American shares tumble 13% after sales strategy backfires; carrier cuts growth

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American Airlines Group Inc,Breaking News: Business,Life

American cut its profit and unit revenue forecast for the second quarter, which coincides with some of the busiest travel periods of the year.

American Airlines will slash its capacity growth in the second half of the year and consider a host of other changes to its operations, CEO Robert Isom said.

"We're going to make some changes very quick," CEO Isom said at the Bernstein Strategic Decision conference on Wednesday. "A significant miss driven in part by close in bookings puts AAL's ability to reap the full value of a robust summer flying season in greater doubt," Bernstein airline analyst David Vernon said in a note.

United, minutes after American's forecast adjustment Tuesday, reiterated its second-quarter earnings estimates, though it didn't provide a revenue outlook. Its chief executive, Scott Kirby, an American Airlines alumnus, is also scheduled to speak at Bernstein's conference.

 

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