American Airlines, Inc. Pass Through Certificates, Series 2019-1 Investor Presentation August 1, 2019 Issuer Free Writing Prospectus Filed pursuant to Rule 433(d) Registration No, 333-216167-01 August 1, 2019
Cautionary Statement Regarding Forward-Looking Statements and Information This document includes forward-looking statements within the meaning of the Securities Act of 1933, as amended, the Securities Exchange Act of 1934, as amended, and the Private Securities Litigation Reform Act of 1995. These forward-looking statements may be identified by words such as “may,” “will,” “expect,” “intend,” “anticipate,” “believe,” “estimate,” “plan,” “project,” “could,” “should,” “would,” “continue,” “seek,” “target,” “guidance,” “outlook,” “if current trends continue,” “optimistic,” “forecast” and other similar words. Such statements include, but are not limited to, statements about future financial and operating results, American’s (as defined herein) plans, objectives, estimates, expectations, and intentions, estimates and strategies for the future, and other statements that are not historical facts. These forward-looking statements are based on American’s current objectives, beliefs and expectations, and they are subject to significant risks and uncertainties that may cause actual results and financial position and timing of certain events to differ materially from the information in the forward-looking statements. These risks and uncertainties include, but are not limited to, those set forth in American’s Annual Report on Form 10-K for the year ended December 31, 2018 (especially in Part I, Item 1A, Risk Factors and Part II, Item 7 Management’s Discussion and Analysis of Financial Condition and Results of Operations), in American’s Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2019 (especially in Part II, Item 1A, Risk Factors and Part I, Item 2, Management's Discussion and Analysis of Financial Condition and Results of Operations), and in American’s other filings with the Securities and Exchange Commission (“SEC”), and other risks and uncertainties listed from time to time in American’s other filings with the SEC. There may be other factors of which American is not currently aware that may affect matters discussed in the forward-looking statements and may also cause actual results to differ materially from those discussed. American does not assume any obligation to publicly update or supplement any forward-looking statement to reflect actual results, changes in assumptions or changes in other factors affecting these forward-looking statements other than as required by law. Any forward-looking statements speak only as of the date hereof or as of the dates indicated in the statements. This Investor Presentation highlights basic information about American and this offering. Because it is a summary, it does not contain all of the information that you should consider before investing. American has filed a registration statement (including a prospectus) with the SEC for the offering to which this communication relates. Before you invest, you should read the prospectus in that registration statement, the other documents American has filed with the SEC that are incorporated by reference therein, the prospectus supplement and any free writing prospectus for more complete information about American and this offering. You may get these documents for free by visiting EDGAR on the SEC web site at www.sec.gov. Alternatively, American, any underwriter or any dealer participating in this offering will arrange to send you the prospectus if you request it by calling Citigroup Global Markets, Inc. (“Citigroup”) at 1-212-723-6171 or Credit Suisse Securities (USA) LLC (“Credit Suisse”) at 1-800-221-1037 or Morgan Stanley & Co. LLC (“Morgan Stanley”) at 1-800-718-1649. This presentation is not an offer to sell any securities and we are not soliciting an offer to buy any securities in any jurisdiction where the offer or sale is not permitted.
Transaction Overview American Airlines, Inc. (“American”) intends to raise up to $1,096,508,000 in aggregate proceeds through an offering of Series 2019-1 Pass Through Certificates (the “Certificates”) in three classes: Class AA Certificates: $578,712,000 Class A Certificates: $289,358,000 Class B Certificates: $228,438,000 The proceeds from the offering will be used by American to finance 35 aircraft that were previously delivered to American on various dates beginning in April 2015 or are currently scheduled to be delivered to American by September 2020, including: The Certificates offered in the transaction will include three amortizing tranches of debt: Class AA senior tranche amortizing over 12.5 years with a 37.4% initial / max Loan-to-Value ratio (“LTV”)1 Class A subordinated tranche amortizing over 12.5 years with a 56.2% initial / max LTV1 Class B junior subordinated tranche amortizing over 8.5 years with a 70.3% initial / max LTV1 American will retain the option to issue additional subordinated classes of Certificates at any time and from time to time with respect to any or all of the aircraft in the future The transaction’s legal structure will be substantially consistent with recent American EETC precedents, including: Standard cross-collateralization, cross-default and buy-out rights Three tranches of cross-subordinated and cross-defaulted debt 18-month Liquidity Facility for each of the Class AA, Class A and Class B Certificates Waterfall with preferred junior interest (consistent with recent American EETCs) Citigroup and Credit Suisse will act as Joint Structuring Agents and Lead Bookrunners; Morgan Stanley will act as Joint Lead Bookrunner Citibank, N.A. will act as Depositary National Australia Bank Limited will act as Liquidity Provider 1 6x Airbus A321-231S aircraft (“A321ceo”) 7x Airbus A321-253NX aircraft (“A321neo”) 3x Boeing 737-800 aircraft 3x Boeing 787-8 aircraft 16x Embraer E175LR aircraft 1 Initial and Max Loan to Value ratios (“LTV”) are calculated as of February 15, 2021, the first regular distribution date after all aircraft are currently scheduled to have been delivered, and are based on certain appraised values of each aircraft and depreciation assumptions.
2019-1 EETC Structural Summary 2 Class AA Class A Class B Initial Face Amount $578,712,000 $289,358,000 $228,438,000 Expected Ratings (Moody’s / S&P) Aa3 / AA A2 / A Baa3 / BBB- Initial LTV / Maximum LTV1 37.4% / 37.4% 56.2% / 56.2% 70.3% / 70.3% Weighted Average Life 8.7 years 8.7 years 5.6 years Regular Distribution Dates February 15 and August 15 February 15 and August 15 February 15 and August 15 Final Expected Distribution Date2 February 15, 2032 February 15, 2032 February 15, 2028 Final Legal Distribution Date3 August 15, 2033 August 15, 2033 August 15, 2029 Section 1110 Protection Yes Yes Yes Liquidity Facility Three semi-annual interest payments Depositary Proceeds from the issuance will be held in escrow with the Depositary and withdrawn to purchase Equipment Notes as the aircraft are financed 1 Initial and Max Loan to Value ratios (“LTV”) are calculated as of February 15, 2021, the first regular distribution date after all aircraft are currently scheduled to have been delivered, and are based on certain appraised values of each aircraft and depreciation assumptions. 2 Each series of Equipment Notes will mature on the Final Expected Distribution Date for the related class of Certificates. 3 The Final Legal Distribution Date for each of the Class AA Certificates, Class A Certificates and Class B Certificates is the date that is 18 months after the Final Expected Distribution Date for that class of Certificates, which represents the period corresponding to the applicable Liquidity Facility coverage of three successive semiannual interest payments.
Key Structural Elements1 Three Classes of Certificates Offered Three tranches of amortizing debt, each of which will benefit from a liquidity facility covering three semi-annual interest payments Waterfall Interest on Eligible Pool Balance of the Class A Certificates is paid ahead of principal on the Class AA Certificates and interest on Eligible Pool Balance of the Class B Certificates is paid ahead of principal on the Class AA and Class A Certificates Buyout Rights After a Certificate Buyout Event, holders of a subordinate Class of Certificates have the right to purchase all (but not less than all) of the Certificates of more senior Classes at par plus accrued and unpaid interest No buyout right during the 60-day Section 1110 period No Equipment Note buyout rights Cross-Collateralization and Cross-Default The Equipment Notes will be cross-collateralized by all aircraft in the collateral pool All indentures will include cross-default provisions Threshold Rating Criteria for Liquidity Provider Downgrade drawing mechanics consistent with recent EETCs issued by American Threshold Rating Criteria for Depositary Replacement mechanics consistent with recent EETCs issued by American Collateral Strategically core aircraft types representative of American’s go-forward, widebody, narrowbody and regional fleet strategy Weighted average aircraft age of 2.1 years2 Additional Certificates American has the right to issue additional subordinated classes of Certificates at any time and from time to time with respect to any or all of the aircraft 3 1 Certain terms defined in prospectus supplement. 2 Weighted by the LMM of the appraised values of the aircraft as appraised by AISI, BK and mba, as of the anticipated Closing Date on August 15, 2019.
Overview of the Collateral Pool
Aircraft Collateral Summary – Appraised Values 5 Aircraft Number Aircraft Type Narrow / Wide / Regional Registration # MSN Delivery Date Appraised Value ($MM) AISI BK MBA LMM2 1 A321-231S Narrowbody N152AA 6887 December 2015 41,420,000 42,900,000 45,280,000 42,900,000 2 A321-231S Narrowbody N157AA 6998 March 2016 43,070,000 45,180,000 45,080,000 44,443,333 3 A321-231S Narrowbody N159AN 7034 March 2016 42,710,000 44,840,000 45,080,000 44,210,000 4 A321-231S Narrowbody N158AN 7009 March 2016 40,640,000 43,360,000 43,390,000 42,463,333 5 A321-231S Narrowbody N160AN 7069 April 2016 42,940,000 45,680,000 45,340,000 44,653,333 6 A321-231S Narrowbody N161AA 7085 May 2016 41,090,000 44,490,000 43,900,000 43,160,000 7 A321-253NX Narrowbody N419AN TBD June 2020 57,050,000 58,760,000 58,450,000 58,086,667 8 A321-253NX Narrowbody N420AN TBD June 2020 57,050,000 58,760,000 58,450,000 58,086,667 9 A321-253NX Narrowbody N421UW TBD July 2020 57,140,000 58,850,000 58,500,000 58,163,333 10 A321-253NX Narrowbody N422AN TBD August 2020 57,230,000 58,950,000 58,550,000 58,243,333 11 A321-253NX Narrowbody N423AN TBD August 2020 57,230,000 58,950,000 58,550,000 58,243,333 12 A321-253NX Narrowbody N424AN TBD September 2020 57,330,000 59,040,000 58,600,000 58,323,333 13 A321-253NX Narrowbody N425AN TBD September 2020 57,330,000 59,040,000 58,600,000 58,323,333 14 737-800 Narrowbody N984NN 31234 January 2016 39,770,000 35,480,000 37,910,000 37,720,000 15 737-800 Narrowbody N985NN 31233 January 2016 39,720,000 35,460,000 37,910,000 37,696,667 16 737-800 Narrowbody N986NN 31236 February 2016 39,760,000 35,820,000 38,130,000 37,903,333 17 787-8 Widebody N803AL 40621 May 2015 103,940,000 103,070,000 94,040,000 100,350,000 18 787-8 Widebody N813AN 40631 February 2016 106,070,000 107,700,000 98,770,000 104,180,000 19 787-8 Widebody N814AA 40632 February 2016 106,840,000 108,280,000 98,770,000 104,630,000 20 E175LR Regional N202NN 17000467 April 2015 22,790,000 22,880,000 23,580,000 22,880,000 21 E175LR Regional N203NN 17000473 April 2015 22,330,000 22,410,000 23,110,000 22,410,000 22 E175LR Regional N204NN 17000477 May 2015 23,050,000 23,220,000 23,980,000 23,220,000 23 E175LR Regional N205NN 17000481 June 2015 22,540,000 22,860,000 23,550,000 22,860,000 24 E175LR Regional N230NN 17000550 April 2016 25,690,000 24,900,000 24,500,000 24,900,000 25 E175LR Regional N231AN 17000554 May 2016 25,050,000 24,980,000 24,650,000 24,893,333 26 E175LR Regional N232NN 17000560 May 2016 24,740,000 24,060,000 24,650,000 24,483,333 27 E175LR Regional N233NN 17000561 May 2016 24,280,000 24,850,000 24,650,000 24,593,333 28 E175LR Regional N282NN 17000810 July 2019 29,950,000 29,820,000 30,850,000 29,950,000 29 E175LR Regional N283NN TBD September 2019 30,050,000 29,910,000 30,900,000 30,050,000 30 E175LR Regional N284JN TBD October 2019 30,100,000 29,940,000 30,920,000 30,100,000 31 E175LR Regional N285NN TBD October 2019 30,100,000 29,940,000 30,920,000 30,100,000 32 E175LR Regional N286NN TBD November 2019 30,150,000 29,970,000 30,950,000 30,150,000 33 E175LR Regional N287NN TBD November 2019 30,150,000 29,970,000 30,950,000 30,150,000 34 E175LR Regional N288NN TBD November 2019 30,150,000 29,970,000 30,950,000 30,150,000 35 E175LR Regional N289MW TBD January 2020 30,250,000 30,260,000 31,000,000 30,260,000 Total $1,519,700,000 $1,534,550,000 $1,523,410,000 $1,522,930,000 1 Collateral cushion calculated as of February 15, 2021, the first regular distribution date after all aircraft are scheduled to have been delivered, which also coincides with date of maximum LTV and is based on certain depreciation assumptions 2 The appraised value of each aircraft set forth above is the lesser of the average and median appraised value of each such aircraft as appraised by three independent appraisal and consulting firms (Aircraft Information Services, Inc. (“AISI”), BK Associates, Inc. (“BK”) and Morten Beyer & Agnew, Inc. (“mba”). The appraised values provided by AISI are presented as of June 26, 2019, the appraised values provided by BK are presented as of June 30, 2019 and the appraised values provided by mba are presented as of June 30, 2019. In the case of existing aircraft, such appraisals indicate the appraised base value of such aircraft adjusted to reflect the maintenance status of such aircraft or otherwise take such maintenance status into account at the time of the related appraisal. In the case of the aircraft not yet delivered to American, the appraisals indicate the appraised base value projected as of the scheduled delivery month and year for such aircraft at the time of the related appraisal. Appraisals indicate collateral cushions1 of 62.6%, 43.8% and 29.7% on the Class AA, Class A and Class B Certificates, respectively, which are expected to increase over time as the debt amortizes
By Delivery Date: 2.1 Years Average Age3 Collateral Breakdown1,2 6 Aircraft by Type Narrowbody / Widebody / Regional Jet New Deliveries / In-Service Aircraft NB: Narrowbody WB: Widebody RJ: Regional Jet 1 The appraised value of each aircraft set forth above is the lesser of the average and median appraised value of each such aircraft as appraised by three independent appraisal and consulting firms (Aircraft Information Services, Inc. (“AISI”), BK Associates, Inc. (“BK”) and Morten Beyer & Agnew, Inc. (“mba”). The appraised values provided by AISI are presented as of June 26, 2019, the appraised values provided by BK are presented as of June 30, 2019 and the appraised values provided by mba are presented as of June 30, 2019. In the case of existing aircraft, such appraisals indicate the appraised base value of such aircraft adjusted to reflect the maintenance status of such aircraft or otherwise take such maintenance status into account at the time of the related appraisal. In the case of the aircraft not yet delivered to American, the appraisals indicate the appraised base value projected as of the scheduled delivery month and year for such aircraft at the time of the related appraisal. 2 Values may not sum to 100% due to rounding 3 Weighted by the LMM of the appraised values of the aircraft as appraised by AISI, BK and mba, as of the anticipated Closing Date on August 15, 2019.
Collateral Aircraft Assessment 7 E175LR A321-253NX (A321neo) A321-231S (A321ceo) 787-8 737-800 In-service fleet of over 576 aircraft; backlog of 192 Demand for Embraer E175LR aircraft has been strong as major U.S. airlines placed significant new orders and contracts for 76-seaters to replace 50- seaters, as a result of new scope clause agreements American has 21 E175LR aircraft on order, Republic confirmed its order for 100 E175LRs, and United Airlines placed a firm order for 25 aircraft American has 168 E175 aircraft in service with Wholly Owned Carriers and Affiliates A321neo is expected to be one of the most marketable aircraft in its category with compelling economics at the top of the single-aisle market Offers 15% fuel savings over A321ceo and a new design standard to accommodate up to 240 passengers A321neo will primarily operate on high demand routes from our hubs to other major markets and from Los Angeles and Phoenix to Hawaii American has 6 A321neo aircraft in service and an additional 64 A321neo aircraft on order all with Airbus Cabin Flex configuration Well placed in the middle of the market and well distributed between full service, low-cost and leisure airlines Predicted demand of almost 5,900 intermediate-size passenger widebodies, including the 787 family, over the next 20 years Large order in 2018 for 22 aircraft from American gives a boost to the backlog American has 20 787-8 in aircraft in service and an additional 22 787-8 aircraft on order A321ceo offers lower seat-mile costs compared to 150-seaters plus more capacity at slot or gate-constrained airports Freighter conversion programs are providing good end-of-life prospects for A321ceos, with first conversions expected in 2019 American has 219 A321ceo aircraft in service, with an average age of 5.7 years Considered the most liquid narrowbody to date 4,750 in operation with 190 operators, with a backlog of 95 aircraft – very popular among mainline, charter and low-cost carriers, good regional distribution, and a favorite with the leasing community Over the last decade, the 737-800 has replaced the MD-80 as the workhorse of the American domestic network American has 304 737-800 aircraft in service, with an average age of 9.6 years AAL to review/ confirm Source: American, Ascend Market Commentary as of 2Q 2019.
The Airbus A321-231S is well positioned to take advantage of traffic growth Airbus A321-231S (A321ceo) 8 Source: Ascend Market Commentary as of 2Q 2019. The A321ceo offers lower seat-mile costs compared to 150-seaters plus more capacity at slot or gate-constrained airports Sharklets (installed on all A321-231S to be financed) improve fuel burn and increase range to allow for true U.S. transcontinental flights, making it a viable 757 replacement Freighter conversion programs are providing good end-of-life prospects for A321ceos, with first conversions expected in 2019 At the end of Q2 2019, there were 1,637 aircraft in service with 103 operators Over 350 of those aircraft were in China, and a further 71 were on order with six operators Operators # of Aircraft 1 American Airlines 219 2 Delta Air Lines 127 3 China Southern Airlines 99 4 Turkish Airlines 68 5 China Eastern Airlines 67 Total 580 Lessors # of Aircraft 1 AerCap 72 2 Avolon 51 3 BBAM 48 4 BOC Aviation 42 5 Aviation Capital Group 39 Total 252 Top 5 Operators & Lessors (In Service / On Order)
Airbus A321-253NX (A321neo) 9 Source: Ascend Market Commentary as of 2Q 2019. The A321neo is expected to continue the A320 heritage of being one of the most marketable aircraft with compelling economics that will be at top of the single-aisle market Expected to develop global population with operators in all sectors, including scheduled, low-cost and charter Offers 15% fuel savings over A321-200 with a new design standard that can accommodate up to 240 passengers Two different technological approaches to reduce fuel burn offer a product hedge against new technology risk Aircraft has seating and range advantage over the 737 MAX 9 The market for A321neo-sized aircraft category is predicted to be around 9,000 aircraft over the next 20 years Operators # of Aircraft 1 Wizz Air 184 2 IndiGo 150 3 VietJet Air 122 4 American Airlines 100 5 Delta Air Lines 100 Total 656 Lessors # of Aircraft 1 Air Lease Corporation 136 2 AerCap 92 3 Avolon 56 4 GECAS 52 5 SMBC Aviation Capital 33 Total 369 Top 5 Operators & Lessors (In Service / On Order) The Airbus A321neo provides minimum-change continuity with A320 family
Lessors # of Aircraft 1 AerCap 214 2 GECAS 189 3 SMBC Aviation Capital 161 4 ICBC Leasing 136 5 BBAM 126 Total 826 Boeing 737-800 10 Source: Ascend Market Commentary as of 2Q 2019. Considered the most liquid single-aisle aircraft today Over 4,750 in operation with 190 operators, and a backlog of 95 aircraft – very popular among mainline, charter and low-cost carriers, good regional distribution, and a favorite with the leasing community Over the last decade, the 737-800 has replaced the MD-80 as the workhorse of American’s domestic network Very active leasing market Over 50% on operating leases with younger aircraft finding new lessees well ahead of lease return dates Continued product improvements, such as longer maintenance intervals and Scimitar winglets, support long-term demand Operators # of Aircraft 1 Ryanair 434 2 American Airlines 304 3 Southwest Airlines 224 4 China Southern Airlines 162 5 Hainan Airlines 150 Total 1,274 Top 5 Operators & Lessors (In Service / On Order) The Boeing 737-800 has wide market appeal
Boeing 787-8 11 Source: Ascend Market Commentary as of 2Q 2019. Includes 787-9 and 787-10 aircraft. Well placed in the middle of the market and well distributed between full service, low-cost and leisure airlines Predicted demand of almost 5,900 intermediate-size passenger widebodies, including 787 family aircraft, over the next 20 years Large order in 2018 for 22 787-8 aircraft from American gives a boost to the backlog Overall 787 production rate has increased to 14/month in 2019 787-8 market values have remained stable since Q1 2019 787-8 is regarded as a good route-prover by American and other airlines Currently, there are 425 787-8s in service/on order with over 40 airline operators Operators # of Aircraft 1 American Airlines 42 2 ANA-All Nippon Airways 35 3 Qatar Airways 30 4 Japan Airlines 29 5 Air India 24 Total 160 Lessors # of Aircraft 1 BBAM 27 2 Boeing Capital 22 3 AerCap 18 4 SMBC Aviation Capital 13 5 ICBC Leasing 11 Total 91 Top 5 Operators & Lessors (In Service / On Order)1 The Boeing 787 is the benchmark in the long-haul widebody market
Embraer E175LR 12 Source: Ascend Market Commentary as of 2Q 2019. Includes all E170/E175 aircraft In-service fleet of 576 E175LR aircraft, with 192 on order Demand for Embraer E175LR aircraft has been strong as major U.S. airlines continue to place significant new orders and contracts American’s total E175LR order backlog is for 104 aircraft, Republic confirmed its order for 100 E175LRs, and United Airlines placed a firm order for 20 aircraft Boeing-Embraer joint venture gives Embraer access to Boeing’s global sales and support network The Embraer E175LR offers mainline jet comfort thanks to its double bubble design Most cabin volume per seat Large eye-level windows are 30% larger than those on similar aircraft Four-abreast seating and no middle seat, allowing easy access to seats and overhead bins and fast boarding and deplaning Generous headroom with overhead bins accommodate roll-on bags up to 24”x16”x10” Superior ground service access and baggage handling Operators # of Aircraft 1 Republic Airlines 288 2 SkyWest Airlines 158 3 Envoy Air 84 4 Mesa Airlines 60 5 Compass Airlines 56 Total 646 Lessors # of Aircraft 1 Nordic Aviation Capital 28 2 GECAS 28 3 Falko 10 4 ALM – Aircraft Leasing & Mgmt. 8 5 GA Telesis 8 Total 82 Top 5 Operators & Lessors (In Service)1 Range of Embraer 175 LR
