American Airlines Group Inc. (AAL)

CIK: 0000006201. SIC: 4512 Air Transportation, Scheduled. Latest 10-K as of: 2026-02-18.

SIC breadcrumb: Transportation, Communications, Electric, Gas, And Sanitary Services > SIC Major Group 45 > SIC 4512 Air Transportation, Scheduled

SEC company page: https://www.sec.gov/edgar/browse/?CIK=6201. Latest filing source: 0000006201-26-000014.

Selected Fundamentals

Financials

Annual standardized facts from SEC companyfacts as of latest extracted filing date 2026-02-18. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0000006201.json. Derived margins are computed from the extracted annual SEC facts.

Flow metrics use full-year FY periods from 10-K/10-K/A filings; balance-sheet metrics use FY-end instants. Missing metrics are omitted rather than fabricated.

Financial Charts

Quarterly

Quarterly standardized facts from SEC companyfacts as of latest extracted filing date 2026-04-23. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0000006201.json.

Flow metrics use discrete quarter-length periods from 10-Q/10-Q/A filings. Q4 revenue and net income are derived only when annual FY and nine-month YTD facts exist for the same fiscal year; derived Q4 values are labeled. EPS Q4 is not derived.

Quarterly Charts

Macro Cross-References

• CPIAUCSL - Consumer Price Index for All Urban Consumers: All Items in U.S. City Average
• UNRATE - Unemployment Rate
• FEDFUNDS - Federal Funds Effective Rate
• CES0500000003 - Average Hourly Earnings of All Employees, Total Private
• DFEDTARU - Federal Funds Target Range - Upper Limit
• DFEDTARL - Federal Funds Target Range - Lower Limit
• DGS3MO - Market Yield on U.S. Treasury Securities at 3-Month Constant Maturity
• DGS2 - Market Yield on U.S. Treasury Securities at 2-Year Constant Maturity
• DGS10 - Market Yield on U.S. Treasury Securities at 10-Year Constant Maturity
• DGS30 - Market Yield on U.S. Treasury Securities at 30-Year Constant Maturity
• T10Y2Y - 10-Year Treasury Constant Maturity Minus 2-Year Treasury Constant Maturity
• CPILFESL - Consumer Price Index for All Urban Consumers: All Items Less Food and Energy
• CPIUFDSL - Consumer Price Index for All Urban Consumers: Food
• CPIENGSL - Consumer Price Index for All Urban Consumers: Energy
• CUSR0000SAH1 - Consumer Price Index for All Urban Consumers: Shelter
• PCEPI - Personal Consumption Expenditures: Chain-type Price Index
• PCEPILFE - Personal Consumption Expenditures Excluding Food and Energy: Chain-type Price Index
• PPIACO - Producer Price Index by Commodity: All Commodities
• T10YIE - 10-Year Breakeven Inflation Rate
• U6RATE - Total Unemployed, Plus All Marginally Attached Workers Plus Total Employed Part Time for Economic Reasons
• PAYEMS - All Employees, Total Nonfarm
• CIVPART - Labor Force Participation Rate
• EMRATIO - Employment-Population Ratio
• UNEMPLOY - Unemployed
• CE16OV - Employment Level
• ICSA - Initial Claims
• JTSJOL - Job Openings: Total Nonfarm
• JTSQUR - Quits: Total Nonfarm
• GDPC1 - Real Gross Domestic Product
• A191RL1Q225SBEA - Real Gross Domestic Product: Percent Change from Preceding Period
• INDPRO - Industrial Production: Total Index
• TCU - Capacity Utilization: Total Index
• HOUST - New Privately-Owned Housing Units Started: Total Units
• PERMIT - New Privately-Owned Housing Units Authorized in Permit-Issuing Places: Total Units
• RSAFS - Advance Retail Sales: Retail Trade
• PCE - Personal Consumption Expenditures
• DSPIC96 - Real Disposable Personal Income
• PSAVERT - Personal Saving Rate
• M2SL - M2
• BOPGSTB - U.S. International Trade in Goods and Services: Balance
• MSPUS - Median Sales Price of Houses Sold for the United States
• HSN1F - New One Family Houses Sold: United States
• RHORUSQ156N - Homeownership Rate in the United States
• TTLCONS - Total Construction Spending: Total Construction in the United States
• RRVRUSQ156N - Rental Vacancy Rate in the United States
• TOTALSL - Total Consumer Credit Owned and Securitized
• REVOLSL - Revolving Consumer Credit Owned and Securitized
• DRCCLACBS - Delinquency Rate on Credit Card Loans, All Commercial Banks
• GDP - Gross Domestic Product
• GPDI - Gross Private Domestic Investment
• GCE - Government Consumption Expenditures and Gross Investment
• PCEC - Personal Consumption Expenditures
• NETEXP - Net Exports of Goods and Services
• GFDEBTN - Federal Debt: Total Public Debt
• GFDEGDQ188S - Federal Debt: Total Public Debt as Percent of Gross Domestic Product
• FYFSD - Federal Surplus or Deficit
• FGRECPT - Federal Government Current Receipts
• FGEXPND - Federal Government: Current Expenditures
• MANEMP - All Employees, Manufacturing
• USCONS - All Employees, Construction
• USTRADE - All Employees, Retail Trade
• USFIRE - All Employees, Financial Activities
• USGOVT - All Employees, Government
• AWHAETP - Average Weekly Hours of All Employees, Total Private
• DGORDER - Manufacturers' New Orders: Durable Goods
• NEWORDER - Manufacturers' New Orders: Nondefense Capital Goods Excluding Aircraft
• BUSINV - Total Business Inventories
• EXPGS - Exports of Goods and Services
• IMPGS - Imports of Goods and Services
• IR - Import Price Index (End Use): All Commodities
• PPIFIS - Producer Price Index by Commodity: Final Demand

Latest quarter (10-Q)

Latest 10-Q source: 0000006201-26-000032.

Extracted between Part I Item 2 and the next Item 3/4 or Part II heading after HTML sanitization. Confidence: high. Filing date: 2026-04-23. Report date: 2026-03-31.

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Part I, Item 2 of this report should be read in conjunction with Part II, Item 7 of AAG’s and American’s Annual Report on Form 10-K for the year ended December 31, 2025 (the 2025 Form 10-K). The information contained herein is not a comprehensive discussion and analysis of the financial condition and results of operations of AAG and American, but rather updates disclosures made in the 2025 Form 10-K.

Financial Overview

Business and Macroeconomic Conditions

Worldwide macroeconomic, political and military events, including war, terrorist activity, and conflict in the Middle East (particularly if it intensifies or is prolonged) and in Ukraine, have contributed, and are likely to continue to contribute, to oil and natural gas price volatility. These factors, along with changes in U.S. or international trade policies and continued uncertainty surrounding such policies, could lead to weakened business conditions for the transportation industry, which may adversely impact our operations through increased supply chain challenges, commodity price volatility and a decline in discretionary spending and consumer confidence, among others.

Our operating results are materially impacted by changes in the availability, price volatility and cost of aircraft fuel, which represents one of the largest single cost items in our business. Because of the amount of fuel needed to operate our business, even a relatively small increase or decrease in the price of aircraft fuel can have a material effect on our operating results and liquidity. Market prices for aircraft fuel have fluctuated substantially over the first quarter of 2026 and prices continue to be highly volatile, with market spot prices ranging from a low of approximately $1.86 per gallon to a high of approximately $4.75 per gallon during the first quarter of 2026.

AAG’s First Quarter 2026 Results

The selected financial data presented below is derived from AAG’s unaudited condensed consolidated financial statements included in Part I, Item 1A of this report and should be read in conjunction with those financial statements and the related notes thereto.

Three Months Ended March 31,

Increase

(Decrease)

Percent

Increase

(Decrease)

2026

2025

(In millions, except percentage changes)

Passenger revenue

$

12,495 

$

11,391 

$

1,104 

9.7

Cargo revenue

214 

189 

25 

12.9

Other operating revenue

1,203 

971 

232 

23.9

Total operating revenues

13,912 

12,551 

1,361 

10.8

Aircraft fuel and related taxes

2,928 

2,587 

341 

13.2

Salaries, wages and benefits

4,674 

4,222 

452 

10.7

Total operating expenses

13,953 

12,821 

1,132 

8.8

Operating loss

(41)

(270)

(229)

(85.0)

Pre-tax loss

(476)

(648)

(172)

(26.6)

Income tax benefit

(94)

(175)

(81)

(46.7)

Net loss

(382)

(473)

(91)

(19.2)

Pre-tax loss – GAAP

$

(476)

$

(648)

$

(172)

(26.6)

Adjusted for: pre-tax net special items (1)

149 

118 

31 

25.0

Pre-tax loss excluding net special items

$

(327)

$

(530)

$

(203)

(38.2)

(1)See “Reconciliation of GAAP to Non-GAAP Financial Measures” below and Note 2 to AAG’s Condensed Consolidated Financial Statements in Part I, Item 1A for details on the components of net special items.

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Pre-Tax Loss and Net Loss

Pre-tax loss and net loss were $476 million and $382 million, respectively, in the first quarter of 2026. This compares to first quarter of 2025 pre-tax loss and net loss of $648 million and $473 million, respectively. Excluding the effects of pre-tax net special items, pre-tax loss was $327 million and $530 million in the first quarters of 2026 and 2025, respectively.

The period-over-period decrease in pre-tax loss on both a GAAP basis and excluding pre-tax net special items was principally driven by an increase in passenger revenue, offset in part by increases in certain operating expenses including salaries, wages, and benefits, aircraft fuel and related taxes and other operating expenses.

Revenue

In the first quarter of 2026, we reported total operating revenues of $13.9 billion, an increase of $1.4 billion, or 10.8%, from the first quarter of 2025. Passenger revenue was $12.5 billion in the first quarter of 2026, an increase of $1.1 billion, or 9.7%, from the first quarter of 2025. Passenger revenue performance improved in the first quarter of 2026, primarily due to higher domestic and international demand for air travel with passenger revenue per available seat mile (PRASM) increasing 6.5% compared to the first quarter of 2025. This increase was primarily driven by a 5.6% increase in passenger yield, while load factor increased 0.7pts compared to the first quarter of 2025.

Cargo revenue increased $25 million, or 12.9%, in the first quarter of 2026 from the first quarter of 2025, primarily due to a 9.0% increase in cargo ton miles and a 3.6% increase in cargo yield.

Other operating revenue increased $232 million, or 23.9%, in the first quarter of 2026 from the first quarter of 2025, driven primarily by higher revenue associated with our loyalty program. During the three months ended March 31, 2026 and 2025, cash payments from co-branded credit card and other partners were $2.9 billion and $1.8 billion, respectively. Cash remuneration for the first quarter of 2026 included a one-time cash payment associated with the extension of a partner agreement announced in 2025.

Our total revenue per available seat mile (TRASM) was 19.32 cents in the first quarter of 2026, a 7.6% increase as compared to 17.95 cents in the first quarter of 2025.

Fuel

Aircraft fuel and related taxes was $2.9 billion in the first quarter of 2026, which was $341 million, or 13.2%, higher as compared to the first quarter of 2025. This was primarily due to a 10.7% increase in the average price per gallon of aircraft fuel including related taxes to $2.75 in the first quarter of 2026 from $2.48 in the first quarter of 2025 and a 2.3% increase in gallons of fuel consumed due to increased capacity.

As of March 31, 2026, we did not have any fuel hedging contracts outstanding to hedge our fuel consumption. Our current policy is not to enter into transactions to hedge our fuel consumption, although we review this policy from time to time based on market conditions and other factors. As such, and assuming we do not enter into any future transactions to hedge our fuel consumption, we will continue to be fully exposed to fluctuations in fuel prices. See Part I, Item 1A. Risk Factors – “Our business is very dependent on the price and availability of aircraft fuel. Continued periods of high volatility in fuel costs, increased fuel prices or significant disruptions in the supply of aircraft fuel could have a significant negative impact on consumer demand, our operating results and liquidity” in our 2025 Form 10-K.

Other Costs

We remain committed to actively managing our cost structure, which we believe is necessary in an industry whose economic prospects are heavily dependent upon two variables we cannot control: general economic conditions and the price of fuel. Additionally, we continue to focus on initiatives to reengineer our business through the use of digital solutions, process enhancements and procurement transformation and we intend to continue to invest in reengineering our business through the remainder of 2026 and beyond to build an even more efficient airline and continue to manage costs while delivering a better experience for our customers and team.

Our 2026 first quarter total operating cost per available seat mile (CASM) was 19.38 cents, an increase of 5.6% from 18.34 cents in the first quarter of 2025. The increase in CASM was primarily driven by higher costs for salaries, wages and benefits, aircraft fuel and other operating expenses, offset in part by a decrease in mainline operating special items, net.

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Our 2026 first quarter CASM excluding net special items, fuel and profit sharing was 15.29 cents, an increase of 5.2% from 14.54 cents in the first quarter of 2025, which was primarily driven by higher costs for salaries, wages and benefits and other operating expenses.

For a reconciliation of CASM to CASM excluding net special items, fuel and profit sharing see “Reconciliation of GAAP to Non-GAAP Financial Measures” below.

Liquidity

As of March 31, 2026, we had $10.8 billion in total available liquidity, consisting of $7.3 billion in unrestricted cash and short-term investments, and $3.5 billion in total undrawn capacity under revolving credit and other facilities.

During the first three months of 2026, we completed the following financing transactions (see Note 5 to AAG’s Condensed Consolidated Financial Statements in Part I, Item 1A for further information on 2026 financing activities):

•repaid in full $629 million of the outstanding principal amount of the senior short-term term loan facility;

•prepaid in full $1.0 billion of the outstanding principal amount of the 8.50% senior secured notes;

•amended the 2025 AAdvantage Term Loan Facility to reduce the applicable interest rate margin;

•increased the aggregate revolving commitments under the 2013, 2014 and 2023 Revolving Facilities from $3.0 billion to $3.1 billion and extended the maturity of each facility from June 4, 2029 to March 5, 2031;

•received approximately $870 million and $127 million in proceeds from enhanced equipment trust certificates (EETCs) under the 2026-1 Class (B)R Aircraft EETCs and the 2025-1 Class A and B EETCs, respectively, in connection with the financing of certain aircraft;

•extended the maturity date of a revolving credit facility that provides for borrowing capacity of up to $350 million by an additional year to March 2028; and

•incurred $554 million in net payments on fuel financing transactions.

Reconciliation of GAAP to Non-GAAP Financial Measures

We sometimes use financial measures that are derived from the condensed consolidated financial statements but that are not presented in accordance with accounting principles generally accepted in the U.S. (GAAP) to understand and evaluate our current operating performance and to allow for period-to-period comparisons. We believe these non-GAAP financial measures may also provide useful information to investors and others. These non-GAAP measures may not be comparable to similarly titled non-GAAP measures of other companies, and should be considered in addition to, and not as a substitute for or superior to, any measure of performance, cash flow or liquidity prepared in accordance with GAAP. We are providing a reconciliation of reported non-GAAP financial measures to their comparable financial measures on a GAAP basis.

The following table presents the reconciliation of pre-tax loss (GAAP measure) to pre-tax loss excluding net special items (non-GAAP measure). Management uses this non-GAAP financial measure to evaluate our current operating performance and to allow for period-to-period comparisons. As net special items may vary from period-to-period in nature and amount, the adjustment to exclude net special items provides management with an additional tool to understand our core operating performance.

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Three Months Ended March 31,

2026

2025

(In millions)

Reconciliation of Pre-Tax Loss Excluding Net Special Items:

Pre-tax loss – GAAP

$

(476)

$

(648)

Pre-tax net special items (1):

Mainline operating special items, net

14 

70 

Nonoperating special items, net

135 

48 

Total pre-tax net special items

149 

118 

Pre-tax loss excluding net special items

$

(327)

$

(530)

(1)See Note 2 to AAG’s Condensed Consolidated Financial Statements in Part I, Item 1A for further information on net special items.

Additionally, the table below presents the reconciliation of total operating costs (GAAP measure) to total operating costs excluding net special items, fuel and profit

[Excerpt truncated for page length; source filing is linked above.]

Latest 10-K MD&A

Extracted between Item 7 and the next Item 7A/8 heading after HTML sanitization. Confidence: high. Filing date: 2026-02-18. Report date: 2025-12-31.

ITEM 7.  MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

2025 Financial Overview

Business and Macroeconomic Conditions

Starting in the first quarter of 2025, the U.S. Government has promoted and implemented plans to place additional tariffs on goods imported into the U.S. from numerous countries and has pursued other trade policies intended to restrict imports and, in response, multiple nations have countered with reciprocal tariffs and other actions.

These or additional changes in U.S. or international trade policies, along with continued uncertainty surrounding such policies, could lead to further weakened business conditions for the transportation industry, which may adversely impact our operations through increased supply chain challenges, commodity price volatility and a decline in discretionary spending and consumer confidence, among others. We continue to monitor the situation.

Many aspects of our airline operations depend on the U.S. Government, and in the fourth quarter of 2025, the prolonged government shutdown led to mandated schedule reductions, strained air traffic control and security screening resources, reduced air traffic capacity at key U.S. airports, and increased delays and cancellations. Additionally, the government shutdown-related uncertainty temporarily impacted customer bookings in the fourth quarter of 2025 and negatively impacted our revenue by approximately $325 million.

AAG’s 2025 Financial Results

The selected financial data presented below is derived from AAG’s audited consolidated financial statements included in Part II, Item 8A of this report and should be read in conjunction with those financial statements and the related notes thereto.

Year Ended December 31,

Increase

(Decrease)

Percent

Increase

(Decrease)

2025

2024

(In millions, except percentage changes)

Passenger revenue

$

49,643 

$

49,586 

$

57 

0.1

Cargo revenue

839 

804 

35 

4.3

Other operating revenue

4,151 

3,821 

330 

8.7

Total operating revenues

54,633 

54,211 

422 

0.8

Aircraft fuel and related taxes

10,718 

11,418 

(700)

(6.1)

Salaries, wages and benefits

17,566 

16,021 

1,545 

9.6

Total operating expenses

53,166 

51,597 

1,569 

3.0

Operating income

1,467 

2,614 

(1,147)

(43.9)

Pre-tax income

190 

1,154 

(964)

(83.6)

Income tax provision

79 

308 

(229)

(74.7)

Net income

111 

846 

(735)

(86.8)

Pre-tax income – GAAP

$

190 

$

1,154 

$

(964)

(83.6)

Adjusted for: pre-tax net special items (1)

162 

667 

(505)

(75.7)

Pre-tax income excluding net special items

$

352 

$

1,821 

$

(1,469)

(80.7)

(1)See Part II, Item 6. Selected Consolidated Financial Data – “Reconciliation of GAAP to Non-GAAP Financial Measures” and Note 2 to AAG’s Consolidated Financial Statements in Part II, Item 8A for details on the components of pre-tax net special items.

Pre-Tax Income and Net Income

Pre-tax income and net income were $190 million and $111 million, respectively, in 2025. This compares to 2024 pre-tax income and net income of $1.2 billion and $846 million, respectively.

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Pre-tax income on a GAAP basis decreased in 2025 as compared to 2024. This decrease was driven primarily by increases in certain operating expenses including salaries, wages and benefits, regional expenses and other operating expenses, offset in part by lower costs for aircraft fuel and related taxes, a decrease in pre-tax net special items and higher revenues.

Excluding the effects of pre-tax net special items, pre-tax income was $352 million and $1.8 billion in 2025 and 2024, respectively. The year-over-year decrease in our pre-tax income excluding pre-tax net special items was principally driven by certain operating expenses as mentioned above, offset in part by lower costs for aircraft fuel and related taxes and higher revenues.

Revenue

In 2025, we reported total operating revenues of $54.6 billion, an increase of $422 million, or 0.8%, as compared to 2024. Passenger revenue was $49.6 billion and remained relatively flat as compared to 2024. Our passenger revenue in 2025 was impacted by the American Eagle flight 5342 accident and softness in domestic demand for air travel in the first half of the year, offset by strength in international travel, particularly in the Atlantic and Pacific regions, and recovery in domestic travel in the second half of the year despite the negative revenue impact from the temporary shutdown of the U.S. Government in the fourth quarter of 2025.

Other operating revenue increased $330 million, or 8.7%, in 2025 as compared to 2024, driven primarily by higher revenue associated with our loyalty program. During 2025 and 2024, cash payments from co-branded credit card and other partners were $6.2 billion and $6.1 billion, respectively. Cash remuneration in 2024 included a one-time cash payment related to the new co-branded credit card agreement announced in December 2024. This one-time cash payment will be amortized over the life of the new agreement beginning in 2026.

Our total revenue per available seat mile (TRASM) was 18.25 cents in 2025, a 1.4% decrease as compared to 18.51 cents in 2024.

Fuel

In 2025, aircraft fuel expense totaled $10.7 billion, a decrease of $700 million, or 6.1%, as compared to 2024. This decrease was primarily driven by an 8.2% decrease in the average price per gallon of aircraft fuel including related taxes to $2.39 in 2025 from $2.60 in 2024, offset in part by a 2.2% increase in gallons of fuel consumed due to increased capacity.

As of December 31, 2025, we did not have any fuel hedging contracts outstanding to hedge our fuel consumption. Our current policy is not to enter into transactions to hedge our fuel consumption, although we review this policy from time to time based on market conditions and other factors. As such, and assuming we do not enter into any future transactions to hedge our fuel consumption, we will continue to be fully exposed to fluctuations in fuel prices. See Part I, Item 1A. Risk Factors – “Our business is very dependent on the price and availability of aircraft fuel. Continued periods of high volatility in fuel costs, increased fuel prices or significant disruptions in the supply of aircraft fuel could have a significant negative impact on consumer demand, our operating results and liquidity.”

Other Costs

We remain committed to actively managing our cost structure, which we believe is necessary in an industry whose economic prospects are heavily dependent upon two variables we cannot control: general economic conditions and the price of fuel. Additionally, we continue to focus on initiatives to reengineer our business through the use of digital solutions, process enhancements and procurement transformation and we intend to continue to invest in reengineering our business through 2026 and beyond to build an even more efficient airline and continue to manage costs while delivering a better experience for our customers and team.

Our 2025 CASM was 17.76 cents, an increase of 0.8%, from 17.61 cents in 2024. This increase in CASM was primarily driven by higher costs for salaries, wages and benefits, regional expenses and other operating expenses, offset in part by lower aircraft fuel costs as well as a decrease in mainline operating special items, net.

Our 2025 CASM excluding net special items and fuel was 14.12 cents, an increase of 4.6%, from 13.50 cents in 2024, which was primarily driven by higher costs for salaries, wages and benefits, regional expenses and other operating expenses.

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For a reconciliation of total operating CASM to total operating CASM excluding net special items and fuel, see Part II, Item 6. Selected Consolidated Financial Data – “Reconciliation of GAAP to Non-GAAP Financial Measures.”

Liquidity

As of December 31, 2025, we had $9.2 billion in total available liquidity, consisting of $5.8 billion in unrestricted cash and short-term investments and $3.4 billion in total undrawn capacity under revolving credit and other facilities.

During 2025, we completed the following financing transactions (see Notes 1, 4 and 11 to AAG’s Consolidated Financial Statements in Part II, Item 8A for further information):

•amended the AAdvantage term loan credit and guaranty agreement to reduce the applicable interest rate margin and to reduce the scheduled quarterly principal amortization amount;

•issued $1.0 billion of incremental term loans pursuant to the AAdvantage term loan credit guaranty agreement (2025 AAdvantage Term Loan Facility), as amended;

•prepaid $487 million of the outstanding principal amounts of certain equipment notes issued under enhanced equipment trust certificates (EETCs);

•increased the aggregate revolving commitments under the 2013, 2014 and 2023 Revolving Facilities from approximately $2.9 billion to $3.0 billion;

•received $432 million of gross proceeds pursuant to special facility revenue bonds issued by the Tulsa Municipal Airport Trust (TMAT), of which a portion was used to fund the redemption of other bonds related to TMAT and the remaining amount will be used to finance the cost of improvements at American’s overhaul and maintenance base at Tulsa International Airport;

•prepaid in full $937 million of the outstanding principal amounts of the 10.75% senior secured IP notes (the IP Notes) and the 10.75% senior secured LGA/DCA notes (LGA/DCA Notes and together with the IP Notes, the 10.75% Senior Secured Notes);

•borrowed $629 million under a senior unsecured short-term term loan facility due in January 2026;

•received approximately $978 million in proceeds from EETCs;

•received $840 million in net proceeds from fuel financing transactions; and

•issued $1.2 billion of equipment loans and other notes payable in connection with the financing of certain aircraft.

American Eagle Flight 5342

On January 29, 2025, American Eagle flight 5342 was involved in a fatal accident in Washington, D.C. The Bombardier CRJ700 aircraft operated by PSA was en route to Washington, D.C. from Wichita, Kansas when it was involved in a midair collision near Ronald Reagan Washington National Airport. We estimate that the accident reduced first quarter 2025 total operating revenues by approximately $200 million, of which the impacted revenue is not covered by insurance. Beginning on September 24, 2025, multiple wrongful death and survival actions have been filed against the U.S. Government, PSA and American seeking unspecified damages, and we expect that additional lawsuits will be filed. While we cannot predict the outcome of these lawsuits, American has industry standard insurance coverage for this incident and we believe these lawsuits are without merit and are defending against them vigorously.

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AAG’s Results of Operations

For a comparison of the 2024 to 2023 reporting periods, see Part II, Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations – “AAG’s Results of Operations” of our 2024 Form 10-K.

Operating Statistics

The table below sets forth selected operating data for the years ended December 31, 2025 and 2024.

Year Ended December 31,

Increase

(Decrease)

2025

2024

Revenue passenger miles (millions) (a)

250,294 

248,795 

0.6%

Available seat miles (millions) (b)

299,411 

292,948 

2.2%

Passenger load factor (percent) (c)

83.6 

84.9 

(1.3)pts

Yield (cents) (d)

19.83 

19.93 

(0.5)%

Passenger revenue per available seat mile (cents) (e)

16.58 

16.93 

(2.0)%

Total revenue per available seat mile (cents) (f)

18.25 

18.51 

(1.4)%

Fuel consumption (gallons in millions)

4,488 

4,391 

2.2%

Average aircraft fuel price including related taxes (dollars per gallon)

2.39 

2.60 

(8.2)%

Total operating cost per available seat mile (cents) (g)

17.76 

17.61 

0.8%

Aircraft at end of period (h)

1,580 

1,562 

1.2%

Full-time equivalent employees at end of period

139,100 

133,300

4.4%

(a)Revenue passenger mile (RPM) – A basic measure of sales volume. One RPM represents one passenger flown one mile.

(b)Available seat mile (ASM) – A basic measure of production. One ASM represents one seat flown one mile.

(c)Passenger load factor – The percentage of available seats that are filled with revenue passengers.

(d)Yield – A measure of airline revenue derived by dividing passenger revenue by RPMs.

(e)Passenger revenue per available seat mile (PRASM) – Passenger revenue divided by ASMs.

(f)Total revenue per available seat mile (TRASM) – Total revenues divided by ASMs.

(g)Total operating cost per available seat mile (CASM) – Total operating expenses divided by ASMs.

(h)Includes aircraft owned and leased by American as well as aircraft operated by third-party regional carriers under capacity purchase agreements. Excluded from the aircraft count above as of December 31, 2025 are three Airbus A321XLR mainline aircraft and four Bombardier CRJ900 regional aircraft held in temporary storage.

Operating Revenues

Year Ended December 31,

Increase

Percent

Increase

2025

2024

(In millions, except percentage changes)

Passenger

$

49,643 

$

49,586 

$

57 

0.1

Cargo

839 

804 

35 

4.3

Other

4,151 

3,821 

330 

8.7

Total operating revenues

$

54,633 

$

54,211 

$

422 

0.8

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This table presents our passenger revenue and the year-over-year change in certain operating statistics:

Increase (Decrease)

vs. Year Ended December 31, 2024

Year Ended

December 31, 2025

Passenger

Revenue

RPMs

ASMs

Load

Factor

Passenger

Yield

PRASM

(In millions)

Passenger revenue

$

49,643 

0.1%

0.6%

2.2%

(1.3)pts

(0.5)%

(2.0)%

Passenger revenue remained relatively flat in 2025 as compared to 2024. Our passenger revenue in 2025 was impacted by the American Eagle flight 5342 accident and softness in domestic demand for air travel in the first half of the year, offset by strength in international travel, particularly in the Atlantic and Pacific regions, and recovery in domestic travel in the second half of the year despite the negative revenue impact from the temporary shutdown of the U.S. Government in the fourth quarter of 2025.

Other operating revenue increased $330 million, or 8.7%, in 2025 from 2024 driven primarily by higher revenue associated with our loyalty program. During 2025 and 2024, cash payments from co-branded credit card and other partners were $6.2 billion and $6.1 billion, respectively. Cash remuneration in 2024 included a one-time cash payment related to the new co-branded credit card agreement announced in December 2024. This one-time cash payment will be amortized over the life of the new agreement beginning in 2026.

Operating Expenses

Year Ended December 31,

Increase

(Decrease)

Percent

Increase

(Decrease)

2025

2024

(In millions, except percentage changes)

Aircraft fuel and related taxes

$

10,718 

$

11,418 

$

(700)

(6.1)

Salaries, wages and benefits

17,566 

16,021 

1,545 

9.6

Regional expenses

5,448 

5,042 

406 

8.1

Maintenance, materials and repairs

3,844 

3,794 

50 

1.3

Other rent and landing fees

3,476 

3,303 

173 

5.2

Aircraft rent

1,220 

1,242 

(22)

(1.8)

Selling expenses

1,997 

1,812 

185 

10.2

Depreciation and amortization

1,890 

1,926 

(36)

(1.9)

Mainline operating special items, net

159 

610 

(451)

(73.9)

Other

6,848 

6,429 

419 

6.5

Total operating expenses

$

53,166 

$

51,597 

$

1,569 

3.0

Aircraft fuel and related taxes decreased $700 million, or 6.1%, in 2025 from 2024 primarily due to an 8.2% decrease in the average price per gallon of aircraft fuel including related taxes to $2.39 in 2025 from $2.60 in 2024, offset in part by a 2.2% increase in gallons of fuel consumed due to increased capacity.

Salaries, wages and benefits increased $1.5 billion, or 9.6%, in 2025 from 2024 primarily due to contractual wage rate increases and higher costs for benefit-related items associated with newly ratified and extended labor agreements reached in 2024, as well as annual contractual wage rate increases in our other labor agreements.

Regional expenses increased $406 million, or 8.1%, in 2025 from 2024 primarily due to an increase in regional flight operations as regional capacity, as measured by ASMs, increased 10.3% year over year. Higher maintenance, materials and repair costs driven by an increase in the volume of airframe heavy checks and cost of materials also contributed to the increase in regional expenses.

Maintenance, materials and repairs increased $50 million, or 1.3%, in 2025 from 2024 primarily due to increased costs for airframe heavy checks and component part repairs driven by higher volume, offset in part by a decrease in the volume of engine overhauls.

Other rent and landing fees increased $173 million, or 5.2%, in 2025 from 2024 primarily due to rate increases at certain airports, offset in part by a decrease in leased engines.

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Selling expenses increased $185 million, or 10.2%, in 2025 from 2024 primarily due to an increase in commissions expense, driven by higher costs resulting from renegotiated agency contracts, as well as an increase in advertising expenses. Higher credit card fees driven by higher rates also contributed to the increase in selling expenses.

Other operating expenses increased $419 million, or 6.5%, in 2025 from 2024 primarily driven by increased costs for crew travel, onboard food and catering, ground and cargo handling, and airport lounge operations, as well as certain general and administrative expenses.

Operating Special Items, Net

Year Ended December 31,

2025

2024

(In millions)

Litigation reserve adjustments

$

77 

$

— 

Labor contract expenses (1)

31 

605 

Severance expenses

44 

13 

A330 fleet-related adjustments (2)

— 

(42)

Other operating special items, net

7 

34 

Mainline operating special items, net

159 

610 

Regional operating special items, net (3)

3 

33 

Operating special items, net

$

162 

$

643 

(1)Labor contract expenses for 2025 included a one-time charge resulting from adjustments to vacation accruals due to pay rate increases effective January 1, 2025, following the ratification of the contract extension in the fourth quarter of 2024 with our mainline maintenance and fleet service team members.

Labor contract expenses for 2024 included one-time charges resulting from the ratifications of new CBAs with our mainline flight attendants and passenger service team members, including one-time payments and adjustments to vacation accruals resulting from pay rate increases.

(2)In 2024, we entered into a sales agreement for certain Airbus A330 aircraft, resulting in a $42 million gain. These aircraft were previously retired in 2020 as a result of the decline in demand for air travel due to the COVID-19 pandemic.

(3)Regional operating special items, net for 2024 included a $33 million non-cash write down of regional aircraft resulting from the decision to permanently park 43 Embraer ERJ145 aircraft.

Nonoperating Results

Year Ended December 31,

Increase

(Decrease)

Percent

Increase

(Decrease)

2025

2024

(In millions, except percentage changes)

Interest income

$

357 

$

468 

$

(111)

(23.7)

Interest expense, net

(1,716)

(1,934)

218 

(11.2)

Other income, net

82 

6 

76 

 nm (1)

Total nonoperating expense, net

$

(1,277)

$

(1,460)

$

183 

(12.5)

(1)Not meaningful or greater than 100% change.

Interest income decreased $111 million, or 23.7%, in 2025 compared to 2024 primarily due to lower interest rates and a decrease in the average balance of our short-term investments, resulting in reduced returns. Interest expense, net decreased $218 million, or 11.2%, in 2025 compared to 2024 primarily due to lower interest rates on our variable-rate debt instruments and lower outstanding debt in 2025, as we continue our efforts to strengthen the balance sheet.

In 2025, other nonoperating income, net included $57 million of non-service related pension and other postretirement benefit plan income, $51 million of net earnings related to our equity investments accounted for under the equity method

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and $40 million of mark-to-market net unrealized gains associated with certain equity investments recognized as net special items. These amounts were offset in part by $40 million of net special charges related to debt refinancings and extinguishments and other costs, as well as $15 million of foreign currency losses.

In 2024, other nonoperating income, net included $113 million of non-service related pension and other postretirement benefit plan income, offset in part by $48 million of foreign currency losses, $24 million of net special charges primarily for debt refinancings and extinguishments and mark-to-market net unrealized losses associated with certain equity investments and $24 million of net losses related to our equity investments accounted for under the equity method.

Income Taxes

In 2025, we recorded an income tax provision of $79 million with an effective rate of approximately 41.2%, which was substantially non-cash. Substantially all of our income before income taxes is attributable to the United States. At December 31, 2025, we had approximately $11.9 billion of gross federal NOLs and $6.0 billion of other carryforwards available to reduce future federal taxable income, of which $1.6 billion will expire beginning in 2033 if unused and $16.3 billion can be carried forward indefinitely. We also had approximately $5.0 billion of NOL carryforwards to reduce future state taxable income at December 31, 2025, which will expire in taxable years 2025 through 2045 if unused.

In 2024, we recorded an income tax provision of $308 million at an effective rate of approximately 26.7%, which was substantially non-cash.

See Note 6 to AAG’s Consolidated Financial Statements in Part II, Item 8A for additional information on income taxes.

American’s Results of Operations

For a comparison of the 2024 to 2023 reporting periods, see Part II, Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations – “American’s Results of Operations” of American’s 2024 Form 10-K.

Operating Revenues

Year Ended December 31,

Increase

Percent

Increase

2025

2024

(In millions, except percentage changes)

Passenger

$

49,643 

$

49,586 

$

57 

0.1

Cargo

839 

804 

35 

4.3

Other

4,144 

3,814 

330 

8.7

Total operating revenues

$

54,626 

$

54,204 

$

422 

0.8

Passenger revenue remained relatively flat in 2025 as compared to 2024. American’s passenger revenue in 2025 was impacted by the American Eagle flight 5342 accident and softness in domestic demand for air travel in the first half of the year, offset by strength in international travel, particularly in the Atlantic and Pacific regions, and recovery in domestic travel in the second half of the year despite the negative revenue impact from the temporary shutdown of the U.S. Government in the fourth quarter of 2025.

Other operating revenue increased $330 million, or 8.7%, in 2025 from 2024 driven primarily by higher revenue associated with American’s loyalty program. During 2025 and 2024, cash payments from co-branded credit card and other partners were $6.2 billion and $6.1 billion, respectively. Cash remuneration in 2024 included a one-time cash payment related to the new co-branded credit card agreement announced in December 2024. This one-time cash payment will be amortized over the life of the new agreement beginning in 2026.

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Operating Expenses

Year Ended December 31,

Increase

(Decrease)

Percent

Increase

(Decrease)

2025

2024

(In millions, except percentage changes)

Aircraft fuel and related taxes

$

10,718 

$

11,418 

$

(700)

(6.1)

Salaries, wages and benefits

17,556 

16,012 

1,544 

9.6

Regional expenses

5,406 

5,009 

397 

7.9

Maintenance, materials and repairs

3,844 

3,794 

50 

1.3

Other rent and landing fees

3,476 

3,303 

173 

5.2

Aircraft rent

1,220 

1,242 

(22)

(1.8)

Selling expenses

1,997 

1,812 

185 

10.2

Depreciation and amortization

1,884 

1,919 

(35)

(1.8)

Mainline operating special items, net

159 

610 

(451)

(73.9)

Other

6,855 

6,431 

424 

6.6

Total operating expenses

$

53,115 

$

51,550 

$

1,565 

3.0

Aircraft fuel and related taxes decreased $700 million, or 6.1%, in 2025 from 2024 primarily due to an 8.2% decrease in the average price per gallon of aircraft fuel including related taxes to $2.39 in 2025 from $2.60 in 2024, offset in part by a 2.2% increase in gallons of fuel consumed due to increased capacity.

Salaries, wages and benefits increased $1.5 billion, or 9.6%, in 2025 from 2024 primarily due to contractual wage rate increases and higher costs for benefit-related items associated with newly ratified and extended labor agreements reached in 2024, as well as annual contractual wage rate increases in American’s other labor agreements.

Regional expenses increased $397 million, or 7.9%, in 2025 from 2024 primarily due to an increase in regional flight operations and costs at American’s regional carriers.

Maintenance, materials and repairs increased $50 million, or 1.3%, in 2025 from 2024 primarily due to increased costs for airframe heavy checks and component part repairs driven by higher volume, offset in part by a decrease in the volume of engine overhauls.

Other rent and landing fees increased $173 million, or 5.2%, in 2025 from 2024 primarily due to rate increases at certain airports, offset in part by a decrease in leased engines.

Selling expenses increased $185 million, or 10.2%, in 2025 from 2024 primarily due to an increase in commissions expense, driven by higher costs resulting from renegotiated agency contracts, as well as an increase in advertising expenses. Higher credit card fees driven by higher rates also contributed to the increase in selling expenses.

Other operating expenses increased $424 million, or 6.6%, in 2025 from 2024 primarily driven by increased costs for crew travel, onboard food and catering, ground and cargo handling, and airport lounge operations, as well as certain general and administrative expenses.

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Operating Special Items, Net

Year Ended December 31,

2025

2024

(In millions)

Litigation reserve adjustments

$

77 

$

— 

Labor contract expenses (1)

31 

605 

Severance expenses

44 

13 

A330 fleet-related adjustments (2)

— 

(42)

Other operating special items, net

7 

34 

Mainline operating special items, net

159 

610 

Regional operating special items, net (3)

3 

33 

Operating special items, net

$

162 

$

643 

(1)Labor contract expenses for 2025 included a one-time charge resulting from adjustments to vacation accruals due to pay rate increases effective January 1, 2025, following the ratification of the contract extension in the fourth quarter of 2024 with American’s mainline maintenance and fleet service team members.

Labor contract expenses for 2024 included one-time charges resulting from the ratifications of new CBAs with American’s mainline flight attendants and passenger service team members, including one-time payments and adjustments to vacation accruals resulting from pay rate increases.

(2)In 2024, American entered into a sales agreement for certain Airbus A330 aircraft, resulting in a $42 million gain. These aircraft were previously retired in 2020 as a result of the decline in demand for air travel due to the COVID-19 pandemic.

(3)Regional operating special items, net for 2024 included a $33 million non-cash write down of regional aircraft resulting from the decision to permanently park 43 Embraer ERJ145 aircraft.

Nonoperating Results

Year Ended December 31,

Increase

(Decrease)

Percent

Increase

(Decrease)

2025

2024

(In millions, except percentage changes)

Interest income

$

949 

$

1,058 

$

(109)

(10.3)

Interest expense, net

(1,780)

(2,029)

249 

(12.3)

Other income, net

81 

5 

76 

nm

Total nonoperating expense, net

$

(750)

$

(966)

$

216 

(22.3)

Interest income decreased $109 million, or 10.3%, in 2025 compared to 2024 primarily due to lower interest rates and a decrease in the average balance of American’s short-term investments, resulting in reduced returns. Interest expense, net decreased $249 million, or 12.3%, in 2025 compared to 2024 primarily due to lower interest rates on American’s variable-rate debt instruments and lower outstanding debt in 2025, as American continues its efforts to strengthen the balance sheet.

In 2025, other nonoperating income, net included $56 million of non-service related pension and other postretirement benefit plan income, $51 million of net earnings related to American’s equity investments accounted for under the equity method and $40 million of mark-to-market net unrealized gains associated with certain equity investments recognized as net special items. These amounts were offset in part by $40 million of net special charges related to debt refinancings and extinguishments and other costs, as well as $15 million of foreign currency losses.

In 2024, other nonoperating income, net included $113 million of non-service related pension and other postretirement benefit plan income, offset in part by $47 million of foreign currency losses, $24 million of net special charges primarily for debt refinancings and extinguishments and mark-to-market net unrealized losses associated with certain equity investments and $24 million of net losses related to American’s equity investments accounted for under the equity method.

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Income Taxes

American is a member of AAG’s consolidated federal and certain state income tax returns.

In 2025, American recorded an income tax provision of $197 million with an effective rate of approximately 25.9%, which was substantially non-cash. Substantially all of American’s income before income taxes is attributable to the United States. At December 31, 2025, American had approximately $11.7 billion of gross federal NOLs and $3.8 billion of other carryforwards available to reduce future federal taxable income, of which $1.8 billion will expire beginning in 2033 if unused and $13.7 billion can be carried forward indefinitely. American also had approximately $4.7 billion of NOL carryforwards to reduce future state taxable income at December 31, 2025, which will expire in taxable years 2025 through 2045 if unused.

In 2024, American recorded an income tax provision of $426 million at an effective rate of approximately 25.2%, which was substantially non-cash.

See Note 5 to American’s Consolidated Financial Statements in Part II, Item 8B for additional information on income taxes.

Liquidity and Capital Resources

Liquidity

At December 31, 2025, AAG had $9.2 billion in total available liquidity and $735 million in restricted cash and short-term investments. Additional detail regarding our available liquidity is provided in the table below (in millions):

AAG

American

December 31,

December 31,

2025

2024

2025

2024

Cash

$

954 

$

804 

$

936 

$

795 

Short-term investments

4,882 

6,180 

4,880 

6,177 

Undrawn facilities

3,397 

3,289 

3,397 

3,289 

Total available liquidity

$

9,233 

$

10,273 

$

9,213 

$

10,261 

In the ordinary course of our business, we or our affiliates may, at any time and from time to time, seek to prepay, retire or repurchase our outstanding debt through cash purchases and/or exchanges for equity or debt, in open-market purchases, privately negotiated transactions or otherwise. Such repurchases, prepayments, retirements or exchanges, if any, will be conducted on such terms and at such prices as we may determine, and will depend on prevailing market conditions, our liquidity requirements, legal and contractual restrictions and other factors. The amounts involved may be material.

Certain Covenants

Our debt agreements contain customary terms and conditions as well as various affirmative, negative and financial covenants that, among other things, may restrict our ability and that of our subsidiaries to incur additional indebtedness, pay dividends or repurchase stock. Our debt agreements also contain customary change of control provisions, which may require us to repay or redeem such indebtedness upon certain events constituting a change of control under the relevant agreement, in certain cases at a premium. Additionally, certain of our debt financing agreements (including our secured notes, term loans, revolving credit facilities and spare engine EETCs) contain loan to value (LTV) or collateral coverage ratio covenants and certain agreements require us to appraise the related collateral annually or semiannually. Pursuant to such agreements, if the applicable LTV or collateral coverage ratio exceeds or falls below a specified threshold, as the case may be, we will be required, as applicable, to pledge additional qualifying collateral (which in some cases may include cash or investment securities), withhold additional cash in certain accounts, or pay down such financing, in whole or in part, or the interest rate for the relevant financing will be increased. Additionally, a significant portion of our debt financing agreements contain covenants requiring us to maintain an aggregate of at least $2.0 billion of unrestricted cash and cash equivalents and amounts available to be drawn under revolving credit facilities. Our AAdvantage Financing contains a peak debt service coverage ratio, pursuant to which failure to comply with a certain threshold may result in early repayment, in whole or in part, of the AAdvantage Financing. As of the most recent applicable measurement dates, we were in compliance with each of the foregoing covenants. For further information regarding our debt covenants, see Note 4 to AAG’s Consolidated Financial Statements in Part II, Item 8A and Note 3 to American’s Consolidated Financial Statements in Part II, Item 8B.

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Sources and Uses of Cash

For a comparison of the 2024 and 2023 reporting periods, see Part II, Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations – “Sources and Uses of Cash” of our 2024 Form 10-K.

AAG

Operating Activities

Our net cash provided by operating activities was $3.1 billion and $4.0 billion in 2025 and 2024, respectively, an $884 million year-over-year decrease driven by lower profitability and net changes in working capital.

Investing Activities

Our net cash used in investing activities was $1.9 billion and $968 million in 2025 and 2024, respectively.

Our principal investing activities in 2025 included $3.8 billion of capital expenditures, which primarily related to the purchase of 23 Boeing 737 MAX aircraft, 12 Embraer E175 aircraft, eight Bombardier CRJ900 aircraft, six Boeing 787-9 aircraft, five Airbus A321XLR aircraft, two Boeing 737-800 aircraft lease repurchases, one Airbus A321neo aircraft, one Airbus A320 aircraft lease repurchase and eight aircraft engines. These cash outflows were offset in part by $1.3 billion in net sales of short-term investments and $344 million in proceeds from sale-leaseback transactions and sale of property and equipment, which primarily related to the modernization of Terminals 4 and 5 at LAX and sale of certain of our A330 aircraft. Additionally, we had $328 million in net proceeds from the issuance of the TMAT special facility revenue bonds.

Our principal investing activities in 2024 included $2.7 billion of capital expenditures, which primarily related to the purchase of 16 Embraer E175 aircraft, six Boeing 737 MAX aircraft, four Airbus A321neo aircraft, four Boeing 737-800 aircraft lease repurchases, two Bombardier CRJ900 aircraft, one Airbus A320 aircraft lease repurchase, 48 aircraft engines and aircraft purchase deposits. These cash outflows were offset in part by $819 million in net sales of short-term investments and $654 million of proceeds from sale-leaseback transactions and sale of property and equipment, which primarily related to the modernization of Terminals 4 and 5 at LAX.

Financing Activities

Our net cash used in financing activities was $1.1 billion and $2.8 billion in 2025 and 2024, respectively.

Our principal financing activities in 2025 included $5.5 billion in long-term debt and finance lease repayments, consisting of $4.1 billion in scheduled repayments, including the $1.0 billion cash settlement of AAG’s 6.50% convertible senior notes. Debt and finance lease repayments also included the early repayments of $937 million for the outstanding principal amounts of the 10.75% Senior Secured Notes and $487 million for the outstanding principal amount of equipment notes issued under EETCs. These cash outflows were offset in part by $3.8 billion of proceeds from issuance of long-term debt, consisting of $1.2 billion from the issuance of equipment loans and other notes payable, $978 million from the issuance of EETCs in connection with the financing of certain aircraft, $1.0 billion from the issuance of the 2025 AAdvantage Term Loan Facility and $629 million under a senior unsecured short-term term loan facility due January 2026. Additionally, we had $840 million in net proceeds from fuel financing transactions.

Our principal financing activities in 2024 included $4.5 billion in long-term debt and finance lease repayments, consisting of $3.7 billion in scheduled repayments and the early repayments of $487 million of the outstanding principal amount of the 3.75% Senior Notes and $263 million toward portions of the outstanding principal amounts of the 10.75% Senior Secured Notes. These cash outflows were offset in part by $1.7 billion of proceeds from issuance of long-term debt, consisting of $990 million from the issuance of equipment loans and other notes payable and $684 million from the issuance of EETCs in connection with the financing of certain aircraft that had previously been delivered.

American

Operating Activities

American’s net cash provided by operating activities was $1.9 billion and $3.4 billion in 2025 and 2024, respectively, a $1.5 billion year-over-year decrease driven by a net increase in receivables from related parties, including the scheduled repayment of AAG’s $1.0 billion 6.50% convertible senior notes. Excluding this net increase in receivables from related parties, American’s operating cash flows decreased $877 million compared to 2024 due to lower profitability and net changes in working capital.

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Investing Activities

American’s net cash used in investing activities was $1.8 billion and $909 million in 2025 and 2024, respectively.

American’s principal investing activities in 2025 included $3.7 billion of capital expenditures, which primarily related to the purchase of 23 Boeing 737 MAX aircraft, 12 Embraer E175 aircraft, eight Bombardier CRJ900 aircraft, six Boeing 787-9 aircraft, five Airbus A321XLR aircraft, two Boeing 737-800 aircraft lease repurchases, one Airbus A321neo aircraft, one Airbus A320 aircraft lease repurchase and eight aircraft engines. These cash outflows were offset in part by $1.3 billion in net sales of short-term investments and $343 million in proceeds from sale-leaseback transactions and sale of property and equipment, which primarily related to the modernization of Terminals 4 and 5 at LAX and sale of certain of American’s A330 aircraft. Additionally, American had $328 million in net proceeds from the issuance of the TMAT special facility revenue bonds.

American’s principal investing activities in 2024 included $2.6 billion of capital expenditures, which primarily related to the purchase of 16 Embraer E175 aircraft, six Boeing 737 MAX aircraft, four Airbus A321neo aircraft, four Boeing 737-800 aircraft lease repurchases, two Bombardier CRJ900 aircraft, one Airbus A320 aircraft lease repurchase, 48 aircraft engines and aircraft purchase deposits. These cash outflows were offset in part by $819 million in net sales of short-term investments and $654 million of proceeds from sale-leaseback transactions and sale of property and equipment, which primarily related to the modernization of Terminals 4 and 5 at LAX.

Financing Activities

American’s net cash used in financing activities was $47 million and $2.3 billion in 2025 and 2024, respectively.

American’s principal financing activities in 2025 included $4.5 billion in long-term debt and finance lease repayments, consisting of $3.1 billion in scheduled repayments and the early repayments of $937 million for the outstanding principal amounts of the 10.75% Senior Secured Notes and $487 million for the outstanding principal amount of equipment notes issued under EETCs. These cash outflows were offset in part by $3.8 billion of proceeds from issuance of long-term debt, consisting of $1.2 billion from the issuance of equipment loans and other notes payable, $978 million from the issuance of EETCs in connection with the financing of certain aircraft, $1.0 billion from the issuance of the 2025 AAdvantage Term Loan Facility and $629 million under a senior unsecured short-term term loan facility due January 2026. Additionally, American had $840 million in net proceeds from fuel financing transactions.

American’s principal financing activities in 2024 included $4.0 billion in long-term debt and finance lease repayments, consisting of $3.7 billion in scheduled repayments and the early repayment of $263 million toward portions of the outstanding principal amounts of the 10.75% Senior Secured Notes. These cash outflows were offset in part by $1.7 billion of proceeds from issuance of long-term debt, consisting of $990 million from the issuance of equipment loans and other notes payable and $684 million from the issuance of EETCs in connection with the financing of certain aircraft that had previously been delivered.

Commitments

For further information regarding our commitments, see the Notes to AAG’s Consolidated Financial Statements in Part II, Item 8A and the Notes to American’s Consolidated Financial Statements in Part II, Item 8B at the referenced footnotes below.

AAG

American

Debt

Note 4

Note 3

Leases

Note 5

Note 4

Employee Benefit Plans

Note 9

Note 8

Commitments, Contingencies and Guarantees

Note 11

Note 10

Off-Balance Sheet Arrangements

An off-balance sheet arrangement is any transaction, agreement or other contractual arrangement involving an unconsolidated entity under which a company has (1) made guarantees, (2) a retained or a contingent interest in transferred assets, (3) an obligation under derivative instruments classified as equity or (4) any obligation arising out of a material variable interest in an unconsolidated entity that provides financing, liquidity, market risk or credit risk support to us, or that engages in leasing, hedging or research and development arrangements with us.

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We have no off-balance sheet arrangements of the types described in the first three categories above that we believe may have a material current or future effect on financial condition, liquidity or results of operations.

Pass-Through Trusts

American currently has 280 owned aircraft and 60 owned spare aircraft engines, which in each case were financed with EETCs issued by pass-through trusts. These trusts are off-balance sheet entities, the primary purpose of which is to finance the acquisition of flight equipment or to permit issuance of debt backed by existing flight equipment. In the case of aircraft EETCs, rather than finance each aircraft separately when such aircraft is purchased, delivered or refinanced, these trusts allow American to raise the financing for a number of aircraft at one time and, if applicable, place such funds in escrow pending a future purchase, delivery or refinancing of the relevant aircraft. Similarly, in the case of spare engine EETCs, the trusts allow American to use its existing pool of spare engines to raise financing under a single facility. The trusts have also been structured to provide for certain credit enhancements, such as liquidity facilities to cover certain interest payments, that reduce the risks to the purchasers of the trust certificates and, as a result, reduce the cost of aircraft financing to American.

Each trust covers a set number of aircraft or spare engines scheduled to be delivered, financed or refinanced upon the issuance of the EETC or within a specific period of time thereafter. At the time of each covered aircraft or spare engine financing, the relevant trust used the proceeds from the issuance of the EETC (which may have been available at the time of issuance thereof or held in escrow until financing of the applicable aircraft following its delivery) to purchase equipment notes relating to the financed aircraft or engines. The equipment notes are issued, at American’s election, in connection with a mortgage financing of the aircraft or spare engines. The equipment notes are secured by a security interest in the aircraft or engines, as applicable. The pass-through trust certificates are not direct obligations of, nor are they guaranteed by, AAG or American. However, the equipment notes issued to the trusts are direct obligations of American and, in certain instances, have been guaranteed by AAG. As of December 31, 2025, $6.9 billion associated with these mortgage financings is reflected as debt in the accompanying consolidated balance sheet.

Letters of Credit and Other

We provide financial assurance, such as letters of credit and surety bonds, primarily to support projected workers’ compensation obligations and airport commitments. As of December 31, 2025, we had $412 million of letters of credit and surety bonds securing various obligations, of which $97 million is collateralized with our restricted cash. The letters of credit and surety bonds that are subject to expiration will expire on various dates through 2037.

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Contractual Obligations

The following table provides details of our estimated material cash requirements from contractual obligations as of December 31, 2025 (in millions). The table does not include commitments that are contingent on events or other factors that are uncertain or unknown at this time and is subject to other conventions as set forth in the applicable accompanying footnotes.

Payments Due by Period

2026

2027

2028

2029

2030

2031 and Thereafter

Total

American (a)

Long-term debt:

Principal amount (b), (d) (See Note 3)

$

3,641 

$

4,455 

$

7,324 

$

4,045 

$

730 

$

4,653 

$

24,848 

Interest obligations (c), (d)

1,267 

1,039 

739 

420 

276 

770 

4,511 

Finance lease obligations (See Note 4)

161 

152 

110 

102 

100 

310 

935 

Aircraft and engine purchase commitments (e) (See Note 10(a))

2,931 

2,468 

4,021 

4,921 

3,151 

6,696 

24,188 

Operating lease commitments (See Note 4)

1,487 

1,358 

1,238 

1,131 

948 

2,987 

9,149 

Regional capacity purchase agreements (f) (See Note 10(b))

1,159 

1,156 

1,082 

900 

457 

399 

5,153 

Minimum pension obligations (g) (See Note 8)

236 

89 

21 

— 

— 

— 

346 

Retiree medical and other postretirement benefits (g) (See Note 8)

111 

113 

116 

115 

112 

588 

1,155 

Other purchase obligations (h) (See Note 10(a))

4,112 

1,803 

1,557 

493 

615 

3,724 

12,304 

Total American Contractual Obligations

15,105 

12,633 

16,208 

12,127 

6,389 

20,127 

82,589 

AAG Parent and Other AAG Subsidiaries (a)

Long-term debt:

Principal amount (b) (See Note 4)

— 

— 

— 

— 

1,757 

1,989 

3,746 

Interest obligations (c)

172 

197 

201 

208 

171 

49 

998 

Finance lease obligations (See Note 5)

3 

— 

— 

— 

— 

— 

3 

Operating lease commitments (See Note 5)

14 

9 

8 

7 

6 

35 

79 

Minimum pension obligations (g) (See Note 9)

2 

1 

1 

1 

1 

1 

7 

Other purchase obligations (See Note 11(a))

14 

12 

5 

2 

— 

— 

33 

Total AAG Contractual Obligations

$

15,310 

$

12,852 

$

16,423 

$

12,345 

$

8,324 

$

22,201 

$

87,455 

(a)For additional information, see the Notes to AAG’s and American’s Consolidated Financial Statements in Part II, Items 8A and 8B, respectively, referenced in the table above.

(b)Amounts represent contractual amounts due. Excludes $313 million and $1 million of unamortized debt discount, premium and issuance costs as of December 31, 2025 for American and AAG Parent, respectively.

(c)For variable-rate debt, future interest obligations are estimated using the current forward rates at December 31, 2025.

(d)Includes $6.9 billion of future principal payments and $1.0 billion of future interest payments as of December 31, 2025, related to EETCs associated with mortgage financings of certain aircraft and spare engines.

(e)See Part I, Item 2. Properties – “Aircraft and Engine Purchase Commitments” for additional information about the firm commitments for the acquisition of aircraft and engines, including the anticipated aircraft delivery schedule. Due to uncertainty surrounding the timing of delivery of certain aircraft, the amounts in the table represent our most current estimate based on contractual delivery schedules adjusted for updates and revisions to such schedules communicated to management by the applicable equipment manufacturer and certain management assumptions. However, the actual delivery schedule may differ, potentially materially, based on various potential factors including production delays by the equipment manufacturers and regulatory concerns.

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(f)These commitments are estimates of costs based on assumed minimum levels of flying under the capacity purchase agreements and American’s actual payments could differ materially.

(g)Represents minimum pension contributions and expected contributions to our retiree medical and other post-retirement plans based on actuarially determined estimates as of December 31, 2025 and is based on estimated payments through 2035. In January 2026, we made required contributions of $236 million and a supplemental contribution of $50 million to our defined benefit pension plans.

(h)Includes purchase commitments for aircraft fuel, flight equipment maintenance and information technology support and excludes obligations under certain fuel offtake agreements or other agreements for which the timing of the related expenditure is uncertain, or which are subject to material contingencies, such as the construction of a production facility.

Capital Raising Activity and Other Possible Actions

In light of our significant financial commitments related to, among other things, the servicing and amortization of existing debt and equipment leasing arrangements and new flight equipment, we and our subsidiaries will regularly consider, and enter into negotiations related to, capital raising and liability management activity, which may include the entry into leasing transactions and future issuances of, and transactions designed to manage the timing and amount of, secured or unsecured debt obligations or additional equity or equity-linked securities in public or private offerings or otherwise. The cash available from operations (if any) and these sources, however, may not be sufficient to cover our cash obligations because economic factors may reduce the amount of cash generated by operations or increase costs. For instance, an economic downturn or general global instability caused by governmental actions, military actions, terrorism, disease outbreaks, natural disasters or other causes could reduce the demand for air travel, which would reduce the amount of cash generated by operations. See Part I, Item 1A. Risk Factors – “Downturns in economic conditions could adversely affect our business” for additional discussion. An increase in costs, either due to an increase in borrowing costs caused by a reduction in credit ratings or a general increase in interest rates, due to an increase in the cost of fuel, maintenance, aircraft, aircraft engines or parts, or due to an increase in tariffs, could decrease the amount of cash available to cover cash contractual obligations. Moreover, certain of our financing arrangements contain significant minimum cash balance or similar liquidity requirements. As a result, we cannot use all of our available cash to fund operations, capital expenditures and cash obligations without violating these requirements. See Note 4 to AAG’s Consolidated Financial Statements in Part II, Item 8A and Note 3 to American’s Consolidated Financial Statements in Part II, Item 8B for information regarding our financing arrangements.

In the past, we have from time to time refinanced, redeemed or repurchased our debt and taken other steps to reduce or otherwise manage the aggregate amount and cost of our debt, lease and other obligations or otherwise improve our balance sheet. Going forward, depending on market conditions, our cash position and other considerations, we may continue to take such actions, and the amounts involved may be material.

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OTHER INFORMATION

Basis of Presentation

See Note 1 to each of AAG’s and American’s Consolidated Financial Statements in Part II, Items 8A and 8B, respectively, for information regarding the basis of presentation.

Critical Accounting Policies and Estimates

The preparation of financial statements in accordance with GAAP requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities, revenues and expenses, and the disclosure of contingent assets and liabilities at the date of the financial statements. We believe our estimates and assumptions are reasonable; however, actual results could differ from those estimates. Critical accounting policies are defined as those that are reflective of significant judgments and uncertainties and could potentially result in materially different results under different assumptions and conditions. We have identified the following critical accounting policies that impact the preparation of our consolidated financial statements. See the “Basis of Presentation and Summary of Significant Accounting Policies” included in Note 1 to each of AAG’s and American’s Consolidated Financial Statements in Part II, Items 8A and 8B, respectively, for additional discussion of the application of these estimates and other accounting policies.

Passenger Revenue

We recognize all revenues generated from transportation on American and our regional flights operated under the brand name American Eagle, including associated baggage fees and other inflight services, as passenger revenue when transportation is provided. Ticket and other related sales for transportation that has not yet been provided are initially deferred and recorded as air traffic liability on our consolidated balance sheets. The air traffic liability principally represents tickets sold for future travel on American, American Eagle and partner airlines.

The contract duration of passenger tickets is generally one year. The majority of tickets sold are nonrefundable. A small percentage of tickets, some of which are partially used tickets, expire unused. The estimate for tickets expected to expire unused is generally based on an analysis of our historical data and other current applicable factors such as policy changes. We have consistently applied this accounting method to estimate and recognize revenue from unused tickets at the date of travel. This estimate is periodically evaluated based on subsequent activity to validate its accuracy. Any adjustments resulting from periodic evaluations of the estimated air traffic liability are included in passenger revenue during the period in which the evaluations are completed.

Loyalty Revenue

We currently operate the loyalty program, AAdvantage. This program awards mileage credits to passengers who fly on American, American Eagle, any oneworld airline or other partner airlines, or by using the services of other program participants, such as our co-branded credit cards, and certain hotels and car rental companies. Mileage credits can be redeemed for travel on American, American Eagle and other participating partner airlines, as well as for other non-air travel awards such as car rentals, hotel stays, cruises and retail goods from program partners. For mileage credits earned by AAdvantage program members, we apply the deferred revenue method.

Mileage credits earned through travel

For mileage credits earned through travel, we apply a relative selling price approach whereby the total amount collected from each passenger ticket sale is allocated between the air transportation and the mileage credits earned. The portion of each passenger ticket sale attributable to mileage credits earned is initially deferred and then recognized in passenger revenue when mileage credits are redeemed and transportation is provided. The estimated selling price of mileage credits is determined using an equivalent ticket value approach, which uses historical data, including award redemption patterns by geographic region and class of service, as well as similar cash fares as those used to settle award redemptions. The estimated selling price of mileage credits is adjusted for an estimate of mileage credits that will not be redeemed using a statistical model based on historical redemption patterns to develop an estimate of the likelihood of future redemption. For the year ended December 31, 2025, a hypothetical 10% increase in the estimated selling price of mileage credits would have decreased revenues by approximately $155 million primarily as a result of additional amounts deferred from passenger ticket sales to be recognized in future periods.

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Mileage credits sold to co-branded credit card and other partners

We sell mileage credits to participating airline partners and non-airline business partners, including our co-branded credit card partner, under contracts with remaining terms generally from one to 10 years as of December 31, 2025. Consideration received from the sale of mileage credits is predominantly variable and payment terms typically are within 30 days subsequent to the month of mileage sale. Sales of mileage credits to co-branded credit card and non-airline business partners are comprised of two revenue elements: a transportation component and a marketing component. We allocate the consideration received from these sales of mileage credits based on the relative selling price of each product or service delivered.

Our most significant mileage credit partner agreement is our co-branded credit card agreement with Citi. In December 2024, we announced a 10-year agreement with Citi and Citi became the exclusive issuer of the AAdvantage co-branded credit card portfolio in the U.S. starting in 2026.

The transportation component represents the estimated selling price of future travel awards and is determined using the same equivalent ticket value approach described above. The portion of each mileage credit sold attributable to transportation is initially deferred and then recognized in passenger revenue when mileage credits are redeemed and transportation is provided.

The marketing component includes the use of intellectual property, including the American brand and access to loyalty program member lists, which is the predominant element in these agreements, as well as advertising and other travel-related benefits. We recognize the marketing component in other revenue in the period of the mileage credit sale following the sales-based royalty method.

For the portion of our outstanding mileage credits that we estimate will not be redeemed, we recognize the associated value proportionally as the remaining mileage credits are redeemed. Our estimates use a statistical model based on historical redemption patterns to develop an estimate of the likelihood of future redemption. For the year ended December 31, 2025, a hypothetical 10% increase in our estimate of mileage credits not expected to be redeemed would have increased revenues by approximately $140 million.

Pensions and Retiree Medical and Other Postretirement Benefits

We recognize the funded status (i.e., the difference between the fair value of plan assets and the projected benefit obligations) of our pension and retiree medical and other postretirement benefits plans on the consolidated balance sheets with a corresponding adjustment to accumulated other comprehensive income (loss).

Our pension and retiree medical and other postretirement benefits costs and liabilities are calculated using various actuarial assumptions and methodologies. We use certain assumptions including, but not limited to, the selection of the discount rate and expected return on plan assets.

As of December 31, 2025, our weighted average discount rate assumptions were 5.5% and 5.3% for our pension and retiree medical and other postretirement benefits obligations, respectively. When establishing the discount rate to measure our obligations, we match high quality corporate bonds available in the marketplace whose cash flows approximate our projected benefit disbursements. Lowering the discount rate by 50 basis points as of December 31, 2025 would increase our pension and retiree medical and other postretirement benefits obligations by approximately $635 million and $40 million, respectively, and decrease estimated 2026 pension and retiree medical and other postretirement benefits expense by approximately $10 million and $1 million, respectively.

As of January 1, 2026, our expected rate of return on plan assets is 7.3%. The expected rate of return on plan assets is based upon an evaluation of our historical trends and experience, taking into account current and expected market conditions and our target asset allocation of 45% U.S. fixed income securities, 18% U.S. stocks, 25% private investments, 9% international developed market stocks and 3% emerging market stocks. The expected rate of return on plan assets component of our net periodic benefit cost is calculated based on the fair value of plan assets and our target asset allocation. Lowering the expected long-term rate of return on plan assets by 50 basis points would increase estimated 2026 pension expense by approximately $60 million.

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Annually, we review and revise certain economic and demographic assumptions including the pension and retiree medical and other postretirement benefits discount rates, health care costs and certain other retirement assumptions. The net effect of changing these assumptions for the pension plans resulted in an increase of $238 million in the projected benefit obligation at December 31, 2025. The net effect of changing these assumptions for retiree medical and other postretirement benefits plans resulted in a decrease of $10 million in the accumulated postretirement benefit obligation at December 31, 2025.

See Note 9 to AAG’s Consolidated Financial Statements in Part II, Item 8A and Note 8 to American’s Consolidated Financial Statements in Part II, Item 8B for additional information regarding our employee benefit plans.

Income Taxes

Our ability to use our NOLs and other carryforwards depends on the amount of taxable income generated in future periods. We provide a valuation allowance for our deferred tax assets, which include our NOLs and other carryforwards, when it is more likely than not that some portion, or all of our deferred tax assets, will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income. We consider all available positive and negative evidence and make certain assumptions in evaluating the realizability of our deferred tax assets. Many factors are considered that impact our assessment of future profitability, including conditions which are beyond our control, such as the health of the economy, the availability and price volatility of aircraft fuel and travel demand. We have determined that positive factors outweigh negative factors in the determination of the realizability of our deferred tax assets. There can be no assurance that an additional valuation allowance on our net deferred tax assets will not be required. Such valuation allowance could be material.

Recent Accounting Pronouncements

Accounting Standards Update (ASU) 2024-03: Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-04) Disaggregation of Income Statement Expenses

This standard enhances transparency in reporting by requiring disaggregation of certain costs and expenses in the notes to financial statements. This update is effective for annual periods beginning after December 15, 2026 and interim periods within annual periods beginning after December 15, 2027, and early adoption is permitted. We are currently evaluating how the adoption of this standard may impact our disclosures.

ASU 2025-06: Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40) Targeted Improvements to the Accounting for Internal-Use Software

This standard modernizes the accounting for costs related to internal-use software by removing references to project stages and by clarifying the thresholds entities apply to begin capitalizing costs. The amendments in this update are effective for interim and annual periods beginning after December 15, 2027, and early adoption is permitted. We are currently evaluating how the adoption of this standard may impact our consolidated financial statements.