By Shivansh Tiwary
(Reuters) -American Airlines pulled its 2025 financial forecast on Thursday, mirroring its peers, as growing consumer apprehension over an escalating trade war results in carriers facing a level of uncertainty not seen since the COVID-19 pandemic.
Economic uncertainty can impact non-essential spending such as travel as consumers turn cautious amid fears of recession from U.S. President Donald Trump’s fluctuating trade policies.
This has created a fresh headache for major U.S. airlines, which just two months ago were riding a wave of strong travel demand.
"The economic uncertainty in the market has pressured demand and impacted American’s first-quarter results and second-quarter outlook," American Airlines (NASDAQ: AAL ) CEO Robert Isom said.
The carrier joined peers Southwest Airlines (NYSE: LUV ) and Alaska Air (NYSE: ALK ) to withdraw their annual forecasts, following similar moves by Delta Air and Frontier earlier this month.
United Airlines recently gave two different forecasts and factored in an economic recession into one of them, saying it was impossible to predict the macroeconomic environment this year.
Isom joined other industry executives to urge the elimination of aerospace-related tariffs, stating, "aircraft already cost too much".
The airline, which is reeling with higher costs tied to expensive labor contracts, said it has no intention of absorbing tariff-related costs and does not expect its customers to bear them.
It forecast its second-quarter adjusted profit per share in the range of 50 cents to $1, compared with analysts’ expectations of 99 cents, according to data compiled by LSEG.
In the first quarter, it reported an adjusted loss of 59 cents per share, smaller than Wall Street’s expectations of 65 cents.
The smaller-than-expected loss offered some relief to the carrier’s shares, which have lost 46% of their value so far this year. They were up 1.6% in morning trade.
The airline reported a total operating revenue of $12.55 billion, down marginally from a year earlier.