The revenue picture for Continental Airlines (CAL) - Get Report brightened somewhat in October, a sign recent pricing pressures on airlines may be moderating, lifting the carrier's shares Tuesday.

Continental late Monday said it filled more seats on its planes in October, as demand outpaced supply. The company filled 78.3% of seats in its consolidated operations, up 4.7 percentage points from a year earlier, and a record for the month of October.

Traffic, a barometer of demand expressed in revenue passenger miles, rose 14.5% year over year, while capacity, measured in available seat miles, increased 7.7%.

Unit revenue, as measured in revenue per available seat mile, or RASM, was flat or improved slightly, following declines in August and September. Continental estimates that consolidated RASM, a key gauge of industry trends, increased up to 1% in October from a year earlier. Estimated mainline RASM rose between 0.5% and 1.5% year over year. Consolidated RASM and mainline RASM fell 1.2% and 1%, respectively, in September.

U.S. airlines are one-third of the way through the seasonally weak fourth quarter, following an abysmal third quarter when they had a tough time raising fares because of industry overcapacity and tough price competition. At the same time, costs have been rising because of sky-high fuel prices, although crude oil has retreated from its high of more than $55 a barrel reached late last month. On Monday, it traded below the $50-a-barrel mark for the first time since September.

Continental shares were up 48 cents, or 5%, at $10.04, while the Amex Airline Index was up 3.6%.

Continental's October results constituted a "reasonable start to a tough quarter," wrote Jamie Baker, a J.P. Morgan analyst, in a research note. "Given recent leisure pricing traction, Continental's October results will likely represent the low point of its quarter, with less severe yield declines moving forward. If so this suggests modest upside to the current loss consensus of $2.83." (J.P. Morgan does and seeks to do business with companies covered in its research reports.)

Baker wrote that Continental's estimated mainline RASM increase of 0.5% to 1.5% was slightly ahead of his own "flattish" forecast.

Continental lost $16 million in the third quarter. Other network carriers, including American Airlines' parent

AMR

(AMR)

,

Delta Air Lines

(DAL) - Get Report

and

Northwest Airlines

(NWAC)

, also reported significant losses in what is usually the industry's most profitable quarter.