American Airlines Q3 2021 Earnings Report Recap

AAL beat on earnings and matched revenue estimates

Key Takeaways

  • American Airlines' load factor missed analysts' expectations.
  • Load factor measures the percentage of seating capacity being filled by paying passengers. It fell sharply last year amid the COVID-19 pandemic and related travel restrictions.
  • The delta variant of the coronavirus has slowed the company's revenue recovery from the pandemic shock.
American Airlines Earnings Results
Metric Beat/Miss/Match Reported Value Analysts' Prediction
Adjusted EPS Beat -$0.99 -$1.01
Revenue Match $9.0 $9.0B
Load Factor Miss 78.7% 79.5%

Source: Predictions based on analysts' consensus from Visible Alpha

American Airlines (AAL) Financial Results: Analysis

American Airlines Group Inc. (AAL) reported mixed results in its Q3 FY 2021 earnings report. The company reported an adjusted loss per share that was narrower than expected. It was the seventh straight quarter of losses, but the loss was the smallest in that time frame as travel demand continues to recover from the COVID-19 shock. Revenue basically matched analyst forecasts and was up 182.7% from the year-ago quarter's pandemic-depressed levels. However, it is still well below the revenue the company was generating before the pandemic. The airline's load factor missed expectations. The company's shares were up nearly 1% in pre-market trading. Over the past year, American Airlines' shares have provided a total return of 52.5%, well above the S&P 500's total return of 31.8%.

AAL Load Factor

American Airlines reported a load factor of 78.7% in the third quarter, well above the year-ago quarter's 58.9%, which was adversely affected by the collapse in travel demand triggered by the pandemic shock. Load factor is a key metric used in the airline industry to indicate the percentage of a carrier's available seats that are filled with paying passengers. Because the costs of sending an aircraft into flight are relatively the same whether there are 50 people aboard or 100, airlines have a strong incentive to fill as many seats as possible by selling more tickets. Higher load factors mean that an airline's fixed costs are spread across a greater number of passengers, making the airline more profitable.

In FY 2019, prior to the pandemic, American Airlines' load factor in each quarter ranged between 82% and 87%. This quarter's load factor is the closest the airline has been to attaining that level again since the start of the pandemic. The company noted in its press release that it was its best quarter since the start of the pandemic. However, it also said that the delta variant of the coronavirus delayed some of its revenue recovery.

American Airlines' next earnings report (for Q4 FY 2021) is estimated to be released on Jan. 26, 2022.

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  1. American Airlines Group Inc. "American Airlines Reports Third-Quarter 2021 Financial Results." Accessed Oct. 21, 2021.

  2. Visible Alpha. "Financial Data." Accessed Oct. 15, 2021.

  3. Yahoo! Finance. "Earnings Calendar: AAL." Accessed Oct. 20, 2021.