American Airlines Q2 Preview: Can Credit Card Boost, Domestic Demand Drive a Beat?

American Airlines Group (NASDAQ:AAL) operates in a highly competitive industry, with rivals employing diverse strategies to capture market share, enhance profitability, and adapt to 2025’s challenges and opportunities. Airlines stocks have soared this earnings season.

Earnings from Delta Air Lines (NYSE:DAL) and United Airlines (NASDAQ:UAL) earlier this month have set higher expectations, and confidence has restored in the industry. Investors are eyeing positive results from American and Southwest Airlines (NYSE:LUV).

Key Highlights:

• The co-branded credit card agreement is projected to boost annual remunerations by 10% starting in 2024. This increase is expected to positively impact cash flow and earnings significantly beginning in 2026.
• American Airlines has projected a 5% increase in unit revenue for Q1 2025, surpassing the growth rates of its major competitors.
• An improved pricing environment and a favorable competitive capacity outlook, especially in the domestic market, could potentially enhance revenue growth.
• A bipartisan group of U.S. senators on Wednesday proposed new airport baggage screening systems and technology updates at checkpoints to improve security and shorten wait times as air travel hits records (Reuters).
• Higher-than-expected cost inflation guidance, with projections of high single-digit unit cost increases in Q1 2025 and mid-single-digit growth for the full year, could reduce profitability margins.

AAL Last Twelve Months Financials and Financial Health

AAL Q2 2025 earnings before market Thursday July 24, 2025

Technical Analysis Perspective

• AAL stock has held 8.25 – 9.05 support since May 2020 (Covid era).
• Prices held the same support in August 2024 and March 2025.
• This support has acted like a trampoline for prices. Prices have strongly pushed higher to 18.30 to 19.10 in January 2025 from August 2024 low (Scenario B).
• Similarly, AAL rolled higher between 20.35 to 22.80 from May 2020 to June 2020 after holding 8.25 – 9.05 base (Scenario A).
• AAL has been trading inside a rising channel since March 2025 after holding 8.50 support.
• AAL is heading to 18.30 – 19.10 provided 10.50 base of the channel remains intact post earnings.

Weekly Candlestick Chart

AAL Seasonality Chart

• AAL closes 0.3% higher in July 50% of the time since 2013, which gives 50% probability of a move either side.

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Ali Merchant is a seasoned financial market professional with expertise in Technical Analysis, Treasury & Capital Markets, Trading, Sales, Research, Training, Fund & Relationship Management, Fintech, and Digitalization. He is a CMT charter holder and an active member of CMT Association, USA, American Association of Professional Technical Analysts, and CMT Association of Canada. He has worked on various roles and organizations in North America and the GCC, such as ABN Amro bank, Thomson Reuters, Refinitiv, MAK Allen & Day Capital Partners (WA:CPAP), and Bridge Information Systems.

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