UPDATE 1-American Airlines loss narrows as travel demand picks up

(Adds share movement, details on cash burn, total revenue)

April 22 (Reuters) - American Airlines Group Inc reported a smaller quarterly loss on Thursday as rising vaccination rates prompted more people to opt for air travel.

Shares of the airline rose 3.2% to $21.66 in premarket trade as it said it reduced its cash burn rate to about $27 million a day in the first quarter, compared with $30 million in the previous quarter.

Demand for air travel is expected to pick up as more people receive vaccines, leading to a drop in COVID-19 infection rates and hospitalizations.

"Looking forward, with the momentum underway from the first quarter, we see signs of continued recovery in demand," Chief Executive Officer Dough Parker said in a statement.

The company posted a net loss of $1.25 billion, or $1.97 per share, for the quarter ended March 31, compared with a loss of $2.24 billion, or $5.26 per share, a year earlier.

On an adjusted basis, the company lost $4.32 per share.

Total operating revenue fell 52.9% to $4.01 billion.

American Airlines ended the quarter with about $17.3 billion in available liquidity. (Reporting by Sanjana Shivdas in Bengaluru; Editing by Anil D'Silva, Aditya Soni)