American Airlines stock surged 17% on Thursday after the airline updated its Q4 guidance and extended its card partnership with Citi. The company now expects payments from co-branded cards to grow 10% annually, contributing a potential $1.5 billion benefit to annual pretax income compared to 2024.
The deal extends American’s 37-year co-branded partnership with Citigroup for the next decade, with Citi acquiring the Barclays American Airlines co-branded card portfolio and transitioning cardmembers to its platform in 2026.
In addition to the card partnership, American Airlines lifted its Q4 guidance, citing improved pricing and revenue environments. The airline now expects total revenue per available seat mile to be flat or rise up to 1%, with a cost per available seat mile excluding fuel (CASM-ex) expected to rise 5% to 6%.
Southwest Airlines also hiked its Q4 forecast, saying it’s “encouraged by recent revenue trends and forward bookings.” The airline expects strong revenue growth, with a 5.5% to 7% increase in revenue per available seat mile, and plans for capacity reductions of up to 3% in 2025.
Rivals United Airlines and Delta Air Lines also saw their stocks rise, with United climbing 3.2% to a new record high and Delta advancing 2.4%. The market trend suggests airlines are benefiting from improving pricing and revenue environments, setting the stage for further gains.
Source: https://www.investors.com/research/ibd-industry-themes/american-airlines-stock-hiked-outlook-citi-southwest-q4