American Airlines lowers guidance for TRASM in 4Q2019, due to lower planned yields

    American Airlines released (10-Jan-2020) the following guidance for 4Q2019:

    • ASMs: Approximately 70.3 billion;
    • TRASM: +0% to +1%. The lowered guidance is due to lower than planned yields in the period before Thanksgiving and a higher completion factor throughout the quarter, though demand remains strong and revenue performance in Dec-2019 was above expectations;
    • Special items: Approximately USD110 million, with approximately USD20 million as non cash. Net special items are primarily due to fleet restructuring costs and merger integration expenses, offset by the mark to market adjustments on equity and other investments;
    • Fuel consumption: Approximately 1117 million gallons at an average fuel price of USD2.04 to USD2.09;
    • CASM excluding fuel and net special items: +1% to +3%. The lowered guidance is primarily due to improved operational performance and a higher completion factor;
    • Pre tax margin excluding net special items: +5.0% to +7.0%;
    • Gross aircraft capex and net PDPs: Approximately USD706 million outflow, primarily due to the delivery dates of certain Boeing 737 MAX aircraft moving from 4Q2020;
    • Shares outstanding: Fully diluted weighted average sharecount of approximately 436 million.

    Additionally, the carrier had approximately USD7 billion in total available liquidity as of 31-Dec-2019. It arranged an additional revolving line of credit in order to have an incremental borrowing capacity of up to USD400 million, due to the uncertainty of the 737 MAXs return. American does not plan to borrow any amounts under this facility, which is set to mature in Sep-2020 and has an option extension to Dec-2020. The total liquidity is composed of unrestricted cash of USD3.8 billion and investments of USD3.2 billion in undrawn revolver capacity, as well as a restricted cash position of USD158 million. [more – original PR]