American Airlines said on Friday it expects to halt its daily cash burn by the end of 2020 thanks to cost-cutting measures and an improvement in travel demand, easing concerns about its short-term liquidity.
Fred Katayama reports.
U.S. carriers have been bleeding cash - some $10 billion a month collectively - and have been pummeled as people stayed at home and canceled flights.
But on Friday, American Airlines said it expects to stop burning cash by the end of 2020.
The U.S.'
Largest carrier credited an improvement in travel demand and cost-cutting measures for that outlook.
That eased concerns about American's short-term liquidity, and investors rushed to buy the stock, driving it up 18% in Friday morning trading.
Shares of other airlines posted slightly lower double-digit gains amid a broad market rally.
Delta has also said it sees its daily cash burn rate dropping to zero by year's end.
The major carriers have recently announced they'll boost their flight schedule in a bet that demand will keep recovering as economies reopen and cooped up households make summer vacation plans.
But the skies still aren't totally clear.
Like Delta, American sees its quarterly revenue nose-diving 90%, and it said it expects its fiscal 2020 results will be materially impacted.
Two large drive-thru COVID-19 testing sites in Dallas are going to lose federal funding at the end of June, but Gov. Greg Abbott..
