American Airlines Group anticipated a smaller-than-expected drop in fourth-quarter revenue on Tuesday, sending the No. 1 U.S. carrier's stock up around 2% before the bell.

The company forecasted a 17 % drop in revenue for the quarter, compared to a 20 % drop previously forecasted.

Increasingly rapid Airlines have had to cancel flights due to COVID-19 infections of the Omicron strain since pilots and cabin personnel became ill and needed to be quarantined.

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Carriers were impacted by mass cancellations over the Christmas and New Year holiday periods, as well as greater staff incentives, with American Airlines anticipating higher fourth-quarter expenditures.

Cost per available seat mile, the industry's standard measure of what it costs to fly one seat one mile, is expected to grow between 13 and 14 %, up from its earlier projection of 8 to 10%.

The airline also said that a write-down of surplus spare parts inventory boosted costs.

The business plans to report a pretax margin of around 12 % to 13 %, down from its previous expectation of 16 % to 18 %.

The corporation is expected to release its financial results on January 20.