Southwest Airlines Flight 1117 from St. Louis lands at Boston Logan International Airport on March 13, 2019. (Photo by John Tlumacki / The Boston Globe via Getty Images)
John Tlumacki | The Boston Globe | Getty Images
American Airlines A record quarterly loss was posted on Thursday and difficult months lie ahead as new travel restrictions and slow vaccine adoption hope for a near-term recovery.
American posted a net loss of $ 2.2 billion in the fourth quarter. Revenue decreased more than 64% to $ 4.03 billion, compared to $ 11.3 billion a year ago. Revenue was $ 3.88 billion for the quarter, above analysts’ forecasts. In premarket trading, stocks rose 30% In the midst of the frenzy of retail buying stocks with large short-term interests. American has much less interest in its stocks than any other US carrier.
The airline expects a capacity decrease of 45% for the first quarter of 2021 compared to 2019 before the Coronavirus pandemic plagued travel requirement. For the first quarter, a decline in sales of 60% to 65% compared to the previous months of 2019 is expected.
Here’s how American performed compared to Wall Street’s expectations in the fourth quarter based on Refinitiv’s average estimates:
- Adjusted EPS: a loss of $ 3.86 versus an expected loss of $ 4.11.
- Revenue: $ 4.03 billion versus expected $ 3.88 billion in revenue.
Early Thursday Southwest Airlines Reported its first annual loss since 1972, saying that capacity will remain conservative through March as demand is weak.
Southwest expects an average core cash burn of around US $ 17 million per day for the first quarter, “due to persistent weak demand and a seasonally weaker travel period in January and February 2021, as well as rising fuel prices.” That’s more than the $ 12 million a day for the last three months of 2020.
Sales are forecast to decrease 65% to 70% in January compared to 2019, slightly better than a 75% decrease previously forecast after cancellations stabilized. Southwest said February revenue is projected to decrease 65% to 75% compared to the same month of 2019.
The share price rose 3% on the Thursday before the market.