The airline industry and American Airlines stock look to rebound from the coronavirus crisis as new routes open up ahead of the peak summer travel season. So, is AAL stock a good buy? For the answer, take a look at American’s earnings and stock chart.
On April 2, the Centers for Disease Control and Prevention said fully vaccinated people are able to travel domestically without Covid-19 testing or the need to quarantine as long as they continue to wear masks while traveling and practice social distancing.
Business travel, airlines’ most lucrative segment, has been a concern for industry watchers as employers utilize virtual meeting options.
Meanwhile, with business and leisure traffic picking up, American has announced new routes to Syracuse, N.Y., Columbus, Ga. and El Paso, Texas. Then in mid-May, American announced flights from New York to Rome that don’t require quarantine upon arrival in Italy, pending a negative Covid-19 test.
The route to Rome comes as European Union officials are set to open the bloc up to leisure visitors from the U.S. and other countries with high vaccination and low coronavirus case rates.
With air travel returning, airlines have recalled pilots and announced new hiring initiatives.
But despite the increase in bookings and destinations, American Air said in a regulatory filing in early June that it still sees second-quarter available seat miles, a measure of capacity, down 20% to 25% and revenue down 40% vs. Q2 in 2019.
American Airlines Fundamental Analysis
Even before the pandemic, American Airlines’ earnings and revenue had been weak for some time. The IBD Stock Checkup tool shows that over the last three years, American Airlines’ earnings per share were flat on an annual basis, with revenue falling at an average of 18%. CAN SLIM investing recommends investors look for bottom-line growth of 25% or more.
In its first-quarter report in April, American Airlines reported a loss of $4.32 a share with revenue plunging to $4 billion. The…