American Airlines’ strong performance during Q4 2022 allowed the company to achieve a net profit for the whole year, as revenues soared to record-breaking levels.
Overall, the company ended Q4 2022 and 2022 with a net profit of $803 million and $127 million, respectively. The last quarter of the year saw AA earn 16.6% more revenue compared to the corresponding period in 2019 and it was the best fourth quarter in the company’s history. On the other hand, operating expenses rose by 53.1% Year-on-Year (YoY) from $30.9 billion to $47.3 billion, as fuel costs alone rose by 103% during 2022.
“We’re proud to have led the industry in operational performance over the holidays while producing record full-year and fourth-quarter revenues, resulting in a third consecutive quarterly profit and a profit for the full year. As we turn our attention to 2023, we will continue to prioritize reliability, profitability and debt reduction,” commented Robert Isom, the Chief Executive Officer (CEO) of American Airlines.
Offloading debt has been a priority for the carrier, as it has $32.8 billion of non-current liabilities on its books. Furthermore, shareholder equity, which measures a company’s net worth and ability to pay off debts in case of liquidation, still stands at -$5.7 billion.
The airline has a goal to reduce its debt by $15 billion by the end of 2025, as it has been reducing its liabilities by $8 billion since Q2 2021, when, by its own account, the company’s debt reached its peak.
Looking forward, American Airlines expects its Q1 2023 earnings per share (EPS) to be around the breakeven point, based on its demand trends, as well as fuel price forecasts. However, full-year profit is still on the horizon, with an EPS of between $2.50 and $3.50 for 2023.