Business Notes AIRLINES

The airline industry is struggling to maintain altitude under the twin burdens of a slumping economy and rising fuel prices. Prognosis: some of the weak carriers may fail. Eastern, already in bankruptcy, is losing $1.5 million a day, about 50% more than a few months ago. A prime reason for the accelerating losses, says Eastern trustee Martin Shugrue, is the rise of jet-fuel prices. The airline pays 96 cents per gal., up from 56 cents before Iraq's invasion of Kuwait. Last week Shugrue urged President Bush to form a task force to find ways to bring oil prices under control. Another money-losing carrier, Pan Am, is laying off workers and switching to smaller jets, while trying to sell its shuttle to Phoenix-based America West.

Even a top carrier is lumbering. After gobbling up PSA and Piedmont in 1987 to form the sixth largest U.S. carrier, USAir is losing market share to competitors. Projecting losses of $350 million for the year, USAir last week suspended its stock dividend and postponed for one year the purchase of 16 new Boeing aircraft.