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AAL, American Airlines Group

Airlines capital-intensive Distress / turnaroundCyclical

American Airlines is one of the large U.S. network carriers. It sells seats to fly people, and space to carry freight, on its own fleet of aircraft and on smaller regional jets flown under its name; the routes fan out through connecting hubs across the country and abroad. Fares are the bulk of the money, and a loyalty program tied to a co-branded credit card adds a second stream the airline gets paid for whether or not the miles are ever flown.

Latest annual: FY2025 10-K

AAL · American Airlines Group

The business

What it sells, where the money comes from, the kind of company it is.

Revenue · FY2025

$54.6B

+0.8% YoY · 26% 5-yr CAGR

Vital signs · TTM, with 5-yr average

Revenue $56.0B 5-yr avg $48.1B

Operating margin 3.0% 5-yr avg 2.6%

ROIC 4% 5-yr avg 4%

Owner-earnings margin 5% 5-yr avg 1%

Free cash flow margin 2% 5-yr avg 1%

The business in brief

read the 10-K →

What this business is and what moves its needle, from its own SEC filings.

Situation: Distress / turnaround. Thin interest coverage, or operating cash burned against real debt, across the record. The balance sheet carries this situation; the debt schedule sets the clock. Cyclical. Margins collapse and recover repeatedly across the record; a single year, good or bad, misstates the through-cycle earning power.
What moves the needle: The governing question is franchise versus commodity: a seat from one city to another is much the same whoever sells it, so the test is whether route networks, hubs and the loyalty program buy any real pricing power, or whether fares are set by the rival willing to fly a half-empty plane. Watch the cost side just as hard, because two of the biggest inputs — jet fuel and unionized labor — sit largely outside the airline's hand; the planes are bought with borrowed money, and the airline carries net debt, so a fuel spike or a fare war meets fixed costs and interest that will not flex. The bad case is the one the industry has lived: capital poured into aircraft that earns back less than it costs, leaving owners poorer after years of flying. The record below carries the margins, the return on capital, and the debt.
Is it a good business?: Return on capital has sat near the cost of capital (median 8%). Owner earnings, the cash-based check, have been thin too. The cycle and the balance sheet decide this one; the worst year tells more than the median, and the rest is in the 10-K.

Drafted from the company's filings and reviewed by hand; every number is shown in full in the sections below.

The record

Ten years of arithmetic, read across the cycle.

The record, 2016–2025

realized figures from each filing · older years to the left

2016’16	2017’17	2018’18	2019’19	2020’20	2021’21	2022’22	2023’23	2024’24	2025’25	TTMTTMMar 2026
											Income statement
$40.1B	$42.6B	$44.5B	$45.8B	$17.3B	$29.9B	$49.0B	$52.8B	$54.2B	$54.6B	$56.0B	RevenueRevenue
$5.1B	$4.2B	$2.7B	$3.1B	($10.4B)	($1.1B)	$1.6B	$3.0B	$2.6B	$1.5B	$1.7B	Operating incomeOp. inc.
12.6%	9.9%	6.0%	6.7%	−60.1%	−3.5%	3.3%	5.7%	4.8%	2.7%	3.0%	Operating marginOp. mgn
$2.6B	$1.3B	$1.4B	$1.7B	($8.9B)	($2.0B)	$127M	$822M	$846M	$111M	$202M	Net incomeNet inc.
38%	—	25%	25%	—	—	32%	27%	27%	42%	44%	Effective tax rateTax rate
											Cash flow & returns
$6.5B	$4.7B	$3.5B	$3.8B	($6.5B)	$704M	$2.2B	$3.8B	$4.0B	$3.1B	$4.9B	Operating cash flowOp. cash
$1.9B	$2.2B	$2.4B	$2.6B	$2.4B	$2.3B	$2.3B	$2.3B	$2.2B	$2.2B	$2.2B	DepreciationDeprec.
$1.9B	$1.2B	($365M)	($565M)	($149M)	$299M	($332M)	$579M	$845M	$731M	$2.4B	Working capital & otherWC & other
$5.7B	$6.0B	$3.7B	$4.3B	$2.0B	$208M	$2.5B	$2.6B	$2.7B	$3.8B	$3.8B	CapexCapex
14.3%	14.0%	8.4%	9.3%	11.3%	0.7%	5.2%	4.9%	4.9%	6.9%	6.7%	Capex / revenueCapex/rev
$4.6B	$2.5B	$1.1B	$1.2B	($8.5B)	$496M	($373M)	$1.2B	$1.3B	$899M	$2.7B	Owner earningsOwner earn.
11.5%	6.0%	2.5%	2.7%	−49.0%	1.7%	−0.8%	2.3%	2.4%	1.6%	4.7%	Owner earnings marginOE mgn
$793M	($1.2B)	($212M)	($453M)	($8.5B)	$496M	($373M)	$1.2B	$1.3B	($680M)	$1.1B	Free cash flowFCF
2.0%	−2.9%	−0.5%	−1.0%	−49.0%	1.7%	−0.8%	2.3%	2.4%	−1.2%	2.0%	Free cash flow marginFCF mgn
$224M	$198M	$186M	$178M	$43M	—	—	—	—	—	$43M	Dividends paidDiv. paid
$4.5B	$1.6B	$837M	$1.1B	$173M	$18M	$21M	—	—	—	—	BuybacksBuybacks
13%	9%	9%	10%	-45%	-5%	4%	8%	8%	4%	4%	ROICROIC
											Balance sheet
$6.5B	$5.2B	$286M	$290M	$6.9B	$12.4B	$586M	$681M	$902M	$1.1B	$5.8B	Cash & investmentsCash+inv
$1.6B	$1.8B	$1.7B	$1.8B	$1.3B	$1.5B	$2.1B	$2.0B	$2.0B	$2.1B	$2.0B	ReceivablesReceiv.
$1.6B	$1.7B	$1.8B	$2.1B	$1.2B	$1.8B	$2.1B	$2.4B	$2.5B	$2.8B	$3.6B	Accounts payablePayables
$2M	$64M	($67M)	($312M)	$146M	($267M)	($11M)	($327M)	($449M)	($765M)	($1.6B)	Operating working capitalOper. WC
$10.3B	$9.1B	$8.6B	$8.2B	$11.1B	$17.3B	$15.3B	$13.6B	$13.2B	$12.2B	$14.0B	Current assetsCur. assets
$13.9B	$15.4B	$18.1B	$18.3B	$16.6B	$19.0B	$21.5B	$22.1B	$24.3B	$24.5B	$28.4B	Current liabilitiesCur. liab.
0.7×	0.6×	0.5×	0.4×	0.7×	0.9×	0.7×	0.6×	0.5×	0.5×	0.5×	Current ratioCurr. ratio
$4.1B	$4.1B	$4.1B	$4.1B	$4.1B	$4.1B	$4.1B	$4.1B	$4.1B	$4.1B	$4.1B	GoodwillGoodwill
$51.3B	$52.8B	$60.6B	$60.0B	$62.0B	$66.5B	$64.7B	$63.1B	$61.8B	$61.8B	$63.7B	Total assetsAssets
$24.6B	$25.3B	$23.8B	$23.6B	$32.0B	$37.3B	$34.9B	$32.4B	$30.1B	$28.6B	$27.3B	Total debtDebt
$18.1B	$20.1B	$23.5B	$23.4B	$25.1B	$24.9B	$34.3B	$31.7B	$29.2B	$27.5B	$21.5B	Net debt / (cash)Net debt
5.1×	4.0×	2.5×	2.8×	-8.5×	-0.6×	0.8×	1.4×	1.4×	0.9×	1.0×	Interest coverageInt. cov.
($284M)	($780M)	($169M)	($118M)	($6.9B)	($7.3B)	($5.8B)	($5.2B)	($4.0B)	($3.7B)	($4.1B)	Shareholders’ equityEquity
0.2%	0.2%	0.2%	0.2%	0.5%	0.3%	0.2%	0.2%	0.2%	0.1%	0.1%	Stock comp / revenueSBC/rev
											Per share
556M	492M	466M	444M	484M	644M	655M	720M	721M	661M	661M	Shares out (diluted)Shares
$72.18	$86.68	$95.65	$103.02	$35.83	$46.40	$74.75	$73.35	$75.16	$82.65	$84.69	Revenue / shareRev/sh
$4.65	$2.61	$3.03	$3.79	$-18.36	$-3.09	$0.19	$1.14	$1.17	$0.17	$0.31	EPS (diluted)EPS
$8.32	$5.17	$2.43	$2.73	$-17.57	$0.77	$-0.57	$1.68	$1.80	$1.36	$4.02	Owner earnings / shareOE/sh
$1.43	$-2.50	$-0.46	$-1.02	$-17.57	$0.77	$-0.57	$1.68	$1.80	$-1.03	$1.66	Free cash flow / shareFCF/sh
$0.40	$0.40	$0.40	$0.40	$0.09	—	—	—	—	—	$0.07	Dividends / shareDiv/sh
$10.31	$12.14	$8.04	$9.61	$4.05	$0.32	$3.89	$3.61	$3.72	$5.72	$5.70	Cap. spending / shareCapex/sh
$-0.51	$-1.59	$-0.36	$-0.27	$-14.19	$-11.40	$-8.85	$-7.23	$-5.51	$-5.64	$-6.17	Book value / shareBVPS

Per-share growththe realized rate an owner's share compounded

	9-yr	5-yr
Revenue / share	+1.5%/yr	+18.2%/yr
Owner earnings / share	−18.2%/yr	—
EPS	−30.9%/yr	—
Dividends / share	−31.5%/yr (4-yr)	−31.5%/yr (4-yr)
Capital spending / share	−6.3%/yr	+7.2%/yr

The record, charted

FY2016–2025

Each measure over its full record; the current point and the worst year marked.

Share count

661Mpeak FY2024

ROIC

4%low FY2020

Net debt ÷ owner earnings

30.6×peak FY2021

Owner earnings vs. net income

Owner earningsNet income

The accountant's number, and the cash an owner can take; the gap is the tell.

$899Mowner earningsvs.$111Mnet incomelow FY2020

Where the cash went

ReinvestBuybacksDividendsAcquisitionsRetained

Each year's operating cash, by what management did with it: the mix, and how it drifts.

FY2016FY2025

Owner-earnings bridge

FY2021–FY2025cash-flow statement, SEC EDGAR →

Net income is the accountant's number; owner earnings is the cash an owner could take out. The walk between them, off the cash-flow statement, and whether the gap is widening or holding.

In fiscal 2025 the business earned $899M of owner earnings, the operating cash left after the $2.2B it takes just to hold its position. It put $1.6B more into growth; free cash flow, after that spending, was ($680M).

Reported net income$111M

Owner earnings$899M · 2% of revenue

	FY2025	FY2024	FY2023	FY2022	FY2021
Reported net income	$111M	$846M	$822M	$127M	($2.0B)
Depreciation & amortizationnon-cash charge added back	+$2.2B	+$2.2B	+$2.3B	+$2.3B	+$2.3B
Stock-based compensationreal costnon-cash, but a real cost	+$57M	+$92M	+$102M	+$78M	+$98M
Working capital & othertiming of cash in and out, other non-cash items	+$731M	+$845M	+$579M	−$332M	+$299M
Cash from operations	$3.1B	$4.0B	$3.8B	$2.2B	$704M
Maintenance capital expenditurethe spending needed just to hold position and volume	−$2.2B	−$2.7B	−$2.6B	−$2.5B	−$208M
Owner earnings	$899M	$1.3B	$1.2B	($373M)	$496M
Growth capital expenditurediscretionary; spent to get bigger, not to stand still	−$1.6B	—	—	—	—
Free cash flow	($680M)	$1.3B	$1.2B	($373M)	$496M
Owner-earnings marginowner earnings ÷ revenue	2%	2%	2%	-1%	2%

Owner earnings is the cash an owner could pull out without starving the business: operating cash less the maintenance capital it must spend to hold its position (here about $2.2B, roughly its depreciation, the rate its assets wear out). The other $1.6B of its capital spending is growth it chose, not upkeep it owed; charged only with the maintenance it must do, the business earns well more than the year's free cash flow shows. The cash-flow statement also adds stock comp back as non-cash, but it is a real cost paid in shares; counted as the expense it is (less $57M), owner earnings is nearer $842M.

Maintenance capex is estimated as depreciation where a growing business invests above it; free cash flow is the figure the scorecard's free-cash margin reads.

III

Quality & stewardship

Returns, the balance sheet, capital allocation, and pay.

Owner’s Scorecard

FY2025 10-K · source on SEC EDGAR →

Will it survive?

Can it pay its interest? 0.9×

Does not cover its interest

Operating income $1.5B ÷ interest expense $1.7B

What this means
A full year of operating profit didn't cover the interest bill. This is the zombie zone: the business depends on refinancing, asset sales, or forbearance to service its debt.
How heavy is the debt, net of cash? $22.8B · 15.5× operating profit

Heavy net debt

Cash $1.1B + ST investments $4.8B − debt $28.6B

What this means
Netting $5.8B of cash and short-term investments against $28.6B of debt leaves $22.8B owed, about 15.5× a year's operating profit (19.5× on the gross debt, before the cash). Net debt is the leverage figure that matters: the cash is already set against the debt. Strategic or illiquid investments aren't counted here.
How long is cash tied up? —

Not enough data

What this means
The filing data didn't include the inputs for this check.

Is it a good business?

Return on invested capital 8%

Below average through the cycle

10-yr median, range -45%–13%; 4% latest = NOPAT $857M ÷ invested capital $23.8B

Industry peers: median 10%

What this means
The rate the business earns on the money tied up in it, Buffett's north star, because over time a stock tracks the ROIC beneath it. Above ~15% sustained hints at a moat; a return below the cost of capital (~8%) erodes value as a business grows rather than building it — the test Buffett weighs most. The headline is the median of the last 10 years (it ran 4% most recently), so one peak or trough year doesn't set the verdict. Asset-light businesses (R&D expensed, little capital) read artificially high, pair this with Owner Earnings.
Owner-earnings margin 2%

Thin, recently turned positive

latest $899M = operating cash $3.1B − maintenance capex $2.2B; positive each of the last 3 years, after an earlier loss stretch (10-yr median 2%)

Industry peers: median 9%

What this means
What an owner could take out without starving the business: operating cash less the maintenance capital it must spend to hold its position — Buffett's owner earnings. That's 2% of revenue this year, a 2% median across 10 years. It chose to put $1.6B more into growth, so free cash flow this year was ($680M) — the gap is investment, not weakness. Treating stock comp as the real expense it is (less $57M of SBC) leaves $842M.
Are earnings backed by cash? 27.92×

Cash-backed

Cash from ops $3.1B ÷ net income $111M

What this means
How much of reported profit showed up as operating cash. Above 1× is reassuring; well below suggests earnings lean on accruals. One year is noisy, growth and working-capital swings distort it, and this is operating cash, not free cash. Watch the multi-year trend.

How is the cash used?

Where do the earnings go? 7%

Reinvests most of it

Dividends + buybacks $64M ÷ Owner Earnings $899M

What this means
Of $899M Owner Earnings, $64M (7%) went back to shareholders, $43M dividends, $21M buybacks. But the buybacks barely exceed stock issued to employees ($57M SBC), net of dilution, little was truly returned. Returning most of it is the mark of a mature business with little left to reinvest at a high return; reinvesting most could mean a long runway, or empire-building. The split doesn't say which; the return earned on it (see ROIC) does.
Investing or harvesting? 1.72×

Expanding

Capex $3.8B ÷ depreciation $2.2B

What this means
Descriptive, not a grade. Above ~1× means investing faster than assets wear out (growth, or, sustained for years, today's earnings carrying less depreciation than tomorrow's will). Below means spending less than it's wearing out (efficiency, or a melting asset base). The ratio won't tell you which; the filings will.

Graham’s defensive tests · 1 of 6 met

Graham’s numerical criteria for the defensive investor (The Intelligent Investor, ch. 14), run on the filings. A floor of safety, not a buy signal; many fine modern businesses fail his strictest liquidity rules by design.

Adequate size Pass

Revenue ≥ $2B · $54.6B

What this means
Big enough to weather a storm. Graham's 1972 floor was ~$100M of sales (≈ $700M today); we use a $2B revenue line as a conservative modern stand-in.
Strong liquidity Miss

Current ratio ≥ 2× · 0.50×

What this means
Current assets at least twice current liabilities, near-term bills covered without touching the business. Strict by design: many cash-rich modern firms run leaner and miss it, holding their cushion in longer-dated securities.
Conservative debt Miss

Debt ≤ working capital · $28.6B vs ($12.3B) WC

What this means
Graham's rule that borrowings not exceed net current assets. Capital-heavy and buyback-heavy firms routinely fail it, read it next to interest coverage, not alone.
Earnings stability Miss

A profit every year (10-yr record) · 2 loss years

What this means
Graham wanted earnings in each of the past ten years, the stability a defensive owner leans on.
Dividend record Miss

Uninterrupted dividends · 5 of 10 yrs

What this means
An unbroken dividend was Graham's mark of durability. He wanted twenty years; the filings show about ten, and a single suspension breaks the streak. Non-payers, many fine modern compounders, fall outside his defensive net by design.
Earnings growth Miss

Earnings +33% over the record · −66%

What this means
At least a third more earnings than a decade ago, averaging three years at each end. Net income (not per-share), so stock splits don't distort it, buybacks and dilution show up in the share-count line instead.
Moderate price —

P/E ≤ 15 and P/E × P/B ≤ 22.5 · decided by the price

What this means
Graham's valuation gate, the wall he kept between a sound business and a sound investment. Three-year average earnings are $0.90/share (latest year $0.17), the averaged base the calculator's gate runs on, and book value is $-5.64/share. Enter a price in “What the price implies” just below for the P/E, P/B, and whether it clears. But this is the rule Buffett outgrew: there's no hard P/E law, and a wonderful business can deserve a far richer multiple if the thesis holds, treat it as the bargain-hunter's floor, not a verdict on the price.

Durability & moat, 2016–2025

Whether the record’s returns held, and what the capital reinvested earned.

Profitable years 8 of 10

What this means
Lost money in 2 year(s), look at what happened there before trusting the average.
Return on capital ≥ 15% 0 of 10 yrs

What this means
A moat shows up as a high return on invested capital that holds year after year, not one good vintage.
Operating margin 9% → 4% (3-yr avg ends)

In the filing’s words The filing attributes gains to higher prices but names price competition too — and the margin slipped, so the pressure is winning here.

What this means
Through the cycle the operating margin slipped — about 9% early to 4% lately, median 5% — competition or costs are biting in.
Reinvestment, incremental ROIC returns capital

What this means
The capital base barely grew: this business returns cash through dividends and buybacks rather than reinvesting. Judge it on the cash returned, not on compounding.
Owner earnings growth −12%/yr

What this means
Owner earnings shrank about 12% a year over the record.
Worst year 2020 · −60.1% op. margin

What this means
Operations went underwater in 2020, understand why before trusting the good years.
Share count +1.9%/yr

What this means
The share count is rising, dilution works against you on a per-share basis.
Dividend record paid

What this means
Paid a dividend in 5 of the years on record.
How management talks about it Promotional

What this means
The returns have faded, yet the filing reaches for a promoter’s vocabulary — world-class, best-in-class, disruptive — more than an owner’s. When the words sell harder than the results deliver, the gap is the thing to weigh.

Does AI threaten the moat?

Low contestability

The moat is physical, regulated or balance-sheet-funded, the kind AI cuts costs within but does not contest.

In its own filing Framed as a capability

The filing positions AI as something the company uses, not something it fears.

“We rely heavily on technology and automated systems, including artificial intelligence (AI), to operate our business, and any failures could harm our business, results of operations and financial condition.”

AI is unlikely to contest a moat that is physical, regulated or balance-sheet-funded; here it reads more as a cost tool than a threat, and the company is using it that way.

Read from the filing's own risk factors, paired with the industry's structure under its SIC code; the durability is read above, the price below.

All figures as filed; the source filing is linked above.

Current Position

as of the latest quarter, Mar 31, 2026

Can the business pay what it owes this year, off the freshest balance sheet: the quality of the assets, the debt actually coming due, and what a low ratio means here.

Current assets$14.0B

Cash & short-term investments$5.8B
Receivables$2.0B
Other current assets$6.2B

Current liabilities$28.4B

Debt due within a year$4.1B
Accounts payable$3.6B
Other current liabilities$20.7B

Current ratio0.49×all current assets ÷ what's due · Graham looked for 2×

Quick ratio0.49×stricter: inventory excluded

Cash ratio0.20×strictest: cash alone against what's due

Working capital($14.4B)the cushion left after near-term bills

Debt due this year vs. cash$4.1B due · $5.8B cash covered by cash on hand, no refinancing forced · both figures from the Mar 31, 2026 balance sheet

Revenue, latest quarter vs. a year ago+10.8%the freshest read on whether the business is still growing

Current ratio, recent quarters0.6× → 0.5×

Deeper floors

Tangible book value($10.2B)equity stripped of goodwill & intangibles

Debt incl. operating leases$33.8B$6.8B of it operating leases; with finance leases, “total fixed claims” below reaches $36.3B (annual-report basis)

Deferred revenue$7.4Bcustomer cash collected before delivery; operating float

From the company's latest filing.

Debt maturity

the debt note, SEC EDGAR →

Not how much it owes, but when it falls due, and against what. The ladder the company files, beside cash on hand and a year's owner earnings.

'26$3.6B

'27$4.5B

'28$7.3B

'29$4.0B

'30$730M

'31$4.7B

Bars scaled to the largest single year.

Due in the next 12 months$3.6Bthe first rung: what must be repaid or rolled over within the year

Within two years$8.1Bthe near wall, the part most exposed to today’s credit conditions

Biggest single year$7.3Bin 2028the lumpiest maturity, where a refinancing, if needed, is largest

Due over the next five years$24.8Bthe near slice; the balance sheet carries $28.6B of debt in all

Against what the business has and earns

Cash & short-term investments, Mar 31, 2026$5.8B

One year of owner earnings (FY2025)$899M

Together, against $3.6B due next year1.8×

Cash on hand as of Mar 31, 2026 plus a year’s owner earnings comes to $6.7B against the $3.6B due in the twelve months after the Dec 31, 2025 schedule: 1.8 times it.

Maturity schedule extracted from the company’s Dec 31, 2025 annual report and reconciled to the total the table states.

Lease obligations

the lease note, SEC EDGAR →

Debt by another name. What the business owes on the property, aircraft, stores and equipment it rents rather than owns is a fixed claim due on a schedule; added back to the debt, it is the true leverage. That ladder, operating and finance leases together, and what it adds to the debt on the page above.

Operating leasesFinance leases

'26$1.7B

'27$1.5B

'28$1.4B

'29$1.2B

'30$1.1B

later$3.3B

Lease payments by year, scaled to the largest; “later” is everything beyond year five, shown apart. These are the contractual cash payments, before the interest the filing imputes back out to the balance-sheet liability.

Due in the next 12 months$1.7Ba fixed cash payment, owed whether or not the business has a good year

Total lease payments$10.2Bevery year plus the tail, undiscounted: the full cash the leases will take

On the balance sheet$7.7Bthe present value of those payments, the recognised lease liability

True leverage: debt plus leases

On-balance-sheet debt$28.6B

Lease obligations (present value)$7.7B

Total fixed claims on the business$36.3B

Counting the leases the way Buffett does, the fixed claims on this business come to $36.3B, of which the leases are 21%. The lease wall above and the debt schedule together are the calendar of what must be paid, and when.

Lease ladder read from the ASC 842 tags in the company’s Dec 31, 2025 annual report and reconciled: the yearly buckets sum to the undiscounted total, which less the imputed interest equals the balance-sheet liability; a ladder that doesn’t tie out is withheld.

How the cash was used, 2016–2025

Over the record, the business generated $25.8B of operating cash; how management split it reads as a reinvestor, most operating cash is plowed back into the business.

Reinvested$33.5B · 130%
Dividends$829M · 3%
Buybacks$8.3B · 32%

Returned to owners$9.1B
200% of the owner earnings the business produced over the span, $829M as dividends and $8.3B as buybacks.
Source of funding−$16.7B
Reinvestment and shareholder returns ran $16.7B beyond the operating cash the business generated, so the gap was financed off the balance sheet: debt rose from $24.6B to $27.3B.
Average price paid for buybacks$38.99
Across the years where the filing reports a share count, 211M shares were bought for $8.2B, about $38.99 each. Year to year the price paid ranged from $27.12 (2020) to $50.40 (2018); its heaviest year, 2016, paid $37.56 ($4.5B).
Net change in share count18.9%
The diluted count rose from 556M to 661M: issuance (stock pay, deals) outran any buybacks, so owners were diluted on net.
Dividend record$0.09/sh
Paid in 5 of the years on record, the per-share dividend shrinking about 31% a year. It was cut at least once along the way.

Buybacks are gross of stock issued to staff; the share-count line above is the net of that, the figure that decides whether owners gained. The average price paid blends a year of purchases (and any accelerated repurchase), so it is close, not exact. The record of where the cash went and on what terms.

Management, ownership & pay

read the proxy →

From the proxy: how much of the business the people running it own, and how they are paid, beside what the business earned for its owners in the same years.

Fiscal year	Pay, as filed	“Actually paid”	Owner earnings
2021	$7.2M	$8.1M	$496M
2022	$4.9M	$3.5M	($373M)
2022	$6.5M	$3.9M	($373M)
2023	$31.4M	$33.8M	$1.2B
2024	$15.6M	$24.0M	$1.3B
2025	$13.9M	$3.4M	$899M

Both pay figures are the company’s own, from the pay-versus-performance table its proxy statement files. “As filed” is the Summary Compensation Table total: salary, bonus, and equity awards at their value on the day of grant. “Actually paid” is the SEC’s prescribed recalculation, which re-marks those equity awards to what they became as they vested; it can swing far above or below the filed figure in either direction, and negative years occur. Owner earnings are the whole business's, from the record above, for the same fiscal years.

Insider ownership<1%
The stake all directors and executive officers hold together, per the 2026 proxy: skin in the game, the first thing Munger reads.
Stock-based compensation$57M
The slice of the business handed to employees in shares this year, 0% of revenue, equal to 4% of operating profit. Buffett's oldest accounting fight: this is compensation, compensation is an expense, real whether or not the headline earnings admit it. One trap: the cash-flow statement adds SBC back, so the operating cash, and the owner earnings drawn from it, are flattered by exactly this amount; counted as the cost it is, what an owner keeps is lower.

Inverting the record

Invert: instead of why American Airlines Group is a good business, the question is what would make owning it a mistake, and whether those marks are in the record. Disconfirming tests across 2016–2025.

2 of the 5 tests turned up something to look into; the other 3 came back clean.

Look hereIs it less profitable than it was?2.1% vs 6.7%
The owner-earnings margin averaged 6.7% early in the record and 2.1% across the last three years, and the latest year has not recovered. Ask the filing whether that is a structural drift or a cyclical trough — price, mix, cost, or a competitor — and whether it is permanent.
Look hereDid the share count rise anyway?18.9%
Diluted shares grew 18.9% over 2016–2025, even as the company spent $8.3B on buybacks. The repurchases were outrun by issuance — to staff, in a raise, or in a deal — and the filing says which; owners' slice still shrank. Read the buyback line beside this one, not on its own.

And these came back clean

Did debt outgrow the business?
Did receivables and inventory outpace sales?
Are "one-time" charges a yearly habit?

Each test is read from the filings and is noisy alone; a flag can mark a cyclical trough or a year of heavy investment as easily as a problem. The filing says which.

Peers, Airlines

The same industry, side by side on owner economics. Each figure is a through-cycle median, so a peak or trough year can’t distort it; the group median at the foot is the line to read each against.

Company	Revenue	Gross margin	Op. margin	ROIC	Owner earn. margin
FDXFedEx Corporation	$87.9B	77%	6.4%	10%	3%
DALDelta Air Lines Inc.	$63.4B	—	9.6%	16%	9%
UALUnited Airlines Holdings	$59.1B	—	7.9%	12%	9%
AALAmerican Airlines Group	$54.6B	—	5.3%	8%	2%
LUVSouthwest Airlines Co.	$28.1B	—	7.6%	11%	11%
ALKAlaska Air	$14.2B	—	6.3%	7%	10%
JBLUJetBlue Airways Corporation	$9.1B	—	-1.9%	-2%	4%
SKYWSkyWest Inc.	$4.1B	12%	11.3%	6%	22%
Group median	—	—	7.0%	9%	9%

The price

What a price has to assume.

What the price implies

reverse-DCF

Type today's close and see the owner-earnings growth you'd have to believe to justify it, beside what American Airlines Group has delivered.

Today’s price $

Through the cycle, American Airlines Group earns about $1.3B on its 2.3% median owner-earnings margin. This year’s 1.6% margin runs below that; the reported figure may understate a lean year. Normalize, below, values the price on that through-cycle figure rather than the latest year.

Base Normalize · through-cycle ($1.3B) Net of stock comp (−$57M) Steady-state · maintenance capex ($2.7B)

—

The assumptions Required return 9% Years of high growth 10 Terminal growth 2.5%

9.0% = the 4.55% 10-year Treasury (Jul 15, 2026) + 4.45 points of equity premium. The rate you require is yours to set.

Enter a price above to run it.

Implied by the price—

Owner-earnings growth · ’21→’25+106%/yr

Owner-earnings growth, delivered—

Owner-earnings yield—

P/E (3-yr earnings ’23–’25)—

P/B—

Graham’s price gate—

Graham capped the multiple at 15×; Buffett and Munger let that rule go: a wonderful business can deserve 50× if the thesis holds. The gate marks the bargain-hunter's floor.

Against a high-grade bond: Graham’s yardstick bond yield%

Prefilled with the 10-year Treasury (4.55%, as of Jul 15, 2026). Edit it for today’s exact figure, or a AAA corporate yield.

Graham measured a stock against the bond you could own instead, the heart of his margin of safety. Enter a price above to weigh the owner-earnings yield against this bond.

Free cash flow $1.1B on 661M shares outstanding, per the 10-Q cover, as of 2026-04-17; net debt $21.5B. The base is the latest year by default; Normalize values it on the through-cycle median owner-earnings margin (to avoid paying on a peak year). Net of stock comp treats option pay as the expense it is. Capex ($3.8B) runs well above depreciation ($2.2B), so this is a build-out; Steady-state swaps total capex for maintenance (≈ depreciation), lifting the base to about $2.7B, the cash it would throw off if it stopped expanding. The dials set the multiple a growth belief justifies; the price, and every dollar on this page, is yours.

Weigh AAL against another business →

The owners of AAL: the meeting and the votes →

Cite: Owner Scorecard, "American Airlines Group (AAL), the owner's record," https://ownerscorecard.com/c/AAL, data as of 2026-07-09.

Manual order: ← AA its page in the Manual AAMI →

Industry order: ← 9202 the Airlines chapter ALGT →