American Airlines Group Inc. AAL reported higher-than-expected earnings in the first quarter of 2016. The company recorded adjusted earnings per share of $1.25, beating the Zacks Consensus Estimate by 7 cents.American Airlines Group Inc. (AAL) Street EPS & Surprise Percent - Last 5 Quarters | FindTheCompanyAmerican Airlines Group reported operating revenues of $9.44 billion in the first quarter, representing a 4% decrease over the comparable figure in the year-ago quarter. Quarterly revenues marginally beat the Zacks Consensus Estimate of $9.43 billion.Consolidated passenger revenue per available seat mile (PRASM) declined 7.5% to 12.43 cents in the reported quarter. Consolidated yield declined 7.1% to 15.62 cents. Traffic grew 3.2% on a 3.6% capacity expansion. Consolidated load factor (% of seats filled by passengers) naturally declined as traffic growth was outpaced by capacity expansion. Load factor declined to 79.6% from the comparable year-ago figure of 79.9%.American Airlines’ results in the first quarter of 2016 benefited from low fuel costs. This is because fuel costs account for a major chunk of an airline's operating expenses. Total operating expenses declined 5.9% to $8.1 billion on the back of a 32.7% reduction in fuel costs. We note that the carrier does not hedge fuel costs.Backed by the impressive quarterly performance, the company authorized an additional $2 billion buyback scheme which will end by Dec 31, 2017. During the first quarter, the company returned in excess of $1.6 billion to its shareholders through the payment of $61 million in dividends and buyback of shares worth $1.6 billion.Furthermore, the carrier declared a dividend of 10 cents per share, to be paid on May 18, 2016 to shareholders on record as of May 4. We are impressed with the company’s consistent efforts to reward shareholders through stock repurchases and dividend payments.American Airlines is constantly looking to introduce new aircraft and remove old ones from its fleet. Keeping with its aim to modernize its fleet, the carrier took delivery of 15 new mainline aircraft and 13 regional ones during the reported quarter, while retiring 22 aircraft. The carrier invested $1.3 billion toward new aircraft during the quarter.Zacks RankCurrently, American Airlines Group has a Zacks Rank #3 (Hold). Better-ranked stocks in the broader transportation space are Canadian National Railway Company CNI, Canadian Pacific CP and China Eastern Airlines Corp. Ltd. CEA, all of which sport a Zacks Rank #1 (Strong Buy).Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days.Click to get this free report >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report CHINA EASTN-ADR (CEA): Free Stock Analysis Report CDN NATL RY CO (CNI): Free Stock Analysis Report CDN PAC RLWY (CP): Free Stock Analysis Report AMER AIRLINES (AAL): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research