Northwest Airlines on Monday beat forecasts, reporting a USD$244 million quarterly profit on cost cutting and higher fares.
The profit for the No. 5 US airline, which exited bankruptcy in May, matches profits for rivals in the third quarter and bolsters the case for industry recovery despite sky-rocketing fuel prices.
Northwest shares rose following the report and were 3.17 percent higher at USD$17.90 on the New York Stock Exchange.
"These results are consistent with our five-year business plan, when adjusted for higher fuel prices," Chief Executive Doug Steenland said in a statement.
It was the first full quarter for Northwest since exiting bankruptcy.
A year earlier the airline reported a loss of USD$1.2 billion, impacted by charges related to its reorganization.
Excluding special items, Northwest reported a third-quarter profit of USD$405 million, up from USD$258 million a year earlier.
The carrier said operating revenue declined 0.9 percent to USD$3.4 billion. Northwest ended the quarter with USD$3.1 billion in unrestricted cash.
The airline industry, recovering from a years-long downturn, has been battered by high fuel costs and low-fare competition.
Strategic fuel hedging and fare increases have given some stability to the embattled industry. Northwest's fuel costs declined 7.9 percent for the quarter.
Northwest said its operating expenses declined 4 percent to USD$2.9 billion, while average fares gained 2.1 percent.
Northwest Chief Financial Officer Dave Davis said that bookings remain strong in the fourth quarter and that there is no evidence of slowing demand.
The carrier said it expects costs per seat mile to rise by between 2.5 percent and 3.5 percent in the fourth quarter with a reduction in the number of available seats down 2 percent to 3 percent. The airline said the bulk of the capacity reductions will be on domestic routes.
On more lucrative international routs, Northwest said it intends to increase capacity 2 percent to 3 percent.
The airline said it expects to pay USD$2.40 per gallon of jet fuel in the fourth quarter.
