American Airlines Group Inc. swung to a loss as the COVID-19 pandemic forced the grounding of non-essential travel.
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The Fort Worth, Texas-based air carrier lost $2.2 billion, or $5.26 a share, as total operating revenue plunged 20 percent to $8.52 billion in the three months through March. Adjusted loss per share, which excluded fleet impairment charges and one-time labor contract expenses, was $2.65 per share.
Wall Street analysts surveyed by Refintiv were expecting an adjusted loss of $2.33 a share on revenue of $8.94 billion.
“Never before has our airline, or our industry, faced such a significant challenge,” American Airlines CEO Doug Parker said in a statement.
“We have moved quickly and aggressively to reduce our costs and bolster our liquidity,” he added. “We are particularly grateful for the $5.8 billion in financial assistance American will receive through the Payroll Support Program, and we appreciate the bipartisan congressional and U.S. Department of the Treasury and Department of Transportation support to protect airline jobs and ensure a strong and competitive U.S. airline industry."
American ended the first quarter with $6.8 billion of liquidity. The embattled airline expects to burn $70 million cash each day, on average, in the second quarter, with the rate moderating to $50 million daily by the end of June. The carrier said total liquidity should rise to $11 billion by the end of the current quarter as assistance from the Coronavirus Aid, Relief, and Economic Security (CARES) Act kicks in.
To compensate for reduced demand, American has cut the number of flights by 80 percent in both April and May, and by 70 percent in June. Its shares fell 56 percent this year through Wednesday, underperforming the S&P 500's 12 percent decline.