Fort Worth-based American Airlines lost $931 million in the fourth quarter to finish a 2021 year that was as much about surviving the COVID-19 and its variants as it was about recovering from the devastating pandemic, the company reported Thursday morning.
American’s losses totaled $2 billion for the full 2021, a vast improvement over the $8.9 billion the company last year, but the company noted that the omicron variant of COVID-19 did weigh on performance. That was particularly evident in December with sick calls from crew members that created cancellations during the busy holiday period. Those variants were a repeating theme through 2021.
“These results would have been better, were it not for omicron,” American Airlines CEO Doug Parker told CNBC Thursday morning. “We saw a large increase in cancellations, our net bookings through the quarter were fell from what had been about 80% of 2019 levels to less than 50% at the end of 2020 in the last week.”
It was the second year of massive losses for American Airlines, the norm for airlines that had to rely on massive amounts of debt and government assistance to survive the financial impact of the COVID-19 pandemic. American’s $2 billion loss was only possible with $4.2 billion in government payroll program support.
There were bright spots for American, which continued to see strong demand from leisure travels along with the return of some business travelers.
American’s $9.4 billion in revenue for the fourth quarter was the best sales figure the company has recorded since the COVID-19 pandemic began, more than double the number American saw in the fourth quarter of 2020. However, revenue was still 17% lower than during the same quarter in 2019.
“Over the past year, we have experienced periods of high travel demand countered by periods of decreased demand due to new COVID-19 variants,” Parker said in a statement. “This volatility has created the most challenging planning environment in the history of commercial aviation.”
The results came as American is still running a smaller operation than it did in 2019. Total capacity was down about 13% in the fourth quarter compared to what it was in 2019 and capacity will still be down 8 to 10% in the upcoming quarter compared to before the pandemic.
“Until the business and long-haul markets return, it will be difficult for these companies to make a full recovery, and our analysis suggests that international revenues will recover by 2024,” analyst Peter McNally of Third Bridge said Thursday. “Second, the operational challenges of running an airline have increased, particularly with labor.”
American said it hired 16,000 employees in 2021 and has plans to hire another 18,000 in 2022.
Much of the recovery won’t come until corporate and international travel returns, McNally said.
Incoming CEO Robert Isom said that small and medium-sized business has returned to about 80% of pre-pandemic levels, but large corporate travel has only recovered to about 40%.
Chief Financial Officer Derek Kerr said the company doesn’t expect to be profitable in January or February, but could be by March.
