American Airlines Group Inc. is a public airline holding company headquartered in Fort Worth, Texas. The merger of AMR Corporation and US Airways Group formed it.
Debt reduction is a central theme for American Airlines
Despite the recent recovery of the airline industry, American Airlines remains in a precarious financial position. Its debt load is the highest among major U.S. carriers, and it has been struggling to pay down its debt for many years. Its management has stated its goal of reducing $15 billion of debt by 2025.
However, the company’s management has yet to reveal how it plans to meet the target. Until this is shown, it’s hard to know whether the stock‘s value is justified.
As part of reducing debt, the company has been utilizing its cash reserves to make scheduled payments and pay down its unsecured senior notes. It also announced that it would reduce its short-term investment balance.
At the end of the third quarter, the company had $37 billion in outstanding debt, compared to $10 billion in assets. As a result, the company’s obligation to asset ratio, or commitment to EBITDA, is at 5.6 times.
The company has several term loan facilities and revolving credit facilities, but it has no significant bullet maturities shortly.
Hurricane Ian wreaked havoc on the airline’s operations
Whether you’re a Florida resident or traveling to the state, Hurricane Ian has been a travel nightmare. Many airports have canceled or suspended flights, and flight delays are expected to continue throughout the week. Several Florida counties have issued evacuation orders.
In addition to travel delays, the airline industry is also dealing with pilots and jet fuel shortages. There are also questions about supply chain issues, and the industry faces an antitrust lawsuit.
On Tuesday, more than 2,000 flights were canceled in the United States. Most of the cancellations occurred in Southeast and southeast Florida.
On Wednesday, the airports of Orlando and Tampa closed. The Tampa International Airport closed at 5 p.m., and the St. Pete-Clearwater International Airport closed at 1 p.m. Both will reopen as soon as possible. The Greater Orlando Aviation Authority activated an Emergency Operations Center.
There are several areas where flooding is still expected to occur in central Florida through the end of the week. Until the water is cleared, some roads may not be usable. If you have plans to visit these areas, contact the airlines directly for updates.
The company’s subsidiaries
Founded in 1926, American Airlines has become one of the largest air carriers in the world. It operates an extensive network of flights to more than 160 destinations in the United States, Latin America, the Caribbean, and Europe. It also serves dozens of countries in the Pacific and Atlantic oceans.
As a member of the Oneworld alliance, American Airlines transports passengers and cargo worldwide. Its fleet includes hundreds of aircraft. In addition to operating over 2,200 flights daily, it loads 2.7 million pounds of cargo.
As of 2012, American Airlines’ subsidiaries operate over 9500 passenger service agents. These employees ensure that customers have a safe and secure travel experience. They also de-escalate tense situations and help passengers rebook flights in case of inclement weather.
The American Airlines fleet is comprised of hundreds of aircraft, which are used to transport passengers and cargo. Its largest plane, the McDonnell Douglas MD-11, was built to accommodate 251 passengers and can fly long-haul routes.