Devon May
Chief Financial Officer at American Airlines Group
Thank you, Robert. I am tremendously proud of what the American Airlines team accomplished during the first quarter. As Robert mentioned, we run a great operation and delivered on our financial guidance for the quarter, keeping us on-track with the full-year plan we outlined in January. During the first quarter, excluding net special items, we reported net income of $33 million, or adjusted earnings per diluted share of $0.05. This result is better than the initial guidance we provided in January, driven by strong revenue production and slightly lower fuel expense during the quarter.
As Robert mentioned, we produced a record first-quarter revenue of $12.2 billion, up 37% year-over-year. Data revenue was 25.4% higher in the quarter on 9.2% more capacity. Unit cost for the quarter, excluding net special items and fuel were 1.4% lower year-over-year in line with the midpoint of our initial guidance range. We generated adjusted operating income in the quarter of $451 million, resulting in a first-quarter adjusted operating margin 3.7%. We have made significant investments in our fleet over the past decade and these investments are paying off. The re-fleeting of the airline and the reconfiguration of our narrowbody interiors have greatly improved to the customer experience, simplified our mainline fleet from eight aircraft size to four and aligned our narrowbody density with our network competitors. American continues to operate the simplest and youngest fleet among U.S. network carriers.
We continue to expect to reactivate nine 737s from long-term storage and take delivery of 23 new aircraft in 2023. We took three deliveries in the first quarter and expect nine in the second quarter, five in the third quarter and six in the fourth quarter. 13 of the deliveries are already financed, and we expect to finalize financing agreements for the remaining 10 this quarter. Based on the latest delivery guidance from Boeing and Airbus, our 2023 aircraft capex is expected to be approximately $1.5 billion, and non-aircraft capex is expected to be approximately $800 million.
In the first quarter, we generated operating cash flow of $3.3 billion. Our adjusted net investing cash flows were $317 million, resulting in record quarterly free cash flow generation of $3 billion. We ended the quarter with $14.4 billion of total available liquidity, $2.4 billion more than our year-end 2022 liquidity balance, driven by bookings strength and ATL growth in the quarter.
We continue to make progress on strengthening our balance sheet, reducing total debt by more than $850 million in the quarter. This debt reduction, combined with the improvement in liquidity, resulted in a $3.4 billion decrease in net debt during the first quarter. We now have reduced total debt by more than $9 billion from peak debt levels in mid-2021. Importantly, we ended the first quarter with a net debt-to-EBITDA ratio of 4.5x, which is lower than our net debt-to-EBITDA ratio at the end of 2019.
By the end of 2023, we continue to expect our total debt to be $10 billion to $11 billion lower than peak debt levels in mid-2021, and we remain committed to our goal of reducing total debt by $15 billion by the end of 2025. Additionally, a constructive financing environment in February allowed us to proactively refinance a 2025 maturity. Our $1.75 billion term loan, primarily collateralized by our South America portfolio of slots, gates and routes. The refinancing transaction efficiently derisked our 2025 debt maturity tower by 20%.
We will continue to balance debt reduction opportunities and investments in the business, while meeting appropriate liquidity levels. We continue to see a constructive demand environment in the second quarter and summer and bookings remain strong. Revenue intakes in the past months are well ahead of the same booking period in 2019, including robust international bookings as customers return to long-haul international travel this summer. Compared to the historically strong unit revenue we produced in 2022, we expect second quarter TRASM to be down 2% to 4% year-over-year on 3.5% to 5.5% more capacity. We expect second quarter CASM-ex to be up 3.5% to 5.5% year-over-year. This projection includes the impact of an anticipated pilot agreement. We continue to expect the full-year impact of all our anticipated labor agreements to be approximately 3 points of CASM-ex.
Our current forecast for the second quarter assumes a fuel price of between $2.65 and $2.75 per gallon, which is $1.30 per gallon lower year-over-year. We expect to produce an operating margin of between 11% and 13% in the second quarter based on our current demand and fuel price forecast. Excluding special items, we expect to produce earnings of between $1.20 and $1.40 per diluted share in the second quarter. These strong results keep us on track to execute on our full year earnings guidance of between $2.50 and $3.50 per diluted share.
Now I'd like to hand it back to Robert for further remarks.