American Airlines forecasts bigger Q3 loss as sluggish demand hits fares

American Airlines forecast a bigger-than-expected third-quarter loss on Thursday, as sluggish domestic travel demand result in more unsold seats and an erosion in fares.

Shares of the carrier fell nearly 3% in premarket trading.

Most U.S. airlines withdrew their financial forecasts in April due to uncertainty caused by President Donald Trump's sweeping tariffs and budget cuts. 

Demand in the domestic travel market has remained subdued with budget travelers approaching their plans with caution. American, which had enhanced its focus on the U.S. domestic market, sees itself more exposed to the trend.

Summer, typically the peak money-making season for airlines, is falling short this year as sluggish demand for standard economy seats forces carriers to cut fares, undermining their pricing power.

Industry executives and analysts have guided toward a stability in demand and the overall travel environment.

American expects adjusted loss per share in the third quarter in the range of 10 cents to 60 cents, compared with analysts' estimates of 7 cents, according to data compiled by LSEG.

The U.S. carrier reported a net income of $599 million, or 91 cents per share for quarter ended June 30, compared with $717 million, or $1.01 per share, a year earlier.

Its total operating revenue marginally rose to about $14.4 billion.

(Reporting by Shivansh Tiwary in Bengaluru; Editing by Arun Koyyur)