On July 26, 2023, an American Airlines plane parked at the gate of Los Angeles International Airport (LAX) in Los Angeles, California.
Daniel Slim | AFP | Getty Images
American airlines On Wednesday, Chief Executive Robert Isom said the company would slash capacity growth in the second half and consider a range of other changes. Parted ways with Chief Commercial Officer Vasu.
Raja has led a plan to drive direct bookings at the airline to replace third-party websites and travel agencies, a strategy that includes cutting the airline’s sales arm. Raja will leave the company next month.
“We will be making some changes very soon,” Chief Executive Officer Isom said at Bernstein’s strategic decision-making meeting on Wednesday.
American Airlines’ capacity will grow about 3.5% in the second half compared with the same period last year, down from annual growth of about 8% in the first six months of 2024.
American Airlines shares fell about 15% in early trading Wednesday.
Pressure mounts on American Airlines leadership team after more upbeat results and comments from rivals delta and Unity Isom said his airline needs to better capitalize on trends around corporate, international and premium travel.
After the close on Tuesday, American Airlines said second-quarter unit revenue would likely fall 6% from a year earlier, down from a 3% decline forecast last month. Airlines made most of their money in the second and third quarters, but some areas performed better than others.
“Severe misses due to close bookings cast further doubt on American Airlines’ ability to capitalize on strong value during the summer flying season,” Bernstein aviation analyst David Vernon said in a note. .
The airline said first-quarter corporate bookings increased by mid- to high-single-digit percentage points, while Delta Air Lines and United Airlines claimed increases of about 14%.
Minutes after American Airlines revised its forecast on Tuesday, United Airlines reiterated its second-quarter profit forecast but did not provide a revenue outlook. Its CEO, American Airlines alumnus Scott Kirby, is also scheduled to speak at Bernstein’s conference.
“American’s lower guidance says more about flaws in its original forecast than any broad changes in passenger demand,” J.P. Morgan airlines analyst Jamie Baker said in a note on Wednesday. He Adding that United’s reiterated forecast is an encouraging sign for Delta.
American Airlines has also been prioritizing Sunbelt cities and its large hubs in Texas and North Carolina over coastal markets.
U.S. air travel hit a record high over the Memorial Day weekend, with executives at United and Delta expecting a record summer and strong transatlantic bookings. As operators add capacity, some weaknesses have emerged, such as in Latin America.
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