- Joe Breitfeller
American Airlines Reports Second Quarter Net Loss of $1.1 Billion on Revenue of $7.5 Billion
American Airlines has reported a second quarter net loss of $1.1 billion or ($1.69) per share on revenue of $7.5 billion. When Payroll Support Program benefits of $1.4 billion before taxes are included, the carrier shows a profit of $19 million or $0.03 per share.
On Thursday (July 22, 2021), American Airlines reported their second quarter financial results for the period ending June 30, 2021. The carrier reported a second quarter net loss, excluding net special items, of $1.1 billion or ($1.69) per diluted share. When net special items before taxes are included, primarily $1.4 billion in Payroll Support Program extension (PSP2 and PSP3) funds are included, the airline shows a GAAP net income of $19 million or $0.03 per share. American Airlines ended the second quarter with a record $21.3 billion in liquidity.
In Thursday’s announcement, American Airlines’ Chairman and CEO, Doug Parker, said,
“We have taken a number of steps to solidify our business through our Green Flag Plan and it shows in our second-quarter results. We have reshaped our network, simplified our fleet and made our cost structure more efficient, all to create an airline that will outperform competitors and deliver for customers. The green flag has dropped and we are ready thanks to the tremendous efforts and dedication of the American Airlines team.”
American Airlines’ daily cash burn rate turned positive in the second quarter to a cash build rate of approximately $1.0 million per day. As previously mentioned, the carrier ended the second quarter with $21.3 billion in liquidity, which will remain at elevated levels in the short-term, but gradually be stepped down to a target of $10-$12 billion by 2022. The airline plans on reducing their debt by more than $15 billion by 2025 through naturally occurring amortization, by using excess free cash flow to pay down pre-payable debt, and by financing future aircraft deliveries with cash rather than debt. Today (July 22, 2021), the airline pre-payed the entirety of their $950 million spare parts term loan which was scheduled to mature in 2023.
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 pre-market trading on Thursday (July 22, 2021), shares in American Airlines were down 1.54% at $21.07/share (9:00 AM EDT).
Source: American Airlines