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American Airlines bullish on 2019 profits

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New York (AFP)

American Airlines reported better-than-expected earnings Thursday behind strong air travel demand and offered a bullish outlook on 2019 profitability.

Profits for the fourth quarter came in at $319 million, compared with a loss of $583 million in the year-ago period due to one-time accounting costs tied to US tax reform.

Revenues climbed 3.1 percent to $10.9 billion.

American said demand was solid in both its passenger and cargo services, with revenues higher in both areas that helped to make up for increased fuel costs.

Energy prices in the fourth quarter were well above those in the 2017 period, but receded slightly compared with the third quarter, when jet fuel costs battered profits.

The company released a 2019 profit target range of $5.50 to $7.50 per share, well above the $5.87 expected by analysts.

Drivers of profitability in 2019 include $300 million in cost savings and expansion of its "premium economy" program that introduces greater price differentiation to ticketing, boosting profits.

The company said it expects $1 billion in revenue improvements in 2019.

"We enter 2019 with great momentum," said Chief Executive Doug Parker.

"We expect our total revenue per available seat mile to grow faster than our network competitors, and to deliver strong pre-tax earnings growth in 2019."

Shares rose 6.3 percent to $33.65 in pre-market trading.

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