American Airlines has reinstated its 2025 profit forecast, but with a sobering revision that signals continued turbulence for the airline industry. The company now expects full-year adjusted earnings per share (EPS) between a loss of $0.20 and a profit of $0.80, well below its original projection of $1.70 to $2.70 announced in January.
The airline also delivered a disappointing outlook for the third quarter, forecasting an adjusted loss per share between $0.10 and $0.60. That falls short of Wall Street’s consensus, which had predicted a modest profit of $0.03 per share.
Q2 Results Exceed Expectations, But Outlook Worries Investors
Despite the grim forecast, American reported a solid performance in the second quarter, with adjusted EPS of $0.95, beating analysts’ expectations of $0.78. Revenue hit a record $14.39 billion, driven by robust international travel demand.
However, investors were rattled by the sharp downgrade in guidance. Shares of American Airlines fell more than 9 percent on the news and are now down over 27 percent year to date, underperforming major airline peers and the broader market.
“While our operational performance remains strong, we’re seeing softness in the domestic market, which continues to weigh on revenue,” said CEO Robert Isom in a statement.
Domestic Weakness vs. International Strength
The airline cited weakened domestic leisure demand as a primary reason for the downgraded outlook. In the second quarter, domestic unit revenue declined 6.4 percent year over year, while international routes particularly transatlantic remained a bright spot, with revenue up about 5 percent.
The company also pointed to macroeconomic headwinds, including consumer uncertainty and potential trade-related tariffs, as risks that could push results toward the lower end of its forecast range.
Analyst Reactions and Industry Context
Despite the lowered guidance, some analysts remain cautiously optimistic. TD Cowen maintained its Buy rating, citing American’s cost discipline and operational execution, but noted that the wide earnings range reflects significant near-term volatility.
American’s cautious tone contrasts with Delta Air Lines and Southwest Airlines, both of which have also reported mixed earnings amid shifting demand patterns and higher costs.
Looking Ahead
As travel trends continue to evolve post-pandemic, American Airlines faces mounting pressure to stabilize earnings amid economic uncertainty. The upcoming third quarter will be a critical test of the company’s ability to navigate weakening domestic demand while capitalizing on international growth.
