Two of the world's largest airlines posted sharp profit declines Thursday, as carriers follow contrasting paths to boost business by either cutting capacity or seeking to grow through the latest downturn.

Singapore Airlines Ltd. warned that forward bookings had weakened, and alongside Dubai-based rival Emirates reported lower earnings because of higher fuel prices and currency head winds.

Meanwhile, the Air Transport Association of America said fewer people are expected to fly this Thanksgiving. The group said about 2% fewer people will fly during the 12 days surrounding the holiday, a drop of 440,000 from 23.6 million Thanksgiving passengers last year. But airplanes will still be packed, the trade association said, because airlines are selling fewer seats to boost their ability to raise fares.

"While demand is down from last year and remains well below the 2006 peak, passengers still should expect full flights," said John Heimlich, chief economist for the ATA.

Fuel costs continue to pressure the industry. In the first nine months of 2011, those expenses rose 38%, or US$9.4 billion, from a year earlier for 10 of the largest U.S. airlines, the ATA said. Some airlines have cut capacity as they seek to preserve profits. Carriers will offer 1.4% fewer domestic seats in the fourth quarter compared with a year earlier, the ATA said.

Singapore Airlines cited forward bookings to Europe and the U.S. as the main source of its weakness, though the Asian flag carrier hasn't followed some rivals with plans to reduce capacity. Its profit fell 49% from a year earlier in the quarter to Sep. 30.

Emirates, the world's largest international carrier by traffic, is continuing its rapid expansion despite posting a 76% drop in profit for the six months to Sep. 30. The airline aims to buoy its results through cost cutting and efforts to lure more business travelers, though it has been willing to cut fares during previous downturns to boost demand.

The reports from two of the industry bellwethers came as the International Air Transport Association said global capacity is continuing to rise at an annualized rate of 6%, though the rate of fare increases to offset higher fuel costs has slowed.

Some airlines have criticized the continued expansion by Emirates and two other fast-growing Middle East carriers -- Etihad Airways and Qatar Airways -- despite softer market conditions.

Emirates raised capacity by 8.2% in its fiscal first half to Sep. 30 as the company's fleet increased to 161 wide-body aircraft. The airline has restarted growth after a six-month pause, but is looking to cut costs in response to rising fuel costs and the impact of the weak euro and pound, which has depressed revenue for a company that reports in dollars.

"We are suffering," Tim Clark, president of Emirates, said during an interview last month, though passenger and cargo bookings remain robust.

In a written statement Thursday, the carrier said its first-half net profit dropped to 827 million U.A.E. dirhams (US$225 million), down from 3.4 billion dirhams a year earlier. Revenue increased 15% to 30.3 billion dirhams.

Singapore Airlines said its net profit declined to S$194.2 million (US$152.4 million) for the three months ended Sep. 30 from S$380.2 million a year earlier. Revenue totaled S$3.7 billion, up slightly from S$3.6 billion, the carrier said in a statement to Singapore Exchange Ltd.

The airline's cargo division reported an operating loss of S$31 million for its fiscal second quarter, compared with a profit of S$102 million a year earlier.

Shares in Singapore Airlines closed down 1.7% at S$11.29.