American Airlines Second US Carrier to Trim Capacity as Fuel, Weather Bite

Article excerpt

American Airlines on Tuesday became the second major US carrier to trim capacity plans as the industry looks to offset rising fuel costs with fewer flights and higher fares.

The unit of AMR Corp. (AMR) said it would reduce planned extra flying this year by a percentage point from existing guidance having said in January that consolidated capacity--which includes regional flying--would be 3.6% higher than in 2010.

The airline also said bad weather reduced revenue by around $50 million in January and February when it had to absorb the costs of storm-related closings at its Dallas-Fort Worth and Chicago hubs.

American's move follows that of Delta Air Lines Inc. (DAL), which last month trimmed its own first-quarter capacity guidance. United Continental Holdings Inc. (UAL) said it had no plans to announce changes to its existing capacity guidance at this time.

The move by Dallas-Forth Worth-based American, revealed in a conference presentation by Treasurer Beverley Goulet, comes as airlines continue to push higher fares to offset the fuel increase.

Jet fuel is trading around $3 a gallon, and Southwest Airlines Co. (LUV) Chairman and Chief Executive Gary Kelly last week said it would have to reassess its own plans when the price reached $3. …