American Airlines shares tumble on rough first quarter outlook

American Airlines said on Thursday it expects to post a first-quarter loss, sending its stock tumbling even after it reported a $590 million profit at the end of last year.

The Fort Worth-based air carrier finished 2024 with a record $52.2 billion in revenue – including $13.7 billion, another record, for the fourth quarter.

That was a 2.7% increase in revenue for the full year and 4.6% for the fourth quarter. Net income was $846 million for the year.

It was a bit of a topsy-turvy year for airlines as the industry got off to a hot start, predicting great expectations amid high travel demand.

But American Air’s dim Q1 outlook partly reflected how carriers overplanned, with many trimming their flight plans as the year continued. To start the year, the carrier expects higher fuel costs, lower capacity with more regional flights, and costlier labor agreements.

“We continue to run a reliable operation, and we are reengineering the business to build an even more efficient airline,” CEO Robert Isom said in a statement

“As we look ahead to this year, American remains well-positioned because of the strength of our network, loyalty and co-branded credit card programs, fleet and operational reliability, and the tremendous work of our team,” he added.

American’s focus in 2024 was reducing its $54 billion debt load that ballooned during the COVID-19 pandemic and improving on-time performance amid intense pressure from the Biden Administration.

American succeeded in paring its burden by $15 million. But the carrier’s on-time performance still ranked last among major U.S. carriers at 75% from January to October 2024, according to Department of Transportation data.

American expects its flight capacity to be up 1% to 2% in the first quarter, and costs per available seat mile to increase somewhere in the high single digits, the carrier said.

American plans to give more details during a call with investors later Thursday morning.