(Reuters) - American Airlines Group Inc (O:AAL) said higher average fares per mile have boosted its revenue and profit expectations for the fourth quarter, a day after rival United Continental Holdings Inc (N:UAL) also raised forecasts.
Shares of top U.S. airlines rose on Friday, with American's up 4 percent and United's up 4.2 percent.
American, the world's largest airline, said on Friday it expects fourth-quarter unit revenue to range between a decline of 1 percent and an increase of 1 percent, compared with its previous forecast of a decline of 2.5 percent to 0.5 percent.
Unit revenue compares sales to how many seats an airline flies and how far it flies them.
The airline now expects pre-tax margin excluding items to be between 6 percent and 8 percent, up from its previous range of 5 percent to 7 percent.
United, the No. 3 U.S. airline by passenger traffic, also forecast on Thursday a higher profit margin in the fourth quarter as bookings strengthened and expenses related to employment benefits were lower than expected.
"United provided a solid upward guide to Q4 expectations last night, pushing consensus close the level where we initially began the quarter," JPMorgan (NYSE:JPM) analyst Jamie Baker said in a research note on Friday.
"Meanwhile, American’s updated guide this morning, also implies upside to consensus estimates and critically also opens the door to positive unit revenues in Q4."