American Airlines Withdraws 2025 Guidance Amid Economic Uncertainty

American Airlines (AAL.US) has withdrawn its 2025 earnings guidance, becoming the latest company to struggle with economic uncertainty that makes it difficult to predict annual performance. The airline, in its first-quarter earnings report, stated that it would "provide an updated full-year forecast once the economic outlook becomes clearer." In January, the company had forecasted an adjusted earnings per share of $1.70 to $2.70 and revenue growth of 4.5% to 7.5%.

The dual pressures of tariff policies and uncertain government spending have challenged consumers' disposable budgets, making it difficult for airlines to accurately predict future travel demand. Previously, Delta Air Lines (DAL.US) and Frontier Airlines' parent company also withdrew their 2025 guidance. The trade policies and comprehensive tariff measures implemented by former U.S. President Trump have sparked a global trade war, increasing the risk of a global economic recession and causing consumers to adopt a wait-and-see attitude towards travel spending.

Economic downturns are now posing challenges for major U.S. airlines, which had previously benefited from strong travel demand and stable ticket pricing. Travel consumption, being discretionary for most individuals and businesses, casts a shadow over the aviation industry's prospects as economic concerns intensify. Delta Air Lines noted earlier this month that declining consumer and business confidence has led to stagnant revenue growth. United Airlines (UAL.US) issued a rare dual earnings forecast last week, outlining scenarios for both stable and recessionary economic conditions.

Uncertain economic prospects are not limited to the aviation sector. Major corporations such as Citigroup (CMA.US) and UnitedHealth Group (UNH.US) have also lowered their full-year expectations. American Airlines is also grappling with operational pressures from high-cost labor agreements signed last year. The company warned in March that an incident involving a collision between a passenger plane and a military helicopter near Washington, D.C., along with other aviation events, has put pressure on demand.

The company reported a net loss of $473 million (or $0.72 per share) for the first quarter, widening from a loss of $312 million (or $0.48 per share) in the same period last year. The adjusted loss per share was $0.59, better than the expected $0.69 loss, primarily due to the continued strong performance of international routes and premium travel demand. For the second quarter, the company expects an adjusted earnings per share of $0.50 to $1.00, with a midpoint significantly lower than analysts' expectations of $0.96. Revenue is projected to change by -2% to +1% year-over-year, compared to the previous market expectation of a 2% increase.