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Airlines report steep drops in June revenue

Airline stocks fell today after carriers including US Airways Group Inc. reported steep drops in June revenue, as the recession continued to hurt air travel.

US Airways said its consolidated passenger revenue, which includes mainline and regional flights, plunged 20 percent in June. Total revenue, which includes some fees, fell 18 percent compared to a year ago.

"These declines in unit revenue are driven by weaker demand for business travel and lower leisure yields as a result of the global economic recession," said US Airways president Scott Kirby.

The Tempe, Ariz., carrier said it cut capacity - seats and flights - 6.1 percent from the June 2008 level, but traffic declined just 4.1 percent. As a result, the load factor, or percentage of seats filled, improved 1.8 points to 86.8 percent.

American Airlines reported that its traffic declined 8.1 percent last month, more than its 7.8 percent cut in capacity. The biggest drop in both traffic and capacity was on domestic routes, where traffic fell 10.1 percent on 10.6 percent less capacity.

The June load factor fell 0.3 points to 85.1 percent compared to last June.

American, which does not detail monthly passenger revenue, said in a Securities and Exchange Commission filing June 18 that its passenger unit revenue would be down 16 percent to 17 percent in the second quarter.

Continental Airlines, the first major carrier to release monthly traffic, said last week that June traffic fell 6.5 percent from a year earlier, and capacity decreased 7.8 percent. The load factor was up 1.1 points to 84.8 percent.

Continental said passenger unit revenues, a key measure of financial performance in the airline industry, fell about 20 percent in the second quarter.

Separately, the Jamaica Gleaner newspaper reported over the weekend that low-fare carrier Spirit Airlines in Miramar, Fla., will purchase Jamaica's national airline, Air Jamaica.

The Gleaner quoted sources close to the negotiations that Air Jamaica's name may be changed to Spirit of Jamaica.

Misty Pinson, spokeswoman for Spirit Airlines, said, "We do not comment on market rumors."

Spirit operates flights from Atlantic City to Boston, Fort Lauderdale, Fort Myers, Myrtle Beach, Orlando and Tampa, Fla., with connections to Latin America and the Caribbean.

Air Jamaica flies daily nonstop from Philadelphia International Airport to Montego Bay.

Shares of US Airways fell 3.66 percent, or 9 cents, to close at $2.37; while American declined 1.66 percent, or 7 cents, to $4.15, and Continental slipped 0.31 percent, or 3 cents, to $9.76.


Contact staff writer Linda Loyd at 215-854-2831 or lloyd@phillynews.com.

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