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American Airlines Group (AAL)

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American Airlines Group Inc. is an American publicly traded airline holding company headquartered in Fort WorthTexas. It was formed December 9, 2013, in the merger of AMR Corporation, the parent company of American Airlines, and US Airways Group, the parent company of US Airways. The airline groups together form the largest airline in the world, with more than 6,700 daily flights to 350 locations in 56 countries worldwide, about $40 billion in operating revenue, over 100,000 employees, and plans to take delivery of 607 new aircraft, including 517 narrowbody aircraft and 90 widebody international aircraft. The integration of American Airlines and US Airways was completed when the Federal Aviation Administrationgranted a single operating certificate for both carriers on April 8, 2015. The company ranked No. 71 in the 2018 Fortune 500 list of the largest United States corporations by total revenue.

In January 2012, US Airways Group, the parent company of US Airways, expressed interest in taking over AMR Corporation, the parent company of American Airlines. In March, AMR’s CEO Tom Horton said that the company was open to a merger. US Airways (US) told some American Airlines (AA) creditors that merging the two carriers could yield more than $1.5 billion a year in added revenue and cost savings. On April 20, American Airlines’ three unions said they supported a proposed merger between the two airline. With AMR under Chapter 11 bankruptcy protection, American Airlines had been looking to merge with another airline. Earlier in July, a bankruptcy court filing stated that US Airways was an American Airlines creditor and “prospective merger partner”; on August 31, US Airways CEO Doug Parker announced that American Airlines and US Airways had signed a nondisclosure agreement, in which they would discuss the possibility of a merger. 

In February 2013, American Airlines and US Airways announced plans to merge, creating, by some measurements, the largest airline in the world. In the deal, which was expected to close in the third quarter of 2013, stakeholders of AMR would own 72% of the company and US Airways shareholders would own the remaining 28%. The combined airline carries the American Airlines name and branding. The holding company was renamed American Airlines Group Inc. The US Airways’ management team, including CEO Doug Parker, retained most operational management positions. The combination was considered a “merger of equals” between US Airways and American Airlines, retaining the more well-established “American” name going forward. The headquarters for the new airline was also consolidated at American’s current headquarters in Fort Worth, Texas. US Airways exited Star Alliance upon completion of the merger, and American retained its Oneworld alliance. Judge Sean Lane approved the merger on March 27, 2013, but declined to approve a proposed $20 million severance package to AA executive Thomas W. Horton. On July 12, US Airways shareholders approved the proposed merger. 

On August 13, 2013, the United States Department of Justice along with attorneys general from the District of Columbia, Arizona (headquarters of US Airways), Florida, Pennsylvania, Tennessee, Texas (headquarters of American Airlines), and Virginia filed a lawsuit seeking to block the merger, arguing that it would mean less competition and higher prices. American Airlines and US Airways both said that they would fight against the lawsuit and defend their merger. In early October 2013, the Attorney General of Texas quit the anti-trust lawsuit.

The Department of Justice reached a settlement of its lawsuit on November 12, 2013. The settlement will require the merged airline to give up landing slots or gates in 7 major airports. Under the deal, the new American is required to sell 104 slots at Ronald Reagan Washington National Airport and 34 slots at LaGuardia Airport. An additional requirement is that American sell two gates at O’Hare International AirportLos Angeles International AirportLogan International AirportDallas Love Fieldand Miami International Airport. Some of the slots will be sold to low-cost carriers such as JetBlueand Southwest Airlines

A private antitrust suit, filed by a group of 40 passengers and travel agents, also sought to block the merger. American’s bankruptcy court judge refused to enjoin the two airlines from merging, saying that the group did not demonstrate that the merger would irreparably harm them. The plaintiffs’ lawyer appealed and was turned down at the U.S. District Court level and was further rebuffed at the Supreme Court after Justice Ruth Bader Ginsburg denied a stay request filed by him. 

Following the Department of Justice approval, the merged company traded on the NASDAQ stock exchange under the symbol AAL. 

On July 13, 2015, American announced that it planned to discontinue the US Airways brand name on October 17, 2015. On October 16, US Airways flew its final flight, US Airways Flight 1939, which was a flight from Philadelphia-Charlotte-Phoenix-San Francisco-Philadelphia

Together with regional partner American Eagle, we offer an average of nearly 6,700 flights daily to 350 destinations in 50 countries. We’re a founding member of the oneworld® alliance, whose members and members-elect offer nearly 14,250 flights daily to 1,000 destinations in 150 countries.

In 2016, American Airlines Group Inc. topped Fortune magazine’s list of best business turnarounds and its stock (NASDAQ: AAL) joined the S&P 500 index.

Founded in 1930, we’re now one of the largest airlines in the world. Throughout the years, American has created more than 900,000 jobs worldwide and supported close to 1,400 nonprofit organizations.

DOUG PARKER

CHAIRMAN AND CHIEF EXECUTIVE OFFICER

Doug Parker CEO American Airlines

Doug Parker was named chairman and chief executive officer in 2013. He oversees American Airlines Group and American Airlines, its principal subsidiary company.

Doug is a strong supporter of the people of the airline industry and American is emblematic of the transformation that has occurred in the industry in recent years. The integration of American and US Airways has been a success and the airline has produced record financial results. This has allowed American to make unprecedented investments in its team members and product while returning money to shareholders.

Previously, Doug was chairman and CEO of US Airways. Under Doug’s leadership, US Airways achieved record revenue growth, operational performance and profit margins that outpaced most industry peers. Before the merger of US Airways and America West Airlines in 2005, Doug was chairman, president and chief executive officer of America West. He became the CEO at America West just 10 days before Sept. 11, 2001, and led the carrier through the crisis.

Doug’s experience prior to joining America West in 1995 includes four years with Northwest Airlines as vice president, assistant treasurer and vice president of Financial Planning and Analysis. From 1986 to 1991, he held a number of financial management positions with American.

Doug serves as the chairman of the Airlines for America (A4A) Board of Directors and also sits on the International Air Transport Association (IATA) Board of Governors and oneworld Governing Board. He is also a member of the Vanderbilt University Board of Trust and the SMU Cox School of Business Executive Board.

Doug earned a Bachelor of Arts degree in economics from Albion College in 1984 and a Master of Business Administration degree from Vanderbilt University in 1986. He married his wife, Gwen, in 1990 and they have three children: Jackson, Luke and Eliza.

90 YEARS STRONG

On April 15, 1926, Charles Lindbergh flew the first American Airlines flight –carrying U.S. mail from St. Louis, Missouri, to Chicago, Illinois. After 8 years of mail routes, the airline began to form into what it is today. American founder C.R. Smith worked with Donald Douglas to create the DC-3; a plane that changed the entire airline industry, switching revenue sources from mail to passengers.

FINANCES

For the fiscal year 2017, American Airlines Group reported earnings of US$1.919 billion, with an annual revenue of US$42.207 billion, an increase of 5.0% over the previous fiscal cycle. American Airlines Group’s shares traded at over $46 per share, and its market capitalization was valued at US$15 billion in October 2018. Data before 2014 are for American Airlines only.

INVESTOR RELATIONS

American Airlines Group Inc. was formed on December 9, 2013 with the closing of the merger between American Airlines and US Airways Group. The company now lists on NASDAQ Global Select Market under the ticker symbol AAL.

ABOUT AMERICAN AIRLINES GROUP

American Airlines and American Eagle offer an average of nearly 6,700 flights per day to nearly 350 destinations in more than 50 countries. American has hubs in Charlotte, Chicago, Dallas/Fort Worth, Los Angeles, Miami, New York, Philadelphia, Phoenix, and Washington, D.C. American is a founding member of the oneworld®alliance, whose members serve more than 1,000 destinations with about 14,250 daily flights to over 150 countries. Shares of American Airlines Group Inc. trade on NASDAQ under the ticker symbol AAL. In 2015, its stock joined the S&P 500 index.AAL American Airlines Dividend HistoryAmerican Airlines is trading at a forward P/E ratio of 5.2.

The remarkably low P/E ratio renders the share repurchases of the company very efficient.

The company expects to achieve $1 B of revenue improvements this year thanks to enhanced product segmentation. Management expects to expand Premium Economy to the whole long-term fleet of the company in the first half of this year. While it offers Premium Economy on more aircraft than any other domestic airline, the above initiative is likely to prove a significant growth driver this year. Management also expects to achieve more than $300 B in annual cost savings by enhancing its efficiencies and reducing cost redundancies.

The world’s largest carrier fell a few rungs on the list, to 71st from 67th, but it retained its leading position among U.S. airlines. American benefited from strong demand that raised its revenues by 5% in 2017. But profits are trending in the opposite direction, falling last year by 28%. The big reason: A $1.3 billion increase in fuel costs. That headwind continues to worsen, and it’s the main reason CEO Doug Parker slightly lowered earnings guidance for 2018. Still, American’s vaunted network management remains excellent. The Fort Worth-based carrier is both simplifying and expanding its regional operations, adding substantially to its fleet via $1.4 billion in purchases from Embraer and Bombardier. American also added valuable gates at its Chicago hub, and expanded service to such tropical locales as Miami, Hawaii, and the Caribbean.

American Airlines Dividend History (AAL)

AAL pay history

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Stocktipsfortoday.com American Airlines Group (AAL)