Two top U.S. airlines on Wednesday posted sizable fourth-quarter losses despite cash grants from the federal government as carriers absorbed the financial impact of the Sept. 11 attacks on the World Trade Center and Pentagon. 

The results showed just how difficult the quarter was for airlines, analysts said, after the crash of four jetliners put the industry into a tailspin. Fourth-quarter revenues dropped precipitously as passengers either flew less or paid less for their tickets. 

Still, the losses were less than what Wall Street expected. 

AMR Corp., the Fort Worth, Texas-based parent of American Airlines and TWA, posted a record quarterly net loss of $798 million as revenues dropped to $3.8 billion from $4.9 billion a year ago. AMR is the world's largest airline. 

Chief Executive Donald Carty had warned employees last month that the fourth-quarter loss would be ``very very big.'' 

That figure included one-time items, charges for idling planes and government cash aid of $29 million, made available by the $15 billion federal bailout package enacted shortly after the attacks. 

AMR's per share net loss was $5.17, down from a net profit of $47 million, or 29 cents a share, in the year-ago quarter. Excluding special items, the net loss for AMR was $734 million, or $4.75 per share. 

Thomson Financial/First Call, which tracks earnings estimates, had pegged the consensus estimate at a loss of $5.08 per share. 

Continental Airlines Inc., the fifth-largest U.S. carrier, posted a net loss of $149 million or $2.58 per share, including the government cash aid of $174 million and charges of $61 million for aircraft and other items. 

Revenues at Houston-based Continental fell to $1.74 billion from $2.43 billion in the year-ago quarter. 

Excluding the grant and special items, Continental's loss was $220 million or $3.81 per share, compared with a First Call estimate of a loss of $4.49 per share. 

FIGURES MAY SET TONE 

Despite the losses, Merrill Lynch airline analyst Michael Linenberg said the results at both carriers were better than he expected. 

``Although Continental's results reflected a tough operating environment, there appeared to be no surprises,'' Linenberg said. ``More importantly, we are encouraged by the improvement in revenues.'' 

At AMR, better-than-expected results were cost-driven, he said. ``In spite of the loss during the quarter, AMR stated that it is encouraged by a number of signs but still has a long way to go before returning to profitability. We do not expect the company to be profitable on an annual basis until 2003.