Source: AFP
Shares in American Airlines fell on Wednesday after it cut its earnings outlook, citing weaker demand and a troubled reservation system upgrade.
Shares of the major US carrier fell nearly 15 percent after American Airlines CEO Robert Isom appeared at a Wall Street conference where he outlined the issues.
While long-haul international travel remains strong, Isom cited a “softer domestic revenue environment,” saying the outlook for the company’s domestic travel has “deteriorated materially” compared to April forecasts.
American cut its second-quarter profit margin outlook and now sees earnings per share between $1.00 and $1.15.
In April, the American forecasted earnings per share between $1.15 and $1.45.
The carrier now expects to add 3.5 percent of capacity in the second half of 2024 after adding eight percent in the first half, Isom said.
![](https://images.yen.com.gh/images/5b534d3a70ce8034.jpg?impolicy=cropped-image&imwidth=256)
![](https://images.yen.com.gh/images/5b534d3a70ce8034.jpg?impolicy=cropped-image&imwidth=256)
Read also
Musk plans biggest supercomputer ever for xAI startup: report
The weak outlook comes after American announced Tuesday that Chief Commercial Officer Vasu Raja will leave the carrier in June.
Isom praised Raja for his creative thinking and embrace of innovation.
“But sometimes we need to reset, and in this case we do,” Isom said, adding that the company needed to focus on execution and being “more detail-oriented.”
Raja had been involved in efforts to get customers to book directly through the airline and its app instead of going through corporate travel managers or online platforms.
But Isom said implementing the changes had turned some customers away.
“We have to make sure we react in the short term and it’s never difficult to work together,” Isom said.
Source: AFP