ATLANTA — U.S. airline profits may be pinched this year because dwindling travel demand from a "deep recession" could tempt them to cut fares, paring the gains from falling fuel prices.

UBS Securities LLC and Morgan Stanley on Friday lowered their 2009 earnings estimates for AMR Corp. by more than 25 percent in part because its American Airlines said Thursday that bookings are down and pension costs are rising.

An industrywide drop in air travel is raising the prospect that airlines would sell cheaper tickets to fill seats.

That would imperil estimates by analysts such as UBS' Kevin Crissey and Michael Derchin of FTN Midwest Research Securities for $5 billion in profits at the nine biggest U.S. carriers.

"The thought that U.S. airlines will suddenly take on pricing discipline and hold their nerve is something I'm not sure I believe in," said Tim Coombs of London-based consulting firm Aviation Economics.

Coombs, who spoke at a conference Friday in Dublin, projects U.S. airline profits will be closer to $4 billion this year.

The biggest U.S. carriers moved last year to ground 460 jets and cut 26,000 jobs as oil prices surged to a record. Jet fuel, which is refined from crude, has plunged 67 percent since a July peak, spurring analysts' estimates for a collective 2009 profit that would be the industry's first in a recession.

Last week, American, United Airlines and Southwest Airlines each said in earnings presentations that travel keeps weakening along with the economy.

Southwest, the biggest discount carrier, has experienced "notable softness" in bookings as the U.S. weathers a "deep recession," Chief Executive Officer Gary Kelly said Friday.

UAL Corp.'s United said some passengers are flying less or switching to cheaper coach seats, while American, the second-biggest U.S. airline, said Thursday that the percentage of seats sold on its flights this quarter has fallen 4.5 points from a year earlier.

That was a "demand bombshell" because American already has trimmed its available seats by 8.5 percent, according to a note Friday from Roger King, a CreditSights Inc. debt analyst in New York.

Fares have been "relatively tame," with some travelers opting for lower-priced tickets, AMR Chief Financial Officer Tom Horton said Thursday on a call. American seeks "the right trade-off between fares and availability and demand."

Morgan Stanley's William Greene in New York lowered his full-year earnings estimate for Fort Worth, Texas-based AMR by 39 percent, to $1.79 a share from $2.94.

UBS' Crissey, who is based in New York, trimmed his projection by 26 percent, to $2.07 from $2.81. Greene rates AMR as "equal weight," while Crissey advises buying the shares.

The nine biggest U.S. airlines had operational losses of $2.5 billion in the first nine months of 2008, and Crissey projects they will lose $1.25 billion in the fourth quarter.

Delta Air Lines Inc. and Continental Airlines Inc. are among the big U.S. carriers scheduled to report results this week. Atlanta-based Delta is the world's largest airline.