American Airlines Group, Inc.

Thank you for standing by and welcome to American Airlines Group's first quarter 2023 earnings call. At this time, all participants are in a listen-only mode. After the speaker presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 11 on your telephone. I would now like to hand the call over to Scott Long, Vice President of Investor Relations and Corporate Development. Please go ahead.

Thank you, Lateef. And good morning, everyone. Welcome to the American Airlines Group first quarter 2023 earnings conference call. On the call this morning with prepared remarks, we have our CEO, Robert Isom, our CFO, Devin May, and a number of our other senior executives are also in the room for the Q&A session. Robert can start the call this morning with an overview of our performance, and Devin will follow with details on the first quarter and will outline our operating plans and outlook going forward. After our prepared remarks, we'll open the call for analyst questions, followed by questions from the media. To get in as many questions as possible, please limit yourself to one question and one follow-up. And before we begin today, we must state that today's call contains forward-looking statements, including statements concerning future revenues, costs, forecasts of capacity, and fleet plans. These statements represent our predictions and expectations of future events. The numerous risks and uncertainties could cause actual results to differ from those projected. Information about some of these risks and uncertainties can be found in our earnings press release that was issued this morning, as well as our form 10-Q for the quarter ended March 31st, 2023. In addition, we'll be discussing certain non-GAAP financial measures this morning, which exclude the impact of unusual items. A reconciliation of those numbers to the GAAP financial measures is included in the earnings press release, which can be found in the investor relations section of our website. A webcast of this call will also be archived on our website. The information we are giving you on the call this morning is as of today's date, and we undertake no obligation to update the information subsequently. Thank you for your interest in joining us this morning. And with that, I'll hand the call over to our CEO, Robert Isom.

Thanks, Scott. And good morning, everyone. American is off to a fantastic start in 2023. This year, we remain focused on reliability, profitability, strengthening our balance sheet, and holding ourselves accountable along the way. This morning, American reported a first quarter profit for the first time in four years, an improvement of almost $2 billion versus the first quarter of 2022. Our performance in the first quarter was driven by continued strength in demand and the tremendous work of our team. American entered the year in a position of strength after the outstanding results our team delivered in 2022, and we built on that momentum in the first quarter. The American Airlines team ran a reliable operation for our customers and delivered profit for the quarter, beating our initial EPS guidance of approximately breakeven. Let's talk more about our first quarter results. We produced record first quarter revenues of nearly $12.2 billion, an increase of 37% versus 2022, on 9.2% more capacity year over year. Demand for our product remains strong. We continue to be very pleased with our domestic and short-haul international unit revenue performance. We've also seen noticeable strength in long-haul international demand, where we have allocated approximately 80% of our second quarter capacity growth year over year and continue to see strong yield performance carrying into the summer months. Demand for our premium cabin has been remarkable across all entities. with premium paid load factor and RASM exceeding 2019 levels. We're well on our way to a fully recovered business, but we aren't there yet. The recovery is still unfolding, and the current demand environment remains dynamic. We continue to learn about evolving customer preferences and changing demand patterns. We've spent the past three years building a resilient airline that can adjust to the variability in demand. We remain nimble and continue to adapt to customer behaviors, both in terms of when and where customers book travel and how we service them. Importantly, customers continue to show preference for our direct channels and travel rewards program. Our co-brand growth continues to outperform consumer spending in line with advantage enrollments, which are now approximately 60% higher than 2019 on capacity that is not yet fully restored to 2019 levels. The American Airlines co-brand portfolio is delivering the fastest growth since the inception of our current agreements with double-digit growth in sales versus the first quarter of 2022. Now let's turn to the operation. The American Airlines team delivered a stellar performance in the first quarter. We operated more than 476,000 flights in the quarter with an average load factor of 80%. We delivered our best ever first quarter completion factor and controllable completion factor, safely completing more flights and more on-time flights than anyone in the industry. We're performing better than ever from an operational perspective. We delivered this strong performance in the first quarter despite the nationwide ground stop in mid-January due to the NOTAM outage and several disruptive weather events that impacted our hubs across the country. Our largest hub, DFW, was greatly impacted by winter storms in January and February and tornadoes and severe thunderstorms in March. Our strong operational performance is driven by our team's focus on running a safe and a reliable airline and taking care of what we can control. Investments in our operation have enabled us to anticipate the operating conditions ahead of us and recover quickly when the unexpected happens. And we'll continue to invest in our team, fleet, and technology so that we're well prepared heading into the summer and the rest of the year. I also want to thank and acknowledge the DOT and the FAA for their efforts to reduce congestion in New York. which will certainly help the industry deliver more reliably for customers this summer. And now, over to Devin to share more about our first quarter results and the outlook for the second quarter.