American Airlines Cuts Capacity Growth Guidance

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 [e-mail]