Susquehanna Financial Group elevates its rating on American Airlines Inc. (AAL) following new revenue-driven strategies, citing improved load factors and ancillary revenue growth. The move reflects confidence in the airline’s ability to sustain profitability amid competitive pressures.
- American Airlines reported a 12.3% YoY increase in PRASM in Q4 2025
- Load factors averaged 87.6% in Q4 2025, nearing pre-pandemic levels
- Ancillary revenue grew 19% year-over-year, driven by premium offerings
- Adjusted EBITDA margin projected at 24.1% for 2026
- AAL shares rose 4.2% in early trading post-upgrade announcement
- Regional jet program contributed to 8% operating cost reduction
American Airlines Inc. (AAL) has received an upgraded investment rating from Susquehanna Financial Group, signaling strengthened confidence in the carrier’s near-term financial trajectory. The upgrade follows a series of targeted initiatives aimed at boosting passenger revenue and optimizing network efficiency across domestic and international routes. The firm highlighted that American Airlines reported a 12.3% year-over-year increase in passenger revenue per available seat mile (PRASM) during the fourth quarter of 2025, driven by higher load factors averaging 87.6%—a level not seen since pre-pandemic periods. These figures reflect disciplined capacity management and demand recovery, particularly on high-margin transcontinental and international corridors. Key drivers behind the upgrade include a 19% surge in ancillary revenue, primarily from premium seating upgrades, baggage fees, and travel insurance packages. Additionally, American’s partnership with regional carriers under its regional jet program has reduced operating costs by approximately 8% while maintaining service quality. These measures have contributed to a projected adjusted EBITDA margin of 24.1% for 2026, up from 20.6% in 2025. The market response has been positive, with AAL shares rising 4.2% in early trading following the announcement. Investors and analysts are viewing the upgrades as indicative of broader industry momentum, especially among legacy carriers investing in customer experience and digital monetization tools.