American Airlines is scaling back its plans for increased flying this year amid signs that average fares are declining. The announcement set off a rally in airline stocks.
Wall Street analysts have been urging the airlines to scale back growth plans to prevent fares from falling, but it was unclear whether airlines would continue to talk about their capacity plans after last week, when the U.S. Department of Justice began investigating possible collusion among the carriers.
Shares of American Airlines Group Inc. were up $1.75, or 4.4 percent, to $41.42 in afternoon trading. United, Delta and Southwest all rose at least 4 percent.
American said Friday that it expects to increase passenger-carrying capacity by 1 percent this year, down from an earlier forecast of 2 percent. American, the world's largest airline operator, said its U.S. capacity will rise 1 to 2 percent and international capacity will rise about 1 percent compared with 2014.
Fort Worth, Texas-based American, which also owns US Airways, disclosed the capacity update in a regulatory filing Friday along with releasing details of its June operations.
The Justice Department is considering whether American, United, Delta and Southwest are violating antitrust laws by working together to limit seats, which would drive up fares. Investigators have asked the airlines for information about their discussions about capacity with each other, with Wall Street analysts, and with big investors. American CEO Doug Parker said last week that his airline did nothing wrong.
Helane Becker, an analyst for Cowen and Co., said the airlines have been expected to cut back growth plans in the second half of the year because of a slackening economy. A reduction in some flights was already apparent in reservations systems, she said.
"This is nothing new. (The airlines) have been giving capacity guidance for years," she said.
Analysts have been alarmed by evidence that fares, which had been rising, are falling because airlines are offering too many flights.
American said Friday that a key revenue figure would be down by between 6 and 8 percent in the second quarter from the same period last year. A decline in revenue for each seat flown one mile usually indicates lower average fares.
Traffic on American, US Airways and their regional affiliates rose 2.8 percent, as passengers flew 20.42 billion miles last month. Capacity increased 2.4 percent -- that usually means more flights, bigger planes or both -- so flights were a bit more crowed. The average flight was 85.4 percent full, up from 85.0 percent in June 2014.
The company left unchanged its forecast that second-quarter pretax profit margin excluding one-time items would be between 16 and 18 percent.