US Airways' Business Off 20%

CHARLOTTE, N.C. -- US Airways(LCC Quote) said unit revenue fell 20% in June, days after Continental(CAL Quote) reported a similar 20% decline.

US Airways President Scott Kirby said the decline in passenger revenue per available seat mile was "driven by weaker demand for business travel and lower leisure yields as a result of the global economic recession." In a prepared statement, Kirby said total RASM, which generally includes fee revenue, declined 18%. Only a handful of airlines report monthly unit revenue numbers.

US Airways said revenue passenger miles declined 4.1%, while capacity declined 6.1%, enabling the carrier to report a 1.8 point increase in load factor to a June record 86.8%.

Despite weak June performance, airline shares were rising Monday as oil prices fell. At midmorning, United(UAUA Quote) shares were up 2.4% to $3.39. Among analysts' current favorites in the sector, AirTran(AAI Quote) was up 2.9% to $6.35 and Alaska(ALK Quote) was up 2.3% to $18.78. US Airways was down 2.4% to $2.40.

Carriers are currently caught in a vicious cycle of weak demand for business travel, harsh fare competition for leisure travelers, and rising oil prices, which has prompted expectations that the industry will lose money this year despite capacity reductions. However, a decline in oil prices would ease cost pressure.