- American Airlines (AAL) issued lackluster earnings guidance for the current quarter.
- Shares of American and rival Delta Air Lines (DAL) sank on the news.
- Delta, which was set to report earnings a day after American issued its lower outlook, plans to offer premium seating on all its aircraft.
American Airlines (AAL) shares tumbled after the carrier gave current quarter guidance that fell short of forecasts. The news sent shares of rivals lower as well.
The airline reported in a regulatory filing that it anticipates first quarter earnings per share (EPS) of between $0.01 and $0.05. That was above the previous outlook of approximately breakeven; however, it was below the $0.06 average estimate by analysts.
In addition, American expects total revenue per available seat mile (TRASM) to be up 25.5%, the midpoint of its earlier prediction of a gain of 24% to 27%.
The news comes a day before the first of the big carriers, Delta Air Lines (DAL), is set to report quarterly earnings. CEO Ed Bastian said in an interview that Delta plans to offer premium seating on all of its planes starting this summer as a hedge against a potential economic downturn. He added that the airline is hoping to attract customers who are willing to pay extra for something more than a seat.
American is expected to release its numbers on April 20.
Shares of American Airlines tumbled 9% on April 12, while Delta Air Lines shares were down 1.7%.