American Airlines (AAL) stock slumped 6% on Thursday as the carrier echoed a trend seen with its peer Southwest (LUV) — weaker-than-expected domestic travel last quarter.
“July has been tough, really hit hard by the uncertainty during the primary booking period,” American CEO Robert Isom said during the company’s earnings call on Thursday morning.
The airline pointed out domestic revenue declined about 6% year over year over year in the three-month period ending in June. However, the company expects that July will be the low point and that performance will improve sequentially month over month. In other words, American’s financials will recover during the second half of the year.
“Let’s face it, 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,” Isom said
American said it expects a loss per share between $0.10 and $0.60 during the current quarter and earnings for 2025 in a range between a loss of $0.20 and a gain of $0.80 per share.
Read more about American’s stock moves and today’s market action.
The airline reinstated its guidance after pulling it in April, along with the other major carriers, following President Trump’s broad-based tariff policy.
Despite posting record quarterly revenue of $14.4 billion, American’s outlook diverges from the more bullish forecasts from Delta (DAL) and United (UAL).
Part of the reason is that American has more domestic destinations and flights than its two biggest rivals. Airlines have been leaning into meeting demand from international routes, as well as premium seats, which command higher ticket prices.
Meanwhile, Southwest stock plunged 10% on Thursday after the carrier issued a trimmed pre-tax profit outlook of $600 million to $800 million in 2025 — as much as $1 billion less than previously anticipated.
“We saw some uncertainty that came in and demand fell off quite quickly during that period,” Southwest CFO Tom Doxey told Yahoo Finance on Thursday morning. “The speed with which that came down was one of the faster reductions in revenue that we’ve seen in years across the industry.”
“The great news is we’re starting to see that stabilize,” Doxey added. “As tariffs and other things are starting to solidify a bit, you’re starting to see that spending change,” creating a potential tailwind for the airline in the second half of the year.
Ines Ferre is a Senior Business Reporter for Yahoo Finance. Follow her on X at @ines_ferre.
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