May 6 (Bloomberg) -- American Airlines and United Airlines led drops in April air traffic by four of the five largest U.S. carriers, a sign that the cooling economy and higher ticket prices are restraining air travel.

AMR Corp.'s American and UAL Corp.'s United, the world's two biggest, had declines of 6.6 percent and 6.3 percent, respectively. American's domestic traffic plunged 8.4 percent after it was ordered to ground its Boeing Co. MD-80 fleet for wiring inspections.

The results marked the second monthly slide in traffic, measured in miles flown by paying passengers, on the airlines' main jet operations after international flying drove increases in January and February. Easter in the U.S. also came in March this year instead of April, paring holiday travel last month.

``Airlines are trying to raise fares, and they're sacrificing traffic to do that,'' said Jim Corridore, a Standard & Poor's analyst in New York. ``They're doing better on revenue management to get yields up, but no amount of yield is enough to cover $120-per-barrel oil.''

Crude oil surpassed $122 per barrel today for the first time in New York trading on supply-disruption threats in Nigeria and Iraq and increased consumption in Asia. Jet-fuel costs have surged more than 75 percent in the past year.

Airlines have attempted to increase fares 14 times so far this year, by as much as $70 round trip, according to airline ticket research firm FareCompare.com.

International Declines

The falloff in traffic may reflect consumer concerns over slowing economic growth. Spending by U.S. households, the biggest part of the economy, grew last quarter at the slowest pace since 2001, when the nation was in a recession, according to government figures.

Carriers are even feeling the pinch in international travel.

American's traffic across the Atlantic fell 5.3 percent on lower demand for travel to London Heathrow, and its Latin America traffic fell 1.3 percent.

United's traffic across the Pacific fell 5.8 percent, while Continental Airlines Inc.'s fell 13 percent.

The figures suggest that the largest U.S. carriers may be headed for losses for a third straight quarter. The 10 biggest airlines posted a combined first-quarter operating loss of $1.69 billion as soaring jet-fuel costs outpaced higher fares.

Delta Air Lines Inc., which last month agreed to merge with Northwest Airlines Corp. to create the world's largest carrier, was the only one among the five biggest airlines to post higher traffic for April, with a 2.5 percent gain.

Delta's international traffic jumped 17 percent as the Atlanta-based carrier boosted capacity by the same amount.

Domestic Travel

All five of the largest U.S. carriers had declines in domestic traffic for April, ranging from about 5 percent for Delta to 9.5 percent for United.

American's domestic figures were hurt by 3,300 canceled flights caused by the MD-80 groundings, which the Fort Worth, Texas-based carrier has said will cost ``in the high tens of millions of dollars.'' About 360,000 passengers were affected.

American, Delta, Chicago-based United and other U.S. carriers have said they will cut domestic capacity by 3.5 percent to 10 percent this year and park some planes in an effort to slash costs and gain pricing power.

`Break Point'

Delta Chief Executive Officer Richard Anderson said last month that U.S. carriers must raise ticket prices by 15 percent to 20 percent to cope with fuel costs. Delta President Ed Bastian told Minnesota legislators yesterday that airlines may be approaching a ``break point'' on fuel.

Southwest Airlines Co., the largest low-fare carrier, said April traffic rose 5.7 percent. The Dallas-based company's practice of locking in fuel prices in advance has helped preserve its 18-year record of profitability.

AMR fell 17 cents, or 1.9 percent, to $8.85 at 4:01 p.m. in New York Stock Exchange composite trading, while Delta slid 24 cents to $7.87. Continental declined 21 cents to $17.57 and Northwest dropped 50 cents to $8.75. UAL Corp. fell 85 cents, or 5.7 percent, to $14.15 in Nasdaq Stock Market trading.

The following table shows the largest U.S. airlines, ranked by
traffic, and their April gain or decline in miles flown by
paying passengers compared with a year earlier. The figures are
for the carriers' main jet operations and are based on the
airlines' reports.

Airline, rank    Percentage gain (loss) Percentage gain (loss)
                 in April traffic       in year-to-date traffic
1. American      (6.6)                  (1.9)
2. United        (6.3)                  (3.8)
3. Delta          2.5                    3.2
4. Continental   (0.8)                   3.0
5. Northwest     (2.0)                   0.0
6. Southwest      5.7                    8.3
7. US Airways    (2.0)                  (0.2)

To contact the reporter on this story: Mary Jane Credeur in Atlanta at mcredeur@bloomberg.net.

Last Updated: May 6, 2008 16:14 EDT