An American Airlines Boeing 737 MAX 8 aircraft approaches San Diego International Airport for a landing from Phoenix on June 28, 2024 in San Diego, California.
Kevin Carter | Getty Images
American Airlines is forecasting a drop in unit revenue of as much as 4.5% for the third quarter as high demand failed to make up for an industry-wide glut of flights that have forced airlines to slash fares.
The Fort Worth, Texas-based airline also forecast full-year adjusted earnings of between 70 cents and $1.30 per share, far shy of the $1.10 to $2.60 per share Wall Street analysts were expecting, according to LSEG.
The carrier has been grappling with an industry-wide oversupply of flights and a direct-to-consumer sales strategy it adopted that backfired. It said in an earnings release Thursday that it has “taken swift and aggressive action to reorient its sales and distribution strategy” after complaints from travel agents and customers.
Shares of American were down more than 7% in premarket trading.
Here is how American performed in the second quarter compared with Wall Street estimates compiled by LSEG:
- Earnings per share: $1.09 adjusted vs. $1.05 expected
- Revenue: $14.33 billion vs. $14.36 billion expected
Southwest’s profit fell 46% during the second quarter to $717 million, or $1.01 per share, even though revenues rose 2% to $14.33 billion.
Adjusting for one-time items, the airline reported earnings of $1.09 per share.
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