American Airlines shares soar after company reports loss of cash and improved demand

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American Airlines Group Inc. shares
AAL,
-15.51%

are up over 12% in pre-market trade on Friday after the company announced a series of trade updates in a file with the Securities and Exchange Commission as its demand trends and consumer path cash flow are improving. The company said it expects second-quarter revenues and total system capacity to be reduced by 90% and 75%, respectively, compared to the previous year. American Airlines cut operating and capital budgets for the year by $ 13.5 billion through “significant cost reduction measures” in the areas of marketing, maintenance, events, training, airport facilities and other areas. The company said it had “surpassed the peak of cash reimbursement activity” as demand for flights began to improve. This helped American Airlines’ cash consumption rate improve to about $ 40 million a day for June, from a peak of more than $ 100 million a day in April. The company hopes to reduce its liquidity rate to around zero by the end of the year “as expected demand conditions continue to improve and its cost initiatives continue to gain momentum.” American Airlines said earlier this month that it plans to fly 55% of its domestic schedule and about 20% of its international schedule in July. Its system-wide capacity in July would account for about 40% of July 2019 flights. American Airlines stocks have fallen 50% so far this year, the S&P 500
SPX,
-5.89%

dropped 7%.

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