New York (AFP) – American Airlines withdrew its full-year profit forecast Thursday, citing economic uncertainty that has clouded its outlook for hiring and capacity additions. Executives from the large US carrier said business travel remained on solid footing as it projected second-quarter profitability amid healthy demand for international travel from the United States.
While American plans to add between two and four percent flying capacity in the second quarter, the outlook is fuzzier for the second half of 2025. “As you look beyond that there’s a lot of uncertainty,” said American chief executive Robert Isom, who pledged a “nimble” response to demand signals. “We have a negative bias to all capacity as we go forward,” he added.
The remarks are the latest indication of how big companies are rethinking plans as more economists warn of a possible recession in the wake of US President Donald Trump’s shifting trade policy. American reported a loss of $473 million compared with a loss of $312 million in the year-ago period. Revenues fell slightly to $12.6 billion, missing analyst expectations.
American said revenues were hit by economic uncertainty and fallout from the January 29 fatal crash of a regional jet operated by American Eagle at Ronald Reagan National Airport in Washington. Bookings remained solid through February but deteriorated significantly in March and April so far, executives said.
The issue is with American’s “most price-sensitive customers, our customers for whom travel is most discretionary,” said Steve Johnson, chief strategy officer. “We’d like to think that’s demand that’s not been lost, but demand that’s on the sidelines waiting to understand which direction the economy is going to go,” Johnson said.
Isom said American is taking a “very cautious” approach to its business, which may translate into lower hiring or fewer plane deliveries. Shares rose 1.8 percent near midday.
© 2024 AFP
