American Airlines executives noted "signs of a slow but steady recovery" in the third quarter, but like its competitors, the carrier does not expect to reach the break-even point by the end of this year.
Passenger revenues for the quarter declined 76.9 percent year over year to $2.5 billion. Domestic bookings were down 50 percent year over year, but that was an improvement from an 80 percent decline seen in July, American Airlines president Robert Isom said in an earnings call. Dallas-Fort Worth and Charlotte have been the best-performing hubs for the carrier, he said.
Demand for short-haul international travel, particularly to Mexico and the Caribbean, has been strong, and Isom said revenue for the region should reach 70 percent of last year's levels in the fourth quarter.
CEO Doug Parker said American is "controlling what we can" as "customer confidence is gradually beginning to return." Cash burn "declined markedly" in the quarter, down to $44 million per day compared with $58 million per day in the second quarter, he said. For the fourth quarter, American expects that figure to decline further to $25 million to $30 million per day.
The carrier estimates that it has cut $17 billion from its operating and capital budgets this year Much of that has come from capacity cuts—American will shift fourth-quarter capacity based on demand but projects it will be down 50 percent overall year over year and 75 percent on long-haul international routes—but fleet adjustments also have contributed to the reduction.
Recently, American decided that it will retire permanently all 15 of its Airbus A330-200 aircraft, along with already-announced retirements of Boeing 757, Boeing 767, Airbus A330-300, Embraer E190 and Bombardier CRJ200 aircraft.
American also furloughed 19,000 employees after federal payroll support ran out on Oct. 1, and the carrier said it would bring those employees back if support is extended. In addition, more than 20,000 employees have accepted offers for either early outs or long-term leave.
American Airlines reported a net loss of $2.4 billion for the third quarter, compared with net income of $425 million in the third quarter of 2019.
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