet in 2020 as a result of the decline in demand for air travel due to the COVID-19 pandemic.
(2) American retired its Airbus A330 fleet in 2020 as a result of the decline in demand for air travel due to the COVID-19 pandemic.
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS 2023 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.
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.
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 2022 to 2021 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 2022 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 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.
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, and our AAdvantage Financing contains a peak debt service coverage ratio, pursuant to which failure to comply with a certain threshold may result in early repayment, in whole or in part, of the AAdvantage Financing.
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, and our AAdvantage Financing contains a peak debt service coverage ratio, pursuant to which failure to comply with a certain threshold may result in 70 Table of Contents early repayment, in whole or in part, of the AAdvantage Financing.
Our principal investing activities in 2023 included $2.6 billion of capital expenditures, which primarily related to the purchase of 17 Boeing 737-8 MAX aircraft, ten Airbus A321neo aircraft, seven Embraer 175 aircraft, seven Bombardier CRJ 900 aircraft and 28 spare engines.
Our principal investing activities in 2023 included $2.6 billion of capital expenditures, which primarily related to the purchase of 17 Boeing 737-8 MAX aircraft, 10 Airbus A321neo aircraft, seven Embraer 175 aircraft, seven Bombardier CRJ 900 aircraft and 28 spare engines.
As of December 31, 2023, 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, 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.
Pursuant to such agreements, if the applicable LTV, collateral coverage or peak debt service coverage ratio exceeds or falls below a specified threshold, as the case may be, we will be required, as applicable, to pledge additional qualifying collateral (which in some cases may include cash or investment securities), withhold additional cash in certain accounts, or pay down such financing, in whole or in part, or the interest rate for the relevant financing will be increased.
Pursuant to such agreements, if the applicable LTV or collateral coverage ratio exceeds or falls below a specified threshold, as the case may be, we will be required, as applicable, to pledge additional qualifying collateral (which in some cases may include cash or investment securities), withhold additional cash in certain accounts, or pay down such financing, in whole or in part, or the interest rate for the relevant financing will be increased.
Management’s Discussion and Analysis of Financial Condition and Results of Operations – “ AAG’s Results of Operations” of our 2022 Form 10-K. Operating Statistics The table below sets forth selected operating data for the years ended December 31, 2023 and 2022.
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.
For the year ended December 31, 2023, a hypothetical 10% increase in the estimated selling price of mileage credits would have decreased revenues by approximately $128 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 six years as of December 31, 2023.
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.
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, 2023, $7.7 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, 2024, $7.3 billion associated with these mortgage financings is reflected as debt in the accompanying consolidated balance sheet.
Income Taxes American is a member of AAG’s consolidated federal and certain state income tax returns. In 2023, American recorded an income tax provision of $394 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.
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.
The letters of credit and surety bonds that are subject to expiration will expire on various dates through 2028. 73 Table of Contents Contractual Obligations The following table provides details of our estimated material cash requirements from contractual obligations as of December 31, 2023 (in millions).
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).
Income Taxes In 2023, we recorded an income tax provision of $299 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 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.
For the year ended December 31, 2023, a hypothetical 10% increase in our estimate of mileage credits not expected to be redeemed would have increased revenues by approximately $127 million.
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.
Our pension and retiree medical and other postretirement benefits costs and liabilities are calculated using various actuarial assumptions and methodologies. We use certain assumptions including, but not limited to, the selection of the: (1) discount rate and (2) expected return on plan assets (as discussed below).
Our pension and retiree medical and other postretirement benefits costs and liabilities are calculated using various actuarial assumptions and methodologies. We use certain assumptions including, but not limited to, the selection of the discount rate and expected return on plan assets.
Lowering the expected long-term rate of return on plan assets by 50 basis points as of December 31, 2023 would increase estimated 2024 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 and health care costs.
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.
(b) Amounts represent contractual amounts due. Excludes $349 million and $14 million of unamortized debt discount, premium and issuance costs as of December 31, 2023 for American and AAG Parent, respectively. (c) For variable-rate debt, future interest obligations are estimated using the current forward rates at December 31, 2023.
(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.
Additionally, certain of our debt financing agreements (including our secured notes, term loans, revolving credit facilities and spare engine enhanced equipment trust certificates (EETCs)) contain loan to value (LTV), collateral coverage or peak debt service coverage ratio covenants and certain agreements require us to appraise the related collateral annually or semiannually.
Additionally, certain of our debt financing agreements (including our secured notes, term loans, revolving credit facilities and spare engine EETCs) contain loan to value (LTV) or collateral coverage ratio covenants and certain agreements require us to appraise the related collateral annually or semiannually.
ASU 2023-09: Income Taxes (Topic 740) Improvements to Income Tax Disclosures This standard enhances transparency of income tax information through improvements to income tax disclosures primarily related to the rate reconciliation and income taxes paid information, as well as improvements to the effectiveness and comparability of other income tax disclosures.
Recent Accounting Pronouncements Accounting Standards Update (ASU) 2023-09: Income Taxes (Topic 740) Improvements to Income Tax Disclosures This standard enhances transparency of income tax information through improvements to income tax disclosures primarily related to the rate reconciliation and income taxes paid information, as well as improvements to the effectiveness and comparability of other income tax disclosures.
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, 2023, we had $318 million of letters of credit and surety bonds securing various obligations, of which $94 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, 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.
Selected Consolidated Financial Data – “Reconciliation of GAAP to Non-GAAP Financial Measures.” 62 Table of Contents Liquidity As of December 31, 2023, we had $10.4 billion in total available liquidity, consisting of $7.6 billion in unrestricted cash and short-term investments and $2.9 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.” 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.
(2) 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 30% U.S. fixed income securities, 24% U.S. stocks, 24% private investments, 16% developed international stocks and 6% 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 35% U.S. fixed income securities, 22% U.S. stocks, 24% private investments, 14% developed international stocks and 5% emerging market stocks.
This decrease was primarily driven by a 16.3% decrease in the average price per gallon of aircraft fuel including related taxes to $2.96 in 2023 from $3.54 in 2022, offset in part by a 6.1% increase in gallons of fuel consumed due to increased capacity.
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.
(d) Includes $7.7 billion of future principal payments and $1.0 billion of future interest payments as of December 31, 2023, related to EETCs associated with mortgage financings of certain aircraft and spare engines. (e) See Part I, Item 2.
(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.
Additional detail regarding our available liquidity is provided in the table below (in millions): AAG American December 31, December 31, 2023 2022 2023 2022 Cash $ 578 $ 440 $ 567 $ 429 Short-term investments 7,000 8,525 6,998 8,523 Undrawn facilities 2,862 3,033 2,862 3,033 Total available liquidity $ 10,440 $ 11,998 $ 10,427 $ 11,985 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, 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.
We also had approximately $5.5 billion of NOL carryforwards to reduce future state taxable income at December 31, 2023, which will expire in taxable years 2023 through 2043 if unused. In 2022, we recorded an income tax provision of $59 million at an effective rate of approximately 32%, which was substantially non-cash.
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.
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 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.
Lowering the discount rate by 50 basis points as of December 31, 2023 would increase our pension and retiree medical and other postretirement benefits obligations by approximately $740 million and $40 million, respectively, and decrease estimated 2024 pension and retiree medical and other postretirement benefits expense by approximately $5 million and $1 million, respectively.
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.
American also had approximately $5.3 billion of NOL carryforwards to reduce future state taxable income at December 31, 2023, which will expire in taxable years 2023 through 2043 if unused. In 2022, American recorded an income tax provision of $116 million at an effective rate of approximately 26%, 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.
See Note 5 to American’s Consolidated Financial Statements in Part II, Item 8B for additional information on income taxes. 69 Table of Contents Liquidity and Capital Resources Liquidity At December 31, 2023, AAG had $10.4 billion in total available liquidity and $910 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, 2024, AAG had $10.3 billion in total available liquidity and $732 million in restricted cash and short-term investments.
Other operating expenses increased $584 million, or 10.8%, in 2023 from 2022 primarily driven by the increase in flight operations, including increased costs for onboard food and catering, crew travel, ground handling and airport lounge operations, as well as certain general and administrative expenses.
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.
Other operating expenses increased $583 million, or 10.8%, in 2023 from 2022 primarily driven by the increase in flight operations, including increased costs for onboard food and catering, crew travel, ground handling and airport lounge operations, as well as certain general and administrative expenses.
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.
(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 77 regional aircraft in temporary storage as of December 31, 2023 as follows: 57 Embraer 145, 11 Bombardier CRJ 700, six Bombardier CRJ 900 and three Embraer 170.
(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.
Many factors are considered that impact our assessment of future profitability, including conditions which are beyond our control, such as the health of the economy, the availability and price volatility of aircraft fuel and travel demand. We have determined that positive factors outweigh negative factors in the determination of the realizability of our deferred tax assets.
We consider all available positive and negative evidence and make certain assumptions in evaluating the realizability of our deferred tax assets. Many factors are considered that impact our assessment of future profitability, including conditions which are beyond our control, such as the health of the economy, the availability and price volatility of aircraft fuel and travel demand.
At December 31, 2023, American had approximately $13.7 billion of gross federal NOLs and $3.6 billion of other carryforwards available to reduce future federal taxable income, of which $3.8 billion will expire beginning in 2033 if unused and $13.5 billion can be carried forward indefinitely.
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.
This financing is reflected in the operating lease commitments line above. (f) Represents minimum payments under capacity purchase agreements with third-party regional carriers. These commitments are estimates of costs based on assumed minimum levels of flying under the capacity purchase agreements and American’s actual payments could differ materially.
This financing is reflected in the operating lease commitments line above. (f) These commitments are estimates of costs based on assumed minimum levels of flying under the capacity purchase agreements and American’s actual payments could differ materially. Rental payments under operating leases for certain aircraft flown under these capacity purchase agreements are reflected in the operating lease commitments line above.
Year Ended December 31, Increase (Decrease) 2023 2022 Revenue passenger miles (millions) (a) 231,926 215,624 7.6% Available seat miles (millions) (b) 277,723 260,226 6.7% Passenger load factor (percent) (c) 83.5 82.9 0.6pts Yield (cents) (d) 20.92 20.67 1.2% Passenger revenue per available seat mile (cents) (e) 17.47 17.13 2.0% Total revenue per available seat mile (cents) (f) 19.01 18.82 1.0% Fuel consumption (gallons in millions) 4,140 3,901 6.1% Average aircraft fuel price including related taxes (dollars per gallon) 2.96 3.54 (16.3)% Total operating cost per available seat mile (cents) (g) 17.92 18.20 (1.6)% Aircraft at end of period (h) 1,521 1,461 4.1% Full-time equivalent employees at end of period 132,100 129,700 1.9% (a) Revenue passenger mile (RPM) – A basic measure of sales volume.
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.
These assumptions as of December 31 were: 2023 2022 Pension weighted average discount rate (1) 5.2 % 5.6 % Retiree medical and other postretirement benefits weighted average discount rate (1) 5.3 % 5.7 % Expected rate of return on plan assets (2) 8.0 % 8.0 % (1) 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, 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.
The net effect of changing these assumptions for the pension plans resulted in an increase of $546 million in the projected benefit obligation at December 31, 2023. The net effect of changing these assumptions for retiree medical and other postretirement benefits plans resulted in an increase of $89 million in the accumulated postretirement benefit obligation at December 31, 2023.
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.
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. American’s principal investing activities in 2022 included $3.7 billion in net sales of short-term investments.
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.
The amendments in this update are effective for fiscal years beginning after December 15, 2023 and interim periods within fiscal years beginning after December 15, 2024, and early adoption is permitted. We are currently evaluating how the adoption of this standard will impact our reportable segment 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 will impact our disclosures.
In 2022, other nonoperating income, net primarily included $423 million of non-service related pension and other postretirement benefit plan income, offset in part by $72 million of net special charges principally for 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 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.
Other operating revenue increased $294 million, or 9.3%, in 2023 as compared to 2022, driven primarily by higher revenue associated with our loyalty program. During 2023 and 2022, cash payments from co-branded credit card and other partners were $5.2 billion and $4.5 billion, respectively.
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.
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. Our principal investing activities in 2022 included $3.7 billion in net sales of short-term investments.
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.
For instance, an economic downturn or general global instability caused by military actions, terrorism, disease outbreaks (such as the COVID-19 pandemic), 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.
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.
Investing Activities American’s net cash used in investing activities was $449 million in 2023 as compared to net cash provided by investing activities of $693 million in 2022. 71 Table of Contents American’s principal investing activities in 2023 included $2.5 billion of capital expenditures, which primarily related to the purchase of 17 Boeing 737-8 MAX aircraft, ten Airbus A321neo aircraft, seven Embraer 175 aircraft, seven Bombardier CRJ 900 aircraft and 28 spare engines.
American’s principal investing activities in 2023 included $2.5 billion of capital expenditures, which primarily related to the purchase of 17 Boeing 737-8 MAX aircraft, 10 Airbus A321neo aircraft, seven Embraer 175 aircraft, seven Bombardier CRJ 900 aircraft and 28 spare engines.
Maintenance, materials and repairs increased $581 million, or 21.6%, in 2023 from 2022 primarily due to increased costs for engine overhauls and airframe heavy checks driven by higher volume, flight hours and cost of materials.
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.
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. (2) Not meaningful or greater than 100% change.
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.
These cash outflows were offset in part by $1.1 billion of long-term debt proceeds, consisting of $866 million from the issuance of equipment notes related to EETCs and $205 million in connection with the financing of certain aircraft.
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 $1.1 billion of long-term debt proceeds, consisting of $866 million from the issuance of equipment notes related to EETCs and $205 million in connection with the financing of certain aircraft.
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.
At December 31, 2023, we had approximately $13.7 billion of gross federal NOLs and $4.7 billion of other carryforwards available to reduce future federal taxable income, of which $3.4 billion will expire beginning in 2029 if unused and $15.0 billion can be carried forward indefinitely.
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.
Operating Revenues Year Ended December 31, Increase (Decrease) Percent Increase (Decrease) 2023 2022 (In millions, except percentage changes) Passenger $ 48,512 $ 44,568 $ 3,944 8.8 Cargo 812 1,233 (421) (34.1) Other 3,464 3,170 294 9.3 Total operating revenues $ 52,788 $ 48,971 $ 3,817 7.8 64 Table of Contents This table presents our passenger revenue and the year-over-year change in certain operating statistics: Increase vs.
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 Expenses Year Ended December 31, Increase (Decrease) Percent Increase (Decrease) 2023 2022 (In millions, except percentage changes) Aircraft fuel and related taxes $ 12,257 $ 13,791 $ (1,534) (11.1) Salaries, wages and benefits 14,580 12,972 1,608 12.4 Regional expenses 4,643 4,385 258 5.9 Maintenance, materials and repairs 3,265 2,684 581 21.6 Other rent and landing fees 2,928 2,730 198 7.3 Aircraft rent 1,369 1,395 (26) (1.9) Selling expenses 1,799 1,815 (16) (0.9) Depreciation and amortization 1,936 1,977 (41) (2.1) Mainline operating special items, net 971 193 778 nm Other 6,006 5,422 584 10.8 Total operating expenses $ 49,754 $ 47,364 $ 2,390 5.0 Additional detail regarding changes in our operating expenses is as follows: Aircraft fuel and related taxes decreased $1.5 billion, or 11.1%, in 2023 from 2022 primarily due to a 16.3% decrease in the average price per gallon of aircraft fuel including related taxes to $2.96 in 2023 from $3.54 in 2022, 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) 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.
Our total revenue per available seat mile (TRASM) was 19.01 cents in 2023, a 1.0% increase as compared to 18.82 cents in 2022. Fuel In 2023, aircraft fuel expense totaled $12.3 billion, a decrease of $1.5 billion, or 11.1%, as compared to 2022.
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.
Total operating revenues in 2023 increased $3.8 billion, or 7.8%, from 2022 driven primarily by the increase in passenger revenue as described above. 67 Table of Contents Operating Expenses Year Ended December 31, Increase (Decrease) Percent Increase (Decrease) 2023 2022 (In millions, except percentage changes) Aircraft fuel and related taxes $ 12,257 $ 13,791 $ (1,534) (11.1) Salaries, wages and benefits 14,572 12,965 1,607 12.4 Regional expenses 4,619 4,345 274 6.3 Maintenance, materials and repairs 3,265 2,684 581 21.6 Other rent and landing fees 2,928 2,730 198 7.3 Aircraft rent 1,369 1,395 (26) (1.9) Selling expenses 1,799 1,815 (16) (0.9) Depreciation and amortization 1,927 1,969 (42) (2.2) Mainline operating special items, net 971 193 778 nm Other 6,008 5,425 583 10.8 Total operating expenses $ 49,715 $ 47,312 $ 2,403 5.1 Additional detail regarding changes in American’s operating expenses is as follows: Aircraft fuel and related taxes decreased $1.5 billion, or 11.1%, in 2023 from 2022 primarily due to a 16.3% decrease in the average price per gallon of aircraft fuel including related taxes to $2.96 in 2023 from $3.54 in 2022, 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) 2024 2023 (In millions, except percentage changes) Aircraft fuel and related taxes $ 11,418 $ 12,257 $ (839) (6.8) Salaries, wages and benefits 16,012 14,572 1,440 9.9 Regional expenses 5,009 4,619 390 8.4 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 1,919 1,927 (8) (0.4) Mainline operating special items, net 610 971 (361) (37.2) Other 6,431 6,008 423 7.0 Total operating expenses $ 51,550 $ 49,715 $ 1,835 3.7 Additional detail regarding changes in American’s 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.
Cargo revenue decreased $421 million, or 34.1%, in 2023 from 2022 primarily due to decreases in cargo yield and cargo ton miles driven by lower demand and increased air freight capacity globally. Other operating revenue increased $296 million, or 9.3%, in 2023 from 2022 driven primarily by higher revenue associated with American’s loyalty program.
Cargo revenue decreased $8 million, or 0.9%, in 2024 from 2023 primarily due to a decrease in cargo yield driven by increased air freight capacity, offset in part by an increase in cargo ton miles. Other operating revenue increased $354 million, or 10.3%, in 2024 from 2023 driven primarily by higher revenue associated with American’s loyalty program.
Selling expenses remained flat in 2023 from 2022 primarily due to a decrease in commissions expense, offset primarily by higher credit card fees driven by the overall increase in passenger revenues.
Selling expenses increased $13 million, or 0.7%, in 2024 from 2023 primarily due to higher credit card fees driven by the overall increase in passenger revenues, as well as an increase in advertising expense and booking fees, offset in part by a decrease in commissions expense.
As such, and assuming we do not enter into any future transactions to hedge our fuel consumption, we will continue to be fully exposed to fluctuations in fuel prices.
As such, and assuming we do not enter into any future transactions to hedge our fuel consumption, we will continue to be fully exposed to fluctuations in fuel prices. See Part I, Item 1A. Risk Factors – “ Our business is very dependent on the price and availability of aircraft fuel.
Cargo revenue decreased $421 million, or 34.1%, in 2023 from 2022 primarily due to a 29.4% decrease in cargo yield and a 6.7% decrease in cargo ton miles driven by lower demand and increased air freight capacity globally. Other operating revenue increased $294 million, or 9.3%, in 2023 from 2022 driven primarily by higher revenue associated with our loyalty program.
Cargo revenue decreased $8 million, or 0.9%, in 2024 from 2023 primarily due to an 11.8% decrease in cargo yield driven by increased air freight capacity, offset in part by a 12.3% increase in cargo ton miles. Other operating revenue increased $357 million, or 10.3%, in 2024 from 2023 driven primarily by higher revenue associated with our loyalty program.
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 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.
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. 72 Table of Contents Pass-Through Trusts American currently has 308 owned aircraft and 60 owned spare aircraft engines, which in each case were financed with EETCs issued by pass-through trusts.
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.
In 2023, one-time charges resulting from the ratification of this new agreement were recorded as mainline operating special items, net in the consolidated statement of operations, including the one-time payment of $754 million as well as adjustments to other benefit-related items of $235 million.
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.
For further information regarding our debt repurchases for the year ended December 31, 2023, see Note 4 to AAG’s Consolidated Financial Statements in Part II, Item 8A and Note 3 to American’s Consolidated Financial Statements in Part II, Item 8B.
As of the most recent applicable measurement dates, we were in compliance with each of the foregoing covenants. For further information regarding our debt covenants, see Note 4 to AAG’s Consolidated Financial Statements in Part II, Item 8A and Note 3 to American’s Consolidated Financial Statements in Part II, Item 8B.
Salaries, wages and benefits increased $1.6 billion, or 12.4%, in 2023 from 2022 primarily driven by higher wage rates associated with the ratification of a new collective bargaining agreement with our mainline pilots.
Salaries, wages and benefits increased $1.4 billion, or 9.9%, in 2024 from 2023 primarily driven by higher wage rates and costs for benefit-related items associated with the ratification of new CBAs with American’s mainline pilots in August 2023 and with its mainline flight attendants in September 2024.
We provide a valuation allowance for our deferred tax assets when it is more likely than not that some portion, or all of our deferred tax assets, will not be realized. We consider all available positive and negative evidence and make certain assumptions in evaluating the realizability of our deferred tax assets.
We provide a valuation allowance for our deferred tax assets, which include our NOLs and other carryforwards, when it is more likely than not that some portion, or all of our deferred tax assets, will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income.
Year Ended December 31, Increase (Decrease) Percent Increase (Decrease) 2023 2022 (In millions, except percentage changes) Passenger revenue $ 48,512 $ 44,568 $ 3,944 8.8 Cargo revenue 812 1,233 (421) (34.1) Other operating revenue 3,464 3,170 294 9.3 Total operating revenues 52,788 48,971 3,817 7.8 Aircraft fuel and related taxes 12,257 13,791 (1,534) (11.1) Salaries, wages and benefits 14,580 12,972 1,608 12.4 Total operating expenses 49,754 47,364 2,390 5.0 Operating income 3,034 1,607 1,427 88.8 Pre-tax income 1,121 186 935 nm (2) Income tax provision 299 59 240 nm Net income 822 127 695 nm Pre-tax income – GAAP $ 1,121 $ 186 $ 935 nm Adjusted for: pre-tax net special items (1) 1,341 272 1,069 nm Pre-tax income excluding net special items $ 2,462 $ 458 $ 2,004 nm (1) See Part II, Item 6.
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.
American Operating Activities American’s net cash provided by operating activities was $3.7 billion and $1.3 billion in 2023 and 2022, respectively, a $2.4 billion year-over-year increase due to higher profitability and cash provided by working capital management.
AAG Operating Activities Our net cash provided by operating activities was $4.0 billion and $3.8 billion in 2024 and 2023, respectively, a $180 million year-over-year increase due to sustained profitability and net changes in working capital. Investing Activities Our net cash used in investing activities was $968 million and $502 million in 2024 and 2023, respectively.
The year-over-year improvement in our pre-tax income excluding pre-tax net special items was primarily due to record passenger revenue in 2023 and lower fuel costs, offset in part by increases in certain operating expenses including salaries, wages and benefits, as described above.
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.
Year Ended December 31, 2022 Year Ended December 31, 2023 Passenger Revenue RPMs ASMs Load Factor Passenger Yield PRASM (In millions) Passenger revenue $ 48,512 8.8% 7.6% 6.7% 0.6pts 1.2% 2.0% Passenger revenue increased $3.9 billion, or 8.8%, in 2023 from 2022 primarily due to continued strength in demand for air travel, resulting in a 7.6% increase in RPMs and an 83.5% load factor in 2023.
Year Ended December 31, 2023 Year Ended December 31, 2024 Passenger Revenue RPMs ASMs Load Factor Passenger Yield PRASM (In millions) Passenger revenue $ 49,586 2.2% 7.3% 5.5% 1.4pts (4.7)% (3.1)% Passenger revenue increased $1.1 billion, or 2.2%, in 2024 from 2023. In 2024, RPMs increased 7.3%, resulting in a load factor of 84.9% as compared to 83.5% in 2023.
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. Our 2023 CASM was 17.92 cents, a decrease of 1.6%, from 18.20 cents in 2022.
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.
Cargo revenue decreased $421 million, or 34.1%, in 2023 as compared to 2022, primarily due to a 29.4% decrease in cargo yield and a 6.7% decrease in cargo ton miles driven by lower demand and increased air freight capacity globally.
Cargo revenue decreased $8 million, or 0.9%, in 2024 as compared to 2023, primarily due to an 11.8% decrease in cargo yield driven by increased air freight capacity, offset in part by a 12.3% increase in cargo ton miles.
During 2023 and 2022, cash payments from co-branded credit card and other partners were $5.2 billion and $4.5 billion, respectively. Total operating revenues in 2023 increased $3.8 billion, or 7.8%, from 2022 driven primarily by the increase in passenger revenue as described above. Our TRASM was 19.01 cents in 2023, a 1.0% increase as compared to 18.82 cents in 2022.
This one-time cash payment will be amortized over the life of the new agreement beginning in 2026. Total operating revenues in 2024 increased $1.4 billion, or 2.7%, from 2023 driven primarily by the increase in passenger revenue as described above. Our TRASM was 18.51 cents in 2024, a 2.6% decrease as compared to 19.01 cents in 2023.
(2) Severance expenses included costs associated with headcount reductions in certain corporate functions. (3) Fleet impairment included a non-cash impairment charge to write down the carrying value of our retired Airbus A330 fleet to the estimated fair value due to the market conditions for certain used aircraft.
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.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

7 edited+0 added−2 removed8 unchanged
Biggest changeAdditionally, the fair value of fixed-rate debt would have decreased by approximately $700 million for AAG and $460 million for American. In connection with the phase-out of LIBOR as a reference rate in June 2023, the U.S.
Biggest changeAdditionally, 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
Based on our 2024 forecasted fuel consumption, we estimate that a one cent per gallon increase in the price of aircraft fuel would increase our 2024 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 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.
We estimate a uniform 10% strengthening in the value of the U.S. dollar from 2023 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 $155 million for the year ended December 31, 2023.
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.
Generally, fluctuations in foreign currencies, including devaluations, cannot be predicted by us and can significantly affect the value of our assets located outside the United States. These conditions, as well as any further delays, devaluations or imposition of more stringent repatriation restrictions, may materially adversely affect our business, results of operations and financial condition. See Part I, Item 1A.
Generally, fluctuations in foreign currencies, including devaluations, cannot be predicted by us and can significantly affect the value of our assets located outside the United States. These conditions, devaluations or imposition of more stringent repatriation restrictions, may materially adversely affect our business, results of operations and financial condition. See Part I, Item 1A.
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 $1.32 per gallon to a high of approximately $4.40 per gallon during the period from January 1, 2021 to December 31, 2023. 78 Table of Contents As of December 31, 2023, 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 $1.91 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.
If annual interest rates increase 100 basis points, based on our December 31, 2023 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 $80 million.
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.
We had variable-rate debt instruments representing 30% of our total long-term debt at December 31, 2023. We currently do not have an interest rate hedge program to hedge our exposure to floating interest rates on our variable-rate debt obligations.
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.
Removed
Federal Reserve, in conjunction with the Alternative Reference Rates Committee, has chosen SOFR, and specifically Term SOFR, as the recommended risk-free reference rate for the U.S. (calculated based on repurchase agreements backed by treasury securities). Prior to the discontinuation of LIBOR, we amended substantially all of our LIBOR-based financing arrangements to transition them to successor rates, primarily Term SOFR.
Removed
We cannot predict the extent to which Term SOFR will gain widespread acceptance as a replacement for LIBOR, the consequences of the replacement of LIBOR on financial markets generally or on our business, financial condition or results of operations specifically, and our transition to successor rates could cause the amount of interest payable on our long-term debt to be different or higher than expected. 79 Table of Contents

Other AAL 10-K year-over-year comparisons