American Airlines Group Inc. climbed after saying it expected to post third-quarter sales above prior guidance, the latest positive sign for the industry after a number of US carriers credited the surprise strength of post-Labor Day leisure travel and an ongoing recovery in business trips.

Revenue in the period is expected to be up about 13% over the same quarter in 2019, the Fort Worth, Texas-based airline said Tuesday in a regulatory filing. That’s slightly better than the company’s prior outlook of no more than a 12% increase. Pre-tax margin is expected to be 4.5%, exceeding the airline’s guidance for as much as 4%. 

American is the first of the four largest US airlines to provide an early glimpse at the quarter since it ended Sept. 30, and its outlook could help set the tone for earnings reports from Delta Air Lines Inc. Thursday and other carriers later this month. American is scheduled to report quarterly results on Oct. 20.

The airline’s shares pared a gain of as much as 6.7% to trade up 2.7% at 9:37 a.m. in New York. American had fallen 33% this year through Monday’s close.

The airline didn’t provide guidance for the fourth quarter or full year in the filing. 

Costs Rising

Costs for each seat flown a mile, a gauge of efficiency, will climb about 14% in the quarter over 2019, at the top end of an initial forecast. The figures exclude jet fuel and special items. Flying capacity was 9.6% lower than the pre-pandemic level, close to American’s outlook for down as much as 10%. 

United Airlines Holdings Inc. last month raised its third-quarter revenue outlook because of leisure demand that was holding steady beyond Labor Day, when vacation travel normally slows and corporate trips pick up. Southwest Airlines Co. also said those trips were helping to offset a slower recovery it was seeing in business travel sales.

While revenue from domestic business travel has broadly recovered to pre-pandemic levels or higher, carriers have yet to see a full return of corporate passenger volume. That’s mainly due to international trips that have been slower to bounce back as travel restrictions remain in place in some countries.