American Airlines (
AAL) reported deeper-than-expected losses for Q1 and announced more capacity cuts on Thursday, ahead of United Airlines (
UAL) results after the close.
The results round out the earnings season for the four major U.S. carriers. Those airlines, along with the rest of the industry, are bracing for more financial turmoil as the coronavirus pandemic keeps flight cabins virtually empty, raising questions about what air travel might look like for passengers in the years ahead.
American Airlines Earnings Report
Estimates: Wall Street expects American Airlines earnings to swing to a $2.16 per-share loss. Revenue was forecast to fall 14% $9.15 billion
Results: Per-share loss of $2.65 on revenue of $8.5 billion. American ended Q1 with $6.8 billion of available liquidity and expects to end Q2 with $11 billion. It sees an average Q2 cash burn rate of approximately $70 million per day, though that should slow to $50 million by June.
American expects to cut 2020 operating and capital expenditures by more than $12 billion. That will come in part by reducing capacity by about 80% in both April and May, and 70% in June, as well as retiring certain older aircraft ahead of schedule. In addition, nearly 39,000 employees have opted for an early retirement, a reduced work schedule or a partially paid leave.
Stock: American Airlines stock sank 8% to 11.63. Delta Air Lines (
DAL), which reported earnings last week, and Southwest (
LUV), which reported on Tuesday, fell 3.6% and 1.2%, respectively.
Delta also announced Thursday that it expects to end Q2 with more than $12 billion in cash after raising $5 billion in new financing and plans to apply for another $4.6 billion bailout loan.
