Fort Worth-based American Airlines Group Inc. (AAG) is generating strong and improving earnings and cash flow, thanks to revenue and cost synergies from the merger of AMR Corp. and US Airways Group in December 2013. We expect gradual improvement in AAG's credit measures, despite heavy capital expenditures and a shareholder rewards program the company announced in July 2014. We are raising our ratings on AAG and its subsidiaries, American Airlines Inc. and US Airways Inc., including raising the corporate credit ratings on the entities to 'B+' from 'B'. We are also raising or affirming ratings on enhanced equipment trust certificates, based on the higher corporate credit rating and particular situations of the certificates. The positive outlook incorporates our expectation for
