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MarketScreener Homepage  >  Equities  >  Nasdaq  >  American Airlines Group Inc.    AAL

AMERICAN AIRLINES GROUP INC.

(AAL)
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U.S. Treasury agrees on loan terms with American, four other airlines

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07/02/2020 | 09:50am EDT
FILE PHOTO: Boeing 737 jet sits at a gate at Washington's Reagan National airport with U.S. Capitol building in the background in Washington

By David Shepardson

The U.S. Treasury said on Thursday it has agreed on terms for government loans with five U.S. carriers, including American Airlines Group Inc .

The Treasury said it had signed letters of intent with American, Frontier Airlines, Hawaiian Airlines, SkyWest Airlines, and Spirit Airlines under a $25 billion emergency loan program created by Congress in March.

American said on Thursday it expects to close on a $4.75 billion Treasury loan in the third quarter on top of $5.8 billion in payroll assistance it was previously awarded.

American Chief Executive Doug Parker and President Robert Isom warned employees on Thursday that it may face significant overstaffing as it tries to win voluntary departures.

"We currently anticipate having 20 to 30% -- or more than 20,000 -- more team members on payroll than we need to operate our schedule this fall," they wrote in an employee memo. "To be clear, this doesn't mean 20,000 of our team members will be furloughed in October, it simply means we still have work to do to right-size our team for the airline we will operate."

Treasury separately awarded airlines $25 billion in payroll assistance bailouts with most of the aid in the form of grants that does not need to be repaid.

Treasury Secretary Steven Mnuchin said in a statement that "conversations with other airlines continue, and we look forward to finalizing agreements as soon as possible." Airlines have until Sept. 30 to decide whether to take the loan.

Like the payroll assistance funds, the loans come with a ban on stock buybacks and paying dividends and set limits on executive compensation.

Hawaiian Airlines, which was awarded $292 million in payroll assistance, had sought an additional $364 million Treasury loan.

Spirit was awarded $335 million in payroll assistance and said it was eligible for $741 million in Treasury loans. SkyWest received $438 million in payroll assistance.

Airlines have warned that a recent spike in U.S. coronavirus cases could dampen travel demand that is still off around 75% from last year but has rebounded significantly over April lows.

Airlines can furlough or eliminate jobs starting Oct. 1.

Last week, six U.S. aviation unions told lawmakers another $32 billion in payroll aid is needed to keep hundreds of thousands of workers employed through March 31.

(Reporting by David Shepardson; Editing by Chizu Nomiyama and Jonathan Oatis)

Stocks mentioned in the article
ChangeLast1st jan.
AMERICAN AIRLINES GROUP INC. -1.93% 13.73 Delayed Quote.-52.13%
HAWAIIAN HOLDINGS, INC. 0.87% 13.89 Delayed Quote.-52.58%
SKYWEST, INC. 2.02% 32.3 Delayed Quote.-50.02%
SPIRIT AIRLINES, INC. -1.42% 18.04 Delayed Quote.-55.25%
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Financials (USD)
Sales 2020 17 390 M - -
Net income 2020 -8 182 M - -
Net Debt 2020 30 137 M - -
P/E ratio 2020 -0,75x
Yield 2020 0,87%
Capitalization 6 983 M 6 983 M -
EV / Sales 2020 2,13x
EV / Sales 2021 1,24x
Nbr of Employees 107 400
Free-Float 98,9%
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Technical analysis trends AMERICAN AIRLINES GROUP IN
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TrendsBullishNeutralNeutral
Income Statement Evolution
Consensus
Sell
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Mean consensus HOLD
Number of Analysts 19
Average target price 11,97 $
Last Close Price 13,73 $
Spread / Highest target 96,6%
Spread / Average Target -12,8%
Spread / Lowest Target -92,7%
EPS Revisions
Managers
NameTitle
William Douglas Parker Chairman & Chief Executive Officer
Robert D. Isom President
David G. Seymour Senior Vice President-Operations
Derek J. Kerr Chief Financial & Accounting Officer, Executive VP
Maya Leibman Chief Information Officer & Executive VP
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