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American Airlines shares are increasing as the airline no longer sees cash consumption by the end of the year



A traveler wearing a protective mask walks past an American Airlines Group Inc. aircraft tail fin at Ronald Reagan National Airport (DCA), Arlington, Virginia, on Tuesday, June 9, 2020.

Andrew Harrer | Bloomberg | Getty Images

American Airlines shares rose up to 16% on Friday after the airline said that an increase in demand for travel will help daily cash burn from a previous forecast of $ 50 million to $ 40 million to lower.

Although the Fort Worth-based airline had softened its highs, it led the S&P 500 higher in the morning trade after announcing a message that it would be expecting to eliminate its cash consumption by the end of the year.

American reiterated its forecast that second quarter sales will still decrease 90% year over year when sales were close to $ 1

2 billion. The airline said last week that it was planning to add more flights, especially for the domestic market, as some demand returned.

Until June 8, American Airlines had flown an average of 129,000 passengers a day and 62% of the flights were occupied, although capacity decreased by 70% compared to the previous year. In May, the airline flew 85,000 travelers a day with a load factor of 47% and a capacity of 75% from May 2019.

Despite the increased demand, the number of people passing through checkpoints at US airports has decreased 81% year over year, according to the Transportation Security Administration.

American has applied for a $ 4.75 billion federal loan under the CARES Act and announced on Friday that it would pledge part of its AAdvantage frequent flyer program as security. The program is valued at $ 19.5 to $ 31.5 billion.

American stocks have so far fallen 41% this year.


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