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Mar 31, 2020
American Airlines Q1 2020 Earnings Report
American Airlines faced significant challenges due to COVID-19, reporting a net loss and taking actions to reduce costs and bolster liquidity.
Key Takeaways
American Airlines reported a first-quarter net loss of $2.2 billion, or ($5.26) per share. Excluding net special items, the net loss was $1.1 billion, or ($2.65) per share. The company ended the quarter with $6.8 billion of available liquidity and expects to end the second quarter with approximately $11 billion of liquidity. In response to the drop in demand, American has reduced costs and improved its liquidity position.
Reported a first-quarter net loss of $2.2 billion, or ($5.26) per share.
Excluding net special items, the first-quarter net loss was $1.1 billion, or ($2.65) per share.
Ended the first quarter with $6.8 billion of available liquidity.
Expects to end the second quarter with approximately $11 billion of liquidity.
American Airlines
American Airlines
American Airlines Revenue by Segment
American Airlines Revenue by Geographic Location
Revenue by Segment
Passenger Revenue
CapyFin.comCargo Revenue
CapyFin.comOther Revenue
CapyFin.comRevenue by Geographic Location
Domestic Passenger Revenue
CapyFin.comLatin America Passenger Revenue
CapyFin.comAtlantic Passenger Revenue
CapyFin.comPacific Passenger Revenue
CapyFin.com Forward Guidance
American Airlines expects its average estimated second-quarter 2020 cash burn rate to be approximately $70 million per day. As the company’s cost initiatives gain traction, its estimated daily cash burn rate is expected to decline over time to approximately $50 million per day for the month of June. Based on its current forecast, the company expects to have approximately $11 billion of liquidity at the end of the second quarter.
Positive Outlook
- Enhanced cleaning procedures through expanded fogging and the use of an EPA-approved disinfectant in high-touch areas.
- Purchased face masks for frontline team members and made them required for flight attendants starting May 1.
- Began distributing sanitizing wipes or gels and face masks to customers.
- Extended waivers for travel occurring through the end of September 2020, enabling customers to change plans and travel through December 2021, and waived change fees for customers who purchase new tickets by May 31, 2020, for future travel.
- Introduced flexible travel waivers and name changes for corporate customers.
Challenges Ahead
- Reduced system capacity by approximately 80% in both April and May, and 70% in June, including schedule changes announced today.
- Accelerated the retirement of four aircraft types, consisting of 20 Embraer 190s, 34 Boeing 757s, 17 Boeing 767s and nine Airbus A330-300s, along with a number of older regional aircraft.
- Suspended all nonessential hiring, paused noncontractual pay increases, reduced executive and board compensation, and implemented voluntary leave and early retirement programs to reduce labor costs.
- Deferred marketing expenditures and reduced contractor, event and training expenses.
- Consolidated its footprint at its airport facilities.
Revenue & Expenses
Visualization of income flow from segment revenue to net income