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American Airlines Reports Fourth Quarter Net Loss of $2.2 Billion, Full Year 2020 Net Loss of $8.9 B

The airline reported a fourth quarter net loss of $2.2 billion or ($3.81) per share on 64% revenue decline to $4.0 billion. For the full year, American Airlines reported a net loss of $8.9 billion or ($18.36) per share on a year-over year revenue decline of 62% to $17.3 billion.

American Airlines Reports Fourth Quarter and Full Year 2020 Financial Results - Courtesy American Airlines

On Thursday (January 28, 2021), American Airlines reported their fourth quarter and full year 2020 financial results. The airline reported a fourth quarter net loss of $2.2 billion or ($3.81) per share on a 64 percent revenue decline to $4.0 billion compared to Q4 2019. For the full year, American Airlines reported a net loss of $8.9 billion or $18.36 per share on a year-over-year decline in revenue of 62 percent to $17.3 billion. At December 31, 2020, the airline had approximately $14.3 billion in total liquidity and expects to end the first quarter of 2021 with around $15.0 billion in liquidity. In Thursday’s announcement, American Airlines’ Chairman and CEO, Doug Parker, said,

“Our fourth-quarter financial results close out the most challenging year in our company’s history. However, we couldn’t be prouder of the American Airlines team and the great things they accomplished last year. Through collaboration, resourcefulness and hard work, our team did its part to keep the economy moving. The American team flew more customers than any other airline in 2020, and they did so safely and with the utmost care. As we look to the year ahead, 2021 will be a year of recovery. While we don’t know exactly when passenger demand will return, as vaccine distribution takes hold and travel restrictions are lifted, we will be ready. We are confident that the actions we have taken to improve our customer experience, enhance our network and increase our efficiency position us well for the future.”

American Airlines 2020 Financial Results - Courtesy American Airlines

American Airlines has incorporated over $1.3 billion of permanent non-volume, non-fuel efficiency cost savings measures into their 2021 operating plan. During 2020, the company removed more than $17 billion from operating and CAPEX budgets, primarily attributable to reduced flying. The company also retired five aircraft types including Embraer 190s, Boeing 757/767s, Airbus A330s and Bombardier CRJ200s as well as some older regional aircraft. American also placed some of their older Boeing 737-800s into temporary storage. Combined, the company removed over 150 older less-efficient aircraft from their fleet, ending the year with the youngest fleet among U.S. network carriers.

Last year, American Airlines reached an agreement with Boeing to defer deliveries of 18 Boeing 737 MAX aircraft and finalized sale-leaseback transactions to finance 2021 Airbus A321 deliveries. The company also reset their international capacity and network for 2021, exiting 19 international routes from six hubs. Non-aircraft CAPEX in 2020 was reduced by $700 million and the company plans on saving an additional $300 in 2021 through reductions in fleet modification work, the elimination of GSE purchases, the pausing of noncritical facility investments and IT projects. Additionally, the company reduced their management and support staff by around 30 percent and over 20,000 team members opted for voluntary early out or long-term partially paid leave.

The company also reduced their daily cash burn rate from nearly $100 million in April 2020 to approximately $30 million during the fourth quarter. American also executed and agreement with the U.S Treasury through the CARES Act loan program to borrow up to $7.5 billion in secured loans, of which $550 million has been drawn. Throughout 2020, the company raised over $13 billion in new liquidity through a variety of equity and debt offerings.

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 AAL were 11.06% higher at $18.39/share (11:05 AM EST).

Source: American Airlines


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