American Airways (AAL) and Southwest (LUV) outcomes for the fourth quarter of 2020
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 posted record quarterly losses on Thursday and faces difficult months 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 declined more than 64% to $ 4.03 billion, compared to $ 11.3 billion. Revenue was $ 3.88 billion for the quarter, above analysts’ forecasts. In premarket trading, shares rose 47%. American has much less interest in its stocks than any other US carrier.
The Fort Worth, Texas-based airline expects capacity to decrease 45% in the first quarter of 2021 compared to 2019, before the coronavirus pandemic weighed on demand for travel. For the first quarter, sales are expected to decline by 60% to 65% compared to the previous months of 2019.
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.
American Airlines executives will be on call at 8:30 am ET to discuss the company’s results and prospects.
Southwest Airlines reported its first annual loss since 1972 earlier Thursday and said capacity will remain conservative through March as demand is weak.
The Dallas-based company Southwest expects an average cash burn of around 17 million US dollars 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.