July 19, 2024

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American Airlines shares decline after cutting second-quarter guidance

American Airlines shares decline after cutting second-quarter guidance

American Airlines (AAL) shares fell after the company lowered its second-quarter sales forecast.

Yahoo Finance Pras Subramanian It reports more on the story and explains what it might suggest about the aviation sector as a whole.

For more expert insights and the latest market action, click here to watch this full episode of Morning Summary.

This article was written by Melanie Riehl

Video version

Let’s go to heaven here.

US airline stocks.

They’re taking a plunge this morning after lowering their sales forecast for the second quarter.

The airline also announced that its chief commercial officer will leave his position next month.

Yahoo Finances Pro Superman has some details on this for us.

The stock sank this morning

Nearly 10%.

rus.

Yes.

Yes, you know what happened there and that revised ALEC also saw Q2 adjusted EPS in a range of one to $15 which was down $45 for the current quarter.

Uh the original points out some problems here in traveling in the summer when most airlines are in good shape.

Uh there are some issues that all airlines deal with.

right.

Uh tensions in the Middle East, consumers who are looking for more discounts than the vindictive traveler will kind of go away this summer, but they still want to travel a little bit, but they don’t want to spend uh high fees on it.

Uh but the American kind of reviews the reviews here with both profit and revenue looking worse than expected.

Plus you mentioned the departure of Chief Commercial Officer Vasu Raja.

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He appears to have made some bets on things like reducing long flights.

Los Angeles to New York and it’s really profitable.

He started focusing on the Sun Belt, which I think is a good business, but not as profitable as these larger long-distance trips.

The company needs more public revenue, it needs more revenue.

It’s not, it’s not meeting expectations here at the moment.

And these concerns.

Why is this happening to America?

Is it only an American problem?

Yes, and this is the question: Is this an American problem or are we starting to see some of this weakness?

When you look at some of the other big domestic players, we had players like Ryanair talking about consumers that are a little bit more cautious, but Delta United, they’re not as cautious about revenue.

They’re actually doing pretty good these days.

I mean I know Brad, you’re very close to Delta, and I’ve heard the same thing too.

So I think it’s a potential American problem.

Coin is known to be a good operator, but they may need more sales numbers to get there and kind of really pump up after the commercial consumer uh re-established some of the long-haul flight paths that are taking a long time and, and, from what I understand, they’re kind of reducing the business. From New York to Los Angeles, which was, which is a big business, but then it’s also difficult to rebuild it like I did.

Obviously, Delta and United are other big players there as well.

This highlights some of the challenges Americans face now.

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Uh, it was one of the most recognizable airlines in the world, yeah, I mean, look when you think about the broader airline space here as well, the biggest thing for summer travel is where companies are starting to talk about where demand should stay flat even as we We’re kind of moving towards this, this cruising rise of normalization if you will versus what are some of the specific issues as you were presenting for American Air versus some of the other airlines out there?

We still don’t know what low-cost carriers will have to navigate during this interim period either.

But at least in this period, it seems to be coming together, even as they give or at least in light of some of the updates around the busy spring break and then the summer travel season, they’re seeing demand holding steady at the moment as well.

So we will continue to track all of these.

But right now, American is handling a lot of other major airlines here as well during extended hours, so we’ll see where things open up.

Bro thank you very much.