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American Airlines Announces Second Quarter Net Loss of $2.1 Billion or $4.82 per Share

American Airlines announced on Thursday a second quarter net loss of $2.1 billion or $(4.82) per share. Excluding net special items, the second quarter net loss was reported as $3.4 billion or $(7.82) per share. The carrier ended the quarter with $10.2 billion in liquidity.

American Airlines Boeing 737NG - Courtesy American Airlines

Today (July 23, 2020) American Airlines announced a second quarter net loss of $2.1 billion or $(4.82) per share. When net special items are excluded the carrier reported a quarterly net loss of $3.4 billion or $(7.82) per share. During the quarter, the company boosted liquidity by $3.6 billion through offerings of stock as well as convertible and secured bonds. American Airlines ended the second quarter with $10.2 billion in liquidity. The airline also signed a term sheet with the U.S. Department of the Treasury for a $4.75 billion secured loan which is expected to close in the third quarter and announced two senior secured not transactions valued at an additional $1.2 billion. Including these pending transactions, American Airlines’ liquidity position would be approximately $16.2 billion. In Thursday’s announcement, American Airlines’ CEO, Doug Parker said,

“This was one of the most challenging quarters in American’s history. COVID-19 and the resulting shutdown of the U.S. economy have caused severe disruptions to global demand for air travel. In spite of these challenges, the American Airlines team has done a phenomenal job of taking care of our customers and our fellow team members. We have moved swiftly to improve our liquidity, conserve cash and ensure customers are safe when they travel. There is much uncertainty ahead, but we remain confident we will emerge from this crisis more agile and more efficient than ever before.”

American Airlines Reports Second Quarter 2020 Financial Results - Infographic Courtesy American Airlines

American Airlines estimates that they will reduce 2020 operating and capital expenditures by over $15 billion, primarily due to less flying. The company has also retired four aircraft types including 20 Embraer 190s, 34 Boeing 757s, 17 Boeing 767s and nine Airbus A330-300s. Additionally, the carrier placed their Airbus A330-200s and older Boeing 737 models into temporary storage, bringing the total number of aircraft removed from their fleet to over 150 aircraft.

Although the company implemented voluntary leave and early-out programs for frontline team members, the carrier still expects to still have more than 20,000 more employees than needed to operate their fall 2020 schedule. To date, more than 40,000 team members have opted for early retirement, a reduced work schedule or a partially paid leave. Additionally, the company has reduced management and support staff by 30 percent or around 5,100 positions. American Airlines has reduced their daily cash burn from nearly 100 million in April to around $30 million in June. Overall, the carrier’s second quarter cash burn rate was approximately $55 million.

In trading Thursday morning, shares in American Airlines Group, Inc. (NASDAQ: AAL) were 1.76 percent lower at $11.16/share (10:46 AM EDT).

Source: American Airlines


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