Trans World Airlines Inc., buffeted by high fuel costs, the poor economy and a 60 percent drop in reservations because of the Persian Gulf War, failed to make $75.5 million in scheduled payments to bondholders yesterday and said it would instead use the cash to keep the airline flying.

The struggling carrier said that, while the decision to withhold the payments put it in technical default on some of its loan agreements, it did not plan to follow competitors Pan Am, Eastern and Continental airlines into bankruptcy court. The airline said it would continue to make regular payments to other creditors while attempting to negotiate new payment terms with its bondholders.

"TWA has absolutely no intention of seeking the protection of the bankruptcy court," said Mark Buckstein, TWA's chief counsel. "We intend to continue to conduct operations as scheduled."

Analysts said the move may have been a prudent one. They said that, despite the default, it seems unlikely that bondholders would immediately attempt to force TWA into bankruptcy. "You're better off trying to conserve cash sooner this way rather than later and see if you can work something out with your bondholders outside the {bankruptcy court} process," said Raymond E. Niedl, an airline analyst at Dillon, Read & Co.

But TWA's decision underscored the urgency of the airline's financial problems and those of the industry in general. The spike in fuel costs last year and a sharp drop-off in air travel because of the economic slowdown and the war have handed many airlines heavy losses, hastening an industry shakeout that analysts say could leave just a handful of large carriers. Eastern had filed for bankruptcy protection and then last month went out of business; Continental filed for court protection for the second time in its history; and Pan Am filed three weeks ago. Under Chapter 11 of the bankruptcy code, a company is protected from claims by its creditors while it attempts to reorganize.

TWA said yesterday its cash reserves have dropped by almost half since September, to $200 million, including a $110 million payment it received this week from American Airlines in exchange for its Chicago-to-London routes. TWA is attempting to sell additional London routes to American, which would bring in another $445 million.

TWA also said its finances had been hurt by a sharp drop in the value of securities it holds in steel and oil giant USX Corp. Carl Icahn, TWA's chairman and principal owner, is a major shareholder of USX.

Buckstein said TWA needs its remaining cash to continue operating. "We'd rather have the cash to fund what we know are going to be substantial losses for the rest of the year." He said the bondholders "are concerned ... but I'm hopeful that we'll be able to work something out with them."