First read is on us.

Subscribe today to keep up with the latest travel industry news.

American Airlines’ Outlook Falls Short as It Expects Rising Costs


The tail of an American Airlines aircraft

Skift Take

American said it was anticipating higher costs driven by lower capacity and expensive labor contracts to dampen its first-quarter outlook.
Summarize this story

Select a question above or ask something else

Summarize this story

American Airlines is still trailing its rivals Delta and United. 

The carrier reported record revenues of $13.66 billion and a profit of $590 million for the fourth quarter, but it is projecting a loss for the first quarter, partially due to rising costs. The increase in these costs are driven by lower capacity, which American expects to fall by as much as 2%, more regional jet flying, and expensive labor contracts. 

The carrier’s outlook contrasts from Delta’s and United’s, both of which are expecting record first quarters. Delta CEO Ed Bastian said he expects 2025 to be the company’s “best financial year in our history.”

American is also still recovering from a botched distribution strategy that involved selling tickets directly. The strategy garnered significant backlash from travel agencies, many of which filed complaints to the Department of Transportation, arguing that the practice was anticompetitive. 

The strategy was also harmful for American’s corporate revenues. Carriers like Delta, United and Alaska Airlines have enjoyed an uptick in business travel during the past year, fueled by the tech and financial services industries. 

However, CEO Robert Isom said on a call with analysts Thursday that the carrier was starting to see “sequential gains in corporate revenue share.”

American also inked a new credit card deal with Citi in December, which Isom said he expects to “drive substantial incremental value” to the carrier. 

The airline earned $6.1 billion in remuneration from its credit card partners in 2024, a 17% increase from the year before. 

Airlines Sector Stock Index Performance Year-to-Date

What am I looking at? The performance of airline sector stocks within the ST200. The index includes companies publicly traded across global markets including network carriers, low-cost carriers, and other related companies.

The Skift Travel 200 (ST200) combines the financial performance of nearly 200 travel companies worth more than a trillion dollars into a single number. See more airlines sector financial performance

Read the full methodology behind the Skift Travel 200.

Up Next

Experiences

How Travel Brands Can Seize the ‘Q5’ Opportunity on TikTok

Driven by increased spending on experiences and the digital habits of younger audiences, TikTok has emerged as a key platform for inspiring and shaping travel decisions. Leveraging the platform’s reach early in the year presents a unique opportunity for travel brands to connect with eager travelers.
Sponsored
Short-Term Rentals

Inside the Vacasa Bidding War — The Unfolding Battle

With Davidson Kempner's latest bid for Vacasa at $5.83 per share and the Vacasa board-endorsed bid from Casago at $5.30 per share, one thing is certain — this is not the end of the story.