American Airlines Shoots Itself in the Foot Again
Last week, JetBlue Airways (NASDAQ: JBLU) announced that it will expand its route map in the first half of 2021, starting with the addition of up to 14 daily flights to Miami in February. The goal is to tap into unmet demand to accelerate the airline's recovery from the COVID-19 pandemic.
With its new routes to Miami, JetBlue is encroaching into American Airlines' (NASDAQ: AAL) turf. American Airlines quickly retaliated by adding new routes to New York, Boston, and Los Angeles from JetBlue's Fort Lauderdale focus city -- and it looks like a boneheaded move.
Entering 2020, American Airlines had the largest debt load of any major U.S. airline. Moreover, it has been burning cash faster than rivals this year. By the end of last quarter, the company had $47.5 billion of debt, pension, and lease liabilities, offset by just $8.3 billion of unrestricted cash and investments. American expects daily cash burn to average about $30 million in the fourth quarter, further weakening its balance sheet.
Source Fool.com
