Most Airlines Are Holding Back on Capacity — American Is Flying More

As the airline industry grapples with highly volatile fuel costs, carriers are either cutting capacity more aggressively or raising airfares. 

But American Airlines is taking a different approach. In the second quarter, capacity for American was up 5.4%, and in the third quarter, it projects capacity will be up between 3% and 5%. 

Cutting capacity typically gives airlines more pricing power, pushes up yields and load factors, and offsets fuel costs. And while American’s second-quarter earnings beat Wall Street expectations and it reported a profit of $71 million, the carrier still lagged behind Delta and United, which both reported profits of $1.6 billion and $805 million, respectively. 

Even though American is flying more seats, executives defended the dec