Shares of United Airlines parent UAL Corp (UAUA.O) were up 8.79 percent at $10.03 in early trade on Nasdaq. Shares of AMR Corp (AMR.N), parent of American Airlines, were up 5.82 percent at $7.27 on the New York Stock Exchange. The Arca airline index .XAL was up 4.47 percent.

The economy shed 11,000 jobs in November while the unemployment rate dropped to 10 percent, a government report on Friday showed. Economists expected 130,000 job losses and the unemployment rate to remain at 10.2 percent.

Passenger traffic has followed job creation by roughly six months. So as the pace of job losses subsides, I expect volume growth should begin to tick up more pronounced than it already has, said Morningstar equity analyst Basili Alukos.

The airline industry has been battered in the last year by a sagging economy that dampened travel demand and caused carriers to slash capacity.

(Reporting by Kyle Peterson, editing by Dave Zimmerman)