American shares off as pricing in doubt

American Airlines Group shares tumbled the most in two years after lower-than-expected U.S. fares dented a closely watched measure of pricing power.

Revenue for each seat flown a mile probably only rose 1 percent to 3 percent in the second quarter, the world’s largest carrier said Wednesday in an investor update, cutting its earlier forecast by half a percentage point on both ends. The measurement is widely used as an indicator of a carrier’s ability to raise fares.

Fare weakness is adding to the pressure on U.S. airlines, which already are contending with a more than 50 percent jump in fuel prices over the last year. While summer travel demand is strong, American CEO Doug Parker has warned of the need for higher fares because of rising fuel costs.