NEW YORK (AP) -- Shares of AMR Corp., parent of American Airlines, rose Wednesday after the airline gave a positive forecast for the first quarter.
Tuesday, after the financial markets closed, AMR said in a regulatory filing that revenue per seat will rise by 3.5 percent to 4.5 percent this quarter for the main airline.
Revenue per seat for the entire company will be up 2.9 percent to 3.9 percent, the Securities and Exchange Commission filing said.
Shares of AMR rose $1.10, or 11 percent, to close at $11.03 on the New York Stock Exchange.
The news prompted a round of praise from analysts, with Merrill Lynch recommending investors buy AMR.
The bank, which seeks investment banking business with airlines, had AMR at ''neutral'' before Wednesday's upgrade.
''We think American is seeing better-than-expected revenue performance in its core Dallas/Ft. Worth markets,'' Merrill said.
Further, since Delta Air Lines Inc. cut back operations at AMR's hub in Dallas/Fort Worth, American faces less competition with Delta's new, lower fares, Merrill said.
In fact, Merrill calculates competitive pressures have eased for American in the transcontinental markets and in Chicago, as United Airlines cuts capacity, and Southwest Airlines and ATA Airlines combine and rationalize some capacity.
Some airline industry observers had worried that first-quarter revenue would suffer for all major carriers because Delta in January cut fares and dropped some restrictions on low leisure fares. But airlines have managed to push through several fare hikes in recent weeks, helping revenue. Also, the early Easter holiday likely prompted more travel than last year.
Shares of other airlines also rose Wednesday, led by Frontier Airlines Inc., which closed up $1.36, or 15 percent, at $10.61 on the Nasdaq Stock Market after Merrill upgraded it to ''buy'' from ''neutral.''
The bank said capacity cuts by United in Denver, Frontier's hub, should help the low-cost carrier.
Merrill also narrowed its loss forecast for America West Holdings Corp. Shares of America West rose 45 cents, or 9.3 percent, to end at $5.30 on the NYSE.
