United Airlines sees passenger revenue rise

UAL Corp. led airline shares higher after the third-largest U.S. carrier reported a measure of February revenue that exceeded analyst estimates.

UAL jumped $1.22, or 7 percent, to $18.74 at 10:18 a.m. in Nasdaq Stock Market trading, the biggest gain in a week. The Chicago-based parent of United Airlines said yesterday that revenue for each passenger flown a mile rose 17 percent to 19 percent in February. The figure beat the 16 percent projection by Hunter Keay, an analyst at Stifel Nicolaus & Co. in Baltimore.

United Airlines is benefiting from a return of premium passengers on international flights. Bookings by those travelers with United rose 25 percent in February and 28 percent in January from year-earlier months, Chief Financial Officer Kathryn Mikells said today on a Webcast from a transportation conference hosted by JPMorgan Chase & Co. in New York.

"We're clearly seeing signs of economic recovery and premium and corporate travelers returning," Mikells said. "We see significant opportunities for continued improvement in 2010."

The company's cost reductions over the past two years, which included retiring older Boeing Co. 737 planes and grounding six wide-body 747 jets, are helping United's bottom line as demand rebounds, she said.

The Bloomberg U.S. Airline Index of 12 carriers rose 2.7 percent at 10:15 a.m., the most in a week.