Most U.S. airlines report traffic declines in August

NEW YORK (Reuters) - Most major U.S. airlines reported another month of declining traffic in August as rising unemployment hurt leisure demand and corporate cost cuts continued to hamper business travel.

Seven of the nine largest U.S. carriers reported a drop in traffic in August, except Southwest Airlines and JetBlue Airways Corp.

Delta Air Lines, the world's largest carrier after its merger with Northwest last year, saw its traffic slump for the eighth straight month.

Dwindling demand has forced carriers to cut capacity this year to keep planes full. Nearly every carrier, except JetBlue, reported a drop in available seat miles (ASMs) for August. Load factors, a measure of how full a plane is, were mostly higher.

Delta is among the carriers slated to cut capacity even further in the fall.

"September is going to be very challenging," said Stifel Nicolaus analyst Hunter Keay. "Corporate travel remains on the sidelines."

Still, airlines have started to see some signs of improvement.

"We remain encouraged that recent booking and yield improvement trends are continuing into September," said US Airways Group President Scott Kirby in a statement.

Traffic for US Airways was off nearly 4 percent in August, while capacity fell 3.8 percent. The carrier reported a load factor of 85.7 percent, flat from a year ago.

(Reporting by Deepa Seetharaman; Editing Bernard Orr)