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American Airlines Slips To Loss In Q2; Sees Q3 System Capacity Down About 60%

American Airlines Group Inc. (AAL) on Thursday reported second-quarter net loss of $2.07 billion or $4.82 per share, compared to net income of $662 million or $1.49 per share in the year-ago period.

Excluding net special items, adjusted net loss was $7.82 per share, compared to adjusted earnings of $1.82 per share in the prior-year quarter. On average, analysts polled by Thomson Reuters expected the company to report loss of $7.56 per share. Analysts' estimates typically exclude special items.

Total operating revenues for the quarter fell 86.4 percent to $1.62 billion from $11.96 billion in the previous year. Wall Street analysts had a consensus revenue estimate of $1.44 billion for the quarter.

American Airlines said it ended the second quarter with about $10.2 billion of available liquidity. Additionally, the company signed a term sheet with the U.S. Department of the Treasury for a $4.75 billion secured loan, which is expected to close in the third quarter, and announced two senior secured note transactions totaling $1.2 billion.

"We have moved swiftly to improve our liquidity, conserve cash and ensure customers are safe when they travel. There is much uncertainty ahead, but we remain confident we will emerge from this crisis more agile and more efficient than ever before," said American Airlines Chairman and CEO Doug Parker.

American Airlines noted that while May and June revenue trends were encouraging, demand has weakened somewhat during July as COVID-19 cases have increased and new travel restrictions have been put into place.

The company said it will continue to match its forward capacity with observed bookings trends and presently expects its third-quarter system capacity to be down approximately 60 percent year over year.

The airline also estimates that it will reduce its 2020 total operating and capital expenditures by more than $15 billion, achieved primarily through cost savings resulting from less flying.

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