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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.
Revenue by Segment
Revenue by Geographic Location
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.
Revenue & Expenses
Visualization of income flow from segment revenue to net income
Historical Earnings Impact
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Avg. Return Before/After Earnings
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