American Airlines shares fall after cutting Q2 guidance

Shares of American Airlines ( AAL ) are falling after the company cut its second-quarter sales outlook.

Yahoo Finance Press Subramanian Tells more about the story and breaks down what it might imply about the aviation industry as a whole.

For more expert insights and the latest market action, click here to watch the full episode of Morning Brief.

This post was written by Melanie Reel

Video transcript

Let’s go to the sky here.

American Airlines Stocks.

They sank this morning after cutting its sales outlook for the second quarter.

The airline also announced that its chief commercial officer will leave next month.

Yahoo Finances Pro Superman has some details on this for us.

The stock sank this morning.

Almost 10%.

Rose.

Yes.

Yes, the revised ALEC also sees Q2 adjusted EPS of $15, down from $45 in the current quarter.

While most airlines do well, the original points to some problems with summer travel.

There are certain issues that all airlines deal with.

ok

Ah Middle East tensions, consumers looking for more discounts than vindictive travelers will turn away this summer, but they want to travel a little more, but they don’t want to pay more for it.

Um but the US-type revisions here, both on profits and earnings, look worse than expected.

Also, you mentioned the departure of Chief Commercial Officer Vasurajah.

He seems to have made some challenges in terms of reducing long distance routes.

LA to New York are really profitable.

He started focusing on the Sun Belt, which I think is good business, but not as profitable as these big long flights.

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And the company needs some more general revenue, they need more revenue.

It’s not, so far not meeting expectations here.

And it worries.

Why is this happening to Americans?

Is this just an American problem?

Yeah, that’s the question, is this an American problem or are we starting to see this weakness?

When you look at some of the other big domestic players, we had, we had, players like Ryanair are a little bit cautious about the consumer but Delta United, they’re not very cautious about revenue.

They are very good these days.

I mean, I know Brad, you’re very close to Delta, and you’ve heard the same thing.

So I think it’s an American issue.

Um Currency O is known to be a good operator, but they may need one more sales figure to get there and really kind of pump up after the business consumer, and re-establish some long-haul routes. , and from what I understand, they’re cutting the LA business from New York, which is a great business, but difficult to recreate like you have.

The others are obviously Delta and United, which are big.

So it highlights some of the challenges that Americans are facing right now.

After being one of the largest airlines in the world, yes, I mean, when you think about the broader airline space here as well, the big thing for summer travel is that companies are starting to talk about where the demand should be. And while we’re still moving toward this, if you look against what are some of the specific issues with American Air, this height of normalization, versus some of the other airlines out there?

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We still don’t know what the low-cost carriers will do in this interim period.

But at least this time around, they’re seeing demand steady now, even if they’ve offered or at least some updates for the busy spring break and summer travel season.

So we will continue to monitor all these.

But now that American Airlines is taking it on the chin, we’ll see where other major airlines open things up here and in the long run.

Bro thanks a lot.

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