Jets are parked on runway 28 at the Pittsburgh International Airport on March 27, 2020 in Pittsburgh, Pennsylvania.
Jeff Swensen | Getty Imageas
American Airlines posted a net loss of $2.1 billion in the second quarter, the latest carrier to outline the financial damage to travel demand from the coronavirus pandemic.
Revenue dropped more than 86% in the quarter to $1.6 billion from close to $12 billion a year earlier.
American carrier has added more capacity back than some of its large competitors like Delta or United than some of its peers in adding capacity back to the market as aimed to capitalize on an uptick in air travel demand that bottomed out in April.
But the Fort Worth, Texas-based airline slashed its daily cash burn rate from $100 million a day in April to $30 million a day in June after it cut flights, idled planes and thousands of employees took voluntary time off.
“We have moved swiftly to improve our liquidity, conserve cash and ensure customers are safe when they travel,” CEO Doug Parker said. “There is much uncertainty ahead, but we remain confident we will emerge from this crisis more agile and more efficient than ever before.”
American and other airline executives are warning that demand has softened due to a spike in coronavirus cases and travel restrictions abroad and quarantine orders in states like New York. American said it expects its capacity in the third quarter to be down 60% compared with last year.
The pandemic has been particularly painful for airlines because a resurgence in cases comes during what is normally the most lucrative time of year, the peak summer travel season.
“The current environment is more unpredictable and more volatile than anything we ever could have imagined,” CEO Parker and the airline’s president Robert Isom, said in an employee note.
Investors are focused now on airlines’ cash burn rates. In addition to parking hundreds of jetliners and slashing routes, carriers are gearing up to shed more workers as the Oct. 1 expiration of the terms of federal aid that prohibit job cuts approaches.
American Airlines’ executives will hold an analyst call at 8:30 a.m. EDT.
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