In a recent note, Citi aviation analyst John Godyn rated all U.S. carriers he covers as high-risk plays, with the sole exception of one major competitor. Godyn cited American Airlines’ leverage ratio of 6.8x net debt to EBITDA and narrow free cash flow margins of 2.5% over the past 12 months as key vulnerabilities. He also highlighted the airline’s exposure to volatile jet fuel, which has accounted for roughly 30% of operating expenses this year. The firm maintained a cautious view on American’s ability to deliver on its capacity growth targets of 8% in fiscal 2026, warning that ongoing labor negotiations could further compress profitability.

During a leadership meeting in Dallas this week, representatives from the Allied Pilots Association, which represents approximately 15,000 American Airlines pilots, debated whether to call for CEO Robert Isom’s resignation. Frustrations center on crew scheduling shortfalls that contributed to 1,200 flight cancellations in the first quarter and on prolonged contract talks that have stretched beyond 18 months. Pilot leaders argued that management’s failure to secure enough junior pilots has forced senior crews into costly overtime and disrupted more than 75% of peak summer long-haul rotations.

According to Zacks Investment Research, American Airlines currently holds a Rank #3 (Hold) based on its earnings estimate revisions. The consensus full-year adjusted EPS forecast has been cut from $1.20 to $0.95 over the past 60 days, as analysts have reacted to higher maintenance expense and slower passenger revenue per available seat mile (PRASM) growth, which stood at 2.8% year-over-year in Q1. However, Zacks noted that American’s forward EV/EBITDAR multiple of 8.1x compares favorably to a historical average of 9.5x, suggesting the stock may offer moderate upside if the carrier can stabilize unit revenues and lock in labor agreements within the next 6 to 9 months.

American Airlines has formally requested 12 more departure gates at Chicago O’Hare International, where it already operates 85 daily departures. Management estimates the added gates could drive a 5% increase in annual seat capacity and boost network revenue by roughly $200 million per year. The expansion plan, submitted to the city’s aviation department, forecasts incremental pre-tax operating margin improvement of 150 basis points in the first full year of service, as higher slot utilization is expected to reduce ground handling costs and dilutive regional flying.