UAL helps lead Airlines Index slide

US Airways Group Inc. and United Airlines parent UAL Corp. led U.S. carriers to a three-month low in New York trading as oil rose and an analyst said travel demand remains "putrid."

The Bloomberg U.S. Airlines Index of 13 carriers fell 3.2 percent at 2:50 p.m., after tumbling to the lowest intraday value since March 24, as US Airways slid 12 percent and UAL declined 10 percent. Oil, used for jet fuel, gained $2.27 to $69.20 a barrel, reversing a decline of 3.8 percent yesterday.

AMR Corp.'s American Airlines and UAL said this month they will cut additional jobs in response to a plunge in travel during the recession. Delta Air Lines Inc. said it needs to "reassess staffing needs" as it cuts international flying by 15 percent later this year.

"Demand remains putrid," Kevin Crissey, an analyst at UBS Securities LLC in New York, wrote today in a note to clients.

He lowered his estimates for earnings or losses and stock price targets today for the 10 U.S. carriers he follows, including Delta, AMR, UAL and US Airways.

Airline revenue patterns may be "about as bad" for June, July and August as they were in May, Crissey wrote.

Continental Airlines Inc., the fourth-largest U.S. carrier, said this month its unit revenue plunged as much as 20 percent for May in its main jet operations. Analysts watch the Houston- based carrier's results because most airlines don't provide monthly figures.

Fidelity Ownership

Fidelity Investments, the world's biggest mutual-fund company, is the top shareholder in five U.S. carriers, Bloomberg data show.

Boston-based Fidelity owned 13.6 percent of AMR, 13.4 percent of Delta, 12.1 percent of US Airways, 10.4 percent of Continental and 9.9 percent of UAL, as of March 31.

Fidelity was the second-largest holder of JetBlue Airways Corp., with a 13.3 percent stake, and AirTran Holdings Inc., with a 6.3 percent stake, according to Bloomberg.

The $4.77 billion Fidelity Capital Appreciation Fund had two airline stocks, AMR and Continental, among its top 10 holdings as of April 30, Bloomberg data show. Airline stocks represented 7.7 percent of the fund's investments.

The fund returned 3.62 percent this year through June 22, compared with a gain of 0.18 percent by the Standard & Poor's 500 Index, including reinvested dividends.

Adam Banker, a spokesman for Fidelity, declined to comment.