American Airlines Group Inc. on Friday lowered its capacity
growth guidance for the year, amid investor concerns over airlines'
aggressive growth plans.
The largest U.S. airline by traffic said it now expects its
systemwide capacity to grow 1% in 2015, down from its previous
forecast for 2% growth. American also lowered its forecast for U.S.
capacity growth by one percentage point to a range of 1% to 2%.
The move helped send American Airlines' shares up 4.8% to $41.55
in morning trading, while Delta Air Lines Inc. added 3.7% and
Southwest Airlines Inc. gained 4%.
The Justice Department recently said that it is investigating
whether U.S. airlines colluded on expansion plans, amid concerns
from consumer advocates and politicians that the industry is trying
to extend its recent run of prosperity by controlling capacity to
keep airfares high.
Airline executives have repeatedly said in recent months that
they would limit growth to protect profit margins. Those statements
were in response to broad declines in airline stocks, sparked by
investor fears that cheap fuel would prompt carriers to oversupply
the market.
While some carriers have scaled back their growth forecasts, the
industry overall is still expanding the seats it offers at a
healthy pace.
For the month of June, American Airlines said its capacity
increased 2.4% while the percentage of seats filled--or load
factor--inched up to 85.4% from from 85% a year ago.
Passenger traffic rose 2.8% from a year earlier.
American backed its forecast for passenger revenue per available
seat mile--an important measure of performance for the industry--to
be down roughly 6% to 8% and for pretax margin of 16% and 18% for
the quarter.
Both United Continental Holdings Inc. and Southwest Airlines
have forecast declines in their second-quarter unit revenues--how
much money they bring in per seat flown a mile--adding to the
evidence that the closely watched metric will continue to drag in
upcoming earnings results.
In addition, American Airlines said it now expects to spend
$1.88 to $1.93 per gallon on jet fuel in the quarter, up two cents
from its June forecast.
Write to Chelsey Dulaney at Chelsey.Dulaney@wsj.com