UPDATE 1-American Air parent AMR posts better quarterly results
* Third-quarter profit compares with year-ago loss
* Revenue rose, costs fell
Oct 17 (Reuters) - American Airlines parent AMR Corp reported improved third-quarter results on Thursday, aided by bankruptcy cost-cutting.
The carrier, which is looking to emerge from Chapter 11 protection by merging with US Airways Group Inc, had net income of $289 million, or 76 cents a share in the quarter, compared with a loss of $238 million, or 71 cents a share, a year earlier.
Excluding restructuring costs and special items, profit was $530 million, the highest quarterly earnings in company history, AMR Chairman Tom Horton said in a statement.
The U.S. Justice Department sued to block the merger with US Airways in August, and a federal trial in the case is set to begin next month.
American, which would become the world's biggest carrier should the merger be completed, has renegotiated plane leases, cut management and frozen pension plans to lower costs since filing for bankruptcy in November 2011. New labor contracts with unions have also made it more cost-competitive.
Quarterly revenue rose 6 percent to $6.8 billion. Passenger revenue per available seat mile, or unit revenue, rose 3.4 percent. Operating costs fell about 4 percent, as expenses tied to salaries fell 13 percent.