American Airlines passenger jets are lined up on the gates at Ronald Reagan Washington National Airport in Arlington, Virginia, on Feb. 10, 2024.
J. David Ake | Getty Images
American Airlines slashed its sales outlook on Tuesday. The corporate has also let go of its chief business officer, Vasu Raja. He’ll leave his position next month.
American Airlines said it expects unit revenues to fall as much as 6% within the second quarter from a 12 months earlier, down from a previous forecast of a decline of not more than 3%. The carrier also trimmed its adjusted earnings estimate for the period to a projected range of $1 to $1.15 a share, down from a previous range of $1.15 to $1.45 a share.
The airline has trailed rivals Delta and United Airlines in recent months in financial performance. United Airlines afterward Tuesday reiterated its expectation to earn an adjusted $3.75 to $4.25 per share within the second quarter.
Executives from each carriers will present at a Bernstein conference Wednesday morning. American Airlines CEO Robert Isom plans to debate the carrier’s plan to change its ticket distribution strategy in favor of driving bookings to its own platforms as an alternative of third-party channels and agencies.
When asked during an April earnings call whether American Airlines had been receiving pushback from corporate customers while rivals reported strong business travel growth, Isom admitted that the carrier could should make changes to the system.
“Look, we have got some fine-tuning to do,” Isom said throughout the April call. “Little doubt the target here is … to hold on to all the fee savings after which also to be certain that that we maximize revenue production. As we take a have a look at the primary quarter, there’s quite likely some profit that our competitors received due to a few of … the changes that we have made.”
Raja, just greater than two years into his role as business head, had been on leave recently, and a spokeswoman for the carrier said last week that he was not leaving the corporate. That modified after internal discussions prior to now few days, in keeping with an individual accustomed to the matter.
He previously served as chief revenue officer and headed American Airlines’ network and alliances departments.
Raja didn’t immediately reply to CNBC’s request for comment.
Correction: This story has been updated to correct Vasu Raja’s title.
