Updated from 10:17 a.m. EDT

AMR

,

(AMR)

the parent of

American Airlines

, the world's second-largest carrier, said Wednesday its profits in the third-quarter rose 51%, beating Wall Street estimates, as it benefited from a gain in customers frustrated with rival

United Airlines

.

Meanwhile,

US Airways

(U) - Get Report

, whose shareholders recently

approved a $4.3 billion acquisition bid from

United Airlines

parent

UAL

(UAL) - Get Report

, said on Wednesday that it lost $30 million in the third quarter, more than Wall Street had expected, amid increased competition and a 75% jump in fuel expenses.

Fort Worth, Texas-based AMR earned $322 million, or $1.96 a share in the third quarter, excluding a one-time loss for the repurchase of unsecured debt. That's sharply higher than its profit of $213 million, or $1.38 a share, earned in the same period a year earlier.

On average, analysts surveyed by

First Call/Thomson Financial

had expected earnings of $1.78 a share. After accounting for the one-time loss on the repurchase of $167 million in unsecured debt, AMR's earnings were $313 million, or $1.91 per share.

Despite the strong earnings report, AMR ended Wednesday regular trading down $1.06, or 4%, at $27.94.

In a statement, Donald Carty, American's chairman and CEO, said the company's third-quarter results were the second-best in its history for that quarter. He cited the $150 million in savings generated from its aggressive fuel hedging program, and strong growth in passenger revenues.

The airline recorded its 10 busiest days ever during the quarter, with a July load factor of 80.3%. Passenger revenues on its American Airlines and American Eagle flights rose 12% from a year ago. But industry analysts say the growth in the number of passengers on American flights this summer likely included quite a few who had rebooked from United flights.

United, the world's largest airline, was plagued with thousands of cancelled flights and massive delays during the quarter due to labor-related disruptions and unusually bad weather at its hub airports.

PaineWebber

analyst Sam Buttrick said American was the biggest beneficiary, estimating gains from United's operational disruptions may have accounted for 31 cents per share of AMR's earnings.

Meanwhile, US Airways, the nation's sixth-largest carrier, was still suffering from revenue losses stemming from its own cancellations and labor problems earlier this year and at the end of last year. The Arlington, Va.-based carrier said it lost 45 cents a share in the third quarter, far worse than analysts' consensus forecast of a 19-cent loss per share, according to a

First Call/Thomson Financial

survey.

US Airways performance in the third quarter was an improvement over a year ago. In the same year-ago period, the carrier lost $85 million, or $1.19 a share, after losing revenue from an unusually high number of cancellations due to bad weather, and potential cancellations from the threat of a labor strike that prompted additional passengers to rebook on competing carriers.

US Airways reported that revenue rose 13% in the last quarter to $2.38 billion, up from $2.10 billion a year earlier. However, operating expenses were up 7.4% at nearly $2.38 billion.

Shares of US Airways finished Wednesday regular trading down $1.13, or 3%, at $31.13.