FORT WORTH, Texas — American Airlines Group Inc. (NASDAQ: AAL) today reported its third-quarter 2020 financial results, including:

• Third-quarter revenue of $3.2 billion, down 73% year-over-year on a 59% year-over-year reduction in total available seat miles (ASMs).
• Third-quarter pretax loss of $3.1 billion. Excluding net special items¹, third-quarter pretax loss of $3.6 billion.
• Third-quarter net loss of $2.4 billion, or ($4.71) per share. Excluding net special items¹, third-quarter net loss of $2.8 billion, or ($5.54) per share.
• Ended third quarter with approximately $13.6 billion of total available liquidity. In addition, in October, the company increased its loan capacity by $2 billion through the CARES Act loan program to $7.5 billion. With this increase, the company’s third-quarter pro forma liquidity balance is approximately $15.6 billion.
• Announced authorization to issue up to $1 billion of equity in an at-the-market offering to further bolster liquidity.

“During the third quarter, we took action to reduce our costs, strengthen our financial position, and ensure our customers return to travel with confidence,” said American Airlines Chairman and CEO Doug Parker. “The American Airlines team is doing a remarkable job taking care of our customers and each other during the most challenging time in our industry’s history.

“We have a long road ahead and our team remains fully engaged and focused not just on managing through the pandemic, but on making sure we are prepared for when demand returns. We are confident that the continued efforts of our team and the actions we have taken will drive customer confidence and strengthen our company for the future.”

Supporting team members, customers and communities

To ensure the safety and well-being of its team members and customers, American:

• Upgraded its Clean Commitment by adding the electrostatic spraying solution SurfaceWise^®2 to its cleaning and safety program. SurfaceWise2 is approved by the EPA as the first-ever long-lasting product to help fight the spread of the novel coronavirus and it will be applied to American’s entire fleet in the coming months.
• Announced a preflight COVID-19 testing program to help reopen markets to travel. Testing options are now available to customers traveling to Hawaii and Costa Rica, with Jamaica and the Bahamas soon to follow.
• Launched a new travel tool to help customers quickly see the current COVID-19 travel guidelines for domestic and international destinations.
• Continues to work with the Global Biorisk Advisory Council for GBAC STAR^® Accreditation for its aircraft and lounges. American is the first airline to seek the accreditation and expects to receive the designation by the end of 2020.

To provide its customers additional flexibility, American:

• Eliminated change fees for most domestic and short-haul international flying. American will also allow customers to keep the full value of their original tickets if they change their plans prior to scheduled travel.
• Is giving customers the option to stand by on flights on the same day at no charge.
• Enhanced its Basic Economy product to give customers the ability to tailor their travel experience, including upgrades, Preferred and Main Cabin Extra seats, priority boarding, and same-day flight changes.
• Is allowing AAdvantage^® elite members to apply their current travel benefits when purchasing a Basic Economy fare.
• Reopened additional Admirals Club lounges with enhanced cleaning and safety protocols as customers begin planning holiday travel.

To support the communities it serves, American:

• More than doubled its cargo-only flying from August to September and operated more than 1,900 flights serving 32 destinations during the third quarter. To date, these cargo flights have helped the airline’s customers move more than 85 million pounds of critical goods around the world amidst the COVID-19 outbreak. Through these efforts, the company’s cargo revenue was $207 million in the third quarter, effectively flat year-over-year on a 59% reduction in total ASMs.
• Donated more than 1 million pounds of food to fight hunger in communities around the world since the start of the pandemic. Through its partnership with Feeding America^® and other charitable organizations, American has contributed its surplus food to help provide meals to families in need throughout the U.S., Europe, Asia and Latin America.

Conserving cash

American continues to take aggressive action to reduce costs and preserve cash. The airline estimates that it has removed approximately $17 billion from its operating and capital budgets for 2020. This has been achieved primarily through cost savings resulting from reduced flying. The company also:

• Removed more than 150 aircraft from its fleet through early retirements or by placing aircraft into temporary storage. In addition to the previously announced retirements of the Boeing 757, Boeing 767, Embraer E190, Airbus A330-300, Bombardier CRJ-200 and certain other regional aircraft, the company recently decided to permanently retire all 15 of its Airbus A330-200 aircraft.
• Reached an agreement with Boeing to secure rights to defer deliveries of 18 737 MAX aircraft scheduled to be delivered in 2021 and 2022 to 2023 and 2024. The company also finalized a series of sale-leaseback transactions to finance its remaining Airbus A321 aircraft deliveries in 2021. As a result, the company now has financing secured for all of its planned deliveries through 2021.
• Made the difficult decision to proceed with furloughs to reduce headcount absent an extension of the CARES Act Payroll Support Program (PSP). In total, more than 20,000 team members have opted for an early out or long-term leave, and 19,000 team members were furloughed beginning Oct. 1. The company, along with its union partners, continues to aggressively fight for an extension of the PSP that would allow the airline to bring back those furloughed employees and reinstate service to small- and medium-sized markets that have suffered without the extension of funds.
• Reduced its non-aircraft capital expense — by $700 million in 2020 and another $300 million in 2021 — through reductions in fleet modification work, the elimination of all new ground service equipment purchases, and pausing all noncritical facility investments and IT projects.

Bolstering liquidity

In addition to reducing its operating and capital expenditures, American continues to strengthen its liquidity position. The company:

• Finalized a $5.5 billion loan agreement with the U.S. Department of the Treasury through the CARES Act loan program. In October, the company increased its loan capacity through the program to $7.5 billion.
• Closed $1.2 billion of financing with Goldman Sachs Merchant Bank through two senior secured note transactions. American does not have any large non-aircraft debt maturities until its $750 million unsecured bonds mature in June 2022.
• Received the final payments of allotted PSP funds, including an incremental $168 million of previously unallocated funds identified by the Treasury Department.
• Announced authorization to issue up to $1 billion of equity in an at-the-market offering to further bolster liquidity.
• Reduced its daily cash burn rate² to approximately $44 million per day in the third quarter from approximately $58 million per day in the second quarter. The company presently expects its fourth-quarter cash burn rate to be approximately $25 to $30 million per day.
• The company’s third-quarter pro forma liquidity balance is approximately $15.6 billion and it expects to end the fourth quarter with more than $13 billion in total available liquidity, which excludes any proceeds from the $1 billion at-the-market equity offering.

Demand and capacity outlook

American saw improvements in passenger demand and load factors during the third quarter, but both continue to be significantly below 2019 levels. The company will continue to match its forward capacity with observed bookings trends and currently expects its fourth-quarter system capacity to be down more than 50% year over year, with long-haul international capacity down approximately 75% year over year.

Conference call and webcast details

The company will conduct a live audio webcast of its financial results call at 7:30 a.m. CDT today. The call will be available to the public on a listen-only basis at aa.com/investorrelations. An archive of the webcast will be available on the website through Nov. 22.