Stimulated by discount fares and expanding route systems as a result of increasing deregulation, air passenger traffic was up 17 percent during the usually slack first two months of the year.

Next week the Air Transport Association will report that air passenger traffic was up 21.1 percent in February for the domestic industry as a whole compared with February a year ago. For the first two months of the year, air traffic was up 17 percent over the 1978 period.

As travelers are finding out, the statistics also confirm that more seats than ever are being filled. Last month, the airlines filled 58.9 percent of the available seats, compared with 55.2 percent last February. For the first two months of the year, the industry load factor was 57.6 percent, compared with 55.5 percent in the same perios a year ago.

Braniff International leads the major U.S. airlines in increasing passenger traffic. Last month, its traffic increased 40.2 percent over the same month a year ago, bringing its traffic growth rate for the year so far to 34.1 percent.

Trans World Airlines follows with a 32.7 percent in traffic growth in February and a 20.1 percent two-month traffic increase. In February, both TWA and United Airlines significantly increased the percentage of seats filled. TWA's load factor was 58.5 percent, compared with 51.8 percent in February 1978. United filled 62.1 percent of its seats last month, compared with 56.3 percent the same month a year ago.

The smaller airlines are doing well also. North Central Airlines set new records in February as passenger boardings climbed 26 percent. Frontier Airlines had a 28.9 percent increase in its passenger traffic in February. Washington-based Allegheny Airlines reported a 24.5 percent increase in traffic during February and a 25.6 percent increase for the first two months.The airline's load factor was 55 percent in February, compared with 50.4 percent for the the same month of 1978.

Many of the airlines have attracted new passengers during the slack winter months with special discount fares offered to promote their new routes, the continuing Super Saver fares, and special February-March half price take-along-a-companion and children free fares.

Some industry observers expect the load factors to increase more in March because of the passengers added to a smaller number of flights as a result of some fuel cutbacks.