American Airlines Group Inc. (NYSE: AAL), opened this morning in the red after warning that it could lose up to 40 cents per share for its first quarter. This is significantly more than the analysts’ forecast of only 4 cents.
In an interview with CNBC, Robert Isom, the chief executive of the flagship airline, expressed a positive outlook for the coming year.
CEO Isom is still optimistic, mainly because the airline has “been able to get labour contracts done”, which means cost certainty for the remainder of 2025.
Despite today’s drop, American Airlines shares are up more than 100 percent from their August low.
AAL chart TradingView
American Airlines reported record revenues for Q4
Robert Isom anticipates that labour-related costs will remain well below the cost of inflation during the second half of this year.
On CNBC’s “Squawk box”, he expressed optimism regarding the efficiency of the carrier and said that the revenue background suggests continued momentum going forward.
American Airlines expects a 4.0% revenue increase on a capacity that is expected to remain flat or even decline in Q1.
The flagship airline reported record revenue and cash flow for its fourth fiscal quarter, which easily exceeded Street estimates on Thursday.
AAL does not pay a dividend at this time.
AAL is rapidly regaining its share of corporate travel
American Airlines works closely with travel management companies and businesses to help it regain its market share in corporate travel.
CEO Isom said in an interview with CNBC today that the airline plans to increase its premium seating by as much as 20% over the next 2 years to boost its revenue growth.
He expects that AAL’s strong cash flow will make it easier to strengthen its balance sheets and achieve its debt reduction “one whole year earlier”.
The new credit card agreement between the airline and Citi “is really big” when we look to 2026, said the chief executive.
Wall Street has given American Airlines a consensus rating of “overweight”.
Analysts expect it to rise by an average of $21 at the time of writing.
What Trump 2.0 means for American Airlines
Robert Isom, the chief executive of American Airlines, expects Donald Trump’s return to the White House will be a positive development for the airline industry.
He praised the Republican leader for his quick response to the pandemic in his first term and said that the Trump administration “understands how important airlines are to the economy as a whole.”
He expects that the new government will make long-term investment in the transportation sector, and will focus on ensuring a more favourable regulatory environment for air carriers.
In the earnings release, he told the investors that AAL was “well-positioned” because of its network, co-branded loyalty cards, fleet and operational reliability and the work of his team.
This post Why American Airlines Q1 guidance might not be as concerning it seems may be updated as updates unfold
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