American Airlines Delivers a Solid Third Quarter as Travel Demand Continues to Surge

We’ve increased our fair value estimate about 2.5% to $20 per share for no-moat-rated American Airlines following the firm’s third-quarter earnings release. American delivered its second consecutive quarter of profitability, posting total revenue of $13.5 billion (13% higher than third-quarter 2019 levels) and adjusted operating margins of 7.2%. Despite grappling with nearly 10% lower capacity and 93% higher fuel costs compared with the third quarter of 2019, robust financial results were enabled by strength in underlying travel demand and favorable pricing during the quarter.