British Airways and Iberia owner International Airlines Group said it expects to deliver significant full-year profit growth, defying gloom in the airline sector, after an uplift in business class travel boosted September traffic.
IAG on Wednesday said its traffic, measured in revenue passenger kilometers, rose by 4.3 percent versus September 2010, while passenger load factor edged up 0.1 percentage points to 82.8 percent.
Europe's second-biggest airline group by value behind Lufthansa said its first and business class travel -- the most profitable part of its passenger business -- rose 9.3 percent, while non-premium traffic was up 3.5 percent.
"We remain on course to produce significant growth in operating profit in 2011 compared to 2010," IAG said in a statement.
IAG shares in London, which have lost around 40 percent of their value in the last three months, closed up 4.5 percent at 156 pence.
Industry body IATA last month said it expected airlines to suffer a weak end to the year due to waning consumer confidence, sluggish international trade and high fuel prices.
It said a weak global economy would prompt a sharp fall in airline profits in 2012 and cut the industry's profit margins to a wafer thin 0.8 percent from 1.2 percent this year. IATA forecasts industry profits in 2012 will fall 29 percent to USD$4.9 billion from USD$6.9 billion this year.
IAG defied the misery in the airline sector in July by posting a first-half profit and predicting full-year earnings growth. European rivals Air France-KLM and Lufthansa have found it more difficult to overcome high fuel prices and sluggish demand.
Despite its recent strong performance IAG warned that some passenger and cargo traffic -- a key indicator for world trade -- could start to fall away in October.
"Indications so far for October point to a softer demand picture in premium traffic and cargo," IAG said.
Analysts believe European carriers should follow US rivals such as Delta Air Lines and United Airlines and reduce costs by cutting capacity.
IAG said it would be "flexible" in its approach to capacity reduction -- taking some planes out of service as passenger numbers drop -- and has already taken steps to reduce its long-haul fleet by three aircraft during the course of 2012.
Irish low-cost carrier Ryanair, which plans to ground 80 aircraft this winter to cut capacity and costs, on Wednesday said its September traffic rose 6 percent.
IAG shares had slumped on Tuesday on growing fears that its transatlantic partner American Airlines is headed for bankruptcy.
Shares of American Airlines parent AMR have fallen a third this week on concerns the third-largest US airline could file for Chapter 11 due, in part, to spiraling staffing costs.
Earlier on Wednesday British regional airline Flybe said it would miss first half revenue targets after traffic on UK routes slumped in September, sending its shares down 40 percent.