American Airlines is calling back its furloughed employees after U.S. Congress passed a relief package, including payroll support for airlines, according to a company memo seen by Reuters.
American Airlines (AAL) is planning to return its furloughed workers in a phased manner. “While pay and benefits will be restored right away, people will be asked to return to the operation in phases,” the company’s CEO Robert Isom said in the memo seen by Reuters.
Notably, on Monday, Congress passed a $900 billion coronavirus aid package, from which airlines would get $15 billion for payroll support. According to the Reuters report, American Airlines is expected to receive approximately $3 billion from the payroll package. The air carrier has furloughed nearly 19,000 workers since October this year.
On Dec. 11, Deutsche Bank analyst Michael Linenberg downgraded the stock to Hold from Buy but raised the price target to $20 (29.2% upside potential) from $18. Linenberg believes that airline stocks are fairly valued at current levels given the upswing in share prices over the past several months due to positive developments on the coronavirus front.
Overall, the Street has a cautiously bearish outlook on the stock. The Moderate Sell analyst consensus is based on 5 Sells, 2 Holds and 1 Buy. The average price target stands at $12.75 and implies downside potential of about 17.6% to current levels. Shares have plunged 46% year-to-date.