American Airlines passenger planes line up at the gates of Ronald Reagan Washington National Airport in Arlington, Virginia, on February 10, 2024.
J. David Ack | Getty Images
American Airlines lowered its sales forecast on Tuesday. The company has also let go of its commercial director, Vasu Raja. He will leave his position next month.
American Airlines said it expects unit revenue to decline by up to 6% in the second quarter compared to the previous year, down from a previous forecast of a decline of no more than 3%. The carrier also trimmed its revised earnings estimates for the period to an expected range of $1 to $1.15 per share, down from the previous range of $1.15 to $1.45 per share.
The airline has lagged behind rivals Delta and United Airlines in recent months in financial performance. United Airlines later on Tuesday reiterated its forecast to earn an adjusted amount of between $3.75 and $4.25 per share in the second quarter.
Executives from both companies will attend Bernstein’s conference on Wednesday morning. American Airlines CEO Robert Isom plans to discuss the carrier’s plan to adjust its ticket distribution strategy in favor of directing bookings to its own platforms rather than third-party channels and agencies.
When asked during an April earnings call whether American Airlines had received pushback from corporate customers while competitors reported strong growth in business travel, Isom acknowledged that the carrier may have to make changes to the system.
“Look, we have some fine-tuning to do,” Isom said during the April call. “There’s no doubt that the goal here is…to stick to the cost savings and then also make sure that we’re maximizing revenue production. When we look at the first quarter, it’s very likely that there will be some benefits that our competitors have had because of some of the… The changes we made.”
Raja, who has spent just more than two years in his role as chief commercial officer, had recently been on leave, and a carrier spokeswoman said last week that he would not be leaving the company. That changed after internal discussions in the past few days, according to a person familiar with the matter.
He previously served as chief revenue officer and headed the network and alliance divisions at American Airlines.
Raja did not immediately respond to CNBC’s request for comment.
Correction: This story has been updated to correct the Vasu Raja headline.
“Infuriatingly humble alcohol fanatic. Unapologetic beer practitioner. Analyst.”