(NASDAQ: AAL), saw its stock fall by as much as 48% over the last twelve months, while the S&P 500 gained 20%.
until 2024. However, one key reason may cause the sector to regain its passenger volume much sooner than expected, and American Airlines could be among the best placed to benefit from an industry-wide rebound. Let us take a look. ” data-reactid=”14″>What’s more, pundits are now saying that global air travel may not recover until 2024. However, one key reason may cause the sector to regain its passenger volume much sooner than expected, and American Airlines could be among the best placed to benefit from an industry-wide rebound. Let us take a look.
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revenue per available seat mile (RASM). Fortunately, that was the nadir of the company’s operations. American Airlines’ cash burn has since narrowed from $100 million per day in April, to $56 million per day through May, to $30 million per day in June. ” data-reactid=”32″>During the height of the pandemic in April, when fatality rates were at their highest, American Airlines’ fleet operated with as little as 15% capacity, and generated just $0.018 in revenue per available seat mile (RASM). Fortunately, that was the nadir of the company’s operations. American Airlines’ cash burn has since narrowed from $100 million per day in April, to $56 million per day through May, to $30 million per day in June.
just around the corner. There are currently nine coronavirus vaccines undergoing Phase-3 efficacy tests in large-scale clinical trials. Preliminary results suggest they produced strong immune responses in smaller population groups. A vaccine for the coronavirus may enter regulatory review by the U.S. Food and Drug Administration (FDA) as early as October. ” data-reactid=”35″>With the help of biotech companies, immunity against SARS-CoV-2 may be just around the corner. There are currently nine coronavirus vaccines undergoing Phase-3 efficacy tests in large-scale clinical trials. Preliminary results suggest they produced strong immune responses in smaller population groups. A vaccine for the coronavirus may enter regulatory review by the U.S. Food and Drug Administration (FDA) as early as October.
(NYSE: PFE) is pricing its vaccine candidate at just $19.50 per dose, or $39 for one immunization treatment course.
In addition, management is taking aggressive measures to right size operations before liquidity runs out. In fact, management aims to turn American Airlines cash flow positive by 2021.
Here are a few reasons why investors can take comfort in American’s progress: First, the company’s unions are in talks to extend Payroll Support Programs to 2021. Second, American Airlines is cutting its active fleet by 150 aircraft, thus reducing unnecessary operational expenses. Finally, management is slashing its unprofitable routes, most of which are between small cities.
All these measures are having a dramatic effect on the company’s turnaround efforts. For example, from April through June, the company’s RASM increased nearly six-fold to $0.103. Almost 60% of the company’s operations originate from its Dallas and Charlotte hubs, which produced RASMs of up to $0.120. That’s almost comparable to pre-pandemic RASM of $0.152 that it generated in the second quarter of 2019.
industrial stocks, American Airlines seems like a great bet. ” data-reactid=”48″>Last year, American Airlines generated $45.8 billion in revenue and $3.79 in earnings per share, and paid out $0.40 a share in dividends. The market will reward the company should its operations make a turnaround and performance starts to match previous peaks within a short period. For investors who are bargain hunting for industrial stocks, American Airlines seems like a great bet.
Zhiyuan Sun has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.” data-reactid=”57″>Zhiyuan Sun has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
Buy Alert: American Airlines Stock Is Headed Higher was originally published by The Motley Fool” data-reactid=”58″>Buy Alert: American Airlines Stock Is Headed Higher was originally published by The Motley Fool
Here are a few reasons why investors can take comfort in American’s progress: First, the company’s unions are in talks to extend Payroll Support Programs to 2021. Second, American Airlines is cutting its active fleet by 150 aircraft, thus reducing unnecessary operational expenses. Finally, management is slashing its unprofitable routes, most of which are between small cities.
All these measures are having a dramatic effect on the company’s turnaround efforts. For example, from April through June, the company’s RASM increased nearly six-fold to $0.103. Almost 60% of the company’s operations originate from its Dallas and Charlotte hubs, which produced RASMs of up to $0.120. That’s almost comparable to pre-pandemic RASM of $0.152 that it generated in the second quarter of 2019.
industrial stocks, American Airlines seems like a great bet. ” data-reactid=”48″>Last year, American Airlines generated $45.8 billion in revenue and $3.79 in earnings per share, and paid out $0.40 a share in dividends. The market will reward the company should its operations make a turnaround and performance starts to match previous peaks within a short period. For investors who are bargain hunting for industrial stocks, American Airlines seems like a great bet.
Zhiyuan Sun has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.” data-reactid=”57″>Zhiyuan Sun has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
Buy Alert: American Airlines Stock Is Headed Higher was originally published by The Motley Fool” data-reactid=”58″>Buy Alert: American Airlines Stock Is Headed Higher was originally published by The Motley Fool
