American Airlines Stock Hits Five Year Low

Filed Under: American

American Airlines keeps setting records… with how low their stock price can go!

Yesterday American Airlines’ stock closed at $24.45, which best I can tell, seems to be the lowest since somewhere around December 2013. So we’ll call it a five year low, but really it’s pretty close to a six year low.

This comes after American’s stock hit a three year low in late May 2019, when it closed at around $28. A week later several American Airlines executives bought a bunch of stock. The company’s CEO, for example, bought about $1.4 million worth of stock at $28.09 per share.

Clearly this was intended to drive up the stock price and signal that positive things were coming, and it kind of worked, at least short term — on July 24 American’s stock hit $34.59, so it did go up about 23%.

Unfortunately since then, in the past five weeks, the stock has dropped sharply, by around 30%, to its current price of $24.45.

One has to wonder at what point shareholders (and customers… and employees…) will get fed up with the current management team’s lack of strategy.

To be clear, I fully recognize that stock price isn’t entirely indicative of how an airline is doing. However, right or wrong, that is how executives are largely judged, given their duty to return shareholder value.

But it’s not like American management is disappointing Wall Street while delighting customers and employees.

I’m sure I’m not the only one who feels like the below is me waiting for management at American to do something — anything — to indicate that things will change.

Not to beat a dead horse, but given the new five year low on the stock price, it’s worth reminding everyone that in October 2017 Doug Parker bet that American’s stock price would reach $60 by November 2018. Not only did that not happen, but it’s now worth less than half of that.

Fun times…

American’s board, are you there? Bueller? Bueller? Bueller?

Comments
  1. Debt to equity ratio is way out of line. Compare that to DL and WN and you’ll realize why the stock price is getting punished

  2. I hear Rupert Hogg is available…

    Doug Parker needs to go; the contempt in which American views and treats passengers -and their employees (read: mechanics)- once shareholders make enough noise it’s only a matter of time before management starts exiting. Either by their own volition or by being told by the board to go.

  3. You guys in the US have really poor airlines in terms of services offered.
    However you are very lucky to have so many credit card sign up opportunities to gain millions of miles to be used in Luxury cabin with other airlines.

  4. Unfortunately Dougie isnt going anywhere, just like Jeff @ UA wasnt thrown overboard, and only was let go when he got into legal problems with that Columbia SC flight

  5. If Doug can have two DWI’s and still be CEO, he’s not going to be fired for the low stock price and his incompetency. Need an Icahn to step in to shake things up or expect the same.

  6. Time for a change – the leadership or lack there of is absolutely palpable. Time to call the Board!

  7. No reason to buy without any concrete plans to improve in the long term. Against inflation, that’s already indicative of net negative growth

  8. Isn’t Doug Parker’s entire compensation dependent on the AA stock price? I recall reading an article several months ago how his base pay and total cash compensation from AA is $0 which says something given how Delta’s CEO total cash compensation was around $3 million and UA’s CEO total cash comp is around $5 million. I dont’ fly AA anymore but I’d imagine Parker would want AA stock price to increase since his pay is dependent on it.

  9. Looking like a good buying opportunity…unless the orange one decides to add airlines to the trade war. They are treating us so unfairly.

  10. The recent drop is very likely due to recession worries, that have amped up in the past month with the yield curve inversion, and the escalating tariffs. Airlines get hammered by recessions as travel is almost always a first cutback for businesses, and they depend on business travel for almost all their profit.

    Anyone looking at United and American’s performance the last few years knows that their recent profits are merely happenstance because of a strong overall economy. A rising tide may lift all boats, but when the tide goes out…

  11. > “stock price isn’t entirely indicative of how an airline is doing.”

    It’s indicative of the future of the airline, not how it’s doing now.

  12. AA trying to continue the legacy of America West, low cost airline, with mediocre service, flight back Dublin to DFW, as fast as possible got served “dinner” then no site of flight attendants for 4 hours, a bit of ice cream, that is it on a 9 hour flight.

  13. @Joey, I’m pretty sure Doug Parker’s “zero” salary is some kind of tax dodge… Speaking of Doug Parker, no doubt he sold that $1.4 million of stock when the shares hit $34.59 (pocketing $1.7+ million). Now that it has tanked again, he will now have to buy more to “save” the airline again…

  14. When Trump gets out office prob real soon he can take over as CEO of American Airlines
    after all he made Trump Airways the best of a class in the world
    Make American great again lol lol

    I didn’t dislike Parker at America West he was fair enough
    now I despise him for ruining a very solid airline and previously world class FF program
    I earned lifetime status for a reason at American not to end up on Delta!!
    Stock or no stock after 20 years at American I’ve taken my 50k a year in flying revenue and fly on most other competing carriers and rarely every step foot on American metal
    He doesn’t get it and likely never will
    Hoping he leaves the company forever if miracles do happen
    I’d be back in the morning if so

  15. When you blame you give up your power to make changes. AA should not just throw money at labor, they must make changes top to bottom on the way they operate. I don’t know of any industry including airlines that have labor issues other than American airlines. Get these labor issues resolved quickly and involve your front line employees. Some with 30, 40 years of experience. Let them be engaged and inspired. If your running an airline the only way you know how and it’s inferior, don’t be afraid to think out of the box. Making changes can be hard if you don’t know what to change. Use your 130,000 employees to your advantage. Don’t pin them down and control their every move. Inspire them instead.

  16. >>Need an Icahn to step in to shake things up or expect the same.

    Like he did with TWA? Cut wages several times for employees, then froze them? Oh, that’s gonna really help.

  17. Flew AA at the weekend, LHR-JFK, for the first time in years. Remembered that AA pilots have a habit of leaving the seatbelt sign on for hours after a bit of turbulence. Gives FAs an excuse not to appear I suppose. No FAs visible for four hours over the Atlantic. Pathetic.

  18. Not necessarily time to buy the stock because you might see it drop to $18.

    I prefer to invest in good companies, not lousy companies with a seemingly bargain priced stock. You might be catching a falling knife…..ouch…..blood!

  19. @Endre

    Insider trading can be both legal and illegal. It just depends on how it is performed. Legal insider trading must be filed with the SEC. It is usually done on a regular schedule (ie monthly, quarterly, etc). Illegal insider trading occurs when an executive purchases or sells stock based on confidential information not yet available to the public (ie right before QTR reporting or other significant good/bad news).

  20. The stock price is an indication of future expectations and the future of AA is dim at best. The conflict with mechanics would continue and operational performance would not improve with the low morale and the cuts Dough and Co did to the airline. When you do not have enough ground grew members you cannot turn around aircraft on time and you would have further delays. I my view back before the merger USAir was dead #5 after DL/AA/UA/CO (in no particular order) and now AA is taking the same slot. Can someone tell me what Dough did right after getting in charge of AA?

  21. Had a bag left off an AA flight recently, I was in F and it was tagged as such. It was my return flight so I wasn’t out anything other than convenience. I contacted AA for compensation, they took a week to respond and told me they credited my account 3k miles. I responded back confused at the small amount and was told that 3k was overly generous of them. Shoot, DL gave me 5k miles because my coach IFE didn’t work, I can only imagine how much they’d have given me for a lost F bag!

    Now, this is not the problem AA has with revenue. But AA’s poor customer service is clearly not helping them out at all

  22. @D3KingAmerican
    @PLFreitag

    “If Doug can have two DWI’s and still be CEO, he’s not going to be fired for the low stock price and his incompetency. Need an Icahn to step in to shake things up or expect the same.”

    I think what @BB is trying to say is Doug Parker alone isn’t messed up enough to destroy AA. You need a tried and true grim reaper like Icahn to kill off AA like how he made TWA vanish. Before you know it, UA and DL (other hidden Icahn investments) will be picking up the good pieces at cheap price and their shares will skyrocket, while Icahn pockets the sale of it. First thing Icahn will probably do is sell LHR slots, then sell all MIA operations to UA and all DCA to DL. Eventually PHX, CLT, PHL will have the same fate as STL, CLE, MEM.

  23. I am a lifetime Platinum after 2MM miles flown on AA after years of EP. But like Dwondermeant, I now never step foot on AA. Will use all my 1.4 million miles on other airlines. Also like him, I take my current 75k+ miles per year to Alaska or Delta. Won’t fly American til Doug is gone and then I will be happy to go back because every employee will be happy. I got caught up in the mechanics slow down about 7 or 8 years ago when it last happened and suffered horribly, but toughed it out. I have a lot of LAX connections and that remote terminal is surely the most horrible place in the aviation universe. Old, tired ex AWA planes through PHX. Ugh…I’ve written to many of these. How is he still there???

  24. As we’ve been saying for years now, another example of American on a race to the bottom. It’s about time the market realized it. Time for Parker to go! He’s actually worse than Carney was. Ugh!

  25. Nothing focuses the mind of a Board or major shareholders like a slumping stock price with the likely promise of more.
    Seems that CEO Parker is living on borrowed time along with the heads of underperforming departments within the business.
    Perhaps, even more unlikely, given Boards remarkable skills of self-preservation, is the need to see some renewal of the Board itself.
    Desperate times call for desperate measures. The present management would be totally incapable of dealing with the consequences of a recession, which is just a case of when, not if.

  26. Oh please please please let this be the turning point where Doug Parker is ousted and they can finally bring back a good product with consistent, reliable, attractive, and commendable services and products. Please Please Please…..

  27. AA Board of directors need to bring Randy McKinney as the new CEO to fix the issues and bring AA back to life.

  28. For the board to allow such corporate malpractice by squandering the golden opportunity handed to them, from a bumbling and clueless management team, amounts to criminal malfeasance to not only stakeholders but passengers and employees as well and should also be held to account. The brand is torn and in tatters now but quick action could save it from becoming another USAirways disaster 2.0.

  29. Doug Parker isn’t the right CEO for American. He would be better off becoming CEO of Allegiant, Spirit, or Frontier. American needs someone like Richard Anderson as CEO.

  30. Lol at all the idiots who thi it’s time to buy because the stock is at a 5 year low with on coming recession did you people actually pass basic Econ in high school? Lmao

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