American Airlines Group Inc. (AAL) - Get Report shares slumped lower Thursday after the biggest U.S. carrier warned that as many as 13,000 employees, or 10% of its global workforce, could be furloughed in the coming months.
American said restrictions on international travel, as well as slower-than-expected vaccine rollouts in the United States and Europe would continue to blunt demand, and echoed calls from rival United Airlines UAL for another $15 billion in payroll support from Congress as part of President Joe Biden's $1.9 trillion stimulus bill.
Earlier this week, the International Air Transport Association lobby group said COVID-related travel restrictions, including mandatory quarantines, could harm the industry's recovery prospects, and forecast overall traffic at just 38% of 2019 levels.
"We are nearly five weeks into 2021, and unfortunately, we find ourselves in a situation similar to much of 2020," CEO Doug Parker said in a memo to airlines employees Wednesday. "The vaccine is not being distributed as quickly as any of us believed, and new restrictions on international travel that require customers to have a negative COVID-19 test have dampened demand."
American Airlines shares were marked 1.2% lower in early trading Thursday to change hands at $17.40 each.
American posted an adjusted loss of $3.86 per share over the fourth quarter, as revenues fell 64% to $4 billion amid a plunge in air traffic and travel linked to the ongoing pandemic.
“As we look to the year ahead, 2021 will be a year of recovery. While we don’t know exactly when passenger demand will return, as vaccine distribution takes hold and travel restrictions are lifted, we will be ready," Parker said.