American Airlines Posts Loss, Cash Burn Less Than Forecast

American Airlines reported a narrower-than-expected second-quarter net loss on an 86% drop in revenue.

American Airlines Group  (AAL) - Get Report swung to a better-than-expected second-quarter loss on an 86% decline in revenue. 

The Fort Worth, Texas, carrier reported an adjusted net loss of $3.4 billion, or $7.82 a share. Analysts surveyed by FactSet were expecting a loss of $7.84 a share for the period. 

Revenue in the quarter fell 86% to $1.62 billion. The FactSet survey called for a consensus estimate of $1.44 billion.

“This was one of the most challenging quarters in American’s history,” Chairman and Chief Executive Doug Parker said in a statement. 

“Covid-19 and the resulting shutdown of the U.S. economy have caused severe disruptions to global demand for air travel."

The better-than-expected results follow those of United Airlines Holdings. On Tuesday, the Chicago carrier reported "the most difficult financial quarter in its 94-year history," swinging to a $1.63 billion second-quarter loss from a year-earlier profit on 87% lower revenue.

American Air reported an average daily cash burn rate of $55 million in the quarter, better than the $70 million a day it had forecast. 

Three weeks ago, American said it reduced its daily cash burn to less than $35 million a day in June from $100 million a day in April. 

The airline ended the quarter with about $10.2 billion in available cash. An additional signed Treasury Department loan term sheet for $4.75 billion is expected to close in the third quarter. 

“We have moved swiftly to improve our liquidity, conserve cash and ensure customers are safe when they travel,” Parker said. 

“There is much uncertainty ahead, but we remain confident we will emerge from this crisis more agile and more efficient than ever before.”

Earlier this month, American said that it was overstaffed by 20,000 employees for the fall schedule. 

However, U.S. carriers are prohibited from laying off or cutting staff pay rates through September under the terms of funding they received from the U.S. Treasury. 

At last check American Airlines shares were up 0.6% at $11.43.