American Airlines Flight 718, the first commercial Boeing 737 MAX flight in the US since regulators lifted a 20-month link in November, takes off from Miami, Florida, on December 29, 2020.
Marco Bello | Reuters
American Airlines reported a record quarterly loss on Thursday and is facing difficult months ahead, as new travel restrictions and a slow release of vaccine clouds hope for a short-term recovery.
The American posted a net loss of $ 2.2 billion in the fourth quarter. Revenue fell more than 64 percent to $ 4.03 billion from $ 11.3 billion. Sales exceeded analysts’ forecasts of $ 3.88 billion for the quarter. Shares increased by 47% in premarket trading. The American has a much shorter interest in his actions than other American carriers.
The airline in Fort Worth, Texas, said it expects capacity in the first quarter of 2021 to drop by 45% from 2019, before the coronavirus pandemic affects travel demand. Revenues are expected to be reduced by 60% to 65% lower in the first quarter compared to the same months in 2019.
Here’s how the American performed in the fourth quarter, compared to what Wall Street expected, based on average estimates compiled by Refinitiv:
- Adjusted EPS: a loss of $ 3.86 compared to an expected loss of $ 4.11.
- Revenue: $ 4.03 billion compared to projected revenue of $ 3.88 billion.
American Airlines executives will discuss the company’s results and prospects on an ET call from 8:30 a.m.
Southwest Airlines reported the first annual loss since 1972 on Thursday and said it would remain conservative with capacity until March, citing weak demand.
The Dallas-based Southwest expects the average core cash burn to be about $ 17 million a day in the first quarter, “as a result of continued soft demand and a weaker travel period in January and February. 2021, as well as the increase of fuel prices ”. It has risen from $ 12 million a day in the last three months of 2020.
It is estimated that revenues in January will decrease by 65% to 70% compared to 2019, slightly better than a decrease of up to 75% that it had previously forecast after the stabilization of cancellations. Southwest said February revenue is likely to drop 65% to 75% compared to the same month in 2019.