Investors on edge after 7.5% fall in August US airlines index

Dallas, Texas

US AIRLINE investors, already absorbing the worst monthly stock performance in a year, are bracing for more disappointment.

A Standard & Poor's index of the five biggest US airlines plunged about 7.5 per cent in August, wiping out about US$10 billion in market value. Shares fell as a price war that started between United Continental Holdings Inc and heavy discounters spread to more carriers and markets.

Analysts see more pain ahead. Three carriers, led by Delta Air Lines Inc, on Tuesday cut third quarter guidance for revenue from each seat flown a mile, a closely watched gauge of pricing power known as unit revenue. UBS Grou…