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+%3Cp%3E+Stocks+ended+Friday+mixed+after+a+roller-coaster+week+in+which+all+three+indexes+each+lost+more+than+2.5%25.%3C%2Fp%3E%3Cp%3EAfter+moving+up+more+than+1%25+in+the+first+hour+of+trading%2C+stocks+steadily+retreated.+%3C%2Fp%3E%3Cp%3E%3Cp%3E%3C%2Fp%3E%3Cp%3E%3Cp%3E%3C%2Fp%3E%3C%2Fp%3E%3C%2Fp%3E%3Cp%3EThe+Dow+Jones+industrial+average+%28%29+closed+the+day+down+2+points%2C+or+0.02%25.+The+S%26amp%3BP+500+%28%29+moved+up+4+points%2C+or+0.3%25.+The+Nasdaq+%28%29+increased+15+points%2C+or+0.6%25.+Both+the+Dow+and+S%26amp%3BP+shed+2.8%25+for+the+week%2C+and+the+Nasdaq+dropped+3.4%25.%3C%2Fp%3E%3Cp%3EPart+of+the+sell-off+came+after+Fitch+put+seven+European+countries+on+credit+watch+negative%2C+citing+the+higher+probability+that+it+could+downgrade+these+nations+in+the+next+few+months.+Still%2C+investors+breathed+a+sigh+of+relief+that+France%2C+in+particular%2C+retained+its+pristine+AAA+rating.%3C%2Fp%3E%3Cp%3EBeyond+France%2C+Fitch+Ratings+also+affirmed+the+ratings+of+Belgium%2C+Spain%2C+Slovenia%2C+Italy%2C+Ireland+and+Cyprus%2C+while+putting+them+on+review+for+potential+near-term+downgrades+Friday+after+the+European+markets+closed.+%3C%2Fp%3E%3Cp%3E%26quot%3BEveryone+was+concerned+that+France+would+lose+its+AAA%2C+so+overall+investors+are+taking+Fitch%27s+moves+as+more+of+a+positive%2C%26quot%3B+said+Michael+James%2C+senior+equity+trader+at+Wedbush+Morgan+Securities.%3C%2Fp%3EEurope%27s+odds+of+success%3Cp%3EAhead+of+the+opening+bell%2C+the+government+released+its+latest+data+on+inflation%2C+which+showed+consumer+prices+rose+at+a+3.4%25+annual+rate+in+November.+That+was+virtually+unchanged+from+the+prior+month.%3C%2Fp%3E%3Cp%3E%26quot%3BThe+good+news+is+that+we%27ve+had+slightly+better+economic+numbers%2C+but+the+bigger+picture+is+there%27s+no+confidence%2C%26quot%3B+said+Ted+Weisberg%2C+president+of+Seaport+Securities.%3C%2Fp%3E%3Cp%3EWeisberg+and+other+traders+said+volumes+have+been+particularly+light+in+the+past+week+both+ahead+of+the+holiday+break+and+because+few+investors+have+conviction+over+the+market%27s+direction.+%3C%2Fp%3E%3Cp%3EFriday+also+marks+%26quot%3Bquadruple+witching%2C%26quot%3B+when+four+types+of+contracts+expire+–+those+tied+to+market+index+futures%2C+market+index+options%2C+stock+options+and+stock+futures.+%3C%2Fp%3E%3Cp%3EWhile+many+traders+try+to+settle+out+those+contracts+ahead+of+expiration%2C+there+is+often+some+volatility+on+the+actual+day.%3C%2Fp%3E%3Cp%3E%3C%2Fp%3E%3Cp%3E+%3C%2Fp%3E%3Cp%3E%26quot%3BWhen+you+have+options+expirations%2C+it+tends+to+skew+trading%2C%26quot%3B+said+Weisberg.+%26quot%3BThey%27re+sort+of+throwaway+days.%26quot%3B%3C%2Fp%3E%3Cp%3EU.S.+stocks+closed+higher+Thursday+on+upbeat+jobs+and+manufacturing+reports%2C+but+the+market+remains+nervous+about+the+European+debt+crisis.%3C%2Fp%3E%3Cp%3EAfter+the+close+Thursday%2C+Fitch+downgraded+seven+banks%2C+including+Bank+of+America+%28%2C+Fortune+500%29%2C+Morgan+Stanley+%28%2C+Fortune+500%29%2C+and+Goldman+Sachs+%28%2C+Fortune+500%29%2C+as+well+as+Europe%27s+Barclays%2C+Societe+Generale%2C+BNP+Paribas%2C+Deutsche+Bank+and+Credit+Suisse.+Most+major+banks+ended+the+day+down%2C+with+Goldman+Sachs+dropping+almost+2%25.+%3C%2Fp%3E%3Cp%3EEconomy%3A+Federal+officials+also+said+Friday+that+Europe%27s+crisis+could+wind+up+being+a+job+killer+for+the+United+States.+%3C%2Fp%3E%3Cp%3ENew+York+Fed+President+William+Dudley+told+lawmakers+that+deterioration+in+the+European+economy+could+reduce+demand+for+U.S.+products.+And+Steven+Kamin%2C+director+of+the+division+of+international+finance+at+the+Federal+Reserve%2C+echoed+those+comments+with+equally+dire+testimony.%3C%2Fp%3E%3Cp%3ECompanies%3A+Shares+of+Zynga+%28%29+rose+10%25+in+their+public+debut+on+the+Nasdaq%2C+before+closing+the+day+down+5%25+from+its+IPO+price.+The+maker+of+popular+Facebook+game+Farmville+priced+shares+at+%2410+apiece+in+the+its+initial+public+offering+late+Thursday.%3C%2Fp%3E%3Cp%3EResearch+in+Motion+%28%29+shares+dropped+sharply%2C+a+day+after+the+BlackBerry+maker+offered+a+disappointing+outlook+for+the+current+quarter+and+next+year%2C+when+it+released+its+earnings+results.%3C%2Fp%3E%3Cp%3E%3C%2Fp%3E%3Cp%3E+%3C%2Fp%3E%3Cp%3EWorld+markets%3A+European+stocks+closed+the+day+with+modest+losses.+Britain%27s+FTSE+100+%28%29+ticked+down+0.3%25+while+the+DAX+%28%29+in+Germany+edged+down+0.5%25.+France%27s+CAC+40+%28%29+shed+0.9%25.%3C%2Fp%3E%3Cp%3EAsian+markets+ended+higher.+The+Shanghai+Composite+%28%29+rose+2%25%2C+the+Hang+Seng+%28%29+in+Hong+Kong+gained+1.4%25+and+Japan%27s+Nikkei+%28%29+edged+higher+0.3%25.%3C%2Fp%3E%3Cp%3ECurrencies+and+commodities%3A+The+dollar+fell+against+the+Japanese+yen%2C+the+euro+and+British+pound.+%3C%2Fp%3E%3Cp%3EOil+for+January+delivery+increased+12+cents+to+%2493.99+a+barrel.+%3C%2Fp%3E%3Cp%3EGold+futures+for+February+delivery+rose+%2420.70+to+%241%2C597.90+an+ounce.+%3C%2Fp%3E%3Cp%3EBonds%3A+The+price+on+the+benchmark+10-year+U.S.+Treasury+increased+pushing+the+yield+down+to+1.86%25+from+1.91%25+late+Thursday.+%3C%2Fp%3E%3Cp%3E–+CNNMoney%27s+Aaron+Smith+contributed+to+this+report.%26nbsp%3B+%3C%2Fp%3E++%3Cp%3E%3Ca+href%3D%27http%3A%2F%2Fmoney.cnn.com%2F2011%2F12%2F16%2Fmarkets%2Fmarkets_newyork%2Findex.htm%27+rel%3D%27nofollow%27%3ESource%3C%2Fa%3E%3C%2Fp%3E+

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My husband and I have a couple of credit cards we never use. However, we have read that one shouldn’t cancel credit cards because it has a bad effect on credit score. We might refinance our house. Should we cancel these cards?

The Italian government has won a confidence vote over its package of anti-crisis austerity measures in the lower chamber of Parliament.

Premier Mario Monti called the vote, held Friday in the Chamber of Deputies, to speed passage of the measures he says are vital to save Italy from financial disaster. The package was approved by a vote of 495 in favor and 88 against. The Senate is expected to vote on the measures in the next few days.

THIS IS A BREAKING NEWS UPDATE. Check back soon for further information. AP’s earlier story is below.

ROME (AP) _ The Italian government faces a confidence vote over a package of austerity measures while a transport strike to protest the cuts is causing havoc for commuters across the country.

Premier Mario Monti is putting his package of new and higher taxes and pension reforms to a confidence vote in the lower Chamber of Deputies to speed up its passage cash advance payday loan.

The vote, which is expected by early evening Friday, will likely clear the measures, paving the way for final approval in the Senate within days.

The main political parties have said they would back the package despite disagreeing on some measures.

Monti says austerity is needed to save Italy from financial disaster, but unions are furious. Public transport workers idled buses and subways Friday. State railways were also on strike.

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Exxon expects to see more and more hybrids on the world’s roads, with gas-sipping models like the Toyota Prius making up half of all vehicles by 2040.

The largest publicly traded oil and gas company says in its annual energy outlook that the use of hybrids _ vehicles that rely on both gas and electricity for power _ and other efficiency gains will keep energy demand in check for the U.S. and other major industrialized countries for years.

Exxon Mobil Corp. predicts that energy demand will remain flat through 2040 in developed nations instant payday loan.

However, Exxon says that China and other developing nations will increase their thirst for oil and other petroleum based fuels. Energy demand within developing nations is expected to rise nearly 60 percent from 2010 to 2040.

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Local entrepreneurs didn’t let a little thing like the toughest economic recovery since World War II stand in the way of starting new businesses.

Despite the uncertainty in the economy, the owners of restaurants, coffee shops, and service firms that opened here over the past few years found myriad ways to finance their dreams.

They’ve had to be creative though, as banks pulled back on lending after real estate loan defaults led to losses on many banks’ balance sheets. Loans of less than $1 million from locally chartered banks, which primarily went to small businesses, fell each quarter in 2010 and so far this year. And only a very slim margin of those loans went to startups, according to Julie Stackhouse, senior vice president of the Federal Reserve Bank of St. Louis.

“Small, entrepreneurial businesses have always faced a challenge of finding credit because they .

The European Commission backed the introduction of jointly issued eurobonds, coupled with stricter budgetary discipline, as the best way out of a debt crisis that’s threatening the 17-country eurozone.

EU Commission President Jose Manuel Barroso said Wednesday that the countries using the euro currency needed to work more closely together to dovetail their budgetary policies and avoid having one nation endanger all others by not living by its financial commitments. The crisis, which started in Greece nearly two years ago, has now spread to much-bigger economies such as Italy and Spain and there was a hint Wednesday that not even Germany is immune.

Barroso, who heads the executive arm of the European Union, said there was a need to “embrace deeper integration for the euro area” and that “implemented in the right way, the joint issuance of debt in the euro area could bring tremendous benefits.”

Barroso said it could lead to greater financial integration and to the creation of a much larger bond market, comparable to that of the United States treasuries.

Germany has opposed the use of eurobonds and has long called on profligate member states to clean up their own houses with as little outside intervention as possible. A big worry for Germany is that its low borrowing costs would get diluted if eurobonds came into issue and it would then be forced to pay higher rates to tap bond markets.

Anticipating the proposal, Chancellor Angela Merkel poured cold water on the idea in the German Parliament earlier in the day.

“It is extremely troubling, I might say inappropriate, that the Commission is now focusing on proposals on eurobonds in different varieties,” she told legislators.

Merkel argued that it was a pretense to suggest that a “collectivization of the debt would allow us to overcome the currency union’s structural flaws.”

While Merkel was voicing her opposition to the idea of eurobonds, Germany suffered what many in the markets are describing as a failed bond auction.

Despite being touted as the European bedrock of financial stability and rigor, Germany failed to raise as much money as it hoped in its latest bond auction, in a sign that even it may not be immune from the debt crisis raging across the continent.

Germany’s Financial Agency said its latest euro6 billion ($8.1 billion) auction of 10-year bonds met with only 60 percent demand. It blamed “the extraordinarily nervous market environment” for the weak demand.

Since Greece pushed the eurozone into its ever-worsening financial mess last year, many member states have seen their cost of government borrowing rise to record levels. Germany’s borrowing rates though have dropped sharply as investors buy up its bonds as a safe haven.

Germany has long been reluctant to bail out member states like Greece, Ireland and Portugal, insisting it was up to their governments to live by sound economic principles and win investor confidence.

Barroso said that eurobonds, or so-called stability bonds, “will not solve our immediate problems.”

Still he said “stability bonds are examples of reinforced governance, of a strong will to live together in the euro area and a good example of discipline.”

_____

Juergen Baetz in Berlin contributed to this report.

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World stocks climbed Wednesday, bolstered by receding inflation in China and Italian Prime Minister Silvio Berlusconi’s promise to resign once a new budget is passed that could prevent the country becoming engulfed in a debt crisis.

Benchmark oil rose to nearly $97 per barrel as the Chinese inflation numbers reinforced expectations that the world’s second-largest economy can continue robust growth and strong demand for crude. The dollar gained against the euro but slipped against the yen.

European shares advanced in early trading on the heels of broad gains in Asia, where Japan’s Nikkei 225 index rose 1.2 percent to close at 8,755.44. Britain’s FTSE 100 gained 0.4 percent to 5,587.13, Germany’s DAX rose 1.1 percent to 6,027.96, and France’s CAC-40 added 0.6 percent to 3,163.50.

But Wall Street was set to fall, with Dow Jones industrial futures losing 0.4 percent to 12,076 and S&P 500 futures dropping 0.6 percent to 1,265.90.

Italy became a key focus for investors this week after doubts emerged that the country would go through with a tough package of austerity measures. Many investors saw Berlusconi as an obstacle to sweeping economic reforms needed to help Italy avoid sinking into a debt crisis.

Berlusconi is the second recent political casualty of the European debt crisis. In Greece, a new interim government _ one that won’t be led by the current prime minister, George Papandreou _ is to be announced Wednesday. New leadership was needed for the passage of an austerity plan in Parliament that would entitle debt-laden Greece to euro130 billion ($179 billion) in new European rescue money.

Some analysts said the political shakeup in Italy won’t stem the tide of debt the country faces. Italy’s borrowing cost spiked to nearly 7 percent this week. That number is important because Greece, Portugal and Ireland were forced to receive financial lifelines after their rates rose above 7 percent. Unlike those countries, Italy is too large to be bailed out by its European neighbors.

“It doesn’t matter who the politician is. They still have the same debt,” said Martin Hennecke, associate director of investment advisers Tyche Group in Hong Kong. Greece’s situation is “peanuts” compared to the financial devastation that could be wrought should Italy default.

“That would sink the whole eurozone rescue process in an instant. That would sink France, too, because of the exposure of French banks to Italy. It’s about seven times more than their exposure to Greece,” Hennecke said.

Yet the optimism generated by Europe’s efforts to contain its debt crisis led investors to plow money back into emerging market equity funds, which posted their biggest weekly inflow since early April, according to Cambridge, Massachusetts-based fund tracker EPFR Global payday lenders.

For the week ending Nov. 2, equity funds posted net inflows of $4.9 billion for the week. Emerging market funds took in 70 percent of that total, EPFR said.

Among Asian markets, South Korea’s Kospi added 0.2 percent to 1,907.53 and Hong Kong’s Hang Seng jumped 1.7 percent to 20,014.43. Australia’s S&P/ASX 200 rose 1.2 percent to 4,346.10.

Benchmarks in India, Indonesia, New Zealand and the Philippines were also higher, while those in Singapore, Taiwan and Thailand fell. Mainland China’s Shanghai Composite Index gained 0.8 percent to 2,524.92 and the smaller Shenzhen Composite Index rose 1.6 percent to 1,071.04.

Another market cue came from China, with the release Wednesday of data showing the country’s stubbornly high inflation fell in October as rapid rises in food costs eased. The decline was seen positively by investors as it gives Beijing more room to stimulate China’s economy.

Japan’s Olympus Corp. fell 20 percent as it may be booted off the Tokyo stock market after it admitted Tuesday it covered up investment losses dating back to the 1990s. Brokerage firm Nomura Holdings rose 4.1 percent, a day after hitting its lowest price of the year amid fears that securities companies might have been involved in the coverup.

Hong Kong-listed PetroChina Co. rose 3.3 percent and China National Offshore Oil Corp., known as CNOOC, gained 4 percent. In mainland China trading, China National Software & Service Co. gained 6.1 percent while several media companies hit the daily limit of 10 percent.

U.S. stock indexes fell early Tuesday after Berlusconi narrowly survived a confidence vote. But the market turned higher immediately after news reports said Berlusconi had promised to step down after economic reforms are passed, likely next week.

On Wall Street on Tuesday, the Dow Jones industrial average rose 0.8 percent to close at 12,170.18. The S&P 500 rose 1.2 percent to 1,275.92. The Nasdaq composite rose 1.2 percent to 2,727.49.

Benchmark crude was down 10 cents at $96.66 a barrel in electronic trading on the New York Mercantile Exchange. The contract rose $1.28 to settle at $96.80 on Tuesday.

In currencies, the euro slipped to $1.3789 from $1.3835 in late trading Tuesday in New York. The dollar fell to 77.67 yen from 77.70 yen.

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For a growing number of young American men, the childhood bedroom is the new bachelor pad.

The percentage of men 25 to 34 years old who live with their parents has increased by almost a third during the past five years, data from the U.S. Census Bureau show.

The economic downturn has accelerated that trend for young men, while women continue to be less likely to bunk with their parents.

Since 2006, the year before the recession began, the percentage of young men living with their parents has grown to 18.6 percent this year from 14.3 percent. Just 9.7 percent of women in that age group now live with their parents, up from 8.8 percent in 2006.

“It’s a way to save money and survive the hardship,” said Qian Cai, director of the Demographics and Workforce Group at the University of Virginia’s Weldon Cooper Center for Public Service.

Young women traditionally have left the house before men because they marry at a younger age. That reason may be changing: Now more women than men are getting college educations, so they may be less likely to be unemployed or lose jobs, Cai said.

Since the beginning of last year, the unemployment rate for women between 25 and 34 averaged 9.1 percent, compared with 10.4 percent for men in this age group.

On the flip side, parents may also be more generous than they used to be. “They have more resources than earlier generations, so they can help out more,” Cai said.

In the past year, the proportion of 25- to 34-year-old men living with parents jumped 2.2 percentage points, while the number of women in that age group staying or moving back home didn’t change significantly, the Census Bureau said.

While the trend is a reflection of the sluggish economy, there may be other factors, said Cheryl Russell, a demographer in Beaufort, S.C., and editorial director of New Strategist Publications.

“Women mature at a younger age, so they are probably more able to hold down a job and pay the rent,” she said. “Men sort of thrash around a bit.”

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A lawyer for protesters camped outside London’s St. Paul’s Cathedral said Wednesday that authorities have offered to let the tent city stay until next year, as the leader of the world’s Anglicans backed a so-called Robin Hood tax on financial transactions to alleviate the global economic crisis.

The loosely organized demonstration against capitalist excess, inspired by New York’s Occupy Wall Street movement, has wrong-footed both city and church officials since it began last month, defying pleas to leave and the threat of legal action.

Authorities have suspended legal bids to remove the tents. On Wednesday John Cooper, a lawyer for the protesters, said that local government had offered the protesters a deal “to stay on site until the new year,” then leave on an agreed date.

“My client is considering this offer,” he said on Twitter. Cooper confirmed the offer in an email to The Associated Press.

A spokesman for the local authority, the City of London Corporation, did not immediately respond to a call seeking comment.

While police and bailiffs have removed protest camps in some cities around the world, the London demonstrators have endured, in part due to their location in front of one of the city’s most famous buildings. Their proximity to Christopher Wren’s 300-year-old icon has embroiled the church in a conflict between bank-bashing protesters and the finance industry.

Archbishop of Canterbury Rowan Williams entered the debate Wednesday, saying “it was time we tried to be more specific” in finding answers to the vague demands represented by the protests.

“The protest at St. Paul’s was seen by an unexpectedly large number of people as the expression of a widespread and deep exasperation with the financial establishment that shows no sign at all of diminishing,” he wrote in a commentary published in the Financial Times.

“There is still a powerful sense around _ fair or not _ of a whole society paying for the errors and irresponsibility of bankers; of messages not getting through; of impatience with a return to ‘business as usual’ represented by still soaring bonuses and little visible change in banking practices.”

The transaction tax _ often called a “Tobin tax” _ was proposed in the 1970s by the late James Tobin, an American economist and Nobel Prize winner. Williams said a low tax rate _ 0.05 percent on each transaction _ could raise more than $400 billion globally each year.

The European Commission supports the tax, estimating that it could raise euro30 billion ($41 billion) a year, but the British government has firmly opposed it, preferring a direct tax on bank assets.

Williams called for a “robust” public debate “to probe how far the government’s preferred option will guarantee the domestic and international development goals central to the ‘Robin Hood ‘ proposals.”

Williams wrote approvingly of three proposals offered last week by the Pontifical Council for Justice and Peace: separation of high-risk investment banking from retail banking; recapitalizing banks with public funds; and a tax on financial transactions.

“If religious leaders and commentators in the U.K. and elsewhere could agree on these three proposals, not as a fixed agenda but as a common ground on which to start serious discussion, the struggles and questionings alike of protesters and clergy at St. Paul’s will not have been wasted,” Williams wrote.

The British Bankers Association opposes a transaction tax, arguing that unless it was applied worldwide it would harm the financial industry in higher-tax countries.

The archbishop’s call for a transaction tax drew a lukewarm response from the bishop of London, Richard Chartres, who is now leading St. Paul’s response to the hundreds of protesters occupying tents outside the cathedral.

“Well, he (Williams) is an intellectual of European standing and I’ll certainly read what he says with great attention,” Chartres said in an interview with The Guardian newspaper.

“He has studied the subject in some detail and, like any other citizen, it’s a totally legitimate thing to do.”

The Anglican church was caught by surprise when demonstrators against corporate greed and banking excess pitched tents outside St. Paul’s on Oct. 15. They had hoped to protest in front of the London Stock Exchange, but were evicted from the private property and moved on to the nearby cathedral.

Since then cathedral officials have appeared uncertain how to respond. They at first welcomed protesters before asking them to leave; closed the building on health and safety grounds then reopened it a week later; and announced legal action to remove the tent city before suspending it and promising dialogue.

The cathedral’s dean and a senior priest have both resigned over the mishandled crisis.

The Corporation of London, the local authority for the cathedral and surrounding area, also has suspended plans to evict the protesters, and the campers say they are prepared for a long stay.

Stuart Fraser, the corporation’s policy chairman, said officials were meeting protesters for the first time Wednesday, “and we will take things day by day.”

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Singapore Airlines is hoping travelers will “Scoot” to its new long-haul budget carrier as one of the world’s leading airline brands seeks to muscle in on Asia’s burgeoning no-frills market.

Scoot, as the new carrier is known, will begin service by June 2012 with four Boeing 777-200 jets flying by the end of that year, chief executive Campbell Wilson told reporters Tuesday.

Scoot plans to initially focus on destinations that are five to 10 hours from its base at Singapore’s Changi International Airport and fly to four or more cities in Australia and China.

“This new market segment is growing fast,” Wilson said. “We aim to bring new business to the SIA group.”

Singapore Airlines, which is also known as SIA, has long relied on its top-rated in-flight service _ epitomized by the iconic Singapore Girl cabin crew _ to lead the long-haul first and business class market, especially in popular Asia to Europe routes.

However, Gulf carriers such as Emirates and Etihad and Asian rivals such as Hong Kong’s Cathay Pacific and Australia’s Qantas have eaten away at SIA’s market share in recent years, pushing the Singaporeans to eye the growing low-cost market.

Scoot will face two main competitors in the region’s long-haul budget market _ Air Asia X, owned by Malaysia’s AirAsia, and JetStar, a unit of Qantas. Analysts expect Scoot will likely seek to provide more frills at a slightly higher price that its rivals.

“This new airline is a poor man’s excuse to fly SIA,” said Shukor Yusof, an aviation analyst with Standard and Poor’s in Singapore. “It will be like luxury budget. When you’re flying 12 to 13 hours, you need to throw in some of the facilities people are used to on intercontinental flights.”

Wilson said Scoot will offer two classes of cabin, with economy tickets up to 40 percent less than full-service carriers. Customers will be able to choose seats, meals and baggage options, he said.

“We’ll offer many other options so people can customize their experience,” Wilson said.

The airline plans to eventually buy several Boeing 777-200ER planes, which can travel up to 13 hours, allowing Scoot to fly to Europe and Africa, he said. Scoot also plans next year to hire about 52 pilots, 250 flight attendants and 40 ground staff with what Wilson called “Scootitude.”

Scoot is a wholly owned subsidiary of Singapore Airlines, which invested 283 million Singapore dollars ($227 million) to start the long-haul carrier. SIA already owns SilkAir, which targets popular Asian holiday destinations, and has a one-third stake in Tiger Airways, a short-haul budget carrier.

Growing demand for budget flights has been a bright spot for the airline industry this year as slowing global economic growth and higher fuel costs hurt earnings. The International Air Transport Association forecasts global airline profits will drop to $6.9 billion this year and $4.9 billion in 2012 from $15.8 billion last year.

Asian airline stocks have also taken a hit, with most carriers, including Singapore Airlines, down at least 20 percent this year. Only AirAsia has bucked the trend, jumping 50 percent so far in 2011.

Some analysts expect travel demand in Asia to improve next year. Airline analyst Mark Webb at HSBC forecasts Asian passenger numbers will rise 7 percent this year and 9 percent next year. He upgraded his rating on Singapore Airlines shares to “neutral” from “underweight” last month.

Scoot hopes to ride the low-cost wave that has made budget flights about 25 percent of Changi’s traffic this year from almost nothing a decade ago. The best earners among Asian airlines this year have been short-haul budget carriers Indonesia’s Lion Air, AirAsia and Cebu Air in the Philippines, S&P’s Yusof said.

“Budget airlines are not a fad. They’re here to stay,” Yusof said. “The market certainly has shifted from legacy carriers to discount carriers.”

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