At last check, the NYSE Arca Airline Index /quotes/comstock/10t!xal.x (XAL 35.57, +0.51, +1.45%) rose 1.5% to 35.60 points with all but three of its 13 components trading up. In the last 52 weeks, the sector benchmark has moved in a range of 36.25 to 12.62 points.

Shares of American parent AMR Corp. /quotes/comstock/13*!amr/quotes/nls/amr (AMR 9.05, +0.34, +3.90%) rose 4.5% to $9.11, Alaska Air /quotes/comstock/13*!alk/quotes/nls/alk (ALK 34.01, +1.26, +3.85%) added 3.4% to $33.86 and Delta Air Lines /quotes/comstock/13*!dal/quotes/nls/dal (DAL 12.48, +0.23, +1.88%) climbed just under 3% to $12.61.

Earlier, the International Air Transport Association said premium travel on international markets grew for the first time in 19 months in December to a level 1.7% above prior-year data. December results are off of very favorable comparisons due to last year's recession. May marked the low point for premium travel when numbers were off by 25% year over year.

"World trade has picked up significantly since May, to a similar extent as premium travel," the trade group said. Read more about global air travel.

Over the long holiday weekend, the U.S. Department of Transportation said it would grant a request from American Airlines and four of its international partners to form a tighter transatlantic alliance if the carriers give up four U.S.-London Heathrow time slots to competitors.

If the decision is made final, American and its oneworld alliance partners British Airways, Iberia Airlines /quotes/comstock/06x!cibla (ES:IBLA 2.18, +0.05, +2.54%) , Finnair /quotes/comstock/22u!fia1s (FI:FIA1S 3.75, -0.05, -1.32%) , and Royal Jordanian airlines would be able to more closely coordinate transatlantic operations.

Though a joint venture between Delta and Air-France KLM /quotes/comstock/11i!aflyy (AFLY.Y 13.40, -0.23, -1.69%) has a greater market share, an American and British Airways /quotes/comstock/23s!a:bay (UK:BAY 205.30, +5.47, +2.74%) venture would have a higher share of Heathrow, according to bond research firm CreditSights.

In a Saturday news release, the DOT said the antitrust immunity could harm competition on select routes between the U.S. and Heathrow, oneworld's primary hub, as landing and taking off slots there are limited. To offset the potential monopoly, the U.S. says it wants to the airlines to give up four Heathrow slots as well as change the alliance agreement to ensure transatlantic capacity growth.

The DOT also wants the carriers to submit traffic data and implement the proposed alliance within 18 months of a final decision.

E.U. approval is still in process.

"Airline joint ventures are here to stay, and applications are popping up all over the place," said GimmieCredit, in a Sunday note to clients. "They allow airlines to maintain revenues but cut overhead through joint scheduling. And they allow governments to offer some of the benefits of cross border mergers without the political fallout."

It may be too late for some airlines with a smaller share of the transatlantic market, such as US Airways /quotes/comstock/13*!lcc/quotes/nls/lcc (LCC 6.88, +0.07, +1.03%) and Virgin Atlantic, but the Pacific is just becoming fertile for similar hookups.

Late Friday, American Airlines announced it would also seek antitrust immunity to forge a closer relationship with Japan Airlines /quotes/comstock/11i!jalsy (JALS.Y 0.87, -0.10, -9.84%) for their flights between North America and Asia.

"An immunized [joint venture] will benefit the public, offer new competition in the fast-growing Asian aviation marketplace and strengthen the relationship between American and Japan Airlines, which will support JAL's successful restructuring," said Gerard Arpey, American's chairman and chief executive.

Last week, JAL ended a long struggle between American and rival Delta for its loyalty. Both U.S. carriers had offered financial support for the bankrupt airline in turn for greater route and fare coordination, but the Tokyo airline ultimately said it would keep its partnership with American. Read more about JAL.