The cost of carrying domestic mail by air was $122 million more than projected in 1985, accounting for almost half of the Postal Service's deficit in that fiscal year, the new postmaster general said Friday.

In his first annual report, former airline executive Albert V. Casey -- who had been on the job for only 18 days -- said "airline deregulation had significant impact on the ability to move this mail by air."

To combat problems caused when the government started allowing airlines to change schedules at will, the Postal Service awarded contracts for a hub operation at Houston for first-class, priority and express mail.

It involves 10 major air mail facilities, and five more are expected to join the hub this year.

Another change for the Postal Service during the year was the installation of 100,000 centralized neighborhood delivery box clusters, used as a substitute for door-to-door mail delivery. There are 315,000 boxes nationwide.

The system, which is "helping to keep rates stable longer," according to the report, reduces the annual cost of serving a household from $105 to $53.

Stamp collectors, who buy stamps from the post office but save them instead of using them on postage, contributed $139.9 million to the Postal Service's total $27.7 billion in revenue in 1985.

Casey also said new forms would be issued this year stressing the ease of using the stamps-by-mail program, which let customers buy stamps without going to the post office and waiting in line.