American Airlines (AAL) - Get Report reported its first unit revenue increase in two years, helped by strong gains in Latin America, and said it expects current-quarter unit revenue to rise between 2.5% and 4.5%.

The carrier also projected a first-quarter pretax margin between 3% and 5%.

For the fourth quarter, the carrier reported net income of $475 million, or 92 cents a share, in line with the FactSet consensus. Revenue was $9.8 billion; FactSet consensus was $9.75 billion.

"Our product investments are showing up in our unit revenue performance," said CEO Doug Parker in a prepared statement. "We had the largest improvement in unit revenue among our competitors and as we look forward, we continue to see strong demand for air service, and improving yields."

American said Latin America passenger revenue per available seat mile rose 10.2%, while domestic gained 0.3%. However, Atlantic PRASM fell 7.7% and Pacific PRASM fell 4.9%.

The consolidated unit revenue gain of 1.3%, measured in terms of total revenue per available seat mile, marked the first year-over-year increase since the fourth quarter of 2014.

On the cost side, fourth-quarter mainline cost per available seat mile excluding fuel and special charges rose 10.3% to 10.17 cents.

For the current quarter, the carrier expects consolidated CASM excluding fuel and special items to gain 9%, reflecting increased labor costs spread over capacity that will decline by 2%. Full-year system capacity is expected to be flat for the year, with international capacity up 4%.

American announced a new $2 billion share repurchase authorization, after returning $606 million to stockholders through share repurchase and dividends during the fourth quarter and $4.6 billion for the full year.

In premarket trading, American shares rose 2.8%.

This article is commentary by an independent contributor. At the time of publication, the author held no positions in the stocks mentioned.