American Express Company (NYSE: AXP) today reported first-quarter net income of $2.2 billion, or $2.74 per share, compared with net income of $367 million, or $0.41 per share, a year ago. The results reflected the impact of $1.05 billion ($802 million after tax) in credit reserve releases(2) , primarily driven by continued improvements in the macroeconomic outlook and strong credit performance.

 
           (Millions, except percentages and per share amounts) 
 
                                              Quarters Ended     Percentage 
                                                 March 31,        Inc/(Dec) 
                                            -------------------  ---------- 
                                                 2021     2020 
------------------------------------------      ------   ------  ---------- 
Total Revenues Net of Interest Expense       $   9,064  $10,310     (12) 
------------------------------------------      ------   ------  ---------- 
Total Provisions for Credit Losses           $   (675)  $ 2,621      # 
------------------------------------------      ------   ------  ---------- 
Net Income                                   $   2,235  $   367      # 
------------------------------------------      ------   ------  ---------- 
Diluted Earnings Per Common Share(1)         $    2.74  $  0.41      # 
------------------------------------------      ------   ------  ---------- 
Average Diluted Common Shares Outstanding          805      808     (0) 
------------------------------------------      ------   ------  ---------- 
# - Denotes a variance of 100 percent or more. 

“I am pleased with our results in the first quarter, where we saw continued improvements in our core business along with best-in-class credit performance, and I’m especially encouraged by the progress we’re making to rebuild our growth momentum going forward,” said Stephen J. Squeri, Chairman and Chief Executive Officer.

“Card member spending excluding travel and entertainment categories was 11 percent higher on an FX-adjusted basis than it was in the first quarter of 2019, and continues to represent the majority of spend on our network. We’ve also seen an uptick across all categories of travel and entertainment spending in the U.S. in recent weeks, increasing our confidence that domestic consumer travel will continue to recover.

“We view 2021 as a transition year, where we are focused on making investments to rebuild growth momentum in our core business. We’ve fired up our card acquisition engine, adding 2.1 million new proprietary cards during the quarter. Also, the additional value we provided on several of our premium products is helping to drive increased Card Member engagement, and our attrition rates and customer satisfaction levels remain better than pre-pandemic levels.

“Our investments to scale next horizon opportunities are well underway. We began the rollout of the Kabbage digital platform to our small business customers, and through our joint venture in China, we have now added more than 14 million merchants to our network.

“Given the progress we’ve seen thus far and clear indicators that the economy is improving, I’m even more confident in our roadmap to achieve our aspiration of returning to the original EPS expectations we had for 2020 in 2022.”

First-quarter consolidated total revenues net of interest expense were $9.1 billion, down 12 percent from $10.3 billion a year ago. The quarter primarily reflected declines in Card Member spending and loan volumes, as well as a lower average discount rate compared to the prior year.

Consolidated provisions for credit losses resulted in a benefit of $675 million, primarily reflecting the previously mentioned reserve releases and lower net write-offs, compared with a provision expense of $2.6 billion a year ago, which primarily reflected significant credit reserve builds.

Consolidated expenses were $6.7 billion, down 7 percent from $7.2 billion a year ago, reflecting lower customer engagement costs(3) and operating expenses.(4) Customer engagement costs were down due to the decline in Card Member spending and lower usage of travel-related Card Member benefits, partially offset by marketing investments the company made to rebuild growth momentum. The decrease in operating expenses was primarily driven by gains related to certain Amex Ventures equity investments, partially offset by higher deferred and other compensation costs.

The consolidated effective tax rate was 25.3 percent, up from 18.8 percent a year ago. The increase primarily reflected the impact of certain discrete tax benefits in relation to lower pretax income in the prior year.

Global Consumer Services Group reported first-quarter pretax income of $2.1 billion, compared with $231 million a year ago.

Total revenues net of interest expense were $5.3 billion, down 11 percent from $6.0 billion a year ago. The decrease primarily reflected declines in Card Member spending and loan volumes compared to the prior year.

Provisions for credit losses resulted in a benefit of $504 million, primarily reflecting a portion of the previously mentioned reserve releases and lower net write-offs, compared with a provision expense of $1.8 billion a year ago, which primarily reflected significant reserve builds.

Total expenses were $3.7 billion, down 6 percent from $3.9 billion a year ago. The decrease primarily reflected lower customer engagement costs due to a decline in Card Member spending and lower usage of travel-related Card Member benefits, as well as lower operating expenses, partially offset by marketing investments to rebuild growth momentum.

Global Commercial Services reported first-quarter pretax income of $665 million, compared with $19 million a year ago.

Total revenues net of interest expense were $2.7 billion, down 14 percent from $3.1 billion a year ago, primarily reflecting a decline in Card Member spending.

Provisions for credit losses resulted in a benefit of $162 million, primarily reflecting a portion of the previously mentioned reserve releases and lower net write-offs, compared with a provision expense of $762 million a year ago, which primarily reflected significant reserve builds.

Total expenses were $2.1 billion, down 7 percent from $2.3 billion a year ago. The decrease primarily reflected lower client incentives and other customer engagement costs due to a decline in Card Member spending, partially offset by marketing investments to rebuild growth momentum.

Global Merchant and Network Services reported first-quarter pretax income of $414 million, compared with $551 million a year ago.

Total revenues net of interest expense were $1.2 billion, down 13 percent from $1.4 billion a year ago. The decrease reflected declines in Card Member spending and the average discount rate compared to the prior year.

Total expenses were $807 million, up 2 percent from $789 million a year ago, driven by higher marketing and promotion investments, partially offset by lower network partner payments due to a decline in Card Member spending.

Corporate and Other reported a first-quarter pretax loss of $210 million, compared with a pretax loss of $349 million a year ago.

About American Express

American Express is a globally integrated payments company, providing customers with access to products, insights and experiences that enrich lives and build business success. Learn more at americanexpress.com and connect with us on facebook.com/americanexpress, instagram.com/americanexpress, linkedin.com/company/american-express, twitter.com/americanexpress, and youtube.com/americanexpress.

Key links to products, services and corporate responsibility information: charge and credit cards, business credit cards, travel services, gift cards, prepaid cards, merchant services, Accertify, InAuth, corporate card, business travel, and corporate responsibility.

Snap Inc. (NYSE: SNAP) today announced financial results for the quarter ended March 31, 2021.

Revenue increased 66% to $770 million in Q1 2021, compared to the prior year.
Net loss and Adjusted EBITDA were $(287) million and $(2) million in Q1 2021, respectively, compared to $(306) million and $(81) million in the prior year, respectively.
Operating cash flow improved by $131 million to $137 million in Q1 2021, compared to the prior year.
Free Cash Flow improved by $131 million year-over-year to reach $126 million in Q1 2021, marking our first quarter of positive Free Cash Flow as a public company.
Common shares outstanding plus shares underlying stock-based awards totaled 1,629 million at March 31, 2021, compared to 1,589 million one year ago.
“We began 2021 by achieving our highest year-over-year revenue and daily active user growth rates in over three years during the quarter, and delivering positive Free Cash Flow for the first time in Snap’s history as a public company,” said Evan Spiegel, CEO. “The strength of our business underscores our relentless focus on product innovation and is a testament to our team’s ability to execute well together over the long term.”

Q1 2021 Summary & Key Highlights

We have an active, engaged community:

DAUs were 280 million in Q1 2021, an increase of 51 million, or 22%, year-over-year.
DAUs increased sequentially and year-over-year in each of North America, Europe, and Rest of World.
DAUs increased sequentially and year-over-year on both iOS and Android platforms.
For the first time, the majority of our DAUs for the quarter were on the Android version of our application.
We invested and innovated in our content offerings:

In March, over 125 million Snapchatters used Spotlight, our newest platform surfacing the most entertaining Snaps from our community.
We launched Spotlight in three new countries–India, Mexico, and Brazil–making it live in a total of 14 countries.
We launched a record 321 new channels in Q1 2021 with over 150 partners from 12 countries.
Over 75 million Snapchatters watched beauty-related content each month on Discover in Q1 2021.
Over 20 million viewers have watched “Ryan Doesn’t Know,” our new Snap Original starring Ryan Reynolds.
We launched our first local market Snap Original, “Phone Swap”, in India.

🙀 Launching for #EarthDay: our AR Lens collab w. @Snapchat & artist @louismasai to bring his LA mural to life using 5G tech.

All to support @NWF’s #SaveLACougars mission to build a wildlife crossing over US 101—to which we’re DONATING $100k! #5GBuiltRight pic.twitter.com/43DAGSHidm

— Verizon (@Verizon) April 22, 2021

We invested and innovated in our camera and augmented reality platforms:

The number of Snapchatters engaging daily with our augmented reality Lenses grew more than 40% year-over-year in Q1 2021.
Over 260 million Snapchatters engaged with Valentine’s Day Lenses over a two-week period.
Lunar New Year Lenses reached over 125 million users.
We released Lens Studio 3.4 with improved capabilities around hand tracking, 3D multi-body tracking, and full body segmentation and a new asset library of 3D models, materials, scripts, and presets to help creators build Lenses.
On average, Lenses created by our community via Lens Studio accounted for more than 50% of daily Lens views.
We strengthened our capabilities to drive improved outcomes for advertisers:

We partnered with the fitness company Sweat to launch a full body Lens to track body movement while exercising in order to recommend optimal form to Snapchatters.
We partnered with Gucci to launch the first sponsored LiDAR Lens which projected a 3D camping site around the user to promote the The North Face x Gucci collaboration.
We partnered with American Eagle to launch a sponsored Lens which displayed different types of American Eagle jeans in AR and included specific fits, washes, and the option to click to purchase.
We announced a partnership with newspaper publisher Gannett, which will promote our advertising solutions to the company’s network of more than 100,000 small business advertisers across the US and Canada.
In March, we acquired Fit Analytics, a sizing technology company that powers solutions for retailers and brands.

We expanded our partner ecosystem:

We announced a partnership with Samsung, which will feature popular Snapchat Lenses in the native camera application on select new smartphones.
We launched a multi-year partnership with digital music distributor DistroKid allowing artists who control their own music publishing to instantly distribute on Snapchat.
We launched our largest Camera Kit integration to date with Moj, a leading short-video platform in India, giving Moj creators access to Snapchat’s Lens Carousel directly inside the Moj app.
We launched Crazy Run in February as part of a multi-title partnership with game developer Gismart, and the game has already reached seven million players.

Financial Guidance

The following forward-looking statements reflect our expectations for the second quarter of 2021 as of April 22, 2021, and are subject to substantial uncertainty. This guidance assumes constant foreign currency rates, and among other things, that no business acquisitions, investments, restructurings, or legal settlements are concluded in the quarter. Our results are based on assumptions that we believe to be reasonable as of this date, but may be materially affected by many factors, as discussed below in “Forward-Looking Statements.”

Q2 2021 Outlook

Revenue is estimated to be between $820 million and $840 million, compared to $454 million in Q2 2020.
Adjusted EBITDA is estimated to be between $(20) million and breakeven, compared to $(96) million in Q2 2020.

Southwest Airlines Co. (NYSE: LUV) today reported its first quarter 2021 financial results:

• First quarter net income of  $116 million, or  $.19  per diluted share, driven by a  $1.2 billion  offset of salaries, wages, and benefits expenses from the extended Payroll Support Program (PSP Extension) proceeds under the Consolidated Appropriations Act, 2021
• Excluding special items¹, first quarter net loss of  $1.0 billion, or  $1.72  loss per diluted share
• First quarter operating revenues of  $2.1 billion, down 51.5 percent year-over-year
• Ended first quarter with liquidity²  of  $15.3 billion, well in excess of debt outstanding of  $10.8 billion

Gary C. Kelly, Chairman of the Board and Chief Executive Officer, stated, “In first quarter, we benefited from temporary cost relief as a result of PSP Extension proceeds, which offset a portion of salaries, wages, and benefits expenses, resulting in first quarter 2021 net income of  $116 million, or  $.19  per diluted share. We remain grateful for this much-needed federal payroll support on the heels of substantial losses in 2020, and ongoing non-GAAP losses in first quarter 2021. The payroll support from the federal government has allowed Southwest to preserve its 50-year history without involuntary layoffs or furloughs, an achievement unprecedented in the  U.S.  airline industry. Excluding the benefit of PSP Extension proceeds and other special items, our first quarter 2021 net loss was  $1.0 billion, or  $1.72  loss per diluted share. While the pandemic is not over, we believe the worst is behind us, in terms of the severity of the negative impact on travel demand. Vaccinations are on the rise, and COVID-19 hospitalizations in  the United States  are down significantly from their peak in January 2021. As a result, we are experiencing steady weekly improvements in domestic leisure bookings, which began in mid-February 2021.

“March 2021 operating revenues decreased 9.7 percent, year-over-year, and decreased 53.5 percent compared with March 2019, representing a significant improvement from relatively stagnant revenue levels experienced from September 2020 through February 2021. Our current outlook for operating revenues indicates a sequential improvement from March to April 2021, and again from April to May 2021, based on improving bookings. We believe there is significant pent-up demand for leisure travel and are optimistic about summer 2021. In response, we are in the process of adding flights in June 2021, and we currently expect June available seat miles (ASMs, or capacity) to be only slightly less than June 2019 pre-pandemic levels.

“We had a solid cost performance in first quarter 2021, despite recently rising jet fuel prices. Spending levels in many cost categories remained muted due to the pandemic. We expect capacity-driven year-over-year cost increases in second quarter 2021, most notably as we return parked aircraft to revenue service and recall a portion of our Pilots, Flight Attendants, and Ground Operations Employees from extended time-off to support increased flight levels planned for summer 2021. We currently expect second quarter 2021 operating expenses, excluding fuel and oil expense, special items, and profitsharing, to increase in the range of 10 to 15 percent, year-over-year, but remain below second quarter 2019 levels³.

“Our liquidity is strong, and we remain the only  U.S.  airline with an investment-grade credit rating by all three rating agencies. As of March 31, 2021, our total liquidity was  $15.3 billion, consisting of cash and short-term investments of  $14.3 billion  and a fully available revolving credit facility of  $1.0 billion. Average core cash burn⁴  was approximately  $9 million  per day in March 2021, and approximately  $13 million  per day in first quarter 2021. Including changes in working capital–most notably, cash flow from future bookings–average core cash flow turned positive in March 2021, and we generated approximately  $4 million  per day, as revenue and booking trends improved. Our average core cash burn in second quarter 2021 is currently estimated to be in the range of  $2 million  to  $4 million  per day. Based on current booking trends and cost outlook, we are hopeful we can achieve breakeven average core cash flow, or better, by June 2021.

“We returned the Boeing 737 MAX (MAX) to revenue service on March 11, 2021. To return the MAX to service, we satisfied applicable Federal Aviation Administration (FAA) requirements by modifying certain operating procedures; implementing enhanced Pilot training requirements; installing FAA-approved flight control software updates; and completing other required maintenance tasks specific to MAX aircraft, as well as completing more than 200 readiness flights. Also in March 2021, as previously disclosed, we completed discussions with The Boeing Company (Boeing) regarding the restructuring of our delivery schedule for MAX aircraft, and added 100 firm orders for MAX 7 aircraft; converted 70 MAX 8 firm orders to MAX 7 firm orders; added 155 MAX options; and extended the order book through 2031. This cost-effective MAX order book allows us to maintain the operational efficiencies of an all-Boeing 737 fleet to support our low-cost, point-to-point route network; accelerate our commitment to fleet modernization with more climate-friendly aircraft; and capitalize on future growth opportunities.

“This year marks our 50th anniversary, and we celebrate what has made Southwest Airlines the most successful airline in the world–our Employees. We applaud our People for their unwavering focus on Hospitality, which has resulted in the  U.S.  airline industry’s top Customer Service ranking for 27 of the past 30 years⁵. Never has their resilience been more vital, as we work our way through the pandemic recovery while pursuing new airports and Customers.

“It is crucial that we continue managing our business prudently in the near-term, while also positioning ourselves to thrive and prosper, once again. We are increasingly optimistic about our future, and we are in the process of updating our strategic plan with a clear set of initiatives for the next five years. Among these initiatives are the aggressive expansion of our route network, having opened or announced 17 new airports since the pandemic began; the launch of Global Distribution System (GDS) access for corporate travelers; the acceleration of fleet modernization efforts to replace our 737-700 aircraft with the MAX; and the development of tangible steps that are aimed at improving upon our environmental stewardship and supporting our environmental sustainability goal to be carbon neutral by 2050. Being a good steward of the environment is not only good for our Planet, it is good for business, and it is the right thing to do for our Employees, Customers, and Shareholders.”

Revenue Results and Outlook
The Company’s first quarter 2021 operating revenues decreased 51.5 percent, year-over-year, to  $2.1 billion, as a result of negative impacts to passenger demand and bookings due to the pandemic. First quarter 2021 operating revenue per ASM (RASM, or unit revenues) was  8.86 cents, a decrease of 26.0 percent, primarily driven by a passenger revenue yield decrease of 28.4 percent and a load factor decline of 3.4 points, all year-over-year.

The Company began first quarter 2021 experiencing stalled demand and bookings in January, driven by a high level of COVID-19 cases, coupled with typical seasonal weakness. In mid-February 2021, the Company began experiencing a modest improvement in leisure passenger demand and bookings that accelerated in March 2021. Passenger fares improved throughout March as close-in leisure demand held steady. Beach and other nature-inspired destinations continued to outperform other regions in first quarter 2021. Beginning in March 2021, demand improvement was system-wide.

The following table presents selected revenue and load factor results for first quarter 2021:

Thus far, the Company continues to experience improvements in leisure passenger demand and bookings for April and May 2021 travel, with expectations of improving passenger traffic and fares compared with March 2021. The Company continues to experience an increase in bookings farther out on the booking curve, with approximately 35 percent and 20 percent of anticipated bookings currently in place for June and July, respectively. These represent fairly typical future booking patterns; however, business travel continues to significantly lag leisure and is expected to have a significant negative impact on close-in demand and average passenger fares.

The following monthly table presents selected preliminary estimates of revenue and load factor for April and May 2021:

The Company achieved its goal of accepting corporate travel bookings in 2020 with Amadeus’s GDS platform and Travelport’s multiple GDS platforms: Apollo, Worldspan, and Galileo. In December 2020, the Company reached a full-participation GDS agreement with Sabre, anticipated to go live by Labor Day 2021. The Company also has an agreement with Airlines Reporting Corporation (ARC) to implement industry-standard processes to handle the settlement of tickets booked through Travelport and Amadeus channels. Once the new Sabre GDS connectivity is implemented, Sabre tickets are also expected to settle via ARC. The Company’s enhancement of its GDS channel strategy complements its expansion of direct connect via Airline Tariff Publishing Company’s (ATPCO) New Distribution Capability (NDC) Exchange and existing SWABIZ ® options, with the goal of distributing its everyday low fares to more corporate travelers through their preferred channel.

Cost Performance and Outlook
First quarter 2021 total operating expenses decreased 57.3 percent, year-over-year, to  $1.9 billion. Excluding special items, first quarter 2021 operating expenses decreased 23.5 percent, year-over-year, to  $3.3 billion. Total operating expenses per ASM (CASM, or unit costs) decreased 34.9 percent, compared with first quarter 2020. Excluding special items, first quarter 2021 CASM increased 16.7 percent, year-over-year.

The following table presents economic fuel costs per gallon¹, including the impact of fuel hedging premium expense and fuel derivative contracts, for first quarter 2021 and the prior year period:

The Company continued to operate fewer of its oldest, least fuel-efficient Boeing 737-700 aircraft as a result of capacity reductions due to the pandemic, which resulted in a year-over-year improvement of 4.7 percent in ASMs per gallon (fuel efficiency) in first quarter 2021. While the Company expects to return more of its 737-700 aircraft to service to support planned capacity increases, second quarter 2021 fuel efficiency is currently estimated to be sequentially in line with first quarter 2021, on a nominal basis, also taking into account the return of its most fuel-efficient aircraft, the MAX, to service in March 2021.

Based on the Company’s existing fuel derivative contracts and market prices as of April 15, 2021, the following table presents estimates of economic fuel costs per gallon⁶, including the estimated impact of fuel hedging premium expense and fuel derivative contracts, for second quarter and annual 2021 and prior year periods:

As of April 15, 2021, the fair market value of the Company’s fuel derivative contracts for the remainder of 2021 was an asset of approximately  $44 million, and the fair market value of the fuel hedge portfolio settling in 2022 and beyond was an asset of approximately  $267 million. Additional information regarding the Company’s fuel derivative contracts is included in the accompanying tables.

Excluding fuel and oil expense, first quarter 2021 operating expenses decreased 60.2 percent, compared with first quarter 2020. The Company accrued  $24 million  of profitsharing expense in first quarter 2021, compared with no profitsharing accrual in first quarter 2020. The Company’s first quarter 2021 net income included special items, the largest of which was a net benefit of approximately  $1.4 billion. This pre-tax benefit was comprised of approximately  $1.2 billion  in PSP Extension proceeds;  $116 million  related to the Employee Retention Tax Credit under the Coronavirus Aid, Relief, and Economic Security Act; and  $115 million  due to the reversal of a portion of the Company’s previous accrual related to the costs for Employees who accepted the Company’s offer to participate in its voluntary extended leave program. Due to increasing passenger demand and bookings, the Company plans to increase flight activity in summer 2021–by approximately 25 points of capacity from March to June 2021, compared with respective 2019 levels–which has prompted the early recall of a portion of the Employees who elected this program. The Company now estimates annual 2021 cost savings from voluntary separation and extended leave programs to be in the range of  $1.1 billion  to  $1.2 billion  compared with annual 2019, as compared with its previous estimation of approximately  $1.2 billion.

Excluding fuel and oil expense, special items, and profitsharing, first quarter 2021 operating expenses decreased 19.1 percent, compared with first quarter 2020, which represented the favorable end of the Company’s guidance range. The significant year-over-year decrease primarily was driven by the decline in variable, flight-driven expenses, such as salaries, wages, and benefits; maintenance expense; and landing fees; combined with the Company’s continued focus on cost management. As expected, the Company realized approximately  $412 million  of cost savings in first quarter 2021 from voluntary separation and extended leave programs. On a unit basis, first quarter 2021 operating expenses, excluding fuel and oil expense, special items, and profitsharing expense, increased 23.4 percent, year-over-year, primarily driven by the significant reduction in capacity.

Excluding fuel and oil expense, special items, and profitsharing, second quarter 2021 operating expenses are expected to increase in the range of 10 to 15 percent, year-over-year³, which includes an estimated  $325 million  of salaries, wages, and benefits cost savings from voluntary separation and extended leave programs. Second quarter 2021 operating expenses, excluding fuel and oil expense, special items, and profitsharing, are also expected to increase compared with first quarter 2021, with 60 to 70 percent of the sequential increase attributable to variable, flight-driven expenses as capacity is expected to increase to near-2019 levels by June 2021. These variable, flight-driven cost increases are primarily in salaries, wages, and benefits due to staffing increases; maintenance expense to return aircraft to revenue service, along with higher flight-driven maintenance expenses as flight levels increase; landing fees; and personnel, passenger, and revenue-related costs. In addition, the Company is experiencing cost increases primarily due to airport cost inflation; higher aircraft ownership costs due to MAX deliveries; and certain favorable tax and insurance settlements realized in first quarter 2021 operating expenses that are non-recurring in second quarter 2021. Despite increasing capacity and operating expenses, both sequentially and year-over-year, second quarter 2021 operating expenses are estimated to remain below second quarter 2019 levels.

Other expenses in first quarter 2021 increased by  $19 million, year-over-year, primarily due to an increase in interest expense driven by new debt issued during 2020, and lower interest income as a result of lower interest rates.

The Company’s first quarter 2021 effective tax rate was 21 percent, and the Company currently estimates its annual 2021 effective tax rate to be approximately 23 percent.

Liquidity and Capital Deployment
As of March  31, 2021, the Company had approximately  $14.3 billion  in cash and short-term investments, and a fully available revolving secured credit facility of  $1.0 billion. The Company currently has unencumbered assets with an estimated value of more than  $11 billion, including aircraft value estimated in the range of  $9 billion  to  $10 billion, and approximately  $2 billion  in non-aircraft assets such as spare engines, ground equipment, and real estate. In addition to the value from aircraft and other physical assets, the Company has significant value from its Rapid Rewards ® loyalty program. As of April 21, 2021, the Company’s cash and short-term investments remained at approximately  $14.3 billion.

Net cash provided by operations during first quarter 2021 was  $645 million, primarily driven by PSP Extension proceeds. First quarter 2021 capital expenditures were  $95 million. The Company estimates its 2021 capital expenditures to be approximately  $500 million, primarily driven by technology, facilities, and operational investments. Based on the Company’s recently completed aircraft purchase agreement with Boeing, the Company estimates its total contractual aircraft capital expenditures for all years 2021 through 2026, which are associated with 169 MAX firm orders (135 MAX 7 and 34 MAX 8 aircraft), to be approximately  $5.1 billion. The Company currently estimates approximately  $700 million  of aircraft capital expenditures in 2022, based on firm orders. The Company has not finalized its 2022 fleet or capital investment plans.

During first quarter 2021, the Company reached an agreement with the  U.S.  Department of Treasury (Treasury) and received approximately  $1.7 billion  in PSP Extension proceeds under the Consolidated Appropriations Act, 2021. The Company soon expects to receive approximately  $259 million  as its final distribution pursuant to the PSP Extension, for a total of approximately  $2.0 billion  of proceeds under this program. In addition, the Company soon expects to reach agreement with Treasury to receive approximately  $1.9 billion  in payroll support proceeds under the American Rescue Plan Act of 2021 (PSP 3) in return for providing consideration to Treasury in the form of a promissory note and warrants.  The Company intends to disclose additional details regarding PSP 3 after the agreement with Treasury is finalized.

As of March  31, 2021, the Company had current and non-current debt obligations that totaled  $10.8 billion. The Company repaid approximately  $67 million  in debt and finance lease obligations during first quarter 2021 and is scheduled to repay approximately  $153 million  more in debt and finance lease obligations in 2021. Based on current debt outstanding and current market interest rates, the Company expects second quarter 2021 interest expense to be approximately  $115 million. As of March 31, 2021, the Company was in a net cash position⁷  of  $3.6 billion, and its adjusted debt⁸  to invested capital (leverage) was 57 percent.

Fleet and Capacity
The Company ended first quarter 2021 with 730 aircraft in its fleet, including 61 MAX 8 aircraft. During first quarter 2021, the Company took delivery of 20 MAX 8 aircraft, comprised of 12 owned and 8 leased aircraft. The Company expects delivery of eight more MAX 8 aircraft in 2021. Also during first quarter 2021, the Company returned eight leased 737-700 aircraft to lessors and expects to retire up to nine more 737-700 aircraft in 2021. In response to capacity reductions due to the effects of the pandemic, 59 737-700 aircraft were in temporary storage as of March 31, 2021. In April, the Company also removed 32 of its MAX 8 aircraft from service due to a Boeing production issue related to the electrical power system on a subset of MAX aircraft. Upon learning of the issue, the Company immediately removed these aircraft from service, out of an abundance of caution, and is currently awaiting more guidance from Boeing and the FAA regarding the appropriate corrective actions. The Company is in the process of returning its stored 737-700 aircraft to revenue service to support flight schedules in summer 2021 and beyond.

The Company’s order book with Boeing includes a total of 349 MAX firm orders (200 MAX 7 and 149 MAX 8) and 270 MAX options (MAX 7 or MAX 8) for years 2021 through 2031. Additional information regarding the Company’s aircraft delivery schedule is included in the accompanying tables.

The Company’s first quarter 2021 capacity decreased 34.5 percent, year-over-year, in line with the Company’s guidance, due to capacity reductions in light of the decrease in passenger demand and bookings as a result of the pandemic. The following table presents capacity results for first quarter 2021:

The Company estimates its second quarter 2021 capacity to increase approximately 90 percent, year-over-year, and decrease approximately 15 percent as compared with 2019, driven by improving passenger demand and bookings. The following table presents capacity estimates for second quarter 2021:

Passenger demand and booking trends remain primarily leisure-oriented and inconsistent by region. Despite recent improvements in leisure demand, the Company remains cautious in this uncertain environment and continues to plan for multiple fleet and capacity scenarios. The Company will continue to monitor demand and booking trends and adjust capacity, as needed. As such, the Company’s actual flown capacity may differ materially from currently published flight schedules or current estimations.

Awards and Recognitions

• Named the #1  U.S.  airline in the Wall Street Journal’s annual ranking for 2020
• Named to FORTUNE’s list of World’s Most Admired Companies; ranked #14
• #1 Marketing Carrier in Customer Satisfaction per the  U.S.  Department of Transportation (DOT)⁵
• Named the top domestic airline for customer service by the 2021 Elliot Readers’ Choice Customer Service Awards
• Named Domestic Carrier of the Year by the Airforwarders Association for the 12th consecutive year
• Named to Glassdoor’s Best Places to Work list for the 12th consecutive year
• Designated a 2021 Military Friendly Company by Viqtory
• Named one of the 25 Best Companies for Latinos to Work by Latino Leaders Magazine
• Named as A Best Place To Work For LGBTQ Equality from the Human Rights Campaign Foundation

American Airlines Group Inc. (NASDAQ: AAL) today reported its fourth-quarter and full-year 2020 financial results, including:

• Fourth-quarter revenue of $4.0 billion, down 64% year over year on a 53% year-over-year reduction in total available seat miles (ASMs).
• Fourth-quarter net loss of $2.2 billion, or ($3.81) per share. Excluding net special items¹, fourth-quarter net loss was $2.2 billion, or ($3.86) per share.
• Full-year net loss of $8.9 billion, or ($18.36) per share. Excluding net special items², full-year net loss was $9.5 billion, or ($19.66) per share.
• Ended fourth quarter with approximately $14.3 billion of total available liquidity. Company expects to end the first quarter of 2021 with approximately $15.0 billion in total available liquidity.
• Incorporated more than $1.3 billion of permanent non-volume, non-fuel efficiency cost-saving measures into 2021 operating plan.

“Our fourth-quarter financial results close out the most challenging year in our company’s history,” said American Airlines Chairman and CEO Doug Parker. “However, we couldn’t be prouder of the American Airlines team and the great things they accomplished last year. Through collaboration, resourcefulness and hard work, our team did its part to keep the economy moving. The American team flew more customers than any other airline in 2020, and they did so safely and with the utmost care.

“As we look to the year ahead, 2021 will be a year of recovery. While we don’t know exactly when passenger demand will return, as vaccine distribution takes hold and travel restrictions are lifted, we will be ready. We are confident that the actions we have taken to improve our customer experience, enhance our network and increase our efficiency position us well for the future.”

American took a number of steps in 2020 to respond to the pandemic and strengthen its business, with an emphasis on supporting its team members, customers and communities; reducing costs; and improving its liquidity position.

https://cweb.com/stock/aal

To support its team members, customers and communities, American:

• Enhanced​ its cleaning procedures at airports and onboard aircraft under the guidance of its Travel Health Advisory Panel, earning the STAR ® Accreditation from the Global Biorisk Advisory Council for effective cleaning, disinfection and infectious disease prevention practices onboard its aircraft and in its lounges.
• Introduced a preflight coronavirus (COVID-19) testing program to help reopen certain international travel markets. American now offers testing for many international destinations and has introduced at-home testing for customers traveling to all U.S. locations that require negative tests.
• Began the rollout of mobile wellness wallet solution VeriFLY to make domestic and international travel simpler. Travelers can now easily understand COVID-19 testing and documentation requirements for their destination and streamline airport check-in through digital verification. Starting today, customers also will be able to use VeriFLY for travel from the United States to the U.K. and Canada.
• Eliminated fees for:
  • Ticket changes on all domestic and international itineraries when traveling from North and South America, with the exception of Basic Economy fares that are nonchangeable.
  • Mileage redeposits for canceled award bookings.
  • Domestic same-day standby.
  • Booking reservations by phone.
• Made it easier for top-tier customers to earn AAdvantage ^®  elite status in 2020 and 2021, paused mileage expiration through June 30, 2021, and extended 2020 AAdvantage status into early 2022 for all members.
• Launched the company’s first cargo-only flights since 1984 to transport critical goods, including the COVID-19 vaccine, and increased service to include 41 destinations for strategic cargo-only opportunities. American helped customers move nearly 800 million pounds of critical goods around the world in 2020, including 167 million pounds on the airline’s more than 5,200 cargo-only flights.
• Announced its goal to reach net-zero carbon emissions by 2050 and detailed the company’s strategy and pathway in its  ESG Report.

To reduce costs and conserve cash, American:

• Removed more than $17 billion from its operating and capital budgets for 2020 primarily through reduced flying.
• Incorporated more than $1.3 billion of permanent non-volume, non-fuel efficiency cost-saving measures into 2021 operating plan.
• Retired five aircraft types (Embraer 190, Boeing 757, Boeing 767, Airbus A330 and Bombardier CRJ200), along with a number of older regional aircraft. The company also placed certain older Boeing 737-800 aircraft into temporary storage. These changes removed more than 150 aircraft from the fleet and brought forward significant cost savings and efficiencies associated with operating fewer aircraft types, giving American the youngest fleet among the U.S. network carriers.
• Reached an agreement with Boeing to secure rights to defer deliveries of 18 Boeing 737 MAX aircraft and finalized a series of sale-leaseback transactions to finance its Airbus A321 aircraft deliveries in 2021. To date, five of the 18 737 MAX deferral rights have been exercised.
• Reset its international capacity and network for 2021, including exiting 19 international routes from six hubs.
• Reduced non-aircraft capital expense by $700 million in 2020 and another $300 million in 2021 through reductions in fleet modification work, the elimination of ground service equipment purchases, and pausing noncritical facility investments and IT projects.
• Introduced programs to right-size its frontline and management teams. In total, more than 20,000 team members opted to participate in a voluntary early out or long-term partially paid leave during the year, and the company reduced its management and support staff team by approximately 30%.
• Made the difficult decision to proceed with furloughs to reduce headcount absent an extension of the CARES Act Payroll Support Program (PSP). American’s furloughed team members have since had their pay and benefits reinstated with the passage of a bipartisan COVID-19 relief package that renewed the PSP from Dec. 1, 2020, through March 31, 2021.

To improve its liquidity position, American:

• Reduced its daily cash burn rate³  from nearly $100 million in April 2020 to approximately $30 million in the fourth quarter. This improvement was driven by the company’s revenue and cost-reduction initiatives throughout the year.
• Secured approximately $9 billion in financial assistance through two rounds of PSP legislation and executed an agreement with the U.S. Department of the Treasury through the CARES Act loan program that gives the company access to up to $7.5 billion of secured term loans, of which $550 million has been drawn.
• Raised more than $13 billion during the year through various other equity and debt offerings.
• Expects to end the first quarter with approximately $15.0 billion in total available liquidity.

Network and partnerships

American reset its network in 2020 to play to the strengths of its hubs and take advantage of its younger and simplified fleet. The airline also established new and innovative partnerships with Alaska Airlines and JetBlue Airways that will create the best and largest network for customers on the West Coast and in the Northeast. These partnerships will allow for efficient growth, including the launch of new service in 2021 between Seattle and London, Shanghai and Bangalore, and between New York and Tel Aviv and Athens.

Demand and capacity outlook

The company will continue to match its forward capacity with observed bookings trends. Compared to the first quarter of 2019, American expects its first-quarter system capacity to be down 45%, with total revenue expected to be down 60 to 65%.