American Airlines held its Q1 2025 earnings call earlier today. While there wasn’t anything that defied expectations, there were a few interesting items of note from the Fort Worth based carrier.
American Lost Almost Half a Billion Dollars in Q1 2025
American Airlines finished the first-quarter with revenue totaling $12.6 billion. Total unit revenue was essentially flat when compared to the first quarter of 2024, rising 0.7%. The slight rise was attributed to growth in international unit revenue, which rose 2.9% year over year. This comes as the airline saw year over year capacity tick down slightly, dropping 0.8%.
The airline also saw growth in premium and loyalty revenue. However, it still has some work left to do to restore revenue in indirect channels as it attempts to rebuild its corporate travel business.
Economic uncertainty offset the airline’s modest gains as leisure travel demand was pressured. The tragic collision between American Eagle Flight 5342 and an Army Blackhawk helicopter also took a toll on the carrier’s financials.
American Airlines CEO Robert Isom said this about the airline’s Q1 earnings:
“The actions American has taken over the past several years to refresh our fleet, manage costs and strengthen our balance sheet position us well for the uncertainty our industry is facing. The resiliency of the American Airlines team, combined with the investments we have made to differentiate our network, product and customer experience, give us extreme confidence in our ability to navigate the current environment and deliver strong results for the long term.”
Market Uncertainty Causes American to Pull Full-Year Guidance
While the numbers weren’t great, anytime you lose half a billion dollars it’s cause for concern, it was mostly in-line with investor expectations. American has indicated it expects its second-quarter 2025 adjusted earnings per diluted share to be between $0.50 and $1.00. However, due to market uncertainty, American has declined to provide guidance past Q2 2025.
This is notable as American typically makes up for first quarter losses with strong earnings during the busy summer travel season. The carrier has much smaller margins than its competitors, specifically United and Delta, so this market uncertainty will hurt American more than its competitors.
American isn’t alone in removing full year guidance as a result of market uncertainty. Southwest Airlines, which is having some issues as it attempts to reinvent itself, also pulled full year guidance and stated that it will cut flights as a result of decreased travel demand.
It’s definitely an interesting time for the airline industry and financial markets as a whole. I’m hoping that many of the market issues get resolved shortly and we can see some stability return for air carriers.
Summary
American Airlines released its first quarter earnings this week and, while the numbers were somewhat aligned with investors expectations, it still lost roughly half a billion dollars. The airline also removed full year guidance due to the current market uncertainty.