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American Airlines Group Inc. (AAG), a Delaware corporation, is a holding company and its principal, wholly-owned subsidiaries are American Airlines, Inc. (American), Envoy Aviation Group Inc., PSA Airlines, Inc. (PSA) and Piedmont Airlines, Inc. (Piedmont). AAG was formed in 1982, under the name AMR Corporation (AMR), as the parent company of American, which was founded in 1934, with r…
Operating margin is thin at 2.69%. Limited cushion if revenue slows or costs rise, not the profile of a wide-moat business.
Revenue growth slowed to 0.8%, essentially flat. Margins also contracted 2.1pp. This is a business that needs a catalyst.
Free cash flow declined 152% versus the prior year, cash generation momentum has weakened. ROIC dropped from 6.67% to 4.21%, capital efficiency is deteriorating.
Profitability & Returns
Revenue (TTM)
$55.99B
▲ +0.8% YoY
Net Income (TTM)
$202M
▼ -86.9% YoY
Op. Margin
3.03%
▼ -2.1pp YoY
ROIC
4.33%
▼ -2.5pp YoY
Cash Flow & Balance Sheet
FCF (TTM)
$1.10B
▼ -152.3% YoY
Op. Cash Flow (TTM)
$4.87B
▼ -22.2% YoY
Net Debt
$26.44B
Cash & Equiv.
$7.39B
5Y CAGR: +25.8%
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