American's Financial Analysis
 

I hear all kinds of information.. just wonder what is true and what is not.. Where does American stand financially? What are their plans for new aircraft, lowering debt, operational, ect..? Any links to view this info?

American has a lot of debt, but has the newest fleet in the industry, the largest network, and arguably the best hubs/gates. AA has been paying down debt way ahead of schedule for a year now. Debt has been cut over $10billion since Covid. There are lots of articles about it, but AA is not in bad shape. Other airlines are just starting to order airplanes and take deliveries in a period of ridiculously high interest rates and damaged supply chain.

https://www.aerotime.aero/articles/a...rlines-q2-2023

Probably the best thing AA has going for it is the new airplanes. With manufacturing and supply chain issues, it is taking forever to get new aircraft right now. Some airlines keep talking about all of these new orders, but the manufacturers are saying that there is no way that they can meet the timelines. Cabin interiors have to be ordered a minimum of 24 months out right now and engine production is a disaster.

The key to being in good shape going forward are as many airplanes as possible and pilots to fly them. AA is in good shape in regards to this.

You can start by reading through their SEC filings. Here’s a link to their latest quarterly report: https://americanairlines.gcs-web.com...6201-23-000070

https://graphics.reuters.com/USA-AIR...xzvx/chart.png

filling

Looks good for the top 3.

Unfortunately the pre tax margin for AA will be less than 10% in the near future, more like 5%, per 10Q report.

Did it say if that is due to earnings miss, or labor cost, or fuel cost?

I would think the amount of bonuses would move the needle some, and they are shopping for planes so if there isn’t a revenue miss then they are just moving their chess pieces around.


Overall, seems like the industry is getting confirmation from Delta and Spirit that the costumer base purchasing habits are changing.

Delta has to boot people out of the lounges and Sprit is underutilized, the TSA screening numbers aren’t reflecting the switch, maybe if TSA put out Precheck screenings from before Covid we would see the changeover there also.

Where is Exorcistdog when you need him? We must be doing pretty well since he doesn't show anymore. I think he is more concerned with his own airline's disastrous financial situation right now. Not looking good for ULCCs, it's not COVID anymore.

AA already stated that profits will be way down this quarter due to the contract but still expect to come out ahead. AA will be just fine.

AA also tends to "underperform" to pay off massive amounts of debt or invest money elsewhere. Expect AA to have a slightly lower profit but have additional expenses in the form of large debt payments ahead of schedule.

It looks like AA is setting itself up for homeruns further down the road and happy to settle for singles now. In a few years, AA will still have the newest and largest fleet and will have paid their debt off. At that point, AA will be able to announce much larger and dramatic profits. That will drive investor values way up. Also at that time, AA's senior management will have even more shares of the stock. They will make out like bandits!

This is the most positive thing I've seen you post. It's refreshing.