American Airlines Group Inc. (NASDAQ:AAL) Q4 2022 Earnings Call Transcript

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Kyle Arnold: You’ve had some cuts at the regional level or service to some smaller cities. What’s your strategy behind the regional served locations right now? And do you think there’ll be further cuts as we continue to go through this pilot shortage at the regional level?

Robert Isom : Hey, Kyle, I’ll just start on this. Look, it’s really unfortunate that we’ve had to reduce service anywhere most especially to some of the smaller communities. That’s certainly a result of the issues that we faced with pilot staffing at our regional airlines. As I mentioned before, we’re working really hard on it. American, I think, has taken the biggest step to get people into the industry of anyone, and I know others have followed us there. That’s going to have an impact. We’ve seen the benefits of those efforts, and we’re stabilizing the fleet, and I think that we just grow back from here.

Kyle Arnold: Is there any outlook on how long there might be constraints at that level?

Robert Isom : Yes. So I think from a regional perspective, it takes time to get people back into the industry. But again, for anybody that is listening and reading, it’s a great time to come into aviation. These are careers. Our pilot careers are ones that are — can be great quality of life, and also very lucrative as well. And so I think it’s an opportunity that as we look to the future, that there are communities that haven’t typically been places where we sourced pilots that we’re going to look to in the future, we’re showing great progress in hiring pilots of color and also female pilots. And I look at that as an opportunity going forward that’s going to greatly benefit and really change the face of our flight crews and really looking forward to it. I think it’s something that’s probably over the course of the next couple of years.

Operator: Our next question comes from the line of Ted Reed of Forbes.

Ted Reed: My question is for Robert. Robert, we’ve been hearing you say for a long time that you’re going to make a reliable airline and a profitable airline and you seem to have done that this year or last year. So now I want to know what is the vision for the future? Can American be restored being the greatest airline as it once we perceive? And do you have a path to do that now that you’ve started to accomplish your other goals?

Robert Isom : Ted, great to hear from you. Let me just start with this. I’m really pleased with profitable quarters and producing a profit for the full year in 2022. The things that we’ve talked about doing are the right things. Getting customers to where they want to go, having the broadest network and doing it in a fashion that can produce profits, pay down debt is exactly where we need to go. And off of that platform, I see great things. But what you’re going to see from us as certainly in the near term is more of the same, intense focus on reliability and profitability and accountability. And for our customers, that’s going to mean we’re going to deliver for them, deliver with the best network that Vasu has talked about, making sure that we have a travel rewards program that’s best in the industry.

We’re going to operate with excellence, and it’s going to require even greater planning and day-to-day execution. And when things don’t go right, and let’s face it. We’re in a business where all sorts of things can happen. We got to be the best at recovering and you’re going to see us continue to invest in that. And along the way, we have the opportunity to really make better use of technology to further digitalize our operations and our customer experience. And Ganesh Jayaram, who’s our new CIO, has been charged with executing exactly that. and ultimately, put this all together in a business model that is incredibly efficient improves margins and reduces debt. That’s what we’re focused on right now. I want to keep the team and their head in the game every day.

And really excited about what that means for the future because I do think it means that American is not just more competitive out in the marketplace, but we’re going to be more competitive in terms of stock performance as well.

Ted Reed: Let me just ask a follow-up to that. When you look back at the history of the industry, the people who’ve been considered the greatest leaders have been the ones who have expanded the airline Wolf candle. And going forward, I don’t mean right away, but over the years, can this airline expand maybe more in Asia or places where you’re perceived this week?

Robert Isom : Ted, just first off, just in terms of ego around here, look, we are focused on business and really making sure that we have the capacity to address the opportunities in the marketplace. American has been around for 96 years now. We’re coming up on our 100th anniversary in 2026. And I want American to be the airlines that meet the needs of our customers, our communities and our shareholders as well. And so we’re focused on that right now. And look, we’re really encouraged by what we’re seeing.

Operator: Thank you. That concludes the media Q&A. I will now turn the call back over to Robert Isom for closing remarks.

Robert Isom : Thanks for that. Thanks, everybody, for listening in. Look, American is in a position of strength, especially as we take a look at coming out of the pandemic. We’re poised to recover. We’re going to focus on our goals, reliability, profitability, making sure that we reduce our leverage and put American in a position to take advantage of opportunities that come about. We’re really encouraged by the results and excited about the opportunities ahead. Thank you very much.

Operator: This concludes today’s conference call. Thank you for participating. You may now disconnect.

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