American Airlines’ revenue tanks 86% in the second quarter
- American Airlines’ revenue tanks 86% in the second quarter as COVID-19 weighs on demand.
- The airline slashes its daily cash burn to £23.62 million in June from £78.73 million in April.
- The U.S. air carrier concludes the second quarter with £8.03 billion of available liquidity.
American Airlines (NASDAQ: AAL) revealed to have swung to a loss of £1.65 billion in the fiscal second quarter on Thursday. The company attributed its dovish performance to the economic blow from COVID-19 that brought the demand for air travel to a near halt in recent months. Its peer, Southwest Airlines, also reported £720 million of loss in Q2 on Thursday.
Shares of the company were reported 0.5% up in premarket trading on Thursday. At £8.93 per share, American Airlines is roughly 60% down year to date in the stock market after recovering from an even lower £7.12 per share in May. Learn more about how can you start trading on the stock market.
American Airlines slashed its daily cash burn to £23.62 million in June
Are you looking for fast-news, hot-tips and market analysis? Sign-up for the Invezz newsletter, today.
At £1.26 billion, American Airlines said that its revenue came in over 86% lower than £9.45 billion in the same quarter last year. According to FactSet, experts had forecast the company to print £1.13 billion in revenue in the recent quarter. In June, American Airlines said that its workforce was likely to be 10% to 20% larger than required next year in July.
The U.S. air carrier also highlighted to have slashed its daily cash burn to £23.62 million in June from a much higher £78.73 million in April as thousands of its workers opted for voluntary time off and the airline idled planes and cut flights in recent months. American Airlines started issuing WARN notices last week to 25K employees.
For the third quarter, American Airlines forecasts its capacity to remain about 60% lower on a year over year basis as COVID-19 cases continue to surge in the U.S., pushing several states including New York into reinstating the travel restrictions.
American Airlines concludes Q2 with £8.03 billion of available liquidity
In its report on Thursday, the U.S. airline also highlighted to have lost £6.16 a share in the second quarter on an adjusted basis. Analysts, on the other hand, had anticipated the company to see a slightly higher £6.17 of loss per share in Q2.
The Fort Worth-based company concluded the second quarter with available liquidity of £8.03 billion. The airline issued £940 million of debt and received financial support from the U.S. government to weather the impact of COVID-19. It also slashed its capital expenditures by over £11.81 billion in 2020.
American Airlines’ performance in the stock market was also reported dovish last year with an annual decline of about 10%. At the time of writing, the U.S. airline holding company has a market cap of £4.54 billion.