American Airlines Group, Inc.

Thank you for standing by, and welcome to American Airlines Group's third 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 1 1 on your telephone. To remove yourself from the queue, press star 1 1 again. I would now like to hand the call over to Vice President of Investor Relations and Corporate Development, Scott Long. Please go ahead.

Thank you, Lateef. Good morning, everyone, and welcome to the American Airlines Group third quarter 2023 earnings conference call. On the call, with prepared remarks, we have our CEO, Robert Isom, and our CFO, Devin May. A number of our other senior executives are also here in the room this morning for the Q&A session. Robert will start the call with an overview of our performance, and Devin will follow with details on the third 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. 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, but 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 September 30, 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 and for joining us this morning. And with that, I'll turn the call over to our CEO, Robert Isom.

Thanks, Scott, and good morning, everyone. Today, American reported an adjusted pre-tax profit of approximately $362 million for the third quarter, an earnings result that was above the high end of our latest EPS guidance range. The American Airlines team continues to produce strong results And as we look ahead to the rest of the year, we continue to prioritize reliability, profitability, accountability, and strengthening the balance sheet. We are also focused on taking care of the team. We are very pleased to have finalized a new contract with the Allied Pilots Association in August. The agreement delivers significant compensation and quality of life improvements to our pilots, while allowing us to expand our training capacity to support underutilized aircraft and our future flying. We're also working toward new agreements for our flight attendants and agents. We're running a strong and reliable operation, involving our commercial offerings, taking care of our team and customers, producing free cash flow, and strengthening our balance sheet. All of this speaks to our steadfast focus on controlling what we can control, and we are proud to say that we are delivering on our commitments. Now, before discussing our results in more detail, On behalf of all of us at American, I want to say how shocked and saddened we are by the horrific attacks in Israel, and we join the international community in condemning these acts of hate and violence. We are devastated by the incredible loss of innocent life. We're making every effort to care for our team members who are impacted by this tragedy and to keep our team members safe while also working with the U.S. government to help find safe travel options for customers trying to depart the region. The safety and security of our team members, customers and their families remains our top priority. Turning now to our financial results. We produced record third quarter revenues of approximately $13.5 billion, driven by a resilient demand environment and record travel rewards program revenue. Domestic demand remains steady, while international demand continues to drive revenue growth, led by the Atlantic, Caribbean, and Central America. During the third quarter, we saw year-over-year growth in corporate and government revenue, with a return to more traditional seasonality trends. we remain encouraged by what we're seeing with demand and revenue from unmanaged business travel. Importantly, more customers than ever are choosing our Travel Rewards program by acquiring our co-brand credit cards in record numbers, enrolling in the Advantage program, and shopping for our product through our direct channels. Co-brand mileage sales growth continues to outpace airline capacity and GDP growth, driving increased levels of loyalty and revenue production from card users. In the third quarter, Approximately 80% of our bookings came from our own channels and modern retailing technology, which is up approximately 11 points from a year ago. These are the most efficient distribution channels in our ecosystem, and we expect to see these trends continue into the fourth quarter and beyond. Looking forward, our network and travel rewards program will continue to be the primary drivers and value for our customers and for American. and we are focused on operating our business as efficiently as possible. Our simplified fleet remains the youngest and most efficient among the US network carriers, and we are working to increase the utilization of both our mainline and regional aircraft. In addition, we are identifying opportunities to drive incremental value across the company. These initiatives and our limited near and medium-term CapEx requirements will allow us to continue to generate free cash flow that we can use to reinvest in the business and continue to pay down debt. Now turning to our operation. The American Airlines team delivered another quarter of fantastic operational results. Our team has produced stellar results for more than a year, including a record-setting performance during the peak travel period this summer. American operated more than 515,000 flights in the third quarter, and we produced our best ever third quarter completion factor of 98.6%. American ended the quarter with the best completion factor of the U.S. network carriers while maintaining our first place standing and on-time departures through the first nine months of the year. No network airline has operated more reliably than American over the past 15 months. Our operational performance is better than ever and it's because of our steadfast focus on reliability and strong execution in an increasingly complex environment. Our commercial and operations teams build a fantastic plan each month. We execute on it and we recover quickly during irregular operations. We're building on our momentum and we are committed to delivering a reliable operation for our customers as we approach the holiday season. And now I'll turn it over to Devin to share more about our third quarter financial results and the outlook for the fourth quarter.