American Airlines reports a $473M loss for the first quarter of 2025, citing economic challenges and the recent crash of American Eagle Flight 5342 as major contributors to its financial setback. Despite the difficult quarter, the airline saw strength in key areas like international travel and loyalty program growth, hinting at a possible rebound.
Total revenue for the quarter reached $12.6 billion, but the carrier posted a diluted loss per share of $0.72. When adjusted for special items, the net loss narrowed to $386 million, or $0.59 per share.
While domestic travel remained under pressure from broader economic uncertainty, international routes delivered some relief. International unit revenue rose by 2.9% compared to the same quarter in 2024. This helped lift total unit revenue by 0.7%, even as the airline slightly pulled back capacity by 0.8%.
American also highlighted rising loyalty and premium revenue, largely driven by its AAdvantage program. Enrolments rose 6% year-over-year, and spending on co-branded credit cards increased by 8%. These gains underscore the program’s growing role in American’s revenue strategy.
However, the shadow of tragedy loomed large over the quarter. The crash of American Eagle Flight 5342 not only raised safety concerns but also weighed heavily on the airline’s public perception and financial performance. In response, American reaffirmed its commitment to improving operational reliability and investing in safety.
Financially, the company ended the quarter with $10.8 billion in available liquidity and generated $1.7 billion in free cash flow. It also continued to chip away at its long-term debt load, reducing total debt by $1.2 billion during the quarter. Since reaching its peak debt in 2021, American has now cut $16.6 billion and remains on track to bring total debt below $35 billion by the end of 2027.
The airline reported a GAAP operating margin of -2.2%, or -1.6% when excluding special items. Despite the negative margin, the airline is signaling confidence in its ability to navigate through near-term turbulence by focusing on customer loyalty, debt reduction, and improved service reliability.
Looking ahead, American Airlines continues to build momentum behind its AAdvantage ecosystem. A strengthened partnership with Citi is expected to launch in 2026, aimed at enhancing loyalty and payment offerings for long-term growth.
Though Q1 closed with a significant loss, American Airlines appears to be laying the groundwork for recovery, betting on loyalty and international operations to steer the airline toward a more stable 2025.
