Shares in JetBlue Airways Corp. fell on Friday after the discount carrier lowered its earnings forecast amid weaker demand.JetBlue was the latest U.S. airline to highlight softening demand because of security concerns and a seasonal drop-off in traffic.

The six-year-old airline has hit some bumps after a period of rapid growth and it embarked on a turnaround effort earlier this year.The company, in our view, faces significant revenue challenges given its rapid growth plans despite a slowing economy, Merrill Lynch analyst Michael Linenberg said.

In a filing late on Thursday, the New York-based airline said it expected a 2006 pretax profit margin of negative 2 percent to break-even. That's one percentage point lower than a forecast range from July 25.

The discount carrier, which features onboard satellite TV, kept its third-quarter guidance for pretax profit margin steady at between negative 1 percent and positive 1 percent. The stable third-quarter forecast coupled with the lower full-year guidance implies a more pessimistic outlook for the fourth quarter.

In the filing, the company said the outlook assumes a third-quarter gain of about $6 million and an immaterial loss in the fourth quarter from the planned sale of five planes.JetBlue also lowered its third-quarter forecast for growth in passenger revenue per available seat mile a measure of demand by five percentage points to 13 percent to 15 percent.

This was countered by a decline in estimated third-quarter average fuel cost to $2.10 a gallon from $2.20 a gallon. This equates to savings of about $10 million based on its expected fuel consumption of 101 million gallons.

JetBlue increased its fourth-quarter fuel hedge in recent weeks. It said it had hedged 51 percent of its estimated fourth-quarter jet fuel consumption compared with 31 percent as of July 25.It is protected against a rise in prices, starting at $2.15 a gallon in jet fuel and $67 a barrel in oil.

The airline didn't say what its exposure to falling prices is. Some airlines that have hedged near peak summer prices may end up paying above-market prices for fuel.JetBlue shares on Nasdaq were down 5 cents at $9.81, after trading as high as $10.10. It was underperforming the Amex airline index, which was up slightly.