(Reuters) -American Airlines Group Inc on Thursday forecast a higher fourth-quarter profit on strong demand for travel during the key holiday season, sending its shares up more than 5% in premarket trading.
The upbeat forecast comes at a time when a worsening economic outlook coupled with high inflation has sparked concerns about consumer demand.
Shares of other airlines including Delta Air Lines Inc (NYSE:DAL), Southwest Airlines (NYSE:LUV) Co and United Airlines Holdings (NASDAQ:UAL) Inc were also up between 1% and 3% premarket.
The fourth quarter was difficult for several U.S. carriers as an industry-wide pilot shortage made it tougher for carriers to ramp up capacity and capitalize on a booming travel demand.
During the fourth quarter, American Airlines (NASDAQ:AAL)' capacity was down 6.1% versus the fourth quarter of 2019, and near the mid-point of its prior guidance of a 5% to 7% fall.
American Airlines expects to report fourth-quarter adjusted earnings per diluted share between $1.12 and $1.17, compared with its prior guidance of $0.50 to $0.70. Analysts had expected a profit of 60 cents, according to Refinitiv data.
The company also forecast a rise between 16% and 17% in revenue from the fourth quarter of 2019. It had earlier forecast revenue growth of 11% to 13%.
It expects costs, excluding fuel, to be up for the fourth-quarter about 10% at the higher end of its previous forecast of 8% and 10%.