American Airlines pulls 2025 forecast as Trump tariffs cause demand uncertainty
American Airlines withdrew its 2025 financial forecast on Thursday, mirroring its peers, as concerns over discretionary budget amid tariff pressures and government spending uncertainties hinder carriers' ability to predict travel demand.
U.S. President Donald Trump's trade policies and sweeping tariffs have sparked a global trade war and raised the odds of the world spiraling into recession, making customers hesitant to spend on travel.
The economic downturn is creating headwinds for major U.S. airlines, which, just two months ago, were benefiting from strong travel demand and solid pricing across their networks.
With travel being a discretionary expense for many consumers and businesses, airlines are grappling with uncertainty around future travel demand due to unpredictable consumer behavior in a potentially deteriorating economy.
On Wednesday, Southwest Airlines, the largest U.S. domestic carrier, withdrew its financial forecasts for 2025 and 2026, citing industry-wide volatility reminiscent of the COVID-19 era.
Wall St rallies on tariff optimism, Trump eases Powell threats
Smaller rival Alaska Air also scrapped its profit outlook for the year.
American Airlines is also reeling from higher costs associated with expensive labor contracts signed last year.
The legacy carrier reported a net loss of $473 million, or 72 cents per share, for the quarter through March, compared with a loss of $312 million or 48 cents per share, a year earlier.
It had earlier forecast an annual adjusted profit per share of $1.70 to $2.70.
The airline reported a total operating revenue of $12.55 billion, down marginally from a year earlier.
Shares of the carrier were marginally down in premarket trade.
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Express Tribune
2 hours ago
- Express Tribune
Elon Musk apologizes to Donald Trump: Tesla founder humbled as he's forced to say sorry, admitting he 'went too far' in Trump-Musk feud
Elon Musk has publicly expressed regret over some of the posts he made about President Donald Trump, acknowledging that they "went too far." The remarks, posted on Musk's social media platform, X, marks the latest shift in the tumultuous relationship between the billionaire tech entrepreneur and the US president. Musk's statement of remorse follows a bitter and public exchange between the two men. I regret some of my posts about President @realDonaldTrump last week. They went too far. — Elon Musk (@elonmusk) June 11, 2025 Musk, who played a key role in Trump's 2024 election campaign, using his vast financial resources to help secure a Republican victory, had recently criticised Trump's 'One Big Beautiful Bill,' a massive tax and spending package making its way through Congress. Musk's sharp criticisms of the bill and his departure from his government role sparked a fiery response from Trump. Trump, speaking to reporters in early June, expressed his disappointment with Musk, saying, "Elon and I had a great relationship. I don't know if we will anymore." He also took to Truth Social, accusing Musk of "going CRAZY!" and suggesting the termination of Musk's government subsidies and contracts. In response, Musk accused the Trump administration of suppressing the release of the so-called Epstein Files, and he supported calls for Trump's impeachment. These posts have since been deleted. The social media feud came to a head when Trump declared their relationship over. Trump appeared to soften his stance on Monday, stating, 'I wish him well,' adding that he would not have a problem with Musk calling him. While Trump hinted that he may move his Tesla off-site, he made it clear that the Starlink service provided by Musk's SpaceX would remain in use at the White House. Musk's statement of regret, without specifying which posts he was referring to, indicates a potential de-escalation in tensions. Shares of Tesla rose by 2.7% following Musk's post, according to local media reports. While the two powerful men's public feud has sparked intense debate, Musk's apology suggests that he may be open to repairing his relationship with the President, despite their differences over policy and the handling of the recent protests.
Express Tribune
4 hours ago
- Express Tribune
US-China reach trade agreement to ease rare earth export curbs
Chinese Vice Premier He Lifeng leaves Lancaster House, on the second day scheduled for trade talks between the U.S. and China, in London, Britain, June 10, 2025. Photo:REUTERS Listen to article US and Chinese officials said on Tuesday they had agreed on a framework to put their trade truce back on track and remove China's export restrictions on rare earths while offering little sign of a durable resolution to longstanding trade differences. At the end of two days of intense negotiations in London, US Commerce Secretary Howard Lutnick told reporters the framework deal puts "meat on the bones" of an agreement reached last month in Geneva to ease bilateral retaliatory tariffs that had reached crushing triple-digit levels. But the Geneva deal had faltered over China's continued curbs on critical minerals exports, prompting the Trump administration to respond with export controls of its own preventing shipments of semiconductor design software, aircraft and other goods to China. I will be disappointed if it's true 'Rare Earth Export Curbs Lifted'. Global security from expanded wars of the waning US hegemon depends on those curbs. — Kathleen Tyson (@Kathleen_Tyson_) June 11, 2025 Lutnick said the agreement reached in London would remove some of the recent US export restrictions, but did not provide details after the talks concluded around midnight London time (2300 GMT). "We have reached a framework to implement the Geneva consensus and the call between the two presidents," Lutnick said. "The idea is we're going to go back and speak to President Trump and make sure he approves it. They're going to go back and speak to President Xi and make sure he approves it, and if that is approved, we will then implement the framework." In a separate briefing, China's Vice Commerce Minister Li Chenggang also said a trade framework had been reached in principle that would be taken back to US and Chinese leaders. The dispute may keep the Geneva agreement from unravelling over duelling export controls, but does little to resolve deep differences over Trump's unilateral tariffs and longstanding US complaints about China's state-led, export-driven economic model. The two sides left Geneva with fundamentally different views of the terms of that agreement and needed to be more specific on required actions, said Josh Lipsky, senior director of the Atlantic Council's GeoEconomics Center in Washington. "They are back to square one but that's much better than square zero," Lipsky added. The two sides have until August 10 to negotiate a more comprehensive agreement to ease trade tensions, or tariff rates will snap back from about 30% to 145% on the US side and from 10% to 125% on the Chinese side. Investors, who have been badly burned by trade turmoil before, offered a cautious response and MSCI's broadest index of Asia-Pacific shares outside Japan rose 0.57%. "The devil will be in the details, but the lack of reaction suggests this outcome was fully expected," said Chris Weston, head of research at Pepperstone in Melbourne. "The details matter, especially around the degree of rare earths bound for the US, and the subsequent freedom for US-produced chips to head east, but for now as long as the headlines of talks between the two parties remain constructive, risk assets should remain supported." Lutnick said China's restrictions on exports of rare earth minerals and magnets to the U.S. will be resolved as a "fundamental" part of the framework agreement. "Also, there were a number of measures the United States of America put on when those rare earths were not coming," Lutnick said. "You should expect those to come off ... in a balanced way." I will be disappointed if it's true 'Rare Earth Export Curbs Lifted'. Global security from expanded wars of the waning US hegemon depends on those curbs. — Kathleen Tyson (@Kathleen_Tyson_) June 11, 2025 US President Donald Trump's shifting tariff policies have roiled global markets, sparked congestion and confusion in major ports, and cost companies tens of billions of dollars in lost sales and higher costs. The World Bank on Tuesday slashed its global growth forecast for 2025 by four-tenths of a percentage point to 2.3%, saying higher tariffs and heightened uncertainty posed a "significant headwind" for nearly all economies. A resolution to the trade war may require policy adjustments from all countries to treat financial imbalances or otherwise greatly risk mutual economic damage, European Central Bank President Christine Lagarde said on a rare visit to Beijing on Wednesday. Phone call helped The second round of US-China talks was given a major boost by a rare phone call between Trump and Chinese President Xi Jinping last week, which Lutnick said provided directives that were merged with Geneva truce agreement. Customs data published on Monday showed that China's exports to the US plunged 34.5% in May, the sharpest drop since the outbreak of the COVID pandemic. While the impact on US inflation and its jobs market has so far been muted, tariffs have hammered US business and household confidence and the dollar remains under pressure. Lutnick was joined by US Trade Representative Jamieson Greer and Treasury Secretary Scott Bessent at the London talks. Bessent departed hours before their conclusion to return to Washington to testify before Congress on Wednesday. China holds a near-monopoly on rare earth magnets, a crucial component in electric vehicle motors, and its decision in April to suspend exports of a wide range of critical minerals and magnets upended global supply chains. In May, the US responded by halting shipments of semiconductor design software and chemicals and aviation equipment, revoking export licences that had been previously issued. China, Mexico, the European Union, Japan, Canada and many airlines and aerospace companies worldwide urged the Trump administration not to impose new national security tariffs on imported commercial planes and parts, according to documents released Tuesday. Just after the framework deal was announced, a US appeals court allowed Trump's most sweeping tariffs to stay in effect while it reviews a lower court decision blocking them on grounds that they exceeded Trump's legal authority by imposing them.
Business Recorder
4 hours ago
- Business Recorder
Zara owner Inditex's early summer sales disappoint as tariffs fuel uncertainty
MADRID: Zara owner Inditex missed expectations for first-quarter sales and early summer trading on Wednesday, as tariff fallout complicated the fast-fashion retailer's efforts to maintain strong growth. Concerns about resurgent inflation and an economic slowdown triggered by U.S. President Donald Trump's erratic tariff rollout have already dampened shopping enthusiasm in the United States and other major consumer markets. Inditex's competitors have also experienced a sluggish spring. The company reported a slower start to its summer sales, with currency-adjusted revenue growth of 6% from May 1 to June 9, compared to analysts' expectations of 7.3%, and down from 12% growth in the same period a year ago. Revenues for its first quarter ending April 30 were 8.27 billion euros ($9.44 billion), missing analysts' average estimate of 8.36 billion euros, according to an LSEG poll. Net income increased 0.8% in the quarter, to 1.3 billion euros. Inditex shares were down 4% in early trading, making it the second-worst performer on the Stoxx 600 index. Inditex did not provide a reason for the weaker sales growth. In a statement, it called its performance 'solid', having labelled it 'very robust' at its previous results announcement in March, when annual sales were up 10.5%. 'Overall weaker sales growth is a combination of demand volatility in Q1, but we need to take a step back and look at mid single-digit growth as actually being quite good in this environment,' said Bernstein analyst William Woods. Inditex rival H&M's sales have also struggled, growing by just 1% in March compared to 4% in the same period a year earlier. Its December-February revenue grew by 2%, below analyst forecasts. Rainy weather in Spain, which accounts for 15% of Inditex's global sales, has also likely hurt the company's performance, according to Bernstein analysts. The Dow rose a quarter of one percent, the S&P 500 added half a percent, Spain experienced one of its wettest ever springs, with Madrid recording three times its usual levels of rainfall for the season. With volatility in foreign exchange markets driven by trade risks, Inditex said currency fluctuations will have a bigger impact than previously expected, predicting a 3% negative effect on its 2025 sales, compared with the 1% it flagged in March.
