- Joe Breitfeller
American Airlines Reports First Quarter Net Loss of $1.3 Billion on 53% Revenue Decline to $4 B
American Airlines has reported a first quarter net loss of $1.3 billion or ($1.97) per diluted share on a 53 percent year over year decline in revenue to $4.0 billion. Excluding net special items, the carrier’s Q1 loss was $2.7 billion or ($4.32) per share.
On Thursday (April 22, 2021), American Airlines Group, Inc. reported their first quarter 2021 financial results. The airline reported a GAAP net loss of $1.3 billion or ($1.97) per diluted share on a 53 percent year-over-year revenue decline to $4.0 billion. Excluding net special items, the Group reported a Q1 net loss of $2.7 billion or (4.32)/share. During the quarter the company raised $10 billion through a debt offering backed by the AAdvantage loyalty program, a portion of which was used to prepay in full a secured loan from the U.S. Treasury. American Airlines ended the quarter with approximately $17.3 billion in total available liquidity, which is expected to increase to $19.5 billion by the end of the second quarter.
In today’s announcement, American Airlines’ Chairman and CEO, Doug Parker, said,
“We are incredibly proud of the American Airlines team for their continued care of our customers and each other. Our team has shown up every day throughout the pandemic and served more customers than any other airline. That focus has served as our inspiration and positions us well as even more customers return to the skies. Looking forward, with the momentum underway from the first quarter, we see signs of continued recovery in demand. We remain confident the network enhancements, customer-focused improvements and efficiency measures we’ve put into place will ensure American is well-positioned for the recovery.”
To reduce costs, American has incorporated over $1.3 billion in permanent non-volume cost reductions into their 2021 plans, including approximately $500 million in management reductions, $600 million in labor productivity enhancements and $200 million in other reductions. The carrier also reached an agreement with Boeing to defer and convert five 787-8 to 787-9 aircraft, with deliveries expected in 2023, while their remaining order of 14 787-8s are expected to be delivered by the end of the first quarter of 2022. American also exercised their remaining deferral rights on Boeing 737 MAX aircraft previously scheduled for delivery in 2021-2022, and 18 of the aircraft will now be delivered in 2023 and 2024.
American’s daily cash burn during the first quarter was approximately $27 million, including around $9 million per day in regular debt principal and cash severance payments. For March, the airline’s daily cash burn was reduced to approximately $4 million and if about $8 million per day of regular debt principal and cash severance payments are excluded, the company’s cash burn rate would be positive. Under the U.S. Government’s COVID-19 relief package passed in March, American obtained the rights to access an additional $3.3 billion in financial assistance, as well as the ability to defer approximately $2 billion in pension funding over the next five years.
American Airlines’ purpose is to “care for people on life’s journey.” Shares in the American Airlines Group, Inc., trade on NASDAQ under the ticker symbol AAL and the company’s stock is included in the S&P 500. In trading Thursday Morning, shares in the American Airlines Group, Inc. (NASDAQ: AAL) were 0.95% higher at $21.21 per share (9:35 AM EDT).
Source: American Airlines