American Airlines Shares Slide as Weak Forecast Spurs Drop

American Airlines Faces Third‑Quarter Loss as U.S. Leisure Market Weakens

Shares of American Airlines fell sharply after the carrier forecast a net loss for the third quarter, driven by persistent softness in domestic travel and the fallout from a fatal crash of a regional jet operated by American Eagle on January 29 at Ronald Reagan National Airport.

Quarter‑of‑Year Guidance Lags Analysts

• Projected loss: between $0.10 and $0.60 per share.
• Full‑year range: loss of $0.20 or gain of $0.80 per share.
• Both projections fall short of analyst expectations.

In the second quarter, the airline posted a profit of $599 million, down 16.4 percent from the year‑ago level. Revenues rose less than 1 percent to a record $14.4 billion.

Domestic Travel Continues to Slip

CEO Robert Isom noted that domestic revenue was down about 6 percent during the quarter. The weak trend has persisted through July, although Isom highlighted a recent uptick in bookings for travel in the coming months.

The decline in travel was partly a result of consumer anxiety earlier this year, as uncertainty over President Donald Trump’s tariff policies battered equity markets.

Competitive Advantage May Play Role

Executives stressed that American Airlines is more exposed to the U.S. market compared with competitors Delta Air Lines and United Airlines. While Delta and United also faced domestic weakness, they gained a larger boost from international travel, giving them a competitive edge.

American Airlines CEO Robert Isom Reports Surge in U.S. Travel Bookings

Booking Trend Bounces Back in Late June

Isom highlighted a notable uptick in reservations as the airline moves from June to July, reflecting a broader recovery seen across the travel sector.

Economic Factors Fuel Demand

• Trump’s trade agreements and the administration’s fiscal package have stimulated corporate spending.
• Extended corporate tax cuts are contributing to an environment favorable for travel bookings.

Market Impact of Weather Challenges

Isom warned that the third‑quarter results could experience an unusual hit from severe weather, citing 5,500 cancellations in the first three weeks of July. He described this situation as an “anomaly” expected to be short‑term.

Long‑Term Outlook

Despite short‑term weather disruptions, Isom expressed confidence that American Airlines will shine over the long term, citing strong operational performance during a tough environment.

Share Price Movement

The airline’s shares fell 7.3% in morning trading, reflecting market sensitivity to the weather forecast.