American Airlines slashed its profit forecast for the year after a backfired sales strategy and an industry-wide glut of flights.An American Airlines Boeing 737 MAX 8 aircraft approaches San Diego International Airport for a landing from Phoenix on June 28, 2024 in San Diego, California.
American said it expects to earn an adjusted 70 cents to $1.30 per share this year, well below the $2.25 to $3.25 a share it forecast in April and short of the $1.10 to $2.60 a share that Wall Street analysts were expecting, according to LSEG. The Fort Worth-Texas based airline also estimated its unit revenue would drop as much as 4.5% for the third quarter as high travel demand failed to make up for an excess of flights.Thursday that it has "taken swift and aggressive action to reorient its sales and distribution strategy" after complaints from travel agents and customers.
"American has a fleet, network and product built to deliver results, but during the second quarter, we did not perform to our initial expectations due to our prior sales and distribution strategy and an imbalance of domestic supply and demand," American's CEO Robert Isom said in a news release.Southwest's profit fell 46% during the second quarter to $717 million, or $1.01 per share, even though revenues rose 2% to $14.33 billion.