American Airlines reported on Thursday (Oct. 22) that it had decreased its cash burn rate to roughly $44 million daily in Q3 from roughly $58 million daily in Q2. The airline now forecasts its Q4 cash burn rate to be in the range of $25 million to $30 million daily.
EVP and CFO Derek Kerr said on a call with analysts that the airline has “moved quickly to raise incremental liquidity, reduce cash burn, and become as efficient as possible.”
The airline has increased its cargo-only flying between August and September by over two times and ran over 1,900 flights covering 32 destinations in Q3.
Furthermore, the airline eliminated over 150 planes from its fleet via early retirements or putting them into temporary storage. Beyond retirements announced in the past, the airline decided to permanently retire each of its Airbus A330-200 planes.
The company also struck a deal with Boeing to secure rights to defer deliveries of 18 737 MAX planes set to be delivered next year and 2022 to 2023 and 2024. It also finalized sale-leaseback transactions to finance the rest of its Airbus A321 deliveries next year.
Kerr said the firm has worked hard to rebuild its fleet into “one of the more efficient to operate and [one that] offers our customers a consistent and improved product and experience.”
The airline has also removed change fees for most domestic and short-haul international trips, while it will let customers retain the complete value of their original tickets if they change their plans before scheduled travel.
American has upgraded its “Clean Commitment” by adding the SurfaceWise®2 electrostatic spraying solution to its safety and cleaning program.
The airline has also rolled out a new tool to assist travelers in expediently viewing the current pandemic travel guidelines from U.S. and global destinations.
Furthermore, American announced a preflight coronavirus testing program to assist in opening markets again to travel. The airline said testing options are available to travelers going to Costa Rica and Hawaii, while Bahamas and Jamaica are “soon to follow.”
The company also said it keeps working with the Global Biorisk Advisory Council on GBAC STAR® Accreditation for its lounges and planes. It foresees receiving the credential by the close of the year.
As for its overall results, American Airlines reported a loss per share excluding net special items of $5.54 on revenue of $3.2 billion. The results exceeded analyst estimates of a loss per share of $5.88 on revenue of $2.76 billion.