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Cheap air fares and sales that pile up on each other have meant bargains for fliers, but low prices are catching up with the airline industry again.

Steep discounting years ago forced dramatic restructurings and prolonged bankruptcies at the nation's biggest airlines. This time, the low prices are hurting the cheapest airlines that some have touted as the future of U.S. aviation.Southwest Airlines said fourth-quarter earnings would be disappointing. Continental Airlines is still losing money on its attempt to imitate Southwest. Newark, N.J.-based Kiwi International is cutting salaries and other expenses aimed at reducing overhead by $1 million each month.

The worries beset airline industry stocks on Thursday. Southwest, which had fallen 15 percent on Wednesday, dropped 371/2 cents Thursday to close at $17.121/2 on the New York Stock Exchange.

Continental's Class A stock was off almost 29 percent Thursday, ending at $9.25, down $3.75 on the NYSE. The airline's chief financial officer said lower earnings estimates by Wall Street analysts were accurate and that Continental would ground 17 jets next month, making it a smaller airline overall in 1995 than this year.

United Airlines, which has started competing with Southwest, saw the stock of parent UAL Corp. fall $4.371/2 to close at $87.621/2 in NYSE trading.

Perhaps the biggest boon to airlines in the latest recovery - cheap fuel - might be getting more expensive. United told analysts it expects per-gallon costs to increase 7 percent next year to 63 cents.

While analysts predict South-west's long-term outlook is strong, some predict the slow winter travel months, combined with low fares, will take their toll on old and young airlines.

"Continental is going to get hit hard, Trans World is going to get hit hard. . . . It's going to hurt not only start-ups but some commuters," said Steve Lewins, transportation analyst at Gruntal & Co. Inc.

Airlines have been tripping over themselves trying to offer the latest fare sale. Just this week, Northwest and Delta airlines announced similar sales within minutes of each other.

Sales have gotten so common, with at least one new round of discounting announced each month, that travel agents report passengers who won't buy at full prices are confident a sale will come along soon enough.

Even Southwest has been holding more fare sales. Southwest added 30 percent more seats to its route network in the past year and held sales in hopes of boosting traffic enough to keep up.

Just this week, the airline cut prices 50 percent from Cleveland, Chicago, Houston and other cities. In late September, Southwest started its first broad fare sale in three years by cutting fares at least 50 percent to steal some thunder from the start of United's lower-fare Shuttle operation in California.

Southwest's sales and regular prices at others, including Atlanta-based ValuJet, have come with relatively few restrictions. That makes the cheap fares available to business travelers, who usually fly with little advance notice.

Completely unrestricted coach fares have dropped 12 percent nationwide and tickets that require a few days' advance purchase have dropped 10 percent compared to last October, according to American Express.

Kiwi International, a young East Coast airline with 13 jets, has cut salaries in a step toward lowering costs. "We would not have to be doing this if we had the fares of a year ago," said Rob Kulat, Kiwi spokesman.