CHARLOTTE, N.C. ( TheStreet) -- Despite continuing benefits from merger chatter and strong demand, shares in US Airways ( LCC) fell 8% on Monday after the carrier reported a disappointing unit revenue gain. Shares fell back to $6.99, representing a gain of 34% for the year, after reaching a 2012 intra-day high of $9.91, up 90%, on Feb. 3. Generally, airline shares have been declining due to rising fuel costs. In mid-morning trading Tuesday, US Airways shares were flat.
In its February traffic report, issued Monday, US Airways said revenue per available seat mile rose 7% in February. That was the smallest gain in five months and less than what President Scott Kirby anticipated for the month during the carrier's fourth-quarter earnings conference call in January. After an 11% RASM gain in the fourth quarter, partially as a result of several fare increases, "the year-over-year comps do start to get a little more difficult," Kirby said. "We expect both January and February RASM to be up about 10%. With the tougher comps and higher leisure focus, we'd expect March RASM to be up a little less but still in the high single digits." US Airways spokesman John McDonald said a factor in the lower RASM number was the record completion factor of 99.7%, largely as a result of mild weather. "We flew more seats than would have been expected," McDonald said, meaning revenue per seat was lower than expected. In a report issued Tuesday, Rodman & Renshaw analyst Dan McKenzie said "the results suggest a small softening in demand, but we're not drawing conclusions given overall industry demand trends that remain intact at this point." A 24% share price decline over the past month means that shares are "oversold," McKenzie wrote, particularly given the possibility of a merger with bankrupt AMR.