stockrowWhat it does
American Airlines Group is a holding company whose airlines provide scheduled passenger and cargo transportation. Founded in 2013, it is headquartered in Fort Worth, Texas. Robert D. Isom is its chief executive officer and president.
American flies passengers through a network of hubs, where travelers can connect between flights. Its hubs include Charlotte, Chicago, Dallas/Fort Worth, Los Angeles, Miami, New York, Philadelphia, Phoenix and Washington, D.C. The company also works with other airlines to connect customers to destinations beyond its own network. Its cargo business transports freight and mail on that network.
The company serves travelers directly and through travel agents and corporate travel intermediaries. It also operates AAdvantage, a loyalty program that rewards members for flying and for spending with partners, including co-branded credit card providers. Members can use miles for flights, upgrades and other rewards.
American Eagle is the brand used by regional airlines that fly shorter routes and bring passengers from smaller markets into the hub network. Some of these airlines are owned by American Airlines Group; others operate under contracts. American controls the marketing, schedules, ticketing, prices and seat inventories for these contracted flights.
In 2025, approximately 224 million passengers boarded American’s flights. At December 31, 2025, the company operated 1,013 mainline aircraft, while its regional operators flew an additional 567 aircraft.
How it makes money
American earns revenue principally by selling passenger travel. It also earns revenue from loyalty-related travel and marketing services, cargo, and other activities. Passenger travel revenue was $45.6 billion in FY2025, representing 83.5% of revenue. Loyalty travel revenue was $4.0 billion, and loyalty marketing services revenue was $3.5 billion in FY2025.
Total operating revenue: $54.6 billion in 2025; $16.3 billion in the third quarter of 2026.
Ticket prices are set market by market. American competes through discounts, fare matching, promotions and loyalty offers, alongside flight schedules and service features. It sells tickets through its website, app and reservations centers, as well as through conventional and online travel agents and travel management companies. Customers can also pay for travel using miles, subject to program and partner rules.
AAdvantage gives American an ongoing relationship with travelers and commercial partners. Members earn miles through eligible flights and through non-flight partners, including co-branded cards, hotels, car rentals, shopping and dining. They can redeem those miles for travel, upgrades and other awards. Cash payments from co-branded credit card and other partners were $6.2 billion in 2025; those payments are not the same measure as annual loyalty revenue. Citi became the exclusive U.S. issuer of AAdvantage co-branded cards in 2026.
On contracted American Eagle flights, American receives the revenue and pays regional operators predetermined fees for flying an agreed number of aircraft. It also reimburses or pays certain variable costs, including fuel and airport landing fees. Cargo revenue comes from transporting freight and mail across the network.
| Product or service | Revenue, FY2025 | Share | Change on the year |
|---|---|---|---|
| Passenger travel | $45.6 billion | 83.5% | −0.30% |
| Loyalty revenue - travel | $4.0 billion | 7.39% | 5.02% |
| Loyalty revenue - marketing services | $3.5 billion | 6.43% | 7.80% |
| Cargo | $839.0 million | 1.54% | 4.35% |
| Other revenue | $640.0 million | 1.17% | 13.5% |
Customers and how it sells
American carries leisure and business travelers, including customers whose employers book through travel management companies. Its AAdvantage Business program rewards eligible companies and their travelers for business bookings. AAdvantage also serves individual travelers who earn and redeem miles with American and participating partners.
Customers can book directly through American’s website, app and reservations centers or use travel agents, travel management companies and online travel agencies. American also distributes content to third parties through technology aggregators and direct connections. Cargo customers can search schedules, check availability, obtain rates and make bookings through its digital offerings.
The airline serves over 350 destinations around the world. Its international service includes Canada, Mexico, the Caribbean, Central and South America, Europe, Qatar, China, Japan, South Korea, India, Australia and New Zealand. Regional flights connect smaller communities to its hubs and complement service in mainline markets. In 2025, 57 million passengers boarded regional flights, approximately 42% of whom connected to or from mainline flights.
The oneworld alliance links member airlines’ networks and loyalty programs and provides reciprocal lounge access. American also has joint businesses across the Atlantic and Pacific and covering Australia and New Zealand. These arrangements let participating carriers cooperate on routes and share certain revenue and costs.
Suppliers and costs
American depends on aircraft manufacturers, fuel suppliers, regional airline operators and a large workforce. Its fleet includes Boeing and Airbus aircraft. For some of its smallest regional aircraft, American says production has ended and identifies Embraer as the only manufacturer for that aircraft size.
Mainline and regional salaries, wages and benefits were its largest expense in 2025, at 38% of total operating expenses. Approximately 86% of its active full-time equivalent employees were represented by labor unions at December 31, 2025. Contractual wage increases and benefit-related costs contributed to higher salaries, wages and benefits in 2025.
Fuel is another major cost. Aircraft fuel expense totaled $10.7 billion in 2025. American had no fuel hedging contracts outstanding at December 31, 2025, and its policy was not to hedge consumption. In the third quarter of 2026, higher fuel costs added $1.9 billion compared with the same quarter a year earlier.
Third-party regional carriers receive predetermined operating fees regardless of passenger numbers, while American pays or reimburses specified variable costs. The company also incurs costs for airports, distribution, maintenance and compliance with aviation regulations.
- Revenue$54.6B
- Cost of revenue−$42.3B
- Selling, general and administrative−$2.0B
- Other operating costs−$8.9B
- Operating income$1.5B
Competitive position
American competes with other airlines on most of its domestic nonstop routes and with network carriers offering connecting flights through their own hubs. Named competitors include Delta Air Lines, United Airlines, Southwest Airlines, Alaska Airlines, Frontier Airlines and Allegiant Air. It also competes with cargo and charter airlines and, on shorter trips, ground and rail transportation.
Internationally, American competes with U.S. and foreign airlines, including state-affiliated carriers. Airlines compete on price, schedules, nonstop availability, reliability, cabin amenities and loyalty programs. Competitors often match fare reductions, and other network airlines also use regional operators to bring travelers to their hubs.
American’s network combines its hubs and regional flights with oneworld membership and joint businesses. These arrangements extend the destinations customers can reach and offer loyalty reciprocity. Our reading: the network and partnerships provide a meaningful competitive advantage for connecting travelers, but other network airlines have comparable hub and regional arrangements.
AAdvantage gives customers ways to earn and redeem miles across flights and non-flight partners. Our reading: loyalty benefits can encourage repeat use, although competing airlines also use loyalty initiatives and promotions to win passengers.
Some airports restrict access through takeoff and landing slots. American’s ability to retain slots generally depends on using them. Our reading: slots can protect access at constrained airports, but their value depends on regulatory rules and continued use.
| Competitor | Where they compete | Threat (our reading) |
|---|---|---|
| Delta Air Lines | Domestic nonstop and connecting passenger routes | High |
| United Airlines | Domestic nonstop and connecting passenger routes | High |
| Southwest Airlines | Domestic passenger routes | High |
| Alaska Airlines | Domestic passenger routes; also an alliance partner | Medium |
| Frontier Airlines | Domestic routes with low-cost pricing | Medium |
| Allegiant Air | Domestic routes with low-cost pricing | Medium |
Growth opportunities
American’s growth plans include expanding and adjusting its network, adding premium seats, improving the customer experience and developing its loyalty program. In 2025, it launched more than 60 new routes and announced over 20 new routes for 2026. Its international joint businesses and airline partners provide another way to extend its network.
American has added premium seating through new aircraft and retrofit programs. It introduced the Flagship Suite on Boeing 787-9 and Airbus A321XLR aircraft and announced plans to expand the product to its Boeing 777 fleet. The company plans to install Starlink connectivity across its narrowbody and widebody fleets. American says premium seating generates roughly half of ticket revenue on about 30% of its seats.
The loyalty program is another area of investment. Citi became the exclusive U.S. issuer of AAdvantage co-branded credit cards in 2026, and American extended its agreement with Mastercard as the cards’ exclusive payment network. Members can earn miles through flights and non-flight partners and redeem them for travel and other awards.
American expects its growth rate in 2027 to decelerate considerably in response to elevated fuel prices. It plans to use reduced aircraft utilization to help accommodate aircraft reconfiguration and connectivity installations, while matching capacity with demand. The company also says slower capacity growth will put upward pressure on unit costs.
- $29.9BFY2021
- $49.0BFY2022
- $52.8BFY2023
- $54.2BFY2024
- $54.6BFY2025
Structural risks
- Fuel: Fuel prices and availability materially affect results. American had no fuel hedging contracts outstanding at December 31, 2025; without future hedges, it remains exposed to fuel-price fluctuations. Higher fuel costs added $1.9 billion in the third quarter of 2026 compared with a year earlier.
- Debt and liquidity: Debt obligations can require a substantial portion of liquidity or operating cash flow for payments, leaving less for investment. Covenants also include liquidity and coverage requirements and restrictions on certain corporate actions.
- Labor: Most employees are represented by unions. Labor disputes, strikes and other disruptions may adversely affect operations and financial performance; wage and benefit costs increased in 2025 under labor agreements.
- Demand and disruption: Economic downturns, geopolitical instability, disease outbreaks, severe weather and air traffic control disruptions can affect travel demand or operations. The 2025 government shutdown caused schedule reductions, delays and cancellations and affected bookings.
- Aircraft and airport access: Aircraft delivery delays, groundings or certification problems can reduce available fleet capacity. At constrained airports, American must retain slots and obtain adequate gates and facilities to operate its desired schedule.
- Regulation and emissions: Aviation is subject to extensive safety, consumer protection and environmental regulation. American expects sustainable aviation fuel requirements to increase fuel costs, although the size of the increase and its ability to pass costs to customers remain uncertain.
Bottom line
Our reading
Our reading: American is a network airline whose passenger business is supported by regional connections, international partners and a loyalty program with recurring commercial relationships (item1). Those assets operate alongside fare competition and substantial labor, fuel and debt obligations (item1; item1a). The 2026 fuel increase and planned slowdown in capacity growth illustrate how costs can constrain the benefits of network and premium investments (call_prepared; call_qa).