American Airlines Group (AAG) is one of the largest airlines in the world. After merging with
in late 2013, the combined airline company, together with its third-party regional carriers including Air Wisconsin, Chautauqua, ExpressJet, Mesa, Republic, and SkyWest operates nearly 6,700 daily flights to roughly 350 destinations in more than 50 countries. American and US Airways operate 946 mainline jets, and regional subsidiaries and third-party regional carriers operate nearly 587 regional jets. AAG extends its geographic reach through code-sharing arrangements and is part of the oneworld Alliance.
Change in Company Type
In late 2013 AMR merged with rival
in a deal worth $11 billion. The milestone transaction created the world's largest airline. The combined entity kept the American Airlines name and is led by former US Airways CEO Doug Parker.
Following the truism that you have to spend money to make money, AMR ordered 460 single-aisle jets -- 200
737s and 260
A320s for delivery between 2013 and 2022; it is the largest aircraft order in history. The new aircraft are designed for fuel efficiency and should save in operating costs. (During 2015, the company took delivery of 75 mainline aircraft and retired 112 older legacy mainline aircraft.)
In 2015 AAG received the delivery of its first Boeing 787 Dreamliner. The company has placed firm orders for 42 Boeing 787 aircraft, with the right to acquire an additional 58.
AAG has primary hubs in Charlotte, North Carolina; Chicago, Dallas/Fort Worth; Los Angeles; Miami; New York; Philadelphia; Phoenix; and Washington, DC. It provides international service to Canada, Mexico, Europe, the Middle East, the Caribbean, Central and South America, and Asia.
Due primarily to its merger with US Airways, AAG has achieved extraordinary growth over the last few years. Revenues soared 59% from $26.7 billion in 2013 to peak at a record-shattering $42.7 billion in 2014. However, revenues declined 4% to almost $41 billion in 2015.
The slight dip in revenue for 2015 was principally due to competitive growth in certain domestic markets, including the Dallas/Fort Worth area. It was also attributed to international weaknesses resulting from foreign currency devaluations, lower fuel surcharges, and the continued economic softness in Latin America, particularly in Brazil and Venezuela.
After suffering six straight years of net losses (mostly due to restructuring charges associated with its US Airways merger), AAG posted $2.9 billion in profits for 2014 and a record-breaking $6.3 billion for 2015. The milestone total for 2015 was mainly attributed to a major decrease in aircraft fuel and related taxes.
The company's operating cash flow has also experienced an upward trend the last two years. Cash flow skyrocketed by more than 100% from $3 billion in 2014 to nearly $6.3 billion in 2015 due to the higher profits and favorable changes in working capital as a result of a decrease in contributions to pension plans.
AAG is adding new aircraft and new service into markets which cater to a wide breadth of industries - entertainment, banking and finance, energy, technology and manufacturing. This includes direct service to all of American's hubs with the most nonstop flights from LAX to New York (JFK); Dallas/Fort Worth; Miami; Philadelphia; Washington, DC (DCA); Phoenix; and Charlotte, North Carolina.
In 2015 the company expanded its global footprint by adding 38 new routes, including 20 international and 18 domestic, which included DFW to Beijing, LAX to Sydney, and LAX to Mexico City.
The company is also planning significant investments in modernizing its fleet and integrating the American and US Airways businesses. The company has set aside $18.0 billion in planned aggregate expenditures for aircraft purchase commitments and certain engines on a consolidated basis for years 2016-2020.