American Airlines cuts growth after sales strategy backfires

An American Airlines’ Embraer E175LR (front), an American Airlines’ Boeing 737 (C) and an American Airlines’ Boeing 737 are seen parked at LaGuardia Airport in Queens, New York on May 24, 2024. 

Charly Triballeau | AFP | Getty Images

American Airlines will slash its capacity growth in the second half of the year and consider a host of other changes to a sales strategy that backfired, CEO Robert Isom said Wednesday. The comments come a day after the carrier cut its revenue and profit forecast and said it is parting ways with its chief commercial officer, Vasu Raja.

American will grow capacity about 3.5% in the second half of the year compared with the year earlier, down from roughly 8% year-over-year growth in the first six months of 2024.

The company’s shares tumbled 15% on Wednesday while investors weighed the airline’s missteps as the peak travel season gets underway, with some analysts questioning how American can capitalize on what rivals expect to be a record summer.

Isom said American is weighing changes to a plan Raja led to drive direct bookings at the airline in lieu of third-party sites and travel agencies, a strategy that included gutting the airline’s sales department.

The changes angered some travel agencies who weren’t able to access some of the carrier’s fares as before, making it harder for them to sell tickets on American flights.

The chief commercial officer will leave the company next month.

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An American Airlines stock chart shows how the company’s shares have tumbled in the past year.

“We’ve used a lot of sticks. We’ve got to put some more carrots in place and make sure that our product is available wherever customers want to buy it,” Isom said at the Bernstein Strategic Decisions conference on Wednesday.

American in February said it would limit some travel agency bookings from being eligible to earn AAdvantage frequent flyer miles. Isom said Wednesday that the airline would reverse that decision.

“That’s off,” Isom said. “We’re not doing that because it would create confusion and disruption for our end customer.”

Corporate bookings

Revenue shortfalls

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