American Airlines Group Inc. delayed deliveries of more than three dozen Boeing Co. aircraft and projected a deeper loss than analysts expected as the coronavirus pandemic continues to quash corporate and international travel.
Eighteen 737 Max jets that were to be delivered this year and next will be postponed to 2023 and 2024, the carrier said in a regulatory filing Tuesday. American will also take fourteen 787-8 planes at the end of the next year’s first quarter, instead of this year. Another five of that wide-body aircraft will be converted to the 787-9 version, with shipments delayed until 2023.
The first-quarter adjusted loss will be US$4.29 to US$4.41 a share, American said. Analysts had projected US$4.05, according to the average of estimates compiled by Bloomberg. Revenue will decline 62 per cent from the same quarter in 2019, before the pandemic decimated travel. The Fort Worth, Texas-based company previously said the drop could reach 65 per cent.
American’s revenue projection meshed with a similar outlook from United Airlines Holdings Inc. as increased vaccinations against COVID-19 fuel a rebound in domestic flying. International and business demand has fallen as far as 80 per cent below pre-pandemic levels, however.
The optimism over domestic travel was dealt a blow Tuesday, as U.S. health officials called for an immediate pause in the use of Johnson & Johnson’s vaccine over concerns about blood clots.
American dropped 2.9 per cent to US$22.25 at 11:03 a.m. in New York, with much of the decline spurred by the J&J news. Other carriers and cruise lines declined as well. Boeing rose less than 1 per cent to US$251.71.
American’s first-quarter loss excluding credits linked to federal payroll aid and costs of an employee early retirement program is expected to be as much as US$2.8 billion, the carrier said. The airline projected burning an average of US$27 million a day in cash for the quarter, compared with previous guidance of US$30 million. Its burn rate turned positive in March, excluding debt principal and severance payments.