The airlines reported the results after rivals Delta Air Lines (DAL) and United Airlines (UAL) looked for reopenings in leisure-travel destinations as they prepare for a slower recovery in corporate and international flying.
American Airlines Earnings
Estimates: Wall Street expected American Airlines to lose $4.35 a share. Revenue was seen falling 53% to $4.03 billion.
Results: American Airlines lost $4.32 a share with revenue plunging to $4 billion. Daily cash burn fell t $27 million. Average cash burn was $27 million per day in Q1 and $4 million in March. Excluding debt principal and cash severance payments, March was positive.
Outlook: American said “we see signs of continued recovery in demand.” American expects Q2 revenue to be down 40% vs. a year earlier, with capacity down 20%-25% vs. a year earlier.
Stock: Shares dipped 1% to 20.79 in the stock market today. AAL stock has a 44 Composite Rating, with an EPS Rating, which measures profit growth, of 10.
Among other airline stocks, Delta and United both lost 0.4%. Ultra low-cost carrier Spirit Airlines (SAVE), which beat forecasts late Wednesday and said it may breakeven in Q2, eased 0.3%
Alaska Airlines (ALK), which reported a slightly smaller-than-expected loss early Thursday, and topped revenue forecasts, lost 0.2%.
Estimates: Wall Street expected Southwest to lose $1.85 per share. Revenue was seen falling 52% to $2.03 billion.
Results: Southwest lost $1.72 a share. Revenue tumbled 51.5% to $2.05 billion. Core cash burn was $9 million per day in March and $13 million per day in Q1. Management sees core cash burn of Q2 of $2 million-$4 million per day, with breakeven cash flow, or better, by June.
Southwest Airlines sees sequential revenue gains as bookings improve, and will increase flights in June.
“Our current outlook for operating revenues indicates a sequential improvement from March to April 2021, and again from April to May 2021, based on improving bookings. We believe there is significant pent-up demand for leisure travel and are optimistic about summer 2021. In response, we are in the process of adding flights in June 2021, and we currently expect June available seat miles (ASMs, or capacity) to be only slightly less than June 2019 pre-pandemic levels.”
Stock: Shares climbed 1% to 62.78. LUV stock has a 51 Composite Rating. Its EPS Rating is 10.
‘Euphoria’ Economy May Lift LUV, AAL Stocks
Airline stocks have rebounded from a year ago, when fears of the pandemic reached their heights. Both Delta and United this month have said a path back to profitability was emerging. Some carriers started to generate cash last month.
The U.S. is still logging thousands of new coronavirus cases. Unemployment remains elevated. But with vaccinations expanding, stimulus cash percolating and more potential travelers amassing savings, anticipation has grown for flood of celebratory, post-lockdown spending.
Delta and United, during their earnings calls, said they were hoping, or prepared, to have flights between the U.S. and the UK open by the summer.
“If the U.S.-UK opens up, I think you’re going to have a hard time finding a hotel room in the UK,” Andrew Nocella, United’s chief commercial officer, said. “Because there’s going to be so many people wanting to go.”
United said it took more than 3,000 bookings on Monday for new flights to Greece, Iceland and Croatia. However, Delta executives said more widespread travel to Continental Europe and Asia could take longer to recover.
Corporate travel could also be slower to come back, as more people do business from home and companies take take steps to ensure travel is safe for employees.
“Our best guess is that a rebound will be correlated with schools reopening in person and more people returning to the office,” Nocella said during the call.
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