American Airlines today announced that it has cut additional capacity for the first quarter of 2003.

As measured by available seat miles (ASMs), domestic capacity - defined as the 48 contiguous U.S. States, Alaska and Canada - will be down by 3.3 percent in March 2003 over the same period in 2002. This schedule reduction is 3.2 points deeper than the original plan announced earlier this year, which projected domestic capacity as relatively flat for the quarter. Following this revision, American’s March 2003 domestic capacity will now be down 18.6 percent from the same period in 2001.

After this further reduction of first quarter capacity, American projects that the domestic capacity reduction for the full year 2003 versus the full year 2002 will now approach 5 percent. The original plan had anticipated a decline of 3.6 percent.

“We continue refining our domestic schedule to meet anticipated demand,” said Henry Joyner, American’s Senior Vice President-Planning. “During this period, which is seasonally the lowest quarter for passenger traffic, we’ve been able to trim flights while preserving a wide variety of scheduling options for customers. And we’ve done the reductions in such a way that they would not impact any one market significantly more than another.”

Joyner said the airline did not anticipate any new reductions to its international schedule in the first quarter.

The airline is actively looking at what impact this may have on its employment levels. Individual departments are reviewing the first quarter schedule to determine staffing needs. However, the airline is on target for eliminating the 7,000 jobs it previously announced in August.

In addition to reducing its scheduled flying, American has been aggressively cutting its operating expenses. It has already identified more than $2 billion in savings that are currently being phased in. The company is actively working toward achieving permanent, structural cost reductions of between $3 billion and $4 billion.

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