American Airlines announced the withdrawal of its financial guidance for 2025 on Thursday, aligning itself with other airlines facing challenging forecasts amid an uncertain U.S. economic climate and lower-than-anticipated leisure travel bookings this year.
In an interview with Finance Newso’s “Squawk Box,” CEO Robert Isom stated, “We came off a strong fourth quarter, saw decent business in January, and really domestic leisure travel fell off considerably as we went into the February time frame.”
The airline reported a modest 0.7% rise in unit revenue for the first quarter, attributing this increase to robust international bookings and strong performance in premium cabins. This trend mirrors statements from other carriers such as Delta and United, which highlighted that more price-sensitive leisure travelers have been reluctant to book flights.
Looking ahead, American Airlines anticipates a second-quarter revenue decline of as much as 2% from the previous year, with an expected increase of up to 1%, which falls short of the 2.2% projected by Wall Street analysts. Capacity for the current quarter is set to increase as much as 4%. The airline estimates adjusted per-share earnings between 50 cents and $1, while analysts had forecasted earnings of 99 cents per share.
Capacity is expected to rise between 2% and 4% compared to the same quarter last year.
Here are the first-quarter results for American Airlines compared to Wall Street estimates compiled by LSEG:
- Loss per share: 59 cents adjusted vs. an expected loss of 65 cents
- Revenue: $12.55 billion vs. $12.6 billion expected
The airline recorded a net loss of $473 million in the first quarter, a significant increase from the $312 million loss reported during the same period last year. Revenue remained stable at $12.55 billion compared to last year. When adjusted for one-time items, the loss per share stood at 59 cents.
Capacity declined by 0.8% during the period.
American Airlines mentioned that its attempts to revive its corporate travel business, which had suffered from a previous flawed strategy, are making headway. However, these efforts are being overshadowed by “economic uncertainty that pressured domestic leisure demand” and the recent tragedy involving American Eagle Flight 5342. This incident, which occurred in January, involved a collision between an Army helicopter and an American regional jet landing in Washington, D.C., leading to the loss of all 67 individuals aboard the two aircraft.
