American Airlines planes line up at the gates at Ronald Reagan Washington National Airport in Arlington, Virginia, on February 10, 2024.
J. David Ake | Getty Images
American Airlines The company sharply cut its revenue guidance on Tuesday and also fired its chief commercial officer, Vasu Raja, who is due to step down next month.
American Airlines said it now expects second-quarter unit revenue to fall as much as 6 percent from a year ago, down from a previous forecast of a decline of no more than 3 percent, and lowered its adjusted earnings forecast for the quarter to $1.45 to $1.15 a share, from $1.15.
The airline is lagging behind its rivals delta and United Airlines United Airlines on Tuesday reiterated its expectation of second-quarter adjusted earnings per share of $3.75 to $4.25, building on its financial performance in recent months.
Executives from both airlines are scheduled to make announcements at the Bernstein conference Wednesday morning, with American Airlines CEO Robert Isom expected to outline the airline’s plans to change its ticket distribution strategy to drive bookings to its own platform rather than third-party channels and agents.
Asked during an earnings call in April whether American was facing backlash from corporate customers while rivals were reporting strong growth in business travel, Isom acknowledged the airline may have to make changes to its systems.
“We need to make some fine-tuning,” Isom said on a conference call in April. “The goal here is certainly to preserve all of the cost savings and maximize revenue. Looking back at the first quarter, it’s quite possible that our competitors got some benefit from some of the changes that we made.”
Mr. Raja, who has been head of sales for just over two years, had been on leave recently and a company spokesman said last week he would not be leaving, a move that came after several days of internal discussions, people familiar with the matter said.
He previously served as chief revenue officer and led American Airlines’ network and alliances division.
Raja did not immediately respond to CNBC’s request for comment.
Correction: This story has been updated to correct Vasu Raja’s title.
