FORT WORTH (CBSDFW.COM/AP) – American Airlines reported a staggering loss of $2.24 billion for the first quarter, when the coronavirus pandemic triggered a sharp drop in air travel.
The Fort Worth-based airline’s revenue fell 19% while costs continued to rise even as the virus spread.
The situation has grown more dire since the first quarter ended. Air travel within the U.S. has plunged 95% from a year ago, judging by the number of people screened at the nation’s airports.
“Never before has our airline, or our industry, faced such a significant challenge,” Chairman and CEO Doug Parker said.
American’s massive loss compared with a profit of $185 million in the same quarter last year.
American said that adjusted for non-recurring items, it lost $2.65 per share. That was worse than the average forecast of a $2.08 per share loss from 15 analysts surveyed by FactSet.
Parker highlighted American’s efforts to bolster its liquidity — building up enough cash, it hopes, to ride out the pandemic — including getting $5.8 billion in federal aid to help cover payroll costs through September.
American estimated that it ended March with $6.8 billion in cash and other liquidity, including $2 billion that it raised during the first quarter.
The airline has cut its flying schedule by 80% in May and June, grounded hundreds of planes, and offered early retirement and partially paid leave to cut labor costs. Cheaper fuel caused by the collapse in energy prices will contribute to a reduction of more than $12 billion in its 2020 spending, the airline said.
“We have a lot of difficult work ahead of us,” Parker said in a statement that also cited uncertainty about the future.
American’s loss dwarfed the $534 million loss reported last week by Delta Air Lines, which is slightly larger by revenue. United Airlines was scheduled to issue first-quarter figures later Thursday.
On Tuesday, Dallas-based Southwest Airlines also posted a first quarter loss, which was its first in about nine years. The airline said it expected revenue to drop by 90% to 95% in April and May compared to a year ago.
(© Copyright 2020 CBS Broadcasting Inc. All Rights Reserved. The Associated Press contributed to this report.)