American Airlines said on Thursday it would authorise issuing up to $1bn in shares to shore up its liquidity as the pandemic continued to weigh on revenue and profitability.
The Fort Worth, Texas-based airline has raised billions on the bond market, but this is the second time since the crisis began that American has said it will sell equity. The company sold $750m worth of stock in June.
American, which ended the third quarter with $13.6bn in available liquidity, said it would sell the shares at an “at-the-market offering”. On Wednesday, the company’s shares closed at $12.74. There are about 508,600,000 outstanding shares.
Goldman Sachs, Credit Suisse Securities, Deutsche Bank, Morgan Stanley and BNP Paribas are involved in the transaction and receiving 1 per cent of the gross sale price, according to a filing with the Securities and Exchange Commission.
American reported a pre-tax loss of $3.1bn on $3.2bn in revenue. Revenue plunged 73 per cent as passengers continued to shy away from flying.
American also said its share of the funds from the US Cares Act has increased from $4.75bn to $7.5bn, although lawmakers have not passed additional funding.
“This gives us more than double the liquidity we had at the start of the year,” chief executive Doug Parker and president Robert Isom said in a memo. “These funds will be critical as we continue to fight for the future of our company.”