American Airlines raises 2025 profit forecast due to capacity cuts, Fares, EttravelWorld

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U.S. airlines raised their 2025 earnings forecast on Thursday, saying they are beginning to pass on price gains following industry-wide capacity cuts after a demand slump earlier this year.

The company’s shares closed down 6 percent after rising nearly 8 percent in intraday trading.

Economic uncertainty, barring President Donald Trump’s sweeping tariffs, led to a slow slowdown in domestic travel earlier this year, shutting down room and forcing it to cut fares to fill seats.

Since then, major carriers have stepped up their efforts to regain pricing power and protect margins. Many carriers are seeing stronger domestic demand, while premium continues to exhibit high-margin sacrifices. The Fort Worth, Texas-based carrier said the offer, a key measure of its ability to charge more for the locations it offers, is key to more charging capacity compared to a return to positive growth, which improved sequentially in the quarter.

By the end of the year, the carrier expects to fully recover the share of indirect income, which was affected by the previous sales strategy, which reduced the prioritized, perks and discounts of contracts interested in corporate travel agencies and customers.

On Thursday, the carrier also named Nathaniel Piper, a global alliance of some major international airlines, as chief commercial officer, effective Nov. 3.

American Airlines, a sharp turnaround from 65 cents to 95 cents a share in the range of 65 cents, to a profit of 20 cents, to a profit of 80 cents

For the September quarter, the US carrier reported a smaller-than-expected adjusted loss per share. Analysts had expected a loss of 28 cents, according to data compiled by LSEG.

On Wednesday, domestic peer Southwest reported a surprise profit, helped by an improvement in travel bookings.

America’s total operating income rose marginally to about $13.69 billion, beating expectations of $13.63 billion.

Premium Services Rule High-margin luxury services, meanwhile, have remained strong as affluent travelers continue to pay extra for a more comfortable journey. Airlines have been hedging their bets on premium services since the pandemic.

“Year-over-year award unit revenue continues to outpace basic cabin,” American reported Thursday.

The carrier also outlined its plans as market entities are employed to close the margin gap with rivals and Delta Air Lines. Perfect Cabin will continue to invest in airport infrastructure, including expanding award seating and new lounges and other facilities, at the pace of the seats.

“We recommend American’s results and see them as another indication of the importance of award cabin and loyalty revenues,” noted TD Cowen’s Tom Fitzgerald.

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