UPDATE 4-AMR results beat Street. shares jump

* Lower fuel costs, capacity cuts help results

* AMR loses $1.30 per share excluding items

* Consensus view was $1.62 per-share loss

* Shrs close up 18.7 pct at $5.01 (Recasts that results helped by lower fuel costs, capacity cuts; updates shares)

By Kyle Peterson

CHICAGO, April 15 (Reuters) - AMR Corp (AMR.N), parent of American Airlines, on Wednesday posted first-quarter results that easily beat Wall Street expectations, helped by lower fuel costs and reduced capacity in the face of weaker travel demand, and its shares jumped nearly 19 percent.

AMR, the first major airline to report results, blamed the weak economy for its loss in the first quarter but said an upturn in the economy could boost its business. Other airlines due to report soon will likely have suffered similarly in the quarter, despite capacity cuts to match slower demand.

"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," AMR Chief Executive Gerard Arpey said in a statement.

But Arpey, on a conference call with analysts and reporters, added he was confident the economy would rebound and that travel demand, especially for businesses, would return.

"If the economy begins to pick up steam ... that will bode well for our traffic in the back half of this year," he said.

AMR said it paid 30 percent less for fuel in the first quarter and sees another decline in the second quarter.

AMR shares closed 79 cents higher, or 18.7 percent, at $5.01 on the New York Stock Exchange.

CAPACITY CUTS

The airline industry has been battered this year by falling demand as the recession trims travel budgets. The industry downsized last year and continues to shrink capacity in 2009.

AMR cut its mainline capacity -- the number of seats on flights owned and operated by AMR -- by 8 percent from the year-ago period. But its load factor, which measures how full a plane is, fell to 75.7 percent from 79.1 percent.

Overall, the results offer positive signs mixed with the negatives for the industry, said Morningstar analyst Basili Alukos.

"I'm still expecting passenger volumes and revenues to be down pretty significantly for all carriers across the board, with the exception maybe of Southwest (Airlines (LUV.N))," he said.

"But capacity is still coming offstream, which is a good thing for the industry," he said.

RESULTS

AMR said its first-quarter net loss was $375 million, or $1.35 per share, compared with $341 million, or $1.37 per share, a year ago.

Excluding items, the company lost $1.30 a share, easily beating analyst forecasts for a $1.62-per-share loss, according to Reuters Estimates.

The results include the impact of a $13 million charge, or 5 cents per share, reflecting the value of future lease payments related to aircraft retirements in the quarter.

AMR said its operating revenue fell 15.1 percent to $4.84 billion in the quarter.

Excluding fuel, AMR's mainline costs per available seat mile increased 6.8 percent in the quarter. The company predicted those costs will be up 6.6 percent in 2009 vs 2008.

AMR expects to cut its mainline capacity 6.5 percent year-over-year in 2009, with the bulk of that reduction on domestic routes. In the second quarter, AMR expects mainline capacity to be down 7.5 percent.

AMR ended the first quarter with $3.3 billion in cash and short-term investments. (Reporting by Kyle Peterson; Editing by Maureen Bavdek, Gunna Dickson, Richard Chang, Gary Hill)