UPDATE 1-U.S. airlines see May traffic dip; flu scare hurts

* U.S. airline traffic down in May

* US Airways, Continental say flu scare hit revenue

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CHICAGO, June 5 (Reuters) - Traffic on U.S. airlines fell sharply in May, mainly because of deep capacity cuts, but at least two airlines said the H1N1 flu scare also hurt revenue.

Monthly data on airline operations released this week showed the virus, also known as the swine flu, reduced demand for international travel as people sought to avoid exposure to the sickness.

"We estimate that the H1N1 impact was approximately $20 million in lost revenue in May," US Airways Group (LCC.N) President Scott Kirby said in a statement.

Continental Airlines CAL.N estimated the H1N1 flu reduced consolidated passenger revenue by $30 million in May.

None of the top nine U.S. airlines reported an increase in traffic for the month. [ID:nN05279456]. The U.S. airline industry has been hit hard this year and last year by an economic recession that put a crimp in travel demand.

United Airlines, a unit of UAL Corp UAUA.O, saw the biggest percent decline in traffic at 14.4 percent. But the carrier also had the largest decrease in capacity -- number of seats for sale -- at 11.9 percent. United's load factor -- a measure of how full an airplane is -- slipped 2.3 percentage points in April.

Traffic for American Airlines, a unit of AMR Corp AMR.N, slipped 11.7 percent on an 8.8 percent decline in capacity.

Airlines shares were broadly weaker on Friday, with the Amex airline index .XAL down 0.83 percent. UAL shares were down 3.52 percent at $4.94 on the Nasdaq. (Reporting by Kyle Peterson; Editing by Lisa Von Ahn and Steve Orlofsky )