What's Going On With American, United Airlines & Delta Air Lines Shares Today?

Zinger Key Points
  • American Airlines shares plummet after revising earnings forecast downwards by almost 30% and announcing departure of top executive.
  • United Airlines, Delta Air Lines witness share decline in sympathy, amid American Airlines' strategy shift towards boosting direct bookings.

American Airlines Group, Inc. AAL shares were trading lower in the premarket session on Wednesday after ending yesterday’s run on the bourses with almost a 3% dip. Shares slumped over 6% after hours.

Yesterday, the airline lowered its adjusted earnings per share forecast from $1.15 to $1.45 to a new range of $1.00 to $1.15, according to an exchange filing. Second-quarter average fuel price is now expected to be approximately $2.70 to $2.80 per gallon of jet fuel.

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The company also lowered its guidance for adjusted operating margin by 1% to a new range of approximately 8.5% to 10.5%. 

In sympathy, rival United Airlines Holdings, Inc. UAL and Delta Air Lines, Inc. DAL shares are also slumping.

United Airlines, however, reiterated its outlook in an exchange filing yesterday. The company continues to expect second quarter 2024 adjusted EPS of $3.75 to $4.25 against the consensus of $4.02.

In a press release dated April 16, United Airlines reiterated expectations for full-year 2024 adjusted earnings of $9 to $11 per share versus estimates of $10.20 per share.

Overall, American Airlines (+9.9%) has performed below rivals United Airlines (+29%) and Delta Air Lines (+37%) in the last six months.

American Airlines CEO Robert Isom intends to address the airline’s strategy shift towards directing more bookings to its own platforms rather than relying on third-party channels and agencies, CNBC reported.

In an April earnings call, Isom acknowledged the potential need for adjustments to the system when questioned about any resistance from corporate customers, especially as competitors experienced robust growth in business travel, the report added.

“Look, we’ve got some fine-tuning to do,” Isom said during the April call. “No doubt the objective here is … to hang on to all the cost savings and then also to make sure that we maximize revenue production. As we take a look at the first quarter, there’s quite likely some benefit that our competitors received because of some of … the changes that we’ve made.”

American Airlines also said its Executive Vice President and Chief Commercial Officer Vasu Raja will depart the company in June.

Stephen Johnson, vice chair and chief strategy officer, will assume leadership of the commercial organization, effective immediately, and help lead the search for a new chief commercial officer in addition to his current responsibilities.

Price Action: AAL shares were trading lower by 8.26% at $12.33, with UAL shares down by 1.07% at $50.10, and DAL shares were trading lower by 2.13% at $49.21 premarket at the last check Wednesday.

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Photo via Wikimedia Commons

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