July 25, 2012 / 3:15 PM / 5 years ago

RPT-WRAPUP 1-Delta, US Airways top estimates on strong demand

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* Passenger revenue aids profitability

* JetBlue profit doubles

* US Airways shares up 6 pct, Delta 2 pct

By Karen Jacobs

July 25 (Reuters) - Delta Air Lines and US Airways Group topped Wall Street's second-quarter profit estimates on Wednesday on strong passenger revenue, sending the major U.S. carriers' shares higher.

Delta reported a net loss after it took charges for fuel hedge contracts and staff buyouts, but said it expected a profit for the third quarter.

Maxim Group aerospace specialist Ray Neidl said higher passenger revenue had aided profitability for both companies in the second quarter, which is traditionally a solid one for airlines as travel picks up during warmer months.

"They are selling more expensive seats and less cheap seats," Neidl said.

On Wednesday, discounter JetBlue Airways said its profit had doubled in the quarter, helped by gains in leisure and business travelers. Southwest Airlines Co topped earnings estimates last week because of higher fares and robust demand.

Still, Neidl expressed concern that U.S. airlines' growth would slow after the summer. Oil prices, another wild card, have crept up in recent weeks, although they are still below their highs for the year.

"The question is post-Labor Day and with the weak economy, will airlines have to start discounting to fill seats," he said.

U.S. airlines have merged, cut back flights to match demand and added charges for food and baggage to boost profits over the past two years.

Delta reported a second-quarter net loss of $168 million, or 20 cents a share, after taking $754 million in charges, including costs of $561 million tied to fuel hedges.

Excluding items, earnings came to 69 cents a share, compared with the analysts' average estimate of 68 cents, according to Thomson Reuters I/B/E/S.

US Airways, which has expressed interest in merging with American Airlines parent AMR Corp, said second-quarter net income had more than tripled to $306 million, or $1.54 a share from $92 million, or 49 cents a share, a year earlier.

Excluding charges, earnings were $1.61 a share, while analysts had expected $1.56.

Operating revenue rose 6 percent to $9.73 billion at Delta and was up 7 percent at $3.75 billion at US Airways.

US Airways shares shot up 6 percent to $12.34 in morning trading, while Delta gained 2 percent to $9.52. So far this year, Delta shares have risen 17 percent, and US Airways has more than doubled.

JetBlue was down 1.5 percent at $5.19.

Reporting by Karen Jacobs in Atlanta; Editing by Lisa Von Ahn

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