American Airlines posts first quarterly loss since emerging from bankruptcy

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© Reuters. American Airlines jets sit at gates at Washington's Reagan National airport in Washington © Reuters. American Airlines jets sit at gates at Washington’s Reagan National airport in Washington

(Reuters) – American Airlines (O:) on Thursday posted a $ 1.1 billion net loss, its first quarterly loss since emerging from bankruptcy in 2013, and warned of a cash burn of about $ 70 million a day in the second quarter, as the COVID-19 pandemic brought travel to a near standstill.

Shares rose 1.8% to $ 12.86 before the bell, as the U.S. airline said it expects to end the second quarter with about $ 11 billion in liquidity.

Airlines, one of the hardest hit sectors by the pandemic, can expect little from the upcoming summer season, usually a popular travel time, as people remain wary of traveling due to fears of catching coronavirus.

“Never before has our airline, or our industry, faced such a significant challenge,” Chief Executive Doug Parker said in a statement.

The pandemic led to the end of the longest expansion in U.S. history, with the nation’s economy contracting at its sharpest pace since the Great Recession in the first quarter.

The U.S. airline swung to a net loss of $ 2.24 billion, or $ 5.26 per share, for the first quarter ended March 31, compared with a profit of $ 185 million, or 41 cents per share, a year earlier.

Excluding items, American Airlines posted a loss of $ 2.65 per share, below analyst’s estimates of a loss of $ 2.33, according to IBES data from Refinitiv.

Total operating revenue declined 19.5% to $ 8.52 billion.

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