American Airlines (AAL +1.25%) is the world’s largest airline by several measures, operating nearly 6,800 daily flights to about 350 destinations across more than 40 countries.
Like all airlines, American is highly cyclical. Demand rises when the economy is strong and falls sharply during downturns. The company survived the pandemic with more than $10 billion in government aid and has since focused on rebuilding profitability through cost control, domestic route strength, loyalty programs, and fleet upgrades.
Fuel remains one of the airline’s biggest variables, accounting for roughly 40% to 50% of operating costs. After peaking in 2022, jet fuel prices fell below $2 per gallon in mid-2025, offering near-term relief -- though long-term energy transitions could raise costs again.
Looking ahead, American is betting on efficiency. In 2024, it placed a major order for 260 new aircraft from Boeing, Airbus, and Embraer to replace older planes and lower operating costs over time.
How to buy American Airlines stock
- Open your brokerage app: Log in to your brokerage account where you handle your investments. If you don't have one yet, take a look at our favorite brokers and trading platforms to find the right one for you.
- Fund your account: Transfer money so you’re ready to invest.
- Search for American Airlines: Enter the ticker "AAL" into the search bar to bring up the stock's trading page.
- Decide how many shares to buy: Consider your investment goals and how much of your portfolio you want to allocate to this stock.
- Select order type: Choose between a market order to buy at the current price or a limit order to specify the maximum price you're willing to pay.
- Submit your order: Confirm the details and submit your buy order.
- Review your purchase: Check your portfolio to ensure your order was filled as expected and adjust your investment strategy accordingly.
Should you invest in American Airlines stock?
You may want to avoid American stock if:
- You believe that competing airlines will take a bite out of American's market.
- You're worried about lawsuits and increased regulatory oversight of airlines.
- You expect inflation will continue to increase gas prices and cut into travel budgets.
- You're wary of companies that are highly cyclical, such as airlines.
- You think American shares are trading at unrealistically high prices.
- Your portfolio already has enough transportation stocks.
On the other hand, you may want to go ahead and buy American stock if:
- You think American will continue to be one of the world's largest airlines.
- You believe people will continue to flock to airports for business and leisure travel.
- You think the recent decline in inflation will continue to decrease fuel costs for airlines.
- You'd like to balance your portfolio with a stock dedicated to a specific mode of transport.
- You think American stock is undervalued and will rise as it expands into new markets.
- You're excited by American's plans to expand and upgrade its fleet.
As with any other investment, there's a short answer to whether you might consider investing in this stock: It depends. Factors that might affect your decision include the level of your portfolio diversification, personal risk tolerance, company and industry knowledge, and assessment of American's competitive position.
NASDAQ: AAL
Key Data Points
Is American Airlines profitable?
American Airlines is experiencing a "challenging economic environment," CEO Robert Isom said in the company's first-quarter 2025 earnings report. While year-over-year revenue rose to $12.6 billion, the company posted a $473 million net loss during the quarter.
Company officials estimated that American lost $200 million in revenue as a result of the January 2025 mid-air collision that killed 67 people over Washington, D.C. In addition, worries over the direction of the economy caused a decline in domestic leisure travel that began in February.
Despite the setbacks, the company finally reached an agreement in September 2024 with its 28,000 flight attendants, who make up the largest unionized segment of the airline's workforce. The five-year deal raised cabin crew salaries by as much as 20%.
Does American Airlines pay a dividend?
American is one of the few S&P 500 companies that doesn't pay a shareholder dividend. It halted dividend payments in 2020 during the height of the COVID-19 pandemic and hasn't restored them.
A statement on American's investor relations website doesn't offer much guidance: "In 2020, we suspended our dividend program. Any future dividend will be declared at the discretion of our Board, and will be subject to a number of economic, legal and other relevant factors."
How to invest in American Airlines through ETFs
For investors who don't want to put all their eggs in one basket, exchange-traded funds (ETFs) are an excellent alternative to individual stock-picking. Since ETFs are a collection of stocks, a poor quarter or year by a couple of its stocks doesn't necessarily mean major losses by investors.
Here are four ETFs that offer exposure to American Airlines while not betting entirely on the aviation giant:
- Vanguard Total Stock Market ETF (VTI -0.16%). The fund holds more than 3,700 stocks -- literally, every security that can be purchased on U.S. exchanges -- and is a weighted fund, which means its performance will be more heavily tied to companies with large market capitalizations.
- Vanguard S&P 500 ETF (VOO -0.14%). A slightly narrower option might be the Vanguard S&P 500, which tracks the largest and strongest companies in the United States, including American Airlines. The ETF makes sense for investors who are content to track the bellwether index, which has averaged a 12.57% annual return over the past decade.
- U.S. Global Jets ETF (JETS +0.14%). An even more focused option for investors interested in American Airlines might be the U.S. Global Jets ETF, a fund dedicated to the airline industry that has $796 million in assets under management (AUM).
- iShares US Transportation ETF (IYT -0.19%). The transportation ETF, which has $566.7 million in net assets, is heavily focused on railroad stocks but also includes trucking, air freight, and airlines; American stock makes up 1.26% of the fund's assets.
Exchange-Traded Fund (ETF)
Will American Airlines stock split?
It's extremely unlikely that American Airlines will announce a stock split anytime soon. The airline last announced a 2-for-1 split in May 1998 as its stock price approached $150 per share. However, that occurred more than 25 years and one bankruptcy ago.
Generally, companies announce stock splits to encourage more investors to buy their stock at less-expensive prices -- not really a problem for American at the moment since it's been trading between $9 and $30 per share for the last year.
Short version: If you're an investor who believes stock splits can help rally share prices, don't hold your breath.
The bottom line
Investors who put their money into American should be aware of the cyclical nature of the airline industry. When times are good, the returns are likely to be good; when times are bad, the returns aren't likely to be as good and may even veer into a repeat of the company's 2011 bankruptcy.
Share prices haven't impressed many investors over the last decade, but they also haven't exactly plunged into penny stock territory. If you believe that the appetite for travel in the U.S. (and elsewhere) will remain as strong in the future as it has in the immediate aftermath of the COVID-19 pandemic, American might prove to be a good option for patient, buy-and-hold investors.
Related investing topics
FAQ
About the Author
