American Airlines on Thursday posted a net loss of $2.1b in Q2, the latest carrier to outline the financial damage to travel demand from the coronavirus pandemic. Revenue dropped more than 86% in the quarter to $1.6b from close to $12b a year earlier. The stock rose 0.5% in premarket trading. American has restored more capacity than some of its large competitors like Delta or United as it aimed to capitalize on an uptick in air travel demand that bottomed in April. The airline did slash its daily cash burn rate from $100m a day in April to $30m a day in June after it cut flights and idled planes and thousands of employees took voluntary time off. “We have moved swiftly to improve our liquidity, conserve cash and ensure customers are safe when they travel,” CEO Doug Parker said. “There is much uncertainty ahead, but we remain confident we will emerge from this crisis more agile and more efficient than ever before.” American said it expects its capacity in the third quarter to be down 60% from last year. “The current environment is more unpredictable and more volatile than anything we ever could have imagined,” Parker and the airline’s president Robert Isom, said in an employee note. On an adjusted per-share basis, American posted a loss of $7.82, slightly more than analysts were expecting.<br/>
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American Airlines pledged its brand and hard-to-get take-off and landing rights in New York and Washington to secure a $1.2b loan, as it tries to weather the sharp downturn in travel due to the coronavirus pandemic. The airline Thursday said it had reached a deal with the merchant banking division of Goldman Sachs for $1b in senior notes, secured by a first lien on the “American Airlines” trademark and “aa.com” domain name in the US and some foreign jurisdictions. Another $200m in senior notes will be secured by a second lien on certain slots at New York’s LaGuardia Airport and Washington’s Reagan National Airport. Derek Kerr, American’s CFO, said the company’s intellectual property was worth approximately $10b. The airline, which has been the most aggressive of the three largest US carriers to add back capacity after the pandemic devastated demand, ended Q2 with a higher cash burn than its rivals. American averaged a $55m daily cash burn for the quarter, going from a high of $100m a day down to $30m by June. American added more flights in May and June when demand for air travel improved from its April nadir, and investors sent the stock upward. Yet rising Covid-19 cases in southern and western US states stalled the travel rebound, which remained a fraction of 2019 passenger numbers. Doug Parker, CE, said he was pleased with the results of the airline’s strategy to fly more than competitors. “Our revenue in June was six times what it was in April, and that would not have been the case if we’d flown only 20% of our capacity,” he said. <br/>
BA pilots are to vote at the end of the month on a package of pay cuts and voluntary redundancies after months of tough talks over the airline’s threat to “fire and rehire” thousands of staff. Balpa, the pilots’ union, has recommended that pilots accept the proposals that include voluntary working, an initial 20 per cent pay cut and the creation of a standby pool of 300 pilots on reduced wages, who will return to flying when aviation recovers from the severe downturn caused by the coronavirus pandemic. The union said the agreement reduced the number of compulsory job cuts from 1,255 to 270, out of a total pilot workforce of 4,300. There will be no “fire and rehire”, the union said. Brian Strutton, Balpa general secretary, said it was “hugely disappointing” that BA had not accepted all of its proposals to eliminate compulsory job losses. “As a result there will be some compulsory redundancies among the pilot community and that is a matter of huge regret,” he said. “Given BA’s intransigence, we have put together the best package we can to save as many jobs as possible.” Pilots will vote on the agreement, with the ballot closing on July 30, Balpa said.<br/>