American Airlines (AAL) expects its first-quarter total revenue to be down approximately 62%

April 13, 2021 7:33 AM EDT

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American Airlines (NASDAQ: AAL) disclosed:

General Overview
Capacity: During the first quarter of 2021, the Company flew 37.8 billion total available seat miles, down 43.4% versus the first quarter of 2019.
Revenue: The Company expects its first-quarter total revenue to be down approximately 62% versus the first quarter of 2019.
Fuel: The Company paid approximately $1.70 per gallon of jet fuel and consumed approximately 610 million gallons during the first quarter of 2021.
Net Loss: The Company expects to report a first-quarter 2021 net loss of approximately between $1.2 billion and $1.3 billion. Excluding the effect of net special credits, the Company expects to report a net loss of approximately between $2.7 billion and $2.8 billion. The Company expects to record an income tax benefit at an effective tax rate of 22%. See “Net Special Credits” and “GAAP to Non-GAAP Reconciliation” below.
Shares Outstanding: The Company’s basic and diluted weighted average shares outstanding for financial reporting purposes was 634.6 million shares for the first quarter.
Liquidity: The Company expects to end the first quarter with approximately $17.3 billion in total available liquidity. In addition, the Company now expects its average daily cash burn1 rate for the first quarter to be approximately $27 million per day, which includes approximately $9 million per day in regular debt principal and cash severance payments. This compares favorably to the Company’s previous first-quarter guidance of approximately $30 million per day. For the month of March, the Company’s estimated average daily cash burn rate was approximately $4 million per day. Excluding approximately $8 million per day of regular debt principal and cash severance payments made, the Company’s cash burn rate turned positive in March.
Fleet and Pre-Delivery Payment (PDP) Facility: During the first quarter, the Company reached an agreement with Boeing related to its remaining 787-8 deliveries. Under the revised terms of the agreement, the Company has elected to defer and convert five 787-8 aircraft to 787-9 aircraft. These deliveries are now expected to occur in 2023 and will retain their existing financing. The remaining 14 deliveries of 787-8 aircraft have been rescheduled to occur by the end of the first quarter of 2022. In addition, the Company has exercised its remaining deferral rights on 18 Boeing 737 MAX aircraft previously scheduled to be delivered in 2021 and 2022. Deliveries of these 18 aircraft are now expected to occur in 2023 and 2024. Related to the deferral of 737 MAX aircraft, in early April the Company elected to prepay $248 million of outstanding loans under its pre-delivery payment 737 MAX credit facility with the related pre-delivery deposits to be returned the the Company from the resulting deferral.
Net Special Credits: The Company expects to report net special credits of approximately $1.95 billion in the first quarter before the effect of taxes. Net special credits principally include a credit of $2.1 billion related to financial assistance provided under the Payroll Support Program Extension Agreement offset in part by severance charges related to voluntary early retirement programs offered to team members during the first quarter.
These results and those reflected in the attached reconciliation tables are preliminary and final results for the first quarter may change. These preliminary results are based upon our estimates and are subject to completion of our financial closing procedures.
1 The Company defines cash burn as net cash provided by (used in) operating activities, net cash provided by (used in) investing activities and net cash provided by (used in) financing activities, adjusted for (1) Payroll Support Program Financial Assistance grant proceeds, (2) net purchases (proceeds from sale) of short-term investments and restricted short-term investments, (3) proceeds from issuance of long-term debt, net of deferred financing costs, but excluding aircraft financing, (4) proceeds from issuance of equity, (5) prepayments of long-term debt and (6) other cash flows that are not representative of our core operating performance.

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First Quarter Investor Relations Update
April 13, 2021
1st Quarter 20211
Previous Guidance Current Guidance
4/13/2021
Total Revenue-60% to -65% (vs 1Q19) ~ -62% (vs 1Q19)
Available Seat Miles (ASMs) (bil) -45% (vs 1Q19) -43.4% (vs 1Q19) to ~37.8 bil ASMs
Average Fuel Price (incl. taxes) ($/gal) ~$1.70
Fuel Gallons Consumed (mil) ~610
Net loss per share excluding net special credits (Basic and Diluted) ($4.29) to ($4.41)
Notes:
1.Includes guidance on certain non-GAAP measures, which exclude net special credits. Please see the GAAP to non-GAAP reconciliation at the end of this document.
2.Numbers may not recalculate due to rounding.


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