By Kyle Peterson
CHICAGO (Reuters) - Skyrocketing fuel costs and disasters in Japan took a bite of out major U.S. airline earnings reported on Thursday, but higher fares helped the carriers, including United Continental Holdings <UAL.N>, meet or beat Wall Street forecasts.
United Continental, parent of United Airlines, posted a quarterly loss and said the decline in demand for travel to Japan following the March 11 earthquake and tsunami lowered its first-quarter passenger revenue by about $30 million.
Low-cost leader, Southwest Airlines <LUV.N>, reported a lower quarterly profit on mounting fuel costs that have extended their gains into the second quarter.
"Revenue was up nicely, led mostly by higher ticket prices, while surging fuel costs erased almost all of the profitability," Morningstar analyst Basili Alukos said.
A series of fare increases throughout the airline industry in the first quarter eased the pain of fuel prices that have soared alongside oil. The price of U.S. crude was around $111.00 a barrel on Thursday, having started the year at $91.31.
The Air Transport Association said last week that U.S. airlines may set a record for fuel costs when they report results, paying about $3 billion more so far this year.
United Continental said the revenue gains it saw in the first quarter were offset by an increase in its fuel tab of 34.5 percent, or $725 million.
On Wednesday, American Airlines parent AMR Corp <AMR.N> posted a smaller-than-expected quarterly loss, but soaring fuel prices prompted the carrier to curb capacity later this year.
United Continental shares were down 1.3 percent at $20.74 in early trading, and Southwest's shares fell 1.4 percent, or 17 cents, to $11.46, both on the New York Stock Exchange.
United Continental, formed last year from a merger of UAL Corp and Continental Airlines, posted a larger quarterly net loss of $213 million, or 65 cents a share, from $82 million, or 49 cents per share, a year earlier.
Excluding $77 million of charges consisting primarily of integration-related costs, the airline said it lost 41 cents per share. On that basis, analysts expected a loss of 48 cents a share, according to Thomson Reuters I/B/E/S.
United Continental compares the results of the merged airline with consolidated year-ago results for UAL and Continental. The old United and Continental currently operate as separate airlines, but management is working to combine them into a single carrier known as United Airlines.
Capacity cuts and consolidation among airlines in the last few years has lent new stability to the embattled companies.
"I'm wondering if oil prices remain elevated, if it doesn't make the carriers that didn't merge, reconsider," Alukos said.
Southwest said net income was $5 million, or a penny a share, compared with $11 million, or a penny per share, a year ago. Excluding special items, profit came to 3 cents a share, in line with consensus analyst estimates, according to Thomson Reuters I/B/E/S.
Quarterly revenue rose 18 percent to $3.1 billion.
Southwest's expenses rose 16 percent as fuel and oil costs increased 26 percent. Southwest expects to acquire low-cost rival AirTran Holdings during the second quarter -- a deal that will strengthen its presence in big U.S. East Coast markets.
JetBlue Airways Corp <JBLU.O> met analysts' expectations, swinging to a quarterly profit. Net income for the first quarter was $3 million, or a penny per diluted share, compared with a loss of $1 million, or nil cents a share.
Analysts expected a gain of a penny per share, according to Thomson Reuters I/B/E/S. JetBlue paid 34 percent more for fuel over the year-ago period but logged $2 million in hedging gains.
Alaska Air Group <ALK.N>, the parent of Alaska Airlines, posted a record quarterly profit, comfortably exceeding analyst expectations. Earnings, excluding special items, of $29.5 million, or 80 cents per diluted share, rose from $13.1 million, or 36 cents per share, in the year-earlier period, the company said on Thursday.
Analysts expected earnings of 71 cents a share, according to Thomson Reuters I/B/E/S.
(Reporting by Kyle Peterson, Karen Jacobs and John Crawley; Editing by Maureen Bavdek)