American Airlines joined other major U.S. carriers in pulling its financial forecast for 2025, citing the uncertain economic outlook that so far this year has weakened U.S. air travel.
Charlotte Douglas International Airport’s largest carrier posted lower U.S. passenger revenue and related results in the first quarter after a pullback in discretionary spending by consumers, especially on travel, American CEO Robert Isom said.
The Fort Worth, Texas-based company exited 2024 with “positive momentum’’ that
decelerated quickly early this year, Isom told analysts on a conference call earlier today. “The economic uncertainty in the market has pressured demand and impacted American’s first-quarter results and second-quarter outlook.’’
American withdrew its full-year forecast, mirroring earlier moves by Delta and Southwest
airlines reflecting softening sales amid uncertainty from the global tariff war sparked by
President Donald Trump’s administration.
As more U.S. CEOs brace for a possible recession, a new poll found roughly half of U.S. adults believe that Trump’s trade policies will increase prices “a lot.” Another three in 10 think prices could go up “somewhat,” according to the poll by The Associated Press-NORC Center for Public Affairs Research.
American shares rebounded today, erasing slightly its drop of more than 45% so far this year after shifting U.S. tariff policies led to retaliation by major trading partners and stoked the possibility of a recession. The stock rose about 2.5% to $9.56 a share in mid-afternoon trading.
The carrier posted revenue of $12.55 billion in the first quarter, in line with analyst
expectations, according to a statement. It reported an adjusted EPS loss of 59 cents, less than the 67 cents expected by analysts.
American expects to produce a profit and positive free cash flow in 2025, according to Isom. He repeatedly cited the economic uncertainty but in his introductory remarks to analysts refrained from mentioning Trump or his administration’s role in it. He did join other airline executives in urging the elimination of aerospace-related tariffs.
American is prepared for what Isom called “a challenging economic environment’’ after
generating free cash flow of $1.7 billion in the three months through March 31. It ended the first quarter with cash and restricted cash of $931 million, compared to $703 million a year earlier.
Efforts by American to refresh its fleet in “a very different economic environment’’ in recent years eased requirements for capital spending for the rest of the decade, the CEO said. He added that if the economy turns down, the carrier can reduce its capacity by returning leased planes or deferring orders for new aircraft without hurting service.
