* A strong March could mean Q1 profits for Delta-analyst
* UBS sees March unit revenue up 17 pct for major airlines
* Airline index up 14 percent this year (Adds quotes from UBS note, background)
UBS lifted its price targets on seven airlines including American Airlines parent AMR Corp (AMR.N) and UAL Corp's (UAUA.O) United Airlines. [ID:nWNAB7511]
"Management commentary remains positive regarding the revenue environment and our channel checks support this view," UBS analyst Kevin Crissey said in a research note.
Crissey projects that March unit revenue for major airlines could be up about 17 percent.
AMR shares rose more than 6 percent on the New York Stock Exchange to $10.40, with Delta up almost 5 percent to $13.40. The Arca Airline index was up nearly 4 percent.
Continental Airlines Inc (CAL.N) jumped 5 percent to $22.27 while US Airways (LCC.N) rose nearly 6 percent to $8.15.
Jesup & Lamont analyst Helane Becker narrowed her estimate of Delta's first-quarter loss, citing improved business demand and capacity reductions.
Becker now estimates Delta will report a loss of 12 cents per share. Earlier she projected a loss of 41 cents per share.
"If March ends strongly, the airline could certainly be profitable," Becker wrote.
Traffic reports for the first two months of 2010 signal that air travel demand, especially from business travelers, is improving. During a JPMorgan Chase & Co aviation conference Tuesday, many airline executives also said they were mulling new fees to drum up additional revenue.[ID:nN09234122]
The Arca Airline index has nearly tripled since the S&P 500 .SPX hit a 12-year low in March 2009. It is up 14 percent since the start of the year. (Reporting by Deepa Seetharaman, editing by Gerald E. McCormick, Dave Zimmerman)
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