American Airlines has sharply upgraded its 2025 profit forecast, signaling improving market conditions as industry-wide capacity cuts begin to strengthen fares after a slowdown in domestic travel earlier this year. Shares in the carrier climbed 4% in morning trading following the announcement.
Earlier in the year, U.S. airlines felt the strain of a dip in travel demand amid economic uncertainty triggered by President Donald Trump's sweeping tariffs. That slump forced carriers to reduce ticket prices to keep planes full.
But with capacity now being pulled back across the sector, airlines are regaining pricing power and protecting profit margins.
American Airlines reported sequential improvements in unit revenue a key measure of pricing strength throughout the third quarter, with September marking the carrier’s return to positive growth.
The airline also noted that domestic travel demand has shown renewed momentum, underscoring the resilience of U.S. travelers despite broader economic concerns.
The company now expects full-year adjusted earnings per share between $0.65 and $0.95, a significant upgrade from its July guidance projecting a potential loss of $0.20 to a profit of $0.80 per share.
Premium cabins remain a bright spot for the airline, with high-margin premium revenue continuing to outpace main-cabin performance as affluent travelers maintain spending on comfort-focused travel experiences.
American's strengthened outlook reflects both a tighter supply environment and a sustained appetite for premium travel factors expected to support the airline industry as it moves into 2025.