American Airlines has presented a mixed financial report, showcasing an unexpected rise in fourth-quarter profits while delivering a less optimistic outlook for the first quarter of 2025. The airline reported a notable increase in its fourth-quarter earnings per share, reaching 86 cents adjusted, surpassing analysts' expectations of 64 cents. Additionally, American Airlines' revenue for the fourth quarter totaled $13.66 billion, exceeding the forecasted $13.40 billion. However, the airline anticipates a flat to a 2% decrease in its first-quarter capacity compared to the previous year, casting a shadow over its future performance.
The airline's fourth-quarter results were particularly surprising to analysts, as they surpassed predictions both in terms of earnings and revenue. Despite this financial success, the airline's outlook for the first quarter of 2025 fell short of analysts' estimates. American Airlines forecasts an adjusted loss per share ranging from 20 cents to 40 cents for the first three months of 2025. This projection reflects a significantly wider loss than the mere 4 cents analysts had anticipated.
American Airlines attributes its conservative first-quarter forecast to current demand trends and fluctuations in fuel prices. These factors have compelled the airline to adjust its expectations as it navigates the challenges posed by the evolving market conditions. In addition to this, the airline reversed a business-travel sales strategy that had backfired last year, further impacting its projections.
The airline's financial maneuverings also included signing a new credit card deal with Citi late last year. This strategic move is expected to bolster the airline's financial standing amid the shifting landscape of the aviation industry. However, despite these efforts, analysts expressed disappointment with American Airlines' first-quarter outlook, highlighting the ongoing challenges facing the company.