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American Airlines Reports $2.2B Loss for First Quarter of 2020

American Airlines

American Airlines posted a loss of $2.2 billion for the first quarter of 2020.

Chief Financial Officer Derek Kerr said earnings projections were looking good until air travel nearly came to a halt in March.

"We began the quarter on track to exceed our guidance; however, the COVID-19 pandemic and unprecedented drop in demand during March radically changed our outlook. Given the unpredictable nature of this event, we suspended our guidance for all of 2020," Kerr said during a call with investors Thursday.

American’s passenger revenue from January through March this year was down $2 billion from the first quarter of 2019.

The airline can access up to $10.6 billion in financial assistance through federal coronavirus relief programs. The company will, however, implement some cost-saving measures.

Chairman and CEO Doug Parker said one is phasing out some aircraft early and reducing their fleet by around 100 planes.

"We will emerge from this in the fall with a smaller airline than we had anticipated prior to the virus, of course, and go into 2021 as a smaller airline. So, we will most certainly — irrespective of what our demand is — go into the fall with more team members than we have work for," Parker said.

American has also reduced its schedule and delayed new routes into June, paused pay increases, reduced executive compensation, implemented voluntary leave and offered early retirement. The company says so far, nearly 39,000 workers have opted for early retirement, a reduced schedule or partially paid leave.

The airline is implementing several changes for people who choose to fly during the pandemic, including a policy for passengers to wear face masks starting May 11, relaxed seating policies to allow for physical distancing at least through May, and enhanced cleaning procedures on planes and in gate areas.

Executives have not said plans for a seven-year, $550 million upgrade of the airline’s Tulsa maintenance base will be affected.

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