American Airlines passenger planes queue at the gates at the John Paul II National Airport. Ronald Reagan in Washington in Arlington, Virginia, on February 10, 2024.
J. David Ake | Getty Images
American airlines lowered its sales outlook on Tuesday. The company also fired its chief commercial officer, Vasu Raja. He will leave his position next month.
American Airlines said it expects second-quarter unit revenue to decline as much as 6% from a year earlier, compared with its previous forecast of a decline of no more than 3%. The carrier also lowered its adjusted earnings estimates for the period to a projected range of $1 to $1.15 per share, down from a prior range of $1.15 to $1.45 per share.
The airline has caught up with its rivals Delta AND United Airlines in recent months in financial results. United Airlines on Tuesday maintained its expectation of second-quarter earnings per share of an adjusted $3.75 to $4.25.
On Wednesday morning, the directors of both carriers will speak at a conference in Bernstein. American Airlines CEO Robert Isom plans to discuss the carrier’s plan to modify its ticketing strategy to direct bookings to its own platforms rather than to third-party channels and agencies.
Asked on an April earnings call whether American Airlines had faced resistance from corporate customers as competitors reported significant growth in business travel, Isom acknowledged the carrier may have to make changes to the system.
“Look, we still have some work to do,” Isom said in an April phone call. “Without a doubt, the goal is… to maintain all the cost savings and then make sure that we are maximizing revenue generation. When we look at the first quarter, it’s quite likely that our competitors saw some benefits because of some of the changes we made.”
Raja, who has served as chief commercial officer for just two years, was recently on leave, and a spokeswoman for the carrier said last week that he was not leaving the company. That changed after internal discussions over the past few days, according to a person familiar with the matter.
He previously served as chief revenue officer and led American Airlines’ network and alliances divisions.
Raja did not immediately respond to CNBC’s request for comment.
Correction: This story has been updated to correct the title of Vasu Raja.
