In this articleAALFollow your favorite stocksCREATE FREE ACCOUNTAn American Airlines’ Embraer E175LR (front), an American Airlines’ Boeing 737 (C) and an American Airlines’ Boeing 737 are seen parked at LaGuardia Airport in Queens, New York on May 24, 2024. Charly Triballeau | AFP | Getty ImagesAmerican Airlines will slash its capacity growth in the second half of the year and consider a host of other changes, CEO Robert Isom said Wednesday, after the carrier cut its revenue and profit forecast and said it is parting ways with its chief commercial officer, Vasu Raja.American will grow capacity about 3.5% in the second half of the year compared with the year earlier, down from roughly 8% year-over-year growth in the first six months of 2024.The company’s shares tumbled 15% on Wednesday while investors weighed the airline’s missteps as the peak travel season gets underway, with some analysts questioning how American can capitalize on what rivals expect to be a record summer.Isom said American is weighing changes to a plan Raja led to drive direct bookings at the airline in lieu of third-party sites and travel agencies, a strategy that included gutting the airline’s sales department.The changes angered some travel agencies who weren’t able to access some of the carrier’s fares as before, making it harder for some agencies to sell tickets on American flights. Raja said last month that the airline’s corporate booking growth was coming in behind big rivals Delta and United.Raja will leave the company next month.”We’ve use a lot of sticks. We’ve got to put some more carrots in place and make sure that our product is available wherever customers want to buy it,” Isom said at the Bernstein Strategic Decisions conference on Wednesday.American in February said it would limit some travel agency bookings from being eligible to earn AAdvantage frequent flyer miles. Isom said Wednesday that the airline would reverse that decision.”That’s off,” Isom said. “We’re not doing that because it would create confusion and disruption for our end customer.”Revenue shortfallsAfter the market closed Tuesday, American said its unit revenues could fall as much as 6% in the second quarter from a year earlier, down from its forecast last month of a no more than 3% decline. Airlines make the bulk of their money during the second and third quarters, but some areas have fared better than others.”A significant miss driven in part by close in bookings puts AAL’s ability to reap the full value of a robust summer flying season in greater doubt,” Bernstein airline analyst David Vernon said in a note.On an earnings call last month, Raja said American’s corporate bookings were up mid-to-high single-digit percentage points in the first quarter compared with increases of around 14% touted by Delta and United.United, minutes after American’s forecast adjustment Tuesday, reiterated its second-quarter earnings estimates, though it didn’t provide a revenue outlook. Its chief executive, Scott Kirby, an American Airlines alumnus, i …
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[mwai_chat context=”Let’s have a discussion about this article:nnIn this articleAALFollow your favorite stocksCREATE FREE ACCOUNTAn American Airlines’ Embraer E175LR (front), an American Airlines’ Boeing 737 (C) and an American Airlines’ Boeing 737 are seen parked at LaGuardia Airport in Queens, New York on May 24, 2024. Charly Triballeau | AFP | Getty ImagesAmerican Airlines will slash its capacity growth in the second half of the year and consider a host of other changes, CEO Robert Isom said Wednesday, after the carrier cut its revenue and profit forecast and said it is parting ways with its chief commercial officer, Vasu Raja.American will grow capacity about 3.5% in the second half of the year compared with the year earlier, down from roughly 8% year-over-year growth in the first six months of 2024.The company’s shares tumbled 15% on Wednesday while investors weighed the airline’s missteps as the peak travel season gets underway, with some analysts questioning how American can capitalize on what rivals expect to be a record summer.Isom said American is weighing changes to a plan Raja led to drive direct bookings at the airline in lieu of third-party sites and travel agencies, a strategy that included gutting the airline’s sales department.The changes angered some travel agencies who weren’t able to access some of the carrier’s fares as before, making it harder for some agencies to sell tickets on American flights. Raja said last month that the airline’s corporate booking growth was coming in behind big rivals Delta and United.Raja will leave the company next month.”We’ve use a lot of sticks. We’ve got to put some more carrots in place and make sure that our product is available wherever customers want to buy it,” Isom said at the Bernstein Strategic Decisions conference on Wednesday.American in February said it would limit some travel agency bookings from being eligible to earn AAdvantage frequent flyer miles. Isom said Wednesday that the airline would reverse that decision.”That’s off,” Isom said. “We’re not doing that because it would create confusion and disruption for our end customer.”Revenue shortfallsAfter the market closed Tuesday, American said its unit revenues could fall as much as 6% in the second quarter from a year earlier, down from its forecast last month of a no more than 3% decline. Airlines make the bulk of their money during the second and third quarters, but some areas have fared better than others.”A significant miss driven in part by close in bookings puts AAL’s ability to reap the full value of a robust summer flying season in greater doubt,” Bernstein airline analyst David Vernon said in a note.On an earnings call last month, Raja said American’s corporate bookings were up mid-to-high single-digit percentage points in the first quarter compared with increases of around 14% touted by Delta and United.United, minutes after American’s forecast adjustment Tuesday, reiterated its second-quarter earnings estimates, though it didn’t provide a revenue outlook. Its chief executive, Scott Kirby, an American Airlines alumnus, i …nnDiscussion:nn” ai_name=”RocketNews AI: ” start_sentence=”Can I tell you more about this article?” text_input_placeholder=”Type ‘Yes'”]
