American Airlines (AAL 2.85%) has a lot going for it. Based in Fort Worth, Texas, it is the largest airline in the world by many metrics. It operates almost 6,800 flights to roughly 350 airports in four dozen countries.
However, like any other airline, it's been known to hit economic turbulence. Read on to learn how to invest in this aviation giant, find out whether it's profitable, and get an overview of the airline's financial situation.
Overview
American Airlines overview
As Americans have returned to the skies -- often in record numbers -- the nation's airlines, battered by the COVID-19 pandemic and bailed out by taxpayers, have begun to thrive again. American Airlines, the world's largest carrier when measured by fleet, passenger revenue miles, and other metrics, has joined its competition in turning the corner.
Investors, however, can't be guaranteed a smooth ride (even if they're lucky enough to get a comfortable seat). The airline industry is an excellent barometer of the overall economy. When times are good, people will spend money to travel; when downturns occur, airlines can run into serious financial jeopardy.
Barely five years ago, American needed more than $10 billion in grants and loans to stay aloft as the COVID-19 pandemic decimated airline travel. As passengers returned, American emphasized domestic flights, replaced old and expensive airplanes with more efficient ones, enhanced its partnerships with other airlines, and placed more of a premium on credit card programs.
To be sure, there have been hiccups; it was hit with a record $4.1 million fine in August 2023 for leaving thousands of passengers stranded on airport tarmacs between 2018 and 2021. Only months later, however, the airline reported its highest-ever load factor and fewest cancellations for a Thanksgiving travel week, including a nine-day holiday stretch without a single mainline cancellation.
Fuel prices are also a concern for anyone investing in a transportation-related stock since they account for roughly 40% to 50% of operating costs. After peaking at $4 per gallon in mid-2022, jet fuel prices have come back to earth, falling below $2 per gallon in mid-2025. However, as global economies gradually transition to a low-carbon economy, the world's leading trader focused on the oil industry has warned of a gap between supply and demand that's likely to begin in 2025 and could mean higher operating costs for airlines.
Still, American is betting on the future. The company raised eyebrows in early March 2024 by announcing a massive order for 260 new jets from three different suppliers, including 115 more Boeing (BA 0.91%) 737 Max 10 airplanes, adding to an existing order of 70 Max 10 models and with options to purchase 75 more. It also ordered 85 Airbus (EADSY 1.6%) A321neos, a single-aisle model capable of carrying 244 passengers, and predicts it will eventually acquire more than 200 of the planes. In addition, the company has ordered 90 Embraer (ERJ -3.78%) E175 jets for its regional fleet.
How to invest
How to invest in American Airlines
1. Open your brokerage app: Log in to your brokerage account where you handle your investments.
2. Search for the stock: Enter the ticker or company name into the search bar to bring up the stock's trading page.
3. Decide how many shares to buy: Consider your investment goals and how much of your portfolio you want to allocate to this stock.
4. 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.
5. Submit your order: Confirm the details and submit your buy order.
6. Review your purchase: Check your portfolio to ensure your order was filled as expected and adjust your investment strategy accordingly.
Pros and cons
Pros and cons of 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.
Stock
Profitability
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%.
Dividends
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."
Exchange-Traded Fund (ETF)
ETFs
ETFs with exposure to American Airlines
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. In some cases, ETFs are diversified enough that even a downturn in one sector -- such as airlines, which suffered during the COVID-19 pandemic -- can be offset by gains in other sectors.
Here are four ETFs that offer exposure to American Airlines while not betting entirely on the aviation giant:
Vanguard Total Stock Market ETF (VTI -0.23%). If you want everything, the Vanguard Total Stock Market ETF might just be the ticket. 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. The fund has a dividend yield of about 1.3% and also boasts a rock-bottom expense ratio of 0.03%.
Vanguard S&P 500 ETF (VOO -0.24%). 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. Put another way, if you invested $200 every month into the fund for 25 years and assumed a slightly lower-than-average return of 10%, you'd be sitting on a nest egg of $236,000 -- almost four times the amount that you deposited.
U.S. Global Jets ETF (JETS 1.02%). 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). Almost 11% of its assets are invested in Southwest Airlines (LUV 2.64%), but American is a close fourth at 10.1%. It features a 0.6% expense ratio, or $6 for every $1,000 invested in the fund.
iShares US Transportation ETF (IYT 0.33%). If you're looking for something a little more diversified than an index fund that only tracks the airline industry, consider the iShares US Transportation ETF. 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. The fund has an expense ratio of 0.39%.
Stock splits
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.
Related investing topics
The bottom line on American Airlines
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.
FAQ
American Airlines FAQ
Can I buy American Airlines stock?
Yes, but you'll need to set up a brokerage account. You can open one either online or at a brick-and-mortar business.
Is American Airlines stock a good investment?
It depends. If you believe that airline travel will continue to climb and you're willing to consider it a buy-and-hold investment, it could be a good addition to your portfolio.
What airline stock is best to invest in?
The best airline stock depends on your goals. Delta (NYSE:DAL) and Southwest have strong balance sheets, and Alaska Air Group (NYSE:ALK) has a reputation as a solid performer.
Does American Airlines stock pay dividends?
American Airlines suspended its dividend in early 2020 and hasn't announced plans to reinstate it.
