FORT WORTH, Texas — American Airways Group Inc. (NASDAQ: AAL) as we speak reported its fourth-quarter and full-year 2020 monetary outcomes, together with: Fourth-quarter income of $4.0 billion, down 64% 12 months over 12 months on a 53% year-over-year discount in complete out there seat miles (ASMs).
FORT WORTH, Texas — American Airways Group Inc. (NASDAQ: AAL) as we speak reported its fourth-quarter and full-year 2020 monetary outcomes, together with:
- Fourth-quarter income of $4.0 billion, down 64% 12 months over 12 months on a 53% year-over-year discount in complete out there seat miles (ASMs).
- Fourth-quarter web lack of $2.2 billion, or ($3.81) per share. Excluding web particular objects1, fourth-quarter web loss was $2.2 billion, or ($3.86) per share.
- Full-year web lack of $8.9 billion, or ($18.36) per share. Excluding web particular objects2, full-year web loss was $9.5 billion, or ($19.66) per share.
- Ended fourth quarter with roughly $14.3 billion of complete out there liquidity. Firm expects to finish the primary quarter of 2021 with roughly $15.0 billion in complete out there liquidity.
- Included greater than $1.3 billion of everlasting non-volume, non-fuel effectivity cost-saving measures into 2021 working plan.
“Our fourth-quarter monetary outcomes shut out probably the most difficult 12 months in our firm’s historical past,” stated American Airways Chairman and CEO Doug Parker. “Nonetheless, we couldn’t be prouder of the American Airways group and the good issues they achieved final 12 months. By collaboration, resourcefulness and arduous work, our group did its half to maintain the financial system transferring. The American group flew extra prospects than every other airline in 2020, they usually did so safely and with the utmost care.
“As we glance to the 12 months forward, 2021 might be a 12 months of restoration. Whereas we don’t know precisely when passenger demand will return, as vaccine distribution takes maintain and journey restrictions are lifted, we might be prepared. We’re assured that the actions now we have taken to enhance our buyer expertise, improve our community and improve our effectivity place us nicely for the longer term.”
American took a variety of steps in 2020 to answer the pandemic and strengthen its enterprise, with an emphasis on supporting its group members, prospects and communities; lowering prices; and enhancing its liquidity place.
To assist its group members, prospects and communities, American:
- Enhanced its cleansing procedures at airports and onboard plane beneath the steering of its Journey Well being Advisory Panel, incomes the STAR® Accreditation from the International Biorisk Advisory Council for efficient cleansing, disinfection and infectious illness prevention practices onboard its plane and in its lounges.
- Launched a preflight coronavirus (COVID-19) testing program to assist reopen sure worldwide journey markets. American now provides testing for a lot of worldwide locations and has launched at-home testing for purchasers touring to all U.S. places that require detrimental exams.
- Started the rollout of cellular wellness pockets answer VeriFLY to make home and worldwide journey less complicated. Vacationers can now simply perceive COVID-19 testing and documentation necessities for his or her vacation spot and streamline airport check-in by digital verification. Beginning as we speak, prospects additionally will be capable to use VeriFLY for journey from america to the U.Okay. and Canada.
- Eradicated charges for:
- Ticket modifications on all home and worldwide itineraries when touring from North and South America, excluding Fundamental Financial system fares which can be nonchangeable.
- Mileage redeposits for canceled award bookings.
- Home same-day standby.
- Reserving reservations by cellphone.
- Made it simpler for top-tier prospects to earn AAdvantage® elite standing in 2020 and 2021, paused mileage expiration by June 30, 2021, and prolonged 2020 AAdvantage standing into early 2022 for all members.
- Launched the corporate’s first cargo-only flights since 1984 to move essential items, together with the COVID-19 vaccine, and elevated service to incorporate 41 locations for strategic cargo-only alternatives. American helped prospects transfer almost 800 million kilos of essential items all over the world in 2020, together with 167 million kilos on the airline’s greater than 5,200 cargo-only flights.
- Introduced its purpose to achieve net-zero carbon emissions by 2050 and detailed the corporate’s technique and pathway in its ESG Report.
To cut back prices and preserve money, American:
- Eliminated greater than $17 billion from its working and capital budgets for 2020 primarily by decreased flying.
- Included greater than $1.3 billion of everlasting non-volume, non-fuel effectivity cost-saving measures into 2021 working plan.
- Retired 5 plane varieties (Embraer 190, Boeing 757, Boeing 767, Airbus A330 and Bombardier CRJ200), together with a variety of older regional plane. The corporate additionally positioned sure older Boeing 737-800 plane into short-term storage. These modifications eliminated greater than 150 plane from the fleet and introduced ahead vital price financial savings and efficiencies related to working fewer plane varieties, giving American the youngest fleet among the many U.S. community carriers.
- Reached an settlement with Boeing to safe rights to defer deliveries of 18 Boeing 737 MAX plane and finalized a sequence of sale-leaseback transactions to finance its Airbus A321 plane deliveries in 2021. To this point, 5 of the 18 737 MAX deferral rights have been exercised.
- Reset its worldwide capability and community for 2021, together with exiting 19 worldwide routes from six hubs.
- Decreased non-aircraft capital expense by $700 million in 2020 and one other $300 million in 2021 by reductions in fleet modification work, the elimination of floor service gear purchases, and pausing noncritical facility investments and IT initiatives.
- Launched applications to right-size its frontline and administration groups. In complete, greater than 20,000 group members opted to take part in a voluntary early out or long-term partially paid go away throughout the 12 months, and the corporate decreased its administration and assist employees group by roughly 30%.
- Made the tough determination to proceed with furloughs to cut back headcount absent an extension of the CARES Act Payroll Assist Program (PSP). American’s furloughed group members have since had their pay and advantages reinstated with the passage of a bipartisan COVID-19 reduction bundle that renewed the PSP from Dec. 1, 2020, by March 31, 2021.
To enhance its liquidity place, American:
- Decreased its day by day money burn price3 from almost $100 million in April 2020 to roughly $30 million within the fourth quarter. This enchancment was pushed by the corporate’s income and cost-reduction initiatives all year long.
- Secured roughly $9 billion in monetary help by two rounds of PSP laws and executed an settlement with the U.S. Division of the Treasury by the CARES Act mortgage program that provides the corporate entry to as much as $7.5 billion of secured time period loans, of which $550 million has been drawn.
- Raised greater than $13 billion throughout the 12 months by numerous different fairness and debt choices.
- Expects to finish the primary quarter with roughly $15.0 billion in complete out there liquidity.
Community and partnerships
American reset its community in 2020 to play to the strengths of its hubs and reap the benefits of its youthful and simplified fleet. The airline additionally established new and modern partnerships with Alaska Airways and JetBlue Airways that can create one of the best and largest community for purchasers on the West Coast and within the Northeast. These partnerships will permit for environment friendly development, together with the launch of latest service in 2021 between Seattle and London, Shanghai and Bangalore, and between New York and Tel Aviv and Athens.
Demand and capability outlook
The corporate will proceed to match its ahead capability with noticed bookings traits. In comparison with the primary quarter of 2019, American expects its first-quarter system capability to be down 45%, with complete income anticipated to be down 60 to 65%.
Convention name and webcast particulars
The corporate will conduct a dwell audio webcast of its monetary outcomes name at 7:30 a.m. CST as we speak. The decision might be out there to the general public on a listen-only foundation at aa.com/investorrelations. An archive of the webcast might be out there on the web site by Feb. 28.
Notes
1See the accompanying notes within the Monetary Tables part of this press launch for additional rationalization, together with a reconciliation of all GAAP to non-GAAP monetary data.
The corporate acknowledged $36 million of nonoperating web particular objects throughout the fourth quarter of 2020. These web particular objects principally included mark-to-market web unrealized good points and losses related to sure fairness investments and treasury price lock spinoff devices.
2The 2020 12-month interval mainline working particular objects, web principally included $3.7 billion of PSP monetary help, offset partly by $1.5 billion of fleet impairment prices, $1.4 billion of wage and medical prices primarily related to sure group members who opted in to voluntary early retirement applications supplied on account of reductions to the corporate’s operation resulting from COVID-19, and $228 million of one-time labor contract bills ensuing from the ratification of a brand new contract with the corporate’s upkeep and fleet service group members, together with signing bonuses and changes to trip accruals ensuing from pay price will increase.
The 2020 12-month interval regional working particular objects, web principally included $444 million of PSP monetary help, offset partly by $117 million of fleet impairment prices and $18 million of wage and medical prices primarily related to the voluntary early retirement applications as mentioned above.
The corporate acknowledged $170 million of nonoperating web particular objects in 2020. These web particular objects principally included mark-to-market web unrealized good points and losses related to sure fairness investments and treasury price lock spinoff devices in addition to prices related to debt refinancings and extinguishments.
3A reconciliation of this calculation will be discovered within the tables that comply with.
Monetary outcomes
Click on the button under to obtain the 4Q20 monetary outcomes.
About American Airways Group
American’s objective is to look after folks on life’s journey. Shares of American Airways Group Inc. commerce on Nasdaq beneath the ticker image AAL and the corporate’s inventory is included within the S&P 500. Study extra about what’s occurring at American by visiting news.aa.com and join with American on Twitter @AmericanAir and at Facebook.com/AmericanAirlines.
Cautionary Assertion Concerning Ahead-Trying Statements and Info
Sure of the statements contained on this report must be thought-about forward-looking statements inside the which means of the Securities Act of 1933, as amended (the Securities Act), the Securities Alternate Act of 1934, as amended (the Alternate Act), and the Non-public Securities Litigation Reform Act of 1995. These forward-looking statements could also be recognized by phrases similar to “could,” “will,” “anticipate,” “intend,” “anticipate,” “imagine,” “estimate,” “plan,” “venture,” “may,” “ought to,” “would,” “proceed,” “search,” “goal,” “steering,” “outlook,” “if present traits proceed,” “optimistic,” “forecast” and different comparable phrases. Such statements embody, however are usually not restricted to, statements about our plans, goals, expectations, intentions, estimates and methods for the longer term, and different statements that aren’t historic information. These forward-looking statements are based mostly on our present goals, beliefs and expectations, and they’re topic to vital dangers and uncertainties that will trigger precise outcomes and monetary place and timing of sure occasions to vary materially from the knowledge within the forward-looking statements. These dangers and uncertainties embody, however are usually not restricted to, these set forth in our Quarterly Report on Kind 10-Q for the quarter ended June 30, 2020 (particularly in Half I, Merchandise 2. Administration’s Dialogue and Evaluation of Monetary Situation and Outcomes of Operations, and Half II, Merchandise 1A. Danger Elements), and different dangers and uncertainties listed now and again in our different filings with the Securities and Alternate Fee. There could also be different elements of which we’re not at present conscious that will have an effect on issues mentioned within the forward-looking statements and may additionally trigger precise outcomes to vary materially from these mentioned. Specifically, the implications of the COVID-19 outbreak to financial circumstances and the journey business on the whole and the monetary place and working outcomes of the corporate particularly have been materials, are altering quickly, and can’t be predicted. The corporate doesn’t assume any obligation to publicly replace or complement any forward-looking assertion to mirror precise outcomes, modifications in assumptions or modifications in different elements affecting these forward-looking statements aside from as required by legislation. Ahead wanting statements converse solely as of the date hereof or as of the dates indicated within the assertion.
