US carriers warn Q4 capacity could be cut if jet fuel stays high

Three large US carriers have said they are prepared to reduce flying in the fourth quarter if jet fuel prices stay near all-time highs, putting planned winter schedules in doubt.

American Airlines chief financial officer Devon May said at a Morgan Stanley investment conference on 16 September that the airline would pull capacity out when fuel rises as it has, and would "touch up" December as a result. American plans the steepest growth of any domestic US carrier in the quarter, with capacity up 10% year on year, as it seeks market share against more profitable mainline rivals.

At the same conference, United's chief financial officer Mike Leskinen said the carrier would likely behave the same way if the fuel curve does not flatten. He said some marginal routes do not make sense in a higher fuel environment and that those would be cut. Leskinen framed the difference in approach plainly: United is chasing margins, while American is chasing share.

Southwest's chief financial officer, Tom Doxey, said trimming capacity would be a natural response if fuel stays higher for longer.

Industry-wide scheduled capacity for the fourth quarter is planned 3% higher year on year in available seat miles, a figure executives cautioned could shift.

Carriers have recovered some of the added fuel expense through fares. According to the US Department of Labor, airfares were up 26% year on year in June, and executives said that number is still climbing. Closing the gap takes time, they added.