American Airlines passenger planes park at the gates of Ronald Reagan Washington National Airport in Arlington, Virginia, on February 10, 2024.
J. David Ake | Getty Images
American Airlines lowered its sales outlook on Tuesday. The company has also fired its chief commercial officer Vasu Raja. He will leave his position next month.
American Airlines expects second-quarter unit revenue to fall as much as 6% from a year ago, compared to a previous forecast of a decline of no more than 3%. The airline also cut its adjusted earnings estimate for the period from $1.15 to $1.45 per share to a likely range of $1 to $1.15 per share.
The airline has left its competitors behind delta And United Airlines in recent months in financial performance. United Airlines later on Tuesday reiterated its expectation of second-quarter adjusted profit of $3.75 to $4.25 per share.
Executives from both airlines will speak at a Bernstein conference Wednesday morning. American Airlines CEO Robert Isom plans to discuss the airline’s plan to change its ticket distribution strategy to include bookings through its own platforms instead of third-party channels and agencies.
When asked during an earnings call in April whether American Airlines had faced resistance from corporate customers while rivals reported strong growth in business travel, Isom acknowledged that the airline may need to make changes to the system.
“Look, we still have some fine-tuning to do,” Isom said during the April call. “Undoubtedly the goal here is to maintain all the cost savings and then also ensure that we maximize revenue production. If we look at the first quarter, it’s very likely that our competitors gained some benefits from… the changes we made.”
Raja, who has been commercial director for just more than two years, had recently been placed on leave and an airline spokeswoman said last week that he would not be leaving the company. According to a person familiar with the matter, this has changed following internal discussions in recent days.
Previously, he served as chief revenue officer and led American Airlines’ network and alliance divisions.
Raja did not immediately respond to CNBC’s request for comment.
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Correction: This story has been updated to correct Vasu Raja’s title.
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2024-05-28 21:57:48
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