American Airlines to seek new financing amid pandemic drag

American Airlines has said it plans to seek new financing as it posted an $8.9b net loss for the year and expects to burn cash until demand for air travel recovers. The airline reduced its cash burn to $30m a day in Q4, down from $44m in the previous quarter and almost $100m in April, when US airlines suffered the worst drop in passenger volumes at the outset of the coronavirus pandemic in the US. It ended Q4 with $14.3b in liquidity and expects to have $15b in two months. The company’s stock price, trading at $18.90, has risen nearly 22% since the Tuesday close after retail investors on Reddit’s r/wallstreetbets community identified the airline, which has been shorted by many investors, as the next company in which they might invest. The Reddit investors have brought about a big surge in the stock price of video game retailer GameStop this month, forcing some hedge funds to withdraw from their short positions. Asked if American felt comfortable selling equity from a legal standpoint, CE Doug Parker replied that the airline still had a remaining $118m worth of shares available that it has been authorised to sell since October. “If we choose to do anything more than that, we obviously will need to inform our investors,” he said. “Whether or not we choose to do that, or feel comfortable doing that, we can’t talk about.”<br/>