–TEMPE, Arizona (AP) - US Airways Group Inc. yesterday said it swung to a profit in the third quarter as its revenue rose and the carrier reduced the number of flights flown.

Net income for the three months ended September 30 rose to $177 million, or $1.87 per share, compared with a loss of $78 million, or a loss of 88 cents per share, during the same period last year.

Excluding special items, the company reported a profit of $185 million, or $1.96 per share, compared with $101 million, or $1.09 per share, a year ago.

Analysts surveyed by Thomson Financial had been expecting earnings, on average, of $1.75 per share. Those forecasts typically exclude one-time costs.

Revenue for the quarter increased to $3.04 billion, up from $2.97 billion. Analysts predicted revenue of $3.06 billion.

US Airways said its passenger revenue per available seat mile - a key measure of airline performance - rose to 12.15 cents, an increase of 5.6 percent. At the same time, capacity, or the number of flights flown, fell by more than two percent. The airline filled 83 percent of its seats in the third quarter, compared with 79 percent for the same period last year.

"Looking into the current quarter, demand remains robust and the yield environment also remains strong," chairman and chief executive Doug Parker said in a statement. "Recent fuel price increases remain problematic, but so long as our industry continues its recent capacity restraint we are optimistic about prospects for 2008."

The airline said that during the third quarter it announced plans to offer jobs to all pilots furloughed by US Airways before it combined with America West Airlines. US Airways also said it would hire an additional 350 pilots by the end of 2008.

US Airways shares fell 67 cents, or 2.3 percent, to $28.07 in late morning trading Thursday. Its shares fell 13.3 percent over the third quarter, and have sunk by about half since it dropped its hostile bid for Delta Air Lines Inc. in January.

The carrier has struggled to combine its work force ever since America West acquired the bankrupt former US Airways in 2005. US Airways has not signed combined contracts with its flight attendants, pilots, mechanics and fleet service unions.

Negotiations with pilots were hindered this quarter when a disgruntled group of pilots from the former US Airways walked out, demanding immediate pay raises.

A rival union says several thousand pilots have signed petitions to decertify the Air Line Pilots Association, which currently represents US Airways pilots.

The carrier said in August it had reached a contract agreement with the union for fleet service workers, but the membership rejected it in a vote.