TAKING THE PULSE: U.S. airlines are again seen posting losses as demand continues to slump even as fuel prices have dropped. When oil prices began falling sharply from their record peak last summer, carriers were convinced that savings in jet fuel - their biggest expense - would more than make up for any drop in travel brought on by the recession. But demand is sliding much more quickly and significantly than airlines expected, prompting projections that the industry will be forced to cut more capacity.

And now, as fuel prices edge higher, U.S. airlines are facing a difficult choice over how to manage their fuel costs without repeating last year's costly mistakes. Airlines had been hedging fuel prices far in advance, but after oil maxed out in July, they suffered huge write-downs because they were forced to continue to pay peak prices even after the recession cut back the number of passengers they served.

COMPANIES TO WATCH:

AMR Corp. (AMR) - reports April 15

Wall Street Expectations: Analysts surveyed by Thomson Reuters anticipate a loss of $1.52 a share on revenue of $4.72 billion. The American Airlines parent had a year-earlier net loss of $1.32 on revenue of $5.7 billion.

Key Facts: AMR said in March it expects American's first-quarter revenue per available seat mile, a key performance measurement, to fall up to 11% on falling demand. In response, the number of available seats is anticipated to fall further later this year. Fitch lowered its credit ratings on AMR and American to highly speculative last month, citing the "collapse" in industrywide demand as the carrier continues to burn through cash.

Southwest Airlines Co. (LUV) - reports April 16

Wall Street Expectations: The discount carrier is seen posting earnings of 3 cents a share and revenue of $2.44 billion, down from 5 cents and $2.53 billion, respectively.

Key Facts: The expected profit, excluding fuel-hedging impacts, comes after two straight quarters of net losses, the first since 1991. They were caused by the plunge in fuel costs overwhelming Southwest's vaunted hedging program. Chief Executive Gary Kelly is navigating the tough economy by expanding into new markets and tinkering with the carrier's low-cost service, adding flights to heavily trafficked U.S. airports.

Delta Air Lines Inc. (DAL) - reports April 21

Wall Street Expectations: Analysts forecast a loss of $1.01 on revenue of $6.79 billion, compared with a prior-year loss of $16.15 a share on revenue of $4.77 billion. Last year's results included a $6.1 billion fuel-hedging write-down.

Key Facts: Delta CEO Ed Bastian said last month the carrier would pull an additional 10% from its international capacity this year on top of previously announced systemwide cuts of 6% to 8%. The company has also said it expects to report a "solid" full-year profit despite forecasting a 14% drop in operating revenue for the first quarter. It said last month it expected to break even before taxes in the first quarter and post a profit in the second quarter.

Continental Airlines Inc. (CAL) - reports April 22

Wall Street Expectations: Analysts project a loss of $1.13 a share and revenue of $3 billion. A year ago, the company posted a loss of 81 cents on revenue of $3.57 billion.

Key Facts: The company aims to switch to the Star Alliance of global carriers from the rival SkyTeam grouping by late October, saying a move would provide a better defense against the industry downturn and cement ties with new partner United Airlines. The company said last month that declining business travel was cutting into its bottom line, and key measures of profitability were deteriorating faster.

UAL Corp. (UAUA) - report date to be announced

Wall Street Expectations: The United Airlines parent is slated to post a loss of $4.27 a share on revenue of $3.8 billion, compared with a year-earlier loss of $4.45 a share on revenue of $4.71 billion.

Key Facts: UAL said in March it expected first-quarter passenger revenue per available seat mile to fall 12% to 13%. Avondale Partners analyst Bob McAdoo called that worse than other legacy carriers' predictions despite United undertaking the industry's deepest capacity cuts. Looming is labor negotiations with six U.S. unions in April. Employees are working under a pact negotiated in bankruptcy court, when the airline significantly cut costs to reorganize.

(The Thomson Reuters estimates and year-ago net may not be comparable because of one-time items and other adjustments.)

-By Kerry E. Grace, Dow Jones Newswires; 201-938-5089; kerry.grace@dowjones.com