American Airlines Reports First Cash Profit Since Start Of Pandemic
The Fort Worth-based airline has reported $11.6 billion in losses since the start of the COVID-19 pandemic in 2020.
The airline said it expects to end the second quarter of its fiscal year with more than $20 billion of total liquidity, citing increased travel as vaccination rates rise.
“Given the strength of summer bookings outlined above and based on preliminary internal results, for the first time since the pandemic began, the company generated cash for the month of May and expects to end the second quarter with more than $20 billion of total liquidity versus its previous guidance of $19.5 billion,” American said in its investor report.
The Memorial Day holiday brought particularly high travel rates. Dallas Fort Worth International Airport hosted roughly 88% as many travelers during this year's Memorial Day weekend as it did in 2019.
The report was followed by the Alliance Bernstein 37th Annual Strategic Decisions Conference where American Airlines President Robert Isom said he's "optimistic" about the company's outlook heading into the third and fourth quarters.
“We’re much more optimistic about where American is, where we are positioned and the demand that is coming in through international, through business and also from leisure on a combined basis,” he said.
The anticipated cash profit will be used to pay off the $50 billion debt the company currently sits on. Financially, American Airlines was the hardest-hit airline during the pandemic. Back in April of last year, NPR reported that the company was burning through cash at a rate of $70 million a day. American was among other major carriers like United and Delta Air Lines that turned to cost-cutting measures, slashing staff and flights.
Now, American Airlines' financial team say it's in the best financial position of the last 15 months.
Donavan Klinger, senior international account manager at American, predicted more domestic travelers will prioritize luxury over cost after putting their travel plans on hold during the pandemic.
"Our ability to sell up is going to continue to look positive when we look back at historic trends," he said.
The airline said with northern U.S. cities reopening, domestic travel will pick up further, in turn leading to more cash profits in the company’s next quarter.
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