[Management View]
American Airlines reported an adjusted pretax profit of $869 million for Q2 2025, with earnings per share of $0.95, reaching the high end of guidance. The company emphasized its strategic priorities, including revenue potential, customer experience enhancement, operational excellence, and efficiency improvements.

[Outlook]
The company projects Q3 2025 revenue to range from down 2% to up 1% year-over-year, with sequential improvement anticipated. Full-year EPS guidance is updated to a range from a $0.20 loss to a $0.80 profit, with a midpoint targeting a $0.30 profit. American Airlines plans to expand premium cabin capacity and enhance customer engagement through loyalty program improvements and digital initiatives.

[Financial Performance]
American Airlines achieved record revenue of $14.4 billion, up 0.4% year-over-year, driven by international premium strength. Domestic unit revenue declined approximately 6% year-over-year, while premium unit revenue outperformed the main cabin by four points. Managed business revenue grew by 10% year-over-year.

[Q&A Highlights]
Question 1: Can you give an approximation of what percentage of American flying loses money, and is there a path towards reducing this percentage?
Answer: American Airlines operates a hub and spoke network system and pays team members at market wages. The domestic network has been under stress due to economic uncertainty, but management expects this to change, providing a tailwind for future growth.

Question 2: Can you frame up what you see within your US domestic performance from July to September?
Answer: July was tough due to uncertainty during the primary booking period. Approximately 65% of Q3 revenue is on the books, with 20% for Q4. Management is optimistic about trends from July into August and September.

Question 3: How are you thinking about capacity and unit cost versus January, and what headwinds or tailwinds should be considered for next year?
Answer: The year is unfolding as expected, with unit cost trends similar to Q2 for Q3 and Q4. Long-term, American Airlines is focused on reengineering the business for efficiency.

Question 4: Are you expecting a full recovery in indirect channel market share as you exit 2025, and what revenue lift should be expected for 2026?
Answer: American Airlines is on track to restore full indirect channel share by the end of 2025, representing a potential $1.5 billion revenue lift moving into 2026.

Question 5: How do you view the United JetBlue arrangements, and what does it mean for American's New York market strategy?
Answer: American Airlines has a specialized New York franchise focused on transcons and international service. The company is confident in its ability to serve New Yorkers and grow through upgaging and partner networks.

[Sentiment Analysis]
Analysts expressed concerns about domestic revenue softness and operational challenges, while management maintained a positive outlook on future demand recovery and strategic initiatives.

[Quarterly Comparison]
| Metric | Q2 2025 | Q2 2024 |
|--------|---------|---------|
| Adjusted Pretax Profit | $869 million | N/A |
| Revenue | $14.4 billion | N/A |
| Domestic Unit Revenue | -6% YoY | N/A |
| Premium Unit Revenue | +4 points YoY | N/A |
| Managed Business Revenue | +10% YoY | N/A |

[Risks and Concerns]
Risks include persistent domestic revenue softness, operational disruptions due to weather, and higher labor costs impacting margins. Management is focused on mitigating these challenges through strategic investments and operational improvements.

[Final Takeaway]
American Airlines delivered strong Q2 2025 results, achieving record revenue despite operational challenges. The company is focused on strategic priorities to enhance customer experience, drive efficiencies, and expand premium offerings. While domestic revenue softness and operational disruptions pose risks, management remains optimistic about future demand recovery and revenue growth. Investors should monitor the company's progress in restoring indirect channel share and executing strategic initiatives to drive long-term success.