It's been a challenging year for airlines: rising fuel prices, a drop in travel after Japan's earthquake and tsunami, a tepid economy, and a hurricane.

Despite it all, most major U.S. airlines expect to be profitable, or at least break even, this year.

At an investor conference in New York on Wednesday, airline executives said bookings are holding up, travel is not materially weaker, and they are managing the sluggish economy with capacity cuts and less competition because of airline consolidation. The most recent was Southwest Airlines Co.'s acquisition of AirTran Airways.

"It's not the same industry as in 2000, or even 2008," US Airways Group chief financial officer Derek Kerr said at the Dahlman Rose & Co. transportation conference.

The U.S. industry has gone from 12 major carriers to seven, including the combinations of United and Continental Airlines and Delta Air Lines and Northwest Airlines.

With passenger-carrying capacity - seats and flights - down 6 percent industry wide, and $2 billion to $3 billion in "a la carte" fee revenue from checked bags and choice seats, airlines "are able to withstand a lot more," Kerr said.

Airlines said they were cautiously optimistic about business.

"Forward bookings are not showing signs of weakening, and corporate bookings remain strong, as does overall pricing," Dahlman Rose analyst Helane Becker said in a note a day after presentations by carriers including Alaska Air Group, JetBlue Airways, Spirit Airlines, United Continental Holdings, Delta, WestJet Airlines, and US Airways.

Several airlines reported an increase in August passenger traffic. Southwest said traffic rose 3.9 percent compared with a year ago, while passenger revenue grew 6 percent, suggesting that air-travel demand remains stable. US Airways said August traffic rose 1.1 percent, while passenger revenue grew 9 percent, largely on higher ticket prices.

Several airlines, including US Airways, United, Continental, and Delta, raised fares on some U.S. routes Wednesday by up to $10 per round trip. JPMorgan Chase analyst Jamie Baker said the $3 to $5 one-way increases were on last-minute fares favored by corporate travelers. The move did not increase prices on tickets that require advance purchase and are usually bought by leisure travelers.

Airlines discussed the financial impact of Hurricane Irene. Delta, whose August passenger traffic fell 0.3 percent, said it took a $15 million hit from the storm and canceled more than 2,200 flights. Delta is laying off 200 administrative employees, most of them in Atlanta.

JetBlue, whose route network was in Irene's path, and US Airways, which scrubbed about a quarter of 9,100 scheduled flights, said the cost of the storm to each was $8 million to $10 million.

"We've had a lot of questions - why is JetBlue growing?" chief financial officer Edward Barnes said. "We see Boston and the Caribbean as huge potential."

JetBlue plans to grow from 100 to 150 daily departures from Boston in the next three years, and add flights to the Caribbean and Latin America, including to San Juan, Puerto Rico.

Southwest's second-quarter revenue was "very strong," but earnings were down from the prior year, and revenue did not keep pace with costs, primarily fuel, said chief financial officer Laura Wright. As a result, Southwest will aggressively manage capacity next year and expects growth to be flat, or down slightly.

Southwest, whose fuel hedges once allowed the airline to spend less on fuel than rivals who did not purchase advance fuel contracts, believes the "days of having a massive market advantage" by buying options to lock in lower fuel prices "are over," Wright said.

Options "are too expensive today. We are still hedging, and we have positions out to 2015, but hedging is more of a catastrophic coverage, which is being driven by the cost," she said.

US Airways' Kerr noted that corporate bookings remained strong. "We see that in our booked yields. We don't see any decline in corporate booking."

UBS Securities L.L.C. surveyed corporate travel managers and found that about half said their firms recently took action to reduce travel spending, or planned to by year's end.

"Although this clearly has negative implications," UBS airline analyst Kevin Crissey wrote, "it is softened by the fact that among those firms that have enacted money-saving measures, half still anticipate air travel spending to grow year over year in the balance of 2011."

The longer-term outlook is "less bullish but does not indicate a pending collapse in corporate travel spending."

Contact staff writer Linda Loyd

at 215-854-2831 or [email protected].