American Airlines shares tumbled Thursday as the carrier projected a third-quarter loss due to lingering weakness in the US leisure market.
The carrier projected a third-quarter loss of between 10 and 60 cents per share, and offered a full-year forecast range of between a loss of 20 cents and a gain of 80 cents per share.
Both of these ranges lag analyst expectations.
The forecast came as American reported a profit of $599 million in the second quarter, down 16.4 per cent from the year-ago level. Revenues rose less than one per cent, but came in at $14.4 billion, a record.
During the quarter, domestic revenues were down about six per cent, said CEO Robert Isom.
The tepid trend has continued through July, but Isom pointed to an improvement in bookings in recent weeks for travel in the coming months.
The weakness in travel was due to consumer angst earlier this year as uncertainty over President Donald Trump鈥檚 tariff policies battered equity markets.
Isom described an improvement in demand as Trump has reached trade deals and after the administration鈥檚 fiscal package was enacted, extending corporate tax cuts.
Major US equity indices are now at records.
鈥楢s we move from June to July, we鈥檙e seeing the same uptick in bookings that everyone else is seeing,鈥� Isom said. 鈥業t鈥檚 been remarkable.鈥�
Isom said the company鈥檚 third-quarter results would also be buffeted by a hit from an unusual confluence of bad weather, pointing to 5,500 weather cancellations in the first three weeks of July.
Isom described the period as an 鈥榓nomaly鈥� and predicted that American would 鈥榮hine鈥� over the long term because of 鈥榟ow we鈥檝e operated during a really difficult environment.鈥�
Shares of the airline fell 7.3 per cent in morning trading.
