Devon May
Chief Financial Officer at American Airlines Group
Thank you, Robert. The focus and dedication of the American Airlines team has resulted in strong operational performance, which is helping to produce solid financial results. Once again we delivered on our guidance for the second-quarter. Excluding net special items, we reported second-quarter net income of $1.4 billion or adjusted earnings per diluted share of $1.92. Our strong operational performance resulted in slightly higher capacity production for the quarter and CASM-ex performance better than the midpoint of our forecast. Revenues remained strong, resulting in an operating margin and EPS that outperformed the high-end of our guidance provided in May.
As Robert mentioned American produced record revenue of $14.1 billion in the second-quarter, up nearly 5% year-over-year. This revenue performance led to our highest-ever adjusted operating income of $2.2 billion, resulting in a second-quarter adjusted operating margin of 15.4%. Unit revenue in the quarter was down just 0.5% versus a historically strong 2022 on 5.3% more capacity, domestic unit revenue was down 1.9%, while international unit revenue was up 18.3% Year-over-Year. Our unit costs for the quarter, excluding net special items and fuel was up 3.7% year-over-year that's better than the midpoint of our initial guidance range due to slightly higher-than-planned capacity production driven by our strong operational performance.
I want to spend a few minutes updating you on our fleet. Our young and simplified fleet differentiates American from our US network peers and provides network flexibility, enhanced efficiency, and an improved customer experience. These benefits are the result of the re-fleeting, we pursued from 2014 to 2019 and accelerated during the pandemic. We are pleased we built our fleet in a low-interest rate environment and at a time when the supply chain wasn't as challenged as it is today. In 2023, we expect to take delivery of 23 new mainline aircraft, which are all now financed. We took 13 deliveries in the first-half of the year and expect 10 more aircraft to be delivered by year end.
For our regional fleet this quarter, we entered into agreements to purchase seven new Embraer 175 aircraft and seven used Bombardier CRJ900 aircraft that will be delivered starting in the fourth-quarter of this year. We're excited to have these aircraft into service and to further bolster our regional connectivity. Based on the latest delivery guidance from Boeing and Airbus, along with our new and used regional aircraft purchase commitments our 2023 aircraft capex is now expected to be approximately $1.7 billion. Our non-aircraft capex is still expected to be approximately $800 million.
We anticipate our 2024 total capex to be between $3 billion and $3.5 billion. Looking beyond 2024, we continually review our medium and long-term fleet plans due to the young age of our aircraft our fleet replacement needs are very limited. Therefore, we expect aircraft capex for the next several years and likely through the end-of-the decade to average approximately $3.5 billion per year. Moving to the balance sheet yesterday Fitch upgraded American's credit rating. This is the first step towards our goal of BB credit metrics by the end of 2025, and it's nice to see our progress being recognized.
We continue to maintain strong liquidity in the second quarter, we generated operating cash flow of nearly $1.8 billion. Our adjusted net investing cash flow was approximately $550 million, resulting in quarterly free cash flow of $1.2 billion. We have produced $4.3 billion of free cash flow in the first six months of the year and expect full-year free cash flow to be approximately $3 billion. We ended the second quarter with approximately $14.9 billion of total available liquidity. We continue to make progress on strengthening our balance sheet in the second quarter by reducing total debt by $387 million. This debt reduction combined with the improvement in liquidity, resulted in a decrease in net debt of approximately $955 million during the second quarter.
We have now reduced total debt by approximately $9.4 billion from peak debt levels in 2021, which is significant progress towards our goal of reducing total debt by $15 billion by the end of 2025. By the end of 2023, we expect our total debt to be approximately $11 billion lower than peak debt levels in 2021. Importantly, we ended the second quarter with a net-debt to EBITDA ratio of 3.8 times, which is lower than it was at the end of 2019.
Now turning to our guidance. Bookings remained strong and we continue to see a constructive demand environment. We saw a record revenue for the 4th of July holiday period and book load factors for the third-quarter are in line with what we saw in 2022. International entities continued to lead the way in terms of Year-over-Year performance and we are encouraged by domestic business demand, notably from small and medium-sized enterprises.
As the recovery continues to unfold the strong unit revenue environment in 2022 represents an increasingly difficult comparison. As a result, we expect third quarter TRASM to be down 4.5% to 6.5% Year-over-Year on 5% to 7% more capacity. We expect third-quarter CASM-ex to be up 2% to 4% year-over-year. Our current forecast for the third-quarter assumes a fuel price of between $2.55 and $2.65 per gallon. Based on our current demand and fuel price forecast, we expect to produce an adjusted operating margin of between 8% and 10% in the third-quarter and adjusted earnings per diluted share of between $0.85 and $0.95, excluding special items.
For the full-year, we continue to expect to produce capacity, that is 5% to 8% higher than 2022. Our full-year forecast for unit revenue continues to be up low-single digits year-over-year. We now expect our full-year CASM-ex to be up 2% to 4% versus 2022. Notably, our expectations for capacity, TRASM, and CASM-ex are all consistent with the initial guidance we provided on our January earnings call.
That said, our estimate for full-year fuel expenses has changed. We now expect to pay between $2.70 and $2.80 per gallon, a reduction from our initial guidance. The full-year update further highlights the positive environment we are operating in, based on our demand and fuel cost assumptions, we expect to produce a full-year adjusted operating margin between 8% and 10% and adjusted EPS between $3 and $3.75. We are very proud of the progress the American Airlines team has made but we believe there is more opportunity ahead of us. We will continue to focus on delivering in 2023, and unlocking even more value in 2024 and beyond.
I'll now turn it back to Robert for closing remarks.
