American Airlines Group, Inc.

may press star 11 again. I would now like to hand the call over to Neil Russell, Vice President, Investor Relations. Please go ahead.

Thank you, Lateef. Good morning, everyone, and welcome to the American Airlines Group Earnings Conference Call. On the call with prepared remarks, we have our CEO, Robert Isom, and our CFO, Devin May. In addition, we have a number of our senior executives in the room this morning for the Q&A session. Robert will start the call with an overview of our performance. Devin will follow with details on the quarter, in addition to outlining our operating plans and outlook going forward. After our prepared remarks, we will 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 and form 10-Q that was issued earlier this morning. Unless otherwise specified, all references to earnings per share are on an adjusted and diluted basis. Additionally, we will be discussing certain non-GAAP financial measures, 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 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. With that, I'll turn the call over to our CEO, Robert Isom.

Good morning, everyone. This morning, American reported an adjusted pre-tax profit of $869 million for the second quarter, or earnings per share of 95 cents, which is toward the high end of the guidance we provided in April. We achieved this in a difficult and evolving operating and demand environment, and we're proud of our second quarter performance. We remain steadfast in our focus on our 2025 priorities, which will continue to shape the long-term success of American. Executing on these priorities will enable us to grow margins, generate sustainable free cash flow, and further strengthen our balance sheet. Our priorities this year include delivering on our revenue potential, renewing our focus on the customer experience, operating with excellence, and driving efficiencies throughout the airline. We're pleased with the progress we've made on each of these fronts and we'll share more on them this morning. Let's begin with our performance during the second quarter. In the second quarter, we produced record revenue of $14.4 billion, a testament to the progress we're making on our commitment to deliver on our revenue potential, even in a challenging environment. Our year-over-year passenger unit revenue improvement led our network peers for the fourth straight quarter. Long-haul international PRASM performed in line with our initial expectations, with all entities producing positive year-over-year results. Driven by continuous strength in the premium cabin, Atlantic PRASM was up 5%, and Pacific PRASM was up approximately 1% year-over-year on approximately 17% more capacity. Premium demand and spending from higher income consumers remain resilient in the second quarter. On a year-over-year basis, unit revenue in the premium cabin performed four points better than the main cabin. We're well positioned to attract premium customers with plans to expand our premium seating further in the years ahead. The strength in international premium was offset by domestic leisure weakness. Domestic unit revenue was down approximately 6% year-over-year as softness in the main cabin persisted throughout the second quarter. While domestic unit revenue is expected to remain lower year-over-year in the third quarter, we expect that July will be the low point and that performance will improve sequentially each month in the quarter as industry capacity growth slows and demand strengthens. As shown on slide four of the earnings presentation that we published this morning, the efforts of our sales team to recover revenue from indirect channels beat our expectations in the quarter, with our indirect share now down 3% versus historical levels. We saw the greatest sequential improvement in indirect leisure channels, but we continue to make progress in corporate channels. We remain on track to get back to our historical share of indirect channel revenue as we exit 2025. In the second quarter, we grew our managed business revenue by 10% year-over-year, outpacing broader industry growth. This result is further confirmation that our sales and distribution efforts are being well received by our customers. Our work to grow the Advantage program and enhance our partnership with Citi is continuing as we prepare for the start of our new 10-year agreement in January 2026. Slide five highlights that active Advantage members have grown 7% year to date, with our highest growth in enrollments coming from Chicago, Dallas, Fort Worth, and New York. Advantage members are more engaged, generate a higher yield versus non-members, and are a key driver for premium cabin demand, currently accounting for approximately 77% of premium revenue. Spending on our co-branded credit cards was up 6% year-over-year for the second quarter as customers continue to favor Advantage Miles as their preferred rewards currency. American remains committed to offering an industry-leading travel rewards program, and we look forward to sharing more exciting updates in the months ahead. The further strengthening of our network remains a key priority for the team. In the second quarter, our growth was focused on Chicago, New York, and Philadelphia, three strategic hubs critical to our network and where we continue to see long-term opportunity. We're encouraged by the early results from this additional capacity with share, unit revenue, and financial results tracking in line with or ahead of expectations. We'll remain responsive to the demand and competitive environment as we execute our long-term network strategy, and we remain focused on deploying capacity that best serves our customers. Our new customer experience organization is elevating every part of the travel journey. We've continued to make meaningful improvements across all phases of the customer experience. We've announced several exciting updates to our lounge network, including opening a new flagship lounge in Philadelphia. In Miami, We've announced plans for a new flagship lounge and are expanding the Admiral's Club lounge footprint. American is proud to offer more premium lounges than any other carrier. Later this summer in Charlotte, we'll open provisions by Admiral's Club, a new, unique, and additional lounge concept for customers that are seeking a quick refreshment before catching their next flight. The new flagship suite on our Boeing 787-9 officially entered service last month on select flights to London. In this winter, this premium offering is expected to expand to Argentina, New Zealand, and Australia, giving more customers the opportunity to enjoy this elevated experience. Customer response to the new aircraft and flagship suite product has been overwhelmingly positive. We want our customers' experience at the airport to be as easy and as seamless as possible. In May, we implemented TSA Touchless ID, which significantly expedites the security screening process. Additionally, we're the first airline to test one-stop security for flights into the U.S., starting with American flights from London to Dallas-Fort Worth, allowing customers to bypass baggage reclaim and TSA rescreening upon arrival. We're excited to be the first carrier to implement one-stop security, which will greatly enhance the connecting experience and overall journey for our customers traveling internationally. Thank you to the Department of Homeland Security for its continued partnership and commitment. We've also introduced several additional customer enhancements during the quarter, including an option for customers to use miles as a form of payment for upgrades and improvements to our in-flight food and beverage offerings. We're excited about the momentum we've built, and we're just getting started. Our customer experience team is undertaking a comprehensive review of every phase of the travel journey and making investments that will deliver tangible improvements for our customers and our revenue performance. Turning now to our operation, the team has continued to plan, execute, and recover through very difficult operating conditions this summer. Disruptive operating conditions are a reality of our business, and the American team continues to do an excellent job recovering from irregular operations and mitigating the impact to our customers. In the second quarter, there was significant storm activity at our hubs in Dallas-Fort Worth, Chicago, Washington, DC, and in the Northeast, a 36% increase in disruptive operational events over the same period last year. Thanks to the investments we've made in technology and our operation, and our team's continued focus on controlling what we can control, we were able to recover quickly from these disruptions. A big thank you to the entire American Airlines team for continuing to deliver for our customers in the midst of a very challenging operating environment. Finally, I'd like to acknowledge the families and communities affected by the catastrophic flooding in Central Texas. American is a proud Texas-based airline, and we've joined forces with our disaster response partners, the American Red Cross, Airlink, and Team Rubicon, to aid relief efforts and support impacted families. Now, I'll turn the call over to Devin to share more about our second quarter financial results and outlook.