American Airlines (NASDAQ: AAL) forecast 2025 profit below Wall Street expectations as the carrier attempts to remedy a sales-strategy misstep that drove away corporate travelers, sending its shares down 7% premarket on Thursday.
The aggressive approach, implemented in 2023, focused on renegotiating contracts with corporate travel agencies and clients while cutting back on perks and discounts.
The plan dented revenue, hurt the airline’s image, and gave rivals an edge, forcing American to spend much of 2024 rebuilding its sales strategy and mending relationships with corporate travelers to regain some of the lost customers.
The company expects 2025 adjusted earnings per share in the range of $1.70 to $2.70, compared with analysts’ average estimates of $2.42, according to data compiled by LSEG.
The airline also forecast a bigger first-quarter loss than analysts expected, breaking away from the bumper predictions of rivals such as Delta Air Lines (NYSE: DAL) and United Airlines (NASDAQ: UAL) that are benefiting from improved pricing and strong winter demand.
The legacy carrier’s stock gained about 30% last year, outstripped by Delta’s rise of nearly 50% and United’s 138% surge.
American Airlines (NASDAQ: AAL) expects a current-quarter adjusted loss per share of 20 cents to 40 cents, compared with estimates for a loss of 4 cents.
“We are reengineering the business to build an even more efficient airline,” CEO Robert Isom said.
Jet fuel prices have also climbed sharply in the past month, tracking a rise in global crude benchmarks driven by broader sanctions targeting Russian oil revenue, alongside growing optimism about stronger demand from China.
The Texas-based carrier reported an adjusted profit of 86 cents per share, beating expectations of 64 cents, due to improved pricing.
Total operating revenue rose 4.6% to about $13.66 billion, compared with estimates of $13.39 billion.
