Cranky Earnings Day: American
American Airlines posted its Q1 earnings today, with the airline reporting a loss of $1.3 billion on revenue of $4 billion.
American reduced its cash burn to $27 million per day including $9 million in debt principal and severance payments. By March, AA was able to reduce its cash burn to just $4 million a day, providing optimism that a breakeven quarter is not far away.
American issued $6.5 billion worth of bonds and entered into a new $3.5 billion loan during the quarter, using its AAdvantage program as collateral. The airline was careful to point out that it used the value of AAdvantage points as collateral, not the AAdvantage members itself. It forgot to make that clarification at the beginning of the deals and dozens of AAdvantage members from the Dallas area were told to report to Wall St by the end of the quarter before the issue was worked out.
AA also repaid $2.8 billion worth of loans while obtaining the right to access an additional $3.3 billion in cash through the CARES Act if needed. American ended the quarter with $17.3 billion in liquidity and it expects to end Q2 with $19.5 billion in liquidity. It expects to gain the extra $2.2 billion in liquidity during the next quarter by selling leftover AAmenity kits on JetBlue flights to London for $39 each.
Cranky Earnings Day: Southwest
Southwest Airlines’s Q1 financials also posted today, with the airline claiming an alleged profit of $116 million thanks in large part to PSP revenue to cover all its losses. Without PSP and other special items, the airline would have posted a $1 billion loss for the quarter.
In Q1 2021, Southwest reported revenues of $2.05 billion, coming just above analyst predictions of $2.03 billion. Boy do those analysts have egg on their face now. The revenue figure is down 60% from 2019, but the airline did cut expenses down to $1.85 billion, a 57% drop from last year.
Southwest expects its Q2 capacity to increase to 90% compared to Q2 2019 as it continues to see strong bookings for the summer. It ended the quarter with $15.3 billion in liquidity and $10.8 billion in outstanding debt.
Cranky Earnings Day: Alaska and Spirit
Alaska and Spirit also posted their Q1 earnings in the last 24 hours with both airlines posting a loss for the quarter.
Alaska’s loss was $131 million for the three months including CARES act funding and offsets, an improvement over its $232 million loss in Q1 2020 only thanks to government money. Without that, the airline would have posted a loss of $436 million.
Alaska reduced its debt by $100 million — from $1.7 billion at the end of 2020 — to $1.6 billion today. Alaska received $546 million in grants and loans from the federal government and anticipates another $80 million at the end of his month. Total revenue for the quarter for Alaska was $797 million with $958 million in expenses, excluding the PSP cash. The airline ended the quarter with $5.3 billion of liquidity including $3.5 billion in cash.
Spirit released its financials for anyone willing to pony up $9.99 to see the release. Lucky for you, here at Cranky Daily we paid up. Spirit posted a Q1 loss of $112 million on revenues of $461 million. As is the norm for Spirit, $599 of its $461 million came from airfare, with the remaining $460,999,401 coming from fees and add-ons.
Spirit ended the quarter with $1.9 billion worth of liquidity which would have been $1,900,000,039, but a gate agent mistakenly let a passenger board with a free carry-on. That gate agent has been fired.
Radixx Reservation System Down
Radixx, a reservation system that serves many of Sabre’s low-cost carrier customers, has been out of service for more than a day, leaving several airlines in a lurch, unable to sell tickets online.
Some airlines can sell tickets at airport points of sale, and for most of the affected airlines, airport operations are operating normally – or as normal as can be for these airlines. Online check-in is not working, and passengers are being required to check-in at the airport.
The affected airlines are from all over the world and include Avelo Airlines and Eastern Airlines in the United States. Other impacted carriers include Air Belgium, Air Transat, Arkia, FlySafair, Peach, Sky, and Wingo.
Sabre reports that it was malware that caused the meltdown and not a crude attempt at upselling these airlines to more expensive Sabre systems that actually (usually) function. The company hopes to have the system back up and running later today in some form with the entire system fixed in the coming days. It is currently on hold with the cable company and the power company, as well as in line at the DMV in an effort to speed the repairs along.
Etihad to Overhaul Fleet
Etihad Airways CEO Tony Douglas said today that the airline plans to eliminate its entire B777-300ER fleet while grounding its A380s indefinitely in an effort to become a smaller, streamlined “boutique” airline. Fine, but at least it’s a boutique airline with gold-plated everything in its premium classes.
Douglas said Thursday that his airline has too diversified a fleet to remain operationally efficient. The airline has grounded its A380s since the onset of the pandemic last March and has no intentions to bring those ten airplanes out of storage. Etihad currently has 19 B777-300ER that it will need to find a buyer or be converted for another use such as office space, the world’s weirdest movie theatre, or yet another Alitalia fleet renewal.
Etihad will keep its focus on its B787 Dreamliners and A350-1000 aircraft going forward. The airline currently has 39 Dreamliners and five A350-1000s in its fleet with 15 more of the Airbii on order.
- airBaltic signed an agreement to build a new cargo hub at its base in Riga.
- Aer Lingus has begun a new route from Belfast to Cornwall/Newquay (NQY).
- Air Serbia plans to put its new A330 named for Serbian hero Nikola Tesla on its Belgrade to JFK route after it takes delivery of the plane this weekend. The aircraft has to make two intermediate stops en route to New York to find an electric charging station in the Atlantic.
- Alsie Express is set to resume scheduled ops for the first time since January.
- Andorra Airlines has begun revenue operations after the airline had trouble making its finances balance offering all its flights for free.
- Emirates is resuming its flight to Mexico City via Barcelona on July 2.
- Nordwind Airlines will begin a new route from Kaliningrad (KGD) to Minsk (MSQ), operating weekly beginning April 30.
- Rex, who is a good boy, has taken delivery of its sixth B737-800NG aircraft.
- Sky Mali secured a wet-leased E145 aircraft. It did not acquire the plane through its rival Sky Mall.
- T’Way Air has s’ecured leases for additional A330 aircraft.
The rotation of the earth really makes my day. Happy Earth Day!