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American Airlines Posts Narrower Fourth-Quarter Loss

American Airlines posts a narrower-than-expected fourth-quarter loss and revenue that beats forecasts as it continues to navigate pandemic-induced turbulence.

American Airlines (AAL) - Get American Airlines Group, Inc. Report on Thursday announced a narrower-than-expected fourth-quarter loss and revenue numbers that beat Wall Street forecasts as the carrier continued to struggle ferrying passengers across the skies amid ongoing pandemic-induced turbulence at a profit.

Fort Worth, Texas-based American posted a net loss of $931 million, or $1.44 a share, better than analysts’ forecasts of a $1.47-a-share loss. Excluding net special items, the carrier posted a fourth-quarter net loss of $921 million, or $1.42 a share. 

Cost per available seat mile, an industry benchmark, rang in at a net $13.14, down from $17.59 a year ago. Revenue came in at $9.4 billion, better than analysts' forecasts of $9.37 billion but 17% lower than in the same period in 2019 on a 13% reduction in total available seat miles (ASMs) versus the same period in 2019, the company said.

“Over the past year, we have experienced periods of high travel demand countered by periods of decreased demand due to new COVID-19 variants. This volatility has created the most challenging planning environment in the history of commercial aviation,” American CEO Doug Parker said in a statement.

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The results roughly matched what American had said it would report in a December update filed with the U.S. Securities and Exchange Commission.

American said fourth quarter revenue would still be down around 17% from pre-pandemic levels recorded in 2019, albeit a 3-percentage-point improvement from its October forecast. Pre-tax profit margins, the carrier said, would be between -12% and -13%, again an improvement from its October estimate of -16% to -18%.

The company ended the fourth quarter with $15.8 billion of total available liquidity. However, it also noted that $4.2 billion of Payroll Support Program (PSP) financial assistance was part of its 2021 mainline operating costs, though that was partially  offset by $168 million of salary and medical costs for voluntary retirement programs offered as a result of reductions to the company's operation due to the pandemic.

For the first quarter, American said it expects revenue to be off 20% to 22% from the same period in 2019 when it generated $10.6 billion in sales. Capacity for the first three months will be 90% to 92% restored, the company said.

American Airlines stock on Wednesday closed at $17.31, down 0.59%. The stock was up 1.3% in premarket trading following the earnings release. The shares have fallen 15% over the past six months.