american airlines q3 earnings 2021


After Robert's remarks, Derek will follow with the details on the quarter and our operating plans going forward. And we find that once people start to travel, they continue to do so. Next year is $2.5 billion. Hey, Dan, I just wanna go back and just add one more point. And our team did this while doing an excellent job of taking care of our customers. Based on current demand assumptions and capacity plans, we continue to expect a slight sequential increase in our revenues and expect total revenues to be down approximately 20% versus the fourth quarter of 2019. With respect to capital expenditures, we expect full-year 2021 capex to remain minimal, with non-aircraft capex at approximately $900 million and net aircraft capex, including predelivery payments, remaining an inflow of $900 million. But we'll have the tailwinds of the costs coming out that we did from an efficiency standpoint and also the -- number one, getting out of the aircraft types and modifying the aircraft to be the same all across from the Oasis project will benefit us a lot as we go into 2022. Your line is now open. But for us, the true north is creating the most comprehensive global network. And the -- as time goes on, we'll be able to fill you in. I think [Inaudible] lawyers are talking to lawyers, but I can tell you for certain, the company is not interested in any sort of talks about settling this. I know you mentioned industrials, healthcare and I think one other group. And we have different agreements that we have to follow in accordance with our collective bargaining agreements to make sure that we're doing everything possible to make sure that people stay with American. Or have you kind of closed that gap through this crisis? American Airlines CEO: Business travel rebound will bring return to profitability. And from an operational benefit, it will help out a lot because, as we swap the aircraft, they will both be in that. On a revenue basis, that will start to recover as people come back and pay us more and fly more, frankly. But what we don't know is so much of that trip behavior also, it was people leaving on a Thursday, coming back on a Monday. This includes the $750 million payment of spare parts term loan and the $550 million prepayment of the term loan with the U.S. Treasury that was completed earlier this year.

All the reason we just said, but -- we're well prepared for all the reasons already said, I don't need to restate them. So they can continue to work. And recent trends show that corporate bookings month to date have improved significantly and are accelerating like they were earlier in the year before the Delta variant and associated restrictions were imposed. And then, just as we look at travel recovery and ways to service, you're going to see that we are adding back amenities that will allow us to sell and bundle in different ways. They're wrong. Ali Sider -- The Wall Street Journal -- Air Travel Reporter. Hey, good morning, everybody. And how do you think about the operational risks around that? Interest expense, I think, in the third quarter was $476 million, I want to say. David, this is Maya. So I'm not saying it's where we'll end up. Your line is now open. I wanna give a shout out to our team. David Vernon -- Sanford C. Bernstein -- Analyst. So yes, look, that's not a new hub is the answer. But you're not adding extra staff or adjusting staffing levels upward? As we get into next year, with every passing week, we see our bookings step up more and more across Transatlantic. The fourth quarter is a -- seasonally, you do burn cash in the fourth quarter. Thanks, Doug, and good morning, everyone. And what I'll tell you is, we will attract people to the profession given the kind of starting salaries that we are offering right now and ultimately what pilots top out at. Go ahead.. Volatility profiles based on trailing-three-year calculations of the standard deviation of service investment returns. And that brings together our top 50 corporate customers and those that are responsible for procurement of travel at those companies. And as Derek said, all the efficiencies you get from eliminating so many sub fleets, training and otherwise. Clearly, there's significant pent-up demand for travel to and from the U.S. and many customers are eager to return to travel when it's permitted. They've got to take care of us and put food on the table. Right now, almost two-thirds of our corporate customers are traveling internationally for at least essential business. And that's the effort. We'll continue to focus on delivering a safe and reliable operations and continuing the momentum as we further scale our operation and welcome back even more customers. Well, it depends on when we were thinking. I don't think you guys mentioned much about that.

Good morning, guys. OK, I appreciate that. Yeah, I'll take that. We've also worked to keep our controllable costs down and have actioned $1.3 billion in permanent annual cost initiatives this year alone. Yeah. And then, just any thoughts on the testing, which -- it seems like every carrier is going to have exemption issues and they're going to have to test. The hiring we're doing now is due for the summer of next year. So I would look at it that way. For the fourth quarter, American expects its revenue to fall by about 20% from 2019, when it generated $11.3 billion. On -- as to who approves the exemptions, I think that's the employer's duty to approve the exemptions. The information that we're giving you on the call is as of today's date, and we undertake no obligation to update the material subsequently. And we are well-positioned for the future. What's going to come next is some of the other banking and financial services, entertainment, as those get back into the office in the start of the new year, they're going to come back to just as we are seeing in some of these other sectors. Other one put in place a requirement that if you're not vaccinated, you're going to pay more for your medical benefits, and it's already in place. Look, we're -- we've been really encouraged by what we've seen over the last, let's call it, three or four weeks at international at large, but especially at Transatlantic. In that 64%, the large corporates are 35% on a year over two-year basis. Hey, this is Vasu. Thank you very much for any color. So to the extent there will be testing going on, it would be for those who have chosen, still have to be vaccinated. So anyway, like I said, I don't want to say we won't ever do it, but it's not something we've begun to look at in this run, I can tell you that. We've got to be a little bit careful in what we share about it. Based on our results, it's clear these actions are paying off, as our third-quarter CASM, including fuel and net special items, was up just 10.5% versus the same period in 2019 despite flying approximately 20% less capacity. Yeah, absolutely not. This morning, we reported a third-quarter GAAP net profit of $169 million or $0.25 per diluted share. No. Thank you, all three of you. And for us, historically, on the West Coast, we've had a very, very small presence, most mainly in the Pacific Northwest, where we've had almost no presence. The reason why I asked is I would have thought, given some of the structural changes you've had within fleet simplification and so on, that 4Q would have had a little bit more leverage to it. And we expect international travel to improve significantly with easing of cross-border requirements. We don't expect anybody to leave American Airlines. We estimate its benefit in about 0.5% to a percentage point of system revenue, but something which is a lot more meaningful to a New York and Boston and West Coast network, which was operating at 50% of historical levels. Your line is now open. Thanks. So we did the paydown of the spare parts loan. Happy to note that hasn't happened since we put that there.

We -- the way we look at this is we go back fly the 2019 schedule today, produce the same RASMs and save that amount. What's that though is, look, we are adding seats, so -- at very, very low marginal costs. And we're seeing that rise every day as the management put in place. And we are simply making that hub stronger by adding -- by having alliance with Alaska, whereby we can do things they can't do or they wouldn't be able to do without an investment that wouldn't make sense by buying international because we have international aircraft. Look, we've done a remarkable job. The Motley Fool has no position in any of the stocks mentioned. It's a lot of things, but the largest ones are $500 million or so in management payroll. A lot of that has a pent-up demand effect. Just looking into the fourth quarter, do you expect the operating cash burn to be larger than the $1.7 billion burn in 3Q? So on headcount, how should we think about FTEs in 2022 and if possible 2023? Following the White House announcement, we saw an immediate increase in bookings in several of our key international markets. And for us, it's pretty simple, that we go create value for customers by being relevant and being relevant to the biggest markets. Thank you, Leslie, I'll just start.

So -- what it says to me is what Robert just said. Yeah, Duane, we don't -- operating cash flow, but the seasonality does -- in profitable years, as revenue -- as cash declining, and we exceptionally comfortable with where the cash is. Our partnership with JetBlue and Alaska are delivering tremendous benefits for customers and enabling new flying that otherwise wouldn't be possible.

Good morning, and welcome to the American Airlines Group third-quarter 2021 earnings conference call. Market-beating stocks from our award-winning analyst team. While we strive for our Foolish Best, there may be errors, omissions, or inaccuracies in this transcript. As Doug mentioned, this summer represented the largest operational ramp-up in the history of American. And then, just related to that, if that had been fully implemented in 2019, how much would that have contributed to pre-tax income?. And as Derek mentioned as well, we're doing hiring throughout the business, and that includes places like our reservations offices as well. And our team safely transported more than 48 million passengers in the quarter. David Koenig -- The Associated Press -- Business Writer. But probably, our top-line initiative is making sure that all of these partnerships are really integrated and seamless for the customer, that a lot of the long-standing issues that have existed in co-sharing relationships really get alleviated pretty quickly. I said they're not going on. Our airline continues to succeed, thanks to the hard work of our team. Can you just talk about debt paydown and the cadence of that and how it's going to look over the next couple of years in the context of you going from $15 billion -- I think you said in the press release $15 billion of debt pay down by 2025? Industrials, healthcare and professional services continue to lead that recovery. Is that just the company? So I'm just trying to square this idea that you don't expect any employees to leave American Airlines. So that's what gives us the comfort. I'll add to that. Because of this choppiness, we will continue to keep liquidity at elevated levels in the near to medium term, with a plan to step down our target liquidity to approximately $10 billion to $12 billion at some point next year when we are confident the recovery has taken hold and we have returned to sustained profitability. Regarding the fleet harmonization project, which we're almost done with, we only have, I think, 60 of the 321s that are remaining. Your line is now open. As we look at South America, really has less to do with investments and more that -- the one thing we can't do for the South American customer is carry them within South America. Yeah, understood. Are you -- does the delays change any of the financing arrangements for those aircraft?. We continue to make significant strides in building the large global network in the industry and reconnecting with our customers. That's where business wants to be. And so it will change out there. Lastly, I know a lot of investors are concerned about inflationary pressure in 2022 and beyond. What it's going to do is benefit, number one, from a CASM perspective because we'll have more seats and from a revenue perspective because we'll be able to sell more seats.. So we are really proud of what the team has done to get back more capacity than others, to take care of more customers than others, and to do so, obviously, safely and efficiently and to do so in a way that has us run in a great operation right now.

For the quarter, revenues were significantly improved over 2020 and were down 25% in the third quarter versus the same period in 2019, whereas they were down 37.5% in the second quarter on the same year over two-year basis. But David -- this is Derek. As Doug mentioned in his remarks, this was our strongest quarter since the pandemic began. As Doug alluded to, yes, half -- $500 million of that is management headcount, $600 million of it is productivity at the other areas with throughout the company. On the call this morning, we have Doug Parker, chairman and CEO; Robert Isom, president; and Derek Kerr, chief financial officer. Is there just too much uncertainty around 2022 revenue to be making capacity decisions today? One important thing to note, just clarifying your question also is, the absolute ASM production of American Airlines in any month in the Q -- in the fourth quarter is actually less than the absolute ASM that we are producing in July, right?