Topline
Despite beating second-quarter estimates, the Dallas-based carrier issued a downgraded outlook for 2025, noting weak domestic demand and a third-quarter profit forecast that fell short of Wall Street expectations, as the airline industry still struggles to recover from tariff news from President Trump that rocked demand.
American Airlines reinstated its 2025 outlook, though with significantly lower expectations than the ... More
American Airlines shares were down roughly 8% midday Thursday after the carrier reinstated its 2025 forecast well below its outlook at the beginning of the year.
American adjusted its 2025 forecast with per-share estimates ranging from a loss of as much as 20 cents to earnings of up to 80 cents—significantly down from its January forecast of between $1.70 and $2.70 earnings per share.
On the company’s quarterly earnings call, American Airlines CEO Robert Isom cited consumer weakness, lackluster business travel demand and operational problems due to a series of weather events.
American’s third-quarter profit forecast fell short of Wall Street’s expectations, though the carrier’s executives told Wall Street analysts demand appears to be stabilizing, and even improving in the coming months.
Earlier this month, Delta Air Lines and United Airlines reported that travel demand has stabilized, though both carriers also lowered their 2025 forecasts compared to the beginning of the year.
While the Dow Jones U.S. Airline index remains down 3% for the year, it is up 57% compared to its lowest point in April immediately following President Trump’s Liberation Day announcement.
Because Wall Street investors are forward-looking. Although American reported higher-than-expected second-quarter 2025 revenue ($14.39 billion vs. $14.3 billion expected) and earnings per share (95 cents adjusted vs. 78 cents expected), the carrier issued a cautious forecast for the third quarter and narrowed its full-year guidance, citing ongoing uncertainty in travel demand.
The airline industry had predicted a strong year of travel demand, but 2025 has served up a few unexpected curveballs. In March, as President Trump talked up his plan to impose double-digit tariffs on most countries around the world, a clutch of major U.S. airlines dimmed their 2025 forecasts, citing dipping consumer confidence and shaky macroeconomic conditions. The next month, most major U.S. carriers, including American, pulled their 2025 financial guidance after Trump issued his the “Liberation Day” tariff announcement. In the days immediately afterward, airline bookings took a nosedive, consumer spending analyses showed. While the three U.S. legacy carriers—Delta, United and American—have taken pains to tell investors that conditions have stabilized since April, all three carriers have cut back their full-year forecasts. For the third quarter, American said it expects an adjusted per-share loss of 10 cents to 60 cents, potentially far worse than the 7-cent loss expected by analysts polled by the London Stock Exchange Group (LSEG).
What Trump’s raft of tariffs—delayed until Aug. 1—will do to consumer confidence later this year. Historically, higher inflation tends to contract consumer discretionary spending on items like travel.
Delta Shares Leap 13% On Profit Forecast That’s Down From January (Forbes)