Grupo Aeromexico (NYSE:AERO) executives told investors the carrier finished 2025 with a strong fourth quarter, citing improving demand trends in the second half of the year, record profitability metrics, and continued progress on fleet and customer-experience investments despite a “challenging operating environment” and ongoing regulatory constraints affecting U.S. operations.
Fourth-quarter momentum and operating performance
CEO Andrés Conesa said the fourth quarter “confirmed the recovery momentum” that began in the prior quarter, as demand strengthened meaningfully in the back half of the year across both domestic and international markets. He attributed the improved performance to higher load factors and stronger unit revenues, supported by “network discipline” and revenue management actions.
On safety, Conesa said Aeromexico was recognized by IATA through its Safety Management Systems assessments, calling it the highest level of operational safety recognition and noting it was the first airline in Latin America to achieve the milestone.
Commercial trends: premium, Europe strength, and loyalty growth
Chief Commercial Officer Aaron Murray said full-year 2025 passenger revenue declined 4.4% year-over-year and passenger unit revenue declined 4.9%, reflecting “currency, economic, and geopolitical headwinds” earlier in the year. Those pressures were most pronounced in domestic border cities and the U.S. market, prompting the company to “right-size capacity” in affected geographies.
By contrast, Murray said the fourth quarter produced “record-breaking performance” for passenger revenue and passenger unit revenue, which rose 4.3% and 6.2% year-over-year, respectively. He said strength was broad-based across domestic and international regions, with Europe particularly strong as demand stretched into traditionally weaker periods. Murray added that Aeromexico’s U.S. portfolio improved, with passenger unit revenue up 5% year-over-year in the fourth quarter, marking the third consecutive quarter of sequential improvement.
Management emphasized the growing role of premium travel. Conesa said premium revenue represented approximately 42% of total revenues, nearly 17 points above pre-pandemic levels, and said premium-led demand from corporate and high-income leisure travelers remained strong. Murray noted premium unit revenue growth in the fourth quarter ran six points ahead of the main cabin year-over-year, driven by improvements in paid load factor and yields, which he tied to investments in the premium experience and progress in selling premium products.
The company also pointed to loyalty engagement. Murray said the share of customers participating in Aeromexico’s loyalty program reached a record 37% in the fourth quarter, up seven points year-over-year and up 13 points since the program’s reacquisition and rebranding in 2023. He said Aeromexico plans to launch a new co-branded credit card program with Invex effective June 1, 2026, alongside its American Express partnership.
Financial results: revenue, margins, cash flow, and leverage
CFO Ricardo Sánchez Baker said Aeromexico reported total revenue of $5.4 billion in 2025, up 2% versus 2024 when excluding “extraordinary non-recurring items” in the prior year. He said those 2024 items included one-time compensation from Boeing tied to the 737 MAX grounding and revenue from expired tickets related to prior commercial flexibility initiatives. Fourth-quarter revenue totaled $1.4 billion, up 3% year-over-year excluding those extraordinary items.
On costs, Sánchez Baker said full-year performance benefited from efficiency initiatives and improved fuel consumption per ASM, but these gains were offset by higher labor costs from collective bargaining renegotiations, higher depreciation tied to fleet growth, IPO-related expenses, and a stronger Mexican peso in the second half that increased peso-denominated costs. CASM excluding fuel rose 1.8% year-over-year.
The company’s profitability metrics included record EBITDA levels. Sánchez Baker reported full-year adjusted EBITDA of $1.7 billion and a 31% margin, which he called the highest in company history. Fourth-quarter adjusted EBITDA reached $502 million with a 35% margin, described as the highest quarterly EBITDA on record. Excluding the TechOps transaction and IPO-related expenses, he said full-year adjusted EBITDA was $1.6 billion (30% margin) and fourth-quarter adjusted EBITDA was $435 million (30% margin).
Operating income for 2025 was $928 million with a 17% margin, described as the second-best annual performance in company history, while fourth-quarter operating income was $303 million with a 21% margin, which management said was a record for a fourth quarter. Excluding the TechOps transaction and IPO expenses, operating income was $861 million (16% margin) for the full year and $236 million (16% margin) for the fourth quarter.
Sánchez Baker said operating cash flow totaled $913 million in 2025. Financial debt decreased by $63 million in the fourth quarter and by $156 million for the full year, ending 2025 with adjusted net debt to EBITDA of 1.8x. Aeromexico ended the year with $1.0 billion in cash and cash equivalents; including a $200 million undrawn revolving facility, total liquidity was approximately $1.2 billion, or 23% of last-12-month revenues.
He also said Aeromexico returned over $200 million to shareholders through capital disbursements during 2025, bringing total distributions since December 2023 to approximately $1.3 billion.
TechOps sale and maintenance impact
During Q&A, management discussed the sale of TechOps, a maintenance joint venture previously owned equally by Aeromexico and Delta. Sánchez Baker said both companies sold their stakes, resulting in a $71 million profit recognized in the P&L. He explained that after the COVID-19 crisis, Aeromexico and Delta transferred TechOps operations, management, employees, and licenses to a third party in 2022, and Aeromexico’s ongoing income related primarily to leasing the facilities, which he said was not material.
Management said the sale does not change how Aeromexico maintains its aircraft. Sánchez Baker said Aeromexico continues operating under commercial maintenance agreements with competitive rates, servicing E190s and 737 NG aircraft in Querétaro while handling 737 MAX and 787 maintenance in-house. He added that as Aeromexico has grown its MAX fleet, it relies less on the Querétaro facility.
2026 outlook: capacity, revenue growth, and regulatory issues
Looking ahead, Conesa said Aeromexico plans to grow capacity by around 4% in 2026 with a disciplined approach focused on resilient markets and profitability. He also cited flexibility to respond to potential changes at Mexico City Airport and possible industry consolidation in Mexico. Commercially, he said the airline will selectively expand long-haul flying, including launches of Mexico City–Barcelona and Monterrey–Paris.
Sánchez Baker said consensus estimates call for Mexican GDP growth of 1.2% to 1.5% in 2026, and Aeromexico plans to increase ASM capacity by 3% to 5% for the full year, with growth beginning in the second quarter due to a high first-quarter baseline. For full-year 2026, management guided for revenue growth of 7.5% to 9.5%, adjusted EBITDA margin of 28.5% to 30.5%, and operating margin of 15% to 17%. For the first quarter, Aeromexico expects revenue growth of 10% to 12%, adjusted EBITDA margin of 26% to 28%, and operating margin of 11% to 13%.
Management also shared planning assumptions used in its guidance, including an average exchange rate of about 18.3 pesos per U.S. dollar and fuel at roughly $69 per barrel, with an estimated crack spread around $25 per barrel.
On regulatory constraints for U.S. growth from Mexico City, executives said Aeromexico still cannot add new routes from the Mexico City metropolitan area until the U.S. Department of Transportation lifts restrictions tied to U.S. claims that Mexico is not complying with the Open Skies Agreement. Conesa said discussions between governments were progressing and that other slot-related issues previously on the table had already been resolved, with cargo being the remaining issue. Murray characterized the restriction as “a slight negative to neutral” for 2026 given Aeromexico’s prior growth into the transborder market, while noting the company had to cancel a planned Mexico City–San Juan route due to the limits.
Executives also discussed the relationship between a stronger peso and demand. Conesa and Murray said peso strength can lift travel demand, with Murray adding the effect historically shows up quickly in booking curves. On leverage reduction, Sánchez Baker said the company’s main financial debt consists of senior secured notes issued in November 2024, with near-term deleveraging opportunities more tied to aircraft lease amortization and higher utilization, as the airline does not expect to grow its aircraft count meaningfully in the next couple of years.
About Grupo Aeromexico (NYSE:AERO)
Grupo Aeroméxico is the parent company of Aeroméxico, Mexico’s long-established flag carrier and commercial airline group. The company operates scheduled passenger and cargo services, with a network that connects domestic destinations across Mexico and international markets in the Americas, Europe and Asia. Grupo Aeroméxico’s operations include mainline services as well as regional flying through its regional affiliates, airport ground-handling and cargo divisions that support its commercial network.
The carrier deploys a mix of narrow-body and wide-body aircraft to serve short-, medium- and long-haul routes, using single-aisle jets for domestic and regional markets and wide-body equipment for transcontinental services.
