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Data: S3 Partners; Chart: Axios Visuals

Loaded with debt and cutting back on coronavirus safety precautions, American Airlines has attracted a lot of attention from short sellers who may be betting on a bankruptcy.

Driving the news: American’s stock fell 1.4% Thursday after it announced plans to suspend service to 15 small U.S. cities in October after the terms of its CARES Act aid requiring the flights expires.

Where it stands: The company’s $29 billion in adjusted net debt "likely leaves it crippled for years to come," Raymond James analyst Savanthi Syth said in a recent note.

  • That's especially worrisome given the decreasing likelihood for more coronavirus relief from Congress in the near term.

The intrigue: Short sellers have accumulated $2.04 billion of short interest in American, more than double the next closest airline, and have been increasing positions, despite fees to borrow that are five times higher than most other airlines.

  • Short sellers own nearly one-third of available shares.

Between the lines: American's lack of a credible safety policy during the coronavirus pandemic and announcement that it would fly full flights in July also may have weighed on the company's stock.

  • It set American apart from other major airlines, like Delta and Southwest, which had instituted in-writing restrictions on flight capacity.

Go deeper

Nov 21, 2020 - Economy & Business

Some air travelers pay premium for social distancing

Illustration: Sarah Grillo/Axios

Business travel remains depressed during the pandemic, but some airlines are seeing more leisure travelers in their first-class cabins.

Why it matters: Many people are avoiding air travel during the public health crisis, fearful they'll catch COVID-19 from a nearby passenger. But for those who can afford it, premium class seats offer more comfort and perhaps a little extra breathing room.

Boeing 737 Max's next hurdle: coronavirus

Illustration: Aïda Amer/Axios. Photos: Bettmann, Stephen Brashear, Ann Ronan Pictures/Getty Images

Boeing is nearing the end of a crippling stretch after the grounding of it 737 MAX last year, while trudging through another one: the pandemic.

Why it matters: Boeing's most popular jet was given the nod to fly again this week, but the world has changed in the 20 months that regulators kept the 737 MAX jet from the skies.

Nov 21, 2020 - Economy & Business

More fliers turn to private jets to avoid crowded airlines

Photo illustration: Sarah Grillo/Axios. Photos: Museum of Flight, Eddie Sanderson/Getty Images

Some travelers are avoiding commercial flights during the pandemic and opting for private charter flights instead, reports the New York Times.

Why it matters: It's expensive, but private planes can offer more peace of mind to passengers concerned about virus-related safety on commercial planes, but can be another pandemic impact hurting traditional airlines.