American Airlines Group Inc at Bernstein Insights Industrials Forum Summary

The following is excerpted from the question-and-answer section of the transcript.

Question: David Vernon - Sanford C Bernstein & Co LLC - Analyst : <_ALACRA_META_ABSTRACT>We're going to start off with a couple of prepared remarks, and then we will dig right into the Q&A. So first of all, thank you guys very much for coming out. I appreciate you joining us for the event. Why don't you go ahead and take us out?

Question: David Vernon - Sanford C Bernstein & Co LLC - Analyst : So I definitely want to dig into the lot of that. A lot of the issues that you brought up in terms of what's next. But maybe if we were to start and think about government shutdown framing what that impact is kind of near term. One of your peers had called out maybe a $200 million sort of pretax profit headwind from the government shutdown. Can you give us a sense for how to think about the right way to assess the impact on American's performance in the fourth quarter from -- LSEG STREETEVENTS | www.lseg.com | Contact Us consent of LSEG. 'LSEG' and the LSEG logo are registered trademarks of LSEG and its affiliated companies. DECEMBER 10, 2025 / 2:00PM, AAL.OQ - American Airlines Group Inc at Bernstein Insights Industrials Forum

Question: David Vernon - Sanford C Bernstein & Co LLC - Analyst : Okay. So as you think about maybe I know it's early to talk about plans and stuff like that, but if you think about the growth aspirations your have for the network kind of looking forward. Obviously, some of that's kind of demand oriented. But if you think about where we are in the economy and so nothing changes, what's the right kind of range of ASM growth to be thinking about for the next couple of years?

Question: David Vernon - Sanford C Bernstein & Co LLC - Analyst : And just to be clear as far as kind of that being able to grow 5% you're still going to be monitoring around what, the market is going to absorb as opposed to saying, hey, we're going to grow 5%.

Question: David Vernon - Sanford C Bernstein & Co LLC - Analyst : Okay. And then within the footprint, you mentioned sort of Philadelphia and Miami and some of the hubs. Is that really where the growth is going to be centered or is it going to be also in more battleground areas like LA, Chicago.

Question: David Vernon - Sanford C Bernstein & Co LLC - Analyst : Okay. And as you think about that framework of bookends of growth, Devon, in 0% to 5% for ASMs, what's a range of CASM ex that folks should be thinking about, given that we have some certainty on the labor cost side, can you help us as analysts kind of think about at the low end it would be here, at the high end to be here?

Question: David Vernon - Sanford C Bernstein & Co LLC - Analyst : Okay. And is there a little bit of gauge benefit in there as well with the new aircraft coming in? Like how do I think about that?

Question: David Vernon - Sanford C Bernstein & Co LLC - Analyst : Okay. So maybe kind of stepping back and looking at the industry. One of the things that I've seen that's been fascinating in the call it, 10-years now, I've been covering the airlines. You're seeing a real bifurcation, I think, in the industry. It's moving away from a commodity sort of industry where low-cost, low-price wins to something more where airlines are trying to really engage on the premium product side. LSEG STREETEVENTS | www.lseg.com | Contact Us consent of LSEG. 'LSEG' and the LSEG logo are registered trademarks of LSEG and its affiliated companies. DECEMBER 10, 2025 / 2:00PM, AAL.OQ - American Airlines Group Inc at Bernstein Insights Industrials Forum I wanted to ask you, Robert, where do you view your positioning in the industry today, right? As far as kind of -- you mentioned before you're premium airline, there are other airlines that are also premium airlines that maybe have a little bit of a different margin profile. Like how do you view kind of where you are? What's working? And what could be better and your sort of assessment of where America is today on that drive to really kind of harvest the premium part of this market.

Question: David Vernon - Sanford C Bernstein & Co LLC - Analyst : Is it -- I mean there's a perception, I think, amongst some investors that maybe you're not as well positioned in that premium side and that maybe explains some of the margin gap relative to peers. Do you think that's accurate, not accurate? Like what is the investment community missing when we're --

Question: David Vernon - Sanford C Bernstein & Co LLC - Analyst : Okay. And then as you think about like the hard product side of it, obviously, a number of years ago, with the Oasis layout, you guys moved away from seatback entertainment right? Is that something that you're going to go back and now try to change? Or do you feel like that's the right product to be putting out in the market. Like one of the examples that gets brought up to me is, American is not necessarily there. They don't have the same kind of seatback entertainment, I'm trying to get a sense for kind of how you view this stuff?

Question: David Vernon - Sanford C Bernstein & Co LLC - Analyst : Okay. So you did mention earlier that you've started a kind of a customer experience initiative and obviously, you've got a new Head of Commercial, who has joined us today. When you think about the priorities you're setting for the team and going after this premium margin opportunity, right? What are the kind of KPIs you're setting out there for them in terms of whether it's closing an experience gap, whether it's the surveys that come out from various parties like help us understand kind of what the -- what success for those teams?

Question: David Vernon - Sanford C Bernstein & Co LLC - Analyst : Okay. And maybe as you think about the margin gap on some of these premium experiences, right? You mentioned lie-flat is going to be 50% growth, premium -- international premium economy is going to be 30% growth. Can you give us a sense for kind of like the relative margin profiles of those premium products?

Question: David Vernon - Sanford C Bernstein & Co LLC - Analyst : I know it's higher. That's not (technical difficulty). LSEG STREETEVENTS | www.lseg.com | Contact Us consent of LSEG. 'LSEG' and the LSEG logo are registered trademarks of LSEG and its affiliated companies. DECEMBER 10, 2025 / 2:00PM, AAL.OQ - American Airlines Group Inc at Bernstein Insights Industrials Forum

Question: David Vernon - Sanford C Bernstein & Co LLC - Analyst : Okay. And as you think about the -- sort of going back to that question around the priorities for the commercial team, right? You mentioned unit revenue. What about profitability? Like how are you thinking about the profitability of the airline kind of relative to peers, right? There's a lot of commentary that says two airlines contribute 50% of the profit pool. And I just -- I'm not -- just a perspective on it.

Question: David Vernon - Sanford C Bernstein & Co LLC - Analyst : All right. So you mentioned WiFi a couple of times. And I understand you're rolling satellite across the fleet. What about the idea of a Starlink or a low earth satellite kind of network.

Question: David Vernon - Sanford C Bernstein & Co LLC - Analyst : Okay. So one of the questions I got from the audience here, as you think about from an experience perspective, right, AI, large language models becoming a lot more prevalent in the way I think consumers are thinking about booking as well as some of the Internet intermediaries are kind of dabbling around the stuff. How are you guys thinking about integrating those tools into the front end? And what kind of revenue opportunity does that kind of present? How do you think about that as a revenue opportunity? LSEG STREETEVENTS | www.lseg.com | Contact Us consent of LSEG. 'LSEG' and the LSEG logo are registered trademarks of LSEG and its affiliated companies. DECEMBER 10, 2025 / 2:00PM, AAL.OQ - American Airlines Group Inc at Bernstein Insights Industrials Forum

Question: David Vernon - Sanford C Bernstein & Co LLC - Analyst : And do you think that technology could be transformative in a way in terms of what channel some of the leisure customers being booked? Do you think you see an opportunity to maybe accelerate the pace of direct bookings? Or do you see this as potentially an area where Google or whoever comes up with a late special sauce that then pushes it a little bit in a different direction?

Question: David Vernon - Sanford C Bernstein & Co LLC - Analyst : Okay. One area that I didn't hear come out was revenue management and pricing. How do you think about AI in the world of sort of the commercial sort of market manager level.

Question: David Vernon - Sanford C Bernstein & Co LLC - Analyst : Okay. So you mentioned the Citi partnership in your opening remarks. I was just wondering if there's anything that's special or unique about that relationship relative to some of the other co-brand agreements? And maybe you can talk a little bit about what that is.

Question: David Vernon - Sanford C Bernstein & Co LLC - Analyst : And as you think about that, I think you guys have sketched out sort of 10% annual growth in remuneration of that over the next couple of years as we're getting closer to it, as you're seeing some of the changes in the structure of the program, any thoughts on that number going up downside right left? LSEG STREETEVENTS | www.lseg.com | Contact Us consent of LSEG. 'LSEG' and the LSEG logo are registered trademarks of LSEG and its affiliated companies. DECEMBER 10, 2025 / 2:00PM, AAL.OQ - American Airlines Group Inc at Bernstein Insights Industrials Forum

Question: David Vernon - Sanford C Bernstein & Co LLC - Analyst : All right. So you mentioned earlier, you've been a little bit behind in international because of some of the delays on the 787s. Where do you see the best opportunity to deploy those aircraft in terms of maybe catching up -- for your network, what are your priorities in terms of international growth?

Question: David Vernon - Sanford C Bernstein & Co LLC - Analyst : Okay. And when we talked earlier about the ASM growth envelope, we be thinking international maybe being at the higher end versus domestic in the next couple of years? Like how do we think about? LSEG STREETEVENTS | www.lseg.com | Contact Us consent of LSEG. 'LSEG' and the LSEG logo are registered trademarks of LSEG and its affiliated companies. DECEMBER 10, 2025 / 2:00PM, AAL.OQ - American Airlines Group Inc at Bernstein Insights Industrials Forum

Question: David Vernon - Sanford C Bernstein & Co LLC - Analyst : Okay. And I think during 3Q, CapEx for next year was kind of ranged 4, 4.5. That's still kind of --

Question: David Vernon - Sanford C Bernstein & Co LLC - Analyst : All right. And then maybe on the balance sheet side, right? Obviously, the repair and the debt paydown has been significant, but you still have a lot more leverage, a lot younger fleet. I'd like to get your perspective, Devon, on how comfortable are investors in understanding that fleet versus leverage issue? Because in my conversations, there's a lot of discussion around, well, just the gross leverage is so high. It's hard for people to kind of make that --

Question: David Vernon - Sanford C Bernstein & Co LLC - Analyst : And how have you guys kind of discussed with the Board what that level of net debt to EBITDA is as a target perspective, right? Some of your peers are talking about trying to get gross leverage down to one time. Like are you -- I mean that's obviously --

Question: David Vernon - Sanford C Bernstein & Co LLC - Analyst : Okay. We'll come in here towards the end. But I guess I think when you think about the overall sort of capital return profile from an investor standpoint, where do you start to think about cash returns to investors relative to debt paydown. Or is there a way to at least build a framework for people to think about and say, if I get to that 3x or if I get to 2.5x, then I can start thinking about optionality.

Question: David Vernon - Sanford C Bernstein & Co LLC - Analyst : Okay. We're coming up to the end here. Maybe, Robert, if you want to take us out, give us the high-level pitch on American as an equity.

Question: David Vernon - Sanford C Bernstein & Co LLC - Analyst : Great. Well, with that, I want to close this out here so we can get to you all on schedule. I want to thank you guys all for making the time. Neil, Nat and Devon and Robert. I really appreciate you guys coming out and supporting the conference, and thanks for your time today.