American Airlines forecasts first positive cash flow since pandemic began
July 13 (Reuters) – American Airlines (AAL.O) said on Tuesday it expects positive cash flow in the second quarter for the first time since the pandemic began, reversing a trend of cash burn of about $100 million a day when global travel had ground to a halt.
The company flew more than 44 million passengers in the quarter, over five times higher than last year, and forecast a daily cash build of $1 million for the period, ending it with more than $21 billion of total available liquidity. (https://bit.ly/3wD1gfR)
“The improved liquidity is encouraging because it suggests that forward bookings are also strong,” Cowen analyst Helane Becker said.
“This suggests we turned the corner in the domestic market and we should see improving sequential quarter results.”
U.S. air travel demand has been rising steadily for months as more Americans get vaccinated and travel restrictions ease.
“Demand for our product remains strong in July and for the remainder of the summer. And business customers are increasingly returning to the skies,” Chief Executive Officer Doug Parker said in a letter.
Shares of American Airlines, which have jumped nearly 27% this year, rose 2% to $20.43 in extended trade.
The company said it expected to report a quarterly net loss of between $1.1 billion and $1.2 billion, excluding net special items.
“While that is certainly a large loss, it is our smallest such loss since the start of the pandemic,” Parker said.
Analysts on average estimated a loss of $1.53 billion in the second quarter, according to Refinitiv data.Reporting by Sanjana Shivdas in Bengaluru; Editing by Devika Syamnath
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