content_image/1019602.jpg
## ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS 

## Background 

Together with our wholly-owned regional airline subsidiaries and third-party regional carriers operating as American Eagle, our airline operates an average of 6,800 flights per day to more than 365 destinations in 61 countries through our hubs and gateways in Charlotte, Chicago, Dallas/Fort Worth, London Heathrow, Los Angeles, Miami, New York, Philadelphia, Phoenix and Washington, D.C. In 2019, approximately 215 million passengers boarded our flights. 

## 2019 Financial Overview 

## AAG’s 2019 Results 

The selected financial data presented below is derived from AAG’s audited consolidated financial statements included in Part II, Item 8A of this report and should be read in conjunction with those financial statements and the related notes thereto. 

<img src='content_image/1019602.jpg'>

$^{(1)}$ See Part II, Item 6. Selected Consolidated Financial Data – “Reconciliation of GAAP to Non-GAAP Financial Measures”  and Note 2 to AAG’s Consolidated Financial Statements in Part II, Item 8A for details on the components of net special items. 

## Pre-Tax Income and Net Income 

Pre-tax income and net income were $2.3 billion and $1.7 billion in 2019, respectively. This compares to 2018 pre-tax income and net income of $1.9 billion and $1.4 billion, respectively. Excluding the effects of pre-tax net special items, pre-tax income was $2.9 billion and $2.8 billion in 2019 and 2018, respectively. The year-over-year increase in our pre-tax income on both a GAAP basis and excluding pre-tax net special items was principally driven by higher revenues and lower fuel costs, offset in part by increases in salaries, wages and benefits, maintenance expenses and costs associated with increased regional capacity. 

