US carriers American Airlines Group Inc (NASDAQ:AAL, XETRA:A1G) and Delta Air Lines Inc (NYSE:DAL) raised their first-quarter revenue guidance on Tuesday, signaling stronger-than-expected demand for air travel despite rising fuel costs.
American now expects first-quarter revenue to grow more than 10% year-over-year, up from its previous 7% to 10% outlook.
The airline said demand has been “stronger than expected,” though higher fuel prices of around $2.75 per gallon are expected to push adjusted earnings per share toward the low end of its prior loss guidance.
Shares of American rose 3.1% in early trading.
Delta raised its first-quarter revenue forecast to $15 billion to $15.3 billion, well above Wall Street estimates of $13.8 billion.
CEO Ed Bastian said travel demand has been “really, really great.”
Delta is maintaining its mid-teens operating margin target and outlined longer-term goals including $3 billion to $5 billion in annual free cash flow, about 10% earnings per share growth, and a return on invested capital above 15%.
Delta shares climbed 4.3%.