Shares of Delta Air Lines and US Airways rose after the airlines reported second- quarter earnings that exceeded analysts' estimates, helped by declining jet-fuel prices.
Shares of Delta rose 1.7 percent to $20.80 at the close, while US Airways added 2.5 percent to $18.50. The Bloomberg U.S. airlines index advanced 0.6 percent.
Delta and US Airways, the first of the major U.S. carriers being followed by analysts to report second-quarter results, are benefiting from lower jet-fuel costs. Both carriers on Wednesday reported higher domestic revenue on steady demand for travel.
"Because of the very high operating and financial leverage, a very small percentage change in a variable like the price of jet fuel can have a magnifying effect on earnings per share," said Michael Derchin, an analyst at CRT Capital Group in Stamford, Conn.
Delta's profit excluding some items increased to $844 million, or 98 cents a share, the Atlanta-based company said. That topped the 95-cent average of estimates compiled by Bloomberg. US Airways' profit of $324 million, or $1.58 a share, beat the $1.52 average of estimates.
Revenue at Delta fell less than 1 percent to $9.71 billion. The carrier's fuel bill tumbled 21 percent to $2.6 billion in the quarter.
"The improving momentum we've seen throughout the quarter continues into our summer bookings," Delta President Ed Bastian said on a conference call with analysts and investors. Revenue for each seat flown a mile will rise by about 3 percent for July and August, while September bookings are also "encouraging," he said.
Including one-time expenses mostly related to adjusting the value of its fuel hedges, Delta's net income was $685 million, or 80 cents a share, compared with a loss of $168 million, or 20 cents, a year earlier.
