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Why American Airlines Shares Took Off

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Why American Airlines Shares Took Off

American Airlines Group Inc (NYSE: AAL) stock took off Thursday, gaining more than 40% on the day.

The company said it believed 74% more flights will take place in July than in June. 

Vasu Raja, American's senior vice president of network strategy, said the busiest day in July would bring in almost twice as many passengers than the busiest day in June, Bloomberg reported

Yet the airline still has a long way to go: the  July estimates only represent 40% of its total capacity.

Why It's Important

The coronavirus pandemic sent American's revenue down 90%, and the stock was down 67%. The airline is still far from where it once was. International scheduled flights are 20% of last year's volume, and Moody's Investors Service estimates that the industry will not see a full recovery before 2023.

What's Next

American is starting to prepare for increased flight capacity by bringing back some of the 450 planes that it has parked.

Revenue is still down approximately 80%. 

"We have a long road ahead," CEO Doug Parker said in a CNBC interview. "But it's coming back." 

The stock ended Thursday's session 41.25% higher at $16.74. 

 

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