American Airlines posts $2.2 bn loss on pandemic, first since bankruptcy exit; total operating revenue declines nearly 20% to $8.5 bn
American Airlines has already reduced its flight schedule by about 80 percent in both April and May. Its June capacity will be down 70 percent, it said.
American Airlines on Thursday posted a $2.2 billion net loss, its first quarterly loss since emerging from bankruptcy in 2013, and warned of a roughly $70 million per day cash burn in the second quarter as the coronavirus pandemic halts travel.
Shares fell 4.3 percent before the bell.
Airlines - among the sectors hardest-hit by the pandemic - have grounded jets, canceled flights and suspended dividends and share buybacks among measures to shore up cash.
Representational image. Reuters
“Never before has our airline, or our industry, faced such a significant challenge,” chief executive Doug Parker said in a statement.
The US airline swung to a net loss of $2.2 billion in the first quarter to 31 March from a $185 million profit a year earlier.
Excluding items, the net loss was $1.1 billion, or $2.65 per share, below analyst estimates of a $2.33 per share loss, according to IBES data from Refinitiv.
Total operating revenue declined nearly 20 percent to $8.5 billion.
The pandemic ended one of the longest expansion in US history, with the nation’s economy contracting at its sharpest pace since the Great Recession in the first quarter. Airline executives have warned that demand may not recover to 2019 levels for years.
American has already reduced its flight schedule by about 80 percent in both April and May. Its June capacity will be down 70 percent, it said.
It sees liquidity at $11 billion in the second quarter, up from $6.8 billion in the first, and Parker said on a conference call that the daily cash burn should slow to about $50 million in June.
Its overall cash position will be helped by a $4.75 billion government loan under the Coronavirus Aid, Relief, and Economic Security (CARES) Act, for which it will have to pledge a portion of its assets as collateral.
American said that, following a recent appraisal, it believes its unencumbered assets are worth over $10 billion, excluding the value of its advantage loyalty program.
It is also receiving $5.8 billion in payroll aid, which bars airlines from cutting pay or jobs through 30 September.
also read
World happier than before Covid pandemic; West slightly lesser than others: Global Happiness Index
"People eventually learned who their neighbours were. They took care of the senior citizens, so the isolation was less severe than you might anticipate. Positive emotions have remained twice as common as negative ones even during these challenging years
WHO accuses China of hiding data on coronavirus origin
The WHO rebuked Chinese officials for withholding scientific research that may reveal the origin of the coronavirus and also asked them about the reasons behind not revealing the data three years ago and why, after it was published online in January, it could not be found now.
Low on food, high on nukes: Why is bankrupt Pakistan focused on its nuclear programme amid worst crisis?
Pakistan is facing its worst economic crisis. There's a shortage of food and medicines and Islamabad is struggling to acquire a much-needed IMF bailout. Amid its many woes, the attention of its government remains on the country’s nuclear programme. It will not be compromised, it says