American Airlines Group Inc. (NASDAQ:AAL) stock fell Tuesday following the release of fourth-quarter and full-year 2025 financial results, as investors digested results that showed revenue growth despite disruptions from a government shutdown late in the year.
The airline posted record fourth-quarter revenue of $14.0 billion, up from $13.7 billion a year earlier, and record full-year revenue of $54.6 billion, compared with $54.2 billion in 2024.
Fourth-quarter total operating revenue was $13.999 billion, an increase of 2.5% from a year earlier, while full-year total operating revenue rose 0.8% to $54.633 billion. The company said the government shutdown reduced fourth-quarter revenue by approximately $325 million.
American Airlines Group reported adjusted earnings of 16 cents per diluted share for the quarter, missing the 34-cent analyst estimate. Revenue of $13.999 billion also fell short of the $14.028 billion consensus estimate.
Fourth-quarter operating margin was 3.2%, down from 8.3% a year earlier, reflecting higher costs and operational disruptions during the period.
Operating And Segment Performance
Operationally, fourth-quarter revenue passenger miles increased 1.5% year over year to 61.596 billion, while available seat miles rose 4.2% to 74.472 billion.
Passenger load factor declined to 82.7% from 84.9%. Passenger revenue per available seat mile fell 2.0% in the quarter, and total revenue per available seat mile declined 1.6%.
Average aircraft fuel price, including related taxes, increased to $2.42 per gallon from $2.34 a year earlier.
By region in the fourth quarter, domestic passenger revenue increased 1.5% year over year to $9.191 billion. Atlantic passenger revenue rose 7.5% to $1.423 billion, Pacific passenger revenue increased 8.3% to $395 million, and Latin America passenger revenue declined 0.9% to $1.648 billion.
Total international passenger revenue increased 3.5% year over year to $3.466 billion.
Cash Flow And Balance Sheet
For the full year, net cash provided by operating activities was $3.099 billion, compared with $3.983 billion in 2024. Free cash flow for 2025 was $(83) million.
The company ended the year with $954 million in cash and $9.2 billion of total available liquidity. Total debt was $36.509 billion at year-end, and the company said it reduced total debt by $2.1 billion during 2025.
Earnings Call
American Airlines executives struck an optimistic tone on the company’s long-term outlook, highlighting strong growth expectations for premium travel and fleet upgrades despite near-term disruptions.
The CFO said the main cabin is expected to deliver strong year-over-year improvement in 2026, assuming a stable macroeconomic environment, while premium seat growth is set to outpace non-premium offerings for the rest of the decade. The CEO added that lie-flat seats are projected to increase by more than 50% by 2030 as part of a broader push into higher-yield segments.
Management also acknowledged short-term headwinds, noting that a winter storm will likely cause at least two more days of elevated flight cancellations before operations normalize. Government-related travel was hit in the fourth quarter, with traffic down about 50% due to the government shutdown. Looking ahead, the company plans to expand its international fleet and premium seating through new aircraft deliveries and retrofit programs, and said it has fully restored its historical indirect sales and distribution share, with a renewed focus on growth from 2026 onward.
Outlook
Looking ahead, American Airlines Group forecasts full-year 2026 adjusted earnings per diluted share of $1.70 to $2.70, compared with the analyst estimate of $1.97, and said it expects free cash flow of more than $2 billion.
For the first quarter of 2026, the company guided to an adjusted loss per diluted share of 10 cents to 50 cents, compared with the analyst estimate of a 30-cent loss.
The outlook reflects the impact of Winter Storm Fern, which the company said has resulted in more than 9,000 flight cancellations and is expected to reduce revenue by $150 million to $200 million.
The company described the storm as the largest weather-related operational disruption in its history.
AAL Price Action: American Airlines Group shares were down 2.92% at $14.14 at the time of publication on Tuesday, according to Benzinga Pro data.
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