Thu, 23 Jan 2025

American Airlines shares tumble as outlook falls short

American forecast a wider than expected loss for the first quarter, sending shares lower.
The airline expects unit costs to rise in the low-single-digit percentage points over the first quarter due to lower capacity, higher mix of regional flying, and new labor agreements. American's full-year earnings forecast of $1.70-$2.70 per share is in line with analysts' estimates. The carrier's revenue is expected to be up 3-5% in the first quarter compared to last year, and up as much as 7.5% for the full year. In a separate development, American Airlines' fourth-quarter profit rose to $590 million from $19 million on sales that were up 4.6% on the year to $13.66 billion. The airline's adjusted earnings per share of 86 cents exceeded analysts' expectations. American has also announced new partnerships with Citi and Barclays, which are expected to generate significant revenue for the carrier in 2025. However, the company still faces challenges related to its business travel sales strategy and fuel prices.
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