UPDATE 2-Delta's key revenue measure up in October, but storm hurt

* Airlines continue to restore service

* US Airways carries extra fuel on flights as precaution

* Analyst sees profitable Q4 for sector despite storm effects

Nov 2 (Reuters) - Delta Air Lines said on Friday that a key revenue measure improved in October, helped by corporate travel and cancellations in the wake of superstorm Sandy.

The airline, which canceled more than 3,500 flights last month because of the storm, said Sandy had hurt October revenue by $45 million and likely shaved about $20 million from the carrier's October profit. It estimated that the storm's effect on November revenue and profit would be less than in October.

Unit revenue, a measure of pricing power and how full planes are, rose 5.5 percent in October from a year earlier. The cancellations caused a 2 percent reduction in Delta's systemwide capacity in October from a year ago.

Delta said the improvement in unit revenue, also known as passenger revenue per available seat mile, was about one percentage point higher than it would have been without the impact of the hurricane. Cancellations tend to help unit revenue as more travelers are put on remaining flights. Delta's percentage of seats filled systemwide in October was 84.6 percent, up from 82.8 percent a year earlier.

U.S. airlines are restoring service in the Northeast after Sandy caused cancellations of nearly 20,000 flights this week. New York-area airport closures had a trickle-down effect as airlines were forced to cut flights in other major cities.

As concern heightened about gasoline shortages and supply chain operations in the area, some airlines took the step of carrying extra fuel on New York-bound flights. US Airways Group said on Fri day it had taken that move as a precaution.

``Even though there are adequate fuel supplies per the Port Authority, we are exercising caution given fuel shortages in the region,'' US Airways spokeswoman Michelle Mohr said in an e-mail. ``It's just another prudent step to ensure that we don't experience any fuel-related disruptions.''

Meanwhile, analysts expect a material earnings hit to airlines from Sandy.

David Fintzen, a Barclays analyst, said in a note to clients late this week that airline profits could suffer by $200 million in the fourth quarter because of the storm. He is projecting a collective pretax profit of $450 million for major airlines excluding AMR Corp's American, which is operating under Chapter 11 bankruptcy.

He added that New York-based JetBlue and US Airways , which has a hub in Philadelphia, likely have the most relative exposure to impact from the storm.

``We think U.S. airlines overall can still be profitable in an off-peak quarter after accounting for the hurricane,'' Fintzen wrote.

Shares of Delta were off 1 percent at $9.60. Other airline stocks edged down, with United Continental off 0.4 percent at $19.41, US Airways down 0.5 percent at $12.49 and Southwest Airlines down 0.3 percent to $9.02.