Last Update17 Apr 25Fair value Decreased 43%
There's a single reason why American is the least attractive of US legacy carriers (in terms of investing, anyway): its balance sheet.
If most airlines and certainly those in the US are loaded up to the hilt with debt, American goes so far as to boast negative equity - any startup would go belly-up with a balance sheet such as this one.
Now, you can survive and even generate decent returns with a precarious capital structure, but of course you're super-sensitive to any shock on the demand side of your business, hitting both revenues and margins - and that is where the clouds gather on American.
After the industry's recent warnings re falling travel demand, the already cut-throat competition for market share will get yet more intensive, while margins will inevitably come under pressure.
I fail to see why American might be an attractive investment proposition outside of the rosiest of economic outlooks, which is not what's at hand right now.
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