Economic uncertainty can impact non-essential spending such as travel as consumers turn cautious amid fears of recession from Trump's fluctuating trade policies.
This has created fresh headache for major U.S. airlines, which just two months ago were riding a wave of strong travel demand.
American joined peers Southwest Airlines and Alaska Air to withdraw their annual forecasts, following similar moves by Delta Air and Frontier earlier this month.
United Airlines recently gave two different forecasts and factored in an economic recession into one of them, saying it was impossible to predict the macroeconomic environment this year. Shares of the carrier were down 1.3%, while peers Southwest and Alaska were down 4% and 7%, respectively. Delta and United shares were also down marginally.
American Airlines is also reeling with higher costs tied to expensive labor contracts signed last year.
It forecast its second-quarter adjusted profit per share in the range of 50 cents to $1, compared with analysts' expectations of 99 cents, according to data compiled by LSEG.
In the first quarter, it reported an adjusted loss of 59 cents per share, smaller than Wall Street expectations of 65 cents.
The airline reported a total operating revenue of $12.55 billion, down marginally from a year earlier.
Reporting by Shivansh Tiwary in Bengaluru; Editing by Vijay Kishore, Reuters.
No comments:
Post a Comment