• American Airlines slashed its revenue and margin outlook for Q2 2024 on Tuesday.
• The airline also announced the departure of chief commercial officer Vasu Raja.
• American's CEO said part of its struggles is due to recent changes in ticket sales strategy.

American Airlines lowered its earnings outlook for the second quarter of 2024 and announced the departure of its Chief Commercial Officer on Tuesday.

Speaking at an event on Wednesday, CEO Robert Isom said the lower earnings guidance can be attributed to a weaker-than-expected marketplace and the airline's weaker-than-expected performance.

A key factor behind lower bookings is the airline's recent changes to ticket sales strategy, Isom said.

That's a not-so-tacit admission that the airline's recent shake-up of its corporate ticket sales and third-party ticket sales strategy quarterbacked by the outgoing CCO, Vasu Raja, has not worked.

"We are adapting our distribution strategy," Isom said at the event, which was hosted by Bernstein. "We moved faster than we should have and we didn't execute well."

In February, American Airlines announced changes to its ticket distribution strategy, including new rules that limit the accrual of loyalty points needed to elite status to tickets purchased from the airline and through select approved travel agencies.

The strategy encouraged customers to buy directly from the carrier instead of third-party websites and travel agencies.

Last year, American gutted its corporate sales team, responsible for managing business travel needs for its major corporate clients.

Isom said that American is reevaluating its distribution strategy to make it easier for travel agencies, corporate clients, and customers in general to interact with the airline. This includes pausing some of the changes policy changes announced in February.

"Our approach has driven customers away from American and we are unequivocally committed to getting those customers back," Isom added.

In a regulatory filing, the airline said it now expects profit margins for the current quarter to be 1% lower than it had predicted in April. In addition, American expects second-quarter revenue to be as much as 6% lower than the same period in 2023.

Raja, who joined the company in 2004 and took over as CCO in 2022, will officially leave the company in June.

Shares of American Airlines fell more than 13% in trading on Wednesday.

• China is developing sensors to hunt enemy submarines from aircraft.
• Recent patents show a focus on magnetic detection and improved sonobuoys.
• New capabilities are critical for China to guard its aircraft carriers, two experts said.

China is developing new systems to hunt the US nuclear-powered submarines that could threaten a Chinese invasion of Taiwan, according to a new report.

The Chinese navy views anti-submarine warfare, or ASW, as essential to any successful amphibious operation and intends to use its aircraft to protect a flotilla from submarine attack by the US or Japan.

"The PLAN [People's Liberation Army Navy] clearly views fixed-wing and vertical lift ASW capabilities as a crucial component necessary for any of its amphibious based contingencies, be that a seizure of an island or reef, or the successful implementation of a Joint Island Landing Campaign against Taiwan," wrote Eli Tirk and Daniel Salisbury in a study for the China Maritime Studies Institute at the Naval War College. "ASW capabilities would be crucial for safeguarding high value surface assets such as carriers or an amphibious landing group, protecting them as they are in port embarking forces, sanitizing the operational area of enemy submarines, and escorting these assets on their way to staging areas and operational areas."

Also significant is that Chinese airborne sub hunters are tasked with protecting Chinese ballistic missile submarines as they sail to their patrol and launch locations. "The PLAN clearly views fixed-wing ASW as an important enabler of its at-sea nuclear deterrent," the report said.

The Chinese navy's current fixed-wing anti-submarine aircraft is the KQ-200, a four-engine turboprop aircraft that is China's equivalent of the US Navy's P-8 Poseidon. The PLAN has about 20 KQ-200s, which have a range of about 3,000 miles.

Much like the US Navy, China's submarine force tends to be secretive. But by examining open-source literature, Tirk and Salisbury were able to discern the efforts China is making in anti-submarine warfare, including patents filed by Chinese researchers.

For example, the state-owned China Electronics Technology Group Corporation filed a patent in 2020 for improved magnetic anomaly detection (MAD), a technology first used in World War II to detect subs by the effect of these big metal objects on the Earth's magnetic field. It's a useful but limited system that usually requires the aircraft to be flying within less than a mile of the target, and can only detect the presence of a sub rather than its course — which means a positive hit must be followed by laying a web of other sensors to be able to target the lurking submarine.

Chinese scientists want to use highly sensitive atomic magnetometers, which use lasers to detect changes in the energy levels between atoms caused by fluctuations in a magnetic field. CETC's patent is for technology that would "enable an atomic magnetometer to sense the direction of a target rather than just its existence," Tirk and Salisbury noted. "According to the filing, previous research on highly-sensitive atomic magnetometers had focused on scalar results (i.e. only the magnitude of a target's magnetic field), but could not provide vectors (i.e. magnitude and direction). MAD is already a shorter-range capability usually used for more precise positioning after other sensors have provided a rough search area, but any additional information could potentially give operators an edge during search operations."

A 2022 patent by Aviation Industry Corporation of China calls for a new system to operate sonobuoys, which are floating canisters, dropped by planes and ships, that detect subs by emitting active sonar signals or by passive sensors that detect the noise of a submarine. Current Chinese sonobuoys require "a complicated and labor-intensive series of manual button presses to configure sonobuoy parameters such as radio working frequency, working depth, working time, and pulse form to fit maritime conditions before deployment."

These parameters aren't displayed on the sonobuoy control system. "This means the display and control system is unaware of whether a sonobuoy is on the rack or has been launched, what type of sonobuoys have been launched, or the parameters of any launched sonobuoys," Tirk and Salisbury wrote. "Instead, operators must manually input this data into the display and control system."

Other patents are for lighter sonobuoys, and improved communications between sonobuoys and aircraft. In 2022, China surpassed America in number of patents filed.

China has also been improving the quality of anti-submarine training. "The PLAN has acknowledged its limitations and has begun taking steps to improve the quality of its ASW training, both in simulators and in physical training environments," the report said. "PLAN ASW units are training under more realistic conditions, and breaking down administrative barriers which prevented them from generating more training opportunities in different operational environments."

For example, since 2015, training materials have stressed the need for ASW aircraft and ships to work closely together, which is standard practice in the US and Western navies. The PLAN is also using simulators to train sensor and weapon operators.

One exercise involved a patrol aircraft transmitting target data to a command ship, "which then integrated it with information from other sources and checked the information against a target information database to confirm whether or not the target was an enemy submarine," the CMSI report noted. "This indicated both a potential command relationship from command vessels to ASW aircraft and confirmed that the PLAN trains to compare potential targets to a database, despite its small (but expanding) ocean surveillance and intelligence collection fleet and a nascent underwater surveillance capability."

Michael Peck is a defense writer whose work has appeared in Forbes, Defense News, Foreign Policy magazine, and other publications. He holds an MA in political science from Rutgers Univ. Follow him on Twitter and LinkedIn.

• Sweden will send an ASC 890 aircraft to Ukraine in a $1.23 billion aid package.
• The airborne early warning plane enhances Ukraine's range against airborne and maritime targets.
• Sweden will also includes tanks, artillery ammunition, and more in its aid package.

Sweden will be delivering an ASC 890 airborne early warning and control aircraft to Ukraine, stepping up its alert system and range, as part of its $1.23 billion aid package announced Wednesday.

Pål Jonson, Sweden's minister of defense, said the aircraft will provide Ukraine "with a new capability against both airborne and maritime targets."

With the contribution of the ASC 890, Jonson added that Ukraine's "capability to identify targets at long range will be strengthened."

The ASC 890 aircraft, also known as the Saab 340, is an Airborne Early Warning and Control airplane equipped with a large radar that looks like a fin mounted above its fuselage. It can scan for aerial threats out to 250 miles, giving Ukraine a capability similar to the A-50 AEW&C planes Russia has used to guide its air defenses and fighter aircraft.

The ASC 890 can operate alongside F-16 fighter jets, National Advanced Surface-to-Air Missile Systems, and other air defenses, acting as a "force multiplier" by spotting and relaying targets to armed aircraft or ground-based missile batteries.

The aircraft's radar will also be able to detect drones and cruise missiles, according to Jonson.

Belgium made a commitment on Tuesday to send Ukraine 30 American F-16s over the next four years on the condition that they wouldn't be flown over Russia. Other countries have pledged Ukraine a total of roughly 85 F-16 jets.

Sweden and other allies such as Netherlands, Denmark, and Norway have also promised to send Ukraine F-16 jets.

President Volodymyr Zelenskyy has emphasized that the contribution of F-16s will help fortify Ukraine's position. Future missions to defend Ukraine's air space or attack ships in the Black Sea may be guided by targeted data relayed from an ASC 890.

Ukraine is currently tasked with defending its lines as Russia has bombarded them with deep strikes.

Sweden also plans to provide Ukraine with armored personnel carriers, Advanced Medium-Range Air-to-Air Missiles, and artillery ammunition along with other resources as part of its largest aid package yet.

• Israel expects its war against Hamas to last months more — past the US election.
• That could keep the war in Gaza at the top of voters' minds.
• Biden's support for Israel is causing him to lose traction among young voters, polls show.

A top Israeli official says the war in Gaza should last at least through the end of the year.

And that's potentially terrible news for Joe Biden's presidential campaign, which has been struggling to shore up support among young voters who criticize his support of Israel.

Israel's National Security Adviser Tzachi Hanegbi said in an Israeli public radio interview on Wednesday that his country is "expecting another seven months of fighting" to achieve its stated goal of destroying Hamas, the Associated Press reported.

Hanegbi said the cabinet knew from the beginning that the war would be long and that 2024 would be "defined as a year of combat," CNN reported.

"You need to have patience and know how to stand strong," Hanegbi said, according to CNN. "This resilience is what has allowed this nation to survive for 75 years and even for 3,000 years before that. Just don't use a stopwatch on ourselves or set ultimatums."

That'll mean that the Israel-Gaza war will remain in the headlines — and potentially cost him votes come November.

Biden has struggled to gain traction among young Americans — the majority of whom oppose his pro-Israel stance, polling shows.

A recent CNN poll conducted by SSRS found that 81% of voters under 35 disapprove of Biden's handling of the war in Gaza. That base of young voters could be critical to winning the presidential election.

It's not just polling that's shown young voters' dissatisfaction with Biden. Thousands of students protesting the war in Gaza at college campuses across the country have taken issue with Biden's support of Israel, which they allege amounts to a US-sanctioned genocide against the Palestinian people.

Some have even taken to calling him "Genocide Joe," Politico reported.

Earlier this year, a movement of uncommitted Democratic voters withheld their votes for Biden over his support of Israel.

In Michigan's February primary, more than 100,000 voters in the state chose "uncommitted" in protest, raising the specter that they could hold out in November.

The war in Gaza rages on

This month, Israel intensified its assaults into Rafah, a major southern Gazan city.

Just last week, the International Court of Justice ordered Israel to halt its operation in Rafah, where more than a million Palestinians have been sheltering, the AP reported. But Israel is plowing ahead.

On Sunday, an Israeli airstrike killed dozens of Palestinians in an encampment outside Israel's evacuation order.

Israeli officials have said they were targeting Hamas militants, and Israeli Prime Minister Benjamin Netanyahu called the civilian deaths a "tragic mistake."

The deadly strike has drawn international outrage; a White House spokesperson said this week that the Biden administration hasn't changed its stance on Israel since the attack.

Since Hamas attacked Israel on October 7, 2023 — leaving hundreds of civilians dead and sparking a fierce Israeli response with airstrikes that have killed tens of thousands of Palestinians — Biden has gone back and forth with Israel over its military operations.

Though Biden has repeatedly pledged his support for Israel, he has also said that Israeli attacks on Gaza were "over the top" and that the starvation of innocent people has "got to stop."

He's called for a ceasefire deal between Hamas and Israel and briefly halted some munitions shipments to Israel, but since then, the US has signaled it would send other military aid to the Jewish state.

Biden seems like he'll continue to straddle the line between defending Israel and condemning attacks on civilians — and that may cost him reelection.

• Elon Musk had breakfast with Donald Trump and Nelson Peltz in March, The Wall Street Journal reported.
• The men shared gripes about Joe Biden's performance as president and talked about voter fraud, .
• It's one example of how much relations between Musk and Trump have warmed up.

You can trace the warming relationship between former President Donald Trump and Elon Musk to some eggs, bacon, and fruit on a Sunday morning.

The two men met with Nelson Peltz in March at Montsorrel, Peltz's estate in Palm Beach, Florida, the Wall Street Journal reported Wednesday. The three talked about this fall's presidential election and took similarly critical stances on President Joe Biden's administration, according to the Journal.

The meeting was first reported by the New York Times in March. Trump sought major donations to his campaign from multiple GOP donors who were there, the Times reported.

Also on the agenda was a "data-driven" project to combat voter fraud that Peltz and Musk have been discussing. They first mentioned the project to Trump at the breakfast meeting, the Journal reported. Voter fraud in the US is rare. However, it has become an interest of Trump since he falsely claimed that he won the 2020 presidential election.

The three billionaires also brought their sons with them to the breakfast. Diesel Peltz, Nelson's son, was at the event, as were Barron Trump, the former president's 18-year-old, and X, Musk's toddler, the Journal reported.

The meeting is one example of an apparent turnaround in the relationship between Musk and Trump. As recently as a few years ago, Musk called Trump a "bullshitter."

Now, Musk is under consideration for a role advising Trump if he is re-elected this November, the Journal reported.

"President Trump will be the only voice of what role an individual plays in his presidency," Brian Hughes, a spokesman for the Trump campaign, told the Journal in response to the report about the breakfast meeting and a potential role for Musk at the White House.

Representatives for the Trump campaign and Musk did not immediately respond to requests for comment from Business Insider.