American Airlines reports $8.9bn 2020 loss on pandemic hit

NEW YORK: American Airlines reported an $8.9 billion loss for 2020 on Thursday due to the coronavirus, but said it expects a rebound to begin later in 2021.

The big US carrier reported a fourth quarter loss of $2.2 billion, compared with profits of $414 million in the year-ago period following another big drop in travel demand.

American's red-ink report comes on the heels of earlier releases from rivals Delta Airlines and United Airlines that show an industry in turmoil after restrictions to contain Covid-19 were enacted across the globe, shutting down or sharply reducing travel.

"Our fourth-quarter financial results close out the most challenging year in our company's history," said American Airlines Chief Executive Doug Parker.

"As we look to the year ahead, 2021 will be a year of recovery. While we don't know exactly when passenger demand will return, as vaccine distribution takes hold and travel restrictions are lifted, we will be ready."

American's fourth-quarter revenue fell 64 percent to $4.0 billion following much lower ticket sales. Annual revenues dropped 62 percent to $17.4 billion.

Like other carriers, American has trimmed its capital budget, retired older aircraft, deferred delivery of new planes and reduced headcount through early retirement.

These efforts have reduced daily cash burn to $30 million in the fourth quarter from almost $100 million in April.

American, like its peers, expects a recovery once coronavirus vaccines are widely deployed. But it signaled the first quarter would suffer from the same market conditions as in recent months.

Shares of American jumped 15.3 percent to $19.10 in pre-market trading.