American Airlines suffers unexpected loss, shakes off bullish rivals

American Air Sees Surprise Loss in Break From Bullish Rivals

2025-01-23 18:30:00 :

(Bloomberg) — American Airlines Group Inc expects an unexpected loss in the first quarter, unlike rival airlines that have profited from unusually strong winter demand and expensive domestic fares.

American Airlines said in a statement when announcing its fourth-quarter results that it expected an adjusted loss per share of up to 40 cents in the period. Analysts had expected an average profit of 1 cent, according to Bloomberg estimates.

The airline’s shares fell 7.9% before regular trading began in New York on Thursday.

The pessimistic forecast contrasts with more optimistic outlooks from rivals United Airlines Holdings Inc and Delta Air Lines, which pointed to strong demand for winter travel in Europe and rising domestic airfares. American’s extensive domestic network and string of Sun Belt hubs should also leave it at significant risk from rising fares as airlines cut unprofitable flights last year to eliminate excess seats.

For Americans, this setback comes at an inopportune time. The company has been trying for months to win back corporate customers it lost last year, after abandoning plans to push corporate customers to book directly rather than with third-party travel managers. American Airlines said the mistake cost it $1.5 billion.

American Airlines has made slow progress in revitalizing business travel. The share of business travel revenue in the fourth quarter still hit a record high, falling 9%. The company expects growth of 2 percentage points in the current quarter and said it expects to regain its full share of indirect bookings revenue by the end of the year.

Fourth-quarter adjusted profit per share was 86 cents, higher than the average analyst estimate of 65 cents compiled by Bloomberg. Revenue was $13.7 billion, compared with Wall Street expectations of $13.4 billion.

(Updated fourth paragraph with more details.)

More stories like this can be found at Bloomberg.com

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