The airline industry is a part of the cyclical transportation segment, which we assess as having "high" industry risk. Largest U.S. airline with extensive route network, following the 2013 merger of AMR Corp. and US Airways Group Inc. to form American Airlines Group (AAG). Above average profitability and much improved operating results because of cost savings that AMR implemented in its 2011-2013 bankruptcy reorganization and revenue and cost synergies that the merger has enabled. Substantial debt and debt-like obligations (pensions, off-balance-sheet leases), although AMR shed some debt and leases in bankruptcy. Strong cash flow generation, but also very sizeable capital spending commitments. AAG has applied excess cash to a mixture of debt reduction, pension contributions, share buybacks, and dividends. The
