American Airlines (AAL) apparently will become the first major airline in about two years to report positive quarterly unit revenue.

American said Wednesday it expects fourth-quarter 2016 total revenue per available seat mile (TRASM) to be flat to up 2% year over year. Additionally, it said its fourth-quarter pretax margin excluding special items will be between 7% and 9%.

TRASM has improved from prior guidance of between down 1% and up 1%, and pretax margin has improved from prior guidance of 6% to 8%, due primarily to improving yields on ticket sales, American said.

Shortly after the opening bell Wednesday, American shares were up 1.7% to $49.31 and have risen about 5% year to date.

The world's largest carrier issued its December traffic report at a time when Wall Street has ramped up the enthusiasm for airline stocks due to unit revenue trends, limited planned capacity growth and the potential for more rapid GDP growth.

However, unless revenue can increase, margins may start to decline due to higher costs for fuel and labor.

On Wednesday morning, the airfare prediction app Hopper said average domestic January fares will be up 8% from January 2016 and will continue to climb over the next six months.

On Thursday, the industry's attention will turn to guidance and results from Delta (DAL) , which will be the first carrier to report fourth-quarter earnings.

Major airline unit revenue has been in decline for about two years, as generally lower fuel prices led to lower fares, leading to lower revenue.

November unit revenue was flat, due to a calendar shift that brought more Thanksgiving traffic into November, but December produced an industry decline of about 2%. Until November, domestic revenue had declined for 19 consecutive months and international unit revenue had declined for 30 consecutive months.

American's December traffic report followed upbeat traffic reports issued Tuesday by United (UAL) and Southwest (LUV) .

United said its fourth-quarter unit revenue will decline between 1.25% and 1.75%, also reflecting improved guidance as a result of "stronger than expected close-in bookings and yields during the month of December." Yield is the fare paid for one mile. Previously, United had guided to a unit revenue decline of 3% to 4%.

The United report prompted UBS analyst Daryl Genovese to raise his fourth-quarter earnings estimate to $1.75 a share, ahead of consensus of $1.39. He has a $90 price target. United shares on Wednesday were trading at $76.19%, up 3.4%. The stock has gained about 5% year to date.

"We continue to view UAL as more similar to its legacy airline peers than it is different and see room for it to chip away at its margin deficit over time," Genovese wrote in a report. "We view this as an opportunity for better earnings growth over the next few years while stock trades at a discount to peers."

Southwest projected a first-quarter unit revenue decline of 3% to 4%, compared with earlier guidance of a 4% to 5% decline. It too cited improved close-in yields.

For its part, Delta said last week its December RASM was flat, "driven by strong demand trends and improving close-in domestic yields," and that fourth-quarter RASM will decline between 2.5% and 3%, an improvement from previous guidance towards a 3% decline.

Delta has said it anticipates flat unit revenue in the first quarter.

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

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