AAL Q4 2020 Earnings

Call Details

• Call Title: American Airlines Q4 2020 Earnings Call
• Date: January 28, 2021 at 5:00 AM UTC
• Management Team:
  • Dan Cravens (Head of Investor Relations)
  • Doug Parker (Chief Executive Officer)
  • Robert Isom (Chief Executive Officer)
  • Derek Kerr (Chief Financial Officer)

Call Summary

Financial Performance

• The company reported a fourth-quarter GAAP net loss of $2.18B, or $3.81 per share, and a non-GAAP net loss excluding $32M of net special non-operating items of $2.21B, or $3.86 per share.
• Full year 2020 GAAP net loss was $8.9B, and excluding net special items the net loss was $9.5B for the year.
• Fourth-quarter total operating expense was reduced by 37% versus 2019 due to accelerated cost actions.
• Fourth-quarter system revenue was down 64% year-over-year while third-quarter revenue had been down 73% year-over-year, reflecting sequential improvement.
• Cargo revenue was a positive contributor, increasing 32% year-over-year in the fourth quarter, supported by more than 5,200 cargo-only flights and 167 million pounds transported.
• Daily cash burn improved from approximately $44M per day in the third quarter to approximately $30M per day in the fourth quarter, inclusive of $8M per day of regular debt principal and cash severance payments.

Guidance

• The company expects first-quarter 2021 system capacity to be down 45% versus 2019 on a year-over-two-year basis.
• The company expects first-quarter total revenue to be down approximately 60% to 65% versus the first quarter of 2019.
• The company expects first-quarter average daily cash burn to be approximately $30M per day and to end the quarter with approximately $15B of total available liquidity.
• First-quarter cash burn assumptions include approximately $9M per day of debt principal and cash severance payments, a $360M WTC amortization, a $240M pension contribution, and $225M in non-aircraft capex.
• Full year 2021 guidance includes $2.9B of debt payments, a $695M pension payment, $900M of non-aircraft CapEx, and a net aircraft CapEx inflow of $1.2B due to financing and sale-leaseback activity.
• Deferral rights were secured with Boeing on eight 2021 MAX deliveries and all ten 2022 MAX deliveries, with five deferrals taken to date and further deferrals contingent on demand improvement.