(New York) Shares of American Airlines fell sharply on the New York Stock Exchange on Wednesday as the airline lowered its second-quarter earnings forecast and acknowledged marketing mistakes.
AAL stock slipped 13.54% to $11.62, its lowest since November 2023 and dragged the travel sector with its fall.
Southwest lost 3.81%, Delta fell 0.76%. The cruise line Carnival returned 2.75%.
Late Tuesday, American Airlines sharply cut its earnings per share outlook to between $1 and $1.15 for the second quarter from a previous target of $1.15 to $1.45.
Its quarterly turnover should fall by 5% to 6% over one year.
The company will also part ways in June with its commercial director Vasu Raja, in this position since 2022 after a career of two decades in the company.
He was the one who implemented a new sales and distribution strategy after COVID-19. Measures which proved to be a failure and caused the company to lose reservations.
As a result, American Airlines lost business travel customers to its rivals by taking several counter-current initiatives such as pushing direct bookings on its site rather than through agencies that companies were accustomed to using. .
“We’re going to make big changes,” CEO Robert Isom promised at an industry conference Wednesday. “I am certain that we can reclaim what we have sown for others. They’re taking advantage of what we’ve done over the last six months. We’re going to get that back,” he said.
The company intends to change its strategy. In particular, it will stop providing loyalty points (“miles”) only to those who book only on its site.
“Sometimes we need a reset. This is what we are going to do,” summarized the boss of the airline.