American Airlines (AAL) reported first-quarter 2025 results that reflected a mix of operational resilience and ongoing cost pressures amid an uncertain economic backdrop. Total operating revenue came in at $12.6 billion, a slight decline of 0.2% year-over-year, driven primarily by softness in domestic leisure demand and the impact of the American Eagle Flight 5342 accident, which is estimated to have reduced revenue by approximately $200 million.

The revenue breakdown showed mixed performance: passenger revenue declined 0.6% to $11.39 billion, while cargo revenue increased 1.1% to $189 million. Notably, other revenue rose 5.0% to $971 million, buoyed by continued strength in the airline’s loyalty program, which saw AAdvantage enrollments rise 6% and co-branded credit card spending increase 8% year-over-year.

On the profitability front, the company posted a GAAP net loss of $473 million, or $(0.72) per share, widening from $312 million in the prior-year quarter. Adjusted net loss, excluding special items, stood at $386 million, or $(0.59) per share. Operating margins turned negative, with GAAP margin at (2.2)% and adjusted margin at (1.6)%, as total operating expenses rose 2.1% to $12.82 billion. The increase was led by higher labor and regional flight operation costs, although these were partially offset by a 13.2% decrease in fuel expenses, thanks to a lower average fuel price of $2.48 per gallon.

Regionally, international operations were a bright spot. Pacific passenger revenue surged 30.2%, and Atlantic PRASM (passenger revenue per available seat mile) grew 10.5%, even as overall international capacity declined 0.8%. Meanwhile, domestic revenue slipped 1.6%, underscoring weaker leisure travel trends.

Operational metrics reflected a slight downturn, with revenue passenger miles down 1.9% and load factor falling 0.9 percentage points to 80.6%. However, yield improved 1.4% to 20.21 cents, and total revenue per ASM (TRASM) edged up 0.7%. Still, rising costs drove CASM (cost per ASM) up 2.9%, and CASM excluding fuel and special items rose 7.8%, largely due to new labor agreements.

Despite the bottom-line pressure, American Airlines generated strong free cash flow of $1.71 billion and ended the quarter with $10.8 billion in total liquidity, including $931 million in cash and restricted cash. The company also reduced its total debt by $1.2 billion in the quarter, continuing its progress toward a long-term goal of bringing total debt below $35 billion by the end of 2027.

Looking ahead, management offered Q2 2025 EPS guidance of $0.50 to $1.00 per share, but withdrew full-year guidance due to macroeconomic uncertainty. Capital expenditures for the year are expected to fall between $3 billion and $3.5 billion, with $2–$2.5 billion earmarked for aircraft investments.

CEO Robert Isom emphasized the company’s resilience and focus on long-term performance, highlighting continued investments in fleet modernization, customer experience enhancements, and operational efficiency. While near-term headwinds persist, American remains committed to cost discipline, debt reduction, and unlocking value from its loyalty program and international operations.