(Adds analyst comment; share movement; detail on revenue, costs, buybacks)
Jan 29 (Reuters) - American Airlines Group Inc on Friday reported a fourth-quarter profit above analysts' estimates as tumbling oil prices continued to add to its bottom line.
American, the world's largest airline, earned $3.28 billion, benefiting from a more than 40 percent drop in its fuel bill from a year earlier.
Excluding special items such as a noncash $3 billion boost from a change in accounting for tax allowances, earnings rose by 16.5 percent to $1.29 billion, or $2.00 per share. Analysts on average expected $1.97 per share, according to Thomson Reuters I/B/E/S.
Shares of American rose 1.3 percent to $38.65 in premarket trading.
The Fort Worth, Texas-based airline said it had repurchased $1.1 billion worth of shares in the quarter as part of a previously announced buyback program.
Sterne Agee CRT analyst Adam Hackel called the buybacks "remarkable" because the company has repurchased about 10 percent of its stock in the last two quarters.
However, intense competition from low-cost rivals as well as weak demand in Latin America and growing fears of a rapidly spreading Zika virus in the region cast some concern about American's top line.
Hackel said the airline's 17 percent drop in passenger unit revenue from Latin America far exceeded the 10 percent decline that Sterne Agee CRT forecast.
For all flights, passenger unit revenue, which compares ticket sales with capacity, fell 6 percent in the quarter. (Reporting by Jeffrey Dastin in New York; Editing by Lisa Von Ahn)