American Airlines on Tuesday raised its quarterly forecast for a key revenue metric, citing higher average fares.
The leading US airline said it now expects total unit revenue, which measures sales with flight capacity, to be up about 2 to 4 per cent, compared with the 1.5 to 3.5 per cent it previously forecast.
The forecast comes at a time when other airline companies are struggling to increase unit revenue. Last week, the second-biggest US airline Delta Air Lines lowered its guidance, citing slower-than-expected improvement in average fares for flights booked at the last minute.
Shares of American Airlines rose as much as 1.4 per cent to US$42.9 in premarket trading.
The new forecast came as shares of United Airlines parent United Continental Holdings fell, after a passenger who appeared to be Asian was physically dragged off a flight on Sunday, prompting a backlash on Chinese social media on Tuesday.
The stock dropped as much as 6.3 per cent to $67.03 before paring the loss to trade 2.5 per cent lower at 9:19am in New York premarket trading.
United Airlines’ decision to drag the passenger off a flight from Chicago to Louisville on Sunday attracted more than 130 million views on its Weibo platform by Tuesday afternoon.
The company got about 14 per cent of its 2016 revenue from flying Pacific routes.
United Airlines also raised its flight capacity forecast for the first quarter, citing an improvement in mainline completion factor – a measure of the number of completed flights relative to the number of flights scheduled.
Last year, US airlines saw a decline in unit revenue, a closely watched measure, due to higher capacity and lower fares.
* Agencies
