American Airlines Flight 718, the first U.S. Boeing 737 MAX commercial flight since regulators grounded for 20 months in November, will depart from Miami, Florida on December 29, 2020.
Marco Bello | Reuters
American Airlines reported a record quarter-on-quarter loss on Thursday and faces difficult months as new travel restrictions and a slow rollout of vaccines stand in the way of hopes for a recovery in the near term.
American posted a net loss of $ 2.2 billion in the fourth quarter. Sales plummeted more than 64% to $ 4.03 billion, compared to $ 11.3 billion. Sales for the quarter were above analyst expectations at $ 3.88 billion. Shares were up 47% in premarket trading. American has far more short-term stakes in its stock than other US carriers.
Fort Worth, the Texas-based airline, said it expects capacity to be 45% lower in the first quarter of 2021 than in 2019, before the coronavirus pandemic undermined travel demand. It expects revenue in the first quarter to be 60% to 65% lower than the same months of 2019.
Here’s how American performed in the fourth quarter, compared to what Wall Street expected, based on average estimates compiled by Refinitiv:
- Adjusted Earnings Per Share: A loss of $ 3.86 versus an expected loss of $ 4.11.
- Revenue: $ 4.03 billion vs. $ 3.88 billion in revenue projected.
American Airlines executives will discuss the company’s results and outlook during an 8:30 a.m. ET call.
Southwest Airlines reported its first annual loss since 1972 earlier Thursday, saying it would remain conservative with capacity until March, citing weak demand.
Dallas-based Southwest expects an average cash burn of approximately $ 17 million per day in the first quarter, “as a result of continued weak demand and a seasonally weaker travel period in January and February 2021, as well as rising fuel prices.” That’s more than the $ 12 million a day in the last three months of 2020.
It predicts revenues will drop 65% to 70% in January compared to 2019, slightly better than a whopping 75% drop previously predicted after cancellations stabilized. Southwest said revenues are likely to fall by 65% to 75% in February compared to the same month of 2019.