American Airlines Slows Seat Capacity Growth

U.S. Travel Association came out swinging on Monday following an announcement by American Airlines Group Inc. that it would slow intended growth for total seat capacity. American shares immediately increased by 4 percent, angering some travel leaders.

“It’s depressing that actions that show disdain for travelers are the ones deemed to be the best business practices,” says Roger Dow, U.S. Travel Association president and CEO. “The real irony is that American says it’s cutting seats because of softening demand, which we’ve been worried was inevitable all along because surveys show U.S. travelers would almost rather have a root canal than fly commercial.”

The largest airline passenger carrier company in the world says its seat capacity in the United States will grow between 1 and 2 percent this year after earlier estimates that put the increase at 2 to 3 percent.

“Until Washington creates the circumstances in which ‘capacity discipline’ is not the profit-making virtue for airlines that it currently is, speculators will continue to reward them for it, which is harmful to an American economy and way of life that is deeply intertwined with travel,” Dow says. “We need an airport financing model that allows airports to expand and let new carriers bid for service. Congress could get us there if it would just listen to common sense: A cut in airline ticket taxes coupled with a boost in the cap on the Passenger Facility Charge user fee would pave the way for the terminal upgrades that airlines have lobbied hard against expressly because they would help bring new competition.”

Dow’s complaints are not falling on deaf ears. The U.S. Department of Justice is investigating whether U.S. airlines have illegally conspired to keep airfares high by limiting the number of flights.

U.S. Travel Association is among 117 travel companies and destination management organizations that have endorsed a letter that has been sent to key transportation leaders in the House and Senate. The letters’ supporters include Convention Industry Council, Hilton Worldwide, Marriott International, Inc., MGM Resorts International, Loews Hotels, Universal Parks & Resorts, and nearly 50 state and regional tourism offices. Even a handful of airports are calling on transportation leaders to take action.

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