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Sep 30, 2020
American Airlines Q3 2020 Earnings Report
American Airlines reported a significant decrease in revenue due to the COVID-19 pandemic, while taking actions to reduce costs and bolster liquidity.
Key Takeaways
American Airlines reported a third-quarter net loss of $2.4 billion, with revenue down 73% year-over-year. The company focused on reducing costs, strengthening its financial position, and ensuring customer confidence in travel. The airline ended the quarter with $13.6 billion in liquidity, which increased to $15.6 billion pro forma for October.
Third-quarter revenue was $3.2 billion, a 73% decrease year-over-year.
Third-quarter net loss was $2.4 billion, or ($4.71) per share.
The company ended the third quarter with approximately $13.6 billion in total available liquidity, increasing to $15.6 billion pro forma.
American Airlines reduced its daily cash burn rate to approximately $44 million per day in the third quarter.
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 fourth-quarter system capacity to be down more than 50% year over year, with long-haul international capacity down approximately 75% year over year. The company presently expects its fourth-quarter cash burn rate to be approximately $25 to $30 million per day and it expects to end the fourth quarter with more than $13 billion in total available liquidity, which excludes any proceeds from the $1 billion at-the-market equity offering.
Positive Outlook
- The company will continue to match its forward capacity with observed bookings trends.
- American Airlines expects to end the fourth quarter with more than $13 billion in total available liquidity.
- The company reduced its daily cash burn rate to approximately $44 million per day in the third quarter from approximately $58 million per day in the second quarter.
- SurfaceWise2 is approved by the EPA as the first-ever long-lasting product to help fight the spread of the novel coronavirus and it will be applied to American’s entire fleet in the coming months.
- Testing options are now available to customers traveling to Hawaii and Costa Rica, with Jamaica and the Bahamas soon to follow.
Challenges Ahead
- American Airlines expects its fourth-quarter system capacity to be down more than 50% year over year.
- Long-haul international capacity is expected to be down approximately 75% year over year.
- The company has removed more than 150 aircraft from its fleet through early retirements or by placing aircraft into temporary storage.
- More than 20,000 team members have opted for an early out or long-term leave.
- 19,000 team members were furloughed beginning Oct. 1.
Revenue & Expenses
Visualization of income flow from segment revenue to net income