Q2 2025 American Airlines Group Inc Earnings Call
Listen only mode.
After the speaker presentation, there will be a question and answer session to ask a question. During this session you will need to press star one on your telephone.
To remove yourself from the queue you May press star one again.
Speaker Change: I would now like to hand, the call over to Neil Russell Vice President Investor Relations. Please go ahead.
Neil Russell: Thank you Latif and good morning, everyone and welcome to the American Airlines Group earnings Conference call on the call with prepared remarks, we have our CEO, Robert Isom and our CFO Kevin May.
Thank you for standing by and welcome to American Airline groups. Second quarter 2025 earnings conference call. At this time, all participants are in a listen-only mode.
Neil Russell: In addition, we have a number of our senior executives in the room. This morning for the Q&A session.
Neil Russell: Robert will start the call with an overview of our performance Kevin will follow with details on the quarter. In addition to outlining our operating plans and outlook going forward.
After the speaker presentation, there will be a question and answer session to ask a question during the session. You will need to press star 1 1 on your telephone.
To remove yourself from the queue. You may press star 1 1 again.
Neil Russell: After our prepared remarks, we will open the call for analyst questions followed by questions from the media.
Speaker Change: I would now like to hand the call over to Neil Russell vice president investor relations. Please go ahead.
Neil Russell: To get in as many questions as possible. Please limit yourself to one question and one follow up.
Neil Russell: Before we begin today, we must state that today's call contains forward looking statements, including statements concerning future revenues.
Neil Russell: Thank you Latif. Good morning, everyone. And welcome to the American Airlines group earnings conference. Call on the call with prepared remarks, we have our CEO, Robert Eisen, and our CFO. Devon May
Neil Russell: Costs forecast of capacity and fleet plans.
Neil Russell: In addition, we have a number of our senior Executives in the room this morning for the Q&A session.
Neil Russell: These statements represent our predictions and expectations of future events, but numerous risks and uncertainties could cause actual results to differ from those projected.
Robert will start the call with an overview of our performance. Devin will follow with details on the quarter, in addition to outlining our operating plans and Outlook going forward.
Neil Russell: Information about some of these risks and uncertainties can be found in our earnings press release and Form 10-Q that was issued earlier this morning.
Neil Russell: After our prepared remarks, we will open the call for analyst questions, followed by questions from the media.
Neil Russell: Unless otherwise specified all references to earnings per share on an adjusted and diluted basis. Additionally, we will be discussing certain non-GAAP financial measures, which exclude the impact of unusual items.
To get in as many questions as possible. Please limit yourself to 1 question and 1 follow-up.
Neil Russell: Before we begin today, we must state that today's call contains forward-looking statements including statements concerning future revenues costs forecasts of capacity and Fleet plans.
Neil Russell: A reconciliation of those numbers to the GAAP financial measures is included in the earnings press release, which can be found in the investors section of our website.
Neil Russell: These statements represent our predictions and expectations of future events, but numerous risks and uncertainties could cause actual results to differ from those projected.
Neil Russell: A webcast of this call will also be archived on our website.
Neil Russell: The information, we're giving you on the call. This morning is as of today's date and we undertake no obligation to update the information subsequently.
Neil Russell: Information about some of these risks and uncertainties can be found in our earnings, press release and form 10 q. That was issued earlier this morning.
Speaker Change: Thank you for your interest and for joining US this morning with that I'll turn the call over to our CEO Robert Isom.
Robert Isom: Good morning, everyone. This morning American reported an adjusted pre tax profit of $869 million for the second quarter core earnings per share of <unk> 95.
Neil Russell: Unless otherwise specified all references to earnings per share are on an adjusted and diluted basis. Additionally, we will be discussing certain non-gaap Financial measures which exclude the impact of unusual items.
Neil Russell: A Reconciliation of those numbers to the gaap. Financial measures is included in the earnings press release, which can be found in the investors section of our website.
Robert Isom: Which is toward the high end of the guidance we provided in April.
Neil Russell: A webcast to this call will also be archived on our website.
Robert Isom: We achieved this in a difficult and evolving operating and demand environment and we're proud of our second quarter performance.
Neil Russell: The information we are giving you on the call. This morning is, as of today's date and we undertake no obligation to update the information, subsequently.
Robert Isom: We remain steadfast in our focus on our 2025 priorities, which will continue to shape. The long term success of American <unk>.
Neil Russell: Thank you for your interest. And for joining us this morning with that, I'll turn the call over to our CEO. Robert Aizen.
Robert Isom: Executing on these priorities will enable us to grow margins.
Robert Isom: Generate sustainable free cash flow and further strengthen our balance sheet.
Robert Isom: Our priorities this year include <unk>.
Robert Isom: Delivering on our revenue potential renewing our focus on the customer experience.
Robert Aizen: Good morning everyone. This morning, American reported, an adjusted pre-tax profit of 869. Million for the second quarter or earnings per share of 95 cents which is toward the high end of the guidance. We provided in April,
Robert Isom: Operating with excellence and driving efficiencies throughout the airline.
Robert Aizen: which in a difficult and evolving operating and demand environment.
Robert Isom: We're pleased with the progress we've made on each of these fronts and we'll share more on them. This morning.
Robert Aizen: And we're proud of our second quarter performance.
Robert Isom: Let's begin with our performance during the second quarter.
Robert Aizen: We remain steadfast in our focus on our 2025 priorities which will continue to shape the long-term success of American.
Robert Isom: In the second quarter, we produced record revenue of $14 4 billion.
Robert Aizen: Executing on these priorities will enable us to grow margins.
Robert Isom: A testament to the progress, we're making on our commitment to deliver on our revenue potential even in a challenging environment.
Robert Aizen: Generate sustainable free, cash flow.
Robert Aizen: And further, strengthen our balance sheet.
Robert Aizen: our priorities, this year include
Robert Aizen: Delivering on our Revenue potential.
Robert Isom: Our year over year passenger unit revenue improvement, let our network peers for the fourth straight quarter.
Robert Aizen: Renewing, our focus on the customer experience.
Robert Aizen: Operating with excellence.
Robert Isom: Long haul international PRASM performed in line with our initial expectations with all entities producing positive year over year results.
Robert Aizen: And driving efficiencies throughout the airline.
Robert Aizen: We're pleased with the progress we've made on each of these fronts and we'll share more on them this morning.
Robert Isom: Driven by continued strength in the premium cabin Atlantic PRASM was up 5% and Pacific PRASM was up approximately 1% year over year on approximately 17% more capacity.
Robert Aizen: Let's begin with our performance during the second quarter.
Robert Isom: Premium demand in spending from higher income consumers remained resilient in the second quarter on.
Robert Aizen: In the second quarter, we produced record revenue of 14.4 billion dollars a testament to the progress. We're making on our commitment to deliver on our Revenue potential even in a challenging environment,
Robert Isom: On a year over year basis unit revenue in the premium cabin performed four points better than the main cabin.
Robert Aizen: Our year-over-year passenger unit Revenue Improvement. Let our Network peers for the fourth straight quarter.
Robert Isom: We are well positioned to attract premium customers with plans to expand our premium seating further in the years ahead.
Robert Aizen: Long Haul International performed in line with our initial expectations, with all entities producing positive year-over-year results
Robert Isom: The strength in international and premium was offset by domestic leisure weakness.
Robert Isom: Domestic unit revenue was down approximately 6% year over year the softness in the main cabin persisted throughout the second quarter.
Robert Aizen: Driven by continued strength. In the premium cabin, Atlantic pasm was up 5% and Pacific pasm was up approximately 1% year-over-year on approximately 17% more capacity.
Robert Isom: While domestic unit revenue is expected to remain lower year over year in the third quarter. We expect that July will be the low point and that performance will improve sequentially each month in the quarter as industry capacity growth slows and demand strengthened.
Robert Aizen: Premium demand and spending from higher income consumers, remain resilient in the second quarter.
Robert Aizen: On a year-over-year basis. Unit Revenue in the premium cabin performed 4 Points better than the main cabin.
Robert Isom: As shown on slide four of the earnings presentation that we published this morning, the efforts of our sales team to recover revenue from indirect channels beat our expectations in the quarter with our indirect shared now down 3% versus historical levels.
Robert Aizen: We're well, positioned to attract premium, customers with plans to expand our premium seating further in the years ahead.
Robert Aizen: The strength and international premium was offset by domestic Leisure weakness.
Robert Isom: We saw the greatest sequential improvement in indirect leisure channels, but we continue to make progress and corporate channels.
Robert Aizen: Domestic unit Revenue was down, approximately 6% year-over-year the softness in the main cabin, persisted throughout the second quarter.
Robert Isom: We remain on track to get back to our historical share of indirect channel revenue as we exit 2025.
Robert Isom: In the second quarter, we grew our managed business revenue by 10% year over year outpacing broader industry growth. This result is further confirmation that our sales and distribution efforts are being well received by our customers.
Robert Aizen: While domestic unit, revenue is expected to remain lower year-over-year in the third quarter. We expect that July will be the low point and that performance will improve sequentially each month in the quarter as industry capacity growth slows and demand strengthens
Robert Isom: Our work to grow the advantage program and enhance our partnership with Citi is continuing as we prepare for the start of our new 10 year agreement in January 2026.
Robert Aizen: As shown on slide 4, the earnings presentation, that we published this morning, the efforts of our sales team to recover revenue, from indirect channels, beat our expectations in the quarter with our indirect shared. Now down, 3%, versus historical levels.
Robert Aizen: We saw the greatest sequential Improvement in indirect Leisure channels but we continue to make progress in corporate channels.
Robert Isom: Slide five highlights that are active advantage members have grown 7% year to date with our highest growth in enrollments coming from Chicago, Dallas Fort Worth and New York <unk>.
Robert Aizen: We remain on track to get back to our historical share of indirect Channel Revenue. As we exit 2025.
Robert Isom: Advantaged members are more engaged generate a higher yield versus non members and are a key driver for premium cabin demand currently accounting for approximately 77% of premium revenue.
Robert Aizen: In the second quarter, we grew our management business Revenue by 10% year-over-year that pacing broader industry growth.
This result is further confirmation that our sales and distribution efforts are being well received by our customers.
Robert Isom: Spending on our co branded credit cards was up 6% year over year for the second quarter as customers continue to favor advantage miles as their preferred rewards currency.
Robert Aizen: our work to grow the advantage program and enhance our partnership with city is continuing as we prepare for the start of our new 10 year agreement in January 2026,
Robert Isom: American remains committed to offering an industry, leading travel rewards program and we look forward to sharing more exciting updates in the months ahead.
Robert Aizen: Slide 5 highlights that an active Advantage, members have grown 7% year to date with our highest growth in enrollments coming from Chicago Dallas Fort Worth and New York.
Robert Isom: The further strengthening of our network remains a key priority for the team.
Robert Isom: In the second quarter, our growth was focused on Chicago, New York and Philadelphia, three strategic hubs critical to our network and where we continue to see long term opportunity.
Robert Aizen: Advantage members are more engaged generate a higher yield versus non-members and are a key driver for premium cabin demand currently accounting for approximately 777% of Premium Revenue.
Robert Isom: We're encouraged by the early results from this additional capacity will share unit revenue and financial results tracking in line with or ahead of expectations.
Robert Aizen: Spending on our co-branded. Credit cards was up 6%. Year-over-year for the second quarter as customers. Continue to favor aadvantage miles as their preferred rewards currency.
Robert Isom: We will remain responsive to the demand and competitive environment as we execute our long term network strategy and we remain focused on deploying capacity that best serves our customers.
Robert Aizen: American remains committed to offering an industry-leading travel Rewards program and we look forward to sharing more exciting updates in the months ahead.
Robert Aizen: The further strengthening of our Network remains a key priority for the team.
Robert Isom: Our new customer experience organization is elevating every part of the travel journey.
Robert Isom: We've continued to make meaningful improvements across all phases of the customer experience.
Robert Aizen: In the second quarter, our growth was focused on Chicago New York and Philadelphia 3. Strategic hubs critical to our Network and where we continue to see long-term opportunity
Robert Isom: We've announced several exciting updates to our lounge network, including opening a new flagship lounge in Philadelphia.
Speaker Change: Miami, you've announced plans for a new flagship lounge and are expanding the Admirals club lounge footprint.
Robert Aizen: We're the early results from this additional capacity with Cher, unit revenue and financial results tracking in line with or ahead of expectations.
Speaker Change: American is proud to offer more premium lounges than any other carrier.
Speaker Change: Later, this summer and Charlotte will open provisions by animals club, a new unique and additional lounge concept for customers that are seeking a quick refreshment before catching the next flight.
Robert Aizen: Will remain responsive to the demand and competitive environment as we execute our long-term Network strategy and we remain focused on deploying capacity that best serves our customers.
Robert Aizen: Our new customer experience, organization is elevating every part of the travel Journey.
Speaker Change: The new flagship suite on a Boeing 770, <unk> officially entered service last month on select flights to London and this winter. This premium offering is expected to expand to Argentina, New Zealand, and Australia, giving more customers the opportunity to enjoy this elevated experience.
Robert Aizen: We've continued to make meaningful improvements across All Phases of the customer experience.
Robert Aizen: We've announced several exciting updates to our Lounge Network including opening a new flagship Lounge in Philadelphia. In Miami. We've announced plans for a new flagship Lounge in our expanding the Admirals Club Lounge footprint.
Speaker Change: Customer response to new aircraft and flagship suite product has been overwhelmingly positive.
Robert Aizen: American is proud to offer more premium lounges than any other carrier.
Speaker Change: We want our customers experience at the airport to be as easy and seamless as possible and May we implemented TSA touch the saidi, which.
Robert Aizen: The later this summer in Charlotte will open Provisions by animals. Club, a new unique and additional Lounge concept for customers that are seeking a quick refreshment before catching their next flight.
Speaker Change: Secondly, expedites the security screening process.
Speaker Change: Additionally, we are the first airline to test one stop security for flights into the U S. Starting with Americans flights from London to Dallas, Fort worth, allowing customers to bypass baggage reclaim and TSA re screening upon arrival.
Robert Aizen: The new flagship Suite on our Boeing 7879 officially entered service last month on a select flights to London in this winter. This premium offering is expected to expand to Argentina. New Zealand and Australia. Giving more customers the opportunity to enjoy this elevated experience.
Speaker Change: Excited to be the first carrier to implement one stop security, which will greatly enhance the connecting experience and overall journey for our customers traveling internationally.
Robert Aizen: Customer response, the new aircraft and Flagship Suite. Product has been overwhelmingly positive.
Speaker Change: Thank you to the department of Homeland Security for its continued partnership and commitment.
Robert Aizen: We want our customers experience at the airport to be as easy and as seamless as possible in may we implemented TSA touchless ID, which significantly expedites the security screening process.
Speaker Change: We've also introduced several additional customer enhancements during the quarter, including an option for customers to use miles as a form of payment for upgrades and improvements to our food and beverage offerings.
Speaker Change: We're excited about the momentum we built and we're just getting started our customer experience team is undertaking a comprehensive review of every phase of the travel journey and making investments that will deliver tangible improvements for our customers and our revenue performance.
Robert Aizen: Additionally, we're the first airline to test 1, Stop security for flights into the US, starting with Americans flights from London, to Dallas Fort Worth allowing customers to bypass baggage reclaim and TSA rescreening upon arrival.
Robert Aizen: We're excited to be the first carrier to implement 1. Stop security, which will greatly enhance, the connecting experience and overall Journey for our customers traveling internationally.
Speaker Change: Turning now to our operation team has continued to plan execute and recover it through very difficult operating conditions. This summer.
Robert Aizen: Thank you to the Department of Homeland Security for its continued partnership and commitment.
Speaker Change: Disruptive operating conditions are a reality of our business and the American team continues to do an excellent job recovering from irregular operations and mitigating the impact to our customers.
Robert Aizen: We've also introduced several additional customer enhancements during the quarter, including an option for customers to use Maz as a form of payment for upgrades and improvements, to our in-flight food and beverage offerings.
We're excited about the momentum. We've built and we're just getting started.
Speaker Change: In the second quarter, there were significant storm activity at our hubs in Dallas Fort Worth Chicago, Washington, DC and in the northeast a 36% increase in disruptive operational events over the same period last year.
Robert Aizen: And making Investments, that will deliver tangible improvements for our customers and our Revenue performance.
Speaker Change: Thanks to the investments we've made in technology and our operation and our team's continued focus on controlling what we can control we were able to recover quickly from these disruptions a big thank you to the entire American airlines team for continuing to deliver for our customers in the midst of a very challenging operating environment.
Robert Aizen: Turning now to our operation, the team has continued to plan execute and recover through very difficult operating conditions this summer.
Robert Aizen: Disruptive operating conditions are a reality of our business and the American team continues to do. An excellent job recovering from irregular operations, and mitigating the impact to our customers.
Speaker Change: Finally, I'd like to acknowledge the families and communities affected by the catastrophic flooding in central Texas.
Speaker Change: American has a proud Texas based airline and we've joined forces with our disaster response partners.
Speaker Change: The American Red Cross Airlink in team Rubicon to aid relief efforts and support impacted families.
Robert Aizen: In the second quarter, there was significant storm activity at our hubs in Dallas Fort Worth Chicago, Washington DC and in the Northeast, a 36% increase in disruptive operational events, over the same period last year.
Speaker Change: Now I'll turn the call over to Devon to share more about our second quarter financial results and outlook.
Robert Aizen: Thanks to the Investments. We've made in technology and our operation and our teams continued. Focus on controlling, what we can control. We are able to recover quickly from these disruptions
Devon: Thank you Robert and good morning, everyone.
Devon: Excluding net special items American reported a second quarter operating margin of approximately 8% and earnings per share of <unk> 95.
Robert Aizen: A big thank you to the entire American Airlines team for continuing to deliver for our customers in the midst of a very challenging operating environment.
Devon: Both at the high end of our guidance.
Robert Aizen: Finally, I'd like to acknowledge the families and communities that affected by the catastrophic flooding in Central Texas.
Devon: Our second quarter revenue of $14 4 billion was up 0.4% year over year.
Robert Aizen: American is a proud Texas based Airline and we've joined forces with our Disaster Response partners.
Devon: Second quarter unit cost, excluding fuel and net special items was up three 4% year over year over half a point better than the midpoint of our guidance.
Robert Aizen: The American Red Cross are linked and team. Rubicon to Aid relief efforts and support impacted families.
Devon: This is a result of the team's continued strong execution on our efficiency initiatives and a shift in timing of maintenance events to later in the year.
Robert Aizen: Now, I'll turn the call over to Devon to share more about our second quarter Financial results and Outlook.
Devon: This resulted in an EBITDAR margin of 14, 2% a one five point reduction year over year, which is similar to the year over year margin decline of our network peers.
Devon May: Thank you, Robert and good morning. Everyone excluding net, special items, American reported a second quarter, operating margin of approximately 8% and earnings per share of 95 cents both at the high end of our guidance.
Devon: This is a great result, considering the current domestic demand environment and our differentiated position, which includes the relative domestic weighting of our network and paying full market rates for all of our largest labor groups.
Devon May: Our second quarter revenue of 14.4 billion was up, 0.4% year-over-year.
Devon May: In fuel and net. Special items was up 3.4% year-over-year over half a point better than the midpoint of our guidance.
Devon: We are committed to running the airline as reliably and efficiently as possible, while continuing to improve our revenue performance and enhance the customer experience.
Devon May: This is a result of the teams continued, strong execution on our efficiency initiatives and a shift in timing of Maintenance events to later in the year.
Devon: These efficiencies are driven by best in class workforce management efficient asset utilization and procurement excellence and are unlocked by investments in technology and process improvements by.
Devon May: This resulted in an iPad margin of 14.2%, a 1.5 Point reduction year-over-year, which is similar to the year-over-year, margin decline of our Network peers.
Devon: By year end, we expect to have driven cumulative savings of over $750 million and delivered approximately $600 million of working capital improvements since we launched our reengineering the business efforts in 2023.
Devon May: This is a great result considering the current domestic demand environment and our differentiated position, which includes the relative domestic waiting of our Network and paying full Market rates. For all of our largest labor groups,
Devon: During the second quarter, we raised $1 billion through a loyalty term loan financing and used the proceeds to cash settle our $1 billion convertible note earlier this month <unk>.
Devon May: We are committed to running the airline as reliably and efficiently as possible, while continuing to improve our Revenue performance and enhance the customer experience.
Devon: <unk> ended the second quarter with approximately $38 billion of total debt and $29 billion of net debt our lowest net debt level since the third quarter of 2015.
Devon May: These efficiencies are driven by best-in-class workforce management, efficient asset utilization, and procurement excellence, and are unlocked by investments in technology and process improvements.
Devon: We ended the second quarter with $12 billion of total available liquidity.
Devon: In the quarter, we produced $791 million of free cash flow and have now produced $2 $5 billion of free cash flow in the first half of the year, we anticipate having positive free cash flow for the full year.
Devon May: By year end, we expect to have driven cumulative Savings of over 750 million dollars and delivered approximately 600 million dollars of working Capital Improvements since we launched a re-engineering, the business efforts in 2023.
Devon May: During the second quarter, we raised 1 billion dollars through a loyalty term loan financing and use the proceeds to cash settle our. Billion-dollar convertible note earlier this month
Devon: With regard to our fleet, we now expect to take delivery of 50, new aircraft. This year at the high end of our previous range of 40 to 50 deliveries.
Devon: This is driven by earlier than planned deliveries of several aircrafts that we now expect to receive in the fourth quarter, a few months earlier than our previous expectation of the first quarter of 2026.
Devon May: American ended the second quarter with approximately 38 billion dollars of total debt in 29 billion dollars of net debt, our lowest net debt levels since the third quarter of 2015
Devon May: We entered the second quarter with 12 billion dollars of total available liquidity.
Devon: Based on these expected deliveries are 2025 aircraft Capex, which also includes used aircraft purchases spare engines and net Adp's is now expected to be between two five and $3 billion and our total capex is expected to be between three five and $4 billion.
In the quarter, we produced 791 million of free cash flow and have now produced 2.5 billion dollars of free cash flow in the first half of the year.
We anticipate having positive free cash flow for the full year.
Devon: We continue to expect moderate levels of Capex in future years with annual aircraft capex, averaging approximately $3 $5 billion for the remainder of the decade.
Devon May: With regard to our Fleet. We now expect to take delivery of 50 new aircraft this year, at the high end of our previous range of 40 to 50 deliveries.
Devon: I'd now like to walk you through our outlook for the third quarter.
Devon May: this is driven by earlier than planned, deliveries of several aircraft that we now expect to receive in the fourth quarter, a few months earlier than our previous expectation, of the first quarter of 2026,
Devon: We continue to be mindful of both the demand and competitive environment as we develop our capacity plans for the remainder of the year.
Devon: For the third quarter, we expect capacity to be up 2% to 3% year over year.
Devon: Our year over year domestic capacity is up by approximately 5% during the July peak of growth will slow to approximately 2% in August and will be down 1% in September.
Devon May: Based on these expected, deliveries are 2025, aircraft capex, which also includes used aircraft purchases, spare engines, and net pdps. It is now expected to be between 2 and a half and 3 billion dollars. And our total capex is expected to be between 3 and a half and 4 billion dollars.
Devon: We expect third quarter revenue to be between down, 2% and up 1% year over year.
Devon May: We continue to expect moderate levels of capex. In future years with annual aircraft capex. Averaging approximately 3 and a half billion dollars for the remainder of the decade.
Devon: We expect July to be one of the years weakest year over year RASM performing months, given the higher industry capacity and that the month was largely booked prior to the strengthening demand trends we've seen over the past couple of weeks.
Devon May: I'd now like to walk you through our outlook for the third quarter.
Devon May: We continue to be mindful of both the demand and competitive environment. Is we develop our capacity plans for the remainder of the year?
Devon: But we believe the worst is behind us and year over year revenue will sequentially improve each month this quarter.
Devon: Third quarter non fuel unit costs are expected to be up two and a half to four 5% year over year, driven primarily by the collective bargaining agreements we have ratified over the past two years.
Devon May: A year-over-year domestic capacity, is up by approximately 5% during the July Peak, but growth was slow to approximately 2% in August and will be down 1% in September.
Devon May: We expect third quarter Revenue to be between down 2% and up 1% year-over-year.
Devon: This performance is in line with the second quarter, but on a lower rate of growth.
Devon: We expect similar performance in the fourth quarter, given the shift in maintenance expense from the second quarter to the fourth quarter.
Devon: Based on our current demand assumptions on fuel price forecast, we expect to produce a third quarter loss per share of between 10 and 60 cents.
Devon May: We expect July to be 1 of the year's weakest year-over-year rather than performing months given the higher industry capacity. And that the month was largely booked prior to the strengthening demand Trends. We have seen over the past couple of weeks.
Devon May: We believe the worst is behind us and year-over-year. Revenue will sequentially improve each month this quarter.
Devon: Based on recent demand trends, we expect full year earnings per share of between a loss of 20, <unk> and a profit of 80.
Devon: With the midpoint being a profit of <unk> 30 per share.
Devon May: Third, quarter non-fuel, unit costs are expected to be up 2 and a half to 4 and a half percent year-over-year driven primarily by the collective bargaining agreements. We have ratified over the past 2 years.
Devon: We believe the top end of the range is achievable if demand in the domestic market continues to strengthen.
Devon May: This performance is in line with the second quarter, but on a lower rate of growth,
Devon: And we would only expect to be at the bottom end of the range. If there was macro weakness that we don't see in our recent booking trends.
Devon May: we expect similar performance in the fourth quarter, given the shift in maintenance expense from the second quarter to the fourth quarter.
Devon: We are proud to be forecasting a profit in a year, where we have faced the challenges of a tragic accident significant and continued ATC delays unprecedented weather the full financial cost of new collective bargaining agreements and a material drop in demand in the domestic market, where we produce over 70% of our revenue.
Devon May: Based on our current demand assumptions and fuel price forecasts, we expect to produce a third quarter loss per share of between 10 cents and 60 cents.
Devon May: Based on recent demand Trends we expect full year earnings per share of between a loss of 20 cents and a profit of 80 cents with the midpoint being a profit of 30 cents per share.
Devon: As a testament to the durability of our business and the resilience of our people.
Devon May: We believe the top end of the range is achievable. If the man in the domestic Market continues to strengthen,
Robert Isom: I'll now turn the call back to Robert for closing remarks.
Robert Isom: Thank you Devin.
Devon May: And we would only expect to be at the bottom end of the range. If there was macro weakness that we don't see in our recent booking trends,
Speaker Change: In closing, we're pleased with our second quarter results and the hard work of the American Airlines team.
Speaker Change: This year has been challenging but our team has skillfully manage through an uncertain demand environment and difficult operating conditions to deliver a safe and reliable operation for our customers.
Devon May: we are proud to be forecasting, a profit in a year where we have faced the challenges of a tragic accident, significant and continued, ATC delays, unprecedented weather,
Speaker Change: We're confident that we're delivering on the right long term initiatives.
The full Financial cost of new collective bargaining agreements and a material drop in demand in the domestic Market where we produce over 70% of our Revenue.
Speaker Change: With our continued focus on execution, we remain on track to deliver for the long run.
Devon May: It is a testament to the durability of our business and the resilience of our people.
Speaker Change: We believe American is uniquely positioned to benefit as domestic demand recovers in the back half of the year.
Robert: I'll now turn the call back to Robert for closing remarks.
Robert: Thank you, Devon.
Speaker Change: With that operator, you may now open the line for questions.
Robert: In closing, we're pleased with our second quarter results, in the hard work of the American Airlines team.
Speaker Change: Thank you as a reminder to ask a question you will need to press star one one on your telephone to remove yourself from the queue. You May press Star one one again.
Robert: This year has been challenging but our team is skillfully managed through an uncertain demand environment and difficult operating conditions to deliver a safe and reliable operation for our customers.
Speaker Change: To allow everyone. The opportunity to participate you will be limited to one question and one follow up please.
Robert: We're confident that we're delivering on the right long-term initiatives.
Speaker Change: Please standby, while we compile the Q&A roster.
Robert: With our continued, focus on execution, we remain on track to deliver for the long run.
Robert: We believe American is uniquely positioned to benefit as domestic demand recovers in the back, half of the year.
Speaker Change: Our first question comes from the line of Jamie Baker of JP Morgan Securities. Please go ahead Jamie.
Speaker Change: With that operator, you may now open the line for questions.
Speaker Change: Thanks, and good morning to the team so Rob.
Speaker Change: Robert you and I.
Speaker Change: <unk> had a constructive exchange.
Speaker Change: Thank you as a reminder, to ask a question. You will need to press star 1, 1 on your telephone, to remove yourself from the queue. You may press star 1 1 again.
Speaker Change: Opinion back at the March.
Speaker Change: Industrials conference so.
Speaker Change: Wanted to kind of stick to that theme following some of the more recent disclosures.
Speaker Change: To allow everyone the opportunity to participate. You will be limited to 1 1 follow up.
Speaker Change: Please stand by while we compile the Q&A roster.
Speaker Change: Disclosures.
Speaker Change: What we heard from a competitor when discussing the industry landscape is that several airlines are operating at double digit percentage of their flights at a loss.
Speaker Change: Our first question comes from the line of Jamie Baker of JP Morgan Securities. Please go ahead, Jamie.
Speaker Change: So I guess, Mike My question for you Robert is twofold first can you give us an approximation maybe on a full year basis to adjust for seasonality.
Jamie Baker: Thanks and um good morning to the teams. So um Robert you and I
Speaker Change: But overall percentage of American flowing loses money.
Speaker Change: And.
Speaker Change: And maybe how that's changed.
In recent years and then second.
Speaker Change: Is there a path towards a more.
Speaker Change: Modest percentage of loss producing flying how do you accomplish that what are the upside drivers. Thanks.
Jamie Baker: Um, had a constructive exchange, uh, in my opinion, back at the March, um, you know, Industrials conference. So, I I, I wanted to kind of stick to that theme following some of the more recent OA disclosures. You know what, what we heard from a competitor. When discussing the industry landscape, is that, you know, several airlines are operating at Double Digit, percentage of their flights at a loss.
Speaker Change: Okay, Thanks, Jamie and.
Speaker Change: So I guess my, my question for you, Robert is twofold first.
Speaker Change: I'll just I'll just start with we don't run our airline based on.
Speaker Change: Other airlines perceptions of our business.
Speaker Change: Can you give us an approximation maybe on a full year basis to adjust for seasonality? What? Overall percentage of American flying loses money?
Speaker Change: We run and have a fantastic hub.
Speaker Change: Spoke network system, a great set of partners, we're really proud of what we do on a system basis.
Speaker Change: and and and maybe how that's changed, you know, and evolved in recent years and then second
Speaker Change: Towards a more.
Speaker Change: If you take a look at our results today.
Speaker Change: The primary differentiator between us and some of our competitors as long as they do things one.
Speaker Change: Modest percentage of loss producing flying. How how do you accomplish that? What are the upside drivers? Thanks.
Speaker Change: Okay.
Jamie Baker: Jamie, and
Speaker Change: We're paying our team members at the market wages.
Speaker Change: Others are benefiting from not doing that I'm sure that that will catch up over the long run and the second thing is we do have a network that we're proud to say is more oriented to the domestic network and let's face. It the domestic network has been under stress because of the uncertainty.
Jamie Baker: I'll just, I'll just start with um, we don't run our airline based on, uh, you know, other airlines, you know, perceptions of uh, our business. Um,
Speaker Change: And the economy and the the.
Speaker Change: <unk> of.
Speaker Change: Domestic passengers to get in the game, we think that that's going to change we think that's going to be a tailwind for us.
Speaker Change: And especially as is demand.
Jamie Baker: Is largely 2 things, you know, 1, um, we're paying uh, our team members at uh, Market wages.
Speaker Change: And capacity come back.
Speaker Change: The balance is going to fit very well with the things that we're doing to make American really.
Speaker Change: Thrive in the long run delivering on a revenue potential improving our customer experience playing into premium taking advantage of international we're going to be having some international growth and that's all based on are all keyed off of.
Speaker Change: Incredible level of efficiency, so I feel proud of what we got.
Speaker Change: Thank you our next question.
Speaker Change: Comes from the line of Conor Cunningham of Melius Research. Your question. Please Connor.
Conor Cunningham: Hi, everyone two if I may.
Conor Cunningham: You mentioned, a sequential improvement in the U S domestic market as you think about <unk>, there's obviously been a wider range of our outlook. Some from some of the other players out there. So I was hoping you could help frame up what you actually see within Europe within your U S. Domestic performance from maybe July to September It does it just track.
Jamie Baker: Others, you know, are benefiting from not doing that. Um, I'm sure that that will, uh, catch up, you know, over over the long run. And the second thing is we do have a network, um, that we're proud to say, is, uh, more oriented to the domestic Network and let's face it. The domestic network has been under stress because the uncertainty, uh, in, in the economy and uh, the, the, the, the reluctance of, uh, you know, domestic passengers to get in the game. We think that that's going to change. We think that's going to be a Tailwind for us. Um, and especially as, as demand, uh, and and capacity come back in in more into balance, it's going to fit very well with the things that we're doing to make American really, uh, uh, uh, thrive in the long run, delivering on our Revenue potential, improving our customer experience of playing into premium, taking advantage of of international. We're going to be having, you know, some International growth and uh it's all based on uh or all keyed off of uh you know, an incredible level of efficiency. So I feel proud of what we got.
Jamie Baker: Thank you. Our next question.
Conor Cunningham: The capacity plans and the reason why I ask is like obviously things changed in July.
Conor Cunningham: You talked about how you were basically fully booked for July. So if you could just talk about where your book for the remainder of <unk> and then maybe for you that would be super helpful. Thank you.
Speaker Change: Sure I can I can start with Hey, I just wanted to note that our vice chair and Chief strategy Officer, Steve Johnson, He's recovering from a case of pneumonia not with US today is fine, but getting some rest and is on the mend so.
Speaker Change: I'll start and hand, it over to Devin look when we take a look at what we've got on the books right now July its been tough really hit hard by the uncertainty during the primary booking period for those that wanted to travel in July as we take a look through the third quarter, we probably have about 65% of revenue on the books I think.
Speaker Change: It's probably plus or minus right and about 20% on the books for the fourth quarter. So there's a lot to go and good reason to have a lot of optimism for some of the trends that we're seeing going from.
Conor: You mentioned, um, a sequential Improvement in the US domestic Market. As you think about through 3Q, there's obviously been a, a wide array of, uh, of outlooks from from some of the other players out there. So I was hoping you could help frame up what you actually see, uh, within your, within your us domestic performance from maybe July to September, uh, does it just track the capacity plans? And the reason why I ask is like obviously things changed in July. Um and you talked about how you were basically fully booked for July. So if you could just talk about where your book for the remainder of 3 q and then maybe 4 q that would be super helpful. Thank you. That sure Conor I can I can start but hey I just want to note that that our vice chair and and chief strategy Officer Steve Johnson
Speaker Change: The July into August and September and into the fourth quarter, but also look we've had a lot of volatility in the business.
Speaker Change: So far and we want to be mindful of that as we have forecast as well Kevin.
Speaker Change: Yes, not much to add.
Speaker Change: Like Robert said, we will see sequential improvement throughout the quarter July is going to look a lot like our second quarter results, but as we get into August and September are going to see some nice improving trends there.
Speaker Change: Expect that to continue into Q4.
Covering from a case of pneumonia not with us today. He's fine. Uh, but getting some rest Inn in is on the men. Um, so I'll, I'll start and hand it over to Devin look, uh, when we take a look at, you know what, we've got on the books. Uh, right now, July has been, you know, tough really hit hard by the uncertainty during the primary booking period, you know, for those that wanted to travel in July and as we take a look through the third quarter, you know, we probably have about 65% of of, of Revenue on the books. I think that's probably, you know, plus or minus right? And about 20%, you know, on the books for the fourth quarter. So, there's a lot to go and, and good reason to, you know, have a lot of optimism for some of the trends that we're seeing going, uh, from
Speaker Change: Okay. That's helpful. And then maybe I could talk maybe we're going to ask a little bit about just earnings base lining out obviously a lot has gone on in the first half of this year and in the question that I guess just around like what the actual potential of the businesses now that you've kind of gotten back to.
Uh, yeah, the July into August and September and into the fourth quarter, but also look, uh, We've, we've had a lot of volatility in the business, uh, uh, so far. And we want to be mindful of that as we forecast as well, Devin,
Devon May: That almost dead. Um,
Speaker Change: The level of demand, where I think is sufficient to what they may be what you were thinking in January. So if you could just talk about what the headwinds that you faced in the first half of this year and what you don't necessarily expect to repeat.
Devon May: like Robert said, we will see sequential Improvement throughout the quarter July is going to look a lot like our uh, second quarter results. Uh, but as we get into August and September, we're going to see some nice improving Trends there and uh expect that to continue in the Q4.
Speaker Change: Next year I think that would be helpful. As we start to think about 26 and beyond thank you.
Speaker Change: Yes, we're obviously a ways off of run rate earnings right now and we see a lot of potential for margin expansion as we go forward and it's everything Robert has talked about and that's everything we've talked about over time as we look out for the next six months domestic marketplace is going to improve and that's it that's a great tailwind for us.
Speaker Change: As we head into next year, we expect that to continue and we're going to start benefiting from our new credit card agreement with Citi, which we're incredibly excited about we.
Speaker Change: We continue to invest meaningfully in the customer and the premium experience, which we think is also going to drive nice tailwind for us so.
Okay, that's helpful. And then maybe I could talk, maybe we got to ask a little bit about just earnings Baseline and obviously, a lot has gone on in, in the first half of this year. And the question that I get is just around like, what the actual potential of the businesses now that you've kind of gotten back to, um, you know, a a a level of demand where I think is, is sufficient to what maybe, maybe what you were thinking in in January. So if you could just talk about, you know what, the headwinds that you faced in the first half of this year and what you don't necessarily expect to repeat uh next year, I think that would be helpful as we start to think about 26 and Beyond thank you.
Speaker Change: This year, obviously, a really tough first half we think we're going to get some nice tailwind as we head into the second half.
Speaker Change: <unk> expansion as we head into 2026.
Speaker Change: Yes.
Speaker Change: Thank you.
Speaker Change: Our next question.
Speaker Change: From the line of Catherine O'brien of Goldman Sachs. Please go ahead Catherine.
Speaker Change: Yeah. We're obviously a ways off of run rate earnings right now, um, and we see a lot of potential for margin expansion as we go forward. And it's, it's everything Roberts talked about. And it's, uh, everything we've talked about over time, like it is. We look out for the next 6 months, domestic Marketplace is going to improve, and that's a, that's a great Tailwind for us. As we head into next year, we expect that to continue and we're going to start benefiting from our new
Catherine O'brien: Good morning, everyone. Thanks for your time two questions. The first one a bit of a follow up to the Connors.
Catherine O'brien: Can you just speak on how youre thinking about capacity and unit costs for January within the low single digit and mid single digit ranges you're expecting.
Catherine O'brien: Shifted at all and then I know this is early but this year I think you had a couple of points of pressure from new labor contracts can you just speak to like headwinds in tailwind, we should be thinking about into next year. Thanks.
Catherine O'brien: Sure. This year is largely unfolding as we expected to start the year you know first quarter we had.
Catherine O'brien: Guided to CASM up 8% for a lot of reasons that we had talked about mainline and regional mix.
Catherine O'brien: Labor expenses a reduction in capacity we came in just inside of that second quarter, we had guided CASM up 4% again, we came in just inside of that number and felt.
Catherine O'brien: Felt good about it we're executing on all of our different cost initiatives, we did benefit in the second quarter with some maintenance maintenance expense it pushed out to Q4.
Catherine O'brien: And so we're going to see a similar unit cost trend to what we saw in the second quarter for both the third and fourth quarter. So at the midpoint unit costs up probably somewhere around three 5%.
Catherine O'brien: As we head into 2026, it's early it's going to be somewhat dependent on our <unk>.
Catherine O'brien: Capacity production, but I'd, just say over the long term I think we've done an exceptional job managing costs. We spent the last couple of years really focused on reengineering the business for efficiency and that's across the entirety of our business.
Catherine O'brien: And I think we're doing a really nice job with it so that's.
Catherine O'brien: That's the outlook for this year and I think in 26 will continue to perform really well relative to the rest of the industry.
Speaker Change: Okay, Great and then maybe just one on on the indirect revenue share if I could you know it.
Speaker Change: That came in better than expected in the second quarter, but on an operating margin basis. The gap to peers is about the same this quarter. It was in the second quarter of last year with with indirect revenue much more recovered is there an element where revenue share is getting close to historical levers levels, that's more volume driven than it was before.
Speaker Change: For the distribution side any change in and Theres some element of pricing that recovers over time in those contracts or or is it you know the margin pressure is coming from the relatively higher domestic exposure and and maybe more market labor rates versus one of your peers you spoke about earlier in the call just just would love to unpack that.
Speaker Change: Yes. Thanks.
Speaker Change: Xactly right at the end.
Speaker Change: To me it feels like a pretty incredible result that our margin performance year over year was very much in line with our peers in a quarter, where we know the weakest part of the business was the domestic marketplace and we have more exposure to domestic and.
Speaker Change: Like you said on the cost side, we are faced with the full cost of.
Speaker Change: Newly reached collective bargaining agreements at least one of our peers isn't in that position, yet but will be eventually so.
Speaker Change: For us to produce the same year over year margin in that environment. It seems like a really great result, and.
Speaker Change: You see it in the unit revenue numbers, we've had four straight quarters of relative outperformance on unit revenue.
Speaker Change: It's just hard to have that flow through to margin.
Speaker Change: Our relative margin when you have these types of differences.
Speaker Change: Catherine I'll, just add one of the other proof points as the corporate managed traffic that's.
Speaker Change: Improved 10% year over year, and a relatively flat business market.
Speaker Change: Not done yet and that's the point I think is really important we've got a few percentage points more to get back to where we were part of the sales and distribution strategy change.
Speaker Change: We've got even more from that because we know that our network and our team is capable of delivering it at higher levels I do believe that.
Speaker Change: The last few percentage points.
Speaker Change: Going to be hard, but also I think that theyre going to be the most profitable points we bring in.
Speaker Change: Yeah.
Speaker Change: Thank you.
Speaker Change: Our next question comes from the line of Tom <unk> of UBS. Please go ahead Tom.
Speaker Change: Good morning. This is a nice for young from Todd Water-witch. Thanks.
Speaker Change: Thanks, a lot for taking our questions.
Speaker Change: But if I heard you right did you say that you were expecting a full recovery indirect channel market share as you exit 2025.
Speaker Change: No.
Speaker Change: So if you could please confirm that and related to that are you able to quantify what would be the revenue lift that we should expect for 2026 as you run rate.
Speaker Change: The 2025 exit rate through all of next year.
Speaker Change: Well, Tom I'll start with the first with its just getting back to our historical share as we exit.
Speaker Change: 2025, we're on track to getting restoring our full indirect channel share and what that means is is that as we as we exit the year. So it's not embedded in the full year 2025 results, but as we move into 2026 I expect to see.
Speaker Change: That that come through.
Speaker Change: Last year about that representing $1 5 billion of revenue.
Speaker Change: There's a good chunk of that is because it's going to flow through and we're really pleased with our performance getting back on track.
Speaker Change: Yeah.
Speaker Change: Okay.
Speaker Change: And as.
Speaker Change: A follow up.
Speaker Change: Just following up on some of the questions asked already.
Speaker Change: If we look at your profit margins relative to your network peers, just like we've seen based on the outlook call. If you've provided this year that give margin gap even at the EBITDA level is likely to widen this year.
Speaker Change: As you look out over the next few years, what do you think are making really needs to be able to make progress in bridging. This gap and do you think there are any structural impediments to American actually fully bridging this gap overtime.
Speaker Change: Well I'll just start with last year.
Speaker Change: At the end of last year, we had a two point EBITDAR margin gap to United inclusive of Deltas Third party business, we had about a two point EBITDAR margin gap to them as well.
Speaker Change: That's a gap that we expect to close over time. This year is an unusual year for all the reasons, we discussed and you have to probably dig a level deeper one.
Speaker Change: We have a larger domestic exposure than either of our large network competitors too. We have we're just a different cycles with where we're at with collective bargain agreements. We have all of ours in place one of our competitors does not so not everything is going to come through in margin in a linear fashion, but we do think oh.
Speaker Change: Over time, yes, we expect we can close that margin gap. We don't think there's anything structural we had talked about what we think are some of the key reasons around it inclusive of your first question sales and distribution is something that was a headwind last year. It remains a headwind for us this year, but coming into next year, I think it'll be a tailwind to margin.
Speaker Change: We've talked about are.
Speaker Change: Our city agreement, there's been a gap to our peers. There. We think we have an incredible partner and incredible agreement in place and we're going to close that gap overtime as well.
Speaker Change: We like a lot of the work that we're doing on the commercial side of the business, including some really nice investments in premium and premium customer, which we think will help as well so there's a gap today.
Speaker Change: There will be a gap this year, but we do expect to close it heading into 2026.
Speaker Change: Thank you.
Speaker Change: Our next question comes from the line of Michael Lindenberg of Deutsche Bank. Please go ahead Michael.
Speaker Change: Hi, Good morning, it's a secondary on for Mike.
Speaker Change: We recently agreed to drop its lawsuit against Chicago Aviation authorities, where do you guys stand today and what does it mean for schedule later this year and early next year out of Chicago, presumably you thought you'd have more slots.
Speaker Change: Let me now.
Speaker Change: Yeah.
Speaker Change: Thanks for the question.
Speaker Change: Hey regarding Chicago.
Speaker Change: Yeah.
Speaker Change: A tremendous opportunity for American we'd been slowest to rebuild out of the pandemic our network for a number of reasons largely because of pilot shortfalls in our in our regionals, but now that we have full ability to staff. We're in good shape and so youll see Chicago.
Speaker Change: Hit 485 peak departures.
Speaker Change: We're on our way to producing even more than that over 500 as we take a look into next year. We have the gate capacity, we need to fulfill that growth and even more and in terms of the status of the litigation, we feel really good about where we're at.
Speaker Change: Worked with the city.
Speaker Change: Design and.
Speaker Change: Finance the expansion of Chicago, and all we're asking to do is have them live up to what they said they would do in terms of gate allocation. So we're not.
Speaker Change: Concerned we've got what we need now and we're going to have what we need going forward.
Speaker Change: And if I just may follow up on the Embraer carat, we've heard that some airlines don't have to accept delivery of airplanes.
Speaker Change: Is that going to be the case with you and Embraer E trade characters through.
Speaker Change: Embraer is a terrific partner and.
Speaker Change: The E 170, fives are just an exceptional aircraft with.
Speaker Change: Soon to be.
Speaker Change: Satellite Wi Fi and full first class cabin.
Speaker Change: So it fits really well.
Speaker Change: We're proud to be the operator of the world's largest fleet of Embraer aircraft and that's unique to American we're working with the Embraer on deliveries.
Speaker Change: We don't anticipate any long term issues as a matter of fact, we know that the Brazilian governance working with.
Speaker Change: The administration and.
Speaker Change: And embraer as well.
Speaker Change: So over the long run we know what's best.
Speaker Change: There's a tremendous amount of U S based content on those Embraer aircraft.
Speaker Change: And there is a lot that goes into negotiating trade deals. So we standby ready to help in any way and we've made sure that the administration and Embraer and knows our interests and we're confident we'll be taken care of.
Speaker Change: Yeah.
Speaker Change: Thank you.
Speaker Change: Our next question comes from the line of Andrew The Dora of Bank of America. Please go ahead Andrew.
Andrew: Hi, good morning, everybody.
Speaker Change: So Robert.
Speaker Change: You gave us speaking a lot about your revenue share in indirect channels.
Speaker Change: I think about share more broadly.
Speaker Change: Your capacity growth has been trailing your network peers for the past six or so quarters.
Speaker Change: I guess as we move forward from here are you content with growing less than your peers and driving that RASM outperformance that you've been getting.
Speaker Change: There come a time when share matters and you need to maybe at least grow in line with some of your primary competition any thoughts around that.
Speaker Change: Sure, it's always a balance and it's something that we're going to make sure that we have a network.
Speaker Change: You know it takes care of our customers in a way that they we need to serve them and that we can do so profitably over over the long run.
Speaker Change: Your capacity growth has been trailing your network peers for the past six or so quarters.
Speaker Change: I guess as we move forward from here are you content with growing less than your peers and driving that RASM outperformance that you've been getting.
Speaker Change: We're super pleased with the hub network that we're fortunate to have.
Speaker Change: There come a time when share matters and you need to maybe at least grow in line with some of your primary competition any thoughts around that.
Speaker Change: Our hubs are based in the.
Speaker Change: Metro areas that are growing the fastest.
Speaker Change: In the United States.
Speaker Change: Sure, it's always that balance and it's something that we're going to make sure that we have a network.
Speaker Change: You've seen from some of our recent announcements about the new terminal F.
Speaker Change: In DFW, it's going to allow DFW debuted the world's largest largest hub.
Speaker Change: <unk>.
Speaker Change: It takes care of our customers.
Speaker Change: Way that they we need to serve them and that we can do so profitably over over the long run.
Speaker Change: We're confident that.
Speaker Change: Our hubs.
Speaker Change: We will support.
Speaker Change: We're super pleased with the hub network that we're fortunate to have.
Speaker Change: More growth.
Speaker Change: And specifically as we look into 2026, you're going to see us make sure that we restore our.
Speaker Change: Our hubs are based in the.
Speaker Change: Metro areas that are growing the fastest.
Speaker Change: Our share in Chicago, you're going to see us continue to build Philadelphia, which has been a.
Speaker Change: In the United States.
Speaker Change: You have seen from some of our recent announcements about the new terminal F.
Speaker Change: Really a bright spot and Youll also see us continue to invest in Miami.
Speaker Change: In DFW, it's going to allow DFW debuted the world's largest largest hub.
Speaker Change: All that goes with it.
Speaker Change: Remember this domestic network that is ultimately.
Speaker Change: We're confident that.
Speaker Change: Our hubs.
Speaker Change: We will support.
Speaker Change: The anchor to help support international growth and our fleet is going to allow for more of that and I liked the opportunity we have to play both in the international market and.
Speaker Change: More growth.
Speaker Change: And specifically as we look into 2026, you're going to see us make sure that we restore.
Speaker Change: Our share in Chicago, you're going to see us continue to build Philadelphia, which has been.
Speaker Change: Premium space as well so good things on the horizon from that perspective, we're gonna take care of our customers.
Speaker Change: Really a bright spot and Youll also see us continue to invest in Miami.
Speaker Change: Got it thank you for that.
Speaker Change: My second question here I know <unk>.
Speaker Change: All of that goes with it.
Speaker Change: <unk> spoken about kind of your corporate revenues growing 10%.
Speaker Change: Tremendous domestic network that is ultimately.
Speaker Change: And a flattish flat.
Speaker Change: The anchor to help support international growth and our fleet is going to allow for more of that and I liked the opportunity we have to play both in the international market.
Speaker Change: A flattish market.
Speaker Change: Can you quantify the demand improvement <unk> seen of late that just gives you the confidence to speak to the accelerating revenue growth. Despite the tougher comps as we head into the back half of the year.
Speaker Change: Premium space as well so good things on the horizon from that perspective, we're going to take care of our customers.
Speaker Change: Yeah.
Speaker Change: It's it's just booking trends and especially what we see coming it was coming from June moving into July.
Speaker Change: Got it thank you for that.
Speaker Change: My second question here I know <unk>.
Speaker Change: <unk> spoken about kind of your corporate revenues growing 10%.
Speaker Change: And then.
Speaker Change: As you move into August and September we feel really confident in terms of improving capacity and supply.
Speaker Change: And a flattish flat.
Speaker Change: A flattish market.
Speaker Change: Can you quantify the demand improvement <unk> seen of late that just gives you the confidence to speak to the accelerating revenue growth. Despite the tougher comps as we head into the back half of the year.
Speaker Change: Environment, and American benefits, and we should benefit more of that more than others given our exposure.
Speaker Change: Yeah.
Speaker Change: Yes.
Speaker Change: Thank you.
Speaker Change: It's it's just booking trends and especially what we see coming it was coming from June moving into July.
Speaker Change: Our next question comes from the line of.
David Vernon: David Vernon of Bernstein.
Speaker Change: Question. Please David.
Speaker Change: And then.
Speaker Change: Hello, Good morning, guys and thanks for taking the question.
Speaker Change: As you move into August and September we feel really confident in terms of an improving capacity and supply.
Speaker Change: So Robert.
Speaker Change: Wanted to ask you a little bit about the investment in sort of the customer experience and I want to ask it in kind of two ways. One first kind of as you look at yourself relative to your peers.
Speaker Change: Environment, and American benefits, and we should benefit more of that more than others given our exposure.
Speaker Change: Where are the big opportunities for you to improve the customer experience and as you talk to investors about this like how are you how are you thinking about.
Speaker Change: Thank you.
Speaker Change: Our next question comes from the line.
Speaker Change: David Vernon of Bernstein.
Speaker Change: Measuring this is it net promoter scores how are you going to kind of judge the performance on improving the overall customer experience. Obviously it will eventually show up in the bottom line, but I'm just wondering how are you thinking it out.
Speaker Change: Question. Please David.
Speaker Change: Hey, good morning, guys and thanks for taking the question.
Robert Aizen: So Robert.
Speaker Change: About your progress on this journey to improve.
Speaker Change: Wanted to ask you a little bit about the investment in sort of the customer experience and I want to ask it in kind of two ways. One first kind of as you look at yourself relative to your peers.
Speaker Change: Investors and analysts.
Speaker Change: Thanks, David I. Appreciate the question first off we're going to measure this by our customers' perception and by revenue performance. Okay. So first off we will evaluate our net promoter scores that will be a huge driver.
Speaker Change: Where are the big opportunities for you to improve the customer experience and as you talk to investors about this like how are you how are you thinking about measure.
Speaker Change: Measuring this is it net promoter scores how are you going to kind of judge the performance on improving the overall customer experience. Obviously it will eventually show up in the bottom line, but I'm just wondering how are you thinking about.
Speaker Change: And as well in terms of revenue performance. This is going to be we're doing this to improve premium revenues and revenue overall, so unit revenues will be the metrics that we take a look at.
Speaker Change: Thinking about your progress on this journey to improve.
Speaker Change: So in terms of where we're at.
Speaker Change: With investors and analysts.
Speaker Change: We've.
Speaker Change: Thanks, David I. Appreciate the question first off we're going to measure this by our customers' perception and by revenue performance. Okay. So first off we will evaluate our.
Speaker Change: Had a long history of firsts in terms of.
Speaker Change: Our customer experience enhancements and improvements and we're building on that so whether it's the new flagship suites on our 780 Sevens, which will soon be on our 321, <unk>, which then will also be on our triple seven three hundreds that are being reconfigured.
Speaker Change: Net promoter scores that will be a huge driver.
Speaker Change: And as well in terms of revenue performance. This is going to be we're doing this to improve premium revenues and revenue overall, so unit revenues will be the metrics that we take a look at.
Speaker Change: That all plays into that are our premium lounge network, which is larger than anyone else you heard our Philadelphia announcement, Miami and there'll be more on that a lot of that is built into the capital spending that we've already planned.
Speaker Change: So in terms of where we're at.
Speaker Change: We've.
Speaker Change: Had a long history of firsts in terms of.
Speaker Change: Customer experience enhancements and improvements and we're building on that so whether it's the new flagship suites on our 780 Sevens, which will soon be on our 321, <unk>, which then will also be on our triple seven three hundreds that are being reconfigured.
Speaker Change: I would suggest that theres not a lot of catch up on that.
Speaker Change: Upfront you will see us invest in.
Speaker Change: Our food and in flight amenities and again, you will see us continue to avoid it.
Speaker Change: To invest in the premium experience.
Speaker Change: That all plays into that are our premium lounge network, which is larger than anyone else you heard our Philadelphia announcement, Miami and there'll be more on that a lot of that is built into the capital spending that we've already planned so.
Speaker Change: Where I look at opportunity going forward, though it really is the <unk>.
Speaker Change: Ability to serve that premium customer, especially international and internationally as well and we have a fleet that is ideally suited to do that so those adjustments that I described they are all going to result in our.
Speaker Change: So I would suggest that theres not a lot of catch up on that.
Speaker Change: Upfront you will see us invest in.
Speaker Change: Our food and in flight amenities and again, you will see us continue to avoid it to.
Speaker Change: The ability to serve.
Speaker Change: Almost 50% more premium customers and premium seating as we move out to 2030 and from an international perspective, our fleet is going to allow us to serve more.
Speaker Change: To invest in the premium experience.
Speaker Change: Where I look at opportunity going forward, though it really is.
Speaker Change: Actually improved flying by almost 50% or more than 50% as we move out into 2030.
Speaker Change: The ability to serve that premium customer, especially international and internationally as well and we have a fleet that is ideally suited to do that so those adjustments that I described they are all going to result in our.
Speaker Change: Alright. Thanks.
Speaker Change: Thanks for that and I guess as you think about kind of where you guys stand relative to peers in terms of net promoter or do you guys do you guys benchmark that at all.
Speaker Change: The ability to serve.
Speaker Change: Well, we do and we think it's a great opportunity.
Speaker Change: Almost 50% more premium customers and premium seating as we move out to 2030 and from an international perspective, our fleet is going to allow us to serve more.
Speaker Change: Okay.
Speaker Change: It's something again that is on our front that we take very seriously it starts with running.
Speaker Change: An exceptional operation.
Speaker Change: Actually improved flying by almost 50% or more than 50% as we move out into 2030.
Speaker Change: And we've been hit with <unk>.
Speaker Change: Our share of.
Speaker Change: Of challenging operating conditions.
Speaker Change: Alright.
Speaker Change: The summer certainly in June and July and no place has been hit no airline is been hit as hard as hard as American so it starts with running a reliable operation and we're making sure that we can recover as quickly as possible investing in technology on that front.
Speaker Change: Thanks for that and I guess as you think about kind of where you guys stand relative to peers in terms of net promoter or do you guys do you guys benchmark that at all.
Speaker Change: Well, we do and we think it's a great opportunity.
Speaker Change: Okay.
Speaker Change: It's something again that.
Speaker Change: And then.
Speaker Change: As on our front that we take very seriously it starts with running.
Moving from there it really is.
Speaker Change: Making sure that we have the basics.
Speaker Change: An exceptional operation.
Speaker Change: And those things that are just central for competition and then there are some things that youre going to see us plan that we'll look to.
Speaker Change: And we've been hit with.
Speaker Change: Our share of.
Speaker Change: Of challenging operating conditions.
Speaker Change: The summer certainly in June and July and no place has been hit no airline is been hit as hard as it's hardest American so it starts with running a reliable operation and we're making sure that we can recover as quickly as possible investing in technology on that front.
Speaker Change: Even outpace the competition and on that front, it's all designed to improve our customer experience and revenue performance.
Speaker Change: Thank you.
Speaker Change: Our next question comes from the line of Duane Fenech worth of Evercore ISI. Please go ahead Duane.
Speaker Change: And then.
Speaker Change: Moving from there it really is.
Speaker Change: Making sure that we have the basics.
Duane Fenech: Hey, Hey, thanks, good morning.
Speaker Change: And those things that are just central for competition and then there are some things that youre going to see us plan that we'll look to.
Speaker Change: So depending upon how we.
Speaker Change: Interpret the guide for <unk>, maybe there is slight sequential improvement in RASM, depending upon how the quarter plays out but I wonder.
Speaker Change: Even outpace the competition and on that front, it's all designed to improve our customer experience and revenue performance.
Speaker Change: How would you rank your enthusiasm for sequential improvement by entity, maybe domestic versus Atlantic versus Latin.
Speaker Change: Thank you.
Speaker Change: Our next question comes from the line of Duane Fenech worth of Evercore ISI. Please go ahead Duane.
Speaker Change: And do you see a path back to positive RASM for domestic this year.
Duane Fenech: Hey, Hey, thanks, good morning.
Duane Fenech: Hey, Duane.
Speaker Change: So depending upon how we.
Duane Fenech: Well I'll just say this about the environment right now in Q3 versus Q2.
Speaker Change: Interpret the guide for <unk>, maybe there is slight sequential improvement in RASM, depending upon how the quarter plays out but I wonder.
Duane Fenech: <unk>.
Duane Fenech: Third quarter domestic is going to be better, but it starts with a month of July that's going to look very similar to what we had in the second quarter, but.
Speaker Change: How would you rank your enthusiasm for sequential improvement by entity, maybe domestic versus Atlantic versus Latin.
Duane Fenech: But we do expect improvement beyond that point and that's actually the entity, where we expect to see the most improvement.
Speaker Change: And do you see a path back to positive RASM for domestic this year.
Duane Fenech: Trans Atlantic we had outstanding performance in the second quarter.
Duane Fenech: You know as the Iran. Conflict was heating up that was doing a pretty decent booking window for Q3. So we do expect a little bit softer performance in the Trans Atlantic in July and August but by September we think it's going to be performing really nicely again.
Duane Fenech: Hey, Duane.
Duane Fenech: Well I'll just say this about the environment right now in Q3 versus Q2.
Speaker Change: <unk>.
Speaker Change: Third quarter domestic is going to be better, but it starts with the month of July that is going to look very similar to what we had in the second quarter, but.
Duane Fenech: Rest of the network I think theres, probably some pressure in short haul Latin long haul Latin and Trans Pacific will probably perform pretty similarly to what we saw in Q2.
Speaker Change: But we do expect improvement beyond that point and Thats actually the entity, where we expect to see the most improvement.
Duane Fenech: But when we look at it in totality, we really like the environment that we're in now versus where we were a couple of months ago.
Speaker Change: Trans Atlantic we had outstanding performance in the second quarter.
Speaker Change: As the Iran. Conflict was heating up that was doing a pretty decent booking window for Q3. So we do expect a little bit softer performance in the Trans Atlantic in July and August but by September we think it's going to be performing really nicely again.
Duane Fenech: Especially as we get to the back end of this quarter. We think there's some really nice potential for positive unit revenue ahead.
Duane Fenech: Not baked into the guide obviously, we're going to have negative unit revenue this quarter at the midpoint, but we do think as we head out to the fourth quarter.
Speaker Change: Rest of the network I think theres, probably some pressure in short haul Latin long haul Latin and Trans Pacific will probably perform pretty similarly to what we saw in Q2.
Duane Fenech: There is potential for positive unit revenue performance.
Duane Fenech: Thanks for that and then.
Speaker Change: But when we look at it in totality, we really like the environment that we're in now versus where we were a couple of months ago.
Speaker Change: I may have missed it apologies if I did but you guys have been pretty good at keeping your capacity and kind of this 3% range.
Speaker Change: Especially as we get to the back end of this quarter. We think there's some really nice potential or positive unit revenue ahead.
Speaker Change: Basically for all the quarters of this year you made some comments about early deliveries does that change the trajectory for the fourth quarter or do you lean harder on retirements or is it just a rounding error. Thank you.
Speaker Change: Not baked into the guide obviously, we're going to have negative unit revenue this quarter at the midpoint, but we do think as we head out to the fourth quarter.
Speaker Change: There may be a little bit more capacity that comes in the fourth quarter with deliveries, it's not going to be a huge amount though.
Speaker Change: There is potential for positive unit revenue performance.
Speaker Change: Thanks for that and then.
Speaker Change: I may have missed it apologies if I did but you guys have been pretty good at keeping your capacity and kind of this 3% range.
Speaker Change: Just on retirements I think you may be aware, we don't have any aircraft retirements there necessary between now and the end of the decade. So.
Speaker Change: Basically for all the quarters of this year you made some comments about early deliveries does that change the trajectory for the fourth quarter or do you lean harder on retirements or is it just a rounding error. Thank you.
Speaker Change: For us when we're managing capacity, it's really just being.
Speaker Change: Tighter around utilization during the off peak periods and I think we were pretty quick to react here in the third quarter at least for these periods like August and September which are traditionally lower demand periods as we head into the fourth quarter, though we like the demand trends, we're seeing and I think we're going to put the right amount of supply in the market to meet that.
Speaker Change: There may be a little bit more capacity that comes in in the fourth quarter with deliveries, it's not going to be a huge amount though.
Speaker Change: Yes.
Speaker Change: Just on retirement I think you may be aware, we don't have any aircraft retirements there necessary between now and the end of the decade. So.
Speaker Change: Thank you.
Speaker Change: Our next question comes from the line of Savi <unk> of Raymond James. Please your line is open.
Speaker Change: For us when we're managing capacity, it's really just being tied around utilization during the off peak periods and I think we were pretty quick to react here in the third quarter at least for these periods like August and September which are traditionally lower demand periods as we head into the fourth quarter, though we like the demand trends, we're seeing and I think we're going to put the right amount of supply in the market to meet that.
Speaker Change: Thanks.
Speaker Change: Just as a clarification, that's all right so.
Speaker Change: On the domestic capacity side.
Speaker Change: The decline is that solely related to you know just.
Speaker Change: Just taking off peak capacity outside as we get into the fourth quarter Youll see that step up again is that how you're thinking.
Speaker Change: Thank you.
Speaker Change: Well I'll, just say fourth quarter capacity isn't finalized yet.
Speaker Change: Our next question comes from the line of Savi <unk> of Raymond James. Please your line is open.
Speaker Change: But yes in the third quarter like we would in a normal year, we pull capacity down in August and September. This year, just given the trends we had been seeing in demand as we went into the second quarter, We pulled August and September down more than we normally would.
Speaker Change: Thanks.
Speaker Change: Just a clarification that's all right so.
Speaker Change: On the domestic capacity side.
Speaker Change: The decline is that solely related to just.
Speaker Change: Some of that capacity would naturally come back in the fourth quarter were just traditional seasonality and that's what I would expect again this year.
Speaker Change: Just taking the capacity outside as we get into the fourth quarter Youll see that step up again is that how youre thinking.
Speaker Change: Makes sense.
Speaker Change: Then on the.
Speaker Change: Operations, France.
Speaker Change: Well I'll, just say fourth quarter capacity isn't finalized yet.
Speaker Change: Seemed like that was one area that you've had really improves.
Speaker Change: But yes in the third quarter like we would in a normal year, we pull capacity down in August and September. This year, just given the trends we had been seeing in demand as we went into the second quarter, We pulled August and September down more than we normally would.
Speaker Change: This is where you were maybe pre pandemic.
Speaker Change: It was a few years of this year.
Speaker Change: Clearly more issues and I wonder if he can pull that is it really down to DCA and whether and if that's the case I mean, whether it might not change like how do you manage through that but it seems like the metrics have gotten worse at American versus peers.
Speaker Change: Some of that capacity would naturally come back in the fourth quarter were just traditional seasonality and that's what I would expect again this year.
Tom: Thanks, Tom.
Speaker Change: Then on the.
Tom: Operations fronts.
Speaker Change: Even though you are kind of recovering better.
Tom: Seemed like that was one area that you had for EDI improves.
Savi: Thanks Savi.
Speaker Change: Look I think American runs.
Tom: This is where you were maybe pre pandemic.
Tom: It was a few years of this year.
Savi: The most reliable safe operation possible.
Tom: Clearly more issues and I wonder if you can kind of is it really down.
Savi: At all times, I'm really proud of our team and the way they've been able to recover.
Tom: Down to DCA, and whether and if that's the case have been whether it might not change like how do you manage through this but it seems like the metrics have gotten worse at American versus peers.
Savi: Let's just go through some of the things that we've dealt with first off June.
Savi: Irregular operations up.
Savi: 35% plus over the prior couple of years and just go ahead and multiply that by two or three times as we moved into July.
Tom: Even though you're in AUR recovery and better.
Speaker Change: Thanks Savi.
Tom: Look I think American runs.
Savi: I said earlier today on.
Tom: The most reliable safe operation possible.
Savi: Another call that.
Savi: We've had almost 800.
Tom: At all times, I'm really proud of our team and the way they've been able to recover.
Savi: Diversion events and 5500 plus weather cancellations just in the first three weeks of July now that is not something that is.
Speaker Change: Let's just go through some of the things that we've dealt with first off yes June.
Tom: Irregular operations up.
Tom: 35% plus over the prior couple of years and just go ahead and multiply that by two or three times as we moved into July.
Speaker Change: Uh huh.
Speaker Change: It's something that will continue long into the future. It's an anomaly and we've seen that now that he has kind of come back into the summer and we're more in a normal cycle.
Tom: I said earlier today on.
Speaker Change: We're going to make sure, though that we do the things that <unk>.
Tom: Another call that.
Tom: We've had almost 800.
Speaker Change: <unk> American as resilient as possible and so whether that's investing in a little bit in the schedule to create some redundancy extra resources.
Tom: Diversion events and 5500 plus weather cancellations just in the first three weeks of July now that is not something that is.
Speaker Change: Technology.
Speaker Change: We're putting AI to use to make sure that we have the best recovery plans and options for our customers out there. So I feel good about our ability to manage through we do need investment in air traffic control one of the issues that we're facing today has its unique to us is as a slowdown.
Tom: It's something that will continue long into the future. It's an anomaly and we've seen that now that heat has kind of come back into the summer and we're more in a normal cycle.
Tom: We're going to make sure though that we do the things that.
Tom: Make American as resilient as possible.
Speaker Change: At a DCA, we had the aircraft.
Tom: So whether that's investing in a little bit in the schedule to create some redundancy extra resources.
Speaker Change: Earlier in the year end, but I fully expect that we will recover from that and that will no longer be an impediment. So over the long run I think that weather normalizes for everyone I think that American.
Tom: Technology.
Tom: We're putting AI to use to make sure that we have the best recovery plans and options for our customers out there. So I feel good about our ability to manage through we do need investment in air traffic control one of the issues that we're facing today has its unique to us as is.
Speaker Change: What we do and how we've operated during a really difficult environment, we're going to shine.
Speaker Change: Over the long run and I feel really good about that so.
Speaker Change: Couple of other proof points, one is that even with these irregular operations are mishandled baggage your rates are improving very very very much and I know that.
Tom: Slowdown DCA, we had the aircraft.
Tom: Incident earlier in the year end, but I fully expect that we will recover from that and that will no longer be an impediment. So over the long run I think that weather normalizes for everyone I think.
Speaker Change: We're doing a great job in getting customers too.
Speaker Change: Back online when operational events.
Speaker Change: That American.
Speaker Change: Problems. So there you have it.
Speaker Change: Because of what we do and how we've operated during a really difficult environment, we're going to shine.
Speaker Change: Yeah.
Speaker Change: Thank you.
Speaker Change: Our next question comes from the line of Tom Fitzgerald of TV Cowen. Please go ahead Tom.
Speaker Change: Over the long run and I feel really good about that so.
Speaker Change: A couple of other proof points, one is that even with these irregular operations are mishandled baggage your rates are improving very very very much and I know that.
Tom Fitzgerald: Alright. Thanks, so much for the time most of mine have already been answered, but I'm curious just how you're thinking about the New York market.
Tom Fitzgerald: Organically now that seemingly a lot of inorganic growth options. There have been have been closed off.
Speaker Change: A great job in getting customers to <unk>.
Speaker Change: Back online when operational events.
Tom Fitzgerald: Thanks, Tom.
Speaker Change: Create problems. So there you have it.
Speaker Change: We have a great franchise in New York.
Speaker Change: Thank you.
Speaker Change: We're the third largest carrier with over 260 peak day departures across all three airports.
Speaker Change: Next question comes from the line of Tom Fitzgerald TD Cohen.
Speaker Change: Please go ahead Tom.
Speaker Change: Our largest operation is it the preferred New York Airport Laguardia.
Tom Fitzgerald: Alright. Thanks, so much for the time most of mine have already been answered, but I'm curious just how youre thinking about the New York market.
Speaker Change: And we have 150 departures there the new terminal is great. It does come at significant expense, but we're optimizing our network to adjust to make sure. We can take new Yorkers to where they want to go and customers that want to go to New York, We're making sure that we have.
Tom Fitzgerald: Organically now that seemingly a lot of the inorganic growth options. There have been have been closed off.
Tom Fitzgerald: Thanks, Tom.
Tom Fitzgerald: Have a great franchise in New York.
Speaker Change: The ability to do that and so.
Speaker Change: The third largest carrier with over 260 peak day departures across all three airports.
Speaker Change: Based on what we're doing we're seeing margin expansion year over year.
Speaker Change: Our largest operation is it the preferred New York Airport Laguardia.
Speaker Change: And our one world hub at JFK terminal, eight, which I think is really unique to American.
Speaker Change: And we have 150 departures there the new terminal is great. It does come at significant expense, but we're optimizing our network to adjust to make sure. We can take new Yorkers to where they want to go and customers that want to go to New York, We're making sure that we have.
Speaker Change: We offer a seamless experience with 125 peak day departures across AAM and our partners, we've got a great product, especially from a transcon perspective.
Speaker Change: And Heathrow to New York, the biggest business market in the world.
Speaker Change: The ability to do that and so based on what we're doing we're seeing margin expansion year over year and our one world hub at JFK terminal eight which I think is really unique to American we offer a seamless experience with 125 peak day dip.
Speaker Change: Yes, our New York is more specialized given our network and where it complements where we're strong in so many other places.
Speaker Change: But we have the ability to grow as well.
Speaker Change: Growth can be through up gauging and we're always making sure that we're flying to the right places.
Speaker Change: <unk> across AAM and our partners, we've got a great product, especially from a transcon perspective, London Heathrow to New York, the biggest business market in the world.
Speaker Change: Okay.
Speaker Change: Thanks, very much that's really helpful. And then just as a follow up.
Speaker Change: Oh, I don't know, if you're able to give us any light sizing or like in terms of like points of RASM, but.
Speaker Change: How are you thinking about I guess headwinds from the Wi Fi for next year, and then and tailwind from the improving mix. So as you take on more.
Speaker Change: Yes, our New York is more specialized given our network and we're in complement where we're strong in so many other places.
Speaker Change: But we have the ability to grow as well and that growth can be through up gauging and we're always making sure that we're flying to the right places.
Premium heavy fleet, thanks again for the time.
David Vernon: Okay. So I'll start with that and Devin you can pitch in.
David Vernon: Regarding satellite Wifi, that's it's going to be fantastic American will be the first carrier to really offer a satellite based Wi Fi across its entire mainline fleet and everything but our 50 seaters from a regional basis, those installations are going out and doing very well we have a wonderful partners.
Speaker Change: Okay. Thanks.
Speaker Change: Thanks, very much that's really helpful. And then just as a follow up.
Speaker Change: Oh, I don't know, if you're able to give us any sizing or like in terms of like points of RASM, but.
Speaker Change: How are you thinking about.
Speaker Change: Headwinds from the Wi Fi for next year, and then and tailwind from the improving mix. So as we take on more.
David Vernon: Chip.
David Vernon: With our satellite Wi Fi being sponsored by AT&T that offers a tremendous.
Speaker Change: More premium heavy fleet, thanks again for the time.
Devin May: So I'll start with that and Devin you can pitch in.
David Vernon: Opportunity for both companies to take care of our customers in the way that they want and find ways to.
Devin May: Regarding satellite Wifi, that's it's going to be fantastic American will be the first carrier to really offer a satellite based Wi Fi across its entire mainline fleet and everything but our 50 seaters from a regional basis, those installations are going out and doing very well, we have a wonderful par.
David Vernon: Serve them, even even even better.
David Vernon: So from that perspective, I believe that based on our partnerships and what we think in terms of consumer sentiment and also usage of the service I think that we're going to do pretty well and you won't see much of an impact in terms of the P&L and in terms of it.
Devin May: <unk>.
Devin May: Our satellite Wi Fi being sponsored by AT&T.
Devin May: It offers a tremendous.
David Vernon: I spoke earlier about.
Devin May: Opportunity for both companies to take care of our customers and the way they want and find ways to.
David Vernon: The work that we're doing from a premium product perspective, we've got.
David Vernon: Tastic.
David Vernon: Foundation.
Devin May: Serve them, even even even better.
David Vernon: And whether it's our facilities our lounges the aircraft that were coming in that are already built into our capital plan, yes, we're going to augment that a little bit with amenities and service.
Devin May: So from that perspective, I believe that based on our partnerships and what we think in terms of consumer sentiment and also usage of the service I think that we're going to do pretty well and you won't see much of an impact in terms of the P&L and then in terms of it.
David Vernon: And we will do that but that won't have a material impact either.
David Vernon: Yeah.
Speaker Change: Thank you at this time the Q&A queue is open to media questions. Please press star one one to queue up for media questions to allow everyone. The opportunity to participate you will be limited to one question and one follow up.
Devin May: I spoke earlier about.
Devin May: The work that we're doing from a premium product perspective, we've got.
Devin May: Fantastic.
Devin May: Foundation and.
Devin May: And whether it's our facilities our lounges the aircraft that were coming in that are already built into our capital plan, yes, we're going to augment that a little bit with amenities and service.
Speaker Change: Please standby, while we compile the Q&A roster.
Devin May: And we will do that but that won't have a material impact either.
Speaker Change: Thank you. Our first question comes from the line of Allison Slider of Wall Street Journal. Please go ahead Alison.
Speaker Change: Thank you at this time the Q&A queue is opened to media questions. Please press star one one to queue up for media questions to allow everyone. The opportunity to participate you will be limited to one question and one follow up.
Allison Slider: Hi, Thanks, so much I guess I'm in New York I'm, just curious what you all made up the United Jetblue arrangements, how can how long do you think that will be and how much of a step back is it that marathon wasn't able to come to some other luckily you met with Jetblue.
Speaker Change: Please standby, while we compile the Q&A roster.
Allison Slider: Thanks Sally.
Speaker Change: Look we are.
Speaker Change: Thank you. Our first question comes from the line of Allison Slider of Wall Street Journal. Please go ahead Alison.
Allison Slider: Had a.
Allison Slider: Creative relationship with Jetblue for a number of years that really benefit customers.
Allison Slider: Hi, Thanks, so much I guess I'm in New York I'm, just curious what you all made up the United Jetblue arrangements, how can how long do you think that will be and how much of a step back is it that wasn't able to come to some other agreement with Jetblue.
Allison Slider: Unfortunately.
Allison Slider: We could.
Allison Slider: Maintain that long into the future.
Allison Slider: And so we haven't had the benefit of that for a couple of years now.
Allison Slider: As I mentioned before we like our New York franchise.
Allison Slider: Specialized.
Allison Slider: But it's centered on those things that really I think our most meaningful not only to our network, but our customers transcon.
Speaker Change: Thanks Sally.
Allison Slider: Look we.
Allison Slider: <unk> had a.
Allison Slider: Our creative relationship with Jetblue for a number of years that really benefit customers and.
Allison Slider: International service and really taken new Yorkers, where they want to go in and making sure that we have a great schedule from all of our hubs into the New York region in region as well.
Allison Slider: Unfortunately.
Allison Slider: We could.
Allison Slider: Maintain that long into the future.
Allison Slider: So we haven't had the benefit of that for a couple of years now.
Allison Slider: New York is one of the places that we've grown our advantage enrollments actually even at a faster clip than we have in the last couple of couple of years. So we know that we have.
Allison Slider: As I mentioned before we like our New York franchise.
Allison Slider: Specialized.
Allison Slider: But it's centered on those things that really I think our most meaningful not only to our network, but our customers transcon.
Allison Slider: Fantastic customer base, there and we'll look for ways to serve them, we have the ability to do some growth ourselves through up gauging, we've got our partner network in.
Allison Slider: International service and really taken new Yorkers, where they want to go in and making sure that we have a great schedule from all of our hubs into the New York region region as well.
Allison Slider: In our one world hub and JFK T eight.
Allison Slider: So I feel really confident about how we're set up and where we're headed going forward.
Allison Slider: Okay. Thanks.
Allison Slider: New York is one of the places that we've grown our advantage enrollments actually even at a faster clip than we have in the last couple of couple of years. So we know that we have.
Allison Slider: Yeah.
Allison Slider: Thank you.
Allison Slider: Our next question.
Allison Slider: From the line of Leslie Josephs of CNBC Youre line is open Leslie.
Allison Slider: Tastic customer base, there and we will look for ways to serve them. We have the ability to do some growth ourselves through up gauging, we've got our partner network and.
Leslie Josephs: Hi, everyone. Thanks for taking my question I'm, just curious if you could talk a little bit more.
Speaker Change: This weakness you have been seeing with the consumer Robert I know that you mentioned the uncertainty going into July what is that exactly and what are the signs of that and just because it differs a bit from what we heard from Delta and American.
Allison Slider: In our one world hub and JFK T eight.
Allison Slider: So I feel really confident about how we're set up and where we're headed going forward.
Allison Slider: Okay. Thanks.
Allison Slider: Okay.
Allison Slider: Thank you.
Leslie Josephs: Sorry, Delta and United.
Allison Slider: Our next question.
Leslie Josephs: Well I think that differs from what we've said as well. So you know the uncertainty that is in July is really due to bookings that were made in the second quarter as we move from June into July we're seeing the same uptick.
Speaker Change: From the line of Leslie Josephs of CNBC Youre line is open Leslie.
Speaker Change: Hi, everyone. Thanks for taking my question just curious if you could talk a little bit more.
Speaker Change: This weakness you've been seeing with the consumer Robert I know that you mentioned the uncertainty going into July what is that exactly and what are the signs of that and just because it differs a bit from what we heard from Delta and American thanks.
Leslie Josephs: In bookings that anybody else has.
Leslie Josephs: Is seeing its been remarkable.
Leslie Josephs: And it's something that gives us great confidence as we look into.
Speaker Change: Sorry, Delta and United.
Leslie Josephs: August and September in the third quarter and the early bookings, we only have 20% of revenue on the books for the fourth quarter, but as we look out into the fourth quarter. It all looks very promising that benefits us because it's largely.
Speaker Change: Well I think that differs from what we've said as well. So the uncertainty that is in July is really due to bookings that were made in the second quarter as we move from June into July we're seeing the same uptick.
Leslie Josephs: Domestic rebound.
Leslie Josephs: So given our exposure domestically I think that that.
Speaker Change: Bookings that anybody else's.
Leslie Josephs: Bodes very well.
Leslie Josephs: Now in terms of the.
Speaker Change: <unk> is seeing it's been remarkable.
Leslie Josephs: Drivers of the reduction in uncertainty I think that comes from more stability.
Speaker Change: And it's something that gives us great confidence as we look into.
Speaker Change: August and September in the third quarter and the early bookings, we only have 20% of.
Leslie Josephs: Tax Bill I think it comes from tariff deals being done with the U K recently announced Japan, hopefully something with the EU soon so all of that bodes well for the for the consumer.
Speaker Change: Revenue on the books for the fourth quarter, but as we look out into the fourth quarter. It all looks very promising that benefits us because it's largely domestic rebound and so.
Leslie Josephs: <unk> this is <unk>.
Speaker Change: Given our exposure domestically I think that that.
Leslie Josephs: Trending in the right direction, while GDP has been pulled down a little bit it's still it's still positive for the back half of the year and I think that that all lens to a customer that's more willing to get out there and spend travel in and do some things that they want to do.
Speaker Change: Bodes very well.
Speaker Change: Now in terms of the.
Speaker Change: Drivers of the reduction in uncertainty I think that comes from more stability.
Speaker Change: Tax Bill I think it comes from tariff deals being done with the U K recently announced Japan, hopefully something with.
Leslie Josephs: Okay. Thanks, and then just one follow up on one of your competitors just talked to you about using AI them or for pricing.
Speaker Change: The EU soon so all of that bodes well for the consumer.
Speaker Change: How do you think about that and is that something that you are considering or already experimenting with.
Speaker Change: <unk>.
Speaker Change: Oh. Thanks I appreciate the question because I quite frankly think that.
Speaker Change: Trending in the right direction, while GDP has been pulled down a little bit it's still it's still positive for the back half of the year and I think that that all lends to a customer that's more willing to get out there and spend travel in and do some things that they want to do.
Speaker Change: Some of the things I've heard or just just.
Speaker Change: It's just not good.
Speaker Change: For American we will use AI to improve our ability to operate the airline we're going to be more efficient because of it we're going to be able to.
Speaker Change: Okay. Thanks, and just one follow up on one of your competitors was talking about using AI them or for pricing.
Speaker Change: Our team members are going to have an easier time of doing their jobs for our customers, it's going to improve their customer experience, we're going to be able to give them the ability to see more of the amenities that we can offer that we're going to be able to serve them in a way that when they do run into difficulties that they can recover faster.
Speaker Change: How do you think about that and is that something that you are considering or already experimenting with.
Speaker Change: And I appreciate the question because I quite.
Speaker Change: Quite frankly think that.
Speaker Change: Some of the things I've heard or just just.
Speaker Change: Just not good.
Speaker Change: For American we will use AI to improve our ability to operate the airline we're going to be more efficient because of it we're going to be able to.
Speaker Change: We have projects underway now that are all aligned in that in that fashion, we talked about operational difficulties one of the big AI investments. We've made is in <unk>.
Speaker Change: Our team members are going to have an easier time of doing their jobs for our customers, it's going to improve their customer experience, we're going to be able to give them the ability to see more of the amenities that we can offer that we're going to be able to serve them in a way that when they do run into difficulties that they can recover faster.
Speaker Change: Project that we call heat that allows us to rebuild the operation as quickly as possible going forward.
Speaker Change: So for us.
Speaker Change: Of course, we're going to find ways to get our product in front of consumers, but consumers need to know that they can trust American okay. This is not about bait and switch.
Speaker Change: We have projects underway now that are all aligned in that in that fashion, we talked about operational difficulties one of the big AI investments. We've made is in <unk>.
Speaker Change: This is not about tricking and.
Speaker Change: Talk about using AI in that way.
Speaker Change: I don't think it's appropriate and certainly from American.
Speaker Change: Project that we call heat that allows us to rebuild the operation as quickly as possible going forward.
Speaker Change: It's not something we will do.
Speaker Change: So for us.
Speaker Change: Thank you. This concludes the Q&A portion of the call I would now like to turn the conference back to Robert Isom for closing remarks, Sir.
Speaker Change: Of course, we're going to find ways to get our product in front of consumers, but consumers need to know that they can trust American okay. This is not about bait and switch.
Robert Isom: Thanks, Latif and thank you to everybody on the call today.
Speaker Change: This is not about tricking and others that talk about using AI in that way.
Robert Isom: We remain confident that the actions that we've taken to deliver on our revenue potential strengthen our network operate with excellence and find ways to drive efficiencies throughout the airline position us well for the long term.
Speaker Change: I don't think it's appropriate and certainly from American.
Speaker Change: It's not something we will do.
Robert Isom: I want to thank you for joining us and thank you for your support and interest have a great day.
Speaker Change: Thank you. This concludes the Q&A portion of the call I would now like to turn the conference back to Robert Isom for closing remarks, Sir.
Robert Isom: This concludes today's conference call. Thank you for participating you may now disconnect.
Speaker Change: Thanks, Latif and thank you to everybody on the call today.
Speaker Change: We remain confident that the actions that we've taken to deliver on our revenue potential strengthen our network.
Speaker Change: Operate with excellence and find ways to drive efficiencies throughout the airline position us well for the long term I.
Speaker Change: I want to thank you for joining us and thank you for your support and interest have a great day.
Speaker Change: This concludes today's conference call. Thank you for participating you may now disconnect.
Speaker Change: Hum.
Speaker Change: [music].
Speaker Change: Hmm.
Speaker Change: Sure.
Speaker Change: Okay.
Speaker Change: [music].
Speaker Change: Okay.
Speaker Change: Mhm.
Speaker Change: Okay.
Speaker Change: [music].
Speaker Change: <unk>.
Speaker Change: Sure.
Speaker Change: Yes.
Speaker Change: Yeah.
Speaker Change: Okay.
Speaker Change: [music].
Speaker Change: Yeah.
Speaker Change: [music].
Speaker Change: Sure.
Speaker Change: Okay.
Speaker Change: Okay.
Speaker Change: Yeah.
Speaker Change: [music].
Speaker Change: So.
Speaker Change: Hum.
Speaker Change: [music].
Speaker Change: Yeah.
Speaker Change: [music].
Speaker Change: Hum.
Speaker Change: [music].
Speaker Change: Hum.
Speaker Change: <unk>.
Speaker Change: Yeah.
Speaker Change: Okay.
Speaker Change: Yes.
Speaker Change: Yes.
Speaker Change: Okay.
Speaker Change: [music].
Speaker Change: Okay.
Speaker Change: Mhm.
Speaker Change: [music].
Speaker Change: No.
Speaker Change: Yes.
Speaker Change: Yes.
Speaker Change: [music].
Speaker Change: Okay.
Speaker Change: Okay.
Speaker Change: [music].
Speaker Change: Okay.
Speaker Change: [music].
Speaker Change: So.
Speaker Change:
Speaker Change: [music].
Speaker Change: Yeah.
Speaker Change: Yes.
Speaker Change: Okay.
Speaker Change: [music].
Speaker Change: Yes.
Speaker Change: [music].
Speaker Change: Hum.
Speaker Change: Yeah.
Speaker Change: Okay.
Speaker Change: Okay.
Speaker Change: [music].
Speaker Change: Okay.
Speaker Change: Okay.
Speaker Change: Yes.
Speaker Change: [music].
Speaker Change: Yes.
Speaker Change: [music].
Speaker Change: Sure.
Speaker Change: [music].
Speaker Change: Yes.
Speaker Change: Yeah.
Speaker Change: Yes.
Speaker Change: Yeah.
Speaker Change: Okay.
Speaker Change: [music].
Speaker Change: Okay.
Speaker Change: Yes.
Speaker Change: Okay.
Speaker Change: Yes.
Speaker Change: Sure.
Speaker Change: Okay.
Speaker Change: Okay.
Speaker Change: [music].
Speaker Change: Okay.
Speaker Change: Yes.
Speaker Change: Yes.
Speaker Change: Yeah.
Speaker Change: Okay.
Speaker Change: [music].
Speaker Change: Yes.
Speaker Change: [music].
Speaker Change: Okay.
Speaker Change: Okay.
Speaker Change: Okay.
Speaker Change: [music].
Speaker Change: Okay.
Speaker Change: Okay.
Speaker Change: Yes.
Speaker Change: [music].
Speaker Change: Yes.
Speaker Change: Okay.
Speaker Change: Okay.
Speaker Change: [music].
Speaker Change: Yes.
Speaker Change: Okay.
Speaker Change: Okay.
Speaker Change: Hum.
Speaker Change: Okay.
Speaker Change: Yes.
Speaker Change: [music].
Speaker Change: Yes.
Speaker Change: Okay.
Speaker Change: [music].
Speaker Change: Okay.
Speaker Change: Sure.
Speaker Change: Yes.
Speaker Change: Yes.
Speaker Change: [music].
Speaker Change: Yes.
Speaker Change: Okay.
Speaker Change: [music].
Speaker Change: Okay.
Speaker Change: Okay.
Speaker Change: Okay.
Speaker Change: [music].
Speaker Change: Okay.
Speaker Change: Yes.
Speaker Change: Yes.
Speaker Change: [music].
Speaker Change: Yes.
Speaker Change: Okay.
Speaker Change: [music].
Speaker Change: Okay.
Speaker Change: Okay.
Speaker Change: Okay.
Speaker Change: Okay.
Speaker Change: Okay.
Speaker Change: Okay.
Speaker Change: Yes.
Speaker Change: Okay.
Speaker Change: Yes.
Speaker Change: Okay.