American Airlines CEO Decries Investor Indifference. ‘Maybe They Don’t Believe Our Story.’

American Airlines’ share price rose after the carrier reported strong earnings on Thursday, but apparently it wasn’t enough for CEO Robert Isom.

In closing remark on the earnings call Thursday morning, Isom said that American has achieved “operational reliability and profitability,” that its first quarter results included record revenue and $2 billion in pretax improvement and that it anticipates record second profits. “It’s astounding that we’re $2 billion in terms of pretax better than we were a year ago,” he said.

Yet investors don’t seem to care much. “I get asked questions about why isn’t our stock price performance moving in alignment with seemingly the true prospects,” Isom said. Perhaps, he said, “It’s due to people not knowing the American Airlines story.

“We’ve got to do a better job of letting folks know what we see and where we’re headed,” he said. “If its not that maybe they don’t believe our story.

“Well keep producing until they do believe,” he said.

In midday trading, American’s share price was around $13, up about 2%. Delta and United were up slightly. Year-to-date, American shares are up about 2%. United shares lead the industry this year, with a 14% stock price gain, while JetBlue is up about 5% and Delta is up about 1%. Southwest is down about 10%.

Isom referred to the somewhat mysterious stock market reaction to American guidance on April 12, when the carrier said it would have higher earnings than it had previously anticipated, but its shares fell 9% to $13 because estimates were higher than the guidance. Shares have not made up much ground since then.

One reason for investor skepticism may be that American has cut back on the perks it provides to corporate travel customers, apparently because the post-pandemic travel environment includes the increased purchase of premium seats by customers who book online. Many analysts may themselves be corporate travel customers.

Dennis Tajer, spokesman for Allied Pilots Association, which represents American pilots, said Isom’s remarks “affirm that he’s sticking to his plan and he’s concerned that investors don’t believe his story. And if he’s worried that investors don’t believe his story, then we’re concerned.

Investors “haven’t fully bitten off that American has it going on,” he said. “I think they’re still walking by the news stand and looking at the pretty cover.

“There is still a tremendous amount of uncertainty associated with American, especially as they shift to where they believe demand is and seem to turn their backs on corporate clients,” Tajer said.

On the call, Vasu Raja, chief commercial officer, said American had been giving away 35% of its status memberships through an exception granted to corporate travel customers. “The nature of the corporate discount and corporate contract is changing,” he said as more customers book through American’s online site or its app and pay up for premium seats.