DALLAS - EXECUTIVES of major US airlines, already seeing signs of slumping travel demand, said on Tuesday they were ready to cut more flights, and Delta hinted at more job losses as the carriers jockey to survive the deepening recession.

US airlines have been helped by a sudden drop in jet fuel prices, and they already cut capacity this fall to further reduce costs and drive up fares.

But traffic has fallen even faster than the supply of seats, especially since the stock market went into a nosedive.

'October was a bang-up month, almost unexplainably strong,' said Southwest Airlines Chairman and Chief Executive Gary Kelly.

'The trends changed in November.' Delta Air Lines Inc., the world's largest carrier, said it will reduce overall capacity another 6 to 8 per cent next year. Delta and its Northwest Airlines unit will cut US capacity 8 to 10 per cent.

In a memo to employees, Delta CEO Richard Anderson and President Ed Bastian said they are analysing the impact of reduced flying on jobs, and 'as in the past, we will offer voluntary programs to adjust staffing needs.' They did not elaborate.

Earlier this year, Delta sharply cut US capacity and aimed to cut 2,000 jobs, although more than 4,000 workers took voluntary severance. Delta and Northwest have 75,000 employees.

American Airlines and its feeder carrier American Eagle plan to cut capacity 6 per cent next year, with an 8.5 reduction in US flying by American itself, said Beverly Goulet, treasurer of parent AMR.

Even Southwest, which saw the pullback of other airlines as an opportunity for growth, is cutting capacity. Mr Kelly said Southwest would drop unprofitable routes and trim first-quarter capacity 4 to 5 per cent, although that's slightly less than the airline's previous goal of a 5 to 6 per cent reduction.

Analysts have already factored in some further cuts in capacity.

But Mr Ray Neidl, an analyst for Calyon Securities, said 'demand seems to be falling a little more than expected.'

The economic slowdown has hurt demand for the airlines' most lucrative seats.

United said it would reconfigure its international planes to cut the number of premium seats by 20 per cent while adding seats in coach. Continental Airlines said it too was seeing weaker demand for first- and business-class seats on international flights, which had been a relatively strong part of the business.

Executives speaking at a Credit Suisse investor conference in New York also vowed to raise more cash to head off a financial crisis.

Ms Kathryn Mikells, the chief financial officer of United parent UAL, said the company will raise about US$300 million (S$458.5 million) in cash during the fourth quarter.

The company said on Monday it plans to sell up to US$200 million in new stock partly to pay down debt.

Falling oil prices help airlines by lowering the price of jet fuel. But some carriers have been forced to put up new collateral on hedging deals that they struck to protect themselves from high-priced fuel.

Delta's Bastian said his airline hasn't been able to fully realize the benefit of the steep drop in fuel prices because of bad bets on hedges when oil was more than US$140 a barrel over the summer.

Based on the current price of oil around US$47 a barrel, Delta is expected to be forced to put up US$1.1 billion in cash collateral at the end of December to cover those hedges. Every $5 drop in oil prices means Delta must put up another US$130 million in collateral, Bastian said.

Last week, UAL said it expected to record US$370 million in hedging losses in the fourth quarter. The company mortgaged aircraft leases to get more breathing room on cash reserves from lender Chase Bank.

Despite all the gloom about travel demand, airline stocks rose on Tuesday on another decline in oil prices. The benchmark price of oil for January delivery fell US$2.32 to settle at US$46.96 a barrel on the New York Mercantile Exchange.

Shares of Delta rose 51 cents, or 6.4 per cent, to close at US$8.47; UAL shares gained 70 cents or 7.8 per cent, at US$9.64; AMR added 42 cents, or 5.2 per cent, at US$8.45; Continental rose 91 cents, or 6.6 per cent, to US$14.78; and Southwest picked up 40 cents, or 5 per cent, at US$8.33. -- AP