USAir Sees Loss for 2nd Quarter and Year : Airlines: The carrier blames the still-sluggish economy for its failure to lure new passengers with reduced fares.

USAir Group Inc., which had hoped for a profit in the latest quarter, said Wednesday that it will lose money for the quarter and for the year because of continued weakness in the nation’s economy.

Shares in the Arlington, Va.-based carrier plunged $1.75 to close at $17.125 in active trading on the New York Stock Exchange.

The airline had based its projections on actual results for April and May and on its expectations for June.

“Revenue increases at USAir in the month of May have not been as strong as expected due to sluggish economic conditions,” the company said in a statement.

It added that it had reduced leisure fares in certain short-haul markets recently to stimulate traffic and boost revenue but that the increase in business did not meet expectations.

In an interview, USAir Chief Executive Seth Schofield said the carrier’s financial trend for the second quarter still compares favorably to the year-ago period, despite the expected loss.

“I hope people don’t read too much into the second quarter because it’s still quite good on a year-over-year basis,” he said. “The trend is certainly going the right way.”

In last year’s second quarter, USAir posted a loss of $2.08 a share on revenue of $1.7 billion. For all of 1992, it lost $13.88 a share on revenue of $6.7 billion.

As for fares, Schofield said, “there has been some discounting, but basically fares have been pretty solid and I think they’ll continue to be. They will be fairly stable for the balance of the summer.”

In May, USAir cut fares on some of its shortest flights. It also recently reduced fares between Los Angeles and San Francisco.

The fare cuts were designed to stimulate traffic and lure passengers from other airports and other forms of transportation, Schofield said.

“We’re not trying to give away our product,” he said.

Meanwhile, Schofield said the carrier will not seek to extend pilot wage concessions that expire Friday.

The contract USAir negotiated last year with the Air Line Pilots Assn. called for wage reductions of more than $55 million over 12 months.