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Boston Globe
7 days ago
- Business
- Boston Globe
40 percent of workers see wage growth lagging inflation, study finds
Get Starting Point A guide through the most important stories of the morning, delivered Monday through Friday. Enter Email Sign Up AVIATION Advertisement AI air fare pricing is a 'bait-and-switch' says American Airlines CEO American Airlines Group Inc.'s top executive blasted the use of artificial intelligence in setting air fares, calling the practice inappropriate because it could trick travelers. 'Consumers need to know that they can trust American,' chief executive Robert Isom said on a call with analysts after the company reported earnings. 'This is not about bait-and-switch. This is not about tricking.' Isom's criticism of the practice echoes several members of the Congress, who are pushing for answers from Delta Air Lines Inc. on its plans to use AI to help set pricing on as much as 20 percent of its network by the end of this year. Delta said this month that it's still in the testing phase that involves about 3 percent of the network today. Delta says it's testing AI to eliminate manual processes and accelerate analysis for dynamic pricing, a strategy long used by airlines and others to raise or lower fares based on demand, timing, and other factors. It is not using the technology to target customers using personal data, and all customers see the same fares in all retail channels, the carrier said in a statement. 'There is no fare product Delta has ever used, is testing or plans to use that targets customers with individualized offers based on personal information or otherwise,' according to the statement from the airline. 'A variety of market forces drive the dynamic pricing model that's been used in the global industry for decades, with new tech simply streamlining this process.' American is using AI to improve airline operations and recovery from service interruptions and to make it easier for consumers to work with the carrier, Isom said. Employing it in pricing decisions 'is not something we will do,' he said, adding that 'some of the things I've heard are just not good.' — BLOOMBERG NEWS Advertisement MARKETS Advertisement Even as stocks set record, JP Morgan is bullish there are better days to come. The S&P 500 Index's record-setting spree may be stoking concerns about inflated share prices and a revival of meme-stock froth, but JPMorgan Chase & Co.'s trading desk isn't concerned. Rather, it expects the furious rally in US equities to keep going. 'While bullishness is not yet consensus, client conversations reveal that even those that skewed bearish are throwing in the towel,' the bank's head of global market intelligence Andrew Tyler said Thursday in a note ahead of the market open. Recent progress in trade deals, positive economic data, and rekindling mergers and acquisitions activity should keep powering the stock market, according to Tyler. From a technical standpoint, the rally is also being supported by the combination of the momentum unwind and meme mania making it difficult for traders to hold short positions. The market could even 'take a significant step higher' if macroeconomic data holds up and the impending trade deal between the United States and Europe is sealed with China following closely behind, Tyler said. — BLOOMBERG NEWS AUTOMOTIVE Tesla profits slip again amid ongoing slump in EV sales Tesla on Wednesday reported a slump in profit, the third quarterly decline in a row, as the company cut car prices in an attempt to revive sales. The company made $1.2 billion from April to June, down from $1.4 billion a year earlier. Sales fell to $22.5 billion from $25.5 billion in the second quarter of 2024. Tesla has not reported an increase in quarterly profit since the third quarter of 2024. Tesla's weak earnings are likely to reinforce concern among some investors that CEO Elon Musk is neglecting the car business while he focuses the company's resources on autonomous driving software, self-driving taxis, and humanoid robots. Musk has said those technologies will make Tesla the most valuable company in the world. Tesla has begun testing a limited self-driving taxi service in Austin, Texas, and said Wednesday it would expand the service 'rapidly.' Wall Street has largely bought into that vision, and the company's share price is up about 50 percent since early April. But such taxis and robots are not yet generating significant revenue for Tesla, and the company remains reliant on the car business to finance Musk's futuristic plans. — NEW YORK TIMES Advertisement BIG TECH Alphabet earnings surge on growth in AI Whether Google will be a winner in the race for dominance in artificial intelligence won't be clear for at least a year or two. In the meantime, its bottom line is doing just fine. Alphabet, Google's parent company, reported second-quarter results Wednesday afternoon that were better than expected. Revenue rose 14 percent from a year earlier to $96.4 billion, while earnings per share jumped 22 percent to $2.31. Analysts had expected revenue of $93.98 billion and earnings per share of $2.20. 'We are leading at the frontier of AI,' said Sundar Pichai, the company's chief executive. Pichai, who mentioned AI more than a dozen times in his commentary on the quarter, added, 'AI is positively impacting every part of the business.' Investors appeared underwhelmed by the quarterly results. Alphabet shares rose less than 2 percent on the news. One apparent problem: Capital expenditures for the year will be $10 billion higher than the company had projected, it said, because of its booming cloud storage business. Even for Google, the new estimate of $85 billion is real money. A few years ago, Google was spending about a quarter of that sum. Investors want the company to pour enough into new data centers to have competitive cloud and AI businesses but not so much that it affects lush profit margins. That's a difficult balancing act. — NEW YORK TIMES Advertisement
Travel Weekly
7 days ago
- Business
- Travel Weekly
American's Q2: Travel agency sales rebound is continuing
American Airlines says it has recovered close to three-quarters of the sales revenue share that it lost when it was aggressively pushing to drive bookings to its website, app and NDC-enabled channels. American has estimated that strategy, under which it pulled more than half of its fares out of the legacy GDSs and slashed corporate and agency sales support in 2023 and early 2024, cost it $1.5 billion in revenue last year. It also said that its industry share of indirect-sales revenue was down 11% from its historical average at its nadir, during the second quarter of last year. But for the second quarter that ended in June 2025, American's indirect sales share was off just 3% from its historical average, the carrier said. "We're really pleased with our performance getting back on track," CEO Robert Isom said during the airline's call Thursday to discuss its Q2 results. The improvement began after the airline abruptly reversed its strategy in late May of last year. Since then, American has re-engaged with corporations and the corporate and leisure agency communities by revamping its sales division with substantial hirings of account managers and sales staff. It also restored content to the GDSs. And American has made several customer-friendly changes to its AAdvantage Business program for small and midsized companies. Isom said American's corporate sales were up 10% in the second quarter, a number that compares favorably to the low single-digit increase reported by corporate travel juggernaut Delta. American said it expected to be down 2% from its historical indirect sales share in the current quarter and predicted it will achieve a full recovery by the end of the year. "I do believe the last few percentage points -- going to be hard," Isom said. "But I also think they're going to be the most profitable points we bring in." He said the airline believes it can eventually push ahead of its historical share level. American's Q2 results, by the numbers For the quarter, American reported net income of $599 million. Operating revenue was $14.4 billion, up 0.4% year-over-year and $110 million better than analyst expectations, according to the investment site Seeking Alpha. Operating expenses were up 2.4% year-over-year. American reported a pretax operating margin of 5.8% on operating income of $1.14 billion. American is guiding toward an operating margin for the current quarter of between -1% and 2%. Executives said that the carrier has been hurt more than United and Delta by the weak prices this year for domestic economy tickets due to its outsized proportion of domestic flying. But AA said it also expects tickets prices to inch upward beginning in August as airlines collectively reduce capacity and with demand on the upswing. American Airlines stock was down nearly 8% in midday trading.
Yahoo
7 days ago
- Business
- Yahoo
American's CEO Says The Airline Won't Use AI to 'Bait and Switch' Ticket Shoppers
American Airlines wants you to know they aren't using AI in ways they say amount to "tricking" customers who are searching for tickets. CEO Robert Isom on a conference call Thursday said American Airlines Group (AAL) will use artificial intelligence to operate more efficiently and showcase amenities to customers. But "some of the things I've heard are just not good," he said in response to a question about using AI to help determine ticket pricing. 'Consumers need to know that they can trust American, okay? This is not about bait and switch. This is not about tricking,' Isom said, according to a transcript made available by AlphaSense. 'Others that talk about using AI in that way—I don't think it's appropriate.' Neither Isom nor the reporter who raised the question named Delta Air Lines (DAL), but the comparison seemed inescapable. Delta has said it would increasingly use AI to identify the highest prices it can charge without losing sales, according to President Glen Hauenstein, citing "amazingly favorable" results. The carrier plans to deploy technology offered by Israeli company Fetcherr on 20% of domestic flights by the end of the year, Hauenstein said this month. "There is no fare product Delta has ever used, is testing, or plans to use that targets customers with individualized offers based on personal information or otherwise.," Delta spokesman Andrew Post told Investopedia. "A variety of market forces drive the dynamic pricing model that's been used in the global industry for decades, with new tech simply streamlining this process." AI aside, the airlines are adopting similar strategies. American, like Delta, is prioritizing the higher income customers who tend to buy premium tickets amid sluggish main cabin sales. American plans to increase its premium capacity by 50% over the next five years and expand its international service, Isom said. Meanwhile, the carrier is reducing domestic capacity. American shares were recently down 8%, and have lost about one-third of their value so far this year. Read the original article on Investopedia Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Reuters
24-07-2025
- Business
- Reuters
American Airlines forecasts wide range due to economic uncertainty
July 24 (Reuters) - American Airlines (AAL.O), opens new tab restored its full-year financial outlook on Thursday but offered a wide range of forecast, citing broader economic uncertainty that is hobbling consumer spending on travel in the domestic market. The Fort Worth, Texas-based carrier expects an adjusted loss of 20 cents a share to a profit of 80 cents a share in 2025. The midpoint of the forecast is 30 cents per share, compared with analysts' average estimate of 61 cents a share, according to LSEG data. American, which generates more than two-thirds of its passenger revenue from the U.S. domestic market, said if domestic travel demand continues to strengthen, it expects to hit the top end of its outlook. But if the economy weakens, it only expects to be at the bottom end of the forecast. "The domestic network has been under stress because the uncertainty in the economy and the reluctance of domestic passengers to get in the game," CEO Robert Isom told analysts on an earnings call. American's shares fell more than 9% in morning trade. The company's outlook contrasts with upbeat forecasts of rival Delta(DAL.N), opens new tab and United Airlines(UAL.O), opens new tab. Alaska Air Group(ALK.N), opens new tab has also reported improvements in passenger traffic and pricing power. American said tepid domestic travel demand impacted its bookings in July. Isom, however, said the performance is expected to improve sequentially in August and September. "We expect that July will be the low point," he said. Still, the company expects its domestic unit revenue, or revenue generated from each seat, to remain lower year-over-year in the third quarter. Its non-fuel operating costs are estimated to be up as much as 4.5% in the September quarter. American expects an adjusted loss per share in the range of 10 cents to 60 cents in the third quarter, compared with analysts' estimates of a loss of 7 cents, according to data compiled by LSEG. Most U.S. airlines withdrew their financial forecasts in April as President Donald Trump's trade war created the biggest uncertainty for the industry since the COVID-19 pandemic. While some have reinstated their expectations, there is lingering uncertainty as to how the economy will fare in an ever-evolving tariff landscape. Demand in the domestic travel market has remained subdued with budget travelers approaching their plans with caution, hurting carriers that primarily service the U.S. domestic market and price-sensitive customers. Even summer, typically the peak money-making season for airlines, is falling short this year, with unsold standard economy seats forcing carriers to cut fares. It dented the second-quarter earnings of Southwest Airlines, the largest U.S. domestic airline. At American, domestic market was the weakest in the second quarter, with its unit revenue declining 6.4% from a year ago. The company's unit revenue in international markets was up, led by a 5% annual jump in the transatlantic market. The U.S. carrier reported an adjusted profit of 95 cents per share for quarter ended June 30, compared with 78 cents a share expected by analysts.
Straits Times
21-06-2025
- Business
- Straits Times
Air India CEO's remarks after plane crash draw scrutiny
Air India CEO Campbell Wilson's remarks were criticised for being identical to one given months earlier by American Airlines CEO Robert Isom. PHOTO: ATUL LOKE/NYTIMES Mr Campbell Wilson stood before a camera last week to read a carefully worded statement about the plane operated by Air India, the company he leads, that had crashed hours earlier in Ahmedabad, India, with 242 people aboard. His remarks immediately drew criticism. Social media users said he appeared cold and lacking in empathy. Soon after that, another critique emerged: Much of Mr Wilson's speech was identical to one given five months earlier by Mr Robert Isom, CEO of American Airlines, after a deadly crash in Washington. The similarities in the two statements are striking. Mr Karthik Srinivasan, a communications consultant in Bengaluru, India, posted transcripts on social media showing that many of Mr Campbell's words had exact parallels in Mr Isom's. 'First and most importantly, I'd like to express our deep sorrow about these events,' Mr Isom said in the video published on Jan 29. On June 12, Mr Wilson began: 'First and most importantly, I would like to express our deep sorrow about this event.' 'This is a difficult day for all of us at American Airlines,' Mr Isom continued. Mr Wilson said: 'This is a difficult day for all of us at Air India.' Mr Isom said, 'I know that there are many questions, and at this early stage, I'll not be able to answer all of them. But I do want to share the information I have at this time.' Mr Wilson said exactly the same thing, except he didn't say 'early', and in one instance he used 'we' instead of 'I'. Many who responded to Mr Srinivasan's post expressed anger and distrust at the airline. The outcry over the remarks has added to the challenges facing Air India as investigators work to understand what caused its London-bound jet to crash moments after takeoff, killing all but one person on board and dozens on the ground. Public relations specialists said that it was common to see similar structures and elements in statements from companies dealing with crises. But they said it was surprising to see one copy another verbatim. Air India did not address the plagiarism accusations in a statement responding to criticism of Mr Wilson's remarks. But it acknowledged that it had drawn examples from other crashes. NYTIMES Join ST's Telegram channel and get the latest breaking news delivered to you.
