Shares of American Airlines parent AMR ( AMR) surged Wednesday after the carrier's first-quarter loss was lower than Wall Street expected.

Citing reduced fuel spending and enhanced cost controls, American -- the first airline to report first-quarter earnings -- said it lost $375 million or $1.35 a share. Analysts surveyed by Thomson Reuters had estimated a loss of $1.68. Revenue fell 15% to $4.8 billion. Analysts had estimated $4.7 billion.

Results included the impact of a $13 million charge or 5 cents a share associated with retirements of A300 aircraft during the quarter. A year earlier, American lost $341 million or $1.37 a share in the first quarter.

Shares in American and other carriers, down early in the day, were rising following American's 11 a.m. earnings release. AMR was up 65 cents to $4.87. Delta ( DAL) was up 24 cents to $7.24. Southwest ( LUV), which will report earnings on Thursday, was up 10 cents to $7.37. Most carriers report next week.

"While lower fuel prices have provided a significant buffer against falling demand in 2009, the struggling economy and capital markets remain significant challenges for American and the rest of the industry," said CEO Gerard Arpey, in a prepared statement. American paid $561 million less for fuel than it would have paid at year-ago prices.

Arpey said the company has cut 2009 capital expenditures by about $100 million, identified ways to help control unit costs and secured financing for planned 737 deliveries into the fourth quarter of 2010.

"Our 2009 outlook remains challenging, but the hard work we have done in recent years to bolster liquidity, reduce debt and operate with capacity discipline has better prepared us to face these difficulties," he said.

"Other revenues," including sales of confirmed flight changes, upgrades, buy-on-board food services and bag fees rose 6.9% to $558 million.

Mainline passenger revenue per available seat mile declined by 8.7% from the same quarter a year earlier. Capacity fell by 8%. Mainline load factor was 75.7%, down 3.4 points. Yield, representing average fares paid, fell by 4.5%, the first year-over-year decrease following 15 consecutive quarters of increases.

Cost per available seat mile, excluding fuel, increased by 6.8%, reflecting the immediate impact of capacity cuts, increased airport fees, and increased pension and medical costs. But the impact was mitigated by reduced capacity and by improved cost discipline on expenses for information technology, materials and repairs.

American ended the quarter with $3.3 billion in cash and short-term investments. Total debt was $14.4 billion, compared with $15.2 billion a year earlier.

Looking ahead, American expects mainline capacity to decrease by 6.5% in 2009, including a domestic decline of 9% and an international capacity decline of 2.5%. Consolidated capacity will also decline by 6.5%.

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