NEW YORK (Bloomberg) — American Airlines parent AMR Corp. rose the most in five years and Delta Air Lines Inc. had its biggest gain in 14 months as the carriers' operating profits beat analysts' estimates and oil fell for a second day.

Both companies expanded plans to ground jets, and Delta doubled its target for new revenue and savings from its pending merger with Northwest Airlines Corp. AMR posted a net loss of $1.45 billion as it wrote down the value of an aging jet fleet. Delta reported a deficit of $1.04 billion on costs to eliminate jobs and reduce the value of assets.

"It's better than we thought it would be," said Michael Derchin, an analyst at FTN Midwest Research Securities Corp. in New York, who recommends buying shares of both companies. "They're making progress" on lowering costs and increasing fares.

Delta and AMR, the world's biggest carrier, are the first of the eight major US airlines to report second-quarter results. The combined losses of the eight will total $910 million before special items, Merrill Lynch & Co. analyst Michael Linenberg in New York projected on July 8.

US carriers plan to ground at least 481 planes and reduce domestic seats by 10 percent or more to cope with jet fuel, which was on average 80 percent more expensive in the second-quarter than a year earlier.

Delta increased 84 cents, or 18 percent, to $5.51 at 12.44 p.m. in New York Stock Exchange composite trading. Its 26-percent gain earlier was the biggest since its emergence from bankruptcy in April 2007. AMR climbed 94 cents, or 21 percent, to $5.35. Its 25 percent advance earlier was the largest since June 2003.

Fuel prices and airline stocks often move inversely. Futures for crude oil, which is refined into jet fuel, fell $5.60 a barrel yesterday, or four percent, to $133.14 at 10.42 a.m. in New York. Yesterday's drop followed a 4.4 percent decline yesterday on signs that a slowing US economy is cutting fuel use.

AMR's net loss of $5.77 a share includes $1.2 billion in non-cash charges for employee severance and the aging planes, some of which will be grounded. Excluding those charges, the loss was $284 million, or $1.13 a share.

On that basis, the Fort Worth, Texas-based carrier did better than the projected loss of $1.41 a share from 12 analysts surveyed by Bloomberg. Sales rose 5.1 percent to $6.2 billion. Net income a year earlier was $317 million, or $1.08 a share.

Delta had a net loss of $2.64 a share. The third-largest US carrier recorded a goodwill write-down of $1.1 billion and $102 million in charges for employee buy-outs and the closure of airport frequent-flier lounges.

Excluding those items, Delta said its profit was $137 million, or 35 cents a share, as higher fares and fuel surcharges boosted revenue. On that basis, 10 analysts surveyed by Bloomberg had an average estimate of 12 cents a share.

A year earlier, the Atlanta-based airline had a profit of $1.59 billion on one-time gains related to its exit from bankruptcy.

AMR said yesterday it would accelerate the retirement of its 34 Airbus SAS A300 aircraft to next year from 2012, stepping up reductions in seating capacity by an unspecified amount to cope with fuel. The carrier also delayed the planned divestiture of its American Eagle regional unit.

Delta pegged its targeted savings from the Northwest purchase at $2 billion and said it will pull 30 more regional jets out of service to save on fuel.