How Spirit Airlines' Struggles Have Changed the Investment Story at American Airlines (AAL)

• Earlier this week, Spirit Airlines disclosed serious doubts about its ability to continue as a going concern, signaling possible cutbacks or an exit from the airline market.
• This sparked a positive market reaction for American Airlines, as reduced industry capacity could strengthen the ability of remaining carriers to maintain or improve ticket pricing.
• We’ll explore how Spirit Airlines’ financial uncertainty, and the potential for lower industry capacity, factors into American Airlines’ investment outlook.

AI is about to change healthcare. These 30 stocks are working on everything from early diagnostics to drug discovery. The best part - they are all under $10b in market cap - there's still time to get in early.

American Airlines Group Investment Narrative Recap

To own shares of American Airlines Group, investors need to believe the company can capitalize on industry capacity shifts and manage costs despite its large debt and exposure to the competitive US market. Spirit Airlines’ financial uncertainty could provide a short-term boost by easing domestic pricing pressure, but it does not fundamentally change the primary catalysts, recovery in US travel demand, and the key risk remains American’s high debt and ongoing cost inflation.

The most relevant recent announcement to this news is American’s amended credit agreements on 19 December 2025 to optimize loan terms and improve liquidity. As industry competitors face distress, American’s proactive approach to managing its balance sheet is especially timely, with the flexibility to withstand market swings and address margin pressures as the domestic market evolves.

However, investors should not overlook the flip side: even as rivals stumble, American’s significant net debt and rising labor costs can quickly become major headwinds if travel demand does not…

Read the full narrative on American Airlines Group (it's free!)

American Airlines Group is expected to generate $61.8 billion in revenue and $1.8 billion in earnings by 2028. This outcome assumes a 4.5% annual revenue growth rate and an earnings increase of $1.2 billion from current earnings of $567 million.

Uncover how American Airlines Group's forecasts yield a $15.02 fair value, a 17% upside to its current price.

Exploring Other Perspectives

Simply Wall St Community members provided 11 fair value estimates for American Airlines, ranging from US$9 to US$23.37. While views on value vary, persistent domestic market challenges and intense competition shape how future financial performance could diverge widely, making it essential to consider multiple viewpoints before investing.

Explore 11 other fair value estimates on American Airlines Group - why the stock might be worth as much as 82% more than the current price!

Build Your Own American Airlines Group Narrative

Disagree with existing narratives? Create your own in under 3 minutes - extraordinary investment returns rarely come from following the herd.

• A great starting point for your American Airlines Group research is our analysis highlighting 3 key rewards and 2 important warning signs that could impact your investment decision.
• Our free American Airlines Group research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate American Airlines Group's overall financial health at a glance.

Interested In Other Possibilities?

The market won't wait. These fast-moving stocks are hot now. Grab the list before they run:

• This technology could replace computers: discover 26 stocks that are working to make quantum computing a reality.
• Find companies with promising cash flow potential yet trading below their fair value.
• Uncover the next big thing with financially sound penny stocks that balance risk and reward.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com