DALLAS (Bloomberg) — Less flying may mean more profit for the biggest US airlines.Major carriers are cutting domestic capacity even as travel demand is rising, helping them fill more seats with passengers. That's sparking optimism AMR Corp.'s American Airlines, UAL Corp.'s United Airlines and others will be able to raise profits and reverse a slide in share prices.

Some airline shares may double within a year because more demand and less supply will allow carriers to charge more for tickets, analysts said. The Bloomberg US Airlines Index has declined 20 percent since January 16 as the price of jet fuel has climbed and average domestic air fares have dropped.

"A small change in ticket prices or load factors will have a huge impact at the bottom line," said analyst Andrew Meister at Thrivent Financial for Lutherans in Appleton, Wisconsin, which manages about $70.6 billion of assets including shares of AMR, UAL, Southwest Airlines Co. and US Airways Group Inc.

American cut US capacity 3.9 percent through June from a year earlier to boost its load factor, or seats filled with paying passengers, by 0.9 percentage points to 82.8 percent. The world's largest carrier said revenue generated for each available seat per mile flown, a key profit measure, rose as much as 4 percent in the second quarter.

United, the second-biggest airline, filled a record 89.1 percent of all its available seats in June.

Carriers' price-earnings ratios have dropped to as little as 7.2 in the case of US Airways, whose shares traded at 53 times earnings in last year's third quarter.

"We believe the stock has washed out and will move nicely higher," UBS Securities analyst Kevin Crissey wrote of US Airways in a June 19 report.

US Airways, based in Tempe, Arizona, yesterday said revenue for each seat flown a mile rose "slightly" in May and June from the same months a year earlier.

"We see an encouraging revenue environment moving into the third quarter," US Airways president Scott Kirby said in a regulatory filing.

The shares' recent decline follows a 20 percent gain in the Bloomberg airlines index in 2006, when US carriers made their first combined annual profit since the September 11, 2001, terrorist attacks. The index consists of 15 US airlines.

The carriers lost $40 billion in five years starting in 2001. Government-backed loans, cash aid and insurance discounts didn't help them avoid bankruptcies. US Airways, UAL, Delta Air Lines Inc. and Northwest Airlines Corp. all filed for court protection from 2002 to 2005.

The airlines used bankruptcy to slash labour costs, default on pension obligations, return aircraft and drop unprofitable routes. The savings helped the industry return to profit last year, along with a 23 percent dip in the price of fuel from Aug. 2 to the end of the year.

The eight largest US carriers may have combined net income of $4 billion this year, according to Michael Linenberg, a New York-based Merrill Lynch & Co. analyst. His forecast assumes an average $67 a barrel crude oil price.

Even so, profits and shares have slumped this year as oil prices have risen again and attempts to raise fares have failed.

The price of jet fuel has climbed 35 percent since January 11, and average fares per mile flown for U.S. domestic flights fell in four of the first five months this year even as passenger traffic rose, according to the latest statistics available.

So-called legacy airlines such as American and United often abandon attempts to increase ticket prices because of competition from discount carriers including Southwest, the largest low-fare airline.