(NASDAQ:AAL) plunged sharply on Wednesday after the air carrier revised down its second-quarter earnings outlook due to a waning of pricing power in spite of an anticipated rise in summer vacation travel.

Premarket trading on Wednesday witnessed American Airlines’ stock dive nearly 8%, pulling down fellow carriers Delta Air Lines (NYSE:DAL), Southwest Airlines (NYSE:LUV), and United Airlines (NASDAQ:UAL), which faced declines ranging from 1.5% to 2.5%. The Fort Worth, Texas-based company adjusted its second-quarter earnings projection on Tuesday to a range of $1.00 to $1.15 per share, lower than the previously expected $1.15 to $1.45 per share.

American Airlines has pivoted its approach away from lucrative corporate travel to grow its share in smaller markets. However, increased capacity in these markets has diminished its leverage in pricing.

Jefferies, which had previously upgraded American Airlines on the strength of its cost controls, downgraded the stock to “hold,” suggesting that “the plan has not developed as projected.”

The profit forecast adjustment comes shortly after the Memorial Day weekend, which marks the commencement of the U.S. summer travel season, customarily the most profitable period for airlines.

“A substantial deviation caused in part by last-minute reservations raises doubts about AAL’s ability to fully exploit a busy summer flight season,” said Bernstein analyst David Vernon in a research note.

While consumer spending within the U.S. remains robust, particularly for premium travel, airfares in Europe and Asia have commenced to level off or decline, suggesting a potential waning of the post-pandemic travel surge.

American Airlines’ shares are trading at approximately 4.89 times their future profit estimates, below the industry average of 7.16.

United Airlines, which also observed a premarket decline of 1.7%, reaffirmed its second-quarter earnings forecast of $3.75 to $4.25 per share on Tuesday.