American Airlines (AAL) 2020 Q4 Quarterly Report Analysis

American Airlines Group Inc. (NASDAQ:AAL) is one of the leading U.S. airlines, operating in 240 destinations across America, Canada, Mexico, and the Caribbean. It was founded back in 1934 by the merger of about 85 small companies. American Airlines expanded aggressively between the 1970s and 1990s to strengthen its international presence, mainly by acquiring routes of other airlines.

The Fort Worth, Texas-based airline just had one of the most difficult years in its history. The company last week posted its biggest-ever annual loss, as the pandemic severely affected its operations.

American Airlines reported a loss of $2.18 billion, or $3.81 for the fourth quarter, as compared to earnings of 95 cents per share in the comparable period of 2019. On an adjusted basis, the loss came in at $3.86 per share, narrower than the consensus forecast of $4.11 per share. For the full year, the company reported a loss of $8.9 billion.

Revenue for the quarter plummeted 64 percent on a year-over-year basis to $4.03 billion, beating the analysts’ average estimate of $3.88 billion. The load factor in the quarter declined to 63.4 percent, as compared to 84.7 percent in the comparable quarter of 2019. Moreover, traffic and capacity decreased 66.7 percent and 55.4 percent, respectively.

Speaking on the results, CEO Doug Parker said, “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. We are confident that the actions we have taken to improve our customer experience, enhance our network, and increase our efficiency position us well for the future.”

American Airlines shares rose more than 9 percent following the results but dropped over 5 percent on the next day. AA stock is once again down on Monday. Overall, American Airlines stock has plummeted about 40 percent during the past 12 months.