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Major airlines see traffic grow

The nation's two largest airlines, American and United, posted big increases in traffic for May _ the first significant advance since the beginning of the year, when the Persian Gulf war discouraged many people from air travel. American Airlines said Thursday its traffic rose 6.6 percent in May, compared with a year earlier. United showed a surge of 14.9 percent.

"The May figures clearly indicate a recovery from the traffic slump we experienced earlier this year," said Michael W. Gunn, senior vice president of marketing for American.

A smaller carrier, Southwest Airlines, said its traffic increased by 6.9 percent in May over May 1990.

The gains in May contrasted with results in April, when the industry's traffic was down 4.2 percent from the 1990 month. Traffic was down 6.9 percent for the first four months of 1991, with the biggest drop in international travel.

Many corporations halted air travel by employees during the gulf war, but most of the bans have been eliminated. To stimulate demand in the meantime, airlines resorted to offering special low fares that had to be bought by a certain time.

Analysts and travel agents said some of the recovery is attributable to the earlier ticket sales, which are now being used.

The big question, therefore, is how much of the traffic results from people traveling earlier to take advantage of low fares and whether there will be a downturn ahead. Thus, the upturn in May could be followed by a decline of traffic in June and then possibly by a small recovery in July.

"The upturn is there," said Julius Maldutis, an airline analyst with Salomon Brothers. "The shame is that financially weaker carriers have extended deep discount fares into the peak season."

The industry lost $1.24-billion in the first quarter because of a huge decline in traffic and high fuel costs caused by the war. That was more than double the loss of $539.7-million in the first quarter of 1990. For all of 1990, the industry had a loss of $5-billion.

The pressure of the gulf crisis led weaker carriers like Pan American World Airways to file for bankruptcy protection from creditors. Pan Am also sold its London routes to United. Trans World Airlines, which has also been under financial pressure, sold some of its London routes to American.

Some of United's traffic rise was a result of taking over those London routes. Nevertheless the airline showed a healthy increase of 9.4 percent in May on its routes in North America.