Unemployment DECREASED by 2.5 million!

[disneysteve]

Oh man - I'd hate to be a state governor these days. If you keep the economy closed, you get civil unrest and mass unemployment, but you save lives. If you open up the economy you get more dead. What an awful decision to have to make.

It is a difficult situation for sure. And sadly it's aggravated by politics, especially being an election year. But politics doesn't change science and facts, as much as people try to pretend that it does.

[QuarterMillionMan]

I think that's all very fairly stated. But it's also part of why after my initial purchase of AAL, I then switched gears and bought JETS instead. There certainly may be individual airlines that don't recover but I'm sure the airline industry isn't going away. I have thought about selling as I'm ahead, but I didn't do it as a short term play so I'm going to hold on for a while and see what happens. I also didn't invest that much overall - 15K total - it won't make or break us no matter what happens.

Now if I had gone in big, yeah, I'd probably be getting out.

[QuarterMillionMan]

On 6/9/20, I bought $28,000 of AAL, two days later I’m down $5000, bummer.

[james.hendrickson]

On 6/9/20, I bought $28,000 of AAL, two days later I’m down $5000, bummer.

QMM - what are their earnings looking like? And, when, if at all, do you anticipate a recovery in the share price?

[QuarterMillionMan]

James, I don’t know to both your of your questions. Delta on CNBC said December they’ll expect to see better revenue so I guess it’s the same for most airlines.

[james.hendrickson]

QMM,

They're going to get hammered. Here is the latest from their 8-k.

As a result of the COVID-19 pandemic, we expect our revenue for the second quarter ended June 30, 2020 to be reduced by 90% compared to our revenue for the second quarter ended June 30, 2019, with systemwide capacity down 85%, compared to the June 2019 quarter. On a consolidated basis, we expect to reduce our average daily cash outflow to approximately $40 million by June 30, 2020, down from approximately $100 million per day as of March 31, 2020. We expect this reduction to be primarily driven by a greater than 50% reduction in our operating expenses for the June 2020 quarter, as compared to the June 2019 quarter, as well as recent improvement in net sales and stabilization in refund requests. We are seeking to reduce our average daily cash outflow to zero by December 31, 2020. We believe this improvement in average daily cash outflow would result from modest continued demand recovery, particularly with domestic leisure travel beginning to return as states lift shelter-in-place orders, and additional cost-cutting initiatives. We expect the recovery in international demand to lag domestic demand. We have added 100 additional domestic flights in June and plan to continue to rebuild our schedule in the September 2020 quarter as demand returns.

Here is the link to their full 8-k from the SEC.

[QuarterMillionMan]

Brutal day today.

[disneysteve]

Brutal day today.

As I said, perhaps people are finally starting to understand that it doesn't matter if the president or governor or mayor decides to reopen things, the virus is going to keep doing its thing regardless. People can protest at the state house or governor's mansion all they want demanding reopening but that doesn't make it safe. The more things reopen, the more people start moving about again, the more people start letting down their guard, not wearing a mask, not social distancing, the more new cases of COVID we're going to see.

Also, just because things reopen doesn't mean business is going to magically return because there are plenty of people who already understand this and are going to remain on quarantine as long as it takes for a vaccine and effective treatments to be developed.

This isn't a political issue; it's a scientific issue. But still a large segment of the population thinks it's a political issue.

[QuarterMillionMan]

Licking my wounds.

[james.hendrickson]

Licking my wounds.

Brutal QMM - If that were my portfolio, I'd be home eating some comfort food.

[disneysteve]

Licking my wounds.

Nah. With the market as volatile as it has been in recent months, what happens on any given day is irrelevant. It can be down 20% one day and up 20% the next. If you bought this as a day trader, sure, that's a problem, but if you bought it to hang onto for a while, just sit back and relax and don't even check on it daily.

[LivingAlmostLarge]

sit tight I think it'll pass shortly. I think we won't have a real dip until end of July when Q2 earning reports come in. Then it'll be brutal.

[disneysteve]

sit tight I think it'll pass shortly. I think we won't have a real dip until end of July when Q2 earning reports come in. Then it'll be brutal.

Do you not think Q2 performance is already factored in? Surely there isn't anybody out there who thinks those numbers will be anything other than awful. I think the real issue will be if Q3 doesn't show a decent improvement.

[LivingAlmostLarge]

Do you not think Q2 performance is already factored in? Surely there isn't anybody out there who thinks those numbers will be anything other than awful. I think the real issue will be if Q3 doesn't show a decent improvement.

Nope I don't think so. A lot of people thought Q1 was good but not realizing it barely counted the shut down. I think that people glossed over how bad the shutdown is and how bad the recovery will be. Everyone thinks it'll be quick I think it'll be slow.

[QuarterMillionMan]

Brutal QMM - If that were my portfolio, I'd be home eating some comfort food.

I made some stuffing and gravy to go with some roasted chicken.