American Airlines chief executive Robert Crandall, one of the industry’s most influential and outspoken executives, warned Wednesday that the airline business may be nearing a peak.
“This is a cyclical business . . . I would guess it’s close to a peak,” Crandall said after the annual meeting of American’s parent, AMR Corp., in Chicago.
His comments, contrary to what most industry insiders have been predicting, sparked a sell-off in airline stocks. AMR tumbled $2 to $67.37. UAL Corp., parent of United Airlines, dropped $2.75 to $113.74, and Delta Air Lines lost $2.50 to $63.75.
After several years of huge losses, U.S. airlines recently began posting profits, and most analysts have been saying that carriers will report much-improved earnings in 1995 and beyond.
Crandall said that American likely would have a profitable second quarter, though the hailstorm that sidelined about 10 percent of its fleet last month will cost the carrier about $20 million in lost revenue.
