American Airlines Group (AAL)

Return on total capital

Dec 31, 2024 Sep 30, 2024 Jun 30, 2024 Mar 31, 2024 Dec 31, 2023 Sep 30, 2023 Jun 30, 2023 Mar 31, 2023 Dec 31, 2022 Sep 30, 2022 Jun 30, 2022 Mar 31, 2022 Dec 31, 2021 Sep 30, 2021 Jun 30, 2021 Mar 31, 2021 Dec 31, 2020 Sep 30, 2020 Jun 30, 2020 Mar 31, 2020
Earnings before interest and tax (EBIT) (ttm) US$ in thousands 2,691,000 2,108,000 1,866,000 2,793,000 3,266,000 4,257,000 5,567,000 4,327,000 2,147,000 -118,000 -593,000 -1,169,000 -748,000 -2,458,000 -5,895,000 -8,795,000 -10,226,000 -6,957,000 -3,361,000 201,000
Long-term debt US$ in thousands 29,813,000 31,110,000 31,191,000 31,827,000 3,700,000 3,700,000 34,057,000 34,459,000 34,903,000 36,158,000 36,354,000 37,093,000 37,323,000 31,911,000 39,421,000 39,124,000 32,021,000 32,203,000 27,307,000 23,181,000
Total stockholders’ equity US$ in thousands -3,977,000 -4,854,000 -4,746,000 -5,500,000 -5,202,000 -5,136,000 -4,385,000 -5,771,000 -5,799,000 -7,893,000 -8,422,000 -8,940,000 -7,340,000 -7,437,000 -7,667,000 -7,945,000 -6,867,000 -5,528,000 -3,169,000 -2,636,000
Return on total capital 10.42% 8.03% 7.06% 10.61% — — 18.76% 15.08% 7.38% -0.42% -2.12% -4.15% -2.49% -10.04% -18.56% -28.21% -40.65% -26.08% -13.92% 0.98%

December 31, 2024 calculation

Return on total capital = EBIT (ttm) ÷ (Long-term debt + Total stockholders’ equity)
= $2,691,000K ÷ ($29,813,000K + $-3,977,000K)
= 10.42%

The return on total capital of American Airlines Group has shown significant fluctuations over the past few years. The ratio was positive at 0.98% as of March 31, 2020, indicating a modest return on the company's total capital. However, in subsequent quarters, the return on total capital turned negative, reaching a low of -40.65% by December 31, 2020, reflecting challenges in generating profits relative to the total capital employed.

The negative trend continued into 2021, with return on total capital ranging from -28.21% to -2.49%. This improved slightly by March 31, 2022, reaching -4.15%, but remained negative. From June 30, 2022, the ratio started to show a positive trend, with returns gradually increasing to 18.76% by June 30, 2023. This positive trend continued to improve, reaching 10.61% by March 31, 2024.

Overall, the return on total capital for American Airlines Group has been volatile, showing periods of negative returns followed by a more recent positive trend. It will be important to monitor the company's performance to assess its ability to sustain and improve returns on its total capital in the future.