American Airlines reports $931 million fourth-quarter loss

American Airlines passenger jets prepare for departure, Wednesday, July 21, 2021, near a terminal at Boston Logan International Airport, in Boston. American Airlines Group Inc. (AAL) on Thursday, Jan. 20, 2022, reported a loss of $931 million in its fourth quarter. On a per-share basis, the Fort Worth, Texas-based company said it had a loss of $1.44. Losses, adjusted for non-recurring costs, came to $1.42 per share. (AP Photo/Steven Senne, File)

DALLAS (AP) — American Airlines lost $931 million in the fourth quarter and the incoming CEO said Thursday that the surge in COVID-19 will delay the airline's recovery by two or three months.

First-quarter revenue is expected to be down about 20% to 22% compared with the first quarter of 2019, and it will fly slightly less than it did two years ago, the airline said.

That outlook roughly matches what other airlines are saying. The rise in virus cases fueled by the omicron variant is hurting bookings, but airlines remain upbeat about spring and summer travel.

Robert Isom, who will take over as CEO after Doug Parker steps down March 31, said the airline expects to return to profitability later this year.

Isom said omicron has especially crimped business and international travel, which are more important in times of the year — including January and February — when leisure travel tends to be light. Corporate travel is just 40% of its pre-pandemic level, he said.

Doug Parker, who will remain chairman after retiring as CEO, said over the past year that American has swung from periods of high travel demand followed by declines as new variants of COVID-19 emerged, which makes the airline's job of planning more difficult than ever before.

The airlines saw strong demand from holiday travelers at Thanksgiving and Christmas, but as the year ended they were struggling with staffing shortages caused by omicron. The combination of winter storms and employees calling in sick led to thousands of flight cancellations in late December and early January, although American grounded fewer flights than Southwest, United or Delta.

After encouraging thousands of employees to quit or take long-term leave in 2020, American hired 16,000 people last year and plans to hire 18,000 this year.

That hiring is based on the expectation that the COVID-19 surge passes soon enough for travelers to get back on planes this spring and summer.

Helane Becker, an airline analyst for Cowen, said domestic leisure travel is above 2019 levels but the virus is holding back lucrative international travel.

“Consumers have a difficult time booking international trips with any certainty given changing rules and testing mandates,” Becker said in a note to clients.

American’s fourth-quarter loss compared with a loss of nearly $2.2 billion a year earlier. Excluding certain items, the Fort Worth, Texas-based company said it would have lost $1.42 per share. Analysts expected a loss of $1.46 per share, according to a FactSet survey.

Revenue was $9.43 billion, more than double a year earlier and slightly above the $9.34 billion forecast from analysts.

American's report came a day after United Airlines reported a $646 million loss for the fourth quarter and said the omicron surge will cause it to fly less than it hoped in the first half of this year. United forecast that first-quarter revenue will fall 20% to 25% and costs will rise from the same period in 2019. Last week, Delta Air Lines posted a $408 million loss.

Shares of American Airlines Group Inc. rose less than 1% in midday trading Thursday.