American Airlines Group (NASDAQ:AAL) said fourth quarter profits fell on higher labour and fuel costs even as revenue rose on last-minute bookings and robust international demand.
In the last three months of 2017, net profit dropped to US$258mln, or 54 cents per share, from US$289mln, or 56 cents per share, the same period a year earlier.
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Operating expenses increased 9.8% from a year ago to US$9.9bn, driven by a 23.5% rise in consolidated fuel costs and a 7% gain in wages and benefits.
However, excluding non-recurring costs, the airline earned 95 cents per share, beating the 92 cents per share expected by analysts polled by Thomson Reuters.
Revenue climbed to US$10.6bn from US$9.8bn last year thanks to strong global demand.
The company’s revenue per seat mile edged up 5.6% year-on-year as available seat miles gained 2.5%.
American expects first quarter revenue per seat mile to rise between 2% and 4% compared to the year-ago period.
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The group has been segmenting its cabins into smaller classes of services, such as a basic economy and premium economy, in an effort to boost revenue and profits enough to offset rising fuel costs.
American said it expects its premium economy, which offers a larger seat and more legroom for a higher fare, to be installed on most of its widebody fleet by the spring of 2019.
Shares were little changed at US$54.79 each in US pre-market trading.