American Airlines has reported a loss for the first quarter (Q1) of 2025 and pulled its 2025 outlook, citing weaker domestic bookings and economic uncertainty.

American Airlines Reports $473 Million Q1 2025 Loss

The first quarter is traditionally the weakest for US airlines, with demand lower during the Northern Hemisphere winter. This morning, American Airlines reported a $473 million loss for the first quarter, worse than the $312 million loss it posted in Q1 of 2024. That represents an adjusted 59 cents per share loss (analysts expected a 65 cent loss) on revenue of $12.55 billion (analysts had expected $12.56 billion). AA said it recognized $87 million as “one-time charge resulting from pay rate increases effective January 1, 2025.”

Unit revenue did grow 0.7% in the quarter (essentially, the revenue generated for each seat available for sale to be flown one mile), which American attributes–like Delta Air Lines and United Airlines–to stronger demand for premium cabin travel and international travel.

For the second quarter, AA is expecting adjusted earnings per share between 50 cents and $1 and predicting revenue will fall within a range of 1% growth to 2% decline (with Wall Street analysts having expected a 2.2% gain). Capacity will rise by “up to” 4% compared to the same period in 2024.

American Airlines Pulls Full-Year Guidance

Following Delta, Alaska Airlines, and Southwest Airlines, American pulled its 2025 financial guidance, blaming economic uncertainty (United is so far the outlier in offering a bifurcated guidance based on whether the US enters recession).

The company is withdrawing its full-year guidance at this time. American intends to provide a full-year update as the economic outlook becomes clearer.

CEO Robert Isom told CNBC:

“We came off a strong fourth quarter, saw decent business in January and really domestic leisure travel fell off considerably as we went into the February time frame.”

Isom blames “economic uncertainty that pressured domestic leisure demand and the tragic accident of American Eagle Flight 5342” for pulling the forecast, referring to a crash near Washington National Airport on January 29, 2025.

What’s Next?

Like so much of the economy, right now, the tremendous uncertainty over tariffs will make it hard for AA to accurately project the rest of 2025. The spate of recent headlines about foreign travelers being detained in the USA may be anecdotal, but it appears that visitors to the USA from around the world are dropping (we will need at least a couple more months of data to confirm it).

AA should not use this period of uncertainty to suspend its move toward becoming a more premium carrier. If the economy rebounds, AA may be left even further behind by Delta and United if it does not take concrete steps (from as small as suspending headphone collection to as big as debuting its new Flagship Suites) to better compete.

CONCLUSION

As expected, American Airlines reported a first quarter loss and has now pulled its full-year forecast. Even as the carrier expects to profit in the second quarter, the economic cloud appears to be hitting the airline hard, though the next 2-3 months should be clarifying.

What do you make of AA’s 2025 Q1 results?