04 May, 2021

American Airlines Reports First-Quarter 2021 Financial results

American Airlines Group reported its first-quarter 2021 financial results last week, demonstrating first-quarter revenue of $4.0 billion, down 53% year over year on a 39% year-over-year reduction in total available seat miles (ASMs).

First-quarter net loss of $1.3 billion, or ($1.97) per share. Excluding net special items1, the first-quarter net loss was $2.7 billion, or ($4.32) per share. Raised $10 billion through debt offering backed by the AAdvantage program and used a portion of the proceeds to prepay in full the secured loan from the U.S. Department of the Treasury. Ended the first quarter with approximately $17.3 billion of total available liquidity. The company expects to end the second quarter with approximately $19.5 billion in total available liquidity.

“We are incredibly proud of the American Airlines team for their continued care of our customers and each other,” said American’s Chairman and CEO Doug Parker. “Our team has shown up every day throughout the pandemic and served more customers than any other airline. That focus has served as our inspiration and positions us well as even more customers return to the skies.

“Looking forward, with the momentum underway from the first quarter, we see signs of continued recovery in demand. We remain confident the network enhancements, customer-focused improvements and efficiency measures we’ve put into place will ensure American is well-positioned for the recovery.”

American continues to take steps to strengthen its business and respond to the pandemic, with an emphasis on supporting its customers, team members and communities; reducing costs; and improving its liquidity position and balance sheet.

To support its customers, team members and communities, American:

Enhanced its travel planning tool to help customers make informed decisions on where to travel and what to expect upon arrival. With one click, customers can view quarantine, document or testing requirements, as well as book flights.
Expanded acceptance of VeriFLY, the mobile health wallet that simplifies and verifies travel requirements, to include all international flights to the U.S. and flights from the U.S. to 11 countries. American’s partners Aer Lingus, British Airways, Iberia and Japan Airlines also began accepting VeriFLY during the first quarter.
Expanded its touchless technology trial to allow customers to use biometric scanners to check their bags prior to departure at Dallas-Fort Worth International Airport (DFW). American will utilize the same technology to allow customers to gain entrance to an Admirals Club lounge at DFW later this year and will consider additional airport solutions going forward.
Updated its mask requirement to align with directives from the Centers for Disease Control and Prevention and the Transportation Security Administration.
Expanded preflight COVID-19 testing options to give customers access to in-person testing at more than 150 local urgent care facilities and hospitals through GoHealth Urgent Care. American also now allows customers to redeem AAdvantage® miles for at-home COVID-19 testing kits through LetsGetChecked.
Canceled the 13,000 WARN notices sent to team members in February following the passage of the COVID-19 relief package that includes an extension of the Payroll Support Program (PSP).
Introduced an incentive program to encourage team members to get the COVID-19 vaccine. American’s U.S.-based mainline and wholly owned team members who get vaccinated will receive an extra vacation day in 2022 as well as $50 in recognition points.
Partnered with health care providers and airports to establish on-site team member vaccination locations in Chicago, Charlotte, Dallas-Fort Worth and Tulsa.
Continued to transport critical goods, including the COVID-19 vaccine, through strategic cargo-only flights. American helped customers move 230 million pounds of goods around the world in the first quarter, including 98 million pounds on its nearly 2,700 cargo-only flights.
Reached agreements with Deloitte and Kuehne+Nagel to help stimulate more production of sustainable aviation fuel and help our customers reduce their emissions from travel.

To reduce costs and conserve cash, American:

Incorporated more than $1.3 billion of permanent non-volume cost reductions into its 2021 plans. This includes approximately $500 million in management reductions, $600 million in labor productivity enhancements, and $200 million in other permanent cost reductions.
Reached an agreement with Boeing to defer and convert five 787-8 aircraft to 787-9 aircraft. These deliveries are now expected to occur in 2023 and will retain their existing financing. American’s remaining 14 787-8 aircraft will now be delivered by the end of the first quarter of 2022.
Exercised its remaining deferral rights on the Boeing 737 MAX aircraft that were previously scheduled to be delivered in 2021 and 2022. With this adjustment, the delivery of these 18 MAX aircraft is now expected to occur in 2023 and 2024.
Accelerated its cabin-standardization program by a year with all Boeing 737s expected to be completed by the second quarter of 2021 and all Airbus A321s expected to be completed by the end of 2021.
Enhanced its technology capabilities through a virtual assistant for customers in the American Airlines mobile app; ConnectMe, a real-time chat tool for airport team members; and an automated crew recovery program.
Opened a new voluntary early out program in February, which approximately 1,600 team members opted into.
To improve its liquidity position and balance sheet, American:

Reduced its average cash burn rate2 to approximately $27 million per day in the first quarter. This includes approximately $9 million per day in regular debt principal and cash severance payments. For the month of March, the Company’s estimated average daily cash burn rate was approximately $4 million. Excluding approximately $8 million per day of regular debt principal and cash severance payments, the Company’s cash burn rate turned positive in March.
Obtained the right to access an additional $3.3 billion in financial assistance through the COVID-19 relief package passed and signed into law in early March. In addition to extending the PSP, the legislation will allow the Company to defer approximately $2 billion in pension funding over the next five years.
Issued $6.5 billion of bonds and entered into a new $3.5 billion term loan facility, using the AAdvantage program as collateral for both.
Used a portion of the proceeds from the AAdvantage financing to prepay its secured loan from the U.S. Department of the Treasury. In doing so, American has terminated its loan commitments under the secured loan agreement authorized by the CARES Act.
Repaid in full $2.8 billion under three separate revolving credit facilities, reducing the Company’s outstanding debt by $2.8 billion without changing its total available liquidity. American is able to draw upon the revolving commitments again or leave them undrawn, per the terms of the underlying credit agreements until such commitments expire, which is currently scheduled to occur in October 2024 for substantially all of the commitments.
Related to the aforementioned deferral of Boeing 737 MAX aircraft, in April the Company elected to prepay $248 million of outstanding loans under its pre-delivery payment 737 MAX credit facility with the related pre-delivery deposits to be returned to the Company from the resulting deferral.
Expects to end the second quarter with approximately $19.5 billion in total available liquidity.

 Network and partnerships

American advanced its newly formed partnerships with Alaska Airlines and JetBlue Airways in the first quarter. Alaska officially joined oneworld as a full member, giving customers more choices and benefits and a seamless travel experience not only on the West Coast but throughout the world. American also expanded its codeshare with Alaska and launched new service between Seattle and London. Additionally, American and JetBlue together will introduce 57 new domestic and international routes for customers in New York and Boston beginning in June. The airlines are also significantly expanding their codeshare to include more than 100 new flights. The Alaska and JetBlue partnerships will continue to deliver significant benefits for consumers and allow for efficient growth, with new service launching later this year between Seattle and Shanghai and Bangalore, and between New York and Tel Aviv, Athens, Santiago and New Delhi.

American Airlines Group Inc.
Condensed Consolidated Statements of Operations
(In millions, except share and per share amounts)
 3 Months Ended
March 31,
  2021  2020 (1) (Decrease) 
Operating revenues:      
Passenger$3,179  $7,681  (58.6) 
Cargo 315   147  nm (2)
Other 514   687  (25.3) 
Total operating revenues 4,008   8,515  (52.9) 
Operating expenses:           
Aircraft fuel and related taxes 1,034   1,784  (42.0) 
Salaries, wages and benefits 2,730   3,219  (15.2) 
Regional expenses:           
Regional operating expenses 544   1,057  (48.6) 
Regional depreciation and amortization 81   83  (2.7) 
Maintenance, materials and repairs 376   629  (40.2) 
Other rent and landing fees 570   611  (6.6) 
Aircraft rent 351   334  4.9  
Selling expenses 151   385  (60.8) 
Depreciation and amortization 478   560  (14.6) 
Special items, net (1,708)  1,132  nm  
Other 716   1,270  (43.6) 
Total operating expenses 5,323   11,064  (51.9) 
Operating loss (1,315)  (2,549) (48.4) 
Nonoperating income (expense):           
Interest income 4   21  (83.3) 
Interest expense, net (371)  (257) 43.9  
Other income (expense), net 109   (105) nm  
Total nonoperating expense, net (258)  (341) (24.3) 
Loss before income taxes (1,573)  (2,890) (45.6) 
Income tax benefit (323)  (649) (50.1) 
Net loss$(1,250) $(2,241) (44.2) 
Loss per common share:           
Basic and diluted$(1.97) $(5.26)    
Weighted average shares outstanding (in thousands):           
Basic and diluted 634,609   425,713     
Note: Percent change may not recalculate due to rounding.     
(1) Beginning in the first quarter of 2021, aircraft fuel and related taxes as well as certain salaries, wages and benefits, other rent and landing fees, selling and other expenses are no longer allocated to regional expenses on the Company's condensed consolidated statements of operations. The first quarter of 2020 condensed consolidated statement of operations has been recast to conform to the 2021 presentation. This statement of operations presentation change has no impact on total operating expenses or net loss.
(2) Not meaningful or greater than 100% change.

American Airlines Group Inc.
Consolidated Operating Statistics (1)
 3 Months Ended
March 31,
 2021 2020 (Decrease) 
Revenue passenger miles (millions)22,464 45,171 (50.3)%
Available seat miles (ASM) (millions)37,764 62,099 (39.2)%
Passenger load factor (percent)59.5 72.7 (13.2)pts
Yield (cents)14.15 17.00 (16.8)%
Passenger revenue per ASM (cents)8.42 12.37 (31.9)%
Total revenue per ASM (cents)10.61 13.71 (22.6)%
Cargo ton miles (millions)532 436 22.1 %
Cargo yield per ton mile (cents)59.18 33.62 76.0 %
Fuel consumption (gallons in millions)608 972 (37.4)%
Average aircraft fuel price including related taxes (dollars per gallon)1.70 1.83 (7.4)%
Operating cost per ASM (cents)14.09 17.82 (20.9)%
Operating cost per ASM excluding net special items (cents)19.19 15.84 21.1 %
Operating cost per ASM excluding net special items and fuel (cents)16.45 12.97 26.8 %
Passenger enplanements (thousands)24,238 42,201 (42.6)%
Departures (thousands):      
Mainline153 253 (39.5)%
Regional186 279 (33.5)%
Total339 532 (36.4)%
Average stage length (miles):      
Mainline1,205 1,153 4.5 %
Regional505 469 7.7 %
Total821 794 3.4 %
Aircraft at end of period:      
Mainline (2)851 942 (9.7)%
Regional (3)548 542 1.1 %
Total1,399 1,484 (5.7)%
Full-time equivalent employees at end of period:      
Mainline88,500 104,400 (15.2)%
Regional (4)24,700 27,100 (8.9)%
Total113,200 131,500 (13.9)%
Note: Amounts may not recalculate due to rounding.      
(1) Unless otherwise noted, operating statistics include mainline and regional operations. Regional includes wholly-owned regional airline subsidiaries and operating results from capacity purchase carriers.
(2) Excludes 35 Boeing 737-800 mainline aircraft that are in temporary storage at March 31, 2021.
(3) Includes aircraft owned and leased by American as well as aircraft operated by third-party regional carriers under capacity purchase agreements. Excludes two Embraer 145 regional aircraft that are in temporary storage at March 31, 2021.
(4) Regional full-time equivalent employees only include our wholly-owned regional airline subsidiaries.

American Airlines Group Inc.
Consolidated Revenue Statistics by Region
 3 Months Ended
March 31,
 2021 2020 (Decrease) 
Domestic (1)      
Revenue passenger miles (millions)18,538 31,856 (41.8)%
Available seat miles (ASM) (millions)27,952 44,238 (36.8)%
Passenger load factor (percent)66.3 72.0 (5.7)pts
Passenger revenue (dollars in millions)2,655 5,780 (54.1)%
Yield (cents)14.32 18.14 (21.1)%
Passenger revenue per ASM (cents)9.50 13.07 (27.3)%
Latin America (2)      
Revenue passenger miles (millions)3,576 7,116 (49.7)%
Available seat miles (millions)7,865 9,068 (13.3)%
Passenger load factor (percent)45.5 78.5 (33.0)pts
Passenger revenue (dollars in millions)482 1,180 (59.2)%
Yield (cents)13.47 16.57 (18.8)%
Passenger revenue per ASM (cents)6.12 13.01 (52.9)%
Revenue passenger miles (millions)199 4,185 (95.2)%
Available seat miles (millions)1,151 6,239 (81.5)%
Passenger load factor (percent)17.4 67.1 (49.7)pts
Passenger revenue (dollars in millions)22 523 (95.8)%
Yield (cents)11.10 12.50 (11.2)%
Passenger revenue per ASM (cents)1.93 8.39 (77.0)%
Revenue passenger miles (millions)151 2,014 (92.5)%
Available seat miles (millions)796 2,554 (68.8)%
Passenger load factor (percent)18.9 78.8 (59.9)pts
Passenger revenue (dollars in millions)20 198 (89.7)%
Yield (cents)13.53 9.84 37.4 %
Passenger revenue per ASM (cents)2.56 7.76 (67.0)%
Total International      
Revenue passenger miles (millions)3,926 13,315 (70.5)%
Available seat miles (millions)9,812 17,861 (45.1)%
Passenger load factor (percent)40.0 74.5 (34.5)pts
Passenger revenue (dollars in millions)524 1,901 (72.4)%
Yield (cents)13.35 14.28 (6.5)%
Passenger revenue per ASM (cents)5.34 10.64 (49.8)%
Note: Amounts may not recalculate due to rounding.     
(1) Domestic results include Canada, Puerto Rico and U.S. Virgin Islands.
(2) Latin America results include the Caribbean.

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