American Airlines Group (AAL) - Get Report posted a wider-than-expected first quarter loss of $2.24 billion Thursday, and suspended its dividend and share buyback plans, after taking nearly $11 billion in government assistance from the CARES Act.
American said its adjusted first quarter loss was pegged at $2.56 per share, compared to a modest 41 cents per share profit last year and a Street consensus forecast of -$2.33 per share. It was the carrier's first quarterly loss since emerging from bankruptcy protection in 2013 Group operating revenues, American said, tumbled 19.5% to $8.515 billion.
American said it would suspend all of its shareholder return plans, including buybacks and dividends, as it looks to ease its second quarter daily cash burn rate from $70 million per day to $50 million per day by the end of June.
The airline, which said it obtained $10.6 billion in financial assistance through the CARES Act earlier this month, will end the second quarter with around $11 billion in group liquidity.
"Never before has our airline, or our industry, faced such a significant challenge,' said American Airlines CEO Doug Parker. "True to fashion, the American Airlines team has done a phenomenal job taking care of our customers and each other during such difficult and often heartbreaking times. We are incredibly proud of their selflessness and dedication to others."
'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 Airline shares were marked 0.6% lower in early trading immediately following the earnings release Thursday to indicate an opening bell price of $12.54 each.