American Airlines (AAL) Raises Q4 EPS Guidance

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December 5, 2024 8:04 AM EST

American Airlines (NASDAQ: AAL)

On December 5, 2024, American Airlines, Inc. (“American”) and Citigroup Inc. issued a joint press release announcing the entry into a new agreement by American and Citibank, N.A. (“Citi”) relating to American’s co-branded credit card program, which press release is attached hereto as Exhibit 99.1. Under the new agreement, scheduled to commence in January 2026, American will partner with Citi as the exclusive issuer of the AAdvantage® co-branded credit card portfolio in the United States.
As a result of the new agreement and based on our current projections, including current macroeconomic assumptions and new customer acquisition and other program growth, American presently expects cash remuneration from its co-branded credit card and other partners to grow by approximately 10% annually. For the twelve months ended September 30, 2024, American’s cash remuneration from its co-branded credit card and other partners was approximately $5.6 billion. As remuneration from American’s co-branded credit card and other partners approaches $10 billion per year, annual pre-tax income is projected to benefit by approximately $1.5 billion, compared to 2024. While American is providing this updated guidance related to the presently anticipated impact of the new agreement, prospectively American does not intend to update these amounts or to comment specifically on the results of our affinity programs. Rather, as is presently the case, the performance of these programs will be an element of the revenue and other guidance American may provide from time to time in the future.
Also on December 5, 2024, American Airlines Group Inc. (the “Company”) is providing to investors updated financial and operational guidance relating to the fourth quarter of 2024. The pricing and revenue environment has continued to improve since the Company’s prior fourth-quarter guidance issued on October 24, 2024. The Company now expects fourth-quarter TRASM1 to be approximately flat to up 1% versus the same period in 2023. The Company presently expects fourth-quarter CASM-ex2 to be up approximately 5% to 6%, above the midpoint of its prior guidance range, due in part to a higher accrual for profit sharing driven by higher anticipated earnings in the quarter. Based on these updated assumptions, the Company now expects its fourth quarter adjusted earnings per diluted share3 to be between approximately $0.55 and $0.75, above the high end of the Company’s prior guidance range.
Estimated 4Q 2024
Current Guidance Previous Guidance
TRASM1 (vs. 4Q 2023)~ Flat to +1% ~ -1% to -3%
CASM-ex2 (vs. 4Q 2023)~ +5% to +6% ~ +4% to +6%
Adjusted earnings per diluted share3 ($/share)$0.55 to $0.75 ~ $0.25 to $0.50
1Total revenue per available seat mile.
2CASM-ex is cost per available seat mile (CASM) excluding fuel and net special items and is a non-GAAP measure.
3Adjusted earnings per diluted share excludes the impact of net special items and is a non-GAAP measure. Adjusted earnings per diluted share calculation assumes a diluted share count of 722.6 million for the fourth quarter of 2024. Shares outstanding are based upon several estimates and assumptions, including average per share stock price and stock award activity. The number of shares in actual calculations of earnings per share will likely differ from those set forth above.
Certain components of the guidance provided exclude fuel and net special items. The updated guidance provided herein is presented to provide comparability with prior guidance. The Company is unable to fully reconcile this forward-looking guidance to the corresponding GAAP measures because the full nature and amount of net special items cannot be determined at this time.
The information in this Item 7.01, including Exhibit 99.1, is being furnished and shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that Section and shall not be deemed incorporated by reference into any registration statement or other document filed pursuant to the Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in such filing.

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