American Airlines Group (NASDAQ: AAL) shares fell 3% in pre-market trading Tuesday after the carrier lowered its revenue outlook for the first quarter of 2025 and warned of a larger-than-expected loss.
In the update released Tuesday, American Airlines said it now expects total revenue to remain flat compared to the first quarter of 2024. This marks a significant downgrade from its earlier projection of a 3% to 5% year-over-year increase. The carrier cited weaker demand in the domestic leisure travel segment—particularly in March—and the ongoing impact of Flight 5342 as key factors behind the revision.
On the earnings front, the airline now forecasts an adjusted loss per share between $0.60 and $0.80. This is a steeper loss than its prior estimate, which had ranged from $0.20 to $0.40 per share, highlighting a more difficult financial picture for the quarter.
American Airlines left its projections for available seat miles (capacity) unchanged at flat to down 2% compared to the prior year. Its unit costs excluding fuel, referred to as CASM-ex, also remain steady with an expected increase in the high single digits. However, the downward adjustment to the revenue forecast suggests that the airline faces a more challenging demand landscape than it had initially prepared for.
The revised outlook comes ahead of American’s scheduled appearance at the 2025 J.P. Morgan Industrials Conference, where company executives are set to provide further insights into financial and operational trends.
This news follows a recent adjustment from Citi analysts, who lowered their price target for American Airlines (NASDAQ: AAL) stock to $21.50 from $23.00. Despite the cut, Citi maintained its Buy rating on the stock.
