US Airways Group on Thursday reported a quarterly net loss on weaker travel demand, but the loss narrowed 57 percent on capacity cuts and accounting gains for fuel hedge contracts related to cheaper jet fuel.

US Airways said its loss amounted to $103 million, or 90 cents per share, compared with a loss of $237 million, or $2.58 per share, a year ago.

Special items included a $170 million unrealized net gain associated with the change in fair value of the company's fuel hedge contracts.

Revenue declined 13.5 percent to $2.46 billion.

The U.S. airline industry has been hit hard by falling travel demand amid an economic recession. Carriers, including, US Airways, braced last year when they began slashing capacity to offset their fuel bills.

US Airways ended the quarter with $2.1 billion in cash and investments, of which $7 million was restricted.

(Reporting by Kyle Peterson, editing by Dave Zimmerman)