NEW YORK (MarketWatch) -- Airline stocks gained Tuesday after United and American airlines gave upbeat quarterly revenue reports, thanks to renewed business travel and international premium-class bookings,.

The sector's benchmark stock index, the NYSE Arca Airline Index XAL, -1.05% , surged to a new 52-week high, closing up 2.6% at 36.99 points.

Shares of Continental CAL, +1.48% climbed 4.4% to $21.09 while American parent AMR Corp. AMR, jumped 8.5% to $9.70 and United parent UAL Corp. UAUA rose 5.3% to $18.43.

Continental, UAL and AMR hit yearly highs earlier in the session.

United Airlines told analysts in New York that its revenue recovery in 2010 has so far outpaced the industry, thanks to a nice bump in international premium-class bookings and revenue from its corporate customers.

For February, passenger unit revenue grew 18% from a year ago, versus 10.5% growth in January, according to the Chicago-based airline operator. Though industry comparisons aren't yet available for February, January growth beat the industry by seven points.

"We are clearly seeing signs of economic recovery," said Kathryn Mikells, the chief financial officer at UAL. Read more on UAL.

Ancillary revenue has become a key source of revenue for United, thanks to first and second bag fees and on-board purchases of food, United said. Read more about airlines retail strategy and the importance of in-flight sales.

At AMR, first-quarter passenger unit revenue is expected to climb by a range of 6.5% to 7.5% versus the year-ago period.

For the year, capacity is expected to climb 1% from 2009 due to the resumption of flights to Mexico that were pared back over the summer due to the swine flu out break, and the launch of its Chicago to Beijing route in April.

"While there remains a lot of uncertainty about the strength of the economic recovery and fuel prices, we're focused on returning our airline to profitability," said Chief Financial Officer Tom Horton, during an analyst meeting in New York.

UAL's United also posted its February traffic results late Monday and noted a steep reduction in passenger revenue due to severe winter storms in North America.

For February, United said its traffic rose 2.1% to 7.82 billion revenue passenger miles, which equals one passenger flown one mile.

Capacity for the month declined 5.3% to 9.93 billion available seat miles while load, or the percentage of seats filled with passengers, rose to 78.7% from 73%.

Winter storms took a $40 million bite of passenger revenue in February due to hundreds of weather-related cancellations, primarily in the North East. The impact of the storms has collectively exceeded $100 million across the industry.

Earlier, Southwest Airlines LUV, -0.29% said weather-related flight cancellations during the month resulted in an estimated $15 million hit on passenger revenues. US Airways LCC, said it suffered $30 million in lost revenue due to the unusual weather, Continental CAL, +1.48% put the impact at $25 million, and budget-carrier AirTran AAI, sees the hit in the range of $5 million to $6 million.

Delta Air Liens DAL, -0.09% said Friday it expects to post something on the weather impact this week.

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