Germany's Deutsche Lufthansa expects operating profit to rise again this year as air travel continues to grow even as financial markets stutter and fuel prices hover at record levels.
The positive trend was expected to continue in 2009, Lufthansa said in its annual report on Wednesday.
"The perspectives for the aviation industry are full of promise," Chief Executive Wolfgang Mayrhuber said in a statement.
"In spite of the current uncertainty in the financial markets, the economic conditions remain good for Lufthansa. There have been no ground-breaking changes in terms of the fundamental conditions or the need for mobility."
Shares in Lufthansa were 4.7 percent higher at 15.72 euros, outperforming a 1.2 percent gain on the German blue-chip DAX index.
"The strong outlook is a positive surprise for us," Equinet analyst Jochen Rothenbacher said in a note.
Mayrhuber's optimism for 2008 was echoed on Wednesday by smaller German rival Air Berlin, despite a drop in 2007 operating profit that missed its own expectations.
Lufthansa said a condition for raising the operating result in 2008 from the record 1.38 billion euros ($2.12 billion) -- a 63 percent rise -- achieved last year was being able to continue to compensate for high fuel prices.
Fuel costs rose 15 percent to 3.86 billion euros last year, though the weak dollar brought these costs down by 7.3 percent and hedging saved 109 million euros.
Lufthansa said this week it was raising the fuel surcharges it imposes on passengers on European and domestic routes to 17 euros each way. It charges 77 euros each way on long-haul flights. Crude oil has almost reached $110 a barrel.
The company said earnings last year were also helped by the performance at airline Swiss, which contributed cost and revenue synergies of 233 million euros. Swiss has been fully consolidated in Lufthansa's accounts since July.
Lufthansa had reported last month that 2007 revenue rose 13 percent to 22.42 billion euros. Net profit more than doubled to 1.655 billion euros.
The carrier has said it would propose raising the dividend for last year to 1.25 euros a share from 0.70 euros for the previous year.
Air Berlin on Wednesday posted full-year earnings before interest and tax (EBIT) of 21.5 million euros, down from 64.2 million in the previous year.
"Although the preliminary results for 2007 do not meet our expectations, we have cause for optimism for 2008," CEO Joachim Hunold said in a statement. "We are also pleased with the current bookings situation."
Air Berlin stock ended 8.1 percent lower at 8.64 euros.