American Airlines has forecast revenue ahead of its previous forecast and a “slight” pretax profit for the second quarter.
During the second quarter of 2021, American flew 54.6 billion total available seat miles, down 24.6% versus the second quarter of 2019 and at the lower end of its prior guidance of down 20% to 25% versus the second quarter of 2019. American second quarter completion factor was 98.6% and on-time arrivals rate (A14) was 82.1%. This was the airline’s best-ever performance on both metrics in a second quarter, despite a challenging month of June.
American expects its second quarter total revenue to be down approximately 37.5% versus the second quarter of 2019. This is an improvement compared to its prior guidance of down approximately 40%.
American expects its second quarter CASM to be up between 11% and 12% compared to the second quarter of 2019 versus its previous guidance of up between 13% and 17%. This improvement is due to the effectiveness of cost efficiency measures put in place.
American paid $1.91 per gallon of jet fuel and consumed 844 million gallons during the second quarter of 2021.
American expects to report a slight second quarter 2021 pretax profit. Excluding net special items, the airline expects to report pretax margin of approximately -19% to -20% versus its previous guidance of -27% to -30%. This change versus previous guidance is due to the improvement in revenue and effectiveness of cost efficiency measures put in place
The airline said that it expects to report between a net loss of $35 million and a net profit of $25 million in the second quarter of 2021. Excluding the effect of net special items, American expects to report a net loss of between $1.1 billion and $1.2 billion. It also expects to record an income tax benefit at an effective tax rate of 22%.
American expects to report net special credits of approximately $1.4 billion in the second quarter before the effect of taxes. Net special credits principally relate to financial assistance provided by the United States Treasury under the Payroll Support Program Extension Agreement.
American expects to end the second quarter with approximately $21.3 billion in total available liquidity. This is approximately $1.3 billion higher than prior guidance due to the continued improvements in revenue production, forward bookings and approximately $145 million in shares issued under its at-the-market (ATM) facility (approximately $650 million of the ATM authorization remains available). In addition, American now expects its average daily cash build rate for the second quarter to be approximately $1 million per day, the first positive quarter since the beginning of the pandemic.