- American Airlines slashed its sales outlook on Tuesday and now expects unit revenues to fall as much as 6% in the second quarter from a year earlier.
- The company has also let go of its chief commercial officer, Vasu Raja.
- The airline has trailed rivals Delta and United in recent months.
American Airlines slashed its sales outlook on Tuesday. The company has also let go of its chief commercial officer, Vasu Raja. He will leave his position next month.
American Airlines said it expects unit revenues to fall as much as 6% in the second quarter from a year earlier, down from a previous forecast of a decline of no more than 3%. The carrier also trimmed its adjusted earnings estimate for the period to a projected range of $1 to $1.15 a share, down from a prior range of $1.15 to $1.45 a share.
The airline has trailed rivals Delta and United Airlines in recent months in financial performance. United Airlines later on Tuesday reiterated its expectation to earn an adjusted $3.75 to $4.25 per share in the second quarter.
Executives from both carriers will present at a Bernstein conference Wednesday morning. American Airlines CEO Robert Isom plans to discuss the carrier’s plan to modify its ticket distribution strategy in favor of driving bookings to its own platforms instead of third-party channels and agencies.
When asked during an April earnings call whether American Airlines had been receiving pushback from corporate customers while rivals reported strong business travel growth, Isom admitted that the carrier could have to make changes to the system.
“Look, we’ve got some fine-tuning to do,” Isom said during the April call. “No doubt the objective here is … to hang on to all the cost savings and then also to make sure that we maximize revenue production. As we take a look at the first quarter, there’s quite likely some benefit that our competitors received because of some of … the changes that we’ve made.”
Raja, just more than two years into his role as commercial head, had been on leave recently, and a spokeswoman for the carrier said last week that he was not 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 American Airlines’ network and alliances departments.
Raja did not immediately respond to CNBC’s request for comment.
Correction: This story has been updated to correct Vasu Raja’s title.
Source: Business - cnbc.com
