American Airlines Group, Inc.

American Airlines Reports Second-Quarter 2021 Financial Results

July 22, 2021
Record liquidity and confidence in recovery drive accelerated deleveraging

FORT WORTH, Texas, July 22, 2021 (GLOBE NEWSWIRE) -- American Airlines Group Inc. (NASDAQ: AAL) today reported its second-quarter 2021 financial results, including:

  • Second-quarter net profit of $19 million, or $0.03 per diluted share. Excluding net special items1, second-quarter net loss of $1.1 billion, or ($1.69) per share.
  • Second-quarter revenue of $7.5 billion, up 87% sequentially from the first quarter of 2021.
  • Ended the second quarter with approximately $21.3 billion of total available liquidity, a record for the Company.
  • Accelerated the deleveraging process with prepayment of $950 million spare parts term loan.
  • Company plans to pay down approximately $15 billion of debt by the end of 2025.

“We have taken a number of steps to solidify our business through our Green Flag Plan and it shows in our second-quarter results,” said American’s Chairman and CEO Doug Parker. “We have reshaped our network, simplified our fleet and made our cost structure more efficient, all to create an airline that will outperform competitors and deliver for customers. The green flag has dropped and we are ready thanks to the tremendous efforts and dedication of the American Airlines team.”

American is committed to strengthening its business and returning to profitability by focusing on its three strategic objectives: Create a world-class customer experience, make culture a competitive advantage and build American to thrive forever.

To create a world-class customer experience, American:

  • Plans to operate more than 150 new routes this summer, including several new destinations and greater connectivity in Miami, Austin, Texas, and Orlando, Florida. During the summer season, American expects to fly more than 90% of its domestic seat capacity and 80% of its international seat capacity, in each case as compared to 2019.
  • Scheduled 10 new domestic and four new international destinations from Austin for this fall as a result of increased customer demand. American and its partners will offer the most options in Austin this fall, with nearly 100 peak day departures.
  • Transitioned regional flight operations at Reagan National Airport from Gate 35X to a new 14-gate concourse, providing customers with a range of new amenities, including an all dual-class operation.
  • Continued to launch COVID-19 testing tools to make flying safer and easier, including self-administered and packable home tests.
  • Worked with VeriFLY to expand the app’s capabilities to include COVID-19 vaccination verification, which is now available in 11 countries, with more planned in the third quarter. Customer usage of VeriFLY has quadrupled since the first quarter and the app can be used at expedited check-in lanes at most U.S. hub airports.
  • Introduced Five Star Essentials at Charlotte Douglas International Airport, Dallas Fort Worth International Airport and Miami International Airport. The service provides an extra set of hands during the customer journey from check-in to the gate.
  • Continued to welcome back customers to Admirals Club lounges across the system with new signature menu offerings and the expansion of innovative touchless technology. All Admirals Club lounges will reopen by the end of August and American’s Flagship Lounge locations will start reopening this fall.
  • Reintroduced full beverage service in all domestic premium cabins and resumed offering canned drinks, juice and water in the main cabin.
  • Revamped its premium cabin onboard amenity kits in partnership with Shinola and D.S. & Durga, brands celebrated for thoughtful design and creativity.
  • Refreshed its inflight entertainment offerings by adding new lifestyle entertainment choices with free access to Rosetta Stone and Skillshare, making it the first U.S. airline to tap into online/remote learning from 35,000 feet.

To make culture a competitive advantage, American:

  • Fortified its staffing by completing all required recall pilot training and bringing back more than 3,000 team members from leaves — with thousands more flight attendants returning from leaves this fall. American has hired nearly 3,500 new team members so far in 2021 and plans to hire 350 pilots this year and more than 1,000 pilots and 800 flight attendants in 2022.
  • Donated 10 million AAdvantage® miles to Make-A-Wish, the organization that creates life-changing wishes for children with critical illnesses, to help grant 95 wishes, in honor of American’s 95th birthday.
  • Initiated a new partnership with the National Park Foundation to encourage exploration of some of the country’s most iconic natural wonders, historic sites, and cultural treasures, and to connect customers with opportunities to support the future of America’s national parks. Customers donated more than 37 million AAdvantage miles to the National Park Foundation through the airline’s new Miles for Our Planet initiative.
  • Raised nearly $1.5 million in support of the American Red Cross and Red Crescent Societies’ efforts to fight the COVID-19 pandemic around the world, including in Brazil, India and other countries in need of assistance to battle the devastating virus. The airline and more than 11,000 AAdvantage members raised the full amount in less than one month.
  • Partnered with United Way of Miami-Dade to provide travel assistance and help reunite families that were impacted by the tragic building collapse in Surfside, Florida.

To build American to thrive forever, American:

  • Committed to develop a science-based target for reducing its greenhouse gas emissions by 2035, supporting the airline’s existing commitment to reach net-zero emissions by 2050. American also agreed to terms to purchase up to 10 million gallons of carbon-neutral sustainable aviation fuel (SAF) produced by Prometheus Fuels, which uses a novel process to make net zero carbon transportation fuels, including SAF.
  • Announced investment in Vertical Aerospace, a leading U.K.-based engineering and aeronautical business developing electric vertical takeoff and landing aircraft. With the investment, American is demonstrating its focus on emerging technologies to reduce carbon emissions and investing in innovative ways that could improve the customer journey.
  • During the second quarter, American had debt amortization and prepayments of approximately $985 million.

Liquidity and balance sheet
The Company’s daily cash burn rate turned positive for the second quarter to a cash build rate of approximately $1 million per day2. American ended the second quarter with a record of approximately $21.3 billion of total available liquidity. The Company expects to keep near-term liquidity at elevated levels but expects to step down its target liquidity to approximately $10 billion to $12 billion in 2022.

American is committed to improving its balance sheet. The Company now expects to reduce its debt by more than $15 billion by the end of 2025 versus its previous guidance of $8 billion to $10 billion. American plans to accomplish this objective through naturally occurring amortization, by using excess cash and free cash flow to pay down prepayable debt, and by potentially using cash instead of debt for certain future aircraft deliveries.

As evidence of the Company’s commitment to delever and its confidence in the future, today American is prepaying the entirety of its $950 million spare parts term loan that was scheduled to mature in April 2023.

Network and partnerships
American and JetBlue continue to roll out benefits for customers to create a seamless customer experience. Starting this fall, AAdvantage elite and TrueBlue Mosaic members will also begin to enjoy benefits across both carriers. This next phase of benefits will include priority check-in, security and boarding, plus up to two complimentary checked bags. American’s AAdvantage members and JetBlue’s TrueBlue members already earn miles or points traveling on either carrier. AAdvantage is now the only loyalty program that allows elite status-earning opportunities when flying across three U.S. carriers — American, JetBlue and Alaska Airlines.

As a result of American’s Northeast Alliance with JetBlue, New York and Boston travelers are seeing significantly expanded travel opportunities with new nonstop service and additional codeshare routes. As part of the alliance, American and JetBlue will operate more than 700 daily flights from New York and Boston this winter, giving customers more choice than any other airline can offer. Additionally, customers traveling on a joint American-JetBlue itinerary will now experience the fastest secure side connecter at New York — JFK and an industry-leading network. Expansion of the airline’s network will provide better global connectivity for growing markets like Austin, Texas, and Nashville, Tennessee.

With American’s extensive network, partnerships and membership in one world, customers returning to travel have access to an unmatched global network.

Guidance and investor update
American will continue to match its forward capacity with observed bookings trends. Based on current trends, the Company expects its third-quarter capacity to be down approximately 15% to 20% compared to the third quarter of 2019. American expects its third-quarter total revenue to be down approximately 20% versus the third quarter of 2019. The Company also expects its third quarter pre-tax margin excluding net special items will be between negative 3% and negative 7%3.

For additional financial forecasting detail, please refer to the Company’s investor update, filed with this press release with the SEC on Form 8-K. This filing will be available at aa.com/investorrelations.

Conference call and webcast details
The Company will conduct a live audio webcast of its financial results conference call at 7:30 a.m. CDT today. The call will be available to the public on a listen-only basis at aa.com/investorrelations. An archive of the webcast will be available on the website through at least Aug. 22.

Notes
See the accompanying notes in the Financial Tables section of this press release for further explanation, including a reconciliation of all GAAP to non-GAAP financial information.

  1. The Company recognized $1.4 billion of net special credits before the effect of taxes in the second quarter of 2021 principally related to the financial assistance received pursuant to Payroll Support Program Agreements.
  2. A reconciliation of this calculation can be found in the tables that follow.
  3. American is unable to reconcile certain forward-looking projections to GAAP, as the nature or amount of net special items cannot be determined at this time.

About American Airlines Group
American’s purpose is to care for people on life’s journey. Shares of American Airlines Group Inc. trade on Nasdaq under the ticker symbol AAL and the Company’s stock is included in the S&P 500. Learn more about what’s happening at American by visiting news.aa.com and connect with American on Twitter @AmericanAir and at Facebook.com/AmericanAirlines.

Cautionary statement regarding forward-looking statements and information

Certain of the statements contained in this report should be considered forward-looking statements within the meaning of the Securities Act, the Exchange Act and the Private Securities Litigation Reform Act of 1995. These forward-looking statements may be identified by words such as “may,” “will,” “expect,” “intend,” “anticipate,” “believe,” “estimate,” “plan,” “project,” “could,” “should,” “would,” “continue,” “seek,” “target,” “guidance,” “outlook,” “if current trends continue,” “optimistic,” “forecast” and other similar words. Such statements include, but are not limited to, statements about the Company’s plans, objectives, expectations, intentions, estimates and strategies for the future, and other statements that are not historical facts. These forward-looking statements are based on the Company’s current objectives, beliefs and expectations, and they are subject to significant risks and uncertainties that may cause actual results and financial position and timing of certain events to differ materially from the information in the forward-looking statements. These risks and uncertainties include, but are not limited to, those set forth herein as well as in the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2021 (especially in Part I, Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations and Part II, Item 1A. Risk Factors), and other risks and uncertainties listed from time to time in the Company’s other filings with the Securities and Exchange Commission. In particular, the consequences of the coronavirus outbreak to economic conditions and the travel industry in general and the financial position and operating results of the Company in particular have been material, are changing rapidly, and cannot be predicted. Additionally, there may be other factors of which the Company is not currently aware that may affect matters discussed in the forward-looking statements and may also cause actual results to differ materially from those discussed. The Company does not assume any obligation to publicly update or supplement any forward-looking statement to reflect actual results, changes in assumptions or changes in other factors affecting these forward-looking statements other than as required by law. Any forward-looking statements speak only as of the date hereof or as of the dates indicated in the statement.

Corporate Communications
mediarelations@aa.com 

Investor Relations
investor.relations@aa.com 



 

American Airlines Group Inc.
Condensed Consolidated Statements of Operations
(In millions, except share and per share amounts)
(Unaudited)
                         
    3 Months Ended June 30,   Percent Increase   6 Months Ended June 30,   Percent Increase
    2021   2020 (1)   (Decrease)   2021   2020 (1)   (Decrease)
                         
Operating revenues:                        
Passenger   $ 6,545     $ 1,108     nm (2)   $ 9,724     $ 8,788     10.7  
Cargo     326       130     nm       641       277     nm  
Other     607       384     57.9       1,121       1,072     4.5  
Total operating revenues     7,478       1,622     nm       11,486       10,137     13.3  
                         
Operating expenses:                        
Aircraft fuel and related taxes     1,611       309     nm       2,644       2,092     26.4  
Salaries, wages and benefits     2,862       2,610     9.6       5,593       5,830     (4.1 )
Regional expenses:                        
Regional operating expenses     558       408     37.1       1,102       1,464     (24.7 )
Regional depreciation and amortization     77       84     (8.2 )     159       168     (5.5 )
Maintenance, materials and repairs     459       287     59.9       835       915     (8.8 )
Other rent and landing fees     686       413     66.2       1,256       1,024     22.7  
Aircraft rent     356       334     6.4       706       669     5.6  
Selling expenses     277       57     nm       427       442     (3.4 )
Depreciation and amortization     481       499     (3.6 )     959       1,059     (9.4 )
Special items, net     (1,288 )     (1,494 )   (13.8 )     (2,996 )     (362 )   nm  
Other     958       601     59.6       1,675       1,870     (10.5 )
Total operating expenses     7,037       4,108     71.3       12,360       15,171     (18.5 )
                         
Operating income (loss)     441       (2,486 )   nm       (874 )     (5,034 )   (82.6 )
                         
Nonoperating income (expense):                        
Interest income     5       10     (50.7 )     8       31     (73.2 )
Interest expense, net     (486 )     (254 )   91.0       (856 )     (512 )   67.3  
Other income (expense), net     49       71     (31.1 )     158       (34 )   nm  
Total nonoperating expense, net     (432 )     (173 )   nm       (690 )     (515 )   34.2  
                         
Income (loss) before income taxes     9       (2,659 )   nm       (1,564 )     (5,549 )   (71.8 )
                         
Income tax benefit     (10 )     (592 )   (98.4 )     (333 )     (1,241 )   (73.1 )
                         
Net income (loss)   $ 19     $ (2,067 )   nm     $ (1,231 )   $ (4,308 )   (71.4 )
                         
                         
Earnings (loss) per common share:                        
Basic   $ 0.03     $ (4.82 )       $ (1.92 )   $ (10.08 )    
Diluted   $ 0.03     $ (4.82 )       $ (1.92 )   $ (10.08 )    
                         
Weighted average shares outstanding (in thousands):                        
Basic     644,123       428,807           639,366       427,260      
Diluted     656,372       428,807           639,366       427,260      
                         
                         
                         
Note: Percent change may not recalculate due to rounding.                    
                         
(1) Beginning in the first quarter of 2021, aircraft fuel and related taxes as well as certain salaries, wages and benefits, other rent and landing fees, selling and other expenses are no longer allocated to regional expenses on the Company’s condensed consolidated statements of operations. The three and six months ended June 30, 2020 condensed consolidated statements of operations have been recast to conform to the 2021 presentation. This statement of operations presentation change has no impact on total operating expenses or net loss.
                         
(2) Not meaningful or greater than 100% change.          
                         



American Airlines Group Inc.
Consolidated Operating Statistics (1)
(Unaudited)
                             
    3 Months Ended June 30,   Increase     6 Months Ended June 30,   Increase  
    2021   2020   (Decrease)     2021   2020   (Decrease)  
                             
Revenue passenger miles (millions)   42,022   7,231   nm   %   64,486   52,402   23.1   %
Available seat miles (ASM) (millions)   54,555   17,081   nm   %   92,319   79,180   16.6   %
Passenger load factor (percent)   77.0   42.3   34.7   pts   69.9   66.2   3.7   pts
Yield (cents)   15.57   15.32   1.7   %   15.08   16.77   (10.1 ) %
Passenger revenue per ASM (cents)   12.00   6.48   85.0   %   10.53   11.10   (5.1 ) %
Total revenue per ASM (cents)   13.71   9.50   44.3   %   12.44   12.80   (2.8 ) %
Cargo ton miles (millions)   555   176   nm   %   1,087   612   77.5   %
Cargo yield per ton mile (cents)   58.86   73.98   (20.4 ) %   59.02   45.24   30.4   %
                             
Fuel consumption (gallons in millions)   844   275   nm   %   1,452   1,246   16.5   %
Average aircraft fuel price including related taxes (dollars per gallon)   1.91   1.13   69.5   %   1.82   1.68   8.4   %
                             
Operating cost per ASM (cents)   12.90   24.05   (46.4 ) %   13.39   19.16   (30.1 ) %
Operating cost per ASM excluding net special items (cents)   15.57   33.84   (54.0 ) %   17.05   19.73   (13.6 ) %
Operating cost per ASM excluding net special items and fuel (cents)   12.61   32.04   (60.6 ) %   14.18   17.08   (17.0 ) %
                             
Passenger enplanements (thousands)   44,019   8,371   nm   %   68,256   50,573   35.0   %
Departures (thousands):                            
Mainline   220   81   nm   %   372   333   11.8   %
Regional   247   103   nm   %   433   383   13.0   %
Total   467   184   nm   %   805   716   12.4   %
Average stage length (miles):                            
Mainline   1,172   1,068   9.8   %   1,186   1,132   4.7   %
Regional   483   482   0.1   %   492   473   4.2   %
Total   808   738   9.3   %   813   779   4.3   %
Aircraft at end of period:                            
Mainline (2)   854   849   0.6   %   854   849   0.6   %
Regional (3)   559   545   2.6   %   559   545   2.6   %
Total   1,413   1,394   1.4   %   1,413   1,394   1.4   %
Full-time equivalent employees at end of period:                            
Mainline   91,100   86,000   5.9   %   91,100   86,000   5.9   %
Regional (4)   26,300   21,400   22.9   %   26,300   21,400   22.9   %
Total   117,400   107,400   9.3   %   117,400   107,400   9.3   %
                             
                             
Note: Amounts may not recalculate due to rounding.                            
                             
(1) Unless otherwise noted, operating statistics include mainline and regional operations. Regional includes wholly-owned regional airline subsidiaries and operating results from capacity purchase carriers.
(2) Excludes 37 Boeing 737-800 mainline aircraft that are in temporary storage at June 30, 2021.          
(3) Includes aircraft owned and leased by American as well as aircraft operated by third-party regional carriers under capacity purchase agreements. Excludes three Embraer 145 regional aircraft that are in temporary storage at June 30, 2021.
(4) Regional full-time equivalent employees only include our wholly-owned regional airline subsidiaries.
                             



American Airlines Group Inc.
Consolidated Revenue Statistics by Region
(Unaudited)
                               
      3 Months Ended June 30,   Increase     6 Months Ended June 30,   Increase  
      2021   2020   (Decrease)     2021   2020   (Decrease)  
                               
Domestic (1)                            
Revenue passenger miles (millions)   34,871   6,804   nm   %   53,408   38,661   38.1   %
Available seat miles (ASM) (millions)   41,037   15,434   nm   %   68,989   59,672   15.6   %
Passenger load factor (percent)   85.0   44.1   40.9   pts   77.4   64.8   12.6   pts
Passenger revenue (dollars in millions)   5,444   1,027   nm   %   8,099   6,806   19.0   %
Yield (cents)   15.61   15.09   3.5   %   15.16   17.60   (13.9 ) %
Passenger revenue per ASM (cents)   13.27   6.65   99.5   %   11.74   11.41   2.9   %
                               
Latin America (2)                            
Revenue passenger miles (millions)   5,970   200   nm   %   9,546   7,316   30.5   %
Available seat miles (millions)   8,461   700   nm   %   16,326   9,768   67.1   %
Passenger load factor (percent)   70.6   28.6   42.0   pts   58.5   74.9   (16.4 ) pts
Passenger revenue (dollars in millions)   936   34   nm   %   1,417   1,214   16.8   %
Yield (cents)   15.68   17.07   (8.2 ) %   14.85   16.59   (10.5 ) %
Passenger revenue per ASM (cents)   11.06   4.88   nm   %   8.68   12.42   (30.1 ) %
                               
Atlantic                              
Revenue passenger miles (millions)   939   189   nm   %   1,139   4,374   (74.0 ) %
Available seat miles (millions)   4,035   817   nm   %   5,186   7,056   (26.5 ) %
Passenger load factor (percent)   23.3   23.1   0.2   pts   22.0   62.0   (40.0 ) pts
Passenger revenue (dollars in millions)   125   42   nm   %   147   565   (74.0 ) %
Yield (cents)   13.26   22.28   (40.5 ) %   12.88   12.92   (0.3 ) %
Passenger revenue per ASM (cents)   3.09   5.16   (40.1 ) %   2.83   8.01   (64.7 ) %
                               
Pacific                              
Revenue passenger miles (millions)   242   38   nm   %   393   2,051   (80.9 ) %
Available seat miles (millions)   1,022   130   nm   %   1,818   2,684   (32.3 ) %
Passenger load factor (percent)   23.7   29.0   (5.3 ) pts   21.6   76.4   (54.8 ) pts
Passenger revenue (dollars in millions)   40   5   nm   %   61   203   (70.0 ) %
Yield (cents)   16.71   12.61   32.6   %   15.49   9.89   56.6   %
Passenger revenue per ASM (cents)   3.96   3.65   8.4   %   3.35   7.56   (55.7 ) %
                               
Total International                            
Revenue passenger miles (millions)   7,151   427   nm   %   11,078   13,741   (19.4 ) %
Available seat miles (millions)   13,518   1,647   nm   %   23,330   19,508   19.6   %
Passenger load factor (percent)   52.9   25.9   27.0   pts   47.5   70.4   (22.9 ) pts
Passenger revenue (dollars in millions)   1,101   81   nm   %   1,625   1,982   (18.0 ) %
Yield (cents)   15.39   18.98   (18.9 ) %   14.67   14.42   1.7   %
Passenger revenue per ASM (cents)   8.14   4.92   65.5   %   6.97   10.16   (31.4 ) %
                               
Note: Amounts may not recalculate due to rounding.                        
                               
(1) Domestic results include Canada, Puerto Rico and U.S. Virgin Islands.
(2) Latin America results include the Caribbean.
                               



Reconciliation of GAAP Financial Information to Non-GAAP Financial Information
                   
                             
American Airlines Group Inc. (the Company) sometimes uses financial measures that are derived from the condensed consolidated financial statements but that are not presented in accordance with GAAP to understand and evaluate its current operating performance and to allow for period-to-period comparisons. The Company believes these non-GAAP financial measures may also provide useful information to investors and others. These non-GAAP measures may not be comparable to similarly titled non-GAAP measures of other companies, and should be considered in addition to, and not as a substitute for or superior to, any measure of performance, cash flow or liquidity prepared in accordance with GAAP. The Company is providing a reconciliation of reported non-GAAP financial measures to their comparable financial measures on a GAAP basis.

The tables below present the reconciliations of the following GAAP measures to their non-GAAP measures:

- Pre-Tax Income (Loss) (GAAP measure) to Pre-Tax Loss Excluding Net Special Items (non-GAAP measure)
- Pre-Tax Margin (GAAP measure) to Pre-Tax Margin Excluding Net Special Items (non-GAAP measure)
- Net Income (Loss) (GAAP measure) to Net Loss Excluding Net Special Items (non-GAAP measure)
- Basic and Diluted Earnings (Loss) Per Share (GAAP measure) to Basic and Diluted Loss Per Share Excluding Net Special Items (non-GAAP measure)
- Operating Income (Loss) (GAAP measure) to Operating Loss Excluding Net Special Items (non-GAAP measure)

Management uses these non-GAAP financial measures to evaluate the Company’s current operating performance and to allow for period-to-period comparisons. As net special items may vary from period-to-period in nature and amount, the adjustment to exclude net special items allows management an additional tool to understand the Company’s core operating performance.

Additionally, the tables below present the reconciliations of total operating costs (GAAP measure) to total operating costs excluding net special items and fuel (non-GAAP measure) and total operating costs per ASM (CASM) to CASM excluding net special items and fuel. Management uses total operating costs and CASM excluding net special items and aircraft fuel to evaluate the Company’s current operating performance and for period-to-period comparisons. The price of fuel, over which the Company has no control, impacts the comparability of period-to-period financial performance. The adjustment to exclude aircraft fuel and net special items allows management an additional tool to understand and analyze the Company’s non-fuel costs and core operating performance.
                             
        3 Months Ended June 30,   Percent Increase   6 Months Ended June 30,   Percent Increase
  Reconciliation of Pre-Tax Loss Excluding Net Special Items     2021   2020   (Decrease)   2021   2020   (Decrease)
        (in millions, except share and per share amounts)       (in millions, except share and per share amounts)    
                             
  Pre-tax income (loss) as reported     $ 9     $ (2,659 )       $ (1,564 )   $ (5,549 )    
  Pre-tax net special items:                          
  Mainline operating special items, net (1)       (1,288 )     (1,494 )         (2,996 )     (362 )    
  Regional operating special items, net (2)       (167 )     (178 )         (381 )     (85 )    
  Nonoperating special items, net (3)       37       11           13       228      
  Total pre-tax net special items       (1,418 )     (1,661 )         (3,364 )     (219 )    
                             
  Pre-tax loss excluding net special items     $ (1,409 )   $ (4,320 )   (6,740.0 %)   $ (4,928 )   $ (5,768 )   (1,460.0 %)
                             
                             
  Calculation of Pre-Tax Margin                          
                             
  Pre-tax income (loss) as reported     $ 9     $ (2,659 )       $ (1,564 )   $ (5,549 )    
                             
  Total operating revenues as reported     $ 7,478     $ 1,622         $ 11,486     $ 10,137      
                             
  Pre-tax margin       0.1 %     (163.9 %)         (13.6 %)     (54.7 %)    
                             
                             
  Calculation of Pre-Tax Margin Excluding Net Special Items                          
                             
  Pre-tax loss excluding net special items     $ (1,409 )   $ (4,320 )       $ (4,928 )   $ (5,768 )    
                             
  Total operating revenues as reported     $ 7,478     $ 1,622         $ 11,486     $ 10,137      
                             
  Pre-tax margin excluding net special items       (18.8 %)     (266.3 %)         (42.9 %)     (56.9 %)    
                             
                             
  Reconciliation of Net Loss Excluding Net Special Items                          
                             
  Net income (loss) as reported     $ 19     $ (2,067 )       $ (1,231 )   $ (4,308 )    
  Net special items:                          
  Total pre-tax net special items (1), (2), (3)       (1,418 )     (1,661 )         (3,364 )     (219 )    
  Net tax effect of net special items       309       374           762       44      
  Net loss excluding net special items     $ (1,090 )   $ (3,354 )   (6,750.0 %)   $ (3,833 )   $ (4,483 )   (1,450.0 %)
                             
                             
  Reconciliation of Basic and Diluted Loss Per Share Excluding Net Special Items                          
                             
  Net loss excluding net special items     $ (1,090 )   $ (3,354 )       $ (3,833 )   $ (4,483 )    
                             
  Shares used for computation (in thousands):                          
  Basic and diluted       644,123       428,807           639,366       427,260      
                             
  Loss per share excluding net special items:                          
  Basic and diluted     $ (1.69 )   $ (7.82 )       $ (6.00 )   $ (10.49 )    
                             
        3 Months Ended June 30,       6 Months Ended June 30,    
  Reconciliation of Operating Loss Excluding Net Special Items     2021   2020       2021   2020    
        (in millions)       (in millions)    
                             
  Operating income (loss) as reported     $ 441     $ (2,486 )       $ (874 )   $ (5,034 )    
                             
  Operating net special items:                          
  Mainline operating special items, net (1)       (1,288 )     (1,494 )         (2,996 )     (362 )    
  Regional operating special items, net (2)       (167 )     (178 )         (381 )     (85 )    
  Operating loss excluding net special items     $ (1,014 )   $ (4,158 )       $ (4,251 )   $ (5,481 )    
                             
                             
  Reconciliation of Total Operating Cost per ASM Excluding Net Special Items and Fuel                          
                             
  Total operating expenses as reported     $ 7,037     $ 4,108         $ 12,360     $ 15,171      
                             
  Operating net special items:                          
  Mainline operating special items, net (1)       1,288       1,494           2,996       362      
  Regional operating special items, net (2)       167       178           381       85      
  Total operating expenses, excluding net special items       8,492       5,780           15,737       15,618      
                             
  Aircraft fuel and related taxes       (1,611 )     (309 )         (2,644 )     (2,092 )    
  Total operating expenses, excluding net special items and fuel     $ 6,881     $ 5,471         $ 13,093     $ 13,526      
                             
        (in cents)       (in cents)    
                             
  Total operating expenses per ASM as reported       12.90       24.05           13.39       19.16      
                             
  Operating net special items per ASM:                          
  Mainline operating special items, net (1)       2.36       8.75           3.25       0.46      
                                             
  Regional operating special items, net (2)       0.31       1.04           0.41       0.11      
  Total operating expenses per ASM, excluding net special items       15.57       33.84           17.05       19.73      
                             
  Aircraft fuel and related taxes per ASM       (2.95 )     (1.81 )         (2.86 )     (2.64 )    
  Total operating expenses per ASM, excluding net special items and fuel       12.61       32.04           14.18       17.08      
                             
  Note: Amounts may not recalculate due to rounding.                          
                             
  FOOTNOTES:                          
                             
(1) The 2021 second quarter mainline operating special items, net principally included $1.3 billion of Payroll Support Program (PSP) financial assistance. The 2021 six month period mainline operating special items, net principally included $3.2 billion of PSP financial assistance, offset in part by $168 million of salary and medical costs primarily associated with certain team members who opted in to voluntary early retirement programs offered as a result of reductions to the Company’s operation due to the COVID-19 pandemic.

Cash payments for salary and medical costs associated with our voluntary early retirement programs were approximately $120 million and $290 million for the 2021 second quarter and six month period, respectively.

The 2020 second quarter mainline operating special items, net principally included $1.8 billion of PSP financial assistance, offset in part by $332 million of salary and medical costs primarily associated with certain team members who opted in to voluntary early retirement programs. The 2020 six month period mainline operating special items, net principally included $1.8 billion of PSP financial assistance, offset in part by $743 million of fleet impairment charges, $537 million of salary and medical costs primarily associated with certain team members who opted in to voluntary early retirement programs and $228 million of one-time labor contract expenses resulting from the ratification of a new contract with the Company’s maintenance and fleet service team members, including signing bonuses and adjustments to vacation accruals resulting from pay rate increases.

Fleet impairment charges in the 2020 six month period included a $675 million non-cash write-down of aircraft and spare parts and $68 million in write-offs of right-of-use assets and lease return costs associated with our mainline fleet, principally Boeing 757, Boeing 767, Airbus A330-300 and Embraer 190 fleets, which were retired as a result of the decline in demand for air travel due to the COVID-19 pandemic.
                             
(2) The 2021 second quarter regional operating special items, net principally included $167 million of PSP financial assistance. The 2021 six month period regional operating special items, net principally included $410 million of PSP financial assistance, offset in part by $27 million of fleet impairment charges. The fleet impairment charges principally included a non-cash write-down of regional aircraft resulting from the Company’s decision to retire its remaining fleet of Embraer 140 aircraft earlier than planned.

The 2020 second quarter regional operating special items, net principally included $216 million of PSP financial assistance, offset in part by $24 million of fleet impairment charges and $14 million of salary and medical costs primarily associated with certain team members who opted in to voluntary early retirement programs. The 2020 six month period regional operating special items, net principally included $216 million of PSP financial assistance, offset in part by $117 million of fleet impairment charges and $14 million of salary and medical costs as discussed above.

Fleet impairment charges in the 2020 second quarter and six month period included a non-cash write-down of aircraft and spare parts associated with our regional fleet, principally certain Embraer 140 and Bombardier CRJ200 aircraft, which were retired as a result of the decline in demand for air travel due to the COVID-19 pandemic.
                             
(3) Principally included mark-to-market net unrealized gains and losses associated with certain equity investments and treasury rate lock derivative instruments as well as non-cash charges associated with debt refinancings and extinguishments.
                             



  Average Daily Cash Build (Burn)    
       
  The Company’s average daily cash build (burn) is presented in the table below, which is a non-GAAP measure that management believes is useful information to investors and others in evaluating the Company’s liquidity position and cash flows from its core operating performance. The Company defines cash build (burn) as net cash provided by (used in) operating activities, net cash provided by (used in) investing activities and net cash provided by (used in) financing activities, adjusted for (1) Payroll Support Program financial assistance, (2) net purchases (proceeds from sale) of short-term investments and restricted short-term investments, (3) proceeds from issuance of long-term debt, net of deferred financing costs, but excluding aircraft financing, (4) proceeds from issuance of equity, (5) prepayments of long-term debt and (6) other cash flows that are not representative of the Company’s core operating performance.

This non-GAAP measure may not be comparable to similarly titled non-GAAP measures of other companies, and should be considered in addition to, and not as a substitute for or superior to, any measure of performance, cash flow or liquidity prepared in accordance with GAAP.
       
      3 Months Ended
June 30, 2021
      (in millions, except days
in period)
       
  Net cash provided by operating activities   $ 3,470  
  Net cash used in investing activities     (3,883 )
  Net cash provided by financing activities     444  
       
  Adjustments:    
  Payroll Support Program financial assistance     (2,631 )
  Net purchases of short-term investments and restricted short-term investments     4,071  
  Proceeds from issuance of non-aircraft long-term debt, net of deferred financing costs     (1,231 )
  Proceeds from issuance of equity     (144 )
  Prepayments of long-term debt     22  
  Other     -  
       
  Total cash build (burn) (1)   $ 118  
       
  Days in period     91  
       
  Average daily cash build (burn)   $ 1  
       
       
  Note: Amounts may not recalculate due to rounding.    
       
(1) Of the total cash build for the three months ended June 30, 2021, approximately $965 million were cash payments for debt amortization and approximately $120 million were cash payments for salary and medical costs principally for the Company’s voluntary early retirement programs totaling an equivalent of approximately $12 million of cash burn per day.
       



American Airlines Group Inc.
Condensed Consolidated Statements of Cash Flows
(In millions)(Unaudited)
           
      6 Months Ended June 30,
        2021       2020  
           
Net cash provided by (used in) operating activities $ 3,644     $ (1,076 )
Cash flows from investing activities:      
Capital expenditures, net of aircraft purchase deposit returns   118       (1,233 )
Proceeds from sale-leaseback transactions   163       376  
Proceeds from sale of property and equipment   161       148  
Purchases of short-term investments   (13,840 )     (7,936 )
Sales of short-term investments   2,837       2,131  
Increase in restricted short-term investments   (404 )     (386 )
Other investing activities   (71 )     (61 )
Net cash used in investing activities   (11,036 )     (6,961 )
Cash flows from financing activities:      
Proceeds from issuance of long-term debt   12,096       9,464  
Payments on long-term debt and finance leases   (5,040 )     (2,477 )
Proceeds from issuance of equity   460       1,527  
Deferred financing costs   (166 )     (84 )
Treasury stock repurchases and shares withheld for taxes pursuant to employee stock plans   (13 )     (173 )
Dividend payments   -       (43 )
Other financing activities   121       -  
Net cash provided by financing activities   7,458       8,214  
Net increase in cash and restricted cash   66       177  
Cash and restricted cash at beginning of period   399       290  
Cash and restricted cash at end of period (1) $ 465     $ 467  
           
           
           
(1)   The following table provides a reconciliation of cash and restricted cash to amounts reported within the condensed consolidated balance sheets:
           
Cash   $ 325     $ 462  
               
Restricted cash included in restricted cash and short-term investments   140       5  
Total cash and restricted cash $ 465     $ 467  
           



       
American Airlines Group Inc. 
Condensed Consolidated Balance Sheets
(In millions, except shares)
 
       
  June 30, 2021   December 31, 2020
  (unaudited)    
Assets      
       
Current assets      
Cash $ 325     $ 245  
Short-term investments   17,625       6,619  
Restricted cash and short-term investments   999       609  
Accounts receivable, net   1,249       1,342  
Aircraft fuel, spare parts and supplies, net   1,789       1,614  
Prepaid expenses and other   660       666  
Total current assets   22,647       11,095  
       
Operating property and equipment      
Flight equipment   37,577       37,816  
Ground property and equipment   9,132       9,194  
Equipment purchase deposits   714       1,446  
Total property and equipment, at cost   47,423       48,456  
Less accumulated depreciation and amortization   (17,218 )     (16,757 )
Total property and equipment, net   30,205       31,699  
       
Operating lease right-of-use assets   7,958       8,039  
       
Other assets      
Goodwill   4,091       4,091  
Intangibles, net   2,008       2,029  
Deferred tax asset   3,631       3,239  
Other assets   1,924       1,816  
Total other assets   11,654       11,175  
       
Total assets $ 72,464     $ 62,008  
       
Liabilities and Stockholders’ Equity (Deficit)      
       
Current liabilities      
Current maturities of long-term debt and finance leases $ 2,798     $ 2,797  
Accounts payable   2,172       1,196  
Accrued salaries and wages   1,580       1,716  
Air traffic liability   7,095       4,757  
Loyalty program liability   2,632       2,033  
Operating lease liabilities   1,587       1,651  
Other accrued liabilities   3,657       2,419  
Total current liabilities   21,521       16,569  
       
Noncurrent liabilities      
Long-term debt and finance leases, net of current maturities   37,201       29,796  
Pension and postretirement benefits   6,627       7,069  
Loyalty program liability   6,674       7,162  
Operating lease liabilities   6,711       6,777  
Other liabilities   1,397       1,502  
Total noncurrent liabilities   58,610       52,306  
       
Stockholders’ equity (deficit)      
Common stock, 647,446,499 shares outstanding at June 30, 2021   6       6  
Additional paid-in capital   7,200       6,894  
Accumulated other comprehensive loss   (6,997 )     (7,103 )
Retained deficit   (7,876 )     (6,664 )
Total stockholders’ deficit   (7,667 )     (6,867 )
       
Total liabilities and stockholders’ equity (deficit) $ 72,464     $ 62,008  
       



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Source: American Airlines, Inc.