American Airlines Group (AAG) knows America's spacious skies -- and lots of others. After merging with US Airways in late 2013, AAG is one of the largest airlines in the world. The combined airline, together with its third-party regional carriers including Air Wisconsin, Chautauqua, ExpressJet, Mesa, Republic, and SkyWest operate nearly 6,700 daily flights to roughly 340 destinations in more than 50 countries. American and US Airways operate 965 mainline jets, and regional subsidiaries and third-party regional carriers operate nearly 520 regional jets and 40 turboprops. AAG extends its geographic reach through code-sharing arrangements and is part of the oneworld Alliance.
Change of Company Type
In late 2013 AMR merged with rival US Airways 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.
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. Revenues from foreign operations (flights serving international destinations) were approximately 40% of American’s total operating revenues and approximately 24% of US Airways’ total operating revenues for 2013. The US accounted for about 60% of AAG's revenue in 2013.
Following the truism that you have to spend money to make money, AMR ordered 460 single-aisle jets -- 200 Boeing 737s and 260 Airbus 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.
The 2011 deal followed a 2008 agreement to acquire 42 Boeing 787-9 Dreamliners, with an option to order 58 more. The first plane of the 2008 deal was set to be delivered in 2014; however, the ongoing struggles of getting the Dreamliner launched have pushed the delivery date back.
AAG's revenues climbed 8% from $24.9 billion in 2012 to peak at a record-setting $26.7 billion in 2013. The historic growth for 2013 was driven by a 5% bump in mainline passenger revenues as the air travel industry experienced higher demand and additional revenue from the sale of frequent flyer mileage credits.
Cost control and debt reduction continues to be a focus for AAG as it restructures after its merger with US Airways. While its net revenues have gradually increased over the last five years, AAG hasn't been profitable since before the recession. AAG's operating cash flow has also fluctuated wildly over the last five years, decreasing by $610 million to $675 million in 2013 due to declines in cash used in accounts receivable, other current assets, and a decline in income loss.
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.