By American Airlines Group Inc (NYSE: AAL) opened in the red this morning after warning of up to 40 cents a share of loss for its first financial quarter – significantly wider than the 4 cents only that analysts had forecast.
Still, chief executive Robert Isom took an immensely positive stance on what the new year holds for the flagship air carrier in an interview with CNBC.
CEO Isom remains bullish primarily because the airline “has been able to get the labour contracts done” which spells cost certainty heading into the latter part of 2025.
Despite today’s decline, American Airlines stock is up more than 100% versus its low in August.
AAL chart by TradingView
American Airlines reported record revenue for Q4
Robert Isom expects labour-related expenses to remain well under the cost of inflation in the back half of this year.
On CNBC’s “Squawk Box”, he expressed optimism about the efficiency of the airline and said the revenue backdrop suggests continued momentum moving forward.
American Airlines is calling for about a 4.0% increase in revenue on capacity that’s seen keeping flat or even declining in Q1.
The flagship air carrier reported record revenue and free cash flow for its fiscal fourth quarter that handily topped Street estimates on Thursday.
AAL, however, does not currently pay a dividend yield.
AAL is quickly regaining its share in corporate travel
American Airlines is working closely with businesses and travel management companies that are helping it regain its share in corporate travel.
The airline also plans on growing its premium seating by up to 20% over the next two years to further boost its revenue growth, CEO Isom told CNBC in an interview today.
He expects strong free cash flow to make it easier for AAL to strengthen its balance sheet and hit its debt reduction “one full year earlier”.
The air carrier’s new credit card deal with Citi “is a really big thing” as we look into 2026, the chief executive added.
Wall Street currently has a consensus “overweight” rating on American Airlines stock.
Analysts see an upside in it to $21 on average at writing.
What Trump 2.0 means for American Airlines
American Airlines chief executive Robert Isom expects the return of Donald Trump to the White House to be a positive for the airline industry.
Hailing the Republican leader’s quick response to the pandemic during his first term, he said the Trump administration “understands the importance that airlines bring to the overall economy.”
He expects the new government to make long-term investments in the transportation sector and focus on making sure that the regulatory environment is more favourable for air carriers.
All in all, AAL is “well-positioned because of the strength of our network, loyalty and co-branded credit card programmes, fleet and operational reliability, and the tremendous work of our team,” he told investors in the earnings release today.
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