American Airlines has restored its full-year outlook despite economic uncertainty continuing to impact domestic consumer demand in the travel industry. The airline expects an adjusted loss per share of 20 cents to a profit of 80 cents per share in 2025, with the midpoint of the forecast at 30 cents per share. This contrasts with analysts’ average estimate of 61 cents per share.
“The domestic network has been under stress because of the uncertainty in the economy and the reluctance of domestic passengers to get in the game,” said CEO Robert Isom on an earnings call. American Airlines generates over two-thirds of its passenger revenue from the US domestic market, which has seen tepid demand affecting bookings in July. However, Isom expects performance to improve sequentially in August and September, saying, “We expect that July will be the low point.”
The airline’s outlook reflects broader economic uncertainty, with consumers pulling back on travel expenses. Demand in the domestic travel market remains subdued, with budget travelers approaching plans cautiously. This has forced carriers to cut fares, impacting second-quarter earnings for airlines like Southwest.
Isom’s comments highlight the challenges facing the industry, particularly in the domestic market. “If domestic travel demand continues to strengthen, we expect to hit the top end of our outlook. But if the economy weakens, we only expect to be at the bottom end of the forecast.”
American Airlines expects its domestic unit revenue to remain lower year-over-year in the third quarter, with non-fuel operating costs estimated to increase up to 4.5% in the September quarter. The company projects an adjusted loss per share in the range of 10 cents to 60 cents in the third quarter.
On Wall Street, American Airlines’ stock took a hit, dropping 7.2% from the market open. The company’s outlook contrasts with upbeat forecasts from rival Delta and United Airlines, while Alaska Air Group has reported improvements in passenger traffic and pricing power.
Most US airlines withdrew financial forecasts in April due to President Donald Trump’s trade war, creating significant uncertainty for the industry. While some have reinstated expectations, lingering uncertainty remains about the economy’s performance in an evolving tariff landscape.