American Airlines raises fourth-quarter unit revenue forecast

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American Airlines aircraft are parked at Ronald Reagan Washington National Airport in Washington, U.S., August 8, 2016. REUTERS/Joshua Roberts/File Photo (Copyright Reuters 2016)

American Airlines Group Inc raised its current-quarter forecasts for pre-tax margin and a key profitability metric, citing an improvement in average fares.

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The company said it now 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 2.5-0.5 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.

Smaller rival United Continental Holdings Inc 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.

(Reporting by Arunima Banerjee in Bengaluru; Editing by Saumyadeb Chakrabarty)