American Airlines Refutes United’s Claim of $1B Loss at Chicago O’Hare
American Airlines refuted United CEO Scott Kirby’s claim that AAL will post a $1 billion loss at Chicago O’Hare this year, emphasizing that its own analysis forecasts flat-to-positive operating results at ORD. The dispute highlights intensifying competition at O’Hare following United’s projected $500 million profit advantage this year.
1. Winter Storm Fern Triggers Broad Travel Waivers
American Airlines has extended travel waivers for customers flying through February 4th after Winter Storm Fern threatened to drop up to 12 inches of snow, sleet and ice across 24 states. The carrier will allow unlimited changes or refunds on more than 5,000 daily flights operating into or out of affected hubs including Chicago O’Hare, Dallas/Fort Worth and Charlotte. AA expects operational costs to rise by approximately $15 million over the waiver period, driven by de-icing, crew repositioning and ground handling delays. Investors should note that similar winter events in 2024 reduced unit revenues by nearly 2% in the first quarter, highlighting the potential earnings impact if service disruptions persist into late February.
2. American Pushes Back on United’s Chicago Profitability Claims
Responding to United Airlines CEO Scott Kirby’s charge that American will lose $1 billion at O’Hare this year while United pockets over $500 million, AA executives pointed to recent slot swaps and a 4% increase in summer flight seat capacity at ORD. CFO Derek Kerr noted American’s incremental contribution margin at Chicago improved from negative $75 per available seat mile (ASM) in 2024 to minus $40 per ASM through January 2026, projecting a break-even on Chicago operations by the end of the second quarter. The carrier added that structural slot limitations and higher airport fees at O’Hare remain challenges, but strategic partnerships with Spirit and JetBlue are expected to deliver network synergies valued at $200 million annually.
3. Key Q4 Metrics Beyond Revenue and EPS
Analysts forecast American Airlines will report a Q4 systemwide load factor of approximately 85.3%, up from 84.6% a year earlier, reflecting steady holiday travel demand. Consolidated capacity (ASMs) is expected to increase by 3.8% year-over-year, while total traffic (RPMs) may rise 4.2%, suggesting marginal unit revenue strength. On the cost side, non-fuel unit costs excluding special items are projected at $0.124 per ASM, against a fuel price assumption of $2.80 per gallon. Free cash flow is estimated to exceed $1.5 billion for the quarter, supported by $1.8 billion in pre-delivery payment financing and disciplined capital expenditures capped at $850 million.