American Airlines passenger planes line the gates at Ronald Reagan Washington National Airport in Arlington, Virginia, on February 10, 2024.
J. David Ake | fake images
american airlines cut its sales outlook on Tuesday. The company has also sacked its business director, Vasu Raja. He will leave his position next month.
American Airlines said it expects unit revenue to fall as much as 6% in the second quarter from a year earlier, down from a previous forecast of a drop of no more than 3%. The airline also cut its adjusted earnings estimate for the period to a projected range of $1 to $1.15 per share, down from the previous range of $1.15 to $1.45 per share.
The airline has lagged behind its rivals. Delta and united airlines in recent months in financial performance. United Airlines later Tuesday reiterated its expectation of earning an adjusted $3.75 to $4.25 per share in the second quarter.
Executives from both airlines will make presentations at a Bernstein conference Wednesday morning. American Airlines CEO Robert Isom plans to discuss the airline's plan to shift its ticket distribution strategy in favor of directing bookings to its own platforms rather than third-party channels and agencies.
Asked during an earnings call in April whether American Airlines had been receiving pushback from corporate customers as its rivals reported strong growth in business travel, Isom admitted the airline might have to make system changes.
“Look, we have to make some adjustments,” Isom said during the April call. “Certainly the goal here is to… retain all the cost savings and then also make sure that we maximize revenue production. If we look at the first quarter, it's very likely that our competitors received some benefit due to some of the… .the changes we have made.”
Raja, who had been in his role as chief commercial officer for just over two years, had recently been on leave and an airline spokeswoman said last week that he would not be leaving the company. That changed after internal discussions in recent days, according to a person familiar with the matter.
He previously served as chief revenue officer and led the alliances and networks departments at American Airlines.
Raja did not immediately respond to CNBC's request for comment.
Correction: This story has been updated to correct the title of Vasu Raja.
