American Airlines Sept. traffic, capacity fall

MINNEAPOLIS -- American Airlines said on Friday that it expects its September traffic to fall 16.4 percent from August, as capacity drops 9.7 percent.

Airlines typically reduce flying after Labor Day, and other carriers have been making cuts, too. This year's fall schedules have been especially lean as airlines try to match their flying with reduced demand.

American said it expects third quarter unit revenue, or revenue divided by capacity, to fall 14.5 percent to 15.5 percent compared with the same period last year. Counting regional flying, unit revenue is expected to fall 14.3 percent to 15.3 percent.

Meanwhile, American's costs are set to rise from August into September, though not as much as it had previously expected. Not counting fuel and special items, the costs are set to rise from 8.43 cents per available seat mile in August to 9.08 cents in September.

American said the increase is mostly because of reduced capacity, pension costs, and costs from efforts to improve reliability. The costs would have risen more if not for smaller passenger-related expenses, foreign exchange, and cost-reduction efforts.

Stifel Nicolaus analyst Hunter Keay wrote in a note that American's passenger revenue declines were less severe than its big competitors. That's because American, unlike some competitors, didn't expand into new international markets such as Europe last year, where the recession short-circuited expected travel growth.

Shares of American parent AMR Corp. were down 6 cents to $8.74 in afternoon trading. On Thursday its shares rose almost 20 percent after AMR announced it had raised $2.9 billion in cash and fresh financing.