January 11, 2017 / 1:28 PM / 8 months ago

American Airlines raises unit revenue estimate

American Airlines aircraft are parked at Ronald Reagan Washington National Airport in Washington, U.S., August 8, 2016. REUTERS/Joshua Roberts

(Reuters) - American Airlines Group Inc (AAL.O), operator of the No. 1 U.S. airline by passenger traffic, raised its estimates for a key industry revenue measure and its pretax margin for the fourth quarter, citing improving average fares.

The company, whose shares were up 1.4 percent at $49.15 in premarket trading on Wednesday, said it now expected quarterly unit revenue to be flat to up 2 percent.

American had forecast a decline of 1 percent to an increase of 1 percent in unit revenue for the period.

Unit revenue compares sales to how many seats an airline flies and how far it flies them.

American said it now expected its pretax margin excluding items to be between 7 percent and 9 percent, up from its forecast of 6 percent to 8 percent.

Smaller rival Southwest Airlines Co (LUV.N) said on Tuesday it expected a smaller decline in fourth-quarter unit revenue, helped by an improvement in average fares for U.S. flights booked at the last minute.

Delta Air Lines Inc (DAL.N), the No. 2 U.S. carrier, said strong demand in December was behind its decision to revise its passenger unit revenue estimate for the quarter to a decline of 2.5 to 3 percent from its previous forecast of a 3 percent decline.

Reporting by Ankit Ajmera in Bengaluru; Editing by Ted Kerr

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