(Bloomberg) -- American Airlines Group Inc. expects profit this year to beat Wall Street’s estimates as it benefits from strength in demand and improved operating performance.

The adjusted profit will be $2.25 to $3.25 a share, American said in a statement Thursday that also included fourth-quarter financial results. Analysts were expecting a profit of $2.22, based on the average of estimates compiled by Bloomberg. 

American shares rose 9.3% at 10:09 a.m. in New York, the most intraday since January 2023. 

“Overall, the carrier’s results and 2024 guide looked solid, with good cost controls and a little expected help from fuel prices, pushing full-year EPS guidance above expectations,” Stephen Trent, a Citi analyst, said in a note.

American’s outlook reflects struggles in the domestic market, where fares are being pushed down by flight capacity exceeding demand, and consumers’ continuing preference for trips outside the US. Passenger revenue from American’s international operations rose 2.5% in the fourth quarter, fueled by travel across the Atlantic, compared with a 2.2% decline in domestic markets.

American expects unit revenue, a reflection of fares and demand, to turn positive by the end of this quarter, Vasu Raja, chief commercial officer, said on a conference call to discuss quarterly financial results. 

“We are more encouraged by what we see in short haul than any other region at the moment,” he said. American plans 75% of its capacity to be in the domestic and short-haul market this year.

The carrier set records for the percentage of completed flights in both the fourth quarter and all of 2023, a result of Chief Executive Officer Robert Isom’s focus on making its flight operations more reliable. “Your focused execution as team members is driving our success,” he told American employees in a message.

Boeing Issues

A decision by US safety regulators to freeze planned production increases at Boeing Co. for 737 Max aircraft shouldn’t affect American’s order of 20 Max 8, as they are likely already in production, Isom said on the conference call. 

The Federal Aviation Administration grounded all Max 9s earlier this month after an Alaska Airlines jet’s fuselage panel blew out during flight. American doesn’t fly the Max 9. 

“Boeing needs to get their act together.” Isom said on the conference call. “The issues they’ve been dealing with, and going back some years now, is unacceptable.”

Isom said American is fortunate to be the largest operator of Airbus SE planes, but no matter where their aircraft come from, “we’re going to make sure that product is incredibly reliable, safe right from the get-go, right off the factory floor.”

The airline expects a first quarter loss of 15 cents to 35 cents, compared with Wall Street estimates of a 21-cent deficit. 

American had an adjusted fourth-quarter profit of 29 cents a share, compared with Wall Street estimates for 12 cents. Revenue was $13.1 billion, matching analysts’ estimates. 

(Updates share price, adds comments from conference call from third paragraph.)

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